The Trend Is Continuing In 2007
The Herald Tribune reports from Florida. “When Matt Kihnke paid $15.5 million for a Bradenton apartment complex in March 2005, the Chicago investor looked primed to become the architect of another condo conversion success story. That was before the real estate market went soft and became saturated with converted apartments. Kihnke’s property is still about a third unsold.”
“As a result, Sanctuary of Bradenton may be one of the most affordable options for first-time home buyers between Tampa and Fort Myers. Studios at Sanctuary of Bradenton sell for $89,900. The most expensive units, 1,055-square-foot lake-view 2-and-2’s, sell for $139,900. Some of the units were listed for at $160,000 or more 18 months ago.”
“‘We used to have a lot of investors who would sit on our product for six to eight months,’ Kihnke said. ‘We’re starting to see those investors again. Buyers understand there is a deal to be had right now.’”
“In the opinion of one analyst, Bradenton’s Coast Bank of Florida is the weakest bank in the state. Coast received the lowest rating among the 376 banks doing business in Florida last year as measured by BauerFinancial Inc.”
“Coast wasn’t the only bank in Southwest Florida that failed to make money last year. Others posted losses from their own loan woes, from costly expansion or because they are young and still struggling to turn a profit.”
“Most of Coast’s problem loans were to borrowers, many of them speculators, who were building homes with Construction Compliance Inc., a defunct St. Petersburg builder.”
“Coast’s capital level. the financial cushion to absorb problem loans and other losses. is at 4.33 percent. That’s barely above the 4.0 percent minimum required by federal regulators to be considered adequately capitalized.”
“In Manatee County, First Priority Bank lost $546,000 and Freedom Bank dropped $1 million in 2006. Both reported sharp increases in their allowances for loan losses. So did Peninsula Bank of Englewood, which posted a $737,000 loss for the year. Both of Sarasota’s newest banks, which opened in October, were in the red with growing pains.”
“Analyst Richard Bove says banks are tightening their loan standards. ‘Some of this is due to pressure from regulators. Much is due to the fear of defaults,’ he said.”
“Troubled mortgage loans, those 90 days or more past due, jumped by $3.1 billion, or 15.6 percent, during the fourth quarter nationwide. Charge-offs of mortgage loans hit a three-year high of $888 million in the quarter.”
The Times News from North Carolina. “In 1998, 196 notices of foreclosure were filed in Alamance County. In 2006, 737 notices were filed. That’s a 276-percent increase. In nine years.”
“The trend is continuing in 2007. Foreclosure filings are up more than 20 percent through the end of March of this year compared with the same period last year, says county Register of Deeds David Barber. ‘It is a national trend.’”
“Laziness or a desire to shirk financial responsibilities isn’t the problem; homeowners who find new or second jobs still can’t surmount their debt, said Graham bankruptcy attorney David Huffman. That’s because the jobs they find tend to pay lower wages and come without benefits.”
“‘Foreclosures, in and of themselves, are just a symptom of what’s wrong with the economy,’ Huffman says.”
“A soft local housing market that encourages inflated appraisal values fuels the problem locally, Huffman says. ‘You got appraisers that are not putting realistic appraisals on property,’ he said. ‘The (real estate agent) comes in and tells them what they want.”
“‘At some point in time, the lending institutions have to become more responsible. It’s not an issue of just sales. You’re really doing nobody any favors by putting them into a house where they can’t afford it,’ he said.”
“Nothing is wrong with foreclosure procedures, Huffman says. The real problem, he thinks, is in the American economy’s reliance on debt. Congress doesn’t weigh in on the problem because tighter lending requirements would ’send our economy into a tailspin,’ he says.”
The News Daily from Georgia. “Last week, a sign high over Interstate 75 reported for the first time there were more than 100,000 homes for sale in metro Atlanta. Sunday, it read 100,233.”
“‘I’ve been selling real estate in Henry County 20 years and this is the largest inventory I’ve ever seen,’ said associate broker Dottie Wise. ‘You’ve got a lot of new homes being constructed, and it’s a mobile society we live in — people are moving in and out,’ she said.”
“Indeed, a construction boom has been partly to blame for the inventory, experts say. According to statistics compiled by the University of Georgia, after several years of uptick in housing starts, building permit issues show signs of slowing.”
“In 2002, for example, Henry County reportedly issued more than 4,000 permits for single family housing. In 2005, however, it issued 3,697.”
“‘Supply kind of got ahead of demand,’ said Jeff Humphreys, director of economic forecasting at UGA. ‘Builders are pulling back,’ he said. ‘I think, actually, this is quite an opportunity, the last chance to pick up quite a bit of value.’”
“‘I would be a little more cautious in buying a condo,’ he said. ‘The value proposition there may not be quite as strong.’”
“The building boom has meant ‘older homes are really have trouble moving,’ said Nikki Finlay, an associate professor of economics at Clayton State University in Morrow.”
“The cooling has led some builders to offer considerable buying incentives, particularly in high-priced homes in areas where inventories are at a peak. One Henry builder, for example, is offering a $20,000 incentive on a $390,000 home.”
“In Clayton and Henry, inventories of moderately-priced homes, those in the $200,000 range, are well above the metro average, according to Tisha Gay, director of public relations for Metro Brokers/GMAC.”
“In Henry, there’s nearly a 10-month supply of homes in the $201,000-225,000 range. In Clayton, it’s nearly 18 months.”
“‘What it means for the buyer is that there are a lot more choices out there,’ Gay said.”
“When Matt Kihnke paid $15.5 million for a Bradenton apartment complex in March 2005, the Chicago investor looked primed to become the architect of another condo conversion success story.”
Why do I get the feeling this guy makes $40,000/year and closed the deal with a stated income loan?
the condos are still going up here in sarasota
the atrium just broke ground
who will buy/live in all these units???
