April 29, 2007

Post Local Market Observations Here!

What do you see in your housing market this weekend? Falling prices? “Ann Smith in Danbury (Connecticut), said sales have been falling since last fall. Home prices have dropped about 10 percent in the region since last fall, she said. Robert Budnik, with Century 21 in Bethel, said houses in the Danbury area typically stay on the market two to three times longer than in the boom time of two or three years ago.”

“‘If sellers think they have the upper hand, they don’t,’ he said.”

“The median sale price in Fairfield County dropped from $494,700 during the last three months of 2005 to $461,700 for the last three months of 2006.”

“JoAnne DiCarlo, like many real estate agents, said some sellers haven’t come to grips with the fact that it is now a buyer’s market. ‘They are still under the impression they can put it at a higher price of a year ago,’ she said.”

Or polling results? “This week, we asked in our weekly poll: Should the government intervene to prevent a predicted wave of mortgage defaults? A majority of respondents, 60 percent, said no, because the deals are private contracts and borrowers need to be accountable.”

“Several respondents left comments on the matter. Here are some of those comments: ‘If they bail out the mortgage holders, how about bailing us all out on our bad investment decisions?’ ‘The lenders KNEW they were lending to Sub-Prime customers. They made their own bed. Let them lie in it.’”

Failed developments? “The West Side Flats condo project was supposed to showcase a new era of riverfront development. For now, though, developers have halted the project and are returning down payments, all seven of them.”

“It’s no secret that the condo market is soft, and real estate experts say it is especially difficult to sell buyers on a speculative idea such as the West Side Flats when so many completed condos are flooding the market.”

“‘I think the biggest problem is the condo market is oversold,’ said Ralph Peterson of Coldwell Banker Burnet. ‘They way overbuilt, way too fast.’”

“Peterson added that another barrier to sales is price.”

An insiders opinion? “The sharp decline of the subprime housing market offering high-cost mortgages hasn’t yet hit bottom, the head of home mortgage buyer Freddie Mac said yesterday.”

“‘I don’t think it’s troughed yet, because of the class of 2006,’ CEO Richard F. Syron said. ‘The mortgages written in 2006 in the subprime market are probably the most troublesome. They haven’t hit the reset point yet on interest rates.’”

“‘To some extent, people in the past thought, ‘Well, I’ll be bailed out by the rise in housing prices, no matter what happens,’ Syron said.”

International headlines? “In the heyday of Spain’s real estate boom a few years ago, homes were going up so fast brick-makers literally could not bake the things fast enough, and had to import.”

“But this week stocks in Spanish construction companies, banks and other firms heavily exposed to the property market plunged, the most vivid evidence yet of a widely expected slowdown. The big question now is whether the meltdown signaled a bubble bursting or a jet coming in for a soft landing.”

“‘Spanish housing is about to implode,’ economist Charles Dumas wrote this week.”

“‘Spain saw Goldilocks at her most beneficent,’ Dumas wrote. ‘Sadly it will now see the bears.’”

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Comment by phillygal
2007-04-28 09:38:03

“‘If sellers think they have the upper hand, they don’t,’ he said.”

Some sellers in the PHL market still believe they can get the money they want. I posted a link in the Bits Bucket in which the owner takes an aggressive tone. He’s demanding an offer, but I don’t think he realizes the offers will come in about 30% less than expected.

“JoAnne DiCarlo, like many real estate agents, said some sellers haven’t come to grips with the fact that it is now a buyer’s market. ‘They are still under the impression they can put it at a higher price of a year ago,’ she said.”

This was from a CT agent but the same can be said for many PHL sellers.
Although I was just on realtor.com and the condo communities I’ve been watching have been showing price declines, some as much as 10%. So the truly motivated are accepting the change in climate.

Comment by Domi
2007-04-28 21:25:03

Welcome to today’s episode of Amazing Realtor Stunts.

In today’s episode we learn that a flipper recently listed a POS Cape at $1.5M.

After the realization that no suckers were willing to pay $1.5M for a Cape, did the realtor:

A) Instruct the seller that the POS Cape was stratospherically overpriced.

