A Sign Of The Trying Times
The Denver Post reports from Colorado. “Since it was established five months ago, the state’s foreclosure hotline has received more than 11,000 calls from people in jeopardy of foreclosure, said Zachary Urban, the administrator of the hotline. ‘The majority of people don’t even know what kind of loan they have,’ Urban said. ‘That in itself is scary.’”
“A big surprise was that 75 percent of those surveyed were refinancing, rather than purchasing, said Kathi Williams, director of the Colorado Division of Housing and co-chairwoman of the Foreclosure Prevention Task Force.”
“‘It’s very obvious that people were inspired by ads to pull cash out to pay off higher-interest credit cards,’ she said.”
The Rocky Mountain News from Colorado. “‘It is not just the homeowner and the lender who is being impacted,’ Williams said. ‘The community as a whole is taking a hit.’”
“For example, she said she has seen estimates that homes in Montbello in northeast Denver lost an average of 4.3 percent of their value in 2006 from 2005 because of foreclosures.”
The Greeley Tribune from Colorado. “Northern Colorado sales tax reports for January show a growing downward trend in residential construction, indicative of a sluggish real estate economy.”
“Significant losses in building permit sales taxes brought overall tax growth down to 3.47 percent down for January. In all, sales taxes on building permits in Greeley were down 57 percent from the same time last year and 58 percent below what was expected.”
“‘It’s symptomatic of the economy,’ said Tim Nash, city finance director. ‘We’ve got a combination of being overbuilt with tightening credit, and foreclosures, so fewer people are in the housing market.’”
“‘Last year wasn’t a stellar year,’ Nash said. ‘At this point, we’re just hoping to match 2006. To start out less than last year is a little disconcerting; 2006 was the bottom of the trough, and it may continue at that level.’”
The Arizona Republic. “A year ago, the 40 homes in the El Pedrigal development, an infill project of high-end duplexes in northwest Mesa, were sold, awaiting the inevitable influx of ex-urbanites drawn to the area’s proximity to the Valley’s center.”
“But the area’s housing slump hasn’t spared El Pedrigal, or any of the other housing developments that neighborhood leaders were counting as key components of west Mesa’s revitalization.”
“At least eight homes in El Pedrigal were listed as available last week by the builder, Engle Homes, in addition to one listed with an agent.”
“It’s a sign of the trying times the industry faces, said Jason Jarvis, Engle Homes’ director of land development, and like builders from Johnson Ranch to Maricopa, Engle is offering incentives to entice prospective homebuyers.”
“‘Pretty much anything, from no closing costs to a deep discount on upgrades and move-in today specials. You name it,’ Jarvis said. ‘I think a lot of people are signing contracts and want to move, and they’re signing contingent on selling their current homes.’”
“‘That was not anticipated until everything started to stall. That wasn’t something just at El Pedrigal that we ran into, I think most builders ran into that in the Valley, with people that were starting to cancel for one reason or another,’ he said.”
“As the market started slipping last year, Steve Villarreal found financers were less willing to commit to his proposed development at 715 N. Country Club Drive so he and his partners reworked the product.”
“‘It was a difficult thing because the lenders were wary of where the values would arrive at because there was so much speculation that there would be a 20 to 30 percent drop in home values,’ Villarreal said.”
“‘Because of the rising cost of single-family detached structures, we found that we weren’t going to be able to get enough out of that site with that design. Changing to condominiums enabled us to get some more density which was pleasing to the lenders.’”
“He’s not concerned about the estimated 5,000 high-end condos planned for the area in and around downtown Tempe, just a few miles away. ‘No, because mine’s going to be priced way less,’ he said.”
“Critics like (analyst) R.L. Brown have their concerns. ‘Much of the infill development that goes on is not the kind of development characteristics that suburban buyers are seeking,’ Brown said. ‘Typically, they want to build maximum density, and you find the three-story attached product. That is not a lifestyle that young families have cleaved to traditionally in this region.’”
“Fiesta Towers made a dramatic statement about the potential of a reinvigorated Fiesta District with four high-rise glass-and-steel buildings, but the project has turned into a scaled-back Fiesta Lofts proposal.”
“The 10- to 19-story buildings shrink to three five- and six-story buildings in the latest proposal filed Tuesday.”
“Although ‘the high-rise towers would make more of a statement,’ said Mesa Planning Director John Wesley, the new plan ‘may be easier to accomplish; it’s better to get something that gets done.’”
“There were doubts from the start about whether there was a market for so many luxury high-rise condominiums in Mesa, especially with similar towers being built or proposed in Tempe and Phoenix.”
“Developer Thomas Roszak, an acclaimed architect, could not be immediately reached for comment. He has said repeatedly that his project would set its own market in Mesa, where there are no similar condominium offerings.”
“In Tempe, where an estimated 5,000 condos will be built over the next five years, developers are upping the ante in their fight for residents.”
“In addition to high-dollar ad campaigns, companies are going out of their way to get customers to their sites with everything from extravagant parties to sweepstakes prizes.”
“‘In Tempe where there are so many projects announced and you’re trying to distinguish what’s real and what’s not, especially before you go vertical, we’re trying to convince the community that this project is real,’ said Justin LaMar, principal at the firm behind the 21-story Mosaic building.”
“Last month, Campus Edge Lofts threw a splashy party on its Apache Boulevard worksite. More than 350 people ate, drank and scaled a 30-foot-high scaffolding to the music of a DJ. Plus, nine people reserved condos.”
“SunCor Development, the brawn behind the Hayden Ferry Lakeside development, gave away a trip to Tempe. (Canadian) Robin Egler won the trip (and) brought her longtime friend. Of course, they toured the Hayden Ferry Lakeside condos. They said after returning home that they have no plans to purchase one of the condos.”
“‘It was an interesting take on salesmanship,’ Egler said.”
How can you NOT know what type of loan you have?
Not that I expect everyone to be as smart and as thorough as myself….but what a sick combonation greed and ignorance make.
Ben, thanks for all your hard work.
I posted this quote once before, but it’s too fitting not to be posted again:
“When you combine ignorance and borrowed money, the consequences can get interesting.” - Warren Buffett
Easy. Plenty of loans were made to illiterate illegal aliens in Greeley who can’t even speak English.
Arizona was a beautiful state and it is terribly sad to learn about this horrific intrusion. I know it’s been moving toward this for many years but it appears that the bad deed has been done. I hope for you AZ bloggers out there that you have your little piece of heaven….and that it remains so.
“‘In Tempe where there are so many projects announced and you’re trying to distinguish what’s real and what’s not, especially before you go vertical,
What I read was:
“In the HBB there are so many problems announced and you’re trying to distinguish what’s real and what’s not, especially before you go vertical,”
Starting a “Fourth Day” I just know it…
Been watching The Masters today, did I miss anything? LOL
I’m right there with ya. Between the Masters and fighting allergies from hell, this is the first time I’ve logged on. Did anything blow up while I was gone? (I should say has anything else blown up)
We are at #50 on the implode-o-meter.
it seem almost deafening, that the
Largest Sub=prime issuer hasn’t said a peep about losses or profits from this subsidiary?
Well Fargo. #1 on the implode-o-meter.
Their stock keeps drifting lower along with the other banks, while the DOW climbs to the highs?
“Foreclosures sold at auction now account for 15 percent of all home sales in California”:
http://www.bakersfieldbubble.blogspot.com/
So, I guess we won’t be hearing the boys at DQ or RealtyTrac talking anymore about the number of foreclosures still being low by historical standards, will we?
And it looks like the foreclosures are following the pattern that iTulip predicted, with the exurbs (Central Valley and Riverside) being hit first, with those foreclosures sure to work their way into the suburbs and the cities in greater numbers in the not-to-distant future.