I’m told rich Arabs, Russians and Venezuelans will all flock to Florida after they finish flocking to Spain, London and other cities where rich people flock.
everywhere is different, and everyone wants to live everywhere
h_a_n aka passthebubbly
I love New Zealand and it will be my lifeboat, hopefully…
But all is not well in paradise.
In the far north of the North Island, the island country received 36 months of rainfall in 36 hours, devastating and unprecedented, less than a fortnight ago~
http://www.nzherald.co.nz/location/story.cfm?l_id=139&objectid=10431630
Mother Nature Rules.
“Up to 450mm of rain fell in 36 hours in parts of Northland”
Yikes, that’s as bad as a good tropical storm over Houston!
Just move to the South Island. Much prettier anyway.
I’m rather partial to NZ too, having moved here recently from the USA. Great culture, great people; you just gotta learn about Rugby and all will be well.
But people here are insane about buying houses. RE gossip is like conversations about the weather. Kiwis are completely obsessed about ‘owning’ a piece of dirt with a house on it, though prices are completely unaffordable on typical wages. Even retirement homes in the middle of nowhere have appreciated like crazy - a colleague bought one for $115k 5 years ago and is now entertaining offers of $300k for it.
Nobody talks bubble, though.
I was in New Zealand in 1997. I remember talking about the beautiful but relatively unpopulated South Island with an Auckland cab driver, who joked that in frigid Invercargill, “you could get yourself a lot of property down there.”
You’re right about the rugby. During my visit the All Blacks were playing a game somewhere in the British Isles, to be broadcast live at 4:30 a.m. local time. Some people I met at a pub were simply going to stay out drinking until that hour, and then enjoy the game.
I’m told rich Arabs, Russians and Venezuelans
LOL, rich Russians, which one?
Wow, there are a lot of wealthy people in Russia right now. Most of them got their money in the last 5-10 years. That country has immense natural resources — oil and gas, primarily.
A lot of poor people too, due to privatization not everyone has shared in the boom.
Yeah, yeah yeah..
Rich Arabs, Baby Boomers, South American Druglords, and your friendly neighborhood bank CEO. Those are really the kind of people that are going to be buying apt conversions, right?
How phu**ing stupid are these people. I hope that cocaine trade picks up for Pablo, he has to come bail me out of my home loan!
MIke,
Who’s that A$$hole maxmoose on the PB Post website? Man what an arrogant person. I asked him some pointed questions that blow holes in his story and he won’t answer.
He is a RE agent. Somebody on the blog knows who he is, but I don’t actually know his name.
Yes, he is an idiot. Big fan of the “heads I win, tails you lose” school of RE. If it goes up, take out the equity. If it goes down, walk away.
Total shill.
Rich arabs are not flocking to the US anymore. Instead they’re flocking to Europe, Malaysia or nearer home to Dubai
They sure must be headed to Dubai, if the MSM is accurate — reporting last week that office space rental is nearly 100%. When I was there five years ago, the vacancy rate was about 80% in most of the sexy new buildings the princes put up in mine’s-bigger-than-yours fashion.
I had a conversion once- when they redid the roof the tar dripped right through the roof boards onto the carpet= cool
I know that story. I owned a condo in West Hollywood, ca. The roof (flat) was always leaking and continual problem along with termite infestation. The condo building was built in the latter part of the 70’s boom. The wood used in construction wasn’t fully seasoned because they had started cutting immature trees having run out of mature trees. Lumber yards were rushing wood products out of the door as soon as soon as they came in and the quality suffered.
The contractor (who went broke in the 90’s) threw the building up so he could start the next one. Nobody could correct the problems. A new roof was put in. After a few years it leaked. The termites kept coming back even though the condo association had the building tented. A REAL pain in the butt ’cause everyone had to pack up and cover up things in their condo’s and then move into a hotel for two days and board their pets. They tried infra-red treatment to “cook” the termites. That lasted less than the tenting. Then an absentee landlord rented (unwittingly) a condo unit to a drug dealer and his hooker girlfriend. The building became a revolving door for drug buyers 24/7. A couple of units were broken into, probably by customers of the dope dealer. He eventually got the renter out but in revenge the dope dealer almost destroyed the condo unit. Holes in the wall, toilets broken and he peed on the carpet so the place was stinking. It cost the owner big bucks to repair the damage. The next year, one of the condo owners stopped paying condo owner fees when she lost her job. Everyone who did pay (there were 12 units) had to make up the difference. She eventually went bankrupt. Then the guy next to my unit who bought for $320,000 at the peak, starting having money troubles when his contract with a movie studio ended and wasn’t re-newed. By now, condo’s similar to his in the same area were selling for as low as $220,00. He walked away but didn’t destroy the unit like the dope dealer. However, his unit remained empty until the bank sold it for $190,000. That same unit (I heard from a friend who still lives in the building) sold at the peak of this current mess for $605,00. I wouldn’t own another condo if it was offered at a 30 year fixed at 2% intererst. At the moment I rent a $700,000 (but prices are dropping) sfh for $1700 a month. The landlord just raised the rent on another 1 year lease by $100. If the rent were to rise to $2,000 + I STILL wouldn’t go out and buy. My feeling is by the time this mess is over, we could very well see 1998 prices because, despite the moron in the White House telling us everything is great with the economy - it ISN’T. Even these fake new job numbers hide the truth. That the majority of these jobs are low paying service jobs and a lot of government jobs, part time jobs, etc. It STILL comes down to one basic fact. Affordability. Actually, it now comes down to two basic facts. (A) Affordability and (B) The potential buyers FICO score.
