Downward Pressure On Prices Is Apparent
The Mail Tribune reports from Oregon. “There is no argument that Jackson County’s real estate market is far afield from what it was two years ago. Median prices arced higher and higher during the first half of the decade, sputtered then stalled and have slowly lost elevation in the past 18 months.”
“‘It’s still a changing market,’ said Colin Mullane, an agent in Ashland and a member of the Statistics Committee of the Rogue Valley Association of Realtors. ‘Last year, we were beginning to see signs of the market changing and slowing down and the statistics are reflective of the same kind of market.’”
“In White City, the median price slipped below $200,000 during the first three months of 2007. For the quarter, it dropped 20.6 percent to $179,900. In places such as Central Point and Talent, lower-priced new construction may well contribute to lower median prices.”
“‘People are looking for value and a good deal,’ Hall said. ‘Buyers just aren’t paying the prices they used to pay because there is higher inventory. That makes buyers more selective and they’re able to get nice houses for the money. It’s one of those things where the developer recognized the market was not strong, and selling lots so builders can make some money, too.’”
“Mullane said downward pressure on prices is apparent in a new development by Charlie Hamilton in Talent. A four-bedroom, two-bathroom, 14,000-square-foot house with granite counters, stainless steel appliances with hardwood entry and a gas fireplace is selling for $314,000.”
“‘There were similar houses built a couple of years ago that sold for $270,000 to $300,000, depending on the square footage, and some of those people are wanting to sell for $340,000 or $350,000 now,’ Mullane said. ‘Those houses didn’t have those extras and it’s hard for the secondary market to beat that when the new ones are selling for $35,000 less.’”
The Seattle PI from Washington. “There are more homes on the market in Seattle these days. The number of homes increased by nearly half in March from March 2006, according to data the Northwest MLS.”
“Karen Woo saw the market change as she spent more than a year looking for a new home, she said. She found one in Laurelhurst last month. ‘There were months that would go by that there was nothing,’ she said. ‘Recently, I have found there were more.’”
“But the competition for those good houses still was intense, Woo said. ‘If you don’t see it the day it’s (listed), you’re probably not going to get it.’”
“‘We’re rushing stuff to market. The people who were waiting till May and June, I’m telling get it out now,’ (said broker) Gordon Stephenson.”
“In King County, the number of homes on the market in March was up 36.8 percent from March 2006, while closed sales were down 1.4 percent and pending sales dropped 8.1 percent. For all 19 counties in the Northwest MLS, listings (were) up 46.4 percent, closed sales down 7.7 percent and pending sales down 9.2 percent.”
“The MLS condo numbers do not include many new condos, because developers sell them directly, outside of the listing service.”
“(Broker) Dick Beeson in Tacoma, said, ‘It just feels like a normal market with well-priced homes seeing offers in 30 days or less and sellers of overpriced properties having a gut check and a motivation check to see if they really are serious about selling.’”
The Bellingham Herald from Washington. “The average time it takes to sell a home in Whatcom County was 109 days in the first quarter, up 58 percent for the same period last year, according to Lylene Johnson of The Muljat Group South office in Fairhaven.”
“Housing sales and prices in the county were slightly higher in the first quarter this year compared to the same period last year, according to the report.”
“The rise in home prices has little to do with recent price appreciation and more to do with the fact the market has changed in the past 12 months, said Julie Hansen, an economics professor at Western Washington University.”
“‘Housing prices didn’t really start to flatten out until midyear (in 2006), so that hasn’t showed up in the numbers yet,’ said Hansen. ‘From the data that’s coming in, we’re still in a flat market when it comes to prices.’”
“Johnson added that sales continue to be strong in the high-end housing market, which could be skewing the average price.”
“‘It is still a situation where if the house is priced correctly, it will sell fairly quickly. If it’s priced too high, it will sit on the market. Buyers know they don’t have to be in a rush to buy, because there is plenty of inventory to choose from,’ Johnson said.”
The Olympian from Washington. “Thurston County single- family home and condominium sales dropped 7.5 percent in March, though last month’s results were softened by a surge in the condo market, the Northwest MLS reported Thursday.”
