Post Local Market Observations Here!
What do you see in your housing market this weekend? Price reductions? “Despite the fact that apartments in the capital were subject to the biggest regional price increase in November last year, flat prices over the Greater London area have recently plunged. The price of a city apartment has fallen by 4.9 per cent since December and the cost of an Essex flat has crashed by eight per cent, according to a study by independent estate agents, Team Association.”
“Figures show that despite demand still outstripping housing supply, the housing stock for January has shown a 215 per cent increase, making it the best month for new listings since last September.”
Or banking developments? “The parent of Coast Bank of Florida will post a $17.3 million loss for 2006 as it tries to recover from a major loan crisis. Sarasota attorney Alan Tannenbaum, who represents dozens of Coast clients, said ‘it appears the bank is moving closer to reality as to what their exposure is,’ though he believes that exposure is probably higher.”
“The bank could lose money from borrowers who walk away from their loans, those who convert their construction loans to permanent loans, or those who want the bank to reduce the value of the loans, he said. Coast revealed in January that those 482 loans were in jeopardy after the home builder stopped construction.”
Condo conversions? “In a sluggish residential market, Falcone Group plans to attract the elite to the top floors of the premiere Philadelphia tower. ‘At the time they purchased the space, it was a good thing to do because there was a glut of office space in the market, and probably that is what led them to consider that,’ said Bob Clements, executive VP of Grubb & Ellis.”
“‘If they opened a year and a half ago, the market was much more favorable to sellers,’ said said Kevin C. Gillen, a Wharton School economist who monitors the local housing market. ‘The condo inventory is very large vs. the number of people who want to buy, so buyers are being very selective right now.’”
Any speculation? “Regina’s housing market continued its torrid pace in February, setting a 20-year high for sales activity and a record high for sales volume, according to the Association of Regina Realtors.”
“‘There’s a real shortage of quality listings,’ said Gord Archibald, executive officer of the association. Archibald said realtors have told him of recent transactions where there were ’six or eight offers on a property in a day or two of coming on the market, selling $12,000 or $13,000 over list price.’”
“Archibald suggested that out-of-province investors may be snapping up bargains. ‘A lot of these investors are out-of-province people who are coming in and parking their money here … because they can buy an investment property here at a pretty reasonable price.’”
“But there’s no doubt that buyers from Alberta are having an impact on the housing market in Regina, he added. ‘I’m hearing almost daily from (association) members who are working with somebody from Alberta,’ Archibald said.”
Reports of overbuilding? ” Even in a slowing housing market, homes continue to be in the works, under construction and for sale in Gilbert. Homebuilders, including Taylor Woodrow Homes Lennar, and Cachet Homes, are planning to bring about 3,600 houses to southeastern sections of the town.”
“Lennar, a Miami-based homebuilder, plans with a joint venture partner to construct 1,965 houses on property at Lindsay and Queen Creek roads. Adora Trails, will bring 1,871 units of single and multi-family housing to property on Riggs Road between Val Vista Drive and Higley Road, said Seth Keeler, project manager.”
“Taylor Woodrow Homes and Element Homes are bringing more than 800 houses to Shamrock Estates, near Higley and Chandler Heights roads. Taylor Woodrow just started selling a 114-lot collection at Stratland Estates, and a 78-lot collection is coming soon to Carrara Estates, Scott Holland said.”
“Gilbert is perceived as an infill community, which may be fueling popularity of new home projects in the area, said ASU’s Jay Butler. ‘For people who want a new home, this is not a community that lacks everything at the moment,’ Butler said.”
“In January, Gilbert was the third largest issuer of residential permits in Maricopa County behind Phoenix and unincorporated areas of the county, Butler said.”
“‘If they opened a year and a half ago, the market was much more favorable to sellers,’ said said Kevin C. Gillen, a Wharton School economist who monitors the local housing market. ‘The condo inventory is very large vs. the number of people who want to buy, so buyers are being very selective right now.’”
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translation: there was a bubble, it popped, and now speculators are stuck with unknown and growing losses
‘The condo inventory is very large vs. the number of people who want to buy, so buyers are being very selective right now.’”
People still don’t get it. In past housing recessions it was the condo market that tanked the most and the quickest, why? Because people can’t control HOA fees. HOA fees can always go up even if condo purchase costs go down, and desperate owners can turn to section 8 renting and in some areas may even turn into rent control. Anyone ever see what a section 8 complex looks like six months after taking effect? I want some control over my investment and that means control over who my neighbors are (ie. people who can afford the property, mow their yards, maintain the property, and in general are good neighbors).
Buying a SFH does not guarantee insulation from Section 8 problems. http://www.contracostatimes.com/mld/cctimes/news/16738997.htm?source=rss&channel=cctimes_news
Very sad. This is what happens to otherwise decent communities where folks just want to live modestly but nicely. That’s how slums come about. Except I think they’re kicking the wrong horse with Section 8. Whatever happened to mr.incomestream? He knew how to manage his Section 8 tenants. He wrote a very interesting post about it a while back. On the other hand, from what I’ve been reading about some towns in California, like Cudahy and Maywood, attempts by landlords to enforce good behavior on the part of their tenants are countered by bullets and protection rackets run by gangs.
I thought you couldn’t get Section 8 if you had a felony.
I don’t know much about section 8. Maybe they index it according to the neighborhood?
http://washingtondc.craigslist.org/nva/apa/286803316.html
“I don’t know much about section 8. Maybe they index it according to the neighborhood?”
Blackhawk, CA doesn’t have a Section-8 problem. According to retired general Barry McCaffrey, China doesn’t have an Al-Qaeda problem.
“Plunging” = 4%? “Crashing” = 8%? Shoot, I don’t even buy a blouse unless it’s marked down at least 15%, and to me, that’s just ‘On Sale’.
Pinellas County, Florida: Massive, swelling inventory; no substantial price reductions; “For Sale’ signs like mushrooms in a pasture; SFH’s under $200k still moving (sort of); condos collecting dust; beaches overbuilt to make San Diego blush.
Standoff: The shot heard ’round the world will soon break the silence.
Forbes 400 (#58) member David Murdock’s plan to build 10,000 new homes was smacked down this week. I am sure he will be back later this year to try again.
Progress on the Greg Norman 36 hole course and new 10,000 home community “McAllister Ranch” continues.
All the other mega developments 5k homes here, 3k homes there continue by all the national builders - mainly Lennar and KB.
WHO IS GOING TO BUY ALL THESE HOMES???
Soon 30 million illegal immigrants will be granted amnesty and receive grants from HUD. Meanwhile the 7 million educated law-abiding people who applied for legal residency and have been waiting for up to five years to come here legally can keep waiting.
break the law = smart
follow the law = stupid
That’s America.
don’t worry, it’s even worse in most in Europe … illegal immigrants get free housing and legal residents are priced out unless they have a huge parent piggy back or are talented liars.
sorry , ‘most of Europe’ and ‘piggy bank’ of course.
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Since most Americans are raised to “follow the law,” are they raised, or bred, to be stupid?
BTW, Arthur Schlesinger, Jr., an eminent historian, died this week. He was interviewed a week before he died. He used words — stupid amd stupidity — several times to describe Americans and their current leaders (he named Bush-Cheney, specifically). It is widely accepted that Americans have learned nothing from history. That is because they know very little of it and whatever they do know is a bunch of garbage, thanks to the propaganda machine.
It would be interesting how all his plays out.
