“You Are Going To Have Some Price Wars”
The East Valley Tribune reports from Arizona. “With the housing market lagging and homes taking months to sell, a Scottsdale-based company is betting homeowners will be eager to try a more unconventional route to successful sales, the auction. National Real Estate Auction Corp. will host a massive real estate auction in downtown Phoenix next month, offering everything from starter homes to multimillion-dollar estates.”
“Home auctions have been around for decades but have gained popularity as an alternative tool for selling in a slow market where competition is tough. Valleywide, there are more than 45,000 properties on the market, at least 10,000 above the norm.”
“‘It’s growing exponentially because more and more people are becoming tired of a lengthy listing,’ said Bill Sheridan, the National Auctioneers Association’s president.”
“(Auctioneer) John McCann hopes to have more than 100 homes at the Valley auction. A typical auction has 20 to 40 properties, so the upcoming Phoenix auction is ambitious, Sheridan said. Auctions allow them to sell fast and at current market value, though that price is sometimes below a seller’s expectations, he said.”
“‘We are accomplishing the goal, but it is sometimes at a discount to what the owner would like to truly have,’ Sheridan said.”
“Scottsdale loan officer Nate Robinson is hoping the auction will boost interest in a 3,000-square-foot house he owns in Buckeye’s Verrado development. He bought it a year ago but had to move soon afterward. Since then, the home has sat empty, and it’s been listed for about four months.”
“‘I think the word auction alone is going to get people out there,’ he said.”
In Business Las Vegas from Nevada. “The number of home closings recorded in the Las Vegas Valley in January fell to its lowest point since May 2004. John Burns, a Southern California-based real estate consultant, said existing home prices will continue to depreciate as long as listings remain high, and he said he doesn’t expect the market to reach ‘healthy levels’ of 15,000 homes until 2008 at the earliest.”
“The Greater Las Vegas Association of Realtors reported there were nearly 24,000 single-family homes, condos and town homes on the market in January.”
“‘I think resale prices are going to be down 6 percent (in 2007),’ Burns said. ‘The new home guys have dropped their prices at least 10 percent and the resale market needs to do the same, and it may take another year or two to do that. Homebuilders do it because they have urgency to sell homes and pay their overhead. Homeowners don’t have inventory. It comes down to nobody wants to sell their home for less than their neighbor.’”
“The median price of existing homes has fallen $10,000 in the last three months and existing homes sold in January for a median price of $278,000, the lowest price since June 2005 when homes sold for $273,000, according to SalesTraq.”
“The decision by more homeowners to put their homes on the market in January isn’t good for the resale market in holding the line on prices, one housing analyst said. ‘You got big inventory out there, and you are going to have some price wars,’ Dennis Smith, the president of HomeBuilders Research, told the audience.”
“Las Vegas housing analyst Steve Bottfeld, who released his monthly housing report Tuesday, said he expects existing-home inventory to reach 24,000 in March and slowly decline to 16,000 by the end of the year.”
“Bottfeld, who tends to be optimistic about the market, said prices may decrease in the first half of the year before climbing in the fall. ‘The disturbing aspect of the still-swelling MLS inventory is that 44 percent of those listings are vacant, and a significant number of them may fall into foreclosure,’ Bottfeld said. ‘This will serve as a dampening force on existing home prices.’”
“In the new home market, sales were off 26 percent in January compared to January 2006 and the 2,135 homes sold were the fewest since May 2004, SalesTraq reported.”
‘The decision by more homeowners to put their homes on the market in January isn’t good for the resale market in holding the line on prices, one housing analyst said.’
Notice they didn’t mention how many were put on the market. Will the number of permits down so much, why aren’t these inventory levels getting significantly smaller in Arizona and Nevada? IMO, it’s because the phantom speculators are still coming out of the woodwork, getting tired of the negative cash flows and waiting for the magical spring bounce.
Ben, not to mention a large amount of need-to-sell sellers that are not even putting their homes on the market.
I just did a post where I found 5 homes in foreclosure and pre-foreclosure on one street in Murrieta, CA. 2 are REO’s listed by HSBC and JP Morgan Chase. But the 3 pre-foreclosures have simply given up and just enjoying life until they turn the keys over when auction time rolls around.
An inventory count would count 4 homes on that street for sale. But really, we know 7 need to sell on that street.
There’s was a MSM story here about massive mortgage fraud in Murrieta a few weeks ago.
“…because the phantom speculators are still coming out of the woodwork…”
Yep. A lot of these sellers are wolves in sheeps clothing. They say they are selling because of changes in jobs, plans, etc., when really they are nothing more than speculators. They never had any intention of living in the place, or holding it long term. The thought of them burning through cash doesn’t hurt my feelings one bit.
“phantom speculators”
and their cousin phantom multiple bidders…
“phantom speculators are still coming out of the woodwork”
Why Ben, here’s one right here….. Me thinks this poor man hath been hoisted upon his own petard.
“Scottsdale loan officer Nate Robinson is hoping the auction will boost interest in a 3,000-square-foot house he owns in Buckeye’s Verrado development. He bought it a year ago but had to move soon afterward. Since then, the home has sat empty, and it’s been listed for about four months.”
imploder,
You called this one right. If he was not a phantom speculator, he would have listed the home before he moved. I hear it all the time in vacant houses that have never been lived in: “He bought it when he was going to move to this area, but his….job transfer or business reversal or personal situation….or?….created a change in plan.” Translation: This speculator used owner occupied 100% sub prime I/O 80/20 financing to get into this house so he could flip it for $100,000. The only change in his circumstances was the real estate market.
Yep..He probably qualified himself for the loan. Whatta scum bag.
We are in the process of moving to a new rental here in LV. Our landlord has jacked up our ren $200 every 6 months to try and cover his losses for this and 6 other homes he bought at the height of the bubble. I am looking a little at buying. Right now there is a huge difference in home prices in the same neighborhood. We found one neighborhood that had a 200,000 difference in price for the same model!
Also seeing our share of bank owned signs in the windows here in the Henderson, Anthem area.
I really miss ownine a house, but I think we will wait one more year and be happy with the 10-20% savings we will get.
‘The Greater Las Vegas Association of Realtors reported there were nearly 24,000 single-family homes, condos and town homes on the market in January….The disturbing aspect of the still-swelling MLS inventory is that 44 percent of those listings are vacant, and a significant number of them may fall into foreclosure,’ Bottfeld said.’
You have several thousand empty houses around and you are accepting a rent hike? IMO, you could threaten to leave if he didn’t cut it below your original rate. Why is it that people don’t feel like they can negotiate rents?
I negotiated my rent, 5.9% reduction.
I also know people who got a sizable reduction by paying for 6 months at a time in cash.
I have thought about doing that, but then I figured people would be alarmed, thinking that I was running a meth lab or something.
