The Slump Is Deep In Illinois
The Chicago Tribune reports from Illinois. “Lumber dealer Rick Baumgarten knew business wouldn’t be good this year. But even after a career spent riding the ups and downs of the housing business, he said he was too optimistic. ‘I didn’t think that the slump was going to be as deep as it was,’ said Baumgarten. ‘I was plain, flat-out wrong.’”
“The slump is deep. New data shows that existing-home sales in the Chicago area they dropped a wrenching 22.1 percent.”
“One economist said the weaker housing market is contributing to public unease. ‘There is a relationship,’ said Jonathan Noonan, chief investment strategist for an investment management firm in Boston. Noonan said some people who once thought of their home as a source of ready cash, whether through home-equity loans or outright sales, may be becoming less confident.”
“‘You could tap into your house just like an ATM’ when sales and prices were rising, he said. ‘What we have now is the unwinding of this.’”
“Jackey Licka, who said that even though she and her husband had a deadline to sell their New Lenox duplex home in order to move into a newly built house in Pennsylvania, they knew they were probably overpricing their unit when they listed it for sale two months ago.”
“‘We knew we were too high in the beginning, and then we lowered it by $10,000,’ she said.”
“Even then, the couple got offers that were $25,000 below their asking price, she said. She said they held firm, and in recent days they negotiated a contract to sell the home for about $7,000 below their asking price, which she declined to disclose.”
“‘We’re definitely in a market that is still finding its legs,’ said Robert Zoretich, president of the Illinois Realtors. ‘Tentative buyers and sellers are still trying to read the market and are taking their time.’”
The Journal Star from Illinois. “Area home sales dipped in the first quarter this year compared with the first three months of 2006, according to the Peoria Area Association of Realtors.”
“‘While construction of new homes has seen a dramatic slowdown nationally, central Illinois builders are moving ahead, said Shara Manning, association president. ‘A lot of people pulled in the reins for six months, but there’s a huge influx of new (housing) starts in the area,’ said Manning.”
“‘New subdivisions are opening. Lots are ready to be built on,’” said Manning.”
“The inventory of homes on the Peoria market remained around the 2,400 mark, said Manning, noting that sellers need to remain competitive in how they price their property. ‘There is an outstanding inventory of affordable homes on the market right now,’ she said.”
“‘Spring is our big time. The second and third quarters will truly reflect what is happening in our market,’ she said.”
The News Democrat from Illinois. “Home Builders Association of Greater Southwest Illinois Executive Director Jerry Rombach said local market declines are modest. ‘We’re not seeing the declines as we’ve seen in other hot housing sectors in Phoenix, Florida, California or Las Vegas,’ Rombach said.”
“‘The message is that a lot of the problems with the present housing market have really been a little exaggerated by the national media, and the word may not be getting out locally that in the Greater St. Louis area, interest rates are still at very favorable levels and product is more available,’ Rombach added.”
“Greater Gateway Association of Realtors executive director Al Suguitan said lenders are always going to devise ways of helping people get into houses, but there are always going to be some people who probably should not have been granted a loan.”
“‘I would say that after the fact, when they’re doing the post-mortem or the forensic analysis on what went wrong with the subprime market, they will point out that some lenders lent money out and shouldn’t have, but lenders have to take risks,’ Suguitan said. ‘That is why they have to have such strong underwriting standards.’”
“‘I think that some of them realize that lending standards were a little lenient during the boom and are tightening them up,’ said realtor Heather Horvath in Collinsville. ‘But a mortgage is still reasonably easy to get.’”
“‘I think our area is OK,’ she said. ‘I don’t think we’ve seen the recession most areas in the nation have seen. You definitely have more to choose from in this market. There are a lot of nice listings out there right now.’”
The Star Tribune from Minnesota. “Foreclosure sales in Minneapolis climbed more than 100 percent during the first three months of this year compared with the same period last year.”
“At the current rate, Minneapolis is on track to far surpass the 1,610 homes foreclosed last year. Nearly 900 of the foreclosures in 2006 were on the North Side, more than the 863 foreclosures the whole city had in 2005.”