Jas
Nicely done web site. Must have paid some good money for it.
http://mcallisterliving.com/
However, take a look at this map from the City of Bakersfield and do note the table in the lower right side of the map with the totals at the top of the table on the right. Warning, map is 5 MB in size so be patient. The significant item in the totals is the Total Lots and then Remaining Lots.
http://www.bakersfieldcity.us/cityservices/devsrv/development_maps/pdfs_maps/active_tent_tract.pdf
I think McAllister is T6229 and File Numbers within it, located half way down the map on the left side.
The following appeared in a mortgage firms ad this week in a local magazine:
“Mortgage fraud in Sedona? I had almost completed an article concerning mortgage fraud for this months’s issue when a potential client called. On the basis of our conversation, I rewrote this column.”
“The potential client wished to enter into a purchase transaction in which a friend of the buyer would receive funds from the proceeds of the sale. The parties in the transaction, including the title and real estate agents, determined that disclosure of this ‘cash back’ on the contract and the HUD made the transaction acceptable. I informed the potential client differently. Any receipt of funds from the proceeds of a real estate sales transaction to a buyer or third party constitutes mortgage fraud.”
I’m no lawyer, but my interpretation is that the cash back at closing is legal if all of the following apply:
- It is fully disclosed to all parties
- It is not used to purchase the house (i.e. used as down payment)
- You have an appraisal for the full amount (purchase price + cash back)
This from Reuters today quoting a lender on subprimes gone bad:
“Higher quality Alt-A mortgages are being affected by the subprime turmoil that has some buyers of his loans putting them back to him after just a single missed payment, he said. But that hasn’t changed his business much, he said.
“It appears that everyone is aggressively enforcing the terms of their contracts (that allow them to return loans), and you could argue too aggressively, he said. “But we just bought them back and then sold to someone else.”
This lender is saying that he has no problems with buying back these loans because they just sell them to someone else.
My question: Who is buying up these “bad” loans?
Probably Fannie Mae ie middle-class taxpayers.
Phoenix Arizona Trustee Sale Notices are at their highest since the Tech bubble burst in 2003.
Maricopa County, AZ, Notices of Trustee Sales are at their highest level since January 2003 (when the tech bubble was bursting).
33 months of inventory in Culpeper County, VA
Seems like a lot.
Newport Beach,Newport Coast,CDM : March 1 MLS iventory = 852 for sale. 2/07 Sales = 36
2 years inventory, prices down 10-20% YOY. Lets see Lansner and OC Register spin this
There’s an area around here, that California Landking Boswell has been angling to build 30,000 homes and I received an e-mail from them saying they got the preliminary ok and it got me thinking…
Visalia, with it’s perhaps 5,000 unsold houses this summer… And it’s full speed ahead, with the Yokohl Ranch?
http://www.yokohlranch.com/yokohl/
At this point in the game, (they haven’t destroyed the land yet, still pristine rolling hills, with oak trees) you just fold your hand (a pair of 3’s, with 4 other players still betting) and move on, don’t you?
It’s a no brainer……….Everybody wants to live in Regina!
(and they’re probably running out of land too!)
No kidding….I was in Regina a few years ago on business(perhaps the only company there), I believe it was in late April, 8 months of blackish snow still covering the ground. absolutely nothing of interest, made Edmonton look like a cultural magnet. Unbelievable that there would be any interest, much less a bubble there as well.
I’m originally from Jacksonville, Florida, and live in Regina now. I never thought I’d live in a town more boring than Jax. This is my first post btw . . . been lurking since last summer. Love the site Ben.
I was in Calgary on a tour of the Big Rock Brewery. The tour guide had a great joke about Saskatchewan. He said, “Saskatchewan’s two biggest exports are wheat and people”. My friends and I about died. There’s no doubt in my mind that this thing is global.
Oh, so agree: I’m in Saskatoon, which is the other Saskatchewan “city”, and yes, this isn’t a hotbed of culture, but even it’s better than Regina.
There’s no economy: the two major employers are the University (where I work) and the Potash Corp, and all the kids I teach leave to get jobs. The overall population of the province is a million people: think North Dakota. There is NO reason for prices to climb, exept for the spillover from the oil boom in Alberta — but they are climbing, nontheless. I’m just not tempted to buy, since I can rent an nice place for 500 a month, while I can’t be sure the couple of hundred thousand I’d sink into a place would do anything but evaporate when Alberta goes bust again.
To each his own…I was in Regina a few summers ago for a wedding and loved the city. It was July and the sun is out past 10 pm and weather is perfect. I love the prairies….dislike ocean and mountains. If you want expensive housing…ever heard of Fort McMurray? Boomtown for years there and housing cannot keep up with the demand.
My thought also - for those who don’t know, Regina is a small city in the middle of nothing but flatland prairies. Last month the temps dipped to -50 w/ wind chill. In the summer of ‘02, temps were below freezing in August. Their boom is the death rattle of the bubble.
Was in Regina last week to give a seminar. Flying in I really had to pay attention noticing any form of urban agglomeration. Taxi ride from the airport, which is in the “far” outskirt of the “metropolis” to downtown done in about 5-7 minutes. Saskatchewan accounts for about 49% of Canada’s arable land (an flat land) so there is probably no other place on this planet that has that much viable land available. If the bubble has reached Regina, it means everything is close to an ending.
OMG - Saskatchewan has to be the butt-hole of the country (and possible the world, lol). Even as a kid when we would drive through there in the summer I would be depressed and bored. Nothing to see at all.
I live in Victoria and absolutely can’t wait for this thing to blow up (median house price over $540k last I saw). Average household income here probably around $60k, so obviously EVERYBODY can afford a half mil on a house, cough. There’s no bubble here, though. We’re different, yawn.
http://put.elpasoco.com/NR/rdonlyres/3BE6A35A-85BE-441F-9D01-EB8DCED68F2F/0/ptstatistics.htm
Foreclosures continuing their accelerating pace here in Colorado Springs. Local NAR shills are going to have an increasingly difficult time explaining away this particular elephant in the living room.
I still don’t think there has been enough red-meat thrown out.
Local Observation:
(Bakersplat outlier.)
When my house burned to vapor seven years ago, I rented the teardown POS across the road while I rebuilt. (The owner had died in it. As had the previous owner.) Basically it was a tent with closets, (although I’d stayed in more comfortable tent-lodgings in Tanzania.) The people who eventually bought it not only did not tear it down, they moved six people and ten dogs into it for five years and proceeded to destroy what was left. After setting new domestic records for the all time Whitetrash Neighbors from Hell, they put it on the market for $289,000USD. (They’d bought for an absurdly overpriced 85K.) It sat for a year until the RE contract expired. Relisted at 169, it sat another six months without even a looker. A few weeks ago, a couple wanting a fixer who knew I’d “lived” there called asking me for information. Could I tell them anything about the place?
Hee hee hee.
Thanks to all you nice people on this blog, I was able to tell them the place was in pre-foreclosure, that the owners were on the hook for at least 125K, and that they should offer 85 for the place and wait for the sputtering outrage. Then when the owners called back to counter, to offer them 80.
The place just sold for 75.
Thanks all!
Good work ahansen. Way to go!
That’s an example of the “reverse bidding wars”. If we saw more of that on the part of buyers, the market would get pushed more quickly into the “healthy” zone.
Hopefully,once they get going with it, Americans will pursue this path with as much gusto as they did the “bid it up” phase.
