Post Local Market Observations Here!
What do you see in your housing market this weekend? Incentives? “Sellers are getting more creative, aggressive, and sometimes desperate with incentives to lure buyers to a massive supply of unsold homes in a bleak housing market.”
“Buy a house in Rancho Cucamonga, Calif., listed for $925,000 and the seller will toss in four sixth-row tickets facing the Lakers bench, VIP parking, and use of the ‘Royal Room’ private lounge.”
“Builders are reporting slow sales for the spring season, when warming weather usually spurs home shopping. More applications are being turned down by lenders or canceled by customers. ‘They are using everything in their arsenal’ to pull in buyers, said Steve Melman, economic services director at the National Association of Home Builders.”
Public Sentiment? “In one of my recent online discussions, several people expressed outrage at those moves to assist distressed borrowers.”
“‘Are we really going to bail out people who are about to get foreclosed upon?’ one reader asked. ‘Why should they get help when there are those of us who will never own homes if the prices don’t come down, and they won’t come down if they continue to be artificially inflated by people who couldn’t afford what they bought.’”
“Ken Wade, CEO of NeighborWorks America, said in a survey of Chicago homeowners, almost 50 percent of borrowers who ended up going into foreclosure had no contact at all with their lenders even after the lenders made numerous attempts to contact them.”
“‘When you think about it that’s a pretty remarkable number,’ Wade said.”
Polling results? “Orange County homebuyers are clearly taking a wait-and-see-approach. By DataQuick’s count, the pace of purchases of newly built homes (or converted apartments) hasn’t been this slow in more than a decade.”
“We asked visitors when buyers will return to the market with vigor. ‘Until the market returns to norms supported by underlying fundamentals we are in for stagnation.’”
“‘When TIME magazine runs a headline stating ‘Real estate is dead!’”
I live (and rent) in an area of Costa Mesa CA called South Coast Metro. I track the listings and sales in order to keep my finger on the pulse of the market. Prices have generally come down $100k to $200k from their highs of late 05/early 06.
Earlier this month two sales occurred, one at $765k with 90% financing and $790k with 100% financing. The 100 % was a first and second, both provided by Countrywide. This is the second time in the past month that I have seen a sale with 100% financing from Countrywide (and I suspect there are many,many more).
I’m guessing that Mr Orozco (who borrowed $790 from Countrywide) would need to have an income of between $150k to $200k. It doesn’t make sense to me that someone with that much income would buy a home without putting anything down. What’s even more confusing is that, with all that is known now about the market (how prices are expected to decline) why lenders are still doing 100% financing!
Even if these transactions weren’t to subprime borrowers, I’m betting a high percentage of them will continue to go into foreclosure.
Good sleuthing Rick. I too am amazed to see lenders still doing 100% deals. I guess they will learn the hard way. But, they are sure dragging this mess out for the rest of us…take your damn MEDICINE already!
I tried to put together a deal in ocean beach SD. The property was a tear down but it was 2 blocks from the beach. My plan was to buy for 370k and put a modular duplex on it. The duplex sold for 90k not including transport costs. There was also a free standing garage on the property with a non legal studio (with plumbling) attached.
The property was a short sale the previous owners paid 489k. My total costs when complete would have been around 475k which would have left me with around 3k per month in mortgage.
Unfortunately there is an all cash buyer looking to pay 400k for the property.
The scary part about all of this is that I found out 100% plus mortgages are still out there and easy to get. In my case the 100% plus would have made sense because I would have been able to cover it with documentable fair market rate rental income.
The cool part is that stupid people are starting to get flushed out of the market.
“The cool part is that stupid people are starting to get flushed out of the market.”
Maybe so, but it’s taking quite some time. I am thinking this will drag on for years. Lots of “investors” still buying at the top. It’s unbelievable. I just talked to my mortgage broker two days ago (Washington), and business is humming right along. The scope of the speculation is hard to fathom.
seems to me there are still lots of fools who need separated from their money…..
My cousin in Malibu is a good example of Bantering’s phenomenon. She and her husband bought a second place in Malibu in Aug 06 before closing the sale of their other house there. Luckily for them, the first did close. However, they are highly leveraged in the second, intending to flip it. The cousin tells me they can hang onto it for about two years. Rotsa ruck, the ARM reset schedule suggests things will be worse in 2009 for must-sellers than they are now.
Yeah, I’m going to pay you $500,000 to buy a “modular” home. Not. Do you think people are stupid?
The property alone is worth 370-375k.
And yes they will lend that kind of money for for what can be considered a 3 unit rental. Even if I developed normal condos and sold them at 300k each I’d still make 100k.
Why do you think I’m competing with all cash buyers?
While I agree that the housing bubble is in full effect. If you can buy a property in an area with a proven rental history. And the rental rates are enough to easily cover the 30yr fixed mortgage costs. It’s time to buy.
I’ve seen this done elsewhere. Can anyone explain why the same lender would write an 80/20 and hold both notes? I can understand holding the first and selling the second, but what I have seen is that the same lender will hold both notes! I have also seen examples where both notes were sold, only to be purchased by the same purchaser. Any insight?
AFAIK the silent seconds are re-selling at a major discount, so I don’t know why any lender is still writing them. Maybe they’re making enough money in fees off the first that they don’t care if they can re-sell the second or not.
“Any insight?”
Lenders can be just as foolish as anyone else. Making loans can become a habit, especially if not making them means you don’t eat.