“‘It’s a bad situation,’ said Elizabeth Ryan, a city planning official. She attributed the spike in foreclosures to the rise of abusive lending practices such as subprime loans.”
“Minneapolis City Council President Barbara Johnson, whose Fourth Ward has a high number of foreclosures, said subprime lenders commit ‘white-collar crime. ‘To have our neighborhoods targeted by these criminals on this scale is overwhelming. They’re ruining our neighborhoods,’ she said.”
“‘In some cases, there was a loosening of credit standards and what happens is homeowners end up with products that in the short term looked like a good deal, but in the long run were unsustainable,’ she said.”
“More than 2,000 homes in Minneapolis and St. Paul went into foreclosure last year, according to sheriff’s records. Other areas statewide also are seeing record numbers of foreclosures.”
“Minneapolis Mayor R.T. Rybak called the foreclosure rise a ‘troubling trend.’ Among the 384 foreclosed homes on the North Side, the Jordan neighborhood had the most: 74.”
“Jason Little, treasurer of the Jordan Area Community Council, said Monday that prospective homeowners need to do more homework before signing any paperwork.”
‘RealtyTrac said Kentucky saw a 59.9 percent increase in foreclosures in the first quarter of 2007, compared with the same period last year, and an 18.85 percent increase from the quarter that ended Dec. 31.’
‘Decatur, Indiana. Residential home owners throughout Adams County are bearing the brunt of an average increase of more than 10 percent in property tax assessments this year, according to three elected officials closest to the annual tax billing process. Some home owners in many parts of the county have seen their tax bills jump by nearly 50 percent this year.’
‘Future years’ (assessments) should better reflect the actual value of properties,’ the assessor said. She added that the depressed local housing market of 2006 should have a lowering effect on property assessments in future years.’
“‘We’re definitely in a market that is still finding its legs,’ said Robert Zoretich, president of the Illinois Realtors. ‘Tentative buyers and sellers are still trying to read the market and are taking their time.’”
Funny how perspectives are different. As a buyer “sitting on the sidelines” I am still waiting for the market to have the legs kicked out from under it.
Be aware and a look out for Real Estate agents!
My sister told me recently she was approached on campus by a Real estate agent.
How slimy and conniving can they get?
The new target market - college students. They learned this one from the credit card companies.
The college student in the house behind me IS a real estate agent. The house is up for sale, of course. And it’s starting out at the same wishing price that the previous owners started out at two years ago. (Yes, those previous owners had to drop their price. Several times, in fact.)
Exactly. The industry spinners are attempting to convince the public we’re nearing the end of a mild correction and the truth is we’re more likely witnessing the beginning of a major bust.
…we’re more likely witnessing the beginning of a major bust.
House on five acres went on the block today:
Absolute Auction, No Reserve
I couldn’t attend but am curious to know the outcome. From the pics it looks like it’s in good repair, but it’s the 5 acre parcel that may have brought the builders out. This is the first No Reserve auction I’ve seen in my area.
Okay, I’ll start. I bid $24,637.
Everything right down to the flower pots!
What MORONS….who is going to take off work just to bid on a house?
I’d say it sells for at least 10% below even the lowest estimate..
Its just like the Repo guys and cars they auction them off at 7 am yes 7 am to get the lowest price and then they or a credit agency can harass the “owner” for years to come.
It’s different here in Naperville!
Yeah, because you’re an exurb of Chicago you’ll get hit even worse than the suburbs and city.
How are you liking that inventory?
Not much. Agents can’t figure out why they are showing all those properties and not making any sales. Makes for interesting monthly meetings.
makes for superlative tax deductions…but I guess you can’t write off expenses if you don’t make anything and don’t pay taxes…
I would hardly call Naperville an exurb being less than a county’s distance into Chicago. Besides, Naperville is the 3rd largest city in the state of IL!
30 miles is an exurb in my book, but it’s all relative
Relative, yes. 30 miles outside of Columbus, OH is country - been there too.
How is Naperville not an “exburb”? Its at least a 45 minute drive into the city. In fact, I think on most days you can make it into the city from NW Indiana Much faster.
I think I understand why we are all confused.
