“The Market Was Terrible And It Still Is”
The Orlando Sentinel reports from Florida. “The slumping residential real-estate market in the Orlando area is still searching for a bottom. The number of homes and condominiums sold by Orlando Regional Realtor Association members in February fell by nearly 39 percent from the same month a year ago to 1,386.”
“At the same time, listings by local Realtors grew again in February, to an all-time high of 22,055. That represented a more than 15-month supply at the recent sales pace, according to the group’s estimate.”
“Orlando Realtor association President Randy Martin said the fact that growth in the local inventory of homes listed for sale has slowed is encouraging. Only 789 listings were added in February.”
“But March, April and May are prime sales months, and some industry analysts have said they expect more frustrated sellers will enter the market, if they can get an agent to handle the listing. The local Realtors’ monthly numbers do not include for-sale-by-owner listings.”
“Annette Rodriguez recently bought a condominium unit in Kissimmee for $175,000, getting more space and a better deal than she thought she would when she began her search about three months ago.”
“‘It’s a good price. I was going for a 2-2 and got a 3-2 for that price,’ she said, snagging a third bedroom in addition to two bathrooms. Also, the sale price was $35,000 below the original asking price of $210,000, and the seller agreed to cover more than $5,000 in closing costs.”
“Realtors, trying to find bright spots in the ongoing slump, point to the unprecedented selection of homes and condos and the fact that sellers increasingly have to accept reasonable offers rather than hold out for unrealistic figures.”
“Agents are struggling to make a sale, at any price, and more are leaving the field every day, said Sergio Saenz, a Kissimmee broker-agent.”
“Local condo sales slipped 52 percent in February from a year earlier. Sales of duplexes, town homes and villas fell 42 percent.”
“Home sales in the broader Metro Orlando market, Osceola and Lake in addition to Orange and Seminole counties, fell roughly in line with the core market, down 37.2 percent from February 2006, to 1,725 properties.”
“Seminole County sales year-over-year were off 42.5 percent, while Osceola saw a 46 percent slide. Orange County held up best, with a 32.8 percent decrease, followed by Lake County with a 34.9 percent decline.”
“‘A couple of my Realtors are looking to find full-time jobs right now. They have to pay the bills,’ said Saenz. Saenz said many people hunting for homes can’t qualify for a loan because prices have outstripped income growth.”
“He said the word many Realtors use these days to describe the market is ‘frustrating.’”
The Bradenton Herald. “A Palmetto developer is offering to sell two undeveloped Manatee County subdivisions with a combined 380 homes. DL Homes is offering to sell Fox Crossing, a 96-unit, single-family subdivision near 27th Street East, for $3.6 million.”
“The developer is also hoping to sell Meadow Terrace and Meadow Terrace West, a combined 284 townhomes near U.S. 301 and Interstate 75, for $9.9 million.”
“‘Nothing’s typical right now because of the way the market conditions are,’ said Charlie Donohue, a consultant for DL Homes. ‘It was our intention to sell these once they were approved but the market was terrible and it still is.’”
“Edie Ousley, a spokeswoman for the Florida Home Builders Association, said it wasn’t surprising that DL Homes was trying to sell subdivisions that aren’t yet built. ‘It’s not unusual that this is happening,’ Ousley said. ‘It’s most likely a reflection of the market conditions that we’re experiencing in Florida.’”
“Donohue said DL Homes is in good financial condition and the attempt to pre-sell the Fox Crossing and Meadow Terrace subdivisions is no reflection on the company’s future business expectations.”
“‘Right now we have over 800 lots approved that are in the pipeline,’ Donohue said. ‘We did 78 homes last year.’”
The News Press. “Last year, Florida lawmakers could pass the largest school-construction budget increase in state history thanks to a hurricane-spawned construction boom. Those days have faded fast.” “Florida economists projected that the state’s economic slowdown will cost state government $956 million between now and the end of next year.”
“The dip stems mostly from plummeting sales-tax collections and documentary taxes on real estate sales, both tied to a down housing market.”
“‘It’s been over 30 years since we’ve had negative growth,’ said Amy Baker, with the Legislature’s Office of Economic and Demographic Research.”
The Post & Courier from South Carolina. “Homes sales in the Charleston region fell by almost 11 percent last month, while the inventory of residential listings climbed by 72 percent compared to February 2006, offering further evidence of a buyer’s market.”
“In all, the number of residential sales, including condominiums, dropped to 881 for February, according to the latest figures from the Charleston Trident Association of Realtors. Year to date, transaction volume is off 17 percent to 1,734 sales, the group said Monday.”
“Local agents have said the market is more balanced and healthier than it was in 2005, when homes that went on the block in desirable locations were getting snapped up within hours or even minutes of being listed.”
“‘It’s a great time for buyers to enter the market,’” said David Kent, president of the association. ‘Terms are more favorable for them than they were in the boom of 2005.’”
ROFLMAO at the 2004,2005,2006 buyers !! DOW is down in morning. Futures are lower cos of mortage news.
They are truely cooked.
I read somewhere that humans inhearantly have trouble understanding exponential functions (things doubleing on a regulat basis). When you have sales dropping and listings increasing you get a classic exponential function.
Yesterday, when the DOW was up, we were told that the DOW had shrugged off the subprime fiasco. Today, the reason given for the DOW being down is the subprime fiasco. Somebody is lying. I wonder who it is?
Life is tough like that ain’t it? We’re told to not always believe everything we hear or read, or to believe everything that we think as well. One thing that everyone can believe is when that fist comes smashing into your gut that “the pain” is a coming!