That’s just a dream of mine. But wouldn’t it be awesome for buyers to really take the bull by the horns here?
from the HUD site for the area where I live (Concord):
“Please Note: Due to increasing property values over the last few years and lack of foreclosed property, there has been almost no Officer and Teacher Next Door home properties available. If no properties appear below than there is no homes available. ”
Hopefully, the increasing number of foreclosed properties will make it easier for Officers and Teachers to buy homes. That is, the ones who still have any credit left.
http://andy.springssearch.com/browse/IDX1_ViewRecord.asp
A tale of two sellers, from Colorado Springs’ prestigious Old North Side. The place asking $875K has been on the market, I believe, for well over 400 days. The original asking price was $969K. The house listed right above it for $920K, just dropped their price by $50,000 (came on the market in the late Fall 2006 for $970K). Sounds like at least one seller is starting to see the light, though a 6% decrease is trifling). Most of the 21 listings in this price range (4 bedroom, 2 bath minimum, $275,000 - $1,000,000) have been languishing, with minor price drops, for months. Most of them, IMHO, are still way overpriced, considering the care & maintenance costs of these older homes and the huge downside risks in the local RE market.
I would like to comment about the two daily newspapers in Santa Barbara County, Ca.
In south S.B county the Santa Barbara News-Press is the main paper, and they have not said word one about the subprime blowout, dropping property values (off 15-20% year over year) and the explosion in Notice of Defaults (300% increase year over year). The News-Press is heavily dependent on real estate advertisements for income, and it is obvious that they are kowtowing to the NAR and CAR by suppressing bad real estate news.
In north S.B county the Santa Maria Times is the main paper, and they’re even worst than the News-Press. Not one word about the fact that in north county for every 1.2 closed escrows there is one house that goes into the foreclosure process. Not one word about the fact that home construction, upon which the north county economy has grown dependent, has come to a grinding halt.
I’ve said it before and I’ll say it again, if it wasn’t for this blog site and the internet I would not know what the true picture is concerning the real estate market and the economy in general.
Newspapers like the News-Press and Santa Maria Times have lost any credibility and relevance they might have once enjoyed.
I would like to hear from other people about how their local newspapers are handling the real estate market issue.
Despite the enormous amount of advertising revenue that the L.A. Times derives from the REIC, they have done a reasonable job of covering the housing bubble. In fact, I first found this blog by following a link in an LA Times story a couple of years ago.
If I lived where you do, I would subscribe to national newspapers. There are only three IMHO: The NYTimes, the LATimes, and the WSJ. Note that I explicitly left USA Today off that list because their reporting is so shallow. In any case, you need to read a few websites in addition to newspapers in order to see the whole picture.
SMlandlord, IMO, the LA Times has been irregular, but I have to admit that I too was led to this blog by something that made me uneasy in a story about subprime lending in that paper, so I guess it’s been an OK coverage if you are a very restless reader and read the story to the end (which most people don’t do). They haven’t covered the housing situation very well, but they have looked at the subprime situation. They have a big article today in the business section.
Would the Washington Post not qualify as a national newspaper?
It would if anyone outside of the beltway actually read it
To me, it’s the local newspaper of our nation’s capitol and the liberal counterpart to the Washington Times. YMMV, especially if you like to follow beltway politics. To be fair, the Post does have good international coverage - but they’re not what I would call a national newspaper.
It’s actually quite good, and it’s too bad that people outside the Beltway don’t read it… It’s funny that people in DC area know more about what your senators are up to than you do. Heh.
The style section is something else, though… I guess it’s a necessary outlet for the cultural sterility of DC. You notice the NYT doesn’t really feel the need to print weekly joke contests.
Well, what have you done about your primary newspapers conducting economic yellow journalism? You sound like you’re in command of sufficient facts. So, have you written letters to the editor? There are ALWAYS alternative newspapers of much smaller distribution or subscription … so, have you contacted them as well? How about calling or emailing some of those reporters for the major NAR-shilling newspapers? What do those reporters have to say for themselves when you challenge them on their misstatement of facts and omission of same?
Our newspapers will never get better if we continue to ignore them or otherwise just shrug off their clear biases. They CAN be shamed into accurately reporting the news, regardless of who’s buying the ads.
I have been banned by my local newspaper, the Santa Barbara News-Press. To make a long story short I called them on the fact that they covered up a fraud that had been attempted on a government contract ($500,000 apeice electric “buses” that our MTD bus service wanted to buy). Being against such environmentally correct projects such as electric buses and bike lanes to nowhere has gotten me blackballed by the “correct thinking” management of the newspaper.
Clearview, The papers are unreliable everywhere. Some are just worse than others. In WA., the Seattle Times takes the cake for being an industry shill, period. No real local RE news there.
They built a ton of condos last year and plans for more this and next. So the Times got busy. Outside of the RE section, they began writing article after article about the virtues of condo living. The propaganda infected the whole darn paper: Front page national news, front page local news, lead article in the “Northwest Living” Sunday supplemant, and then, the final straw, front page BUSINESS section.
They’ve done such a great snow job on people here concerning downtown condos that , beginning last Sunday, they finally had to start issuing disclaimers below new condo ads that say , in affect: “watch your back, you may lose money and when/if you do, don’t come crying to us about it.” (see my post below for exact wording).
That paper has been one giant RE ad for the past year.
The St. Louis Post-Dispatch has been a shill for the RE industry all through the housing glory days. Last year they finally started to come clean. They actually had a decent editorial about subprime last week-
http://www.stltoday.com/stltoday/news/stories.nsf/editorialcommentary/story/86A2A19B87F813C48625728C0000CEC9?OpenDocument&highlight=2%2C%22default-o-rama%22
With all of the problems in the real estate industry, there are at least 3 additional problems that have not yet been fully recognized by the market. They are peak oil, the rapid increases in the price of gas which will soon exceed $3 or $4 per gallon and water shortages in the dessert areas.
Is anyone considering how much values will decline when gas is $6 or more per gallon in 2 years and millions of people can no longer afford to pay $100 per week to drive over 50 miles to work in addition to the huge increases in the cost to heat and cool their big homes? The values of homes too far from employment centers and/or too expensive to heat and cool will fall off the cliff with no demand for these units. When will this happen? The experts say 5 years or less. Phoenix and other dessert areas are doomed and the inadequate water supply which was ignored when these homes were permitted and built will be the final nail in the coffin. I would not be surprised to see entire subdivisions abandoned because of these problems. Woe to the owners or lenders of these homes when this happens.
Man, I’d love to live in the dessert areas. I can just imagine the caramel streams, mud pie trees and pudding bushes.
LOL!
keep dreaming about peak oil because that’s what it is. there is more oil politically locked away in the USA to keep us going for hundreds of years at current rates
colorado rockies, eastern gulf of mexico, anwr that enviromentalists swear is empty but will fight tooth and nail against drilling, eastern continental shelf and probably a few other places i forgot that people won’t drill because they like the pretty view
Keep dreaming yourself. We will never run out of oil … it will just grow so expensive to extract from remaining areas and forms, that it will fall into niche uses (lubricants, plastics, medicines, fuel for legacy vehicles, etc.).
Peak oil is actually here. World production of oil (note: “world” — hence, hardly subject to your bashing of NIMBYs and environmentalists, however much they deserve it here in the USA) has peaked. American oil production peaked long ago. We’ll still be able to pump and scoop out the oil, oil sands, and oil shales … just at increasing costs. And THAT was the issue here. The exoburbs that have so hellishly expanded across America cannot survive such price increases for oil. Trying to “save ourselves” with pervasive public transit will also not work, since public transit in America is always a very expensive proposition, and even if the costs are moderated (basically, by killing off the lawyers, environmentalists, capitalist contractors, unionists, and politicians involved) it’s still economically impossible to serve all the exoburbs.