If you are from Wheaton, Naperville is not an exurb.
If you are crazy and commute from Naperville, Naperville is not an exurb.
If you live in the city, Naperville is still an exurb.
It’s all a matter of perspective
There are plenty of days that Oak Park is a 45 minute drive from downtown….is that an exburb?
Plenty of people commute from Naperville into Chicago. My boss, for one. Why, I don’t know.
Same in the northern suburbs. Was looking at a recent listing on realtor.com. House bought in 2004 for $360K, asking price $500k. Others in same neighborhood asking (wishing) for the same price. Prices still seem sticky.
That does not include the North Shore, I assume. Are prices holding firm? Lived in Lake Forest for about 6 years (rented, of course) before moving to West burbs….next door neighbor sold his home in ‘03 for $525K and looks as if same home is on the market for $675…
Not the north shore. Didn’t know you could touch anything in Lake Forest for less than $800k. And that would get you a shack.
I have noticed that talking to family back in rural Illinois, as well as reading the local rags on line that they are keeping the thought of “it’s different here!” alive and well. Word from the locals is that the housing problems are not something that they will suffer. Meanwhile the median price has appreciated in the past 7 years:
64% in Peoria
60% in Bloomington
70% in Springfield
59% in Champaign - Urbana.
Wages have not increased there at this rate. My relatives shrug it off as “lots of people want to live here, this is a great place!”.
Well, Naperville must be a great place….our RE agency is bringing in new agents as fast as they can slide in the door. Inventory has increased three-fold since last year this time and the only phone calls are for rentals….but this is the place everyone wants to be…we have nothing to worry about.
I don’t know about the other markets, but in Peoria that stat is very misleading - I find it unlikely that the “same house” is up even close to 64% over 7 years in this area. I believe the stat there is being led by lots of new housing stock that is much higher priced than the existing stock (very much of which is well under $100,000) causing the median to go higher.
Wages have not increased there at this rate. My relatives shrug it off as “lots of people want to live here, this is a great place!”.
Wow! Is there anyplace that is NOT different? Actually, nowadays pretty much all of America is the same, sans weather. I mean all Americans think the Olive Garden is great Italian. Chi-Chi’s is great Mexican food, etc., etc.
It’s nice not to get homesick and so comforting to drive to anytown USA and find the same strip mall wherever you go with Target, OfficeMax, Linens ‘n Things, PetCo and the Applebees on the corner. And if you miss Ma and Pa shopkeeper you can always visit them at Wallmart to say hi.
So many great establishments have suffered the Wal Mart effect. Sort of what happens to small retail when the Wal Mart lands, times get tough for them. While it is great to get low prices, it really eliminates variety. With big nation wide homogenous food outlets, lots of great places to eat disappear.
Chi-Chi’s went Tango Uniform (t*ts up) many years ago.
I mean all Americans think the Olive Garden is great Italian.
Don’t get me started…
Come on, phillygal, let it out. A good rant always seems to help, and gives us some amusement.
OK.
Not really a rant, but here goes.
Friends have stopped asking me to purported Italian restaurants. There are very good Italian restaurants in the Philadelphia area, but my friends seem to know only the chain places.
It’s hard to explain to folks that when you were raised by a mom who served stellar Italian meals…the restaurant offerings have to be authentic or they just aren’t worth the price of admission. This also applies to my peeps of other ethnic persuasions…if they had a mom who was a kick-a$s cook, they shy away from most restaurants who serve their country’s cuisine.
My Italian cousin is cooking dinner for me tonight, but the enjoyment factor will be limited due to my just returning from dentist. Che peccato!
Leave the gun, take the cannoli.
I agree.
phillygal, are you saying that the Italian coldcuts sandwich at Subway doesn’t quite match a good Italian deli?
Subway’s OK in a pinch. But no, not the same as an Italian Special hoagie at one of the zillion hoagie shops around here. And it’s probably a safe bet that Subway will never be able to match a grilled chicken with fresh broccoli rabe and sharp provolone on hot-out-of-the oven rolls from Cacia’s.
OK hungry now - gotta go to cuz Joe’s for some (soft) home-cooked mangia mangia!