Plus, as everybody knows, in the long run “Real Estate always goes up”.
Hey Rick:
I know exactly where you’re talking about -we looked at homes there between Fairview & Bear - they are nearly all infested with termites - either drywood or subterranean. NOT worth 700+k. Problem there too is a lot of upper-class immigrants from Armenia, India, Asia and former Iranians looking to score it big in America. They are driving up the cost of RE because they will pay anything (or almost) to live here. Then they bring the entire family, extended family, and friends over here next. What a mess.
~Misstrial
You’re right Misstrial…. about the termite problem (our rental has numerous signs) and the immigrants. Almost all of the buyers have foreign sounding names.
~Misstrial
I spoke with CW just days ago. Even with an excellent credit score I couldn’t get 100% but I could put down as little as 2% and they’d roll the closing into the price - go figure. This also had to documented income. If I wanted to go stated, they offered to pass me to Full Spectrum.
hi,
if it’s not too personal, could you post some details about your credit-worthiness? maybe a fico range? just curious to see where the new lines are being drawn…
730 fico, married, both long time univ employees,
median household income for this area, only debt is DH’s student loans.
“What’s even more confusing is that, with all that is known now about the market (how prices are expected to decline) why lenders are still doing 100% financing!”
What is even MORE confusing is why are people buying??????
SKB
Hey now, I’m agressively lowballing. You can thank me for softing up the sellers around here >; )
Thank you!! I take it you are on the west side of LA, right?
Ooops, I just saw UC Davis, sorry about that.
” … why are people buying??????”
Reminds me of a quote:
“We don’t see things as they are; we see things as we are.”
Lots of folks feel now is a great time to buy real estate. Lots of folks feel it’s ALWAYS a good time to buy real estate. These are the mantras they’ve been told all their lives.
Many wish they would have bought during the last slump, ’cause if they did they’d be rich now.
These people are the catchers of falling knives.
We asked visitors when buyers will return to the market with vigor….“When TIME magazine runs a headline stating ‘Real estate is dead!’”
When Oprah says, “Real Estate is dead.” Now, THAT would have some impact.
Just heard a new one here in Vegas. “Get 10X your credit score in free upgrades.” I guess this is on top of the free granite and pools and all the other crap they are already giving away.
I work in the pet food industry. We are about to offer a free condo with the purchase of a case of canned cat or dog food…
sellnrun - is there more melamine in the condo or the pet food?
In the pet food, depending upon Chinese influence. The condos are laced with granite.
don’t forget, granite is radioactive
Driving from Palo Alto to Santa Barbara yesterday, I saw a billboard for HAPPY NEW PRICES at a housing development near Paso Robles. Also, heard the California Association of Realtor’s new radio ad: “California Realtors: We get it.” But…do they? I wonder…
“Also, heard the California Association of Realtor’s new…”
~~~~~~
In any industry – whenever you start to hear a flood of advertisements, you know it’s in trouble. The rosier their picture, the worse its condition.
I was in Andronico’s (the upscale grocery store next to Stanford’s campus) last weekend. I would guess a new academic was in the checkout line in front of me. She was complaining about how it was impossible to find a house, and the check out clerk said “prices are finally starting to come down.” Don’t know if the local press has figured it out yet, but the grocery clerks are on top of the situation.
Wow, you mean she didn’t check out prices in the bay area BEFORE she chose to arrive??? Here we go again, another dumba___ academic. SIGH!
~Misstrial (who likes Drager’s!)
OMG don’t get me started >; )
At UCD, we have a bitch of a time recruiting because they smart ones do research.
That being said, I’m sure Stanford has a seed loan program for faculty housing much like UC does. It’s the only way they can get people to move here.
A friend of mine was recruited to teach at Harvard a few years back. They gave him a HUGE incentive for housing, which clinched the deal. I suspect most schools in the really expensive markets have to do something.
At least UC doesn’t do 100% financing.
the combined LTV can *only* (/sigh) be 95% up to $1.25M. Above that you’ll need 10% down and chancellorial, presidential, and regental approval.
The hilarious thing is that the announcement of the recent changes in MOP came with a graph showing median sales prices (near UC campuses, all CA, and USA) from mid 1980s to present. Why on earth lower the LTV standards when one can clearly see we’re in the mother of all bubbles. The peak of this graph FAR exceeds anything seen in the 1990 portion of the graph.
Sigh, more taxpayer money lost. I just tell the faculty recruits they need to rent until prices collapse, and that no matter where they choose to go the story will be the same, just that the stakes are higher here in CA.
I’m A South Florida professional Geek (professor), first job out of the gate. I actually declined this job when it was offered to me, because of the housing costs. After a lot of negotiations, though, I finally accepted.
My sense is that not only my university, but many other colleges and universities in Florida do not yet understand the gravity of the problem that faces them. We don’t have the experience California does with this, so it is all new. By way of example, the first offer that I was given was for salary (competative) plus 3k towards the downpayment on a house. They were actually impressed with themselves for that 3k.
What’s worse, most colleges down here offer nothing. So, on top of having to put gainful employment on hold longer than your peers only to get a pretty awful salary in the end, you also take a job in which you are guaranteed not to have home ownership. Word has it from a friend at the local community college that they are actively wondering whether they will pass re-accredidation because they cannot find people to teach the necessary courses. Imagine a coutny without a community college.