America’s yuppie sprawl is coming to a very final end. I welcome it. The yuppies have effectively destroyed the American Republic with their financial elitism and they’ll be lucky if we normal folk don’t just shoot them for it.
except for NYC which defies belief, a lot of businesses are moving to the exburbs. i was west of philly at our location out in the boonies and there are drug companies, newspaper printing plants, office parks, you name it. Google is moving out to some remote places. so many people moved out to the sububs it now makes sense to locate your business outside a city.
and they were talking about peak oil back when Time was scaring everyone with it’s The Next Ice Age is Coming story.
$60 a barrel oil is expensive now, but 10 years from now when energy is an even smaller part of our GDP no one will care since the economy will adapt.
Cities belong to the Industrial Age, not the fututre. Filled with corrupt politicians and hostile minorities, they will all go the way of Cleveland, Buffalo, Pittsburgh et al.
BitterT: The exoburbs that have so hellishly expanded across America cannot survive such price increases for oil.
I’ll have to disagree here. I think we’ll just drive smaller cars. Like they do in Europe. And drive shorter distances for our weekend excursions.
You should check out the oil drum blog. It will open your eyes.
And the oil that’s left is the hard to get variety, much of which requires freshwater being pumped into the ground in amazing quantity, to coax the oil upwards. Which will we treasure more?
Water or Oil?
EROEI, (energy returned on energy invested) is the mason dixon line. You must get a better than 1:1 return, or it’s curtains for any oil enterprise. In the boom days of early Texas and California oil, ratios of 30 to 1 or more, were common. Today, the rates of return are all less than 2, many near the breakeven point.
a: And the oil that’s left is the hard to get variety, much of which requires freshwater being pumped into the ground in amazing quantity, to coax the oil upwards. Which will we treasure more?
What’s wrong with using seawater?
Seawater is great, if you’d like to render the local freshwater useless. A no go there.
You should look at a graph of oil production over time. It’s perfectly linear, no dropoff whatsoever. Sure, there may be such a thing as peak oil, but it’s definitely not here today.
Nor tomorrow, nor in the forseeable future…..
I am currently at an RV Park on the east side of Las Vegas, just off of Boulder Hwy. I just received a letter from mgmt informing me that all residents must be vacated by 30 April, 07 because they are going to turn the park into……. Condominiums! Yep, still have some optimism floating around here in Vegas, condo crash notwithstanding.
Doesn’t impact me in the least since I was going to head up towards Yosemite around that timeframe and now it just sets the date for me. I find it interesting nonetheless.
Tough neighborhood. Beware gangbangers.
I have been enjoying your posts Auger-Inn and you seem to be on a cross country adventure of some type. I will be on the Eastern Sierra on 4/28 for the opening of trout season. I really love that place (Mammoth Lakes during the late spring timeperiod. Good luck and keep us posted.
Ooooh, please give details of good fishing spots! I’m heading up to Carson City on the 11th and then no serious plans other than finding a spot to enjoy the parks (yosemite, sequoia, etc) with my family for a week or so (we are on a sojourn around the country in our motor home, in our 3rd year). I’m not sure if I will be in that area around opening day but would love to record the info in the event a future visit during fishing season. Thanks in advance!!!
Auger,
Are you RV’ing full-time? Have a house or? Nice, if you can be that flexible. Are you home-schooling, too?
Sounds interesting & fun, except for the “kids in an RV for a long period of time” part. After one week of that, we’re ready to head home!
See you at Grumpy’s for a cold one or Robertos.Green Banks Crowley trout big and fat !
“I was going to head up towards Yosemite”
I was just up at Yosemite last weekend. No wonder Ansel Adams took such great pictures, exploring the Yosemite Valley is nothing less than a religious experience. Have fun up there!
More bad news for downtown LA loft conversions:
ACLU Challenges LAPD’s skid row cleanup.
Bring on the Blight, Matey!
Dutch housing market: as mentioned yesterday, prices are still rising; latest official figure is +7% for Jan.07 compared to Jan.06. Price increase last month was 1.2% (14% annualized) and the general impression is that pricegrowth has accelerated over the last months.
On the other side, while inventory is officially lower than a year ago many sellers keep complaining that their homes are not selling. Some people in my area who have their home on the market for a year or so lowered asking price by 20-25%, but still no takers. And I keep seeing more incentives like 10K euro cashback or free new kitchen with the sale of existing homes; that’s very unusual over here. So probably the increased median price mostly reflects a shift to more expensive properties (for people who still have money - that is the relatively rich).
Did an appraisal in Greeley, CO this week. 47 od 82 sales in the neighborhood I was in had been marketed in MLS as lender owned/reo. Average and median prices down approximately 15% in this neighborhood. The big bagholders appear to be CFC and Wells.
regarding the UK market (not really a local observation): we have a new ‘home improvement’ series from the UK on Dutch television. The first three episodes that I have seen were - surprise, surprise - all a serious warning for flippers. Quite unlike previous BBC series about getting rich quick in RE (that probably stimulated many people to change their career and become a RE mogul), this one clearly shows the dangers of this kind of speculation. Flippers end up with a loss because they didn’t do their homework, or an expensive property doesn’t sell because the flippers simply want too much (like 300K euro gain for a few months of working on a home - although I have to say they did a nice job). I guess the series was recorded in the second half of last year and the sentiment clearly has changed from a year ago. Even the Dutch flipper programmes now show that there are not always loads of buyers who want to buy every POS for big bucks (hint: sellers should hire the best realtor they can find!) - but they still encourage people to believe that you will always make money when you sell your home, no doubt about that!
A Dutch flipper? It sounds like some kind of jelly-filled pancake.
I thought it sounded like a wooden sandal.
Glad to hear things are possibly beginning to change course in the Netherlands.
Frankly, NHZ, your “RE’s still heading up in Holland” reports were beginning to get a bit irritating. lol.
sorry if it’s irritating, it’s just meant as a reminder that this is probably going to take much longer than most on this blog are thinking. But if the EU bubble is really bursting I will be happy to report every detail
“sorry if it’s irritating, it’s just meant as a reminder that this is probably going to take much longer than most on this blog are thinking.”
Take much longer where? The Netherlands, or the U.S.?
I’m sure Seattle PD didn’t mean that *your posts* were irritating. Just that the permanently high plateau was irritating.
I enjoy your posts very much, as you’re an important data point for all of us to evaluate what’s going on globally.
Although I was onto the credit bubble aspect back in 2003, and knew the U.K. was experiencing something similar, I was very surprised to find how widespread the credit bubble had been.
Thanks for being a great part of Ben’s blog, nhz!
Sorry if someone already posted this one about foreclosures in Santa Cruz county:
http://www.santacruzsentinel.com/archive/2007/March/03/local/stories/06local.htm
But I thought it was different here…?
But there’s no doubt that buyers from Alberta are having an impact on the housing market in Regina
God help us all. Even Californians haven’t been buying in North Dakota, which is just a hundred or so miles south of Regina.
Actually I think divine justice is at work here - a lot of Alberta oil money is going to go down the tubes buying RE in Saskatchewan (which had a bigger population in the 1920’s than today, BTW). There are towns in Sask where you can buy a house for $25K or less.
“There are towns in Sask where you can buy a house for $25K or less.”
And believe me - that’s more than they’re worth, lol. You couldn’t PAY me enough to live in f’ing Saskatchewan. I’m in BC, and I can’t wait for everybody to stop smoking the BC bud and wake up here. Victoria prices are ridiculous!
Tampa Bay area. Last spring two houses next door to one another went on the market priced at about $400,000. One sold at $409, the other didn’t sell. It’s back on the markrt at $369 which is still way too high, IMO, as similar houses are now barely going for $300.