Everyone who thinks that renting a unit out, cash flow negative, is a good idea, needs to read this story. I think it would do us all a service if people realized that renting apt’s is supposed to PAY you money, not cost you money, and this is exactly the reason why.
I just wanted to say that it is becoming very uncomfortable going into stores because the salespeople are increasingly aggressive and desperate.
cause they’re realtors and x mort brokers ?
that’s why employment numbers look good
Funny, but possibly true. These people are extremely agressive and frustrated at this point.
This is what happens when you eliminate stable paycheck type jobs….
The desperation level is quite Evident! If they Knew they were getting even $300-400 at the end of each week you would not see that leavel of desperation,
Come may 1st the employees will be evicted from their aprtments for non-payment of rent, if business stays this way.
I was in Reno over the weekend. I hit every casino the area that had a craps table, including a couple in Tahoe.
The casinos weren’t crowded at all, especially for a holiday weekend. All the dealers I talked to confirmed this. It was very rare for a floor to have more than one table open, even on Saturday night.
The weather was excellent and the ski areas were still open, so the only explanation had to be the bubble bursting.
I did OK. Swung around between plus and minus a lot but ended up on the plus side. Mostly played Don’t Pass. Had a lot of three- and four-number payoffs when the inevitable seven showed up.
h_a_n aka passthebubbly
Sounds like the gambling industry is already being impacted by the squeeze on overextended Americans.
I had my cousin visiting from Vegas over the weekend, and I couldn’t help asking him about the economy there, what is it exactly (outside of gambling and prostitution) that keeps that place going? He would only respond with gibberish like “the land on the Strip is worth more than Park Avenue” and “9 people move to Vegas every minute” becuase of all the job growth. He rents out heavy equipment for construction sites and has had a big enough slowdown that he’s got into another business, yet he still can’t see that Vegas is going to implode completely. If American families are no longer pulling money out of HELOC’s, how the heck are they going to afford a luxury like a Vegas vacation?
I remember when going to Vegas was something you did on the cheap. Drive up from LA. Stay at some cheapo resort on the strip (many have be bulldozed away). Eat cheap prime ribs and play nickel slots. I remember when it didn’t cost a kings ransom to see a show.
Now its all themed resorts and Bellagios, etc. I used to wonder were do these people get the money? I also used to wonder how “middle class” families could afford to stay at deluxe Disney Hotels ($350+ per night). It never occurred to me back them that these vacations were all HELOC’d.
That’s why I go to Reno. It’s what vegas used to be. And vegas ain’t got no Tahoe in its backyard.
I work for an airline and have had a few layovers in the Reno Circus Circus recently. Every time the place seems empty. I’ve asked the check-in girl each time how full they are and not once have they been sold out. Of the five or six times that I’ve asked over the last two months, it always seems to be about 70% full. Even with the Professional Bowlers Association, the Tattoo convention, and some other “interesting” groups come through town, the place doesn’t seem crowded at all. I see dealers stading idle, there’s not much smoke at all in the casino, plenty of open slots, and no lines at all for restaurants. I did get panhandled by the way - some guy that looked about 20 years old with a girlfriend who was obviously about to deliver his offspring.
Not to burst your ‘bubble’ but it could be that the idea of frittering away ones hard-earned cash on booze and gambling on the very same weekend as the celebration of Christ’s resurrection is a wee bit of a conflict to some.
Yeah - I don’t exactly think of Easter as a great Vegas holiday weekend. I was there for a Mother’s Day weekend a about 7-8 years ago (bachelor party) - and we got a lot of lot more personal attention in the strip clubs than we would on a normal weekend (a comment made to me by both Vegas regulars and one of the strippers). Also, played $5 blackjack in the casino at Mandalay Bay — when I (happily)remarked I was suprised they had such low stakes tables on a weekend - they told me this was one of the rare weekends when they had $5 tables (usually at least $10 on the weekends).
You notice this too, eh? I went into a Home Depot a few weeks ago to take a gander at the high-end front-loading washer/dryers (not that I have any intention of buying anything until at least Jan ‘08), and the salesperson practically put his arm around me to get me to but then and there.
and the salesperson practically put his arm around me to get me to but then and there.
LOL
That was one of the places we were getting mauled
I was in my local Home Depot (Alexandria, VA) over the weekend. Normally the checkout lines at the registers are so long I use the not-always-reliable self-serve checkout. But last Saturday afternoon, I had my pick of registers to choose from. No lines at all. Barely anyone in the store, even…
In my seven years of coming to this store to pick up things to fix my apt (I rent, but my sweet 80-year-old landlord depends on me to keep the unit in good repair, and I am happy to repay her kindness since she has not raised my rent since 1999) I have never seen that kind of terrific customer service at that store.
Perhaps the Easter weekend had something to do with it, but who knows?
Thanks for the update from Virginia, I’ll make a note that another state has joined the ranks of the soon to be recession.
Split Virginia into two different “states” if you can. Northern VA (area that may communte into DC) and the rest of the state. Very different economies. Alexandria is supposed to be one of the “its different here” areas. If Alexandria is starting to be in trouble, then the rest of the state has probably been in trouble for a while.
I’m in the analogous area of Maryland. I would LOVE to see prices come down here.
People have to remember that while federal employees don’t often lose their jobs, salaries are limited and raises are few and far between. Adjustible rate mortgages are a disaster for government workers. They are never going to have enough extra money to make much higher payments.
Ha ha - I had almost the same exact deal in Alexandria (although my octagenarian landlord was a guy) - lived from 1991 to 2002 in a great apartment with no rent increase the whole darn time. Had two other units with people also there about a decade (and two other units on the ground floor that turned over a little more often).
I got a house I’m happy with and can afford ….. but I do miss those day’s of stroking an $800 check, a small electric bill (heat, water included), a phone and cable bill, and that’s about it.