DO NOT pay in advance rent at a time like this. if your flipper landlord foreclose you may as well kiss those advanced payments good bye.
Go to a bank and prepay into account, let the amount get
transfered to landlord each month. Therefore if he FC you
prepaid amount is safe…
BTW, if he does FC as you indicate you can take him to court…
amount is due back since delivery of services were not performed. A good laywer whould be all over this.
If it looks like it is going to be a convoluted deal with a good chance of lawyering in the near future and the monthly amount is marginal then I will not bother with it. (It’s not like I am renting on Park Ave for $10,000 a month.) Simplicity is bliss.
I had someone propose this to me once. The cost of setting up an escrow-type of account, along with the issue of only being able to draw a month at a time takes away any benefit over regular monthly payments. The cost of any needed legal action would be more than the six months or less of lost rent. Most lawyers would require a substantial retainer for this kind of work. I’m a landlord and I say never pay rent in advance unless you have to.
I would only pay a property management firm, and I only use property management firms. I have never met my landlord.
Here is another problem with renting from FB’s:
‘As foreclosure rates continue to skyrocket in the Las Vegas Valley, homeowners are still falling victim to tricky mortgage plans they can’t keep up with. But renters are also caught in the mess.’
‘Broker Thomas Blanchard says it’s a situation that’s growing due to increasing foreclosure rates, but tenants can negotiate protection. Blanchard explained, ‘There’s nothing that says you can’t have someone write in a lease that says the tenant can check on the mortgage to make sure it’s in good standing on a monthly basis.’
‘He also suggests working with a property management company and not paying rent directly to the owner to ensure you get back your security deposit. Quick scams can also leave you hanging.’
‘People have taken a first month’s payment, last month’s payment and security deposit the night before we showed up with the constable to do an eviction or lockout,’ Blanchard continued.’
SVGUY: problem is, you’ve got a case, but so does the bank holding his mortgage, the utility company, and the general contractor that he uses to maintain the property. And no, a lawyer won’t jump on this simply because their chance of getting paid is minimal. Look around for other rentals. Find a few that will rent for less than him. Tell him that’s where your moving and see how he likes the prospect of a vancency and the cost of finding a new tennant.
You made a better point than me.. my hats off sire
Sadly rents have skyrocketed in San Francisco Bay Area.
15-25%
Unlike late 90s when everyone was coming to work in tech
companies thus creating a shortage and increases…
Today seems that mgmt companies like Avalon have decided to
increase their revenue/income without any regard to local econony health. We are no where near what we had in 1999.
I expect this to show up in the next FED beige book comments …
Thus an increase in rates to combat the new price inflation.
I guess we know what happens next…
SVGUY - are you implying that the rents are going up just cause the management companies want more money? Isn’t that like saying sellers can get higher sale prices just cause they feel like it?
Yes… earnings target by public traded companies
read the latest managment comments on their SEC fililing from
AvalonBay Communities, Inc. (NYSE: AVB) and others.
Its pretty clear.. In the business langauge they call it
Revenue Extraction… Ouch…
The big rental companies have a near monopoly position on non-crappy rentals in the Sunnyvale-Santa Clara area.
My rent is $1320 now but will likely be jacked up $100 or more this May, we’ll see . . . the nice Sikh family across the way moved out this month, so I’ll have a good barometer of their difficulty in finding new tenants by then.
(damn, shoulda got the 13 mo lease so I would be looking for Jul 1 move ins . . . much easier date for Palo Alto (Stanford move outs) I would expect . . .
My landlord wants to raise my rent and his reason is that he is losing a couple hundred $ on the house each month. Like that kind of logic works … it is my job to bail him out hahahah. He baught at the top of the market in 2005.
Oh ya he also works for HSBC on wall street.
Negotiating rent is so easy it’s ridiculous not to. I’ve had landlord’s take the price down before I even countered- just because I hesitated and balked slightly at their first price - and that was when things weren’t *nearly* as bad as they are now in terms of rental inventory.
Seriously, in Seattle a few of years ago, friends were getting rents *lowered* by hundreds of dollars a month just by mentioning they might be looking to move.
F*d specuvestors trying to raise your rent and renters falling for that? Just plain silly. This is exactly the time when you have enormous bargaining power.
Renters rule!!!
(To the tune of ‘We are the Champions’):
We are the renters, my friends
And we’ll keep on renting to the end,
We are the renters,
We are the renters,
No time for bagholders,
‘Cause we are the renters,
of the World!
(Until we each buy ourselves a house at the Great Post-Bubble Blowout Sale, coming soon to a town near you!)
SPD
OT. Can we email on the side re Chinese for kids?
“Why is it that people don’t feel like they can negotiate rents?”
It’s part of American culture, and I confirmed that in a Marketing course in college. For instance, no American negotiates with dentists or doctors, even though these professionals have autonomy to give discounts. You also notice that behavior on those travel TV programs, when the hosts are buying stuff. It’s normal to bargain outside the US, but here…
I did get a 10% reduction! And, Garbage, sewerage, water paid!
I see Zillow in my area is finally starting to get religion. Prices are starting to come down in the Tacoma/Pierce county area of Washington state.
My neighborhood has had drops of 15-45K adjustments in the last month. The area tends to have homes in the price range of 250-550K. Lots of vacant developments that have been improved (curbs, streets, and stubbed out utilities), many of these have been sold by the developers to individual builders last year that were looking to flip (spec. home) some unsuspecting fool into. So far there has been little work on these areas. Many of these lots (normal numbnail size 5-6K square foot) cost the builders 150-170K just for the land.
At those prices a builder would have to charge 475-550K just to make a decent profit. With sub-prime market closing its doors many of these lots will find their way up for resale at a discount. There is going to be an reversion to the mean over the next couple of years. The average homeowner can not afford these prices even at these artifically low interest rates. Incomes have not gone up with the housing inflation. Its the laws of supply and demand..plain and simple.
Reality trac website keeps showing many local homes going into forclosure and many signs on local telephone posts showing sharks looking to bail out buyers from their mistakes. “We prevent forclosure!” Even my neighbor came over to the house a couple of week ago asking if we would like to buy their house (we currently rent) we said no. She went on to say that they are going to get forclosed on. They bought a new travel trailer, DisneyWorld vacation, new jaccuzi tub, new truck, etc, etc (house ATM). now they are screaming and the bankrupcy laws have changed and have some teeth!!
My other neighbors are in denial about prices. They are all owners and of course want to see prices never stop rising (even though the value has doubled in the last 5-6 years). Many are counting on retiring in part from the home appreciation. Last year there were tons of “for sale” signs this spring I think we will see a 50% increase.
“Zestimates” are still screwy on the east side. Zillow shows the price our home sold for in August and yet the Zestimate is 120K higher than the selling price.
Same exact deal with us - same area, sale date, zestimate inflated by the same amount over actual sales price. So who’s pulling the strings at zillow?