Kay, are you anywhere near the Apollo Beach area?
Sierra foothills near Sacramento: Inventory basically flat (though at a historically high level), mostly old listings sitting since the fall, asking peak or near-peak prices. A few sellers have “cracked” and made significant reductions in their asking prices, but still they sit.
Anecdotally, we know of some properties being held back until spring, waiting to give selling the “best shot”. We also know that some local realtors were part-timing as flippers, and some are still carrying their 2006 “projects”. My best guess would be that individual sellers are still hoping to for a Bay-area seller to rescue them.
My wife and I sold our house in Southern California at the peak; now we watch and wait.
“My best guess would be that individual sellers are still hoping to for a Bay-area seller to rescue them.” You mean Bay Area buyer, right?
It’s not just the individual sellers, but also the big HBs, from Sacramento to Reno, who are hoping for Bay Area buyers to rescue them. This worked for quite a while, but as a Bay Area resident and potential buyer, I’m now thinking:
OK, prices are now reasonable by Bay Area standards, BUT so much building was done in the past several years that I don’t see where all the occupants will come from. Even if I want to move there myself, I sure don’t want to move to a ghost neighborhood, or one in which most of the occupants are foreclosed squatters.
So, like you, my wife and I will watch and wait some more…we don’t need to buy, or sell what we have.
Well, it’s finally happened. After 10 years of touting, “RE always goes up, get in now to get your equity”, check out this disclaimer that’s suddenly appearing below the ads for new condo developments in downtown Seattle:
******”Obtain the Property Report required by Federal Law and read it before signing anything. No Federal Agency has judged the merits or value, if any, of this property.”*****
My favorite part is “the value, *if any*, of this property”.
Sounds like somebody (in this case, Countrywide, John L. Scott and Vulcan Properties) are making sure their a$$es are covered for when the condo market tanks.
This is absolutely a first for the area. Are they doing this elsewhere?
From Long beach, CA :
Seeing some declines in sold prices of 3/2’s 1500-1800sq ft on full lots(.11-.13 acres). One SHF at 5026 woodruff ave in lakewood 90713 in a decent neighborhood sold for 497,717 on 2/15/27, almost $100,000 off sold price of $590,000 on 1/31/06. More data on some decent price drops in LB area will be posted later today.
Again for Long beach, this time for zip 90807, Bixby Nolls district which is a halfway decent tiny middle class pocket in the other wise generally dismal north Long Beach section.
3443 rose ave 3/2 1,714 sq ft on .13 acre lot 1920,s built sfh sold on 1/17/07 for around $500,000.
3501 rose ave 3/2 1,310 sq ft on full lot sold for 454,863 on 2/14/07, which was 65,137 reduction from $520,000 sale price on 8/23/04. 1940’s sfh. 346/sq ft.
Another yr 1941 SHF on 3700 linden, a 3/2 1600 on 8400 lot
sold on 2/2/17 for $450,000.
Just a block away some idiot still has his home listed for $659,000, same area, same size, same age.
These sold prices in a halfway-decent part of LB just screwed over a ton of buyers of 2/1 700-900 sq ft shoeboxes paying $400,000-$450,000 in the ragged hood areas of LB, who are about to get the s*it kicked out of them as comps get lowered all over LB.
BTW Bixby district 90807 shows on jan data quick average median of $505,000. This area of long beach has long been a solid tiny middle class pocket but is showing some sizable price reductions in sfh’s. Explanation: this tiny decent enclave abuts the crime-ridden gang infested 90805 and the 90806 zips. The upcoming shutdown of the nearby boeing C-17 plant may be another factor.
Also, someone purchased a foreclosure at 2134 pasadena ave in LB 90806(bad area) for REO price of $438.218. 3/2 1514 sq ft . Bad deal. In that s*ithole part of LB they could have waited a few more months and the bank would have dropped it another $100,000. There are still too many RE idiots jumping the gun too early thinking that the bottom has been already been reached.
thanks for the posts peter…I have family that lives in Long Beach and I know those areas well
I just now walked by 5026 Woodruff, lakewood (I live a coupla blocks away) and the house looks to be in good shape.
But the house next door, at 5020 Woodruff, looks like hell; This may be a big factor in the price reduction.
And then again, maybe it isn’t.
Thank you both for your replies. I have been closely tracking sales/sold data on zillow for bixby nolls,lakewood, east and northeast Long beach zips 90808, 90815,90804 and even cypress 90630. All are normally decent stable clean middle class sections of LB, and i have family there as well. I am seeing a few good sales price drops for SFH’s, of $50,000 to almost $100,000, from peak 2004-2005 sold prices. These are 3/2’s and higher on 5000+lots in good solid stable areas.
The 3501 rose ave price of $454,863 in stable Bixby area , a 3/2 on large full lot, is a real eye opener.
There is no place in LA within easy driving distance to westside/dwtn/OC jobs market where stand-alone homes of this type in a decent neighborhood would have fetched for less than $600,000 or $700,000 less than a year ago. Maybe the market in LA is at last seeing a downward price spiral, though the amt of data picked from zillow is sporadic and far between.
“The 3501 rose ave price of $454,863 in stable Bixby area , a 3/2 on large full lot, is a real eye opener.”
No wonder! it is a foreclosure! went by to check it out and it has a no trespassing sign on the front window. Property not trashed out,lawn looks kept up with two large shade trees in front. Looks as if the recent buyer is doing a bit of touch-up rehab. Neighborhood still kept up. There is a posted realty sign which says Boardwalk properties with phone no.
May be that someone brought the distressed property either at auction or after it became a bank REO with intent to quick-fix it and resell. No matter. That sold price even if it was a REO purchase still registers as a sale at a firesale price of $454,863, -12.5% off 8-23-04 price of $520,000. This should reset comps for all similar properties all over Long Beach down to $450,000, and the foreclosure torrent has just barely begun.
Maybe by late spring/summer 07 we may see more frequent LB foreclosure sales prices resetting comps down to under $400,000 for 3/2’s,1500,6000+ lots in decent areas of LB such as Bixby 90807. This would be roughly a 30/35% reduction from peak 2005-06 prices.
Sacramento area:
Good news, my coworker — who has been trying to sell his place since Nov. ‘05 — tells me the market has bottomed out and will start moving up again later this year. Still plenty of denial. For those who know Sacramento, he lives in Loomis and is trying to sell his 4/3.5 for $585K. I’m not positive, but I believe his initial listing was at/near $700K, so he’s already wished his way down $100K+.
Another coworker tells me that she knows four owners who have been hit by ARM adjustments and are now trying for short sales, so I’d say the ‘1 in 5′ short sale statistic is either accurate or possibly increasing. She says all of them are about her age, so these are couples in their early thirties who are going to be seriously screwed one way or the other. I think she said all of them also have kids; let’s hope the children learn from their parents’ mistakes.
I’m watching the signs sprout on the way to work (Antelope to Roseville). Saw one place go from ‘for sale’ to ‘for rent’ last fall, never got rented, and it kicked back to ‘for sale’ yesterday. Spring sales season is on!
Additionally, my roommate and I had a lot of fun hunting for a new rental the last few weeks. Being good renters w/ decent income from stable jobs made for a lot of returned calls, offers of decreased deposit requirements, and one memorable FB who said he’d give us a $50 Target giftcard if we took immediate possession. Because, yanno, that $50 would totally offset the difference of a month’s rent, or wait, no it wouldn’t.