“Total active listings for single-family homes increased 38 percent to 1,802, up from 1,303. Total active listings for condos increased 133 percent to 49 units, up from 21. Single-family home sales, meanwhile, dropped to 365 homes last month, down from 421 last year, a decline of 13 percent, according to the data.”
“The torrid housing market of 2004 and 2005, with its high rates of price appreciation and short selling times, was an abnormal period, said broker Ron Hill. ‘It’s now a normal market,’ Hill said. ‘It actually involves work to sell a house, but that’s OK. That’s why people hire us.’”
“Olympia Real Estate broker Heather Macy said she has recently seen more listings expire or get cancelled because sellers were unwilling to adjust their expectations.”
“‘The most important thing is for real estate agents to educate their sellers,’ she said. ‘It’s a good time for them to sell, but they’re only going to get what the market will bear.’”
I re-read the Oregon article a few times and never found who Hall is.
‘The state’s economic growth slowed in February for the third time in four months. But a monthly report by the University of Oregon says the housing market is not to blame. The university said its index of economic indicators, which tracks economic performance in eight categories, slipped back slightly in February. But one of those categories — seasonally adjusted Oregon residential building permits, actually increased in February for the fifth time in six months.’
‘Housing slump effects: The heat pump repair guy who came to my house last week said his company’s business is down by two-thirds this year because of the slump in the Clark County (WA) housing market. Big-time investors pulled out of some local single-family housing projects, leaving builders with a lot of inventory that will take a while for the market to work through, he said.’
I sell to 1711 SIC type contractors- and it’s slow
BTW the jobs report showed an uptick in construction jobs- all -commercial ?
Re-post from the Bits;….
See what Lennar just did with its sub’s ?? Sent a letter to all sub’s telling them to reduce prices on all work including completed work by 20% or be excluded from bidding for 6 months…
We have discussed here about the major builders and why they keep building…Its because they can find margin through the type of practice discribed above…They are ruthless competitors and will take no prisoners (including previous purchasers in a tract) when they have to….We will now see not only layoffs in the construction industry but also lower wages for the tradesmen that remain….
“‘It’s still a changing market,’ said Colin Mullane, an agent in Ashland and a member of the Statistics Committee of the Rogue Valley Association of Realtors.
———————————————————————————-
Does working for the Rogue Valley Association of Realtors make Mullane a rogue statistician?
“In White City, the median price slipped below $200,000 during the first three months of 2007. For the quarter, it dropped 20.6 percent to $179,900.”
Ouch! I thought a 25 percent drop in the YOY median for the East (SF) Bay market sounded painful, but 20 percent in one quarter? That is equivalent to an annualized rate of 59 percent median price decline.
P.S. Google has a cool feature (relatively new, but not sure how new) where you can enter a mathematical expression and get back a calculation. For instance, here is what I got when I annualized the 20 percent rate of decline:
(1 - (0.8^4)) * 100 = 59.04
Looks like the annualized decline is 41%, the value that remains is 59%.
Let me make this perfectly clear:
Assumed quarterly rate of decline = 20%
Percentage remaining after one quarter of 20% decline = 100% - 20% = 80%
Amount left after 1st quarter = 80% X 100% = 80%
Amount left after 2nd quarter = 80% X 80% = 64%
Amount left after 3rd quarter = 80% X 64% = 51.2%
Amount left after 4th quarter = 80% X 51.2% = 40.96%
Overall decline over 4 quarters = 100% - 40.96% = 59.04%
If this is still unclear, I suggest you enroll in remedial math immediately.
2nd quarter decline = 20%
Amount left after 2 quarters = 80% X 80% = 64%
3rd quarter decline = 20%
Amount left after 3 quarters of 20% decline =
P.S. To figure out the approximate number of quarters to lose 50% of the initial value at a 20% quarterly rate of decline, you can use the “rule of 72″:
72 / 20 = 3.6 quarters, which again suggests the value falls by over 50% in one year (however, at as high a rate of decline as 20% per quarter, the rule of 72 is much less accurate than at rates of decline closer to 0).
You’re right, I wasn’t paying attention when I read your eqn.