Yeah, it was probably easier to get approval from Bob “I Don’t Need Regental Approval” Dynes awhile ago than it is now.
One of the community colleges in the Florida panhandle is just finishing up construction on a faculty apartment complex in response to too many potential hires turning them down over the housing/salary issue. They’re holding rents below market rate, so at least you can end up being in a position where you save up enough for a down payment for a townhouse in the boonies if you really want to buy.
Not university-related, but the Chicago Public Schools are in the midst of an effort to re-invent themselves and make all of their schools good (CPS runs a number of selective-enrollment schools that match or exceed anything a private school can offer - including the ivy league recruiting advantages).
Anyway, last year they sweetened the pot and got a lot of old-school people to retire. Right now, they need somewhere north of 125 principals for next school year. Base pay is now well over $100,000, plus you get a bonus based on how bad the school is. It’s possible that a young 20-something fresh out of grad school could be pulling down $150,000 a year. At 3x salary, these people can buy anywhere in the city. Outside of downtown, they could easily be getting AN AWFUL LOT of housing at those salaries.
To top it off, the city just hired a headhunting firm to start searching the country for the best young talent. The only school system in the country that matches these salaries is NYC, but they aren’t hiring (and their cost of living ruins their comparison).
If all of you guys are worried about what local housing costs are doing to university recruiting, well, add another worry. Your best primary talent is about to get cherry picked.
I have also been tracking equestrian properties in Norco, CA. whenever a new listing comes on the market I run the property profile on a title companies website to see who the seller is, when it was last purchased and for what amount, and how much financing was put on the property.
Last week a property came on the market that had been purchased using 100% financing in August of 06 for slightly less than its listing price. This obviously reeked of being a flip or worse (fraud). I ran the property on foreclosure.com and, sure enough, it was also in foreclosure. I then ran the owners name back through the title companies web site and the name came up 4 times as the owner property in Riverside County. Three of the transactions (including Norco), also involved 100% financing and had been previously purchased a short time before. All of the names involved appeared to be middle eastern, including the previous owners.
IMO, this would appear to be a good case of fraud.
Report them. Prosecutors love going after multiples.
http://www.fbi.gov/page2/dec05/mortgagefraud121405.htm
~Misstrial
Thanks Misstrail and to Tom Stone too (below), I will send a report. Funny think is, I could start pulling the records from the foreclosures and within hours could probably uncover hundreds of suspected cases of fraud involving multiple houses. If it is so easy for me, why arent there more investigators doing it (or are they)?
FYI, I have access to a title company’s website, where I can put in a name and it gives me a list of the property that shows up under that name….. simple stuff really.
IMO, the problem of fraud is rampant, beyond your wildest dreams, and much of it will never come to light as there is not enough resources devoted to investigating it and much of it dissapears under the shadow of foreclosure.
I don’t think many people realize how few FBI agents there really are. Not nearly as many as people think. Furthermore, these guys are chasing bank robberies, drug cases, organized crime, fraud (outside of housing), terrorism, and many other crimes. Chasing down bad loans is probably not high on their list. They would probably be overwhelmed unless it was blatant.
Exactly and if there isn’t a direct victim making a complaint thre’s not much incentive for the bureau or the U.S. Attorney to pursue the case. From what I’ve heard the mortgage companies have been ignoring this stuff hoping it will go away not camping out at the FBI office tryong to get them to take on these cases.
rick,please report these property transactions to MortgageFraudWatchlist.com.I have sent a few reports to them,and it helps.ayone else aware of obvious fraud,please do the same.it helps.
Not sure about that site. Lots of ads/links to/for refi’s and exotic mortgages, like Countrywide. Maybe there is another one that has a similar url??? Or a typo? Attorney Rachel Dollar has a good site. http://www.mortgagefraudblog.com/
~Misstrial
Paladin where are you? We need your site link if you have it up yet?
His site has been sort-of up for a while:
http://www.paladinreports.com/
But it ends there. There’s an e-mail address that he might respond to. I (presumably) agree with you — we need people like Paladin to continue to trace and report these fraudsters. I wonder how many resources the “War on Terror” is taking away from fraud-hunting and prosecution.
This is late, but Paladin responded yesterday and said that we could still e-mail any potential fraud cases to his listed e-mail address.
” have also been tracking equestrian properties in Norco, CA.”
These types of fraud are apparantly rampant in such newly developed IE areas as Norco and South Temecula. In the case of Norco, it was till very recently just open pasture fields with scattered ranch homesteads. Then the HB’ers last several years started constucting huge tracts of SFh’s, endless square miles of them, almost an entire new community off the west side of the 15 north of Corona.
Off second st on the east side of the 15 there are still the old homesteaded 1-acre ranch tracts but evidence of specu-investors putting up spankin-new Mcmansions within this largely equestrian rural community. This area is rife with flipper activity due to the rural homesteaders selling out as Norco undergoes the changeover from a former rural ranch community into another IE bulldozed urban exurb(and a quite dusty smelly one). Thus the inevitable fraud attendant with all this flipping/selling/reselling.
IMHO Norco is a very bland cookie-cutter community, one of the worst regions of the IE(that says a lot). Very similar to adjoining Ontario and Chino - Flat and featureless, cow-dung smells, ragged decrepit ranch shacks, 90+% hot and nasty haze/smog 8 months of the year,ect. Amazing that KB homes was advertising SFH’s on a banner off the 15 fwy for homes in the mid $600,000’s. That is plain nuts.