They are low now. I would consider those numbers normal. Wait until it gets to be around 2,000 a month just in L.A. County alone. Thats when the real fun begins. If the prices are already down now. Can you imagine what it will be like at 2k a month you’ll be buying million dollar mansions for 250k. It will be interesting to see how far it drops and it won’t take 3 or 4 years to get there.
“you’ll be buying million dollar mansions for 250k”
When was the last time you were in LA? Those $1M “mansions” are 3bd1ba Korean war era hovels already that should be prices well below $250K. The mansions are north of $2M. Most people from somewhere other than CA are in total disbelief when they see how much the dumps in marginal areas sell for. to callit a joke is an understatement. It’s even tough to laugh.
LA is going and ALL of CA is going to get CRUSHED.
I remember seeing a bar graph on Russ Winter’s site that showed a big increase in resets coming up in May. When I saw that I thought that is when it is ON.
I think you have to give it a few months past the resets. Many people will try to hang on as long as they can before throwing in the towel. Plus there’s always the hope that Jesse & Co. will succeed in getting the foreclosure moratorium.
So about 1 in 7 home sales in CA are foreclosure auction sales?!? And to think, we’re still at the beginning of this.
Unbelievable.
Ghad… I read that number and at first went… “WELL YEA!”
But then I thought about it. Its a very sad statistic. Its incredibly early in the cycle to be seeing that. Let’s think about it a moment: 15% of home sales are foreclosures before the government even officially warns we might be entering a recession.
In every other recession in the past foreclosures were a lagging indicator. In the past people would hold on to their homes as long as they could.
And it looks like the foreclosures are following the pattern that iTulip predicted, with the exurbs (Central Valley and Riverside) being hit first, with those foreclosures sure to work their way into the suburbs and the cities in greater numbers in the not-to-distant future.
Yep… now the question, how long until Santa Monica, the South bay, and other areas are hit? This downturn is moving faster than I thought was possible. A year ago on this forums I was rightfully critisized for the speed I thought things would happen. Today I’m in the camp that believes everything will happen slowly.
But now that I’ve been educated at the slow pace of a housing downturn, the fact the pace is happening this fast… is hair raising. Once the mortgage companies give up on a high turn-over in mortgages… LA will lose a good number of banking jobs. Once a significant number of construction companies default on their loans… more LA/Bay Area banking jobs will be lost.
The sheeple just don’t see this coming. They’re just becoming aware that home prices can decline. How the heck will they react to the mass layoffs in the pipeline?
ugh…
No popcorn on this…
I’ve scared myself.
Neil
The funny thing is that those are not even scary numbers yet. I remember L.A. County doing 2 thousand sales a month
I remember L.A. County doing 2 thousand sales a month
Scary… Looking over at OCrenter’s excellent blog I see LA peaked at 12,001 in June of 2005. February, a slow month, was 6,300 (versus 7,089 in 2006 and 7,056 sales in 2005).
Two thousand… I believe that number. I know there were some horrid months… but my mind is just not able to comprehend it getting that bad. Oh, its going to be worse this time. Intellectually I know that. But I was imagining a bottom rate of 3,000/month.
What’s your prediction for the sales rate in LA this summer?
Neil
Continued decline, subprime tanking kicked the legs off the stool. It’s already dead on the street the media just hasn’t reported it yet. The only ones buying are the illegals and the foolish. Subprime tanking is causing a lot of escrows to kick out so the only ones left really are the foolish.
Another thing if the sampling from the phone calls I am receiving are any indication by mid-summer the foreclosure numbers are going to be stifling. I don’t even thing the Carlton Sheets guys are running around anymore. Folks have started to key in and the banks will reset the market starting 4Q 2007/1Q 2008.
I also don’t think Countrywide is going to survive this time. They are starting to breathe heavy.
Ah mrincomestream, i’m glad you said it and not me. Countrywide in the tank? Unthinkable! But I too have uttered this sacrilegious prediction. When Countrywide goes, we’ll officially be back in the Dark Ages.
Countrywide is done. Its only a question of when.
I’ll agree with mrincomestream, by 4Q2007/1Q2008 the market will need a reset button.
2007/2008 will be interesting.
Got popcorn?
Neil
I’m not too sure about Countrywide. Rumor has it that they are hiring. Of course, it could be “loss reduction specialists”, but still… I’m thinking that Countrywide will be propped up by Wall Street operators and used as a roll-up vehicle when the time is right.
Rumor has it that they are hiring.
Most of the dot coms hired until the end. The best trick to motivate a workforce is to post jobs on Monster. Its cheap and makes them feal secure.
But look at the facts, Countrywide is laying off. Not a lot, but two neighbors of a coworker. So if they have jobs out there… they are hiring new skills while shedding old.
Also, the credit tightening is reducing their revenue. As to risk, they are under-reserved. Look at the lawsuits for New Century… Pretty soon the MBS buyers will want it all back.
Countrywide is shedding contractors - I know someone in IT who was let go in March.
“I also don’t think Countrywide is going to survive this time. They are starting to breathe heavy.”
I respect your opinion, but have to say WOW to this one! I am not sure if I agree…the $hit hits the fan if they go down…
The reason I say Countrywide maybe done is that they buy a lot of paper. For the past year at least every single refi I have done Countrywide was in the shadows. My clients always got a call from them trying to undercut me. Plus the fact they are building an unprecedented R.E.O. inventory that unless they severly discount and fast too push them out the door. They are going to choke on the load. Last time industry rumors circulated that banks were dishing out the R.E.O.’s slowly as to not totally crash the market. I don’t think Countrywide is going to have that luxury this time. I think their current R.E.O. load is close to or has exceeded what they held at any given time during the last downturn. That boat is not going to be able to continue to take in water for much longer. Severe discounts are in order and fast. It will be interesting to see if they catch on quick enough. I don’t think they will. Mozillo isn’t having the right dialogue.
They’re doing more than just posting jobs on Monster - and don’t ask me how I know this…a little birdie told me.
If I were running big money, I would be looking for a cheap acquisition with a back office that could be converted to managing foreclosures. And I would be looking for staff that understood the loan business. One way to get such a cheap acquisition would be to loan money to someone like Countryside with some nasty terms that would result in ownership of the business and shafting the stockholders when the SHTF. That could be used as a vehicle to roll up the FB servicing business of a bunch of outfits like Ownit and New Century. And what a servicing it could be! Remember, the fools who bought all of those CDOs will need a service company to clean up the mess. Lemons -> Lemonade.
Just a thought.
Oh, and yes, I’m evil. You gotta be evil to be a landlord, right?
sm_landlord-
Careful… your teeth are showing…
Totally agree — Countrywide is a “dead man walking”.
There’s no question in my mind that virtually all of the dedicated mortgage lenders are going down, even the depositories. What I’m wondering is which major *banks* will survive…
The Evil Overlord site is dead, but the precepts remain:
http://www.eviloverlord.com/lists/overlord.html
yes - it is depressing. there are going to be many innocent bystanders - all because of stupid greedy people in society
Neil
Is popcorn a good survival food?
“No popcorn on this…
I’ve scared myself”
LMAO!!
Beautiful SM,
A creditor rolling up Countrywide is the answer to my biggest question of who and how will all these REOs get handled. Stealing Countrywide and turning it into primarly a REO Business (collecting fees from these fucked MBS buyers) is a really elegant solution to the coming REO disposal crisis.
It keeps the larger business in tact and running for the next cycle. When RE turns up again they could be first through the gates selling MBS again as one of the few players.
At some point the owners will see more presant value in these REOs as rentals and finance some mechanism to rent them. I feel that this time we will reach that many vacant property.
In the 90s this was done by courthouse auctions one home at a time. I think that in this cycle much more of this will be taken private in larger pools and sold as HBS (home backed securities), the same as MBS without a FB and at a level with possibly good ROI when rented.