I expect the housing market to decline as well but I don’t know which world you’re all living in. I’ve never seen the stores more crowded where I live and all the latest economic reports don’t point to dramatic fall in growth. In fact, the need for workers seems to be growing. Maybe you caught those stores during a slow part of the day.
The only item i’d be buying right now is decent longer term food staples…
There’s a perfectly valid reason the Mormons keep a year’s worth of food~
Think what you’d like of the religion, but their predilictions towards survival come from trial by ordeal, way back when.
Hunger will do that to you.
They’ve done all the heavy lifting, as far as telling you what you’ll need.
Go with the pros~
http://lds.about.com/od/preparednessfoodstorage/Food_Storage_and_Emergency_Preparedness.htm
You sound like you are living in California where stores may still be crowded, but here in Florida furniture stores are shutting down, etc. Not having going out of business sales, no, shutting down entire units left and right. I am not in the furniture business, just following the articles about the severe drop off in business and the ramifications for stores having to close down which have been here for over 20+ years.
California may still have some liquidity compared to other states with lower wages such as Florida. Not saying you are in California, just speculating by the sound of your post.
It’s going to be a long summer here in FL, that’s for sure. The equity has dried up, the snowbirds are gone, people feel poor (or are poor because of housing depreciation). I predict many many nights at restuaraunts/bars/clubs without waits!
I also predict that another 5 stores will go under in each “master planned” development within 20 miles of me (or about 20% turnover in the next 5-6 months). People in the area know what I am talking about..
Also, I am noticing a few furn stores going out of business. Storehouse was only opened for about 3 months in Downtown at the Gardens before it went under. And I am seeing it repeated in other stores as well.
That sounds nasty Mike, as I stated in my comments to Observer I think he is in California doesn’t understand when he asks which world we are living on that he should be asking himself that question, not us as we are more reflective of what the rest of the nation is experiencing. It may be more severe here in Florida, but still reflective of what is happening elsewhere.
I used to live in California but now I live in Texas. I moved here about 1.5 years ago. I was going to start a retail-type business here but didn’t because retail here was slow. That has changed in the past 6 months or so. I’ve never seen retail so busy here although I’m still shocked at the amount of vacancies compared to California. I’ve been very observant of retail traffic here over the past 1.5 years.
I don’t care about Storehouse, as long as TooJay’s is still open.
retail in nyc is booming. there just seems to be an endless supply of people eager to give you their money.
long lines for seating at most good restaurants and starbucks is always packed (btw i hate their coffee)
a major trend has developed in nyc over the last few years with only the major chains able to survive
cvs,starbucks, and a bank on everycorner
the other day i waiting for my wife outside her office on 3rd ave and this woman asked me where is a starbucks?
i started laughing and said just walk 2 blocks in any direction and you will find one
not sure about home depot because i despise that store
slightly off topic-yesterday at easter dinner with the in-laws they were disagreeing with me on my rentals plans
saying i should eventually buy. i think their eventually and my eventually are 2 totally different time frames
i am glad i am not an fb, my dog was ill again and i had to take her back for another visit and ouch it was $$$$$
just think if i was fb my poor dog would be a goner by now. i am sure she is happy i rent!
My sister live in the DFW area. She says people are still spending like crazy. Restaurants are constantly packed, etc.
Strange, considering that there are so many foreclosures in DFW.
In Colorado, that’s an easy one to answer:
7 Apr 07 AP Business story, “Consumers borrowed less freely in February.”
“…Use of revolving credit, primarily credit cards, rose at a brisk pace of 3.4 percent in February. That was a big pickup from a 1.7 percent growth rate logged in January.”
While the house ATM is shut off, the credit card companies are picking up the average FB’s demand for cash and the good life. The crash is coming much quicker than anyone realizes, if these people start to live their lives via Visa and MasterCard.
“…long lines for seating at most good restaurants and starbucks is always packed (btw i hate their coffee)”
OT, but I am so cheap I always get brew coffee (not lattes, etc). Every Starbucks I have ever been to has had NASTY brew coffee. Extremely acidic, as though it had sat out oxidizing all day. Is it like that everywhere? Are they trying to encourage ‘buying up’ to expensive coffee drinks? Instant coffee would be less nasty…
Starbucks overroasts their coffee. Who knows why.
“‘What it means for the buyer is that there are a lot more choices out there,’ Gay said.”
No…It means you are putting in just above the waterfall….At least the bad rapids.
You should be taking out and portaging down river.
“One Henry builder, for example, is offering a $20,000 incentive on a $390,000 home.”
Gosh. An entire 5% off. What will they think of next? I’ve already seen $50K off $400K homes in the outer suburbs of Atlanta (I’m in Florida, but looking there) and we’re just getting started. The builders, generally, will be one step ahead of used-homoaners all the way down, offering more or better or newer, for less.
Atlanta was touted as a 2007 grower in CNN
there’s a small area where you can live safely there
ehuuuh,,hehuhhehuh, he said “homo-aners”
That IS pretty funny, but he could also have meant “Ho Moaners”
That distant exurb building will continue forever in Atlanta till they meet Chattanooga. I don’t think those houses out there will ever appreciate due to over building, energy inflation, traffic (until gasoline costs/availability drive traffic back down) etc…. There *may* be a few exceptions for things like parts of Alpharetta that may sustain real employment, etc…
Homoaners ™
“Nothing is wrong with foreclosure procedures, Huffman says. The real problem, he thinks, is in the American economy’s reliance on debt. Congress doesn’t weigh in on the problem because tighter lending requirements would ’send our economy into a tailspin,’ he says.”
~~~~~~~~~~~
Bingo!
That’s right. We’ve replaced the manufacturing sector with “financial engineering” of products (debt products). We need to start “exporting” some of these debt products so we can even out the balance of trade.