Zillow uses an algorithm to calculate home values, and they don’t adjust individual values for individual sales prices. Instead, they use those sales prices to modify the algorithm and also post them right next to their estimate so that people can know how far they are/were off. It’s an honest way of admitting that their prices are approximations, not appraisals, and it allows people to decide better for themselves how much weight to put on Zestimates when they are figuring out how valuable their homes are. Zillow is just a tool to estimate your homes value, not an appraisal mechanism. A home is worth what somebody will pay for it, and that is impossible to know unless there is a solid offer on the table.
Methinks you’re a realtor.
Smells like troll around here, doesn’t it?
I agree with Diane, and SVGUY below, “zestimates” are worthless. Noone should take zillow very seriously at all. Use it to do some research, have a little fun - that’s all it’s good for.
The only good thing one gets from Zillow is the historical prices.
Users need to have a sanity check. zestimates are worthless.
Take what ever prices were say in 1997 and add 4-5% YoY to get real value.
Cross check with rents and income and you get verification your number is correct. In SF Bay Area thus we are due for 50% correction.
“Take what ever prices were say in 1997 and add 4-5% YoY to get real value. Cross check with rents and income and you get verification your number is correct. In SF Bay Area thus we are due for 50% correction.”
Why 1997? Why not 1985? or 1991? And why do you expect home costs to be the same as rents? Owning has always been more expensive than renting, at least initially. Over the years, rents go up with inflation and home payments stay the same (at least with a fixed rate loan, which, imo, is the only type of loan anybody should have). People expect to pay a premium to get the benefits of ownership. Probably not 100% more, but certainly more.
It’s so blatantly obvious Diane’s a troll. What brokerage do you work for Diane?
Definitely troll.
BanteringBear - Nope. Sorry, I don’t work in real estate, don’t have a realtor’s license, and don’t want to. I am interested in bubbles and market behavior, and am particularly interested in the people who are followers of the housing bubble meme. This is one of the more interesting sites about the bubble. I’ve never denied that a bubble exists, btw. I challenge you to find that. I do disagree with the idea that home ownership is a bad thing, and I believe that there are even now good opportunities to buy homes (although not in all markets, and not for all people, and never, ever, with an adjustable 80/20 loan). I believe that there are actually many individual bubbles, some large, some small. Some areas peaked 2 years ago and others late last year. Some areas never saw dramatic increases. Some areas will see dramatic price drops, and other areas will see smaller drops. Some areas will not see drops, only price stagnation for some amount of time. I don’t think it’s possible to predict exactly how much prices will drop, or when it will stop. I was serious when I asked why 1997 should be the year to set as the start of the calculation. Why 1997? The city I live in didn’t see significant price increases until after 2000. In 1997, home values were depressed due to very high interest rates. There seem to be a lot of assumptions and I don’t know where they come from. I read this blog for a while before I posted, because I certainly don’t want to step on toes. I’m no troll, just a curious person with slightly different priorities than some people on this blog.
I will answer that Diana, 1997 was the last year in my area were home prices were sane. Around 3-4 times med salaries. A home purchased as investment were cash positive. You wont find the inflation as we had back in the 1970s happening again. That wont happen. Inflation is dead!
If you believe that owning is a premium over renting, then you must also believe RE as rent producing investment is a money losing asset. Rent revenue would never cover the ownership expenses because of this premium paid.
But we could say same with any property management or REIT corporation. Would a corporation overpay and then maybe breakeven or even make a profit.
Where is the logic/reason behind your statement of this “premium” …. and please spare me the “pride of ownership” nonsense. Im a numbers man.
I don’t think it’s possible to predict exactly how much prices will drop, or when it will stop. I was serious when I asked why 1997 should be the year to set as the start of the calculation. Why 1997?
At what point did the S&P stop the deline and find a bottom?
thats easy… again what was the rational year? 1996 or 1997…
take the normal appreciation of the market at 7% annually ( per Peter Lynch) and you intersect at around 700-800’s ..
Regression to the mean!
Guess what! it did bottom at around 800~ how about that!
Here is a test … you look at the chart and figure it out…
http://www.zillow.com/Charts.htm?chartDuration=10years&zpid=19610589
svguy - Thanks. As I said, in my area, home values didn’t bottom in 1997, they slid down in the early 90’s and stayed low until around 2,000. As for renting being a losing proposition, it often is. I think that a smart operator can make money, but it is not the cash cow that many perceive it to be. By the time you pay for maintenance, non-rental time, and taxes, it’s easy to lose your shirt. Rental is almost never a wise investment for the short term owner who wants to flip. Renting cay pay off if somebody has a property that they have low/no mortgage payments on. That means that a renter has to be in it for the long haul. When you run into situations where owning is cheaper than renting, people tend to abandon the rental market and buy, which causes rents to drop and home values to go up. That happened in Sacramento in the last few years. High value rents went way down as higher income people abandoned them for home ownership. Of course, slums can be very profitable, if that’s the way you want to go.
I agree some will not have bubbles…
Here in the bay area we had lots of cash out of stock options and many used it as “free money” the new economy and great wealth as reason… well that didnt happen. With the expensing of cheap stock and new back dating scandals that appeared. It is highly unlikely we will see the IPO boom which fueled the buying in 1999 Due to Sarbanes Oxley and heavy review by the SEC many hot start ups are being acquired rather than IPO. So eliminate the gains from 1999 to 2002… thats total frothy bubble…
I saw home which were 180K in 1998 sell for 500K by 2000 and now selling for 660K. Much of that since 2003-4 was using toxic loans.
SVGUY - the Bay Area (I presume you mean the SF Bay Area) is just insane, and has been as long as I can remember. My mother lives there, in a modest 3 bedroom in Foster City that would probably sell for around $800,000. She has one small 2nd mortgage she took out because the 40 year old kitchen was falling apart at the seams. I couldn’t buy the house I grew up in, although I make good money. Neither could my brother. I really don’t know how anybody affords it, but houses seem to sell pretty quickly once they hit the market. It’s considered a very good neighborhood.
I recall seeing 2000 sq ft TH for 180-190K in 1996-97. Right before the IPO cash outs hit in 1999-2000.
SVGUY and Diane - it’s fun to read your back and forth. keep going please.
SVGUY, I agree with Diane’s question regarding why 1997, as opposed to 85, or 74?
It seems to me like 1996/7 was the bottom of the last cycle in california, especially after you factor in inflation. So maybe 3 to 4 times income will be the bottom of this cycle, but i don’t think it represents “real value”. historically in CA hasn’t the mean ratio been more like 5 times income?
nit picking as usual.
i remember trying to time the bottom of the S & P too. i bought too much too soon on the way down when things really started sinking, and by the time it was really cheap i didn’t have enough money to keep investing (it was tied up in real estate). But i hung on and came out with a nice profit.