To be honest, my intuition was telling me that even at that quarterly decline rate, that the end result of > 50% was too drastic.
It really is a shocking number.
I have spent a lot of time over the past 1 1/2 years doing business in Jackson County….It is shocking to see the amount of California speculation that has occured there…Without easy money or price appreciation the area just cannot support the amount of inventory they have…It will be a long slow bleed for this area I believe unless we have a national recession…Then its katie bar the doors…..
I wonder if the constant-percentage scenario would really happen ….
More likely, home owners are reducing by fixed amounts until they hit the price that sells. This would mean an increasing percentage, as the asking price falls:
$300,000 - $10,000 = 3% drop from $300,000
$285,000 - $10,000 = -3.5% drop from $285,000
etc.
White City is considered near-equivalent to a ghetto…. For the past few years, small single-family homes have been built on cheap land…. With the combo of demand reduction via tightening loan requirements, plain old price for value, and coming defaults, White City is looking to fall farther, faster, than other places in the valley.
Ashland is still monumentally self-congratulatory, attracting what few equity refugees are available.
County-wide, prices are down .087 % YOY, with inventory up a huge percentage for the same time frame…. The beat goes on…
“Ashland is still monumentally self-congratulatory, attracting what few equity refugees are available.”
As the equity refugees dwindle, I can’t imagine how the Ashland market will stay propped up for much longer. In a town of 20,000, I can’t imagine the slowing stream of outside $$$ won’t have a huge impact.
I’m hoping to buy there in 2008.
White City is a ghetto? Sounds ironic.
There’s a small city in the DFW area named White Settlement. It got its name back in the Wild Wild West days. A few council members wanted to change the name because they thought it sounded racist. The residents put those council people in their place pretty quickly.
However the Southern California city originally founded as “White Conquest” was later re-named “Compton” by city council members…
Looking up WhiteCity on Realtor.com even by California standards looks overpriced.
When you drop 20% in a quarter does it really matter? These folks are screwed anyway you calculate it.
“A four-bedroom, two-bathroom, 14,000-square-foot house with granite counters, stainless steel appliances with hardwood entry and a gas fireplace is selling for $314,000″
14,000 square feet? or 4,000 square feet?
Yeah, I saw that too. I’m packing our belongings right now, I’m getting moving quotes. Stop me if that is a typo.
“A four-bedroom, two-bathroom, 14,000-square-foot house…selling for $314,000.”
Is that a typo or is that seriously a 14,000 sq-foot home for $314k? If not, who the hell would need a 14k square-foot home? And who’d want to try to heat (or cool) something of that size?
sounds like a more reasonable price for a mansion
….too many zeros by one….. s/b 1400 sq ft
A 14,000 sq ft. with four bedrooms and two bathrooms, impossible.
A house that size would have many bedrooms and lots of bathrooms. My house is 4,000 sq ft and has five bedrooms and four bathrooms and two kitchens.
SKB
Much of this article could have been written by an (OC)writer last year.
Same type of stuff, 1)It’s a normal market,2( permits still up,3)’buyers looking for a good deal” versus waiting for blood? 4) builders discounting the resale market.
Happy Easter
Yep, here in Pullman, WA (eastern border) it feels a lot like Bozeman, MT last spring. A last gasp of hope with abundant signs that something is wrong.
THe strange thing here is that the high end vanished first. There is nothing listed below $200k and very little sells above $230k. So essentially you can only discriminate based upon home quality, everything selling is listed at roughly the same price. Looks like the builders with spec homes at $300-500k are the real bag holders.
I lived 8 miles east of Pullman in Moscow 82-85. I’m sure the area has grown since then but how can homes be 300K+?
My husband talked to some guy who pointed out a passel of building lots, in east Medford, amenities in, with a wishing price of $350K (each, of course). My new mantra: “Let me know how that works out.”
Marylee;…How about all those finished lots out in eagle point on the golf course….
(It just feels like a normal market with well-priced homes seeing offers in 30 days or less and sellers of overpriced properties having a gut check and a motivation check to see if they really are serious about selling.’”)
is that sort of always the case?
I can’t honestly wait to all these comments are flushed out of the papers.