Fists of Fury anyone?
>>>“‘A couple of my Realtors are looking to find full-time jobs right now. They have to pay the bills,’ said Saenz.
I hear Wal-Mart is hiring.
Good suggestion Bad Andy, but will WalMart wages be enough to cover their Cadillac Escalade and HELOC payments?
:) 
“…but will WalMart wages be enough to cover their Cadillac Escalade and HELOC payments?”
No, but when they leave the keys on the table and the Escalade gets repoed, it will cover a studio rat trap and a 1988 Chevy Nova!
I’ll buy the Escalade in cash for half to a quarter of the new price.
i like the earlier NOVA’S, like about 1970
Realtwhores becoming JBRs (jealous bitter renters)?? Perish the thought! O, the humanity! I think many will fling themselves off their faux-French chateau roof-tops rather than submit to such an ignominious fate.
Realtwhores becoming (JBRs) jealous bitter renters?? Perish the thought! O, the humanity! I think many will fling themselves off their faux-French chateau roof-tops than submit to such an ignominious fate.
Realtwhores becoming (JBRs) jealous bitter renters?? Perish the thought! O, the humanity! I think many will fling themselves off their faux-French chateau roof-tops rather than submit to such an ignominious fate.
Ok, stuck in moderation purgatory again, I see…
Let’s try a slightly cleaned-up version this time:
Realtors becoming (JBRs) jealous bitter renters?? Perish the thought! O, the humanity! I think many will fling themselves off their faux-French chateau roof-tops rather than submit to such an ignominious fate.
Apparently the Realtor variant “Realtwh0re” automatically triggers the spam filters. Bummer.
Um, well this does not bode well for the world’s three largest truck and SUV builders; GM, Ford, and Chrysler.
Got 10% down?
Can everybody please report on their local WMT greeters? The ones at my local WMT have a terrible look of human desperation, with very long, sad faces; not greeting anybody, not smiling at all. I think these people are former Realtors (TM).
” I think these people are former Realtors ™. ”
Who probably had to repo err trade down from Escalade to 1988 Nova.
ROTFL
Would you like fries with that?
Realtors ™ commissions peaked at 0.9% of GNP. (Normal peak at 0.6%). On its way down to the normal bottom of 0.3% of GNP? Or lower? I think lower. Anyone else? But not much (0.2% of GNP would be really slow…)
Got popcorn?
Neil
Good stat regarding realtor percentage of GDP Neil.
In answer to your other question, if I have to eat popcorn I prefer Kettle Corn but I don’t have any at present
None at present? Stock up. This is a marathon event!
Got popcorn?
Neil
0.2% of GNP would be really slow…
Especially when GNP starts experiencing a downward motion of its own.
Thanks for that information.
One of my neighborhood told me, “I can’t believe how fast the market turned. I haven’t seen it this bad since Black Monday.”
I can see the worry in my working (non realtor) neighbor’s eyes at this point. They don’t find the drop in prices amusing any more, they are scared.
I don’t think it helps them any when I point out that the whole neighborhood has made their money in real estate, now what are they going to do for money?
Mish’s charts today all pointing south..looking pretty grim
http://globaleconomicanalysis.blogspot.com/
Mish is like a weather forecaster in the Shahara Desert who constantly predicts rain “in the next few days.” Given enough time, Mish and the forecaster will be right.
I have to agree. The chicken little, end-of-the-world, buy gold and ammo crowd has been around forever. In fairness, they are just as useless, and financially dangerous, as the buy-now-or-be-priced-out-forever crowd.
Hope for the Best, Prepare for the Worst. Good advice if you live in Fraudida.
Even a broken clock is exactly correct twice a day, with infinetely varying degrees of correctness twice a day, depending on how “correct” you want to be.
Got 10% down?
“Even a broken clock is exactly correct twice a day”: Not if it is digital.
although I see the “broken clock correct twice a day” point, I also have to defend Mish somewhat.
If one looks at true economic analysis, he does a pretty good job of discussing economic fundamentals. I have learned a TON on his board, from him and the people he spars with (such as Heliben)
His one true error is that he is a believer in Austrian economics, and refuses to understand that although Austrian economics is a better/healthier theory than many/most used these days, it can be subverted by govt intervention and by manias.
Thus, his predictions came way too early, but the prediction was based on sound economic data.
too bad for him and others (like Shiff etc) that the Fed had such loose policy and we had a major credit bubble with secondary mania prolonging the bubble far longer than any would imagine
His “erroneous” forecasts are no different than most of us on this blog who started coming here in 2005… we were years too early.
but time is showing us right, and I suspect time will show Mish right too.
(such as credit bubble destruction causing overall credit contraction… he predicted this years ago, and it is starting).
Indeed, time WILL show Mish to be right. Just like the Sahara weather forecaster.
But how many incorrect forecasts does it take before the person loses all credibility?
I don’t agree with all of the guy’s predictions (esp. regarding deflation scenarios), but couldn’t one say the exact same thing about Ben Jones?
As recently as a year ago, most MSM talking heads were summarily dismissing bubble-critics like him as doomster tinfoil-hat Chicken Littles. Not every bubblehead got the timing precisely right, but who does? Show me ANY prognosticator out there with a 100% perfect track record –bull or bear.
Personally, I’ll go with the hard-eyed realist who sees the warning signs screaming “danger ahead” and chooses to pay attention vs. the Pollyanna/Pangloss perma-bulls who like to drive through the rear-view mirror all the time –right off a cliff.