We ended up going for a 2/2 townhouse about five minutes from work in Roseville. Rent’s only about $100 more a month than our share of a 3/2 SFH in Antelope (lost a roommate, so we’re losing a bedroom), the area is much nicer and it’s only about 200 sq ft smaller. I feel slightly more secure renting from a corporation than some of the FBs we met. Got a reduced deposit and a $500 credit toward first month’s rent. Didn’t everyone but the people on this board insist rents were going to just skyrocket to catch up with home prices? Uh huh, yeah, sure.
Hey Ren, I used to be homeowner in Antelope (sold in summer 2004), what is your rental fees for the new rental? Just curious what they are nowadays.
$1420/month (just under 1500 sq ft, 2 car garage)
Oops, that’s the current place in Antelope. New place is Roseville is $1150. Take into account the $500 credit, reduced deposit and cheaper water/sewer/trash and it’s not bad at all.
How could rent go up when supply has suddenly mushroomed?
And, right, rents are going to go up during a recession. /sarcasm
All those FB’s, mtgbrkrs, Realtors, and MiniTrumps are going to be living out of their cars … Not even an FS wants to rent to an unemployed shlub with no assets. Duh.
Much to my disbelief, northern Phila. suburb inventory is holding very steady, and I’ve noticed many pendings in the last week. I have no idea at what price, but the askings on these homes have maybe fallen 5%. There hasn’t yet been a flood of inventory, and I’ve even noticed new communities with a high number of visitors, but I hear, low sales. I don’t know where the money is coming from.
Here’s an observation. I took my son out for a ride on the Norton today in OC and as we rolled out of Silverado Canyon and through El Toro I noticed a lot of improvements in the retail commercial areas. I was wondering if the money sunk into this retail commercial space is counting on the wealth effect of the now deflating housing market to match sales traffic to what it has been in the last 5 years. These areas may be in for a disappointing cash flow future.
Maybe counting on the new Great Park development for their future…
I thought El Toro was called Lake Forest now … or are we talking about different towns?
Same town…many locals still call it El Toro as that was the original name of the community…residents voted in 1991 to rename it Lake Forest.
“residents voted in 1991 to rename it Lake Forest”
When I lived in Mission Viejo, we called it “Fake Forrest”.
Is the meeting of the 5 and the 405 now called “The Lake Forrest ‘Y’”?
Heh heh…still calling it the “El Toro Y”…some things never change…
Ya got me on this one. Yep, it’s Lake Forest. I think OCKurt has something there. The Great Park is probably the gold mine this town spruced up for.
I’m seeing foreclosures in NoVA. If the big wave of resets won’t hit us until this summer, what will it look like a year from now?
As for the current foreclosures, I’ve Zillowed them, and for the most part these are houses that were bought in early (i.e. jan - march) 2004.
Unfortuntely, due to personal issues, I won’t be able to put my house on the market until a few more weeks. I just hope I can beat the foreclosures.
I just saw an add on the local TV Real Estate show in Jax Florida, which shows local listings 24/7 on TV, for loans @ .25 percent!
They offered a million dollar loan with monthly payments of $262 a month!
This is madness. Looks like some mortgage companies still have the pedal to the metal to make those commissions.
I just finished my Sumter County, South Carolina Home Sale for January 2007 blog. Better late than never but it was an unavoidable delay. My source of data was the on-line county records and they fell asleep when it came to updating their records. Took me over 20 days of e-mailing to get the site updated.
http://ourcarolina.com/modules/wordpress/?p=47
In short, Sumter County saw a rebound in single family home sales when compared to January 2006. There was some bad news though! Average selling prices where down about 12%.
Now is the time to invest in your future
By Mike Marmion,
Branch Manager, McMillin Realty (San Diego)
We all have a friend or relative who made a fortune on a stock. How did they do it? Simple — they bought low and sold high. Well, I can’t give you your next hot stock tip, but I can give you some sound real estate advice. If you are thinking about investing in San Diego real estate, now is a great time to do it — so do it.
The difference between investing in stock and California real estate is that the stock can lose value over time. While that stock may have significantly decreased, that is not the case with San Diego real estate. San Diego real estate always goes up! When were homes most expensive between the 60’s and today? (A. In 2005.) Real estate inflates in value over time, along with continuing through cyclical periods.
Currently, the market in San Diego has undergone a correction. Historically it always does and by the way, I never took an economics course in college, which explains why this statement makes no sense whatever. The market runs up for a period of three to seven years, and then it goes through a correction period where prices decrease but remember, San Diego prices always go up over the long run. Again, the decreases in prices typically has a cyclical nature to it. The opposite is true when the prices rise. Typically the down period is three to seven years. We are now approaching the two-year mark from when prices started to decrease. That three-year mark is coming up quick and right now we are seeing prices stabilize as the inventory decreases in many areas of the San Diego market but just wait until the subprime bomb hits inventories this spring — you ain’t seen nothing yet!. It would appear that we are at or approaching a low point. If the conditions remain the same, it would make sense that the demand will start to outpace the supply no subprime, no demand, fool!. When that happens, basic economic principles tell us that prices will go up. MY HEAD IS SPINNING!
Most economists and studies state that we should see prices start appreciating toward the end of the year or at least sometime next year. The question is do you wait until then to be certain? The answer is wait until home prices fall back into line with rents and incomes to be certain. I would urge you to act now. Presently you have cooperateve sellers who will give you price and terms and pay closing costs, an attractive supply, builders who will offer concessions, close to historically low interest rates and much lower prices than 1-2 years ago sounds like desperation is starting to take a toll on the supply side, but we ain’t there yet. Remember, the prices never drop all the way back to the last decades price — they just correct. Also remember that the prices always correct to 100-120 times rents. Right now it looks like prices have corrected 15-20 percent in the down cycle. Tis a mere flesh wound thus far. He who takes advantage of this will see their investment rise back to the 2005 all time high and then some (in other words go up 15-20 percent). Are you willing to personally guarantee that statement?. He who waits may lose a big percentage of the gain from the investment. But what if I only want a home to live in, not an investment?. Is there a risk in investing? If you are stupid enough to listen to shills like this guy, there is a lot of stupidity risk. Of course, there always is. Timing is extremely important. So you are saying buyers should wait until 2011 or so, when homes pencil out again as investments? We hear about the Midwest and East Coast getting pounded by snow, Florida getting hit by the next hurricane and other national headlines throughout the country. It’s very hard to imagine sunny, warm San Diego ever looking unattractive to the majority of people. Then why do we have net outmigration since 2000? Couple this with the fact that in the state, we are the lowest priced major city Cough! and we have almost used up all the land for development Cough! Hack!.
Invest in San Diego — invest in your future. Don’t have any regrets. Call an agent today and take advantage of the timing of the cycle. Catch yourself a falling knife today!
good one GS…
“Tis a mere flesh wound thus far.”
That’s funny.
Hilarious!
That made me think about an old SNL skit, in which a comic tries to make use of subliminal suggestion by rapidly stating his subliminals in between innocous statements made at a normal speed and inflection.
Like this:
“Now is the time to invest in your future (buynow buynow buynow). If the conditions remain the same, it would make sense that the demand will start to outpace the supply(signhere signhere signhere). When that happens, basic economic principles tell us that prices will go up (buynow buynow!).
The subliminal in the the SNL skit was (hotsex hotsex) as I recall.
my eyes glazed over reading that hype.
i saw some sign spinners announcing COMP USA is going outta business. being curious i went to check out the 20% off on entire store. found out all comp usa stores in southern cali are Closing Shop.
Expect to see a lot more consolidation in retail. Who needs a CompUSA when there is a Fry’s within driving distance? Whole Foods is buying Wild Oats. Drugstores are battling it out and buying each other up. We give gifts to our UPS and Fedex guys (who we know by name) at Christmas.