I guess it’s a lesson for me with housing - it’s impossible to time the market - buy it if you like it and it seems like a good deal after you’ve done your homework.
i’ll be looking for a 50% haircut in the san francisco market.
“why 1997, as opposed to 85, or 74?”
We’ve seen wage-inflation from the 70s and 80s, but not late 90s.
oh, I agree with bubbleboi that 97 is a trough year and not mean. The market in the SF Bay hit equilibrium in 2001-2003, I think that is the mean it will rever to. Right now, listings are kinda 4-5% annual appreciation from where they were in 2003. (listed for $420 but might sell for $390, sold in 2002 for $350).
Dont forget lumber prices had gone down 50% since peaking in 2005.
So costs are going down.
I see these same signs everywhere in Hollywood and Davie Florida. I consider it a sign of the times.
Sorry, I posted in the wrong place. I was referring to the signs all over the streets of those wanting to bail people out of foreclosure.
Good for you, su meri, I’m glad you are moving. I was just in Vegas this past weekend and noticed $1200/mo would rent a very decent place. Unless your original rent was next to nothing, I am sure you are right to get out and let this guy stew in his own juice.
It is unreal what you can get here for 1200-1500 compared to LA. I am living in a huge new 4br/3 bath house for 1550.00/mo. They originally wanted 1900.00 but we made a deal. It is a new house in a 12 home subdivision adjacent to Summerlin(Cheyenne and Buffalo), 4 homes are for sale, 3 are vacant (maybe 1 or 2 foreclosed) small version of ghost town,
I hate this area of town and I will move when my lease is up, The thing that does not make sense about Vegas is there really is no money here, it is a very blue collar uneducated and (don’t hate me for saying the truth) “low life” town. So even 300K for a house seems way out of line for Vegas. I will never buy a home here, I dont see the value of it in this town. I will rent as long as I have to be here for work then goodbye Charlie, its a nice place to visit and all that.
“it is a very blue collar uneducated and (don’t hate me for saying the truth) “low life” town.”
From So Cal…you are forgiven.
Move, there are a lot of properties available. I know of one owner who has dropped the asking rent from $2000 to $1600 on a 2200 sq ft less than one year old. Still no takers. Still too high.
Su Meri:
Please please please explain why you are so desperate to BUY a house……
If we could understand your thinking maybe we can figure out why this bubble happened……..Seriously, there is no earthly reason to buy a house qwhen it costs double to own then to rent.
Also, I would have moved long ago $200 increase every 6 months is a rip off, so please tell me why it took you so long to move and stick this moron landlord with an empty apartment?
Logically, renting over owning is the way to go, but I want to buy also for these reasons:
1. I can customize my living space to the exact specifications I want such as knocking out walls. This won’t happen at a rental.
2. I won’t be forced to move AGAIN because some owner needs to sell, foreclose, etc.
3. I am more “inspired” to care for the property that is mine, than for the property of someone else.
4. I can make worthwhile long-term investments into things like a garden. Moving a garden has a lot of transaction cost!
5. I can get a fixed mortgage which means fixed payments. No more negotiating rents every year.
I am sure there are other reasons. Anyone else?
All good points but in the SF Bay Area
(1) additional costs “customise” due to “as is” no repairs in contracts do appear. I seen horrible property selling as if prestine. Thats costly i addition to already to high of price.
(2) with income to price multiple double digit many used interest only loans. It wont be long that many will moved out by the bank.
(3) I agree totally
(4) I agree totally
(5) fixed rates are getting rare in the bay area. IO has skyrocked past 50% in 1995.
Get a trailer and make do. Anyone who buys now is being foolish with their money. You will have the oportunity to do all the things you want to do at some point. For now it is just best to wait. But if you are of the “I want it now” genre then you are part of the reason of our problem (Housing prices) in the first place.
“Las Vegas housing analyst Steve Bottfeld, who released his monthly housing report Tuesday, said he expects existing-home inventory to reach 24,000 in March and slowly decline to 16,000 by the end of the year.”
I love when people make testable assertions for the record like this - not only do we get to laugh about them at the end of the year when they are proven grossly wrong, they will also make for great reading during the next bubble, just as stories from the early 1990s are highly entertaining to read today. I bet Mr. Bottfeld didn’t intend to be the butt of jokes for not only this generation but future ones, but such are the times we live in, with cheap hard drives and servers remembering what he would like to have us forget.
Oh, and for anyone reading this at the 2019 peak of the next Great Housing Bubble, hello from the distant past!
Wrong date, I think. If this episode is like the stock run-up of the 1920’s, it will take 70 years to happen again.
…but I have been waiting to get in at the bottom of the next RE bubble. It’s my retirement fund…
I agree. The stock bubble of 1929 didn’t come back until 1998. The Florida RE bubble of 1926 didn’t come back until 2002. It will take another 70-80 years for another widescale RE bubble.
In terms of financial pain and systemic risk, the crash after the Go-Go Years of the late 1960s were pretty bad and very much resembled the tech bubble. Even scarier when you think that the late 60s were followed with the crash in 1974, and the 70s in general with stagflation. There’s a reason why BusinessWeek had that “Death of Equities” cover story.
Good point. I live in California, where we seem now to be on a regular boom/bust cycle every 15 or so years. I keep forgetting that most of the rest of the country doesn’t exhibit that behavior.
It may well be 70+ years before it happens nationally again - and even then, probably not in places like Indianapolis, which seems completely immune to cyclic behavior!
Also, we probably won’t have another boom of this MAGNITUDE in California again in my lifetime. I sure as hell hope not anyway.
So OK, if it’s still possible to read ASCII documents stored on magnetic media in 2077, hello from your great grandparents’ generation! And sorry about Bush.
By then it will be part of Greater Mexico.
…or great China.
I thought Gary Watts was going by Steve Bottfeld in NV.
“Bottfeld” is the Latin word for Loser.
I don’t understand how the analyst can come up with the idea that the inventory will drop to 16K by year end. Is he assuming the current inventories will be globbled up between now and then? and also assuming that no new inventories added to the current one? he also neglect the fact that the buyer pool is also shrinking due to tighter credit.
arson?
you might be right constant fire sirens in brooklyn *nyc* lately constantly the condo devs are burning crap i think…
There have been a couple of suspicious fires at partially built condo complexes in San Diego recently, too. (Escondido had one, I think downtown San Diego did, too.)
You are right, and drying up in LV too:
‘The nationwide downturn in the residential housing market has claimed another victim and this time it’s a Las Vegas company. Silver State Mortgage abruptly closed its doors Wednesday, sending borrowers, title companies and independent mortgage brokers who worked for the lender running for cover.’
‘Scott Bice, the state mortgage division’s commissioner, says too many defaulted loans caused Silver State’s warehouse bank, Washington Mutual, to close the business down and seize its assets.’