Get a job.
see employment goes up a wages go down……….weeeeeeeeeee
DO you REALLY WANT TO HIRE anyone connected with the real estate business?
ya Think… maybe they could be arrested for mortage fraud? Wouldn’t that look cute on TV, FBI agents raiding your company, and doing the perp walk, not of illegals but of real estate scam artists!….LOL
“DO you REALLY WANT TO HIRE anyone connected with the real estate business?”
Wal-mart does. We already covered this.
Walmart hires anyone with a pulse, but they don’t trust everyone with handling money and they have LOTS of cameras.
And I’d rather have well dressed FBI agents show up anytime compared to what will happen when the real estate types get into their next line of work. When they do drug raids, they break down the door and come in with automatic weapons, dressed in black with completely covered faces.
If I were rolling into that kind of RE infested environment, I’d suggest heavy armament, and especially earplugs and those grenades that make you temporarily deaf.
‘Sergio Saenz said many people hunting for homes can’t qualify for a loan because prices have outstripped income growth.”
Sorry Sergio, but home prices outstripped income about 2 years ago.
Funny thing, now that banks are making sure they can get repaid…
No amount of “Buy now or get priced out forever” could possibly save the market.
Got popcorn?
Neil
“Buy now or get priced out forever”
Neil, now it’s buy now and I’ll give you the Jag in the garage.
Century 21 agent Christian Frazier, whose Orlando office handled the condo sale for Rodriguez, said the huge number of properties on the market gives investors more incentive to get back into the game — but this time, it’s longer-term investors easing back into the existing-home market rather than short-term speculators.
“There’s room to negotiate, and they have so much leverage,” Frazier said of buyers. “I’m looking for a fixer-upper myself, to hold.”
“I’m looking for a fixer-upper myself, to hold.”
I am also looking for a few nice bags to hold.
Pay attention…This is why the median isn’t really a good measure in this market. The buyer was willing to spend the same amount — she merely upgraded to a larger place for the same price. The net affect on the median house price would be zero if everyone did the same — but the net wealth of sellers would be severe.
“This is why the median isn’t really a good measure in this market.”
Yes it is…NAR told me so. If you’ve ever looked at the Palm Beach Post’s blog about real estate you’ve seen the agents trying to use median to spark a revival. “Median is up 26% from last month. Prices are INCREASING as we speak.” Let’s forget the fact that the median is down 12% from last year.
Hey, who do you think that Maxi is? I think he is a flipper up to eyeballs in debt and scared to death of a market downturn.
“Hey, who do you think that Maxi is? ”
More like a real estate agent who’s tired of dumpster diving.
What would be good numbers to have? How do we really measure this market properly?
“What would be good numbers to have?”
Average listing price would be good numbers. They don’t exist as far as I know.
Anything else? I can get average prices easily (for my area that is).
Actually no - average listing price is a poor indicator, because it doesn’t take into account the delta between listing in selling price, which can vary widely. In my area it has gone from 100% in 2005 to about 91.5% today.
The ONLY true measure of prices is same-house comparisons - i.e. how much did a given house sell for relative to how much it sold for in the past.
Even that measure isn’t perfect, because it’s affected both by wear-and-tear (on the negative side) and on improvements/remodeling (on the plus side). Long term these probably about even out though.
Unfortunately I’ve never seen any such numbers. I think Shiller might have used these to some extent in his long-term (100+ years) analysis, but the analyis is very much not detailed.
The delta between list price and sales price is skewed in very urban areas. Condos make up a large percentage of sales and a large percentage of condos have the condo unit and the parking unit as separate items (some people don’t want a parking space, some people want multiple parking spaces). They have different PINs from the county and are taxed separately.
In such an instance, the listing will have the price of the condo and the listing description will say “parking additional - $30k” and it’s either optional to sell together or not. It’s very easy to rent out parking spaces so many sellers don’t mind if you take the condo but not the parking. If you buy the parking it’s handled in the same transaction - gets recorded and mortgaged as a pair.
So… the listing price doesn’t often include parking but the selling price usually does include parking.
I’m sure that in the land of the SFH this is less of an issue.
Well, I am not the only one reading/posting on that blog, huh?
Of all the blogs I frequent, the PB post definately has the most delusional people on it. The Sun Sentinal (Miami area) has a much more realistic crowd, as do almost all the other bubble papers I read/post on.
Do you think that it could be fear? In PB, if the predictions hold true, some people really paid 2X the true value (or higher in isolated cases) for their homes. I think that is just too much for some to contemplate. Thus the battling on that blog?
Just a theory.
Oh, and Max? I have no idea who he is, but must have some connection to RE. There is just no way he is impartial; the stats/ideas he throws around sound like they are right out of the NAR playbook.
“Oh, and Max? I have no idea who he is”
I don’t either, but he tries to use his wealth of “knowledge” to insult the housing bears.
Plus, she bought in Kissimmee, parts of which are absolutely atrocious. It’s got a lot of competitors, but in my opinion International Drive is the ugliest road in the state. The road is like hell paved over, lit with neon, populated with a swarm of unsynchronized stoplights, and dressed up with mini-golf courses, t-shirt shops, and fast-food outlets that repeat themselves ad nauseum.
I moved VERY briefly (2 months) to the Orlando area. I felt like I was caught in a rat’s maze of surreal roadways. Was very happy to return to the Tampa area, although I avoid the Pinellas rat’s maze like the plague. Ever driven to Clearwater from the east side of Tampa? One of the most frustrating experiences of my life. You can’t get there from here.
“Plus, she bought in Kissimmee”
Kissimmee may not be the nicest area, but we’re running out of land! Good thing she bought now or she would have been priced out of the market forever!