Retail/commercial property, especially storefronts, will be the next shoe to drop in investment property.
“Retail/commercial property, especially storefronts, will be the next shoe to drop in investment property.”
Looks like CVS is swallowing the Sav-on drugstores. Home depot still expanding into new areas, even putting stores into marginal LA inner city districts.
BTW i noticed consumer volume rather slow at my local Long Beach Walmart and Home depot this past weekend. This retail market slowdown may be just a localized thing for LB, which is one area of LA where Home prices are starting to tank. It may be time of year slow period or 10-11 am just too early for most consumers, but my ground-level/ man-on-the-street observation/antenna senses a retail slowdown. Anyone else notice this occurring in their local areas?
Wow. Good to know.
In today’s San Francisco Chronicle, there were two big articles on Foreclosures on Page 1 of Business. My favorite quote…”…the last time the housing industry suffered a downturn, in the early to mid-1990’s.” Hello, FB’s, that was just 10 years ago. Not 20. Not 30. Not never.
No one in the Bay Area seems to remember this. I do, because I bought in 1996. Market was dead. I wonder when recent buyers (2004 - 2006) will start to get the wake-up call.
Don’t know about the foreclosures, but I’ve lived on the Peninsula/Silicon Valley since the mid ’50s (not quite a native). It is virtually impossible for a first time buyer who has no accumulated wealth, subprime loan or not. Note that the wealth may have been accumulated by the buyer’s Mom & Dad, and you’ll get the picture. There are a few super-successful young couples who can buy their first SFH on their own, but they are very few.
15-20 years ago, it was still possible for relatively young professionals and managers to buy here with 10-20% down and 1.5 incomes. In the more pleasant neighborhoods, these buyers have stayed put; thus, inventories are low. In my Peninsula neighborhood, which has clean air and great views, but is not at all pretentious (1500-2000 sq.ft.), only two homes were listed about 6 weeks ago; both sold within a week. Two more just got listed this weekend; the open houses were very well-attended, as usual. Asking prices are about $1M.
OK, the prices are bubblicious, but do the residents care? Some of us have retired or downshifted early, and we now have time to enjoy our homes and surroundings, so why would we want to sell? Our mortgage payments are lower than the rent we would have to pay for our own homes. And would we care if our homes did depreciate? I wouldn’t, since I never expected much appreciation. And lower prices would make it easier for my kids to buy.
Went to two open houses two weeks ago. One in Bellevue and the other in Issaquah Washington. The Bellevue one already dropped their asking price by 25K from 624K to 599K, and the Issaquah one dropped it by 14K from 599K to 585K. This is the Pacific Northwest that is supposed to be still in high demand due to job growth in Microsoft and Boeing.
Pretty scary when the housing markets depend disproportionately on two employers for their fortunes, especially when one of them, Boeing, experiences huge downswings from time to time. It makes no sense to me that Seattle has a fairly weak job market, yet its houses are currently priced almost as high as those in Southern California. I’m not sure I would be willing to take on a $200k mortgage if paying it depended on maintaining employment in Seattle. A $600k house there is just insane.
Now is the winter of our discontent
Made glorious summer by this warm Santa Ana wind;
And all the loans that lour’d upon our houses
In the deep bosom of the ocean buried.
I know this is off subject but has anyone seen the recent AARP ads that quote children about taking care of medicate and social security? Here is the AARP, the biggest screwer of your grandkids and helpers to the gimme my over 62 year old benefit, acting like they are championing these poor children. These kids and their parents will have to pay the bill via a much lower living standard. It reminds me of the tobacco companies chanpioning the “Tabacco Research Institute” for cancer research.
Disgusting.
Philadelphia: Developer is asking $15,000,000 for a 7,000 sq. ft. penthouse condo! That’s about $2,000/sq. ft. Isn’t that what they go for in NYC???
http://www.philly.com/mld/philly/news/16827658.htm
Anyone know what’s going on in Loudoun County VA? I’ve been working so much that I didn’t even know the market had dropped so much the other day!!! Anyway, just wondering about the Cascades/Lowes Island area. Any foreclosures there?
From Clark Howard’s Message Board. Note: The following is a compilation of several of his posts because it took a few questions to get the facts out of the guy. Here’s his story about a house in some godforsaken town in MI.
“I have been trying to sell a house in a small resort town in Northern Michigan, but the town is not helping. Where should I advertise? I live in Atlanta and the people in the small town can’t afford even a small, below appraisal house. I want to sell it without a realtor, but where should I start?
Appraisal was done in Oct. of 2005. Market has gotten worse in that area. I did list it with an agent for 6 months. Lots of lookers and good reviews, but the market is flooded with same priced homes with more to offer. We listed on Craigs List, Owners.com and did flyers to all agents in a 60 mile radius. That was about 15 months ago. I have just became discouraged and needed a little incentive.
Am I a fool to continue on my own, and is the market going to help me out anytime soon? To a vacationer, a perfect market. Lots of house for the money and a perfect place to escape to snowmobile, fish and camp, but I am not ready to give my house away, just because everyone else in town has folded. The real estate agents say the market is bad and flooded. I tried to list with the best agent in town, but he only added it to his pile of houses on the market. He said it shows well and he had a lot of lookers, but it is just a bad market.”
From LA’s Westside.
Boy, slowly but surely, this is beginning to look different. A LOT more houses in the market, even comparing with last week. Some that have gone unsold are now being advertised for lease.
Asking prices are still out there. For example, a 1924 3/1 in a nice street (small house, good lot) that sold for 399K in 1998 has an asking price of 1.225M (with upgrades, but nothing earth shattering, still only one bathroom and the third bedroom is more like a little anteroom to the master bedroom). Another 2/1 about 1,000 sq.ft that also went for 399K in 1998 is listed at 845K. People just can’t let go of that 100% appreciation, can they? I can’t wait for the day when it becomes common knowledge that you are not owed 100% appreciation just for having bought and held a house for a few years. Until then, I’ll just visit open houses and expect to be fed…
399K? How can a middle-class-type afford that? Isn’t that something like 4k a month? That is the low price? Really?
Roidy
399K was the price in 1998. Now they’re asking much more. Go figure, ACH, this is the way things are in bubbleland.
I attended several condo open houses today in Chicago’s Loop (downtown.) People are definitely out looking but most things have been sitting for quite some time. The most striking were the resales in 8 W Monroe (known as the Metropolis.) This is a former office building that was converted about a year ago. Half the building is now renters. It is basically all investor owned.
I saw three units that a “real estate trust” from New York had bought pre-construction. According to the realtor, they thought they were “cheap” (because they were used to NY standards/prices) and that they could flip them easily for big profit. Wrong. I would estimate, given the horrible layouts and cheap upgrades, they are at least $100,000 overpriced- minimum. The agent said they would entertain “any reasonable offer” as they’ve been holding them nearly a year now.
Home owner fees on the biggest two bedroom unit they are selling were $653 a month. That is money just being burned.
I had to stop myself from laughing (at least until I had exited the building.)
Also, foreclosures are on the rise in the downtown condo market here. For anyone familiar with the buildings, there are two 2 bedroom foreclosures in the Sterling Building (down the street from Trump Tower Chicago- sporting similar views.) One of them, on the 42nd floor, sold in 2005 for $650,000. It is being sold by the bank for $375,000 (and still no one is biting on it.)
Prices are declining in many parts of the Chicago market now. Look out below!
Metropolis? Ha! I saw it last summer visiting relatives. I just have to laugh.