‘In the last two months, there have been about 22 other failures like this,” Bice said, referring to the ripple effect in the depressed housing market that is starting to hurt alternative lenders everywhere. ‘Because of the (high) default rates, the market has changed,’ Bice said. ‘Loans you could get six months ago are no longer available. The credit market has tightened up.’
I love it
Burn baby, burn!
This business of auctions by homedebtors will not make a significant dent on prices IMO. Sh#t hits the props when it becomes auctions of REOs, prolly starting in late summer/fall of ‘07.
Probably right, because the homedebtors undoubtedly post too-high reserve prices. Article says, “I think the word auction is going to get people out there.” Yup, it’ll get them out there, and the reserve prices will get them outta there with their bank accounts intact, i.e., nothing bought.
Yup. They owe to much to sell for less, and I don’t think that the short sales will REALLY take off until the banks are already overloaded on REO.
“Scottsdale loan officer Nate Robinson is hoping the auction will boost interest in a 3,000-square-foot house he owns in Buckeye’s Verrado development. He bought it a year ago but had to move soon afterward. Since then, the home has sat empty, and it’s been listed for about four months.”
This says it all: a “loan officer” is a FB. Guess he believed his own hype. Come to think of it, on the last refi I did, two years ago, my loan officer offered payment-option, interest-only terms and mucho cash out. She seemed a bit surprised when I chose conventional 5/1 ARM, 30yr fully amortizing terms with no cash out. And this was at a major bank…
Apparently you don’t know Nate….he got a bogus appraisal for 100k over the loan and titled the property to someone named Juan.
” He bought it a year ago but had to move soon afterward.”
i.e. he lied on his loan docs, and claimed he was going to be an owner-occupant.
It probably is a good time to join the fraud-investigation department of a bank - it is going to be a rapidly growing area, and it would be a source of daily entertainment to investigate all the houses where claimed owner-occupants mysteriously “had to move” shortly after signing the loan papers, but without leaving town.
why not lose the realwhore (6%) drop the price and use the INTERNET !
“Scottsdale loan officer Nate Robinson is hoping the auction will boost interest in a 3,000-square-foot house he owns in Buckeye’s Verrado development. He bought it a year ago but had to move soon afterward. Since then, the home has sat empty, and it’s been listed for about four months.”
You know, I find it very entertaining when a loan moron gets a taste of his/her own bitter medicine.
Just back from Vegas today. Still cranes are busy but too many units “W” hotel condo project on hold because of cost of construction?? Too many high priced condo’s with no buyers. Waht a mess!
I second that Ben. There are a ton of rentals in L.V.
If you are paying your rent on time, and keeping the place in decent shape, your Landlord is a fool to not work something out to keep you there.
It has been fascinating to see the ABX index implode in the last two weeks which is a substantial reason for the recent lending tightening. I realize it will take time for everything to trickle through…..months if not years….but as of now, how much in % terms have the lenders priced out? in your opinion?
The MSM is finally getting with it.
http://www.thereporter.com:80/business/ci_5297423
Ya, but………….the contrary view always seems to gets quoted:
voilâ: Still, some economists such as Sean Snaith, a consultant with the Stockton-based Business Forecasting Center at University of the Pacific, say the fallout from the housing slump, as well as the slump’s extent, has been overplayed by economists such as those with the Anderson Forecast.
“It was not a housing bubble, but a housing souffl\é,” Snaith said. “If some of the key ingredients in the souffl\é were missing, it would go flat. But it was not a bubble.”
Snaith argues that the housing market in California and the East Bay has actually been more resilient than some forecasters believe.
Did he mention the high % if i/o loans in East Bay!
No Equity to speak of… all accrued buy unpaid.
I’m seriously thinking about putting up my Henderson NV home for sale next month FSBO. If I could sell my own in California before the runup, I can do it here.
Two other houses like mine for sale in the development, one sitting for 9 months because the seller is greedy and is not chasing prices down. I’m going to put mine up for $299K, the first time I know of a house in this area has been below $300K in several years. Of the two for sale, one is at $325K and the other for $340K. I think the 299 will look attractive. I don’t have to sell, own the house free and clear, but I hate Nevada so much I wish an asteroid would drop on it and I want out of this cesspool of a state.
It’s true that those first few properties to list below a percieved limit can really appear to be deals.
When you’ve been perusing the MLS for months and everything’s been above 500K, the first 499K list looks attractive, ditto for all the other 100K increments.
Let us know how long it takes to sell. If you’re trully the first “below 300K” in the neighborhood in years, it’ll be interesting to know how quickly you can unload it.
Thats great. I bet it will sell. Then the neighbors will gasp as comps are driven down. Too bad for the FB neighbors who overpaid.
I think you should go for $289,000 and see if there is a bidding war!!!
Also maybe the other homeowners might match your $299,000 but not another $10K lower.
BUT YOU’LL RUIN THE NEIGHBORHOOD COMPS!!!!!!
Already ruined by the freud and fake multiple bidders from realtors.
What bidding wars? Unconfirmed comments from a realtor….LOL
Oldest trick in the book…
You’ll accomplish several goals…..
Sell your house
P*ss off the neighbors
I did that a few years ago and enjoyed it immensely.
Many of these “auctions” are a joke as the sellers (still in denial) are in most cases simply setting absurdly high reserves for minimum bids
The real auctions will probably not begin until fall 2007
We initially signed a 6 month lease because we are trying to move out of Las Vegas and hoped to only need a 6 month lease. We paid 1900 for a nice house with pool and spa. I guess they had tried to rent it for 2100 for about 4 months and finally droped it to 1900. As soon as our 6 month lease was up the upt the rent to 2100. I did want to leave, but I could not bring myself to move AGAIN! Signed another 6 month lease that ends next month and now they want to up it another 200 to 2300. I wrote a letter that doubled as a 30 day notice saying that due to the excessive rent increase we are out.
The guy paid 560,000 for the house a year and a half ago. Now people in this neighborhood are asking $475,000 and still can’t sell.
Guy is in trouble, may even be facing bk.
To answer aNYCdj’s question, we have owned 3 different houses the past 10 years. One in the LA area and two here in Vegas. I have to admit I miss the sense of ownership, of fixing the place up however we want and of course of not dealing with a landlord.
I agree there is no logical reason to buy right now rather than rent. I am just hoping that 12 months from now the time will be right.
So has he replied to your letter yet Su Meri? It would be interesting to know how he handles the situation. Just to see how naive or aware he is to reality.
I’m watching people wake up to reality around this by various degrees and it’s very interesting.
Sent it on Thu. If he won’t go back down to original amount (1900) we are out. By now we feel taken advantage of
You might be taken advantage of if he is in trouble, you end up staying (because he lowers the rent) and you get a notice from the bank that you have to be out in a few days.
Yeah, you may be better off with Ben’s suggestion and go the property management route. Move out of there and let this specuvestor deal with a vacancy in this market. And let him know you are using a property management outfit.