Is it too late to get a toxic loan and still be eligible for the bailout?
Lie on an application now, before you’re unforgiven forever!
One of our talented posters probably could come up with a video parody of “The Unforgiven.”
I really like the Bellingham Herald because, unlike the Seattle paper, they sometimes have at least partially truthful, frank discussions of the market.
I really wonder who this numbnut Karen Woo is who couldn’t find a home in Laurelhurst. FYI, every time there’s an uptick in Seattle listings or an increase of DOMs, the local TV news and/or paper locates somebody to trot out and announce to the media ” It’s very tight! People are fighting over houses!”)
We haven’t started our huge spring jump yet. I’m looking for that to happen sometime in April. Meanwhile, foreclosures are increasing pretty rapidly in both areas. At some point, the Belllingham Herald will mention that. I don’t expect the Seattle papers to ever talk about it.
When foreclosures reach critical in Seattle, we’ll be treated to our next installment of “We can’t find a house in _____!!!” (insert desirable North Seattle neighborhood).
In todays Seattle Times RE section the feature article focuses on two happy new home owners who went over budget to secure their not-quite- dream home. One ( a nurse) wanted to spend 200K but went to 250K. Wanted to live in city but settled for the burbs. Spent just 3 weeks “searching” for her new home.
I cannot wait for the Alt A implosion. The Seattle area is in the top 10 nationwide for those loans.
Yeah, I wondered why Seattle had so little subprime yet such heavy Alt A exposure. Then I realized– Seattle is also the whitest city I’ve ever been in. I wonder if there is a real correlation there. Regardless, Seattle is a good 6 mos behind the price drop curve, but in the end the ARMs all reset eventually. One wonders if WaMu will survive.
“Seattle is also the whitest city I’ve ever been in.”
Ever been to Portland?
I have read before that Maine is the whitest state in the union. It is also the greyest and with the highest total tax burden. These facts may vary depending where you read them. Maine actually has quite a few unflattering stats and, from my observations, I would say they are fact.
Yep but people in Maine all look alike. Theres not much to do in the winter except…….
I meant Portland, OR.
Bend and Eugene are whiter than Seattle and Portland by far.
I thought these stats were interesting:
http://www.muninetguide.com/states/oregon/municipality/Portland.php
http://www.muninetguide.com/states/maine/municipality/Portland.php
Having lived in both, Boise ID is MUCH whiter than Portland, Or. Not even close.
Boise, ID is also less than 1/3rd the size. You could say the same about Kennewick, WA. I guess it all depends on what you consider to be a viable sample set.
ajas — one possibility is that Seattle has high employment in high-tech and a typically (read: overly) optimistic group of FBs. They all drank the kool-aid and bought homes they couldn’t afford, but they had decent credit scores because of their employment, whereas the subprime borrowers elsewhere had lousy scores. If this is so, it would support the argument that the dollars-per-house losses will be much greater in Seattle than in the average city.
I’m absolutely amazed at the number of people who allot one weekend to find a house. Look at all the house in their price range, then buy the best one for near list. It as if they are shopping at Walmart for new sheets. Particularly for a small market like Pullman, WA only a limited fraction of potential homes are on the market over any given weekend.
THe logic is, “the university will only fly us in once and we have to buy a home before we move.” Renting for a few months to get a feel for the town and market, is of course out of the question.
“Renting for a few months to get a feel for the town and market, is of course out of the question.”
Of course it is, why throw your money away on a rental? LOL
I hear ya. It makes since to many of us on this blog, but a lot of people still feel they will be ridiculed by their (possibly, upside down) neighbors and new co-workers, as well as family members. But look at it this way…at least they will have company when they all start cryin’ in their beer about the market change.
BayQT~
I always thought that people from the West Coast were too smart to fall for such things. I mean they all go to college and such.
BTW, these neighborhoods in Seattle that they find people to exclaim “Can’t find a house here!” are precisely the ones that I’ve been tracking for over a year now, on a more than weekly basis (check Zip Realty and record #’s of properties vs. price reductions, DOM’s, MLS # changes, etc.)
So the first time, they got one of these liars (or duped buyers? hard to tell) to go on TV and exclaim they “couldn’t find a house!!” I was shocked. Now I just expect it. It’s one of their tactics.