My thesis is that there is just to much cash around for this not to happen. I surely see $5-10 trillion USD abolished in the coming US credit defaults, but as the dollar collapses more USD will return from overseas.
It is clear that our credit will be cut off at some (nearer rather than farther) point. As that happens the foreigners holding dollars will the choice of buying USD denominated investments or buying gold or any other commodity for a Triplegazzilion$$s/gram. The only possible ROI on their USD is to repatriate it the USD investmenst or face it turning to worthless dust in their hands.
..and yet I saw this on Craigslist just now..100% stated witha FICo of over 600.
http://sfbay.craigslist.org/sfc/rfs/306852860.html
It’s even uglier than that here in Colorado Springs. Last month there were 891 sales (out of an active inventory of over 5600), and 325 foreclosures. Not sure how many of the sales were foreclosures that were auctioned off.
Funny thing about Springs was that even last year it appeared to have dodged the Colorado bust. No crazy appreciation, but from what I heard the market was still semi-healthy.
But now its 325 foreclosures. We only had about 100 in Larimer County. Weld County (Greeley) did have close to 500 foreclosures.
so that is how the Feb pending home sales topped January!
The “NOD” list is now included in the “pending homes sales”
Got it!
implode-o-meter reaches 50 !!!!!!!
I was hoping it would reach 50 in 49 days…
Radio host of show on KFNN just mentioned implode-o-meter count. LOL
Rememeber the SNL skit where the lady keeps yelling “IM FIFTY!” “yeahhhh FIFTY BABY…. fiiiifffffftteeeee”
funny.
HelloKitty,
Quit, quit, quit it…on the floor not breathing…
youtube has someone doing an impersonation!
Im Sally O Mally AND I’M FIFTY!!!
http://youtube.com/watch?v=Q9fBy_cMLoU
HelloKitty,
What can I say…Damn you!
OMG that is hilarious
Two items of note.
First, with 1 in 7 home sales in CA now at auction, this is going to be realy messy. We may get to that famous 50% off from 99-01 prices. If we already at 15%, next year we might be at 50% of all home sales.
Second, with 50 brokerage houses out, if we just use 3B dollars for each, that is 150 billion gone. Poof. The magnitude o this bubble is getting scary. I realize New was at something like 66 billion, so the estimate might be more like 200 billion dollars. WOW!
This bubble is gonna be one mother of a pain for this country. As I said before, even lowering rates to 1% won’t help. Homes were just too expensive. Also, lenders couldn’t afford to do this. It would wipe them out.
We are truly screwed as a nation.
There are no more bubble left. The stock market is a joke. A rigged game.
Game over. Just a matter of time. Get and stay out of debt. May be buy some metals and learn a trade. Possibly get some land to grow some veggies on. This is gonna be real ugly when it is all said and done.
“The stock market is a joke. A rigged game.”
I totally agree. Every time there’s bad news, it seems like some miracle rally takes place.
I’d get in on the joke myself if I wasn’t convinced that the laughter is going to stop abruptly very soon.
I’d get in on the joke myself if I wasn’t convinced that the laughter is going to stop abruptly very soon.
Yep… scary.
I commented a few weeks ago that things have just changed:
http://recomments.blogspot.com/2007/03/did-dam-break.html
Folks, we know the theater is on fire. I don’t know about you, but I’m getting ready to shut up and hit the exit. As exciting as it might be watching the people run for the exit, I’ll watch it from outside in the cold.
Effectively we bears have been congregating outside in the alley trying to shout in to get out. Is is almost time to shut up and get out of the alley before we get caught in the stampede?
I’ll be very amused if everything happens while I’m on my honeymoon out of touch!
Got popcorn?
Neil
Back on the popcorn one post later….?
And you were doing so good.
Back on the popcorn one post later….?
And you were doing so good.
Economically I’m a bear.
By personality I’m an optimist.
So I recover quickly.
Got popcorn?
Neil
Honeymoon? Congrats, I guess (just kidding):) I’ll keep the popcorn bowl full while you’re gone. Have fun!
Stay on the popcorn, you have to keep up your strength….. especially for the honeymoon!
Thanks for your contribution here Neil. Most visitors to the HBB only have time to read, and appreciate all those who contribute information. That “Ben” guy does a pretty good job too….
I’ll keep the popcorn bowl full while you’re gone. Have fun!
You’ll have a wait. The wedding is mid-may.
That “Ben” guy does a pretty good job too…
That “Ben guy” focuses on more areas of economics than I have time for. I’m curious about the economy and the chance to buy a home.
Sadly, too many coworkers are fleeing the state. Yes, I know population/job flight is required to correct the home prices, but its sad to see people you like pack up.
Enjoy the weekend. Mine has started!
Neil
Have you ever seen that guy Art Laffer on Krudlow’s show? Everything is just fine the economy is booming, there’s plenty of capital [credit formation IMO]. He sounds like Baghdad Bob!
yep, every time the stock rally starts to fizzle.
Someone starts selling cash notes, & bonds.
Today it only took minus 1.7 tics loss for every 1 Dow point advance}
Earlier in the week the bonds got hit 2 tics equalled 10 Dow points!
Like clock work? Somebody is busy trying to un-invert the curve as “If” that is why the economy is collapsing?
Rail traffic weekly report was delayed all morning.
For the week -8.7% lowest for the year, Qtr to date - 4.7%
But the rails reversed their early morning lossses, as if they can make up the car loads!! Or we hit bottom just as the rails admit to missing Q1 earnings.
Game over. Just a matter of time. Get and stay out of debt.
Are you kidding? Number one rule of filing BK is to run that sucker up baby. IF it gets as ugly as you claim then being in debt won’t matter. You ever watch the movie the Pianist? While the polish families were waiting to go to the Getthos there was a little boy selling carmels and the old man asked him “what are you going to do with the money?”
Getting out of debt is always a good idea in a recession (which we’re probably heading for). If you have no debt and lose your job, you can probably muddle through. If you’re up to your eyeballs in debt and lose your job, the mortgage/car loan/credit cards will eat you alive.
Some friends of mine that live in Maricopa are moving out of state due to a job transfer. They listed their home a couple of months ago and have cut the price once. Not a single looker. In fact, they said there are builders still building new construction and undercutting all the sellers. A similarly-sized new home to the one they are trying to sell is now being listed at around $100,000 less than their current price. Some of these homes are now going for around $70 per square foot.
If you bought a home in Maricopa (or Queen Creek, Buckeye, Surprise, etc.) in the past five years, I hope you plan on living there for a LONG time or can take a six-figure hit in your financial portfolio!
Toast, this is another scary anecdote you bring up. Many on this board have mentioned that during open houses no one is even looking, except othjer neighboring sellers. It is one thing to have at least some lookers, even gawkers, but no one is even looking, let alone offering.
Something is going to give this summer and when it does, all hell is gonna break loose.
Prediction, Countrywide goes done, or seriously reduces itself. The magnitude of this bubble is slowly, but surely reaching critical.
Something is going to give this summer and when it does, all hell is gonna break loose.
Prediction, Countrywide goes done, or seriously reduces itself. The magnitude of this bubble is slowly, but surely reaching critical.
100% agree. In the 1990’s recession real estate agents here in California still talk about the “week without a phone call.” Are we heading that way?
It does seem to be a summer sans sales.
And credit will keep tightening…
What will the minimum down payment be for people with good credit? 30%? I’m serious. Lenders are going to be strugling to lend.
Mid credit? 40%?
Poor credit? I’m already hearing 40%… can it go back to 50% down if your FICO isn’t at least 650?
Hang on… the ride is going to be fast and we won’t know until it happens that we’ve hit the splash pond.
Got popcorn?