B) Update the MLS photo so it no longer depicts the tiny Cape, and instead shows only the front door of the house.

You are correct, the answer is B. Thanks for playing.


Comment by phillygal
2007-04-29 14:52:19

I don’t know how that’s supposed to bring swarms of buyers to the door. It certainly doesn’t look like the entrance to a $1M home.

Comment by aladinsane
2007-04-28 10:00:23

“‘Spanish housing is about to implode,’ economist Charles Dumas wrote this week.”

“All generalizations are dangerous, even this one.”

Alexandre Dumas

Comment by nhz
2007-04-28 11:58:13

yes, it has been said many times before so why would this time be right? Don’t underestimate the ECB and EU parliament gangsters, there will be bailouts for most speculators until the bitter end.

Comment by B-hamster
2007-04-28 10:01:21

Probably previously posted, but two MSNBC links:

I knew the MSM would be responsible for the housing bust.

Comment by Domi
2007-04-28 11:41:31


Funny how the bank was not willing to accept the bid for the cul-de-sac home… definitely a sign that we are currently in a recession.

Comment by Darrell_in_PHX
2007-04-28 12:06:02

I’m thinking it means they think they can find a buyer if they finish it themselves or market it to a larger group than the dozen people there.

Or, the banks themselves are now the over-leveraged speculators. Buy the house, and put it in the balance sheet as an asset, then use it as leverage to borrow more money to buy the next one… Hoping to keep the balls in the air.

I’m thinking…. the REAL bargains will be at the bankruptcy auctions when the banks go bankrupt.

Comment by Blue Skye
2007-04-29 11:39:44

Do banks go “bankrupt” or do the assets of failing banks always get “purchased” by another bank?

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Comment by lurker
2007-04-28 10:02:14

Chicago -

Last weekend, while driving on the Kennedy from the city to the junction, I saw a huge sign offering a car with a condo purchase at a new development. Unfortunately, I don’t know the details and have had no luck getting info from the internet. But it is a huge sign (billboard size banner) in plain sight for those of you in the Chicago area.

Comment by B-hamster
2007-04-28 10:05:26

Um, I thought the pupose of buying a condo was to live closer to all the amenities that didn’t require driving.

When we moved to town, we ended up selling a car.

Comment by aNYCdj
2007-04-28 10:31:36

When we moved to town, we ended up selling a car.

WHOA GET A GRIP ON LIFE….That makes too much sense for most people!

PS: I should talk living in queens(renting) with a car, but then i still DJ and need it for my equipment.

Comment by passthebubbly
2007-04-28 11:08:18

You can live in your car, but you can’t drive your house.

I actually *do* live in a condo building in Chicago but neither have, need nor want a car.

I have a separate Chicago RE observation which I’ll post below.

Comment by Scott
2007-04-29 10:06:48

They had a similar stunt here in San Diego for a variety of condo complexes, one a few blocks from where my wife and I live. If I recall correctly, it was a condo conversion of a very unattractive 1970s apartment building, and if you bought you got your choice of:

(a) A free trip to Hawaii
(b) A free VW

I actually blogged about it, so I have the details and date. See this blog entry, which was posted on Nov. 7th, 2005. Here’s a snippet:

Today I received in the mail an ad for a condo converstion down the street, one of the “sign flipping” condo projects. If you buy a condo from them, you will get with your purchase… a free Volkswagen New Beetle.

Personally, I’d rather have them knock off $20K, or whatever it is they’re paying to get one of those cars, but they’d rather keep from showing deflating prices. Seriously, though, what buyer would want this deal? I mean, it basically costs you to have this car, with taxes, registration, insurance increases, and so on. If they knocked off $20K that would save $202 in property taxes each year for however long you owned the condo (not to mention $4K up front (assuming you are putting 20% down… an outdated assumption, I know), along with having paid just $20K less!

Comment by GetStucco
2007-04-29 11:06:41

“Seriously, though, what buyer would want this deal?”

I would guess a buyer who does not actually intend to repay the loan would want this kind of deal, as the cost of the new car, HI vacation, whatever is implicitly financed as part of the loan.