“‘Are we really going to bail out people who are about to get foreclosed upon?’ one reader asked. ‘Why should they get help when there are those of us who will never own homes if the prices don’t come down, and they won’t come down if they continue to be artificially inflated by people who couldn’t afford what they bought.’”
AMEN to whomever here wrote that! That’s a nice, succinct way to put it…when I write to various asshats who are proposing a bail-out of any kind. The only bail-out I want to see is what they have to post “bail” to get “out” of jail.
better tell hillary,shumer,frank,dodd and friends
they’re ready to bail
Already did plus all my locals. What’s sad is I’ve been a card carrying Dem for years and they will likely loose my vote over this.
Don’t believe the hype..
http://tinyurl.com/2kgrnk
“But none of the three Democrats has offered more than general ideas for aiding borrowers, and none has called for a massive federal assistance program.
“Dodd has been extremely clear that he is not talking about any kind of bailout,” a spokesman for the senator said.
One problem with even suggesting a broad-based rescue plan for homeowners who are under water is that any bailout of borrowers also would be viewed as a bailout of their lenders, potentially including some lenders that allegedly preyed on home buyers during the housing boom.”
I believe the term is “grandstanding”.
I agree that it’s grandstanding, no doubt about that. But it’s also helping prop up prices by giving FB’s hope. Plus, what if somebody really takes them seriously…
I told my wife we should have followed the herd and bought a big house that we can’t afford. We could have hung on until the government came to bail us out.
That is what we get for being responsible and not living beyond our means.
Still would rather be renting and stockpiling cash than be reliant on our federal gov
Holding on to cash is relying on the government only in a different sense.
Report from Santa Barbara:
Same old thing, comps show property values down 15%-25% from their 2005 peak, sales are down 30% from 2005, 40% from 2004.
What is interesting is the fact that our local newspaper, the Santa Barbara News-Press, has finally begun to admit that the real estate market has gone bust and the local economy is shrinking. For the past year the News-Press has been covering up this story. Now the story is too big to ignore.
Over the last 6 months, Santa Barbara County employment has dropped 3%. The job base is shrinking, companies are leaving yet unemployment does not seem to be increasing, which indicates that laid off workers are leaving the county.
The News-Press has failed to cover the housing bubble story for the past year. But 2 days ago they had a front page story on the sorry state of the county’s economy, the first front page story on the issue in over a year.
The News-Press is typical of most newspapers. They take their marching orders from their advertisers, like the real estate industry.
For over a year the NAR and CAR have been dictating to the News-Press what stories to run.
But now the cat’s out of the bag. Newspapers have to begin telling the truth. They can no longer ignore the bull in the china shop.
good catch
also unemployed 1099 workers seldom get unemp payments
just go to retail jobs etc and become “employed”
You are in SB? Have a look at Craig Smith’s blog. (He’s a former SB County prosecutor.) Lot’s of helpful links. http://www.west.net/~smith/blog/index.shtml
~Misstrial
I am not impressed by that guy. He’s obsessed with Wendy McCaw, the owner of the News-Press.
I have issues with the way the News-Press covers the news, but this Smith guy, and his buddies at Santa Barbara’s weekly rag “newspaper”, have gone over the top with their cyber- stalking style of coverage of Wendy McCaw. He needs to get a life.
P.S,
I’m not saying that Smith is doing something illegal, but it’s creepy how some Santa Barbara bloggers and “newspapers” are obsessed with McCaw. Before long these people are going to push some nut job into doing something against her. They really do need to tune it down.
No worries. I am not aligned with anyone.
~Misstrial
It’s late and I can’t resist a boo-hiss corny one:
Hopefully that doesn’t make you Missaligned.
Santa Barbara population went negative last year I believe. I’m sure it was worse then they were able to document
Change from July 1, 2005 to July 1, 2006
Santa Barbara County total loss -573
Net International Migration 2,768
Net Internal Migration -6,809
Total migration loss -4,041
So once again, the birthrate is propping up the numbers at 6,467
So once again, the birthrate is propping up the numbers at 6,467
At least SB wasn’t as bad as Monterey
Total change July 1, 2005 to July 1, 2006
Monterey County -2134.00
Santa Barbara County -573.00
Mendocino County -167.00
San Benito County -164.00
Plumas County -146.00
Sonoma County -79.00
Inyo County -60.00
Tuolumne County -43.00
Humboldt County -29.00
I have some really cool data from the IRS filing address that estimates total migration numbers from every county to every other county, as well as their median income.
Quick fact: Inland Empire received 1 in 5 migrants from surrounding counties in the last five years.
“Quick fact: Inland Empire received 1 in 5 migrants from surrounding counties in the last five years.”
This is indeed the case! Immigrants are the primary purchasers of homes in the Riverside/San bernardino metro regions. And they are not especially picky about the area. I was in the tri-cities area(East of freeway 215/north of fwy 10 in a forgotten wasted Redlands industrial tract and saw immigrant blue collars/truck drivers and their families buying wasted run-down properties at the shabby edges of industrial zones, rehabbing the property and presto, a decently-fixed up property in an area no American Citizen would even think of living in. Also the immigrants can park their rigs right on the lawn in these downzoned industrial edge districts, which i have seen American truckers do as well in some wasted IE tracts.