Thanks Su Meri…………but why not wait 2 years and maybe save 20%….or more
I mean maybe $100,000 doesn’t mean much to you but it sure does to a lot of others.
How about just buying a house you think is reasonably priced and you like and can afford, and ignoring this modern concept of home as profit center. In two years you might save 10% more. In 3 years you might save another 10%. Or you might find a fire sale right now and get a great deal. Or you might buy a house in 4 years after prices start to rise again… or they may keep going down for 10 years. Without a working crystal ball, it’s all guesswork. Speculators worry about buying low and selling high. Homeowners should worry about living in a neighborhood that suits them and in a home that they like and can afford.
“How about just buying a house you think is reasonably priced and you like and can afford…”
You’re on the wrong blog, troll. This blog is a gathering place for sensible people, not FB’s like yourself. People here realize what a horrendous waste of money it would be, to buy right now. You’ll have no luck trying to press this crowd into buying.
BanteringBear - Actually, the writer didn’t say they were planning on buying now. They said 1 year from now. The reply was that they should wait 2 years and save more money. My point is that we really can’t know if home values will be at bottom 1 year from now, or 2 years, or 10. Do you know exactly what day the market will bottom in every city? If you do, could you please apply your skill to the stock market and let me know the results. My belief is that at some point people who want to swim have to jump into the water. You can plan for the best, but the motto “next year will always be better” is not a way to live. It sounds as if the original writer is following ntrends and making plans. That’s smart. In a year, they may decide that it’s really a good time to buy, or maybe not, but there is no way to know now that 2 years will be better than 1. That’s not trolling or pushing houses, it’s just common sense.
“That’s not trolling or pushing houses, it’s just common sense.”
Pardon me Diane, but if I do recall correctly, you timed the market brilliantly in Northern, CA, buying at the absolute pinnacle. Then, you loudly proclaimed how prices were not declining in your neighborhood. Frankly, you have not shown much common sense as the facts speak otherwise. You have been jabbering incessantly about the positives of buying into this market. Well, I’ve got news for you. This is absolutely positively the WORST time in history to buy a home, period. The risk by far outweighs the reward. Markets which didn’t even experience appreciation are at risk since, with a chokehold on lending, selling becomes exceedingly difficult, subsequently driving down prices. You may not be an industry shill, but you sure sound like one. Your purchase decision speaks volumes about your market savvy. When it’s buy low, sell high, the last person to listen to is the one who bought high.
BanteringBear - Actually, I said that prices are not declining YET in my county. That is based on accounts in regional and local newspapers as quoted by the owner of this blog. I don’t know what you want me to assume - the numbers are the numbers. I can’t make up numbers to prove that prices are collapsing when they don’t exist. Ask me again in a year if prices have changed. There will be new data by then, and I expect it to show a decline. I expect prices to decline and have been surprised that they haven’t yet. I purchased with the expectation that I would probably lose about 20% short term, but would break even or come out slightly ahead long term (over the 15-20 years I plan on living here). Prices simply didn’t peak here at the same time they did in other areas. They started to rise later and peaked later. Is that terribly hard to understand? As for being “market savvy”… I don’t pretend to be. I own a home for various reasons, none of which include financing my retirement. This isn’t about the money to me. I would own even if I were guaranteed that I would lose money over renting in the long run. I’m not trying to buy low and sell high. I bought a home that suits me in an area that I love. I bought a home that I can afford. The last time I bought was another of those “worst time in history to buy” times. I paid 9.25% interest for about 5 years, but I never missed a payment. I loved owning. Housing values had crashed and nobody expected them to ever go up again. I got lucky and made a profit when I sold. I don’t expect that to happen again. Is it really that hard for you to understand that sometimes people make decisions that aren’t based on the bottom line? Sometimes there are other factors besides money?
Troll alert.
Every time these trolls come with these stupid NAR sales pitches, I throw up in my mouth.
Not to worry … at the end its all about the numbers.
You forget that many took their money out of the stock market. Purchased even bigger homes and are using their home ATM and future retirement fund. Paul Volcker spoke at lenght about the real down side of such action. They expect their non-income producing asset as their main investment portfolio.
I dont belive in “cant be predicted” that nonsese. There are plenty of studies that call for 50% in my area. I ran the same numbers and get same results.
I agree with you, SVGUY. People predict all the time; it’s called “Financial Planning.”
svguy - What studies? I’m serious. Do you have a link? I’m interested. The last time we had an increase in prices like now was after WWII. Then, the prices didn’t go down again. I think we can all agree that conditions are different now and that the prices will not stabilize at the recently increased values. But how can you know exactly what will happen as a result of something that has never happened before? Even if your area goes down 50%, does that mean that everyplace will do that? What about areas where prices didn’t go up much? Will they see 50% drops, too?
in the bay area prices dropped in 1981 by 15% and then as much as 40% in 1991. Lots of studies have been listed on Bens Blog.
You can seach on Wiki for latest additions.
http://en.wikipedia.org/wiki/Real_estate_bubble
You can real Robert Shillings book Irational Exhuberance for more details.
As for 1945 it should be obvious when millions of GI returned got an eduction from GI bill and the US rebuilt the world. that was a different economic events.
There is also the FDIC study made in 2005 which gives out more deals to all metros…there is lots out there.
Search for the following
FDIC warns of housing bubble:-
NEW YORK | June 20, 2005 8:22:17 PM IST
The Federal Deposit Insurance Corp. is warning the U.S. housing market is in danger of a serious disruption because some markets are ultra-pricey.
Diana -
Looking at your area.. I would say eyeballing it (LOL) around 250K would be your entry poing in your area…2002-04 looks little frothy and 2005-06 are crazy appreciation. As you can see its going down… just like the NASD did in Q1 of 2000. Follow the intersection and normal appreciation since 2000-02 if you feel more comfortable.
http://www.zillow.com/Charts.htm?chartDuration=10years&zpid=61332465
svguy - I’m not in Elk Grove. I’m in a rural area of Nevada County, near the Placer County line. Houses haven’t sold in our neck of the woods in the $200,000’s for quite a while. I suspect that areas like Elk Grove are going to see a lot more depreciation than other areas of Northern California - because they saw greater appreication.
Diana -
Many well paid people are in the same boat. Well paid but cant afford.
When prices are this high, it’s not about finding the right house or finding a payment to fit your budget, it’s about the amount of debt you sign your life away for. 300k, 400k, 500k etc, that is a mountain of debt for your average middle class family regardless of interest rates. They will be house poor for the rest of their working lives unless incomes miraculously double or more. Many have said it here before that it is much better to buy a reasonably priced home with a higher interest rate then to take on a huge mortgage with lower rates. You can always refi the loan but you can not renegotiate the price you agreed to pay. To buy now just because you think you would feel better owning a home is a huge mistake.