Neil
Neil, couldn’t agree more. I think when the carnage is all that is left after a summer, fall, and winter of no sales and maybe some small token bailouts here and there, coupled with another 30-50 lenders dying, we are gonna see some serious stoppage of lending. Housing will go down 50%, which means here in the South OC I might finally get that 250K home, which is in line with the ol’ tyme fundys. On top of that 30-50% down may not be a stretch. I am sure many think we are tin foilers, but even losing another couple of lenders this week added to the 15% OF ALL HOME SALES in CA are auctions, makes me worry. This may just be a fast skid on a long road down, but the speed at which these happened is getting me a little nervous.
As for your blog and mentioning people leaving. I hate to say it, but I am really beginning to look at leaving again. Last summer I was really serious, but after coming back to work I kind of left that thought. However, after searching online again and seeing even non-frothy non-bubbly zones losing 5, 10, 20% I am reconsidering. While Northwest South Carolina has been on the radar for a year, I have added Tennessee and Southern Ohio, maybe Indiana. God knows I love So Cal, both kids were born here. However, I just keep seeing to many posers and too many bubbles for my liking here. Even I did buy at 250K I would still possibly have the HOA (which you guys know I detest with every fiber of my body) and I would still have the mortgage. When I look at those places I mentioned and see that if I went with even a 30-yr @ 6%, my mortgage would be just 3-400 a month, i want to cry. When I see what 100-125K will buy, I weep. So Cal just doesn’t do it for me anymore. I love the weather and all, but I guess the luster is what is gone. Maybe that is what you are referring to. People realize that the cost of living here isn’t worth it anymore.
Case in point. I moved here basically in 1986 to go to ‘SC (fight on Chris). My first day my suite mate, from Torrance couldn’t get me to go for a ride with him to his hometown fast enough. Mind you we left at 2 or 3 in the afternoon and were buzzing along the 10 freeway south at 65 in his 69 camaro. try that now. I warned him that LA would grow like NYC, but he laughed at me. I also warned him that people wouldn’t be as laid back forever. While we are still laid back, look at all the drive by shootings. SO much for laid back, at least in traffic!
Anyway, I just don’t see any silver lining in Cali RE the next 2 years, unless you consider buying very, very, very low as the sliver lining. For the rest, it will be scary, unless their mortgage is secure and/or they have no debt.
Glad to be going on vacation in 42 mins. I really need to get away from this blog and the bad news for awhile. FYI, taking the kids to Dizzyland for 2 days. It is a belated birthday gift that was leftover from January.
I might finally get that 250K home, which is in line with the ol’ tyme fundys.
If homes ever really get to $250k… I’ll buy one. Sans mortgage.
“ but the speed at which these happened is getting me a little nervous.”
Me too.
1986 to go to ‘SC (fight on Chris)
(alumni)
FIGHT ON!
I’d love to buy here. (Family, weather, etc.) But if my company moves to Austin TX or a half dozen other places… (e.g., DC), I’m gone.
Got popcorn?
Neil
OCDan, I just can’t see your being able to buy a starter home for $250K in OC. I don’t think prices have been that low for the past 12 years. Maybe you should move to somewhere more affordable. Do you have family in those affordable areas? Usually a good job and family are the best reasons to locate.
OCDan,
have a great vacation. We love Disneyland, we go there every year with our, now, five yearold daughter for our wedding anniversary.
By the way, to you and Neil, Fight On!
And to REHobbyist, pay attention adn read more of the blog and learn from those many here who have some knowledge of not just r.e., but econ 401, etc. Then you will understand why in two years the OC will have undergone at least a 50% haircut. Take care.
I know Chrisusc, I know. But OCDan sounds like he really wants to buy an affordable house. And the most bearish are saying 50% haircut; which would take the median down to 300K, not 250K. I just don’t want him to be disappointed. If he can find a better house for less in some of the places he mentioned, he should leave. I’ve lived in OC and it’s not that great.
Yup. F the OC.
And the most bearish are saying 50% haircut
You haven’t been paying attention. The *least* bearish here are saying 50%; You don’t want to know what the rest of us think.
Mind you we left at 2 or 3 in the afternoon and were buzzing along the 10 freeway south at 65 in his 69 camaro. try that now.
Holy shit, the 10 used to go south??
jbunniii: Maybe they were talking about exiting south from the 10. It doesn’t move very well east/west, for that matter.
tj and the bear: More than 50% would be wonderful, especially for young fathers like OCDan. You’re right - it’s good to be optimistic. Although I’m afraid for what the world would look like following such a crash. We’ll see very soon.
Low six figures should buy a house in AZ, IMO.
When all is said and done, houses in some of these AZ exurbs will probably be selling for pennies on the dollar. And I’m talking about a dimes worth of pennies.
When we drive out to their house, I always find myself thinking “How could all these people have bought into this charade?” Maricopa might as well be Mars.
You are correct. AZ has way way too much land to have expensive RE. I tell my friends and family that cheap housing is a great thing. Like cheap clothing, groceries, vehicles and anything else you buy. They look at me as if I’m crazy. Of course, not much is cheap today.
Even that is generous!
Most of those homes were not even there 5 years ago. I have a cousin who bought in QC two years ago. Precon 2 year back, but moved in 1 year ago. Decided to move back to CO. Home sits empty and I assume no lookers and foreclosure soon to follow. The are asking $275k for a 2900 square foot home. No upgrades. I think they need to get that to break even. My guess in looking at the comps is that they need to price at $200k to sell. And even then who is buying way out there. Epitomy of a FB.
Re: Arizona developer who’s choosing condos over SFHs, bad move. Why pay double to live in a condo when one can have the same experience living in an apartment, and save money?
Any developer who could figure out how to make money building small starter homes on lots with enough room for kids to play would be a genius. People don’t want/can’t afford McMansions, but that seems to be the only kind of single family home being built.
Totally agree. And if they could build into their design a strong enough structure to allow the owner to add a second floor without needing to beef up the structure, all the better, as it would allow the owner to easily add on in the future as their family grows. Wouldn’t really cost much to do it either, usually just using a little bigger studs (e.g., 2×6 instead of 2×4) and/or doubling up some of the studs. Seems like it would be a good selling point.
Especially if the builder stuck around to do the second story additions in a few years when growing families, home businesses, excuse du jour “necessitate” that second story.
absolutely. what a good idea…
If people thought ahead, we wouldn’t be in the mess we’re now in.
Because the lender knows that the land cost prevents SFH’s from penciling out, so they push for condos. Doesn’t have anything to do with how people want to live. Then they trot out the urban living myths and away they go.
Somebody should tell these folks in Tempe that the condo/DJ/booze parties were tried in Florida and it didn’t work there either.
“Because the lender knows that the land cost prevents SFH’s from penciling out, so they push for condos. Doesn’t have anything to do with how people want to live. Then they trot out the urban living myths and away they go.”
Another consequence of the greedy, filthy landholders and speculators. I’d like to see a change in the imminent domain laws, and much higher taxes on raw, unused land. Merely having the financial means to take land out of use for the sole purpose of profit has been problematic for this country for hundreds of years. It has negatively impacted growth as, oftentimes, whole communties are designed and built around areas which cannot be accessed or used due to greed. This adds to the cost of infrastructure and contributes to longer commutes, and a less efficient society in general. In many instances, it is only for the benefit of those who were born lucky.
When I was looking for small acreage in western, WA, I met an older gentleman in his 80’s. He was selling off around 160 acres, mostly subdivided into 5 acre tracts. He told me that he inherited all of the land from his grandfather, so the land had been in the family for a long time. They, at one time, had thousands of acres. The grandfather paid something like $50 per acre way back in the day. The old man mentioned that any time he and the wife wanted to generate some cash, they sold off a little land. Since prices were up, they were selling a little more, but still holding the most valuable waterfront properties. He seemed like a decent guy, but he was greedy as hell when it came to his prices. I didn’t even make an offer, for a number of reasons.
In another of my searches I ran into another of these types, only a woman. She was older, and had thousands of acres of prime land. Since prices were up, she was selling off tracts of acreage. And again, she was just born lucky.