The first time they did it, it was a wannabe buyer in the Bryant neighborhood who was standing outside a house that supposedly went through numerous bidding wars. The interview began outside in front of the house, so I recognized as one that had been on the MLS for a couple of months already. They proceeded inside where they showed video of the kitchen counter littered with all the cards of RE agents who’d supposedly submitted bids for the house, as proof of the still- frantic activity.
When I checked the tax records after it finally sold, it had gone at slightly BELOW asking price.
This happened about a year and a half ago, after the bidding wars had finally calmed down and things were gong into price reduction mode.
Nothing surprises me anymore with the Realtors and media up here. Unfortunately.
seattle price drop, I’ve expended an enormous amount of blog time trying to explain to the housing bears on seattlebubbleblog that it doesn’t make any sense at all that people are having such a hard time trying to find a house to buy, when you can rent the same house for such a reaonable rate. I was up in Seattle interviewing at UW for a graduate school position, and the house I was staying at in Bryant was next to a beautiful four-bedroom craftsman. As it so happens, it was a rental owned by people who were friends of a friend. Had I arrived a week earlier they would have rented it to me for 1300. It’s on 38th, right near the Burke-Gillman, nice quiet street, beautiful house. I found a perfect 3 bedroom craftsman not too far away for under 1700, and another 3 bedroom in Montlake for 1050. In other words, it’s really not very hard to rent in Seattle. Lots of nice houses, very reasonably priced.
Lionel-
Had to laugh when you said “I’ve spent an enormous amount of time on the Seattle Bubble blog trying to convince…”. More power to you , keep up the good fight! But I finally quit going there because , as you’ve politely stated, it’s exhausting!
That blog is about one hairs breadth more relevant than the local newspapers. It gets better as things become MORE and MORE ****OBVIOUS****. By the time Seattle’s crashed completely, they’ll all be in agreeement about the “coming crash”.
Sad. Seattle is a city that really needed a good bubble blog.
So you’re saying the bears at Seattle Bubble don’t see the light? I’d have to disagree. Most of the regulars there are incomplete agreement of the coming correction. The problem is there’s one or two bulls that intentionally stir things up, and many of the regulars fall for it every single time. It’s become more about countering the bull’s points rather than objectively analyzing the data, which is what I loved about that place. I can find arguments anywhere, I don’t need them there too. It’s really turned me off to the place. But it’s not the bears, it’s the bulls and their constant data cherrypicking.
Nowhere in this country is the denial greater than in the PNW, more specifically the greater Seattle area. The Kool Aid is consumed from concentrate. It is remarkable. Even the mere mention of price declines stirs up an angry, vengeful rabble. I have to believe it is due to the unconscionable number of speculators on the precipice of financial ruin.
Take that and multiply it north of the border: in Vancouver, BC the KoolAid is also spiked with Vodka and Red Bull. Great denial high hangover’s a b*tch tho.
I just saw a horror/comedy filmed in Vancouver; I think it was called “Slither” or something of the sort, about an alien life-form. The scenery was gorgeous, but the area was supposed to be very redneck; I couldn’t tell if it was supposed to be in the U.S. (I missed the opening).
In any event, if the old chant “location, location, location” really means something, I can see why properties are expensive there. There is something to be said for beauty. Here in Florida, location is now irrelevant, and developers are asking the same thing for junk built in trashy areas as for junk built in nicer ones.
Lots of Asian and European cash buyers in the Vancouver, Canada market and a fairly high percentage of Asian population there that soon will likely become more than 50% of the population. Also a lot of Eastern Canadian and Prairie retirees move to the West Coast. Vancouver is currently rated third best city in the world to live in by some recent international report but in all fairness i have to believe that it is due for a serious price correction down. Victoria also the same but prices a bit cheaper. There are other places on the West Coast of Canada that are somewhat cheaper. Think in the event of a credit implosion there ought to be no special places but in the meantime the U.K. market just keeps marching on and on and upwards and upwards. Any bets on this one??