Diane, you obviously haven’t checked out Vegas have you? I rent a 1200 sf house for $1050 a month…zillows for $270k. Girlfriend is looking at 1700 sf for $1100 a month…zillows doesn’t know it exists yet.
Foreclosures are skyrocketing and housing just keeps being built.
This town has no idustry except construction and selling each other houses.
Casinos pay anywhere from $20k to 80k per year except for top management.
Diane? Why don’t YOU buy a house in Vegas?
I have a $50k saved and more accessible in a 401k and I’m not going to buy yet.
You are absolutely right. Unfortunately, that has not been the case in a long time. If it were, you wouldn’t have all these suprime lenders going out of business, increased foreclosures, and a huge glut of homes for sale nationwide. America seems to have lost sight of what is important. Their greed is what has been driving this market not the need to buy a house one can afford, enjoy and make it into a home. I hope that day returns soon. I don’t consider myself to be very market savvy. However, common sense will tell you there’s a problem. That’s why you read this blog.
Yeah, it’s a SMALL plant, but 25% are laid off…….HardiPlank
http://www.thedailylight.com/articles/2007/02/08/dailylight/news/02-02-08-hardie.txt
Sounds like workers are paying the price, for a spat between James Hardie and the city code enforcement. I think the city is over-reaching. Hardiboard is so much nicer than vinyl. (I see vinyl everywhere here in the south. Ugh.)
I had LP up north, you know, the kind that has stuff growing out of it…..they must have replaced that crap on a million homes. I went to Hardi and loved it.
BTW, I agree about vinyl in the south….looks like sh*t
How do you buy at an auction? Do you have to have
a specific amount of the purchase? I’m waiting till
probably 09 to buy but watching and trying to figure
out how to get a good deal.
Prescott, AZ?
A friend of mine is putting her house here in Springfield MO on the market March 1st and moving back to AZ. They were here a few years for family reaons. She is moving to Prescott (a different place in AZ than she lived before). Does anyone have any insights on the market there that I can share with her?
Thanks.
Friend of my wifes wants to move out of Phoenix but can’t sell their house. Had it for sale with a realtor time expired and never got their keys back and had to change all the locks. Now its for sale by owner. Same thing with the house 3 doors down from my rental, for sale by owner now after not being able to sell through a realtor. House is empty as well. I think its about not bringing money to the closing , maybe money the owners don’t have?
“Had it for sale with a realtor time expired and never got their keys back and had to change all the locks. Now its for sale by owner.”
Not all of the costs of dealing with realtywhores gets full disclosure up front.
Prescott is a cool area. Literally. It has very mild temperatures compared to the valley and is a beautiful place to live. It has an old style “back to the future” town square and ‘wiskey row’, a line of old bars from the wild west days. It used to be the capital of Az.
If she is from there, then she already knows the area. Land in Northern Arizona has gone up 5x++ in the past 3 years. In Pine Az where ive looked, 3 years ago 1 acre was about $50 - 75K. Now people are asking as much as $500K. It is just absurd.
If the lot has a pine tree on it, forget it. Beautiful yes, and everyone else thinks so too. It would be great to be moving to Prescott. If you like little towns, it is a great one. However, like every other sage piece of advice listed here. I would rent. The only reason to look at buying is to see how much money you ’saved’ when you buy in 2009.
Jasper
su meri,
I am also a renter in LV (89117). We’re in the seventh month of a one-year lease @ $1,500/mo. The house isn’t very nice, but we have animals and he didn’t mind.
This morning he stopped by early and asked if we’d be home for an appraiser he has coming. He’s going for a re-fi and said right now he’s $600 in the hole monthly. I don’t know if he meant on our rental alone (he owns about four or five houses.)
He asked that we not tell the appraiser we are renters.
He also asked if we were looking to buy and that now is a good time. I said no, that we were looking to rent for the indefinite future. He said he was happy to hear that. The thing is, I didn’t mean his house. (As I said, it’s not that nice, it’s overpriced and mainly, my mother can’t deal with the stairs anymore.)
After he left, I realized he got the wrong impression. To guard against losing my deposit ($1,500 rent + $1,200 pets + $400 cleaning deposit = $3,100), I think I should tell him ASAP that we’re leaving so he can rent or sell the joint. There are so many rentals out there and the landlords suddenly don’t seem to mind animals.
You’re doing the right thing.
I’m getting that creepy feeling about my deposit.
booklover
seems a home listed in that zip is listed for 350 should go down to 200 or so.
Thats one big bubble.. looks like a tumor….
Check out the graph on price for zip…
http://www.zillow.com/Charts.htm?chartDuration=10years&zpid=7108697
“I’m getting that creepy feeling about my deposit.”
Yeah I know what you mean. We’re renting in AZ. Check your state laws - in AZ you can sue for the amount not returned + 2X that amount. And there’s small claims court to avoid paying a lawyer. Maybe put a lien on the property for when it gets foreclosed?
“He asked that we not tell the appraiser we are renters.”
It sounds fishy, doesn’t it? Do you know what he meant by that?
My landlord didn’t say. I assume that he is giving the bank the impression that he is living in the house to meet the mortgage requirements; he lived there before we rented it.
YOU CANNOT BREAK A LEASE without possibly losing your deposit….A LEASE WORKS BOTH WAYS.
You can try and get the landlord to use the pet deposit as the last months rent if he is selling…….because a landlord cannot legally deduct minor or average wear and tear when selling a house.Or when moving back in…. Only if it becomes another rental…
Listen to me carefully, that $3100 rent pet deposit cleaning is YOUR MONEY………When a lanlord is broke, its better to not pay the last months rent and figure he wont have the money or time to sue you.
Just figure you depsoits have ALREADY BEEN SPENT and act accordingly, dont give the landlord any ammuntion in court.
Oh no, we fully intend to honor the lease and stay until the end of July; we have no intention of breaking it. It’s just that with good warning maybe he’ll be able to sell or rent it. If that happens we wouldn’t mind leaving early. I would make exactly that arrangement - he would deduct the last two months out of my deposit. (I’d take the $100 the third month before.)
I had the same thought - the deposit’s already spent and not exactly waiting there for us whenever we we end up going.
I check foreclosure.com to see if any homes on our block are listed (the people next door are in bankruptcy; the place behind us was foreclosed on) just in case our rental turns up there.
I’d hate to hear “you’ve got three days to move.”
Prescott, AZ. is just like any other location in Arizona, with Phoenix metro at the top of the heap….destinations for mediocre last chancers, transient grifters, desperadoes and coupon clipping budget-obsessed losers that can’t make it anywhere else.
I resent that just cause you clip coupons don’t mean your a looser.
Maybe u are just a cheap sob…
Shifting Housing Market Snubs Bad Credit
http://tinyurl.com/2rxwsf
“Although consumers with low credit scores will find it harder to get mortgages, they will still have some options, said Phil Cyr, owner of Equity Lenders, a small mortgage company in Berlin, Conn.