I think we should sell these debt products to Africa at a discount. Can you imagine how much the African continent would start booming, if they would start buying these products from the US? This could solve the problem of the US trade deficit. This is a win win situation.
“Buyers understand there is a deal to be had right now.’”
Thank goodness we’ve finally hit rock bottom and I can start buying condos now.
Buyers understand there is a deal to be had right now… by continuing to rent
It’s nice to be told what I understand…
“Buyers understand there is a deal to be had right now.’”
…and tomorrow, and the day after that, and next year and five years after that…..
Oh really? Great, I am ready to buy tommorrow. I will pay right 1999 price + 3.5% per year for any property that fits my basic criteria in Palm Beach county.
Still interstered in blathering to me about what I need to understand.
What you need to understand is that is where prices are heading, and plan accordingly (change jobs, buy guns and ammo, I don’t really care, just stop telling me what I don’t understand).
Those people are in no position to tell me what I need to understand!
Thinking of a nice high-rise condo in tranquill downtown San Diego? You better watch this then (from the Down Town San Diego Quiet Zone website):
http://www.quietzonesd.info/mar%2004%202007%200320%20hrs%20BNSF%20train.wmv
These are the same SD condos with HOA fees ranging from $550 to $800 a month. I remember walking through a few of these a couple of years ago. I asked the sales person how anyone could ever make these “investments” pencil out. She just stared at me like I was talking about space exploration in solar systems outside of ours. She was cute but very dense.
Thats classic! I can just see that engineer with his ipod on doing chinups on that horn cable.
I forgot the link: http://www.quietzonesd.info/
BTW that minor train horn noise happened at 3:20 AM
A little bit of anecdotal info on Naples condos-
I live in a condo development about 3 miles from the beach. These are nearly identical 3-bedroom, 2-story villas with 4 units per building. At the height of the bubble in 2005, the largest sale was for $365,000.
Very few sales have occurred between then and now. There are currently 11 units for sale (out of 100+) with listing prices ranging from $249,000 (one of the few 2-bed units) up to $389,000. Many of these have been for sale about a year. One motivated seller has a deal pending for $215,000 on a 3-bedroom unit. Needless to say, there has been a ton of talk around the neighborhood.
In 2001 and 2002 these units could be purchased for 105,000 to 120,000. There is still so much denial here. everyone that I’ve talked with that is trying to sell is depending on getting their price and many have been assured by their REALTORS that they’ll get it done. As a REALTOR, why even bother listing a unit at $389,000 when the identical unit just sold for $215,000?
Real estate agents commonly tell homoaners they can get way more than is realistic - it’s called “buying a listing.” After a while, the agent will break the bad news to the seller and get them to start lowering the price. Eventually, it sells and the agent gets his six percent. Notice in these cases the agent does essentially nothing to advertise the property beyond putting it in the MLS.
Thanks for the update from Naples, bottom line the person who dropped their price well below the competition has a contract pending, surprise, surprise
Last night’s 11:00pm news in Naples, businesses on 5th already complaining business is down due to season being over. Local realtor said prices have dropped and are near bottom then will go back up! The women doesn’t have a clue!
Congress doesn’t weigh in on the debt issue because they are busy indebting the entire nation just as furiously as individual consumers are indebting themselves. Congress is a go-along, get-along institution, after all. It’s going to do exactly what everyone else is doing. Now when everyone else files for bankruptcy, what do you think Congress will do?
Just this once, I’ll go out on the limb and pre-empt the inevitable responses of “impossible!” It is not only possible, but increasingly likely. My grandfather on my mother’s side not only lived through Weimar Germany (which he fled in 1929 when he saw where Hitler was taking the nation) but also through the Great Depression in the US. He was fond of exclaiming that “You kids don’t know what hard times are!” but his stories about the lines outside of closed banks, and the people who could get neither food nor work were firsthand observations. It can happen. It has happened. It will happen again. Nobody is taking any steps to make sure it doesn’t happen in the US. In fact, fiscal irresponsibility is rampant, and there is no outcry for restraint, no voice crying out for rationality, save, perhaps, for Ron Paul. Ergo, the chain from individual insolvency to lender insolvency to national bankruptcy grows more likley every day.
If you’re going to post on the contrary side of this point, please provide a concrete refutation or explain in detail how you think a financial crisis can be avoided.
A “concrete refution?” “Explain in detail” how this can be avoided?
KIA, that sort of like asking, “So, you still beating your wife?”
But I’ll take a stab at it. The government’s debt is in dollars. The interest rates the governments pays on bonds are fixed at time of sale as represented by the discount to face value. The government’s debt is fixed-rate. The government will, over time, inflate away its debt.
What happens when everyone decides to stop buying our debt? There will be no more deficit spending and entitlement/welfare programs. Defense will have to be cut 50%. The world will cry and curse because we can’t be their police/welfare mother anymore.
When is “everyone” going to make that decision?
Defense accounts for 21% of the Federal Budget. Another way to look at it is 4% of GDP goes for defense and 16% for social programs. Under Carter the defense percent of the budget was 35%, Kennedy 55%, and Johnson 65%.
The facts are that defense spending is low and social spending is high by historic standards.
And when you think about it, defense spending bolsters manufacturing, and social spending bolsters retail and services.
Any other questions about why manufacturing is dying and we now live in a consumer/service economy?
That was before the gvmt combined the SS trust fund with the regular budget. Once they did that, The defense budget looked like it was cut in half.
Sounds like Weimar Germany, no? So, you don’t really disagree with KIA, you just have a different name for the same outcome. KIA calls it “declare bankruptcy” (which means the dollar can be redeemed for zero) and you call it “inflate away debt” (which, given the dollar has lost 95% of its 1913 value, means the dollar can be redeemed for zero).