I am not sure what the answer is, but taxing the hell out these people is a start. Force them to sell the land, cultivate it, or do something useful with it. I’d like to see an end to land speculation once and for all.
Would you like to buy a vowel?
Having a hard time getting your price?
“taxing the hell out these people is a start. Force them to sell the land, cultivate it, or do something useful with it. I’d like to see an end to land speculation once and for all.”
——————————–
this kind of system works real well in Cuba and North Korea.
How are the house prices working for you?
I’m thrilled that house prices are going down, and that overbuilding will result in low prices for the next 2 generations. It will be great for the country. My house is almost paid for. I don’t believe Big Brother should control land price or use.
“I don’t believe Big Brother should control land price or use.”
I don’t believe big brother should control price either. The market works just fine. As for land use, well, I’ve got news: ever heard of zoning laws, restrictions, etc.? They already control use. I’m not against developers, farmers, anyone who buys land to put it to use. I’m dead against those who buy it to take it out of use, solely for the purpose of profit. Never has been good, never will be.
who decides when and why an owner should be forced to sell?
“I’m dead against those who buy it to take it out of use, solely for the purpose of profit.”
That may be the stupidest thing ever posted. Absolutely stupid! The nature and essence of the US economy is Profit. Your job comes from some individual having a novel idea and putting it to the use of the country. A better widget. If you don’t like capitalism - leave.
“That may be the stupidest thing ever posted. Absolutely stupid! The nature and essence of the US economy is Profit. Your job comes from some individual having a novel idea and putting it to the use of the country. A better widget. If you don’t like capitalism - leave.”
I never once said I was against profit, or capitalism. I was only speaking about speculation in raw land, and its consequences. The fact that you were unable to recognize that says a lot about your intelligence.
Sorry, BB, that *was* lame. Personally I’d prefer raw land stay that way. Too much beautiful country getting paved over for exurban sprawl as it is. Speculation? These people are the epitome of “buy and hold”.
“Sorry, BB, that *was* lame. Personally I’d prefer raw land stay that way. Too much beautiful country getting paved over for exurban sprawl as it is. Speculation? These people are the epitome of “buy and hold”.”
Lame? OK, why? Tell me what VALUE land speculators add. What is the GOOD they do? Swooping in and driving up prices to absurd levels so farmers, growers, and end users cannot even work the land is NOT good. I haven’t heard one good argument in their defense. And because I despise speculation in land, does not mean I am for paving the earth, or against capitalism. I don’t know where you guys get this stuff.
This gain on raw land is part of some Econ course I took. Many argued for very steep capital gains on land sales coupled with taxes to fund the state in proportions to its area (or other equitable proportion) the idea being that this would tie the lands real value (profitability) to dictate the size of the local governments to only that which is really desired by the people.
If the owners of the land (the rich and powerful) pay the most taxes for the government they (having the most power) helpfully (selfishly) limit the size of Gov and Gov corruption.
Nothing like a bunch of powerful people working together for something that benefits society at large.
Swooping in and driving up prices to absurd levels so farmers, growers, and end users cannot even work the land is NOT good.
Nobody “swoops in” until one of these ridiculous booms hits, and then they’re only looking for short-term gains. Not worth discussing, since those that have speculated are now losing their asses.
I live near Toluca Lake, home of Bob Hope’s former estate. Hope’s father told him land is the best investment, therefore he steadily acquired virtually everything from Malibu/Ventura in to Burbank. Sold most of it off in pieces decades later and made a killing. No harm, no foul as far as I can see. Most are the same way. Takes tremendous patience and foresight, of which most speculators are lacking.
I’m not sure if that is the solution. They do that here in Japan, especially places like Tokyo, Osaka and Kyoto and what do you get?
Concrete jungle that is just ugly to look at, they tax you higher if your land is not doing something economicaly, even if the building is empty and no one is renting (commercial or residential) your taxes are still lower.
The only green space in places like Tokyo and Osaka are the old gardens of the ancient fuedal lords and merchants of before the War. (Just visited the old English style mansion of the founder of the Mitsubishi Zaibatsu, I felt like I was back in the US or in England)
I love green space. I wish we had more of it. But parks, gardens and the like aren’t the result of speculation. Most enjoyable green space is public land, owned by the government.
Out here, quite a bit of green space is the result of speculation. Much of Chicago has been downzoned to the point that the land value makes it unprofitable to build anything (except for the 50×125′ lots in the residential areas of the city - you can built a 3-unit apartment/condo which in many cases is profitable). Therefore, you have to make a “donation” of some sort to get anything of decent size built.
Build a park, add public river access, deposit 8 figures into the Chicago Public Schools operating fund, etc.
About 1/3 of the lot for Trump’s new downtown tower is going to be greenspace, donated to the city (plus it will have a public river walk). There’s an apartment tower under construction a couple blocks from me. About 1/3 of that lot will become a public park. There are a lot of other examples. The proposal for North America’s new tallest building includes $20-30 million so the city can finally develop a new park site that they’ve so far been unable to fund.
It turns out that incentives for public green space work pretty well for greedy capitalists.
“That may be the stupidest thing ever posted. Absolutely stupid! The nature and essence of the US economy is Profit. Your job comes from some individual having a novel idea and putting it to the use of the country. A better widget. If you don’t like capitalism - leave.”
Hee Haw Hee Hee. Folks, property rights are a creation of the government. They are 100% a figment of government actions, as they have been since the ancient Egyptians’ government started enforcing and registering property boundaries. If you check out your land title, you will see that your land (actually just a bundle of rights concerning the land that was created by the gov’t and has been passed from owner to owner) can be traced back through a series of owners up until it first appears as a homestead or land grant or rail road land grant, etc. What was it before that? Gov’t land: they shot a bunch of Indians and took it. Depending where you are, you may or may not have been given water rights, mineral rights, rights to build toxic waste dumps, etc etc. Yes, I like seeing free trade in land, but don’t go Ayn Rand on us by asking why the ‘Big Brother’ is involved in land. What you own isn’t really the land, it is the rights to use it and prevent others from using it, it is Big Brother incarnate. There always has been a strong tradition (and component of the property rights inherent in property in the US) of terminating the rights of absentee landlords and speculators. Why else do you think there are such things as adverse possession, easements by necessity, etc. The owners not around? You can just move in, pay the taxes, mow the lawn, and after a few years it is yours.
speculators = capitalism. Speculators buy when nobody else wants to, supporting a price floor, and sell when nobody else wants to, supporting a price ceiling. speculators regulate/normalize/limit profit by their self-serving (thank dog) capitalist and competitive actions. hurray for capitalism, it is the driving reason why we have a higher standing of living in the usa. for the best lessons in economics you could ever get read Victor Niederhoffer’s book “The Education of a Speculator” and check out his website http://www.dailyspeculations.com. He’s the best explainer of markets, speculation and trading I have ever seen.
don
Oh, I know that! It’s just a smaller-lot version of what goes on in my neighborhood. There’s one-acre zoning, so developers have to charge at least $750K to make a profit. (Typical pricing is closer to $1M.) That means ugly huge McMansions… that are taking forever to sell anyway.
“‘Last year wasn’t a stellar year,’ Nash said. ‘At this point, we’re just hoping to match 2006. To start out less than last year is a little disconcerting; 2006 was the bottom of the trough, and it may continue at that level.’”
He had it right when he said that they were “hoping” that 2007 would match 2006. But he is incredibly wrong when he states that “2006 was the bottom of the trough, and it may continue at that level.” They haven’t seen the bottom of the trough yet, and 2007 will be lower than 2006. As noted in the article, “sales taxes on building permits in Greeley were down 57 percent from the same time last year and 58 percent below what was expected.” So, how exactly is 57% below last year’s level equal to continuing at the 2006 level? Must be the combination of the new math and govt predictions.