That made me laugh, Phillttim. The last time I was in Illinois was in a miserable little speck called Decatur, where my wife’s grandparents lived. I asked if there was any place to eat that wasn’t an Applebees, etc., and all I got were blank looks. All I wanted was some ethnic food, Polish, Armenian, I didn’t care. I assumed that there would be an ethnic group that supported some kind of cuisine. Nope. We ended up eating at a place called Bennigan’s, is that what they’re called? Had something, fish, chicken, doesn’t matter, whatever sauce covered it was so thick and sugary that it forever altered whatever lay underneath.
Tell them to take you to Stoney’s in Dalton City next time. It’s the only high-falutin restaurant for miles.
Appreciate the tip, vile, but, just so I’m clear, high-falutin wasn’t what I was looking for; I just wanted a good meal. For all of LA’s staggering problems, one can usually find a pretty good ethnic eatery for cheap, especially if you find yourself on the eastside.
Lionel, I hear you.
Some years ago I was in SLC. Hosts raved about an Italian restaurant so off we went. I was happy we were headed to this place since the Mexican joint we’d dined at left a lot to be desired. I just figured my host’s friend owned the restaurant and they wanted to support him, so that’s why we were enduring the essentially inedible food.
What they served me at the purported Italian restaurant looked like - in a word - slop. My grandmother would have been embarrassed even to throw that dish out for fear that the trashman may have believed her kitchen had produced that mess.
There’s quite a few SLC posters here - please, people, tell me you have better choices in ethnic cuisine these days!
That’s what happened to me the last time I went to visit my brother in Grand Prairie, TX. I requested Mexican food (there are a million great restaurants nearby). Got taken to a soul-less chain. Ordered the chicken mole. The sauce was so sweet it made my teeth hurt.
Happens in reverse too. Granparents flew out to Puget Sound to see the MIL. We went up to meet them. Puget Sound has lots of good old school fish joints, on the water, but my wife’s grandmother is insistent on hitting a Red Lobster. God bless her if we didn’t spend an hour of so in traffic heading inland to yet another soulless tasteless restaruant.
http://www.smartmoney.com/home/living/index.cfm?story=rent&hpagenda=1&pgnum=2
Anyone have any ideas about the market in Rogers Park, South of Evanston? Have a sibling closing soon on 2 bd., 2ba. and still trying to talk him out of it. Somewhere in the $275K range, I think.
Demographics have been changing there over the last 6-7 years, but not necessarily for the better. Close friend lived there for many, many years but sold her home for the relative safety of the NW suburbs.
Tons of condos under construction still. I would call it “glut like”. As in, who is going to live in all these brick front, cinder block everywhere else condos?
I have seen some lowering of the prices though. One went from “starting in the 300’s” to “starting in the 200’s”.
Nice haircut. I remember seeing lofts on the northside starting at 400k+.
Denver, same trip I took to Decatur, we visited a cousin of hers who lived in Rogers Park. I second the opinion it’s not a great area. Didn’t feel particularly safe.
$275K for Rogers Park is still quite expensive IMHO.Rogers Park is quite unsafe and is pretty much the cheapest neighborhood in Chicago’s North Side.
The building I live in has 2 bed apartments for 290K odd(assessments are a killer though).This is in what I call “le Gold Coast”-the most pretentious and upscale neighborhood in the city.Am still not biting.Renting is awesome!!!
He shouldn’t be paying more than $200-225k for a unit that size, and it should have parking. RP is the absolute worst neighborhood to park in. And when you think you’ve found a safe spot to park? You’ll get ticketed anyways.
Lots of Cabrini Green exiles in RP make it a not so savory neighborhood, and if he’s buying close to the lake, forget it. Freezing in the winter and impossible in the summer as everyone who lives in RP comes to picnic along the lakefront.
People like to move to RP because of the proximity to the El, but the constantly fluctuating population of Loyola, the rampant section 8 housing and lack of decent parking keep it in a constant down cycle.
Hope this helps! I lived there for 8 years before moving out. Nothing like listening to rapid gunfire coming from two blocks away….off of Touhy no less.