“I have some really cool data from the IRS filing address”
OMG share please >; )
Publicly available from the IRS:
http://www.irs.gov/taxstats/indtaxstats/article/0,,id=96816,00.html
The decimal points are not necesary (i.e., -43.00). We all understand that human populations generally come in whole numbers.
Sorry, was just a quick copy and paste and I had the table se to decimals for percentages
We’re having the same issues with The Tribune up here in SLO, and if you ask me, the Santa Maria Times is even worse. Houses in Santa Maria are being foreclosed at a rate more than double that in SLO, but not a peep from the local rags.
http://centralcoasthousingbubble.blogspot.com/
Thanks for that post. You would think the SLO Tribune would be supportive of lower home prices since they have reported many times since 2002 that local employees cannot afford to live in SLO anymore due to the escalation of home prices. AS far as SM, yeah, I think you are spot on there too - all those new homes built over by WalMart and the new homes off Cook St. Most of those homes were in the $600k range. Lockheed is laying off in SM too. So, who can afford those homes?
~Misstrial
Thanks so much for this info. (I stopped reading the News-Press during the McCaw ugliness.) This is music to my ears!
(Waiting for the bottom to buy in Santa Barbara….)
–
“Over the last 6 months, Santa Barbara County employment has dropped 3%. The job base is shrinking, companies are leaving yet unemployment does not seem to be increasing, which indicates that laid off workers are leaving the county.”
Not necessarily; they might have dropped out of the labor force. For example, more than 10% of those employed in Silly.con Valley in 2000 still live there have stooped looking for a job long ago.
You will see more and more of this.
Jas
Jas, it would’ve been nice if you had pointed this out to Steve over at CR the other day!
No doubt these people are living off equity. I wonder how long before they’re forced to rejoin the workforce…
22151 s of DC inventory growing ,but so are sales
at late 05 pricing
heavily improved properties sitting
“”"Are we really going to bail out people who are about to get foreclosed upon”"”
Take a look at the victims of Katrina, were we not suppose to bail them out? Its been just about 2 years and that place is still a mess.
Nothing that government does, will help the majority.
120 billion
thats a free house for everyone “displaced”
Over the last 6 months, Santa Barbara County employment has dropped 3%.
lots of ag and rich folks
this could be significant
comments ?
imo, the drop probably reflects a loss of construction jobs in north county and ag jobs due to the weather (strawberries ruined in Santa Maria, for example).
I’m on the e-mail list for Blue Bee on State. Amazing thing they have a sale going on. Could it be the rise in unemployment? Not sure. I’m thinking it has more to do with the tighter lending and a drop in folks able to get HELOCs and refi’s.
In any event, I’m looking forward to crap shacks on De La Vina dropping in price from $1M. Not even MDs can afford to buy in SB.
~Misstrial
Blue Bee always has sales. It’s a very popular place with women, who will line up hours before the doors open on sales day.
As far as property prices. Condos are selling for $359/square foot in some nice areas of Santa Barbara. Give it a year and 2 bed condos will be selling for $350,000 in Santa Barbara on a regular basis. Small detached homes will start at $400,000.
The coastal areas of California will always be pricey. Middle class people must choose between buying a small 500 square foot one bed condo in coastal Cali or a 3 bed 2 bath 1500 square foot detached home for the same price somewhere else.
I hope you’re right about those prices! I haven’t seen even a tiny, unrenovated house in my target neighborhood for less than $1 million since I first started paying attention to real estate in the late 1990’s.
I would have to disagree with you re Blue Bee sales. Blue Bee sales are invitation only. The last time they had a sale was just before Christmas in 2006. They know I live part-time in NM, and as added perk, I am not charged shipping because I am a desired customer.
~Misstrial
When Mayor Nagan wanted “Nu Horleenz” to be a Chocolate City again, i think everybody said WHOA……Not in my lifetime, and the funding slowed
——————————————
Take a look at the victims of Katrina, were we not suppose to bail them out?
I have a co-worker that needs to move out of her apartment in a few months. One of her roommates, and her boyfriend, were sick of renting. They need to own. The happy couple found a small condo in the $600,000 range. I spoke to my co-worker the other day. They are all still moving out but the roommate has cancelled buying the condo. Apparently her parents told her it was dumb to buy when prices are so high.
Sensible decisions like this are the enemy of the REIC. I’m sure more and more people will have parents telling them the same thing. This is taking place in New York City just as a lot of those condos appear to be nearing completion. I expect I will receive a lot more advertisements in the mail to buy $950,000 condos because I’m wasting my money on rent. Denial is still heavy in the air but the wind appears to be changing.
Apparently her parents told her it was dumb to buy when prices are so high.
Wow! That roommate has smart parents AND the sense to listen to them.
Where are all those real estate hucksters today who a year ago were saying you can’t lose money in real estate, that real estate always goes up? All this was predicted, but they denied again and again that housing prices were in a bubble. Well, I guess they crawled back under their rocks!
From Hawaii (Oahu anyway). Inventory is up slightly after holding steady all year. Prices have fallen 10% roughly. What I do notice is is that this year more and more of the houses and condos that are listed are desperate flippers, playing a dutch action against each other. A condo you would’ve gotten for 150 in 2000 in a ratty condition- same condo now for 325 (down from 350+) with all new everything, staged, marketed… the few that are owner-occupied for sale are riding the wave down as well but capturing big gains (no major upgrades, low cost basis, etc). The sharks are out and scaring/insulting sellers a little bit but there’s not much lowballing going on. We are seeing alot of military sales lately.