Hot off the press March numbers for Northern Colorado according to IRES. Link is: http://realtytimes.com/rtmcrcond/Colorado~Fort_Collins~bjjohanningmeier
Total home sales down 8% March vs. March. New home sales down by 34% 3/07 vs. 3/06. Year to date total down 10% and new down 31.7% vs last year. Median prices flat to slightly higher overall. Loveland and Greeley seem to be hurting the most.
Mr. Nash . . . better cross some fingers and toes, 2007 is not shaping up to match 2006.
At least they seem to have slowed down building houses.
“A big surprise was that 75 percent of those surveyed were refinancing, rather than purchasing, said Kathi Williams, director of the Colorado Division of Housing and co-chairwoman of the Foreclosure Prevention Task Force.”
This is the kind of info i have been waiting to see, the fact that Refi-Foreclosures are an order of magnitude greater than Purchase foreclosures pretty much kills the argument that only people who bought at peak are in trouble. Fact is anyone who refi’d in the last 5 years hoping to either sell or continually refi is in deep shiznat.
Are these those “Joneses” we were all trying to keep up with?
Are these those “Joneses” we were all trying to keep up with?
If any of them are willing to sell a good condition Massarati cheap enough… I’m there. (My fiance’ really loves those cars… But I’m cheap.)
Otherwise… we’ll press her old Accord into one more 1/2 year of service before buying during the model change over. Man were there good deals during the model change over in 1993.
Got popcorn?
Neil
Personally I favor those Aston Martin DB7’s…
They are quieter and more gentile than the Maseratis. They are on the freeways in the OC daily, yet it’s rare to see them. Far less ostentatious than the Ferraris and Maseratis. Cost to operate? Who cares!! AMG Mercedes a dime a dozen. Are they good cars for the overprivileged??
Got an ex-brother in law that paid around $100k in 1997 and took out the proverbal HELOC in 2003. You know, new kitchen, some landscaping, toilet bowls made of gold, yadayada. Well he wife decide to call it splitsville and are trying to move their house but can’t because their, UPSIDEDOWN!!
maybe they should try to salvage the marriage by being “upside down” on one another - or various other positions
too late
Your are correct. I have been doing some hunting on RealtyTrac over at the Central Coast Bubble Blog and the pattern for most of the NOD’s is very clear: bought 5-7 years ago and HELOC’d or re-fi’d 3 to 5 times, rate resets, and wham-o … party’s over.
After seeing this, it really affirms (at least to me) that consumer spending is going to take a dive. Some of these people were burning through $50-100K per year in HELOC money.
http://centralcoasthousingbubble.blogspot.com/
SLO Bear,
Great information. Scary…
And its just started. Most sheeple still think they can get in one more refi. The one’s foreclosed on are the ones who couldn’t leave 20%+ of their equity still in the house! All others can re-fi one last time…
But its too late. As OCDan noted… this is going fall apart by summer.
Got popcorn?
Neil
Okay, one more post before I go. For all those who even think a major bailout is coming, fughaddaboutit. At the rate this is falling apart, no gubmint, state or fed is going to be able to come to the rescue. Most of these clowns are getting ready for summer vacay and won’t have enough of a bipartisan coalition to get anything passed.
Good luck and good night. It’s lights out.
I don’t know. The Fed hasn’t moved yet, and who knows what the government will ultimately do.
Still, the curtains definitely seem to be drawing back for Act I to begin.
I
“…the fact that Refi-Foreclosures are an order of magnitude greater than Purchase foreclosures pretty much kills the argument that only people who bought at peak are in trouble.”
You got that right. Two nights ago, while on a late night mls surfing binge, I started pulling up the recorded documents on several of the listings. I was finding homes purchased in 1995 that were HELOC’d and refi’d to the hilt. The idea that it’s contained to subprime is laughable. This was an all out lending assault by the banks, one which will have absolutely catastrophic repercussions.
It also means there may not be the amount of foreclosed RE on the market that some had expected. Some FBs may not be as Fd as some think, and that will help prices.
“Developer Thomas Roszak, an acclaimed architect, could not be immediately reached for comment. He has said repeatedly that his project would set its own market in Mesa, where there are no similar condominium offerings.”
“Set it’s own market” Hey Tom, Blow it out your A$$! Architects are the worst, and I have one in my family.
An architect acting as a developer? On a condo project? I deal with both on a regular basis, and there is always a fight over indemnification between the developer and architect on condo deals. I wonder how he handled that?
funny stuff right there.
sons a bi*ches never make mistakes, it was the idiot kid rendering who screwed up….. most are absolte jack-fricken-A$$’es. offense intended, and I’m married to one! Queen of the inconsequential, I call her.
When I was growing up, a couple of our neighbors were architects who built their own homes. After they sold, the new owners had to extensively remodel because off all the ‘cool’ but ridiculous stuff the architects designed into the house- odd spiral stairways that were strangely dysfunctional, bizarrely-shaped rooms, etc.
The only thing I need to know about architects is that George Costanza wanted to be one.
Only because he thought he would aid in his ability to get laid!
Wasn’t Hilter a want-to-be architect but could never make it ? Maybe that’s why Hilter failed at being a dictator,(evil guy actually ).
No, he was a wannabe painter. The architect was Albert Speer, as I recall.
“75 percent of those surveyed were refinancing, rather than purchasing”
do refis qualify as subprime, or does that term only refer to low FICO score home purchase loans?
Yes, refis qualify as subprime.
The banks have been trying to squeeze every last dollar of home equity from the Denver area since the late 90’s. I lived there till 98 and 1/2 my junk mail was for 125% refis. It’s not just the last 5 years for Denver, prices there have been near flat since 2000.
It’s a bad time to be an ignorant borrower.
It might be an even worse time to be an ignorant lender.
I’ve seen the same thing in my searches when I actually was considering buying something … There’s a TH development in Thornton that has existing pre-owned units for $150k and new the builder wants $200k (with $20k in cash to close) … Short sellers are starting to panic and I could very well see those units going back to what they were first sold for ($140k).
There’s no way I’m buying now. There are going to be a ton of houses I’d love to live in for rent. Then maybe in 4-5 years I’ll consider buying.
The last time there was a housing bust (late 80s I think) it took 14 years for prices to come back to what was considered “reasonable” based on normal historical appreciation. There’s no way I’m buying at a peak that may take 20-25 years just to break even
“Last month, Campus Edge Lofts threw a splashy party on its Apache Boulevard worksite. More than 350 people ate, drank and scaled a 30-foot-high scaffolding to the music of a DJ. Plus, nine people reserved condos.”
I’d like to reserve a condo for later this evening, around 6′ish~
“‘It’s very obvious that people were inspired by ads to pull cash out to pay off higher-interest credit cards,’ she said.”
“yeah, that’s it honey let’s pay off these credit cards with all this cash…..Whoa! did ya see that BOAT?!?!”
And, of course, he’ll need a new big truck to pull that boat, plus he probably needs a couple of Seadoos for the kids. “Now where did that money go? How can our credit cards be maxed out again? We either need another HELOC or more credit cards; or both!”
You should see all the (fairly brand new) trucks, harleys, BMW’s for sale in my town parked along the curbs. It’s going to be quite a show. What I like the most is going to the model homes and watching the agents 2006 Audi’s being replaced by 1986 Cutlass Supremes
More and more coworkers have been asking me if they should buy a used BMW… hmmm… doesn’t anyone know the resale trend? (How quickly are values dropping?)
Yes… I drive a BMW. 140k+ miles and counting.
Fun! Too expensive to maintain… but I’ve avoided 3 accidents that I never would have in my old Toyota… So I just can’t make myself give it up. 
I still that my lucky starts that the CHP officer two years ago “only” gave me a ticket for 85+. 
Got popcorn?