Close to the most God-awful place on earth and International doesn’t even make sense, stops starts, turns for no reason. But, she was dumb enough to buy now for a mere additional bedroom. You wouldn’t get me to buy for less than a bathroom.
That’s a great point Suzanne!
http://chicagobubbleblog.blogspot.com/
“Donohue said DL Homes is in good financial condition and the attempt to pre-sell the Fox Crossing and Meadow Terrace subdivisions is no reflection on the company’s future business expectations.”
I’m not sure, after all I’m just an observer, but didn’t the term “pre-sell” used to mean getting a flipper’s signature on a contract before commencing construction? I mean back in the day. So now pre-selling means pulling the plug on an entire subdivision hoping some GF developer comes along? My god, they’ve gotta be few and far between. But anyway, it’s nice not to have to listen to the constant growl of concrete trucks, rebar tractor trailers, drywall deliveries, and the attendant harley drag pipes every morning anymore. Plus the added benefit of not having to breathe diesel fumes all day. Yeah, it’s all done here at ground zero.
Yes, you can pretty much stick a fork in Florida at this point. Sooner or later, somehow this mess will have to be cleaned up. As I sit here typing, I can smell a wildfire from somewhere, the smoke is being wafted on the gentle spring breeze. I predict a development somewhere in the state will go tits up as a result of fire season. And then there’s hurricane season, we don’t know what that will bring, but tornadoes up in Lake County already did a number. Florida was never meant to have this sort of development.
“Sooner or later, somehow this mess will have to be cleaned up.”
Have you seen Punta Gorda pre and then post hurricane? Nothing but shiny new buildings and empty lots where s**tholes used to sit.
Well, then there’s hope for Florida after all. Although, I like the old crackerboxes and concrete block homes. Gimme one of those over the shiny new stuff any day.
Some developers in Florida have a longer perspective:
Barron Gift Collier: Mr. Collier was an avid fisherman and established the Izaak Walton Club at their Useppa Island resort. Named for the 17th Century author of The Compleat Angler, it became one of the most exclusive sporting clubs in the world. Collier next developed golf courses and improved a hunting club, the Rod and Gun Club, in Everglades City, Florida that also attracted wealthy tourists. Over the next decade, the Colliers went on to acquire more than a million acres (4000 km²) of land in southwest Florida, making them the largest private land owners in the state. He invested millions of dollars to transform and develop the wilderness, including drainage of the Everglades and construction of the Tamiami Trail. For his influence and investment in the state’s future, the Florida legislature named the newly-created Collier County, Florida, in his honor on May 8, 1923.
More than a million acres before 1929 and somehow survived it. On the other hand, no debt on land you’ve owned for 80 years.
Now you also know who to blame for the ever present mess on 41.
Isn’t there also a term called “pre-buying?”
Unfortunately, now you will have to put up with the razing cycle. The noise of illegals tearing down everything they built.
I liked how DL Homes says everything is good because they have 800 lots approved and in the pipeline. They then go on to say they did 78 units last year. So, they are holding AT LEAST 10 years worth of inventory?? That is way, way too much for any builder, especially one that does only 78 homes during a pretty decent selling year such as 2006. I wonder if any of the DL Homes folks have been through a down cycle before?? Wait a minute! Could the DL in DL Homes stand for David Liereah Homes?? How to Profit from the housing boom by purchasing 800 lots in Florida.
Is it just me, or does Horton seem to be the only HB in Florida that is willing to tell it like it is and do those things necessary to stay in good financial condition? Seems like every time I read a quote from them, it has sort of a cautious, bearish tone to it. Might be one of the few HBs you could trust.
“Might be one of the few HBs you could trust.”
Nawww…..Don’t be fooled. I wouldn’t use the word “trust” in the same sentence with “HB” just yet. I’ve been keeping an eagle eye on a DR Horton construction project in Dublin, CA over the last year and a half. They’re not all sweetness and light. I think they are more like the “good cop” in the “good cop, bad cop” scenario at this point in the game. Did you stop to think that maybe they *want* you to think they are being more cautious and bearish?
BayQT~
Hey QT! You must be referring to the lovely “Elan” condos at the BART station. Is it just me or has Horton slowed down construction pace significantly? I stopped by there about a year or so ago, and just laughed at the prices people were supposedly willing to pay for a condo overlooking 580 and a parking lot. Wonder how many of the original pre-sales will actually end up closing? I saw on the city website that Horton also has approval for a second phase but has not pulled permits. Guess sales at Elan aren’t moving as quickly as planned? Those units need a 50% haircut before I’d ever consider them to be fair.
I think that those ugly ass like structures will be middle class ghettos combined with Section 8 housing within 10 years. The same goes for those crap piles being built in Livermore North of 580.
Hey CA Guy! You bet! I’m referring to the “luxurious” Elan. LOL! They STILL haven’t changed their signage to reflect the true low end offering. Perhaps wishful thinking?? And get this….for the below market units (and probably for all the rest, too) they have to “approve” the lender or use their own DHI lending arm. The first time I saw some BS like that, I thought “the nerve of them telling me who I can use as my lender!!”
Their little lottery application period is supposed to be over in a couple of days, and then the approval period begins. (Can you tell I’ve been studying these guys??) And there is also the “owner occupied” requirement noted in the application. Guess what I’m gonna be doing when the project is finished and the “new owners” have supposedly moved in? I’m gonna take a drive past in the evening to see if I can see any signs of life (lights on in units, cars parked in Elan’s lot, etc). It’s gonna be VERY interesting.