Michele
Thanks all. And I agree, with everyone’s post on Rogers Park, btw. Drab, brick, and somewhat shady. Was there in Feb. for a 1 day visit, and just had a “look over the shoulder” feel to it. Froze my ass off, and I love to ski at 0 or below. (dry cold
)
I didn’t hear any gunfire the couple of nights I was sequestered inside the RP condo, but I did hear, wafting up through the night air, some of the most vile and repugnant language I’d ever heard in my life. Just people walking along, spewing vileness. That’s what I think of when I hear the words Rogers Park.
How close were you to the Morse El stop?
I like living in the rp. but prefer my 945 rent including heat with lake view to a hefty condo payment.
There has been so much development in Rogers Park the past few years i’m amazed it ever got absorbed. If you search the north side for foreclosures, alot of them will be in Rogers Park. I assume it’s alot of first time buyers, sub-primers and others who stretched too far to get in the game. I think the trend there will be stagnant at best over the next few years, as more traditionally desirable neighborhoods (lakeview, lincoln park) closer to downtown become more affordable, demand will drop like a stone in Rogers Park.
just looked up some stats on the MLS:
in 2007 average condo sale price YTD is $230,507 and 220 sales
in 2006 $222,402 (during same period ytd) with 269 sales.
in 2005 $201,155 with 251 sales.
not as weak as i was expecting, but i still think the neighborhood will stagnate moreso than other neighborhoods over the next few years.
RP (zip 60626) foreclosures
http://www.foreclosure.com/search.html?st=IL&cno=031&z=60626
Look at all dem condos….
Rogers Park… look at all these comments about Rogers Park… who the hell wants to live in Rogers Park?
So it’s right off the El. Yeah, so it 95th Street. Enjoy your 45-minute El ride to a condo that’s a whopping 15% cheaper than the Gold Coast, idiots.
“Foreclosure sales in Minneapolis climbed more than 100 percent the first three months of this year compared with the same period last year.”
In a related note, the amount of people wondering why the hell they ever moved to the Twin Cities increased 3000% during the same period. One person noted “That Mall of America lost its appeal after about two weeks. All people do is drink here and then drive around on their snowmobiles. It’s the redneck capital of the north. Get me out of here.”
Minnesotan dream is of a fish house and a snowmobile….also a Texan heading back south with an Okie (or Mexican) under each arm….up to our eyeballs in Texans up here.
What on earth are Texans doing in Minn?? Do you guys listen to country music, too?
Yep, not2, lots of ersatz country music and big pickup trucks and bar-b-que, too. Even Shiners beer here too….no armadillos, though!!
Well, dang! Was getting ready to move from IL to the wide open spaces of Tejas..maybe I should move further north instead!
‘up to our eyeballs in Texans up here.’
Wow, that’s the first time I’ve heard that.
Lot of Texas plates up here….more than any other state excepting Wisconsin. Twin Cities papers have been getting jittery about real estate values and the amount of time stuff is sitting on the market unsold. Gawd, there is 9 places two blocks south of me that have been for sale since summer of last year!! The for sale signs go away in winter and come back out again in the spring.
Ya’ll servin’ Dos XX?
The for sale signs go away in winter and come back out again in the spring.
Maybe the snow just melts.
“‘up to our eyeballs in Texans up here.’
Wow, that’s the first time I’ve heard that.”
Actually, I suspect a good many of those Texas plates are from snowbirds who declare Texas as their home state to save on taxes. A lot of Minnesotans spend winters in Texas. Plus you’ve got the 3M-Austin connection.
I remember when 3M began moving jobs down there. One heckuva lot of 3M’s Minnesota employees followed their jobs down there, only to return to MN in a couple-three years. Back in the 1980s at least, Austin Texas was considered third-world living in the eyes of Minnesotans accustomed to a significantly higher quality of life and public amenities. *Especially* public education. The stories those ex-employees had to tell about what life in Texas was like - and the horrified reactions of their neighbors! It was priceless entertainment.
We had a flood of Texans here in 02-04, my friends in Texas told me they were just sending the California flakes back. You could usually spot the agregious Texans before you could read their plates by their exotic driving skills.