Neil
I know the feeling. It’s just a huge drop in handling everytime I have to drive a Toyota or GM or whatever. The loose steering, the body flex, the weight imbalance — highway curves feel so dangerous that you have to hold on with all your strength to keep the car between the painted lines. Heaven forbid if you have to drive a heavier car like a SUV or minivan.
Drove a few BMWs before and now I’m un a MINI Cooper. BMWs have solid handling but MINI with it’s lighter weight takes it a few steps beyond. It simply goes where you direct it with perfect precision. And on twisty mountain roads, get the hell out of my way unless you’re driving a Lotus Elise or riding Japanese superbike.
This is a redo on the old checkbook joke: “Whadda mean I’m out of money. I’ve still got a house!”
would you folks just STOP IT…
That’s pretty funny.
“since it was established five months ago, the state’s foreclosure hotline has received more than 11,000 calls from people in jeopardy of foreclosure”
- So did they tell that guy to STOP CALLING ALREADY?!? 11,000 calls he should have got all the information he needs after maybe a few hunderd!
From: http://www.foreclosure.com
State Info
Updated: 04/05/07 5:50 PM
Foreclosures: 5,954
Preforeclosures: 12,631
Bankruptcies: 7,175
They’ve still got a bunch of folks to talk to.
Hmmmm. McAfee mansion goes on the auction block, gotta wonder how this ends up…since it’s by choice McAfee’s not exactly hurting.
http://www.koaa.com/news/view.asp?ID=7245
“The auction does not have any reserves or minimums.”
But it’s expected to go for “tens of millions.”
We’ll see.
Lemme see,
Ive got my bid $17.44, you think the Gov would take that as a tax basis.
“As the market started slipping last year, Steve Villarreal found financers were less willing to commit to his proposed development at 715 N. Country Club Drive so he and his partners reworked the product.”
“‘It was a difficult thing because the lenders were wary of where the values would arrive at because there was so much speculation that there would be a 20 to 30 percent drop in home values,’ Villarreal said.”
They will, in time, be regarded as optimists. Has PHX inventory passed 60k yet?
High profile FB? Anyone wanna bid on this?
http://www.tmz.com/2007/04/05/britney-slashes-price-on-malibu-mansion/
K-Fed big pimpin will be broke and destitute inside 3 years.
he goes down just like hammer-time
I believe MC Hammer lives in Tracy, CA, and according to someone I know that also lives out that way, he’s in a nice neighborhood, so he’s not exactly destitute. Compared to where he was at one point, it’s quite a fall tho.
I am seeing an ENOURMOUS GIGANTIC explosion of over 1 mill listings
in the LA area. I cant blame them if you can sell your crummy 1.2 million dolar home (yes that is a crummy home here) and then RETIRE NOW would you do it? yes. yes and yes.
For example realtor.com has 757 listings over 1 million in malibu. The highest is 75 million. Low end 1 million is all older apartment style condos of course. Malibu is gonna TANK SO SO BAD. The reason is the high price is for ‘prestige’ in a recession that is first thing you dump.
It should be trendy to be frugal by next year. Remember the phrase ‘living with less’ from the mid 90’s??? Its coming baaaaack. Starting with britney ! I think it be hidden in ‘living green’ such as saving the planet by having a small house driving a prius (it used to mean you are poor, now it means you are ‘living green’)
Yea, I thought I was the only one who noticed that. A lot of the coast is suddenly coming up for sale. Seems like everyone is trying to bail out before summer gets here. Sad thing is most of that stuff is not worth a million bucks.
Also noticing the green dialogue picking up.
Buffett sold his Laguna Beach house for $4 million in 2004, at the peak. I am sure it was to be true to his principles, obviously not for the money.
Walking down the street here in Santa Monica the other day, I saw a condo building with three signs jammed in the same planter out front. They were so close together that I had to walk right up and practically stick my head between in order to read them.
On weekends, I notice lots (and lots!) of condos are for sale but most of the SFHs have seemingly been pulled off the market. We’ll see what this weekend looks like - after all, it’s spring selling season, right?
I’ll be looking at Malibu houses starting a year or two from now. You never know when someone might need to sell in a down market.
Remember the phrase ‘living with less’ from the mid 90’s??? Its coming baaaaack.
Hey, that’s a fashion I could get behind.
Hey, at least there’s hope - a few years of wage increases and affordability improves.
Grad salary offers on the rise
Chemical engineers, marketing majors are raking it in, but accounting grads aren’t seeing similar increases.
By David Ellis, CNNMoney.com staff writer
April 5 2007: 10:58 AM EDT
NEW YORK (CNNMoney.com) — This year it really pays to have a college degree.
Salary offers made to soon-to-be college graduates are on the rise in just about every field, according to a quarterly survey of 81 schools published this week by the National Association of Colleges & Employers’ (NACE).
This year engineering majors were once again some of the most handsomely compensated, according to NACE. Chemical engineers topped the list with the average offer climbing 5.6 percent over the past year to $59,707. Civil and mechanical engineering majors saw job offers climb by roughly 5 percent or more.
Marketing majors, by far, experienced the biggest jump in salary. Over the past year, offers climbed 10.3 percent, on average, to $41,285.
Accounting majors, while one of the mostly highly sought after students by employers on college campuses, only saw their starting salaries climb just 2.7 percent to $47,421.
Offers made to computer science grads, which fell in the 2005-2006 school year, have rallied this year, climbing 2.5 percent to $52,177.
Salaries for liberal arts majors appear to be holding steady. Based on early numbers, the salary offers for liberal arts majors were up 1.2 percent from last spring to $31,333, but below the pace of inflation.
So far this year, the job market has looked pretty promising for the 1.5 million college seniors set to graduate this year, despite recent signs of weakness in the larger U.S. labor market.
In fact, NACE estimated last fall that employers will hire 17.4 percent more graduates this year than they did in 2005-2006.
And that trend appears to be showing up on college campuses nationwide.
“We are seeing a real aggressive push for the hiring of new graduates,” said Stan Inman, director of career services, at the University of Utah, which graduates roughly 5,000 students annually.
While U.S. economic expansion certainly is driving the college labor market, many employers are ramping up their hiring in an effort to find replacement workers for the fast-approaching retirement of the baby boomer generation.
NACE plans on publishing its next quarterly report in July.
http://money.cnn.com/2007/04/04/pf/college/grads_salaries/index.htm?postversion=2007040510
OT - While at the gym I was reading some Close Caption for Kudlow & Co. An older gentleman mentioned it’s the tip of the Ice Berg. Diane Swonk was saying things will be OK, she is a Goldilocks Gal.
Kudlow is now spending more time talking about RE.
“‘It was a difficult thing because the lenders were wary of where the values would arrive at because there was so much speculation that there would be a 20 to 30 percent drop in home values,’ Villarreal said.”
So, how do y’all like that speculation now, eh?
Neil, how long do you think “Lance” would last on this board??? LOL
As long as VA_INvestor, er… speculator did. Not very long.
Lance was on this board about a year back… He got so trashed that he retreated back to david’s blog.
David, do you still check this blog? I haven’t posted my blog in your comments, but I love your blog and welcome you to review mine.
Lance has become boring… he cannot injest any new information or change in trend. I truly think he only argues to practice his lawyer skills. He also treats shills as experts. WTF?
I notice when I point out all of the jobs leaving DC he can only state “why doesn’t your company just raise prices and salaries.” Umm… that requires no competitor (a monopoly).
I love DC. Bummer my company’s flow of jobs is out of there.
Unfortunately they took an option on land in Houston TX and Mobile AL.
Oh, ok cities, but I would have prefered Huntsville AL, Austin TX, or the plot of land in Virginia almost 50 miles west of DC (hence why I started reading David’s blog).
The bottom won’t be hit until people are scared of Real estate.
That’s a long way away…
Got popcorn?