Yeah, I agree…..50% haircut.
BayQT~
Used to be, when times got tough in Fla, you just ignored it and went to the beach, or the springs, or went fishing. But thanks to the developers, a lot of access is denied, waters have been fouled with fish going belly up and you have to share the parks with illegal immigrants, their bawling anchor babies and blasting polka music. I’m thinking of countering with a little Def Leppard.
Def Leppard? Too tame. How about a bit of Wagner, say, “Ride of the Valkyries?”
I hear ya, Slim. Anything will do, as long as I don’t have to listen to that crazy Mex accordian polka crap. That’s why it is important I do my part to assist in the assimilation effort and introduce the guest workers to the joys of classic rock. It’s the least I can do.
Wow. Sounds like Florida is becoming like Costa Mesa, CA.
– “You can lead a horse to water, but you can’t beat the stupid out of him.”
The longer the Economic imbalances in the mortgage finance market have been able to pile up, the bigger the impending unwinding of the Housing market. The Housing bust will be directly proportional to the excesses during the prior credit-driven Housing boom. We are looking at a spectacular market failure that will be recorded in the history books along with the 1929 stock market bubble and crash. A cascade of debt defaults will trigger more debt defaults in the debt saturated, US Bubble economy.
When I started following the bubble, I never really thought of the subprime and all the fraud. I just thought it would be a typical over exuberant, speculator-led bubble that would just reach its peak, dry up and then drop.
The fraud and mortgage industry implosion are value-added features. LOL!
Bubbles are bubbles because they sustain and grow themselves until they break. They don’t just peter out: some mechanism of the feedback loop has to break. In this case, the breakage includes the subprime lenders at an early stage.
I agree. However, there is also an added component to complicate forecasts. The financial wizardry that now exists in the market is not understood by anyone. One might think the bubble will unwind in a similar manner to way it wound upwards. However; there are so many variables, that a full range of scenarios is still possible. One thing for sure, though, “What goes up.. must come down”. In the revision to the mean; the profits of the bubble will equal the debits of the crunch. Gordo
OT: remember the LA Times article Ben had up a couple of days ago? Well, there’s new development in regard to the poor homeowner trapped by the subprime implosion and can’t refinance. That poor homeowner, as it turns out, purchased 3 homes within one month, and orchestrated purchases by a straw buyer on two of the homes.
read more at BMIT
Thanks for the update, ocrenter. GREAT story.
OcRenter,
Great find. I loved your headline too.
The shear amount of fraud is amazing. Isn’t that why down payments were always required as hucksters never seemed to have the dough to muck up the system? Not to mention, 20% down pays for half of the bank’s losses if the mortgage goes south.
The implode-o-meter isn’t done feeding. The shear amount of mis-managed money staggers me. Oh well.
Got popcorn?
Neil
Wow, what a story. When I commented on this story a few days ago I stated that I wished I could interview Sharon to find out what she was thinking two years ago. Now I know.
And what about that Hispanic couple, the Marpulas, who’s story was discussed here a few days ago? I know there was more to that one also.
I am very critical of home owners and agents who sell overpriced properties to stupid buyers. However, I now have to admit that buyers are the main culprits. They are greedy and stupid, two traits that mix like gasoline and road flares.
Great work OC, as usual.
Wow. I read something that I didn’t forsee: The inability of a potential seller to find an surrealtor willing or able to take them on. Not only that but the # of surrelator’s exiting the industry due to inability to make any income, will make this worse in the near future - There will be a shortage of realtors.
Makes sense: If you are commission based, why retain a client with all it’s overheads if they are not serious about setting price that leads to a sale. The only way things are moving are price reductions. This could lead to some innovative ways of buttering the Realtor : Monthly retainers etc instead of end of sale commissions (However, with that approach it would be a dis-incentive to sell !) but I doubt it.
Not willing or able to move on price ? Sorry you will eventually be cut loose. They will be RE untouchables.
Oh the humanity.
Anybody late into this market is priced in forever.
Few years ago they were thinking a good job they got on the train that was leaving the station. Now the train is picking up speed albeit in the wrong direction going down hill and they cannot jump off.
(Will make this worse in the near future - There will be a shortage of realtors.)
No problem. The internet will take the place of much of the work now done by Realtors, and the remaining Realtors will make a lot more money by doing more real work.
With low barriers to entry, the fat in the industry’s prices didn’t mean realtors got rich, it just meant more Realtors with not much to do.
“Anybody late into this market is priced in forever.”
Well said.
“‘It’s a good price. I was going for a 2-2 and got a 3-2 for that price,’ she said, snagging a third bedroom in addition to two bathrooms. Also, the sale price was $35,000 below the original asking price of $210,000, and the seller agreed to cover more than $5,000 in closing costs.”
Here’s the deal Annette, when you get a “good deal” is when you buy something for just about as low as it will go. Buying a car that blue books at $10k for $8k would be considered a good deal, Buying a house that will continue to lose vaule is only a “good deal” for the person that you will be selling it too
http://www.nypost.com/seven/03132007/business/bear_minimum_business_roddy_boyd.htm
Early, but certainly not the last. And they have money to take. Soon to be seen in a commercial for James Sokolove.
—“What would be good numbers to have?”—-
How bout Price per Square Foot, for a given neighborhood or category of property, with incentives pro rated and deducted.
It’s a lot better, but even this can hide the cost of improvements and, as you intimate, incentives.
I’d be shocked if even 1/3 of the listings around here include square footage.