Anyone else notice crime on the rise, of the desperate type, and am I paranoid to see this as an omen of recessionary times ahead?
Aloha
I used the above price to try and relate it to mainland cities as our medians are around 320 for condos, 630 for SFHs. I also track the 500- 900K range of condos and SFHs and see the same pattern BTW, but with very low sales. The same properties are relisted, withdrawn, expired, relisted, in escrow, relisted, then finally sold near asking after over a year on the market. The upper upper end I have no idea about.
From South Miami - the prices of sfh’s in good locations (Pinecrest, Coral Gables) are maybe off 3-5% from April-2006 peak, and still way above 2005 level. The small house I was tracking near Pinecerest (not in the best school district!) was originally listed at 699k, reduced to 659k and sold for 640k. This is still 25-30% above 2004 prices.
The inventory is growing everywhere, but anything priced at 2005 levels in good neighbourhoods gets snapped fast. I am not happy about that, but that’s how it looks to me.
The condo prices are down 10-15%, and there is a lot of inventory in Miami exurbs (the crqp built in the last 3 years along the Turnpike).
SD Ziprealty.com inventory is currently 17,405, up by 1 home from this morning and 2,400 or so (14%) from February 1, 2007.
Also interesting — March 2007 DataQuick numbers. Paradoxically, the number of homes sold was off by 31% from March 2006, while the median sold price hit a new record of $484K, well above the conforming limit of $417K on the mortgages to which the Fannie & Freddie bailout would apply. One possible explanation: The subprime implosion knocked the legs out from under the low- and middle-income buyers who until recently were buying homes they could not afford. The 69% of buyers still in the game would have bought more expensive homes, anyway, and their purchases are the only ones left standing.
—————————————————————————————————————-
California March 2007 Home Sales
April 12, 2007
A total of 39,800 new and resale houses and condos were sold statewide last month. That’s up 27.5 percent from 31,228 for February, and down 31.0 percent from 57,675 for March 2006. An increase from February to March is normal for the season. Last month’s sales made for the slowest March since 1997 when 36,498 homes were sold. March sales from 1988 to 2007 range from 29,356 in 1993 to 68,848 in 2005. The average is 46,256.
The median price paid for a home last month was $484,000, a new record. That was up 2.5 percent from February’s $472,000, and up 3.0 percent from $470,000 for March a year ago.
http://www.dqnews.com/RRCA0407.shtm
We are in the denial, stand-off stage here in Pullman, WA. THis is supposed to be the height of the selling season, but very little is selling and the major builders have been carrying spec homes since the end of last summer.
Basically, there are two price ranges here:
(a) $220-$240k for any sort of a post WWII to 1970’s home with modest updates.
(b) $300-$500k for new or nearly new homes.
Homes in category (a) were listed at $200-$220k and moving briskly a month or two back, but after a few homes went at $230-240k (”one weekend” buyers) prices went up and homes now sit.
Category (b) homes have been sitting all along. The builders have been ramping up new construction by 10-15%/year, and just priced themselves out of the market. Very few buyers in this town for $300k+ homes.
We continue to negotiate with builders for a modest new home (all the spec homes are McMansions), and network actively for potential FSBOs. Builders here aren’t used to negotiating and are clearly frustrated… but at the end of the day most are desperate for a guaranteed sale, so they keep talking even if the price reductions have been modest to date.
By the way, I just just got more info about Big Sky, from some other inlaw. His wife is a realtor up at Big Sky. She says that the market “suddenly” became a buyers maket this spring.
What happened to the endless supply of Wall Street bonus types who will always want to buy 2nd homes in Big Sky, regardless of price?!
Duane, thanks for the Big Sky updates. I don’t know if you’ve seen them, but I’ve made a blog and videos about the Billings market. Click on my name to see them. I think this place is in for some real hurt, and Billings is one of the least overheated in the state!
I’d like to get some more information from you, if you don’t mind. Can you send me an e-mail at the address listed on my webpage? Thanks!
That’s a GREAT video and the update, too. Worth watching, no matter where you are. Reminds me of W. Colorado. Thanks.
Ex-nnvmtgbrkr
Take a look at this
http://sfbay.craigslist.org/eby/rfs/316130384.html
I don’t care if it is on a golf course; isn’t Yerington out in the middle of bumf(_)ck Egypt?
LOL — in the mid 1950s my father drove all of us to California to visit friends and relatives. He took us to Yerington to look at an investment property which, fortunately, he did not buy. All I recall is that it wass hot and dry and there was a vast amount of nothing. Those photos make it look like this is the single new structure there in the past 50 years.
Ever spent any time in the CA central valley?
No — is it that bad?
The interior of CA is really nasty in the summer, almost as hot as NV yet with a lovely coating low humidity. The air quality is what makes it really bad. If you don’t have asthma before you move here, you will later.
Austin home market appears to be cooling
The once-sizzling Central Texas home market appears to be cooling off. The number of homes sold in March was flat, the third month in a row that sales have stalled or declined.