Neil
“scared of Real Estate. That’s a long way away…”
Yeah, but you can smell the fear in the air.
“The majority of people don’t even know what kind of loan they have”
So much for evolution.
Are we not men?!!!
“A big surprise was that 75 percent of those surveyed were refinancing, rather than purchasing, ”
———————————————-
this is a big reason why prime and alt-a will have problems as well, financial irresponsibility does not know class lines
“In addition to high-dollar ad campaigns, companies are going out of their way to get customers to their sites with everything from extravagant parties to sweepstakes prizes.”
That’s already been done to death in several localities. And it doesn’t usually work because;
- most people want HEFTY DISCOUNTS when buying a home, NOT a possible free dinner at Acapulco’s.
- it REEKS of desperation and scares away many potential buyers. It empowers those still interested to lowball or press for even more concessions.
Until RE people start offering free bj’s during Open Houses I’ll stay put right here in my comfy & affordable rental.
“Until RE people start offering free bj’s during Open Houses I’ll stay put right here in my comfy & affordable rental.”
“bj’s during Open Houses”……….. Has Suzanne researched that?
Trust me…. nothing is free with Suzanne….
Here’s a fun Craigslist listing in Superior, CO which is closer to Boulder than Denver. Superior is just over run with McMansions like this … 7 years ago none of these existed. 4 years ago, none existed that I know of …
4400 sq ft home available for rent for $4400/mo
Look at the pictures. The place is EMPTY. This is not a “oh geez, I have this awesome house and now I have to relocate.” This has to be a last ditch effort for a flipper to keep the house before it goes to foreclosure.
Who is going to pay $4400/mo? That’s about $775k for this home which as we all know is way overpriced.
What happens to all these homes bought with 100% financing (and maybe stated loans?) Do they sell for 25% of their original sale price? What about all the $350-700k McMansions in between? There are going to be a TON of these in Colorado … It’s going to be a great time for people with cash and good credit when things get their worst … 4400 sq ft for $250k?
Where do I sign up?
Wow, you mean it’s cheaper to buy there than to rent?!
LOL, no the reverse
And maybe I didn’t get your joke.
Will it be at some point? Definitely. There are a TON of spec homes and of course the sub-prime foreclosures … DR Horton apparently has 500 they are dumping. Talk about just screwing all their previous customers (with their pants still on!)
One would have to be nuts to try to flip property in Colorado. There has been next to no appreciation since 2000.
I’m guessing that the owner lost his job at Sun or IBM.
The only thing about that is that wouldn’t there normally be furniture in there? Maybe they’ve been out for a while but if he’s without a job and can’t afford that house, where’s he getting the money to cover that mortgage? HELOC? Definitely wouldn’t rent from him if he’s gonna lose it when the bank comes calling.
I know of a few people who lost high paying jobs here, found another job out of state, and simply left.
FWIW, I remember houses like this going for around $350K in 1998. I would guess that the current market price for that house is in the low 400’s.
One problem I see with that house is the obvious “do it yourself” landscaping (for instance, there are almost no trees). Buyers out here in that price range expect professional landscaping.
Ben, really having withdrawals without the “California Finale”…..
Chico, CA newspaper, the Enterprise Record, has a “Call-in” column in the paper (sort of a crude letter-to-the-editor) titled “Tell it to the E-R”. This was in the paper today……
Real estate in trouble in Butte County:
“This is about the North Valley Real Estate, the paper that comes out in your newspaper. I’m getting tired of reading about the real estate from these people. The realtors say oh, it’s not that bad, or oh, don’t worry about it. You know what, it’s real bad. I can understand the real estate man wanting to say it’s not that bad to make the business do better, but in all reality, there may be houses out there, but no one will loan you money. I’m sorry, but don’t make the rose smell like a rose, when it’s actually a weed”.
(out of the mouths of Buttants …….) I have to find this person and have a group hug…. even if it is just the two of us.
Oh, and on a side note about the local economy…..
I work with a Chico City Councilman, and he said the City is looking at an approximate one million dollar sales tax shortfall for this fiscal year. This is a small town, and he says it’s “a big deal”.
Contrary to the relentlessly upbeat pronouncements of the local NAR shills, it’s NOT different here in Colorado Springs. Here’s the YOY stats for March 2007:
26% increase in inventory (to over 5600 active listings)
-1.9% median price
-14% sales
45% increase in foreclosures (325 vs. 224 in Mar 07)
Foreclosures have hit 17-year highs. Right now there’s roughly one forclosure for every 2.5 sales.
Sources:
http://put.elpasoco.com/NR/rdonlyres/3BE6A35A-85BE-441F-9D01-EB8DCED68F2F/0/ptstatistics.htm
http://www.ppar.com/public/stats_public.asp
OT: I was walking through La Cienega Park in Beverly Hills, CA at the corner of Olympic & La Cienega and what did I see? A class for sign twirlers! It was a real operating legit business (forgot the name). They were wearing shirts with the name of the company and the website and were using an expensive video camera to film the students. The students appeared to be no older than teenagers that did not seem to happy to be there. I assume you can see them performing their skills on a Los Angeles intersection this weekend. The funniest part was the park ranger talking to one of the organizers and then walking with him to the office. I assume there are restrictions on using the public park for a commercial operation. This is Beverly Hills ya know, where sleeping and urinating in the park is A O K.
Multiple sign twirlers spotted today at Hollywood Way and Alameda in Burbank. Must be a new condo failure. Who would want to live there? It’s industrial/commercial, right under the takeoff path from Burbank Airport.
They’re there every day pushing a development called “Entourage”. The whole area is considered “studio close”, so they’re hoping to sucker in all those actor wannabes.
“A big surprise was that 75 percent of those surveyed were refinancing, rather than purchasing, said Kathi Williams, director of the Colorado Division of Housing and co-chairwoman of the Foreclosure Prevention Task Force. ‘It’s very obvious that people were inspired by ads to pull cash out to pay off higher-interest credit cards,’ she said.”
It’s obvious the War on Savers has been highly successful, including the brainwashing of American households to believe that whenever they are a little short on funds, there will always be another lender available to refinance them into more spending power…
What’s the surprise? When you have a bunch of dopes spending well beyond what they make.
bantering bear said: I’m dead against those who buy it to take it out of use, solely for the purpose of profit. Never has been good, never will be.
Hoz is right, this isn’t the brightest statement out there today . People who ‘take it out of use’ are often older people holding the only form of wealth they trust - land. They don’t trust dollars because of inflation, and are still afraid of the stock market because of the last bust(even though it’s 100 year average is 10% up a year with 20% a year variance). But the real funny part of Bantering Bear’s sentence is the “for profit” part. It sounds like you despise profit-making, the essence of capitalism. it’s ok to make it profit, in fact it’s GREAT. I hope everybody on this board(and all of society) makes a juicy profit from the greater knowledge they achieve through this board. I see profits as ‘future captured work units”, if I save and earn enough (and probably buy raw land to park the money safely) I won’t have to work so hard when i’m old, weak and tired. don’t be against profit, profit is good. speculators are good because they buy when prices are low and nobody else will touch them, and they sell when nobody else will sell. they are the supreme ‘rationers’ of the product they speculate on, like a captain on a sea voyage that has bad luck befall(example from vic niederhoffer). the action of their speculations drives volatility out of the prices, provides a price floor when no one else will buy and a price ceiling when no one else will sell. The human nature to speculate, to serve one’s self for profit, is as basic as man’s fundamental first order of nature - survival. Speculation just for profit is good for society as a whole, regardless of each individual speculator’s outcome. The competitive process of multiple speculators drives the profit from speculation to a minimum. it really is a naturally made beautiful system, allowing people easy ways to mitigate/minimize their risk(for a price of course). Anti-profit, that’s a f**k**g laugh. How many people you know show up for work without getting paid? get your econ 101 straight and toss the Marx.