Noonan
Noooonan!
Noooonaaan!
“One economist said the weaker housing market is contributing to public unease. ‘There is a relationship,’ said Jonathan Noonan, chief investment strategist for an investment management firm in Boston. Noonan said some people who once thought of their home as a source of ready cash, whether through home-equity loans or outright sales, may be becoming less confident.”
Miss
Misssss~
Miiiisssssss!
Welcome back Aladdin Sane (one of my favorite albums from decades ago) “Motor sensational, paris or maybe hell - (Im waiting)
Clutches of sad remains
Waits for aladdin sane - youll make it”
Thanks…
Good to get away from this ball and chain, once in awhile~
Noonan
Noooonan!
Noooonaaan!
“One economist said the weaker housing market is contributing to public unease. ‘There is a relationship,’ said Jonathan Noonan, chief investment strategist for an investment management firm in Boston. Noonan said some people who once thought of their home as a source of ready cash, whether through home-equity loans or outright sales, may be becoming less confident.”
Miss
Misssss~
Miiiisssssss!
“‘You could tap into your house just like an ATM’ when sales and prices were rising, he said. ‘What we have now is the unwinding of this.’”
—————————————–
this sounds deflationary
which is the same thing the long bond yield is telling us, bonds bought by people with actual large sums of money- people who back up their opinions with billions in cash
Got Cash??
>Got Cash???
The Chinese do. Loads and LOADS of it.
Guess we’ll see. I don’t count out the ability of the FED to inflate the USD into oblivion though. Place your bets:)!
“Noonan said some people who once thought of their home as a source of ready cash, whether through home-equity loans or outright sales, may be becoming less confident.”
Sigh…..I give up. I just cannot get the mentality that a HELOC is ready cash. You are buying money on credit based on an “asset” that may or may not retain its value, which is determined in a mostly subjective manner. If it can’t be paid back quickly, it’s just another credit card.
And why do people allow themselves to be marketed to in this manner? “It’s your investment! You’ve earned it!”
It’s not your “cash” until you sell. And then only if you sell at profit!!
Okay, I’m off to take my meds now.
Sigh…..I give up. I just cannot get the mentality that a HELOC is ready cash… If it can’t be paid back quickly, it’s just another credit card.
Last week heard bank manager speaking with customer on phone. It sounded as if the customer couldn’t wrap her head around the payment she had to make on her HELOC. (It was one of those option deals where you can choose to pay interest only if you’re not financially astute but want to “invest” in botox, implants and a new set of Portmeirion china.)
There was a sense of urgency to the conversation, and I have to say I didn’t feel any shaden-however-you-spell that word. However I did consider it a portent of money pain in the arriviste ‘burbs.
That reminds me of my recent trip to the bank. In the lobby was one of those Smart Cars.
I don’t know what the rest of the conversation was, but on my way out the only thing I heard the bank manager say to a potential client as I passed was….”so it’s smart to get a HELOC on your home to buy a SmartCar.”
I drove straight home and took a shower.
Normally, you can live in your car but you can’t drive your house, but I wouldn’t want to try to live in a SmartCar.
Sounds like where my parents live, Phillygal. When we get together, we have a lot of schadenfreude-fun.
I don’t get it either. It completely boggles my mind.
IT’S A LOAN!!!
YOU HAVE TO PAY IT BACK!!!
ALL OF IT!!!
Ultimately, you have to sell your house to pay off the loan. I don’t know if people truly understand that.
Seriously, if you’re that confident that your house will eventually be worth 2X what you paid for it, just sit on it and then sell it . Now you have the cash in hand to do whatever you want with it. But people nowadays have zero self control. They simply cannot put off buying tomorrow what they want today. Well, they got the goods. Now they have no future money.
Welcome to debt slavery.
IT”S A LOAN! And you have to repay it. All of it. PLUS interest.
This is off-topic, but I thought it interesting.
http://web.mit.edu/cre/news/061220-rca-index-launch.html
Now I know re is dead.