Vancouver is currently rated third best city in the world to live in by some recent international report
Only for the independently wealthy. Vancouver is one of the most unaffordable cities in the world. LA prices, Portland incomes.
Also a lot of Eastern Canadian and Prairie retirees move to the West Coast.
Used to move. Net domestic migration to BC is now zero. Retirees only move where housing is cheaper than they already are.
“Nowhere in this country is the denial greater than in the PNW…”
I’m not surprised. A lot of those markets are dependent on outside money, as the locals can’t afford the houses on PNW wages. As the equity/specuvestor faucet shuts off, what’s left?? Absolutely nothing. Must be terrifying. I’m sure the local press will try to put lipstick on that pig for as long as possible, as it’s what’s propped up home values, county tax rolls, etc.
I work with a guy from Lynden, WA and he’s always telling me how much money there is in town. I look around and see a few McMansions and people in flashy cars. (Surprising the number of people you see in these $40,000 cars going in for payday loans a few doors down from our office.)
I’m like dude, so what’s the big industry here? And he tells me farming and Californians. I never knew the latter was an industry.
Bear, I think the denial is strongly rooted in snobbery, in the core belief that they’re different; smarter, more tech savvy, better educated, whiter, than those poor idiots who are being foreclosed upon. I recognize it so clearly because, living in West LA for so long, I see those same superior, delusional people here. I’m not a great believer in what the bible preaches, but pride really does seem to come before the fall.
You’ve nailed it Lionel.
In Bothell, WA Centex just dropped the prices by $30k across the board for their “Woodridge” neigborhood. (Was: $470k starting, now $440k starting). Centex doesn’t advertize this drop, probably afraid to peeve already-bought-in-owners in the community.
For those in the PNW, this is a fun neigborhood to get a feel for the PNW’s housing situation. Lots of lots not built on, 10 houses built, 4 of which are for sale.
The party is just beginning…
One more thing and then I’ll (maybe) shut up about this. (!)
Today, the local PBS affiliate had a show about the local housing market. ALL of the questions and discussion were directed toward ONE interviewee: the head of the local Caldwell Banker guy. ‘Nuff said.
Even PBS is in on it. Which is a shame because many people who do not trust the other media outlets look to PBS as a source of integrity. But in Seattle, every outlet is bought and sold.
That’s why I was absolutely FLOORED to see the Seattle Post Intelligencer front page headline a couple weeks back “Seattle Home Sales Fall” or whatever it was. Shocker. I literally felt I was in a parallel universe for a couple seconds there.They’ll probably spend the next 2 months backtracking off of that statement.
A close friend owns a house in Spokane, WA and put it on the market last Thursday for 20% more than he paid 2 years ago (and has put no money into improvements). He got a full price offer from a well qualified buyer in one day, and said his realtor said there will likely be at least one backup offer. The market isn’t dead everywhere. I might add that prices are still quite affordable in Spokane compared to most of the country; this was a 2000 SF home on a nice wooded lot for $235k.
While your story may be true, a quick look into the Spokane market easily reveals flat to declining prices, a steep decline in sales, and rapidly increasing inventories over the course of the past year. Wages are paltry in the area, and houses are hideously overpriced given that fact.
I’m not surprised by this anecdote. I’ve seen a few homes in the $200-$230k range move very quickly here in Pullman. But then others sit for a long time. Basically, locals are sitting this out but there are semi-random interjections of outsiders moving in (new hires at the university) who want to buy a house right away and think $230k is a steal for an unrenovated 1963 rancher. The smart money knows that the pool of outside fools is relatively small and it won’t be time to deal until summer at least.
Of all the cities I travel to in the NW on business, Spokane is the one city for which I have no idea what sustains it.
Gonzaga could be its most well-known attribute, but I would guess most people wouldn’t answer “Spokane” if quizzed about what city it’s in.
If moving to Spokane you MUST bring your own job or work in the medical profession.
Splish, Splash, I was taking a Bath and along came the end of Subprime…..
Write in the End …with your own words…ha ha ha
According to the new Yahoo foreclosure site, Olympia WA. is in the top 10 (#9) foreclosure areas in the US. Did the newspaper article mention that??!!
Olympia is a pretty nice town and it’s the state capitol so presumably has at least one fairly steady employer.