I have access to the raw MLS data around here and it’s amazing how poorly real estate agents enter information into the system. Lots of misspelling and wrong info, bad addresses, etc. Sometimes I think part of it is intentional so that it looks newly listed and it takes a lot of digging to uncover the long chain of expired listings.
realtors still haven’t gotten tihe message to their clients. Prices here are still averaging 40-50% over purchase price in 05-06. One builder just dropped some lots he is offering by $35K- that still puts them at a 100% markup over his purchase price in 05. The SF price here is $200-250 owners think they are being robbed if they don’t get it…and they don’t get it either.
Charleston realtors deserve everything comming their way. They have been telling their clients that “Chasn is protected, Re never goes down here”
LIBOR 1 month 5.32
LIBOR 2 months 5.34
LIBOR 3 months 5.35488
LIBOR 6 months 5.33
___________________
No relief in sight for FB resets…
For players: from MVille
According to Miller Tabak, LEND has a very tight relationship with KB Homes and a curtailment or shutdown of LEND could meaningfully impact KBH.
Give it a shot if you like. I think I will too.
KBH has had some “meaningful impacts” on my area, in terms of development. If LEND “meaningfully impacts” KBH, I’ll be tempted to do some sign twirling of my own in front of one of their developments around here. BTW, Toll signs are appearing in one of the KBH development here. Wondering about that. Looks like KB is not building, but Toll is building on their land.
KB Homes in my work complex shares an office with Countrywide. Got to love those “preferred lender” arrangements. I’m sure they’re in the best interests of the buyer/borrower.
Well, the market is in negative territory this morning, so let’s wait for the PPT to make it positive between 12 noon and 2PM, as usual.
I don’t think there’s any chance of rescue today. Smells like another 4% drop to me.
Yep, but they will do it tomorrow or after…
That’s a mightly lovely bag your holding. I especially like what you’ve done with the kitchen using your HELOC.
Looks like this data will be big news when it comes out, as it is already one of Bloomberg’s top stories:
“Bloomberg) — Home loan delinquency rates released today by the Mortgage Bankers Association may show an increase for a fourth straight quarter as subprime defaults ripple through the real estate market.”
Any idea when it is coming?
just hit the tape:
mortgage delinquencies: 4.95% (3 year high)
subprime: 13.3% (4 year high)
Rate of homes entering foreclosure process hitting a record of 0.54%…
———————–
U.S. mortgage delinquencies jump, new foreclosures at record
By Steve Kerch
Last Update: 12:00 PM ET Mar 13, 2007
CHICAGO (MarketWatch) — Many more U.S. homeowners were unable to keep up with their mortgage payments in the fourth quarter, the Mortgage Bankers Association said Tuesday, with the rate of homes entering the foreclosure process hitting a record 0.54% and the delinquency rate on U.S. home loans leaping to 4.95% from 4.67% three months earlier. The rise was led by subprime mortgages, where delinquencies increased to 13.33% from 12.56%, and FHA loans, which saw a record-high delinquency rate of 13.46%. Trouble in subprime mortgages, made to borrowers with the riskiest credit, has roiled lenders and the stock market in recent days. Doug Duncan, the MBA’s chief economist, said the jump in delinquencies was expected given the housing-market slowdown and that the shakeout in subprime lending should restore equilibrium to that market shortly.
“‘It’s a great time for buyers to enter the market,’” said David Kent, president of the association.
Translation: It’s a great time to mutilate yourself with the biggest machete you will ever see.
Got 10% down?
They can coax me into entering the market, but they can’t make me buy.
“‘It’s a great time for buyers to enter the market,’” said David Kent, president of the association.
If its such a great time to buy real estate, why are so many people wanting to sell theirs ? It doesn’t make sense !
Because it’s a Great time to buy OR sell a home.
Didn’t you get the memo?
Icahn affiliates plan offer for WCI Communities, shares soar 16% pre-market:
http://www.naplesnews.com/news/2007/mar/13/icahn_affiliates_plan_tender_offer_wci_communities/?latest
LEND has lost 50%+ of its market cap today.
CFC and WM will be going down further as exposure to subprimes will be devastating….
We (sarcastically) call that a 2-for-1 split. With LEND today it’s more like a 5-for-2 split.
The bubble areas, for example New England, Florida, mid-atlantic, California among others - will be very lucky if this correction/downturn ends up with an average 20% to 40% price reduction in these markets and stabilizes in 5 to 10 years. That would mean the economy got off relatively easy and could muddle through somehow
That would roughly be in line with past downturns in certain locations
Any rational person realized the continued huge price increases in residential real estate that occured into 2004 and 2005 were simply creating a bigger mess longer term - and of course were being fueled by this massive lowering of credit standards disguised as so-called “creativity” and “innovation”. As the Wall Street Journal stated yesterday HSBC a few years back claimed in their subprime subsidiary - they had 150 Ph D’s modeling risk - the implication being that such sophistication was near foolproof
In simplest terms a relatively normal bubble became a super-bubble by lowering credit standards and labeling it another name and supposedly offloading risk to many different parties using many different exotic investment instruments -and since bubbles create busts - this is likely to be a super-bust
Although there are many debt instruments sharing this risk - its well known that many of the investors come from one area of the world: ASIA - and it will be hard for them not to notice what is occuring
Of course, if the subprime mess actually spills into the other securitized debt markets - then we got a major recession nearly guaranteed
WTF were those 150 PhDs doing all day?
How on earth do you “model” out the fact that your making loans to people that have NO ability to pay you back?
Those 150 people might have been the most overpaid people on earth (assuming they actually existed).