Jerry Rombach said local market declines are modest. ‘We’re not seeing the declines as we’ve seen in other hot housing sectors in Phoenix, Florida, California or Las Vegas,’ Rombach said.”
Hey Jerry, wait until the bloodbath from Detroit leaks down your way.
I got replies from Realtors about my lowball offer of $50,000 under asking of $225,000. “We cannot accept your offer. If you come look at the house, you will see the value.”
You can kiss my ayyyess. (said in a South Side accent)
Was the rejection signed by the seller? If not, are you sure the offer was presented to them?
How long has that house been on the market?
IOW, how long have prospective buyers not been recognizing its value?
http://yochicago.com/magazine/columnists/don-debat/an-odd-adjustment-%e2%80%93-housing-market-shaky-despite-good-economy-rates_968
Benchmark 30-year fixed-rate mortgages are holding steady near the 6 percent mark this spring, but the housing market is still shaky, leaving even some veteran analysts scratching their heads.
“Looking into 2007, we view this housing cycle adjustment as significantly different than the past two housing cycle adjustments – one from the late 1970s to the early 1980s, another from the late 1980s to the early 1990s,” said marketing expert Ron Peltier, president and CEO of HomeServices of America, Inc., a Berkshire Hathaway affiliate. Mortgage rates averaged 15 percent during that first adjustment period and 10 percent during the second.
“Past real estate slowdowns were economically driven,” Peltier said. “The nation was in or near recession, and the housing market was impacted by the nation’s overall economic climate.”
And here was a reply to the above article…
“Have things slowed down a bit from around 2005, when homes were being sold at a record pace, and which included a ton of speculative investors as well as new homeowners who were given mortgages when they couldn’t afford it? Yes. But from a historical perspective, sales are still strong in 2007. Slowing down from unsustainable record paces of selling doesn’t exactly equate to “shaky”.”
Just like housing inventory, the supply of stupid people just won’t stop growing.
“Minneapolis City Council President Barbara Johnson, whose Fourth Ward has a high number of foreclosures, said subprime lenders commit ‘white-collar crime’…”
Uh-huh. And if those same lenders had refused, based on credit scores, to provide loans to her constituents or had demanded a big down payment, she would have been yelling, “Discrimination!”
“‘The message is that a lot of the problems with the present housing market have really been a little exaggerated by the national media, and the word may not be getting out locally that in the Greater St. Louis area, interest rates are still at very favorable levels and product is more available,’ Rombach added.”
Claiming the media created the real estate problem is like blaming an eyewitness for a car wreck.
The Conference Board blamed higher gasoline prices, but one economist said the weaker housing market also is contributing to public unease. “There is a relationship,” said Jonathan Noonan, chief investment strategist for Appleton Partners, an investment management firm in Boston. Noonan said some people who once thought of their home as a source of ready cash, whether through home-equity loans or outright sales, may be becoming less confident. “You could tap into your house just like an ATM” when sales and prices were rising, he said. “What we have now is the unwinding of this.”
This “economist” just figured this out this week, or was it last week that his brilliant theory just fell out of the sky?
Driving around the ‘hood this morning, 3 (new) vacant commercial buildings, one hand written res (100% creative financing, will pay your downpayment!) sw chicago ‘burbs.
I hope housing drops at least 30% in Chicago suburbs. More in the city.
A few problems here in Illinois, and the economy doesn’t have a darn thing to do with it.
A) Overpriced housing. And that’s the buyers fault for continuing to buy and let these builders and sellers get carried away. I’m here to tell you, if you pay more than $120 sq/ft for a custom home, you paid too much. And I mean lot and basement included. I’m being generous too at $120.00
B) Average family has no business paying any more than $225k for a house, but you can’t find them. These builders feel they need to make $100k a house and are building these cheap ass monsters in the burbs. The builders way overpaid these now rich farmers.
C) Property taxes. Stay out of Will County for sure. DuPage not a lot better, but it is. I got news for these townsips that think they’re going to raise them, property values are headed down friends not up. I lived in a beautiful 2 bedroom apartment in Indiana for less than what my property taxes are in Illinois.
It’s going to hurt a lot of people, but I want to see housing fall by at least 30%.