“Olympia is a pretty nice town and it’s the state capitol so presumably has at least one fairly steady employer.”
And, you forgot to mention, EVERYBODY WANTS TO LIVE THERE!.
I wish they still had the beer factory…Oli was my favorite….
The SF Chronicle Real Estate section today ran an article that claimed “core” Bay Area markets are booming (SF, Southern Marin, Silicon Valley). It’s just the “outer fringes” that are in the deep six. Mind you, the article was a series of quotes from a few realtors. Not a single statistic or fact or YOY comparision was provided. Sales are up! Compared to what?? What about inventory?? No mention of that elephant in the room.
Sales are up compared to Christmas-New Years week
SJ Mercury ran a similar article on the front page last weekend with a map showing where it was “hot” and “not”. I can’t speak for Marin bc I’m not interested in moving there but in Mountain View the claim was 25 days inventory. MLS on Sat. showed only 9 SFR for 94040 (MtView) and contrast with 325 on the fringe, 95020 (Gilroy).
The Mt. View market is “hot” particularly the rental market…The statements about silicon valley are also accurate a least for now….The valley is humming again eerily like 1999….
Don’t believe it. Sure, there are some homes selling but the upper end condos are just sitting there. A condo next door to my rental apt. just lowered he price from 685,000 to 649,000. Two condos across from me have been on the market for a year. A new senior assisted living luxury condo complex with condos for sale from $1 M to $2 M has sold exactly one condo in th elast two months I’ve bben watching the listings.
In the city of San Mateo, there are 274 homes for sale in the MLS. In Feb, there were around 270 and only 17 were pending sales. In March, roughly the same. It picked up the beginning of this month, but I’d be surprised if it lasts.
Today’s Tampa Tribune was as thin as the usual weekday variety, despite the weekend magazine, the television magazine, and all the other Sunday add-ins. It appears the level of real estate and home improvement/decorating advertising is dramatically dropping. At least momentarily.
I made another visit to home depot yesterday and it was again a wasteland.
Except for all the “Hurry, no payments for 12 months when you sign up for a Home Depot card today” adverts, right?
To be perfectly fair, most Sunday papers are pretty thin on major holiday weekends. Easter does play a role.
yes, mine was missing most of the flyers….as most stores were closed
LA Times was half its normal Sunday size today.
Off topic, does anyone know where to find data charting the increase in the equity withdrawal trend from the mid 90’s until today? A link would be greatly appreciated.
Here’s a chart, at the bottom of the page:
http://usmarket.seekingalpha.com/article/20415
Looking at that chart, I was wondering how it goes below 0? More paying back MEW loans than taking out new?
I was wondering how it goes below 0?
Some old-fashioned loans have this thing called amortization …
Thanks sleepless!
All that money will be missing from the consumers’ pockets. What will happen to the economy considering consumer spending is 70% of GDP. Hmmmmmmmm
UK FACES £459BN HOUSING CRASH
THE BUBBLE is about to burst on Britain’s booming property market. Experts fear a crash is coming that could wipe at least £450billion off the value of the country’s housing stock.
The far-reaching consequences would include a spate of bankruptcies and repossessions as home owners, mortgaged to the hilt, suddenly found their biggest asset falling in value.
Thousands more would face the agonising uncertainty of negative equity, where the value of their house falls below the outstanding mortgage.
Many experts accept that a crash is not a matter of “if”, but “when”.
http://www.express.co.uk/posts/view/3862
I hear the Europeons are even more greedy and psychotic than Americans. Property values in Madrid increased by 40% in 2005 alone. It’s even worse in Eastern Europe. London is the most expensive city in the world per sqft. My friends from Vietnam say that foreigners have been bidding up prices there too. It’s become quite a bubble in some areas. Japan might be the only place that will be spared from this disaster, only because their RE prices have been dropping for the last 16 years. I think a bailout is much more likely in Europe because of their cradle-to-grave socialist tendencies. Speculate and when things go wrong, cry for a bailout.
Nope, the Japanese are in on it too. In Tokyo there is a ‘mansion’ boom right now. A mansion is more like a condo/townhouse in the US.