So, guess we’re still waiting for that concrete, detailed refutation.
IAT
Exactly! Just be sure you’ve got all your holdings in ‘neutral’ investments - inflation hedges…you still get nailed for gains on the inflation, but…better than having your saving eroded.
All money is debt. Money does not exist until it is borrowed into existence.
Please explain to us how the government will “inflate away” the debt by issuing more debt.
” In fact, fiscal irresponsibility is rampant, and there is no outcry for restraint, no voice crying out for rationality, save, perhaps, for Ron Paul. Ergo, the chain from individual insolvency to lender insolvency to national bankruptcy grows more likley every day.”
Fiscal irresponsibility ? If your talking about the free spending Congress, then Yes! I would agree. But dont point to the banks as if they are fault. They are well regulated since the 1930’s.
But dont point to the banks as if they are fault. They are well regulated since the 1930’s.
Louie:
I’m assuming you’re being sarcastic?
Who lends to the “indebted” govt? The Federal Reserve.
Who lends to all these foreign regimes? The Federal Reserve, sometimes through the World Bank/IMF
Who lent to the lunatic homedebtor masses the last 5 years? The local banks.
But you were probably being sarcastic I’m guessing?
Thank you for saying that HIC before I had to
Who lends to all these foreign regimes? The Federal Reserve, sometimes through the World Bank/IMF
What on earth are you talking about?
The United States borrows more money from foreign governments than the whole rest of the world put together.
Talk about denial.
Hitler was elected to the chancellorship in 1933.
But he was active in politics at least as early as the Beer Hall Putsch of 1923 (he tried to overthrow the government) and started seeking power through elections upon release from prison in 1924. He published Mein Kampf shortly thereafter. So, by 1929 what he hoped to do was clear . . . to those paying attention.
IAT
Hitler’s NSDAP was almost broke by the 1932 elections. If the Depression had not start to affect Germany, which was already economically weakened by the Weimar Republic’s hyperinflation, the middle-class economic voters who were hurting would not have been susceptible for Hitler’s extreme message. Once the NSDAP began losing votes after the Nov. ‘32 parliamentary elections, Hitler realized he only had one more chance to take the chancellorship–which he got after the Feb. ‘33 elections.
But until the NSDAP gained power, Hitler had to beg and borrow funds from supporters and wealthy industrialists. Most of the big supporters saw very little ROI on their donations until the Feb. ‘33 appointment to Chancellor. Much to the world’s ultimate dismay, I must add…
Someone pointed to the Soft Landing a few months back…here is the def. from Wikipedia.com
http://en.wikipedia.org/wiki/Soft_landing
http://en.wikipedia.org/wiki/United_States_housing_bubble
Soft landing
“Soft landing is a landing in which buoyancy is slightly decreased. In finance, it refers to a situation where a growth rate slows, but still remains positive.
As well as describing trends, it is commonly used when predicting future financial events - when the user believes that the current trend is unsustainable, and must slow down, but will not crash.
An example newspaper headline: “Soft landing forecast for house prices as rate hikes stem growth” - Business Report, South Africa 1 Feb 2007. As it stands, these forecasts have very little scientific value and there is not one single verifiable instance of a soft landing following an economic bubble.
Similar claims were made repeatedly by vested interests (VIs) about the prospects for the housing market in The U.S. but there is now an almost unanimous consensus that the United States housing bubble is undergoing a significant market crash.”
There have been very few successfully engineered soft landings, ever.
A quick observation from Las Vegas.
Took my family out to a Easter Buffett yesterday (my Dad wanted to go to one he heard about) at the Rampart Casino on the West side of town. We got over there and it turns out it is part of a Marriott Resort complex with a really nice looking golf course. Anyway, the signage indicating the casino is in the Marriott complex doesn’t exist (I think we were born with this info?) so we ended up driving a short distance past the Marriott on the side street. We came upon a construction project ( Mira-something) with about a dozen or more buildings (3-4 stories) that were getting ready to be roofed with spanish tile (it was all stocked on the roof). It is difficult to estimate how many units were in each building but I would say that overall they had to number in the hundreds.
Any guesses on the pricing?
Drumroll……..
Starting at 800K!!!!!
How many millionaires you know thinking of coming out to buy a Las Vegas condo this year? Hehehe
“How many millionaires you know thinking of coming out to buy a Las Vegas condo this year?”
Who needs to be a millionaire to afford an 800+k condo? Oh wait, I was thinking it was 2005.
Heh, my dad lives down the street from there. Paid just over $200K about 10 years ago for a nice little 2+2 on a golf course with a great view of the mountains.
Old Kinky: http://en.wikipedia.org/wiki/Kinky_Friedman
New Kihnke: http://en.wikipedia.org/wiki/Dodo_bird
easy on the Kinster, I think the USA would be a much better place if millionaire professional politicians were replaced by real f-ing people.
Here are some St. Lucie County single-family residential sales reports. Apparently some people are still making money at this. I don’t get it. Are they deaf, blind and dumb?
Here are some examples taken from TCPalm Real Estate:
1701 Mariner Bay Blvd,
Fort Pierce, Mariner Bay
1,482 square feet
$8,678.92 yearly taxes
Sold for $500,000 on Mar. 12, 2007
Previously sold for $356,700 on Feb. 4, 2005
1002 SW Barbarosa Ave,
Port St Lucie, Port St. Lucie
1,809 square feet
Sold for $240,000 on Feb. 15, 2007
Previously sold for $182,900 on Apr. 21, 2004
504 SW Halibut Ave,
Port St Lucie, Port St. Lucie
2,020 square feet
$5,026.87 yearly taxes
Sold for $325,000 on Feb. 6, 2007
Previously sold for $285,000 on Mar. 31, 2006
2468 SW Red Ter,
Port St Lucie, Port St. Lucie
2,236 square feet
$5,516.13 yearly taxes
Sold for $329,000 on Feb. 28, 2007
Previously sold for $250,000 on Jun. 30, 2005
my old man’s hoping for a 2004 offer on his house in ft myers
He should talk to my brother who bought at a 40% premium from assessed value in Ft. Myers.