Sales of preowned single-family homes in March totaled 2,343 for the month, a slight 1 percent increase over the year-ago period, according to the Austin Board of Realtors.
http://www.statesman.com/business/content/business/stories/realestate/04/21//21homesales.html
In 2004 we considered a house buy in Seminole County, Florida, on the north side of Orlando. We refused to get into bidding wars and dropped out. About six months after I’d found Ben’s blog, I was addicted and began to track in realtor.com the numbers of active listings in the areas we had cared about. Count criteria was single family, 3+2+, asking $200K-$600K. The two areas were 32746 (Lake Mary), which includes the large yuppiedom of Heathrow, and zip 32771, just north of that, which has similar gated and medium-to-high end communities:
32746 32771
09-12-05 82 50
01-27-06 176 124
04-20-06 214 180
07-10-06 316 230
10-25-06 340 271
01-20-07 273 244
04-20-07 320 284
Today the inventories are about 4 and 6 times what they were roughly a year and a half ago, respectively. No buyers, more sellers. Wait a while. Still no buyers, ever more sellers. Guess who’s going to win that one.
I’ve also tracked listings elsewhere in the South, but outside Florida I find that realtor.com is not useful for that because many houses have two or three MLS numbers and subsequently are listed multiple times concurrently.
Well after living in DC a few years I never knew how profitable “terrorism” and invading foreign countries could be. Every where you turn, you see a defense contractor’s name plastered across a commercial building. This is the money that is propping up the out of control real estate/rent prices here. I was here when the dot com business (a fairly heavy presence here) was flying and real estate was nowhere near what it is now. Yeah, Greenspan pulled the lever that started this whole mess and Bush and crew sat back and watched it all unfold, but its the damn Pentagon/Patriot Act that is keeping this mess going. Aarrgh. It used to be reasonably affordable here and housing wasn’t the topic on EVERYBODY’s lips. I guess the big question is, will the blank checks on “defense” ever stop?! Or will the gov’t just run this country into bankruptsy?
I just got my NOD list for this week. Out of 41 NODs in Multnomah County (Portland), 32 of the properties were purchased after 2003.
Or, said another way, 75% of NODs for this week reflected purchases made from 2004-2006.
Inventory, per Zip Realty:
TAMPA
01/21/07 59,865
02/24/07 62,658
03/24/07 63,931
04/01/07 62,972
04/07/07 63,894
04/14/07 64,290
04/21/07 64,299
MIAMI/FTL
01/21/07 103,131
02/24/07 109,638
03/24/07 111,863
04/01/07 112,680
04/07/07 112,774
04/14/07 113,809
04/21/07 114,582
ORLANDO
01/21/07 32,341
02/24/07 34,398
03/24/07 35,971
04/01/07 36,105
04/07/07 36,284
04/14/07 36,493
04/21/07 37,267
PHILA
01/21/07 32,698
02/24/07 32,552
03/24/07 33,729
04/01/07 33,962
04/07/07 34,508
04/14/07 35,409
04/21/07 35,898
ATLANTA
01/21/07 57,620
02/24/07 61,895
03/24/07 65,107
04/01/07 66,929
04/07/07 67,660
04/14/07 68,689
04/21/07 69,753
BOSTON
01/21/07 42,170
02/24/07 42,870
03/24/07 45,429
04/01/07 46,298
04/07/07 46,525
04/14/07 47,979
04/21/07 48,789
BALT.
01/21/07 46,025
02/24/07 45,877
03/24/07 49,506
04/01/07 50,100
04/07/07 51,871
04/14/07 54,022
04/21/07 55,686
Any Utahns here? I was in SLC two weeks ago. Being the curious person I am, I took a drive up I-15 toward Ogden. In Kaysville, I noticed a house farm so I pulled off the highway to take a look. I happened upon Sunset Equestrian Estates.
OMFG, I thought you Nevadans and Arizonans were joking when you’ve talked about whole neighborhoods of vacant homes. Well, I drove through what was over 1 sq. mile of vacant homes in various states of completion. Street after street of front yards of dirt and for sale signs. Down one cul-de-sac I found ONE homeowner with, you guessed it, a FSBO sign out front. Very young family with no neighbors anywhere (unless you count backhoes and piles of 2×6s).
I think those people might have been renters. I looked up the house at the county and it appears to be owned by 2 brothers at a different mailing address in Layton. Specuvestors I suspect.
Unfortunately I only had the camera on my phone which didn’t do the house farm justice.
On the way back to SLC after dark, I noticed several other newish looking developments with very few lights on. (just south of Ogden, east side of I-15)
Can you say housing surplus? I knew you could.
By the way, I love SLC. You should be proud of your city. Aside from the masses of homeless in Pioneer Park and a few rough spots it felt very clean downtown.
The snowboarding was phenomenal as well. And only 30 minutes away!
As I posted under another topic on this blog, it’s really hard to figure out what houses are selling for in SLC, at least just by looking at RE magazines, as almost no one puts prices on the houses they advertise. I’ve been in SLC a lot lately (eye surgery for a dog plus follow ups) and have been trying to get a read on RE there. The city is really beautiful and clean for a city, but as I also pointed out earlier, it’s on a major fault line and there have been many articles in the news media there about how they’re due for a big one. There’s a lot of geological evidence for this, it’s not just a media hype. SO… if you do buy there, be sure you get an earthquake-proof house, if there is such a thing. WIll look for the house farm next week when I return (good term and thanks for the post).
Lost,
It was in Kaysville on the west side of I-15. Try this link:
http://tinyurl.com/2ld9wv
I believe its off of Burton Lane as shown on this map. Heading west on Burton, take the first right after crossing the second RxR tracks. That should be Sunset Equestrian Estates.