ALERT:
NEW U.S. HOME FORECLOSURES HIT RECORD HIGH; SUBPRIME DELINQUENCIES RISE TO 13.33%
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B9BDB33B1%2D819E%2D4297%2DA096%2DCCDFB0FB8982%7D&siteid=mktw
Still in the 2nd inning folks, can someone get me a cold beer from the snack bar. All this popcorn is making me thirsty..
I’d go so far as to say this is only the first pitch of the game. (man, I can’t wait for baseball to get underway next month!)
You’ve got to love that Doug Duncan. Just a little subprime shakeout and then it will all stabilize. It must be quite easy for some people to sell their souls. Isn’t Duncan the economist who sold his D.C. area home at the peak and then became a renter? Obviously the guy is not an idiot, just a spin doctor.
From the article…
Doug Duncan, the MBA’s chief economist, said the jump in delinquencies was expected given the housing-market slowdown and that the shakeout in subprime lending should restore equilibrium to that market shortly.
We expected this! Nothing to see here folks! Move along!
http://www.marketwatch.com/news/story/home-builders-feel-spillover-effects/story.aspx?guid=%7B965D3FD4%2D5B9C%2D4A28%2D8479%2DCC4CC7B0F6B1%7D&tool=1&dist=bigcharts&
Centex claims that less than 5% of 2006 sales were subprime yet 50% of sales were to non-english speaking buyers? I better stop at the hardware store and get me some pruning shears then onto borders to pick up “spanish for dummies” cause I’m doing something wrong!!
I guess that there is some poetic justice in that these people are buying the junky houses they don’t know how to build correctly (I guess it would help if they could read - In Spanish!)
“‘It’s a great time for buyers to enter the market,’” said David Kent, president of the association. ‘Terms are more favorable for them than they were in the boom of 2005.’”
Is it ever a good time to jump in front of a fast moving locomotive? You go first Kent; I’ll pass.
The DOW is in absolute freefall today. So much for the dead cat bounce.
http://dallas.craigslist.org/rfs/293207487.html
Credit score in the low 500’s? LOL. I think the only two people with scores that low are Charlie Manson and Homer Simpson.
dont forget Casey.
“but I specialize in difficult FHA/VA files and will take the extra time and trouble to get you done.”
Lost in translation: “I know how to scam the system”
http://www.marketwatch.com/news/story/home-building-ma-hold-frenzy-likely/story.aspx?guid=%7BA05E665C%2D11B4%2D44DD%2DAA53%2D9842EA3EB5AE%7D&dist=TQP_Mod_mktwN
Step right up folks, get your Merger-and-acquisition activity tickets right here, frenzy coming in 2008. Don’t miss it, tickets to the show going fast!!!
According to this MLS chart I just ran across, Chicago listings are up over 11% in one week?!?! Is that even possible? And Jacksonville inventory is just flying off the shelves! Why is accurate real estate data hidden from the public? Now, that sh!t has to change.
http://www.ochomereview.com/homewp/nation/
Also, I’ve noticed that inventory disappears as soon as a sale is pending. There are a ton of houses “pending” right now. I guess these are all the soon-to-be homeless that got in to the sub prime game before the rules changed?
“‘Right now we have over 800 lots approved that are in the pipeline,’ Donohue said. ‘We did 78 homes last year.’”
Does this mean that they now have a better than 10 year supply in the pipeline?
Roidy
“Over the next four months, Florida’s tax income will dip $303.4 million, ending in the red for the first time since the energy-crisis era of 1974-75…. ‘It’s been over 30 years since we’ve had negative growth,’ said Amy Baker, with the Legislature’s Office of Economic and Demographic Research.”
Oh boy! That’s not good.
Because you killed the goose that laid the golden egg you idiots.
Sure, tax the he** out of the snowbirds. Not like they have any options, right? We are shooting for the SB (snowbird) crowd down here with at LEAST 1.5M in net wealth. Sure, those people are definately going to get in line to be f**ked by the tax system down here.
I told (as did many others on here) everyone I knew that this is exactly what was going to happen, it was a suprise to none of us. Just keep trying to blast others with taxes, especially educated, well off people.
How about we STOP TRYING TO STICK OTHERS with our taxes, and work on trying to fix the spending problem?
“How about we STOP TRYING TO STICK OTHERS with our taxes, and work on trying to fix the spending problem?”
Spending problem? What spending problem? Why did we hire you to do a report for us? Spend more and tax more! Silly conservative, Palm Beach County is for liberals!
No, that’s too easy. Better to try to line your own pockets first. Then you can start cutting everything because you’re already insulated. (See also Riviera Beach)
Agree with the “Stop trying to stick it to others.” While we need property tax reform, Rubio’s plan is set up for failure.. Here’s what I think will happen.
Yes, not having property taxes no Homestead’s will encourage a lot of population growth in Florida. Florida will have the lowest tax per-capita for it’s full-time residents (it will be the only state with no income taxes AND no property taxes for homesteads).
Florida will see enormous population growth, if the tax proposal passes. But while the population growth increases rapidly, the amount of tax revenue will not increase as fast, as the new residents will undoubtly homestead their properties and only pay sales tax.
The sales tax will not be nearly enough revenue to pay for the services that each new resident uses (schools, police, etc.).
Florida cities that have very little commericial property to tax will find themselves fighting in Tallahasse for their share of the sales tax revenue, but they will still have to cut back on crucial services.
So what will happen then? Well, local governments will be foced to:
Increase the millage rate on commerical and non-homesteads (which will really hinder economic growth), Tallahassee will be forced to increase the sales tax (which will also hinder economic and tourism growth).