Why Your Home is Not the Investment You Think It Is:
http://finance.yahoo.com/real-estate/article/102603/why-your-home-is-not-the-investment-you-think-it-is
major reality dose…
Few, if any, renovations make a profit. A new kitchen or family room might raise the resale value of a house, but rarely as much as they cost to build.
Why doesn’t everyone know this? I hear people say all the time that you get 100% out of what you put into a remodeled kitchen.
Of the 22 projects it analyzed, only two – an upper-range sidingreplacement and the modest bathroom remodeling – would make money. That suggests that remodeling projects ought to be regarded not as a creator of value, but as a consumer product, like a car or purse, that appeals to taste and style. Consumers usually don’t think about a financial return when they make those purchases.
“Do the renovations you want, and don’t worry too much about resale,” advised McDonald, who now does remodeling for others. “Someone will appreciate your fantastic kitchen, and you get to enjoy it in the meantime.”
From
http://www.signonsandiego.com/uniontrib/20060618/news_1h18remodela.html
CONTRAST THIS:
“I think, actually, this is quite an opportunity, the last chance to pick up quite a bit of value.’
WITH THIS:
“for the first time there were more than 100,000 homes for sale in metro Atlanta”
AND
“In Henry, there’s nearly a 10-month supply of homes in the $201,000-225,000 range. In Clayton, it’s nearly 18 months.”
Anybody see a disconnect between these thoughts, or am I just Senor Crazy?
it’s your last chance to quickly make a decision before these homes are snatched up!!! You only have 10-18 months to decide, assuming nobody else puts their home up for sale, and assuming the sales rate doesn’t continue to plunge!
It makes me so mad, I could just pee.
Any more on that gal in Atlanta whose parents helped her buy into that expensive condo? I think it was brought up here within the last several months. Didn’t she work for a tv station or something akin to that?
Nothing that I’ve seen. She must be underwater by now, though, I really don’t follow the condo market here. Only thing I see is too many buildings go up in Buckhead and to a lesser degree MidTown.
CAN bank raises rates- looks like you get an ARM or a 10 year in Canada
Five-year closed 6.64 per cent (up 0.20 per cent)
Seven-year closed 6.95 per cent (up 0.20 per cent)
Ten-year closed 7.50 per cent (up 0.20 per cent)
Check this out.
http://sfbay.craigslist.org/eby/wan/308715400.html
My name is Marissa and my fiance and 10 month old daghter and I are trying to buy a house. I had my credit run and although some of the debt was mine, I found out that unfortunately a family member of mine had opened credit in my name totally over $10,000. I am struggeling to turn this person in, because despite her problem with stealing and opening accounts in OTHERS names she is a good mother to her children. Turning her in would get the kids taken away. I got approved for the home loan, but since my score is so bad due to my family member I have to put $47,000 down. We have been saving our money, but we could not come close to saving that much. We need about $45,000. I don’t know what else to do but turn to others for help, since I am not able to turn to my family member. Please help us get our daughter Emma Elizabeth out of an apartment that she has no room to move around in and into a home. I have seen emails like this before and at the time I was able to donate a dollar out of my pocket and now that I need help I was hoping that the generosity could be returned from people that are better off than we are. Thank you for your help. Your donation is VERY appreciated and will help a young family get out of debt and into a home where their daughter can have room to be a child and grow. God bless. I have attached some photographs of our baby girl Emma.
Turn in your dead-beat cousin.
She’s asking for $45,000. So they have $2000 saved up, keep saving before you consider buying. Those fancy pictures of your daughter cost a couple of hundred bucks a pop, granted I know everything is for the kids, but when it comes to saving, you need to stick to a plan.
My advice: Keep saving. Once you move into a brand new house, you’re going to spend thousands of dollars filling up the rooms.
Please help us get our daughter Emma Elizabeth out of an apartment that she has no room to move around in and into a home.
Shoulda thought of that BEFORE you got knocked up, honey.
Like it’s the kid asking for a better place.
I — am —- going — to —- puke….
I absolutely hate this kind of play on emotions. Reminds me of why I am so self-centered and hateful to the rest of the world. God forbid your child should have to live in an apt, there is no fate worse in life.
Also, call Experian and have them fix your FICO score. Assuming that debt is not yours, you should not be suffering for it (again, ASSUMING). I had to do it, lot’s of adults have a problem like this, call them up and get it fixed!
Pardon me while I go vomit up my lunch.
I agree, why doesn’t she try to get on Extreme Home Makeover!!!
Oh right I forgot she needs to own a house first before they come in,tear it down and build a McMansion with all of the high tech gear you can possibly fit into the house and a new car and collage fund. But wait there was one that did it:
http://www.msnbc.msn.com/id/8973501
SKB
I despise that show.
SKB
Her problem (if what she says is true) is that the family member has stolen her identity and charged $10k on the account, but this gutless lady WON’T do anything about it and thus can’t get the debt taken off.
The reason is that the credit card company will only remove that debt off of her account of she files an Affidavit of Fraud against her sister or whoever that was, who then might face charges for the theft. It’s a common problem, and lots of people suffer the bad credit rather than send a family member on to the DA’s office.
Many people won’t do that, and I bet the one doing the stealing knows it.
Disgusting. MF, let me join you for a vomit-fest.
Please help us get our daughter Emma Elizabeth out of an apartment that she has no room to move around in and into a home.