“There’s still a saturation of lenders still out there lending in the subprime market,” he said.”
We are not there yet.
This has changed in the last 2 weeks, good luck trying to get a subprime mortgage now.
Does anyone happen to know the website to the Phoenix auction company or a link to the list of houses for sale? This may be an opportunity to get a bargain. Also, how does this work? Do they set a reserve price and is it public? I wouldn’t want to get into a situation where I am committed to a seller, but they have no commitment to sell because it is 60% of what they paid.
I doubt it. I’ve read about auctions elsewhere. The people running these auctions seem to be operating on the assumption that the excitement of the auction will inspire people to bid high for homes. They are not actually trying to unload homes at any price. Most of the seller’s have the right of refusal. This is like an undisclosed reserve price. If the price isn’t right, then they simply don’t agree to the sale. Maybe this auction is different, but the quotes from the people running the auction aren’t promising.
Funny Thing happened on the way to an Australian RE auction.
A good read…dont be fooled in thinking it isnt happening in the states with unconfirmed blind bidding. Happening everyday. Fake apprasials are just the symptom of the bigger picture. I saw this first hand.
ELEANOR HALL: The nation’s auctioneers are being hammered this lunchtime following comments by a Melbourne magistrate about dummy bidding at auctions. Magistrate Colin Mcleod referred to the practice as “evil and fraudulent” when he ruled on a defamation case between a buyer and a real estate agent.
Dummy bidding happens when agents and sellers install fake bidders in the crowd to push up the price of a property. One commentator says the practice is so widespread it has become Australia’s great, hidden, consumer scandal.
CALLER: I’ve dummy bidden for many people many times and it’s often said that the vendor can make one bid, but I can tell you now that the vendors through the auctioneer itself make many, many bids. It’s a joke, but the unsuspecting people don’t realise what’s happening.
http://www.abc.net.au/worldtoday/stories/s323652.htm
In the year since dummy bidding at auctions was banned in NSW, only one agent has been prosecuted and no member of the public has been detected pushing up the price of a home with fake bids.
Industry figures agree the laws have largely stamped out the practice among agents. But requiring prospective buyers to register before bidding and limiting sellers to a single “vendor bid” has been less successful at preventing the mates or relatives of the vendors bidding the price up as a favour.
In Victoria, where similar laws have operated since February, a Melbourne man, Adam Post, was fined $750 yesterday and put on a good behaviour bond for making seven fake bids at a friend’s auction. He had not told his friend or the agent what he was planning.
In Wollongong, agent Frank Conti was banned from the industry for five years in April after accepting fake bids at auction, but there have been no prosecutions of vendors, friends, relatives or paid dummy bidders.
Lisa Bradley, buyer’s agent with FindersKeepers.com.au, said although it was now too risky for agents to bring dummy bidders to auctions, she suspected informal arrangements might still operate
http://www.smh.com.au/articles/2004/09/01/1093939003500.html
Funny Thing happened on the way to an Australian RE auction.
A good read…dont be fooled in thinking it isnt happening in the states with unconfirmed blind bidding. Happening everyday. Fake apprasials are just the symptom of the bigger picture.
ELEANOR HALL: The nation’s auctioneers are being hammered this lunchtime following comments by a Melbourne magistrate about dummy bidding at auctions. Magistrate Colin Mcleod referred to the practice as “evil and fraudulent” when he ruled on a defamation case between a buyer and a real estate agent.
Dummy bidding happens when agents and sellers install fake bidders in the crowd to push up the price of a property. One commentator says the practice is so widespread it has become Australia’s great, hidden, consumer scandal.
CALLER: I’ve dummy bidden for many people many times and it’s often said that the vendor can make one bid, but I can tell you now that the vendors through the auctioneer itself make many, many bids. It’s a joke, but the unsuspecting people don’t realise what’s happening.
http://www.abc.net.au/worldtoday/stories/s323652.htm
In the year since dummy bidding at auctions was banned in NSW, only one agent has been prosecuted and no member of the public has been detected pushing up the price of a home with fake bids.
Industry figures agree the laws have largely stamped out the practice among agents. But requiring prospective buyers to register before bidding and limiting sellers to a single “vendor bid” has been less successful at preventing the mates or relatives of the vendors bidding the price up as a favour.
In Victoria, where similar laws have operated since February, a Melbourne man, Adam Post, was fined $750 yesterday and put on a good behaviour bond for making seven fake bids at a friend’s auction. He had not told his friend or the agent what he was planning.
In Wollongong, agent Frank Conti was banned from the industry for five years in April after accepting fake bids at auction, but there have been no prosecutions of vendors, friends, relatives or paid dummy bidders.
Lisa Bradley, buyer’s agent with FindersKeepers.com.au, said although it was now too risky for agents to bring dummy bidders to auctions, she suspected informal arrangements might still operate
http://www.smh.com.au/articles/2004/09/01/1093939003500.html
Here’s a prediction for you: Arson becomes a massive national problem that receives an increasing amount of front page press in 2008.
We’re going to hear some truly horrific stories of fires soon. When I was a kid we would drive through Harlem on my up to Westchester from NYC. We would pass through block, after block, after block of “burnouts”. Think it can’t happen again?
Arson doesn’t help an underwater homeowner. You continue to pay mortgage while insurance co. putzes around settling. Then you must rebuild. Easier and less legally retarded to just return the keys and call it a day. Not to say some moroooooon somewhere won’t mistakenly do it anyway.
I told myself a year ago I would buy in a year. Now I am saying a year from now I will buy. Who knows I will see which way the wind is blowing 12 months from now, right now I feel we are at the tipping point here in Vegas.
Honestly I am hoping to move back to the Valencia/Santa Clarita area of CA. Anyone think they will pop like Vegas?
I was just reviewing a saved Yahoo real estate listing of homes for sale in Queen Creek back in June 2006. Some of these houses that were in the $400,000 range are now zillowed in the high $280s. Queen Creek prices have taken a big hit in the 30 days ending February 13, 2007. I have seen valuations drop $21,000 for a 30 day period on houses in the $280,000 to $400,000 range.
Sellers ” we are not going to sell at a loss” you may have no choice, you can hoot and holler all you want if their are no takers then what?
Sellers see the elephant in the room, they think nobody else see’s the elephant thus their houses sit and sit?
Robinson home:
On Market: 162 days
Type: SFR
Status: ACTIVE
MLS #: 2616160
ZipRealty Price Track:
Price Increased: 09/16/06 — $649,000 to $675,000
Price Reduced: 11/10/06 — $675,000 to $649,000
Price Reduced: 01/25/07 — $649,000 to $625,000
county recorded Sales Price: $576,222 (1/4/2006)
He didn’t have to move. A lying flipper got caught.