Yeah, I really like the idea of not paying property taxes because I’m homesteaded. But this is not an economically sustainable model.
‘It’s been over 30 years since we’ve had negative growth,’
I’m not up on all the lingo, but isn’t “negative growth” an oxymoron?
But even more than that, all this pissing and moaning about tax income dipping is beyond stupid, IMHO. They treated the windfalls as if they would never end and spent them, instead of eliminating debt, improving infrastructure and socking some away for when things drop back to normal, like the way it was before.
Florida is what it is: a sub-tropical state for retirees, tourists and those of us who want to kick back in a laid-back environment and don’t care about a corporate “career”. It’s not a “world class” anything and that’s part of its charm, or was. What did the HBs give us in Florida? Three and four bedroom overpriced homes for families, when their market is really 1 and 2 BRs for empty nesters, retirees, vacationers and singles. It’s been that way for a long time. There are always going to be some families here, but many are exiting the state. And I can tell you that GFs who bought the 3 and 4 BR homes are trying to fill them with roommates, asking like $600/month for people to rent rooms in those houses. I’m looking for a 1 BR and you wouldn’t believe the really silly solicitations I’ve gotten from people desperate for someone to help make their mortgage payments. They can go pound sand, for all I care.
For all that Florida government tends to be a messed-up joke in some areas, Tallahassee actually has spent the past couple of years using the unplanned state budget surplus to shore up the rainy day fund, and the pay cash for some capital projects instead of issuing bonds.
They’ve also made sure that the state employee pension program is solvent, something no other state in the country can claim.
Record foreclosures in 4th Qtr:
http://tinyurl.com/2q8a28
Accredited stock value cut in half:
http://tinyurl.com/2m9×3k
Link didn’t work for Accredited story. Try this one.
http://tinyurl.com/2m9×3k
And another thing……
Scary Math: More homes, fewer buyers
http://tinyurl.com/2ehfcs
Yow. Things is gettin’ fugly.
CNBC just reported that the mtg mess is starting to bleed up into the AltA and Prime market. Look out below folks; that’s going to be another BIG nail in the colfin.
It’ll never be fixed until a current homeowner could buy his own home back today.
“It’ll never be fixed until a current homeowner could buy his own home back today.”
IF that’s the case, I have to change my prediction from 2008 flatline to 2038!!
LEND
4.22 down -7.18 -62.98%
Even more amazing:
Volume 34.51 Mil
BUT there are only:
Total Shares Out. 21.58 Mil
Wow thats what you call a quick roast.
now accepted as truth
part 2
Personal Finance
Yahoo! Personal Finance
Why Your Home Isn’t the Investment You Think It Is
The Wall Street Journal
DETROIT (Reuters) - Job losses in the U.S. industrial heartland have left states like Michigan and Ohio more vulnerable to mortgage defaults, as home finance costs rise amid often moribund real-estate markets.
On a combined basis, Michigan and Ohio accounted for an out-sized 15 percent of foreclosures across the United States in January, the most recent month for which data is available from tracking service RealtyTrac.
Some 546,000 jobs have been lost in the two states since 2000, according to U.S. government figures, as shutdowns and layoffs at auto plants rippled through the economy.
More hardship is expected as announced job cuts take effect and unionized auto workers begin to leave the area or risk running through recent severance packages in the absence of new jobs, analysts said.
In addition, many homeowners who put their houses on the market months ago and refinanced or bought houses elsewhere with adjustable-rate mortgages are now trapped between a soft real-estate market and their own escalating monthly payments.
“A lot of people had visions of selling their homes, but that’s not happening,” said Hunt Gersin, president of Troy, Michigan-based mortgage broker Interactive Financial Corp. “Personally, I know dozens of people with houses for sale and no offers. There’s not a bottom in sight.”
ECONOMIC DISTRESS
Richard DeKaser, chief economist at National City Corp. in Cleveland, said there was no reason to believe Ohio and Michigan have more subprime mortgages, high-interest loans extended to people with poor credit scores, than other states.
“The Midwest has endured more of its share of economic distress and home prices here haven’t been robust, which by extension makes those subprime mortgages … more vulnerable than subprime mortgages more generally,” DeKaser said.
“But it doesn’t necessarily follow from that there is a high concentration of these loans in those markets,” he said.
DeKaser and other economists said there was no question economic distress in the industrial Midwest has made it more difficult for many borrowers.
“Michigan has been losing jobs for six years now and the distress that comes with job loss alone … is resulting in greater mortgages difficulties,” said DeKaser, adding the exodus of residents to seek jobs elsewhere has compounded the problem of falling house prices.
“So you’ve got this vicious cycle of falling property values and falling employment levels, falling population, and it is making for a very painful mix,” he said.
Ohio, DeKaser said, was not as clear-cut, with northern and more industrial portions of the state around Cleveland and Youngstown suffering more than Columbus and Cincinnati to the south.
Michigan was the only state to see home prices fall in 2006. The national average increased almost 5.9 percent but prices slipped by 0.4 percent in Michigan, according to a recent federal study.
“In California and other markets, the problem was that housing prices raced away from incomes,” said Dana Johnson, chief economist at Detroit-based Comerica Bank. “What happened here is that incomes have just fallen away from home prices.”
Rather than speculative buyers on overextended credit, the region’s housing bust is playing out as “a different, quieter story,” Johnson said.
“I think you have people who had every intention of paying off their mortgages and living in their houses and just couldn’t,” he said.
Alan Greenspan is at it again!
http://tinyurl.com/2dr7mh
jct