So this is what passes for a sob story these days?
Anyone remember the 50’s program called “Queen For A Day”?
Why yes! i actually do.
I don’t believe one line in the story other then ‘please send a dollar or more’. Gee, is it mail fraud when using the US mail?
The rule of thumb is 50% of home price for furnishings, providing you aren’t using early garage sale (which I did).
heh? you must be kidding! so, $300K of furnishings for a $600K house?!?
Well, you are probably right. $600K doesn’t buy much house anymore, but at the time I was shopping many years ago, it bought a mansion.
Fran Chise, My furniture includes many nice antiques but is worth no more than $25,000 total. The furniture looks perfectly fine in a house that is on the market at $575,000. Of course I’m not BUYING the house for $575,000 and I don’t think anyone else will either. But someone would probably pay $450K for the house, if the builder had the sense to reduce his price. I think a fine “rule of thumb” for furniture nowadays would be 5% of home purchase price.
…have to put $47,000 down. We have been saving our money, but we could not come close to saving that much. We need about $45,000.
What business do these people have even having their credit checked to buy a house?!? They only have $2000??? And they want to buy a house?! Are you frickin kidding me?? Unbelievable. These people don’t have a credit problem…. they have a cash problem. They have no business getting a mortgage.
They have a greed problem.
Don’t worry. They’ll get the mortgage, default on it within a year, then blame the lender and get a bailout.
Did anyone catch Casey Segrin on CNBC’s Suze Orman last weekend? She was actually telling him to forget trying to work with the lenders, let the houses go, then open up a consulting business. She continually called him bright and felt he could be making “$6K, $9K per month” talking about what he did.
Sorry, this guy, and hundreds of thousands like him, are not heroes. They should be barred from homeownership permanently. Their mass greed spuriously inflated home prices to the point that legitimate professional couples could not buy. All this talk of bailouts and modifying FBs mortgages so they can stay in their houses makes me sick. Let the market forces be! We certainly didn’t intervene when prices were going up 30-40% per year, did we?
I love my wife. She dreams of punching Suze Orman right in her big horsey face!
“She continually called him bright and felt he could be making “$6K, $9K per month” talking about what he did”
Yes, what a great business model. Share your experience for money with other FB’s who can’t even afford their mortgage.
Yeah, some people should not own a home. This is a prime example.
I don’t think she realizes the cost in upkeep, taxes, furnishings, etc. She’s the type that we’ll read about crying how she can’t afford a home six months down the road.
If home ownership is the American Dream, she needs to keep dreaming.
And is this a down of 10%?? More…less? That implies a loan of 470K. How about a move to a less expensive place…say Michigan. Hear houses are are going cheap up there.
They have an intelligence problem.
credit is tightening.
http://www.thestreet.com/_dm/newsanalysis/banking/10348978.html
And it’s the Alt-A loans causing the problems for them too. This is not contained to sub prime!!
guess things will boom later this year
Friday it expects to make 40 to 60 cents a share for the first quarter and $3.75 to $4.25 a share for the year. Analysts surveyed by Thomson Financial were looking for $1.06 for the quarter and $5 for the year.
Txchick57…only a MERE… “Check this out?”
ha ha ha
Las Vegas:
http://www.lvrj.com/business/6917572.html
“‘At some point in time, the lending institutions have to become more responsible. It’s not an issue of just sales. You’re really doing nobody any favors by putting them into a house where they can’t afford it,’ he said.”
I think Huffman is a little unclear on the concept of exactly WHO the lending institutions work for (shareholders & executives) and in WHOSE interests they operate (their own).
If lending irresponsibly and giving FBs more rope makes them far more profits than properly qualifying them, then guess what? Subprime City here we come! If MBS/CDOs allow lenders to sell all the default/foreclosure risk downstream to suck… er, “investors”, virtually eliminating any DIS-incentive they have to originating toxic loans, then guess what? NINJA loans for everyone!
Lenders don’t give a rat’s ass about what’s in their customer’s best interests, and never have. The only different about now vs. then (pre-bubble) is that there used to be SOME downside for the lender for making crazy-ass loans to unqualified borrowers (i.e., they’d hold most of the loans on their own books and have to eat the losses). Nowadays, you just incorporate a fly-by-night mortgage broker outfit, originate as many loans as possible as fast as possible, sell them downstream to pensioners, hedge funds, FCBS, etc., then file BK and disappear before all the suckers start showing up with repurchase agreements in hand.
Virtually no risk, all reward. What’s so hard to understand here?
Around December that sign on interstate 75 showed about 40,000 houses for sale. Late last year it was about 89,000. A realtor friend said that many folks take their homes off the market during the holidays and that by spring it would pick back up. It certainly has…
The plea for money to help with a house purchase is a gypsy scam. It’s a classic pitch: poor but earnest people, bad luck, think of the children, and end with a ” God Bless “.
Classic !!
(You see this exact bullshit rubbish sales scam on flyers placed on used cars that they try to lowball an purchase price all the time, here around the Sacramento area.)
RE may be local in a normal market but this ain’t a normal market. If you aren’t seeing and feeling the crunch, it just has not made it to your neck of he woods yet. Not because of some RE master forecasting formula, but simple logic; There has never been such a huge run up in prices (and attending phunny lending) and we are seeing historical supply levels that have yet to reflect the yet to be accounted for solid foreclosure numbers.
Here in South Florida it is starting to be evident. Most everyone I know can count at least one friend or relative who has left the state. I can count six. In my particular area, I have seen prices dropp 100K or more and homes sitting on the market over 100 days. Still these homes are overprices with that reduction and they are not selling. Many people, such as myself, will continue to rent until the market gets real. I can afford 400K home. I want $400K dollar home for the money.