And their selling like hot cakes. A lot of people are worried about interest rate hikes, which the bank of Japan has been doing slowly. There building them like crazy here. Where I live in Shinagawa City, they have 4 or 5 projects within walking distance of my apartment. And where I work I can look out my window and see several other over-priced projects.
They have a lot of ‘I can make that monthly payment, so I can afford that house here’ kind of mentality. Interest rates on home mortgages are anywhere from 2.3-3.1% for a 30 year fixed.
My wife and I checked out some brand new homes in a suburb of central Tokyo (Machida City) and the neighborhood was kind of iffy (for Japan) and the houses were tiny and averaged about 800k and the construction was shoddy. My wife wants to move back to the US!
So Japan/(esp Tokyo) is on the real estate kick now too. But it’s starting to lose air now and I think Japan is going to have another bubble pop, especially with the mayor of Tokyo’s deficit spending and now he was just re-elected to spend more money, that Tokyo doesn’t have. Japan is screwed just like everyone else, maybe worse.
Excellent read. Maybe this will be part of the inflection point required for global property prices to either “correct” or “crash”. Maybe this will also contribute to recognition of the U.K. Banks role and exposure to the housing bubble - credit risk that their banks have in the U.S. Housing mania. I think banks like HSBC and Barclay’s amongst likely very many others are up to their eyeballs in MBS and CDO type mortgages and are about to get their locks shorn in retribution for the greed and probably ignorance in “investing” in riskier and riskier and grossly illiquid markets to try to obtain higher and higher returns. Tick, tick, tick.
what happened to the 04 UK crash ?
They saved it for 2007-08………btw
450 billion pound is getting very close to $1,000,000,000,000 US
Too wierd. When I pressed that link, it went to the paper/journal and a notice came up that that particular article is now unavailable and “may have been deleted”.
that is a first.
Six trillion seconds equals 189,276 years. Now, as an aside, along with the nearly six trillion miles in the light-year, you might be interested to know that there are nearly five trillion dollars in the current U.S. national debt. Is it any wonder that our politicians in Washington are concerned?
hi i am from singapore
we experience a housing boom 1990 to 1996
it busted in end of 1996.
i have brought a property in 1990 then and it is a public housing.
it costed $135000
it rocketed to around $650000 in 1996
i did not sell it then,
when it went down to $500000 in 1997 i still hope for higher prices.
i only sold it when it in 1999 when at $420000
the price of the house now? $335000.
during the height of the boom, many have brought their house at
$500000 and above.
how much are they worth now? around $300000 and that;s ten years after the bust. now singapore is experiencing a boom in property again. but the prices of these houses are still not going up very much. it is always the new developments that go first.
your sub prime rate looks very similiar to the time in singapore in 1990’s. Back then HDB our national developer will loan to anyone whether be he 60 or 35 years old with or without job 80% of the loan. it was in 1995 when they decided to tighten the critireon that housing begin to slide. Back then i was pratically euphoria. people gong for holidays, people buying new cars etc..
Well, sit back Singapore, because you’re going to see that Americans do everything bigger than the rest of the world - even housing busts.
“But the competition for those good houses still was intense, Woo said. ‘If you don’t see it the day it’s (listed), you’re probably not going to get it.’”
“‘We’re rushing stuff to market. The people who were waiting till May and June, I’m telling get it out now,’ (said broker) Gordon Stephenson.”
So inventory is up 50% YoY while pending sales is down 8-10%
and your rushing for what reason? is it because Gordon says so!
Something wrong with this picture and the buyers dont get it…
I love homes that are rushed to market. I love the use of Velcro to plug leaks in pipes and mounds of spackle to cover unfinished walls. Keep on rushin’!
There a huge disconnect in Portland between “starter homes” and everything else. Stuff priced below 250K which gets you a cruddy 1200sft house sells quickly, but there aren’t many of these around. Anything above that will sit and sit, the market is getting flooded. For 270-290K, you can get 1700-2000sqft. I’m all for living within one’s means, but I can’t believe that people won’t shell out an extra 25K and get a decent sized house. Quarter-million bucks for a condo-sized house seems ridiculous.