So, is that ridiculous Trump tower still being built? Even in the “hot” market last year, the Trump tower seemed like an albatross to me.
We went to look at some model homes in Ardenwood this weekend. The townhomes range from 600k for 2/2.5/2CG/1300sqft to 680k for 3/3.5//2CG/1600sqft. The SFHs range from 1.13M for 4/4/3CG/2743sqft to 1.3M for 4/4/3CG/3009sqft.
The builder is John Laing Homes. Their website is http://www.johnlainghomes.com where you can get all the details.
So I asked the sales lady there whether they have incentives. She gave me this look and said no, except that if you go with their “preferred” lender you get $7500 towards closing costs. In fact these prices are $20k higher than the first release, which was last week.
WTF is going on? In new homes in San Ramon, for example, they are giving incentives galore, well into five figures worth and sometimes approaching six. Ardenwood maybe much closer to the Peninsula (being just across the Dumbarton bridge), but they’re treating it like it’s as special as Palo Alto. In fact, this sales lady was comparing these homes to condos being built in Palo Alto at the same price point and noting how much more you’re getting for your money in Ardenwood.
To be fair, these are very nice homes on the inside in terms of quality and fittings (as far as I could tell). Slab granite, upgraded appliances, porcelain tile flooring in baths, and nice fixtures. However, in general all these “upgrades” in my view add up to no more than $50k. The existing houses across the street are selling in the $800k range and these guys are asking 1.2 million?
The worst thing is that last week’s release was all sold (5 houses). They then proceeded to sell the 3 model homes (1 sold, 2 under contract as of today) and are selling another 5 next weekend at the prices quoted. The sales lady said they have 250 people on their “interest” list, which was formed before the pricing was determined. We went at 5pm yesterday, by which time all the brochures were gone and so were the coffee cups. Tons of Indians and Chinese folks looking, plus the token White and Black family. For those of you who know Fremont, in particular Ardenwood, this is a familiar scenario.
We lived in Ardenwood for four years. It is nothing but a sea of houses and some commercial concerns, built on former farmland. Can someone explain to me how a builder can be asking such elevated prices, getting them, and then proceeding to up them $20k every week? It is supposed to have the best elementary school in Fremont after the Mission San Jose schools (Forest Park), but these houses don’t even go to that school. They go to Ardenwood Elementary, which is pretty average for Fremont, from what I hear.
Not only that, but these houses are very close to Union City, and the gangs that come from there. When we lived in Ardenwood (on the “better side”, mind you) our car was broken into, allegedly by Union City gang members. The rich Indians and Chinese who will end up buying these new houses are going to be sitting ducks.
Can someone explain to me how this can be happening in Fremont, let alone the peninsula? I’ve heard anecdotally that SELLING prices are still rising in Mountain View, Palo Alto and Menlo Park, in multiple-offer situations with one to two-week listing periods. Do buyers in these places not know that there is a bubble?
Is there, in fact, a bubble in the peninsula and Fremont? We sold in 2003 thinking the price was too high and missed out on 2 years of gains, about 50%. It is extremely frustrating now to see asking prices still being accepted as if nothing was out of order. Sometimes I think there are enough dual-income families, highly-paid software engineers and executives to keep the “hot” areas priced high indefinitely.
And this whole school thing is insane. The best school districts are said to be Palo Alto, Cupertino and Mission San Jose (Fremont). Just because the rest are crappy, does that mean that all the rich people flock to these districts and keep the house prices sky-high there? These areas all doubled (or more) over the last five years but don’t look like losing any significant portion of that gain even as the outlying areas burn ..
I just wanted to encourage those of you in the area to visit these model homes and talk to the salespeople and see how entitled they appear to be.
One aspect I forgot to mention; the lot sizes are 4000+ square feet only. They’ve done a sneaky thing; instead of dividing the land between the houses evenly they give you the entire portion on one side of your house as your yard (there is no rear or front yard). This means your yard goes up to the wall of the next house. With the setup in some of the models of an outdoor dining scenario, this means your neighbour can look out of his upstairs window and literally look down onto your plate and/or spit onto it.
Furthermore, this complex comprises mostly townhomes and relatively few SFHs. I count 162 townhomes and 33 SFHs. The only recreational area is a tiny park which I estimate at about 30,000 sqft. In other words, the population density is extremely high and the builder must be making a killing. But they must have also purchased the land at a very high price which probably affects their margins so I don’t know how much they could conceivably reduce before the profit disappears. In any case, this is moot because, as I mentioned earlier, they are actually INCREASING their prices (by 20k in one week). I have no doubt they will continue to do so while the seemingly never-ending stream of GFs in Fremont continues to come along with their bucketfuls of money.
The farther they come, the harder they fall.
“Sometimes I think there are enough dual-income families, highly-paid software engineers and executives to keep the “hot” areas priced high indefinitely.” Amazing, isn’t it? Don’t forget accumulated wealth, especially extended-family wealth where Chinese and Indians are concerned. And Chinese are culturally predisposed to invest in real estate; if they’re recent immigrants, they’re also used to very high real estate prices.
I’m surprised about Fremont, but not so much about the Peninsula, where I live. The Peninsula’s supply of SFH has been flat for a long time, while demand has increased. There is a lot of open space, but more and more is being placed in the public domain to protect it from development. Some really wealthy people here contribute to organizations like the Peninsula Open Space Trust (POST), which buys land and then (usually) turns it over to the MidPeninsula Regional Open Space District (MROSD). Being a tree-hugger, I’m happy with this, but I must admit it makes housing less affordable.
Re the school thing, yes, good schools do boost demand and prices. My neighborhood’s elementary school drew a lot of residents (myself included) here, and it’s very much a community center. Other amenities here (San Mateo Highlands) include quiet, safety, natural beauty, and convenient location: SFO, the ocean, and the Bay are just 15 minutes away. Downtown SF and Palo Alto are 30 minutes away. The houses are pleasant enough, nothing special, but that’s not the point. I suspect most of us here aren’t terribly concerned about prices falling, since we plan to stay. Overbidding seems to have ceased, and asking prices have plateaued at ~$1M. But inventory has shrunk; there are 0-2 listings at any given time, and they sell very quickly. How long can this continue? I don’t know…
Forgot to mention, I bought my 4/2, 10k sf lot, in SM Highlands 21 years ago, for $230k. Great appreciation, right? Actually, the IRR is only ~7%/yr, but that’s OK; I figure it’s equivalent to living in a nice place rent-free.
Hate to say this, but in the Carlsbad (La Costa) area of North San Diego County, homes are starting to **fly off the shelf** just in the past week or two.
It looks like at least half of the listings suddenly sold (some listings were on & off the market for a year or more). Anyone seeing the same thing?
Hopefully, most of these will BOM-out of escrow due to the lending debacle, but it’s freaky…
I wonder how many FB’s using subprime are being rushed through the system before it collapses.
Lot’s of signs out today in Costa Mesa. Prices are still at wishing levels. For example, 155 22nd St. 92627. Sold in June of 2006 for 740k and listed now for 789k. 6% in 9 months. This is a strange little place insofar as it is a 2 bedroom, 2 bath, 2332 sq/ft house. Why so many sq/ft for 2 bedrooms? And why almost 800k? Who’s going to buy this with subprime nearing it’s demise.
Other areas nearby are starting to show weakness. Stanton, though not my first choice of areas, does have 3 bedroom, 2 bath SFR’s in the 400k range. I know, if you are reading this from flyover land that sounds insane, and it is. It is the insanity we either choose to wait out or walk away from here in CA.