I believe the culdesac of which I spoke is at the north end, the northernmost culdesac shown. Take the second left upon entering the Estates and then the first right. I believe the street is Preakness.
Anyway, I was freaked out by this area. If you go out to Sunset Dr. you’ll see Phases 6 and 7 getting started.
I recommend you buy at least 3 lots since they surely are out of land in Utah!
“northernmost culdesac shown.”
Meant the northernmost in those two blocks. The streets at the top that look like the symbol for pi is another sub-division with no owners.
Thanks, Sleepless, will put it on my places to go see list, along with Brigham’s Tomb, the Green Jello Monument, and the world’s largest manmade disaster, Kennecot Copper MIne (visible from outer space). Wasn’t it weird seeing seagulls in Park City?
PS - like your term “house farms” - my tree farm buddy’s all excited and wants to know where he can get starter houses. He wants to grow his own subdivision. I told him it wouldn’t sell, even if he could figure out how.
Seagulls are the state bird of Utah. Interesting story - check your history.
Yeah, I know all about them eating the grasshoppers and that, but I’m from Colorado, and I’ll never get used to seeing biurds I associate with the ocean up in the high mtns (have seen them occasionally here, but very rare).
Yeah, I know all about them eating the Mormon crickets and that, but I’m from Colorado, and I’ll never get used to seeing birds I associate with the ocean up in the high mtns (have seen them occasionally here, but very rare).
whoops - sorry, slow down, cowboy
Assuming you mean wishing (asking) prices, realtor.com shows 2,275 single family residences for sale and each has the price included.
As some of you know, I live in 2 States: CA & NM.
Here are my stats for Las Cruces, NM: 2 years ago = a little over 500 (five hundred) homes for sale. Now, there are over 1500 (fifteen hundred) for sale. Denial dies hard and prices have only come down about $5k per residence which is a joke. Best thing is to go onto the Wayback Machine and enter realtor.com as the search. Past years will come up to select from. Choosing 2006 I have been able to find homes that have been on the market for at least one year as of now.
I think that a lot of realtors are spec sellers and that accounts for the stubbornness. There are a number of local lawsuits going on alleging violations of the federal Truth in Lending Act (”TILA”) - however, dumb is as dumb gets because the statute of limitations for TILA violations is one year. And in one case the plaintiffs waited nearly 2 years before seeking a judicial remedy.
~Misstrial
My husband is in the process of dissolving his grandfather’s estate, which includes real estate in three distinct CA markets–all of which suck right now–Antioch, Paso Robles, and Lakeport. The Lakeport and Antioch properties are SFH rentals with stable tenants but which have not been updated or even well-taken care of. The Paso property is a four-unit apartment building that is not in total disrepair, but needs a lot of work. Probate laws require an appraisal as of the date of death–June 2006. But do to some legal issues the properties could not be listed for sale until now. If we want to accept an offer that is less than 90 percent of the appraisal on DOD, we have to get a judge (and the other heirs) to approve the sale. In other words, we are F#$%ed sellers…
Maybe it would be better not to sell right now - if he was able to get by with the properties like thay are, maybe you should do that for a few more years and just collect the rent.
If we were the only heirs we would, but we have to liquidate the assets to distribute to other people who unfortunately hate each other so would not make amicable “joint owners.” We did just get a call from the realtor on the Paso property–he has an offer from a vietnamese family that wants to buy it and move some extended family members into it. The offer is within 10 percent of the asking price, so we are crossing our fingers that it works out.
Heirs always want their money…now!
Builder in East Lyme, Connecticut offers an incentive which includes completely finished basements or an upgrade to gourment kitchen at NO charge. Builder estimates incentive value at $60,000. Less than 1/2 of the 28 homes in Phase I of a 168 lot subdivision have been sold. It has taken over 600 days + days to sell some 11 homes in the $625,000 to $725,000 range. This is just one of numerous subdivisions in town, 100’s of lots available, in the $500,000 to $900,000 price range. Inventory is skyrocketing. Dozens and dozens of spec homes just sitting. Some re-sales listed well below town’s recent re-evaluation of appraised value. Correction mode in full swing.
March data are out for LA County from dqnews.com
Here in Santa Monica, the sales pattern for SFHs is still quite odd:
90401 - no sales
90402 - 13 sales @ $1079/ft median
90403 - 4 sales @ $944/ft median
90404 - 1 sale @ $822/ft
90405 - 17 sales @ $659/ft median
OTOH, it looks like few more condos are selling. The reported median prices are starting to drop, but the numbers sold are too small to be sure that we have a trend in place, and of course you can’t tell what’s actually selling from the DQ numbers.
But I am encouraged. It’s starting to look like we’ve finally seen the top here in SM. Now it will be interesting to see if we trend down or freeze up for a while. My crystal ball says that SFHs freeze up and Condos start trending down in price over the next six months.
I’m becoming a crazy person in good old NW Arizona. In Kingman not much is selling, prices keep going up and every week there is a new subdivision. This quote is once again from a topix.net forum on Kingman, Arizona.
“Mohave county will be receiving the bulk of 80,000,000 baby boomers that are slated to retire. We have the best weather in the U.S.A. low cost of living. Relatively crime free communities. We are close to 3 major metropolitan areas. Prices are reasonable currently. In my professional opinion, it would be highly advantageous to buy now…. email me @….”
So you other guys should just stop building. I don’t know where this county of about 160,000 people is going to put those 80,000,000 people, but they’re coming.