If the seller did not offer such incentives, then they would obviously have to price the home at (lower) actual market value in order to sell it. This is especially problematic for newly built condo towers or McMansion tract home developments, where the mirror-image similarity across units would turn a drop in the price of one sale into a major financial hit, as this would become the new comp and drag down the price of the whole project.

I can see why developers go for incentives, but they still seem like they should be illegal (charitably assuming they are not), as it seems fraudulent to record the value of HI vacations or new cars as part of a home’s sale price.

Comment by Inspired
2007-04-29 10:56:44

Yeah selling houses with a car {porche} in the garage was a trick the sellers in Aliante Sub-division of N.Las Vegas used…..not sure it worked the flippers were foreclosed on anyway!

Comment by GetStucco
2007-04-29 10:59:16

Now that the housing market in Chi town is going down the tube, the tallest-ever condo tower has been approved for construction:
Tallest condo tower approved
By Brian Louis

April 29, 2007

The “Chicago Spire,” planned as the world’s tallest residential building, won the approval of the Chicago Plan Commission recently, clearing the way for construction to begin on the skyscraper.

Historical footnote:

The Empire State Building was completed in 1931 (at the onset of the Great Depression) and stood as the World’s tallest building for 41 years thereafter, until the construction of the ill-fated twin towers in 1972.


Comment by Duane Lapinski
2007-04-29 14:49:57

Also try looking up “the curse of the sky scraper.”

Comment by Crapburner
2007-04-28 10:05:44

Local conditions suck….eastern suburbs of Saint Paul have mucho for sale signs all over the place. Places south of me have been on sale since last spring and not moving….$250K Pulte Homes…..the 120K homes in our place seen to go and turn over since I think that is the price range.

Washington County is getting real weird for real estate and business….shopping centers and lifestyle centers appear and then are vacant….

The crash is happening here and no one is talking about it but can see it with your eyes if you keep it open.

More popcorn please.

Comment by homoaner
2007-04-29 11:06:35

“Washington County is getting real weird for real estate and business….shopping centers and lifestyle centers appear and then are vacant….”

No joke. I was driving yesterday on Hudson Blvd past a several-block section of new shopping centers and retail clusters, and was wondering, “Where the heck are the PEOPLE?” Saturday evening, almost no cars in sight. I couldn’t see any housing, either, until I continued on past the golf course and saw that *hideous* development full of rowhouses alongside the course. Talk about the worst of both worlds - you get to pay the property taxes like a SFR owner, but are also stuck sharing walls and paying HOA fees. I’d rent an apartment before I’d buy a section of Habitrail to call my own.

Comment by Carlos Cisco
2007-04-28 10:07:14

Out here in NE Ohio its easy to find out the total mtg+HELOC numbers on a home for sale. Because of this, buyers will suggest an offer BELOW this number, the swine! Although real estate sales agents are, by law, required to submit all offers, some are refusing to them write up; if someone hands them a filled out contract…..then they are obligated to present. Is phoning a seller and telling them they have a lowball offer meeting the letter of the law? I guess there are all kinds of ways to reduce our carbon footprints.

Comment by ronin
2007-04-28 11:36:51

Why would it be against the law to contact the seller?

The real estate person will want to control the transaction and hence will try to serve as the sole conduit for all information. But then you as an offerer have no contract with the real estate agent, right?

The worst that can happen- if you and seller agree on a deal, even if the real estate person contributed nothing, they can probably claim full commission. On the other hand, if they failed the contract by not submitting an offer…

(Usual disclaimers bla bla).

Comment by SoBay
2007-04-28 10:20:50

““Several respondents left comments on the matter. Here are some of those comments: ‘If they bail out the mortgage holders, how about bailing us all out on our bad investment decisions?’

Can I get a refund (Bailout) on my Ca Super Lotto tickets?

Comment by talon
2007-04-28 10:41:14

Hey, get in line. I deserve a bailout first for that biotech stock I bought in 1998 for $6 that is currently selling for 10 cents. I was a victim—a friend said “this thing is just going to go up and up,” after which some invisible aura took control of me and caused me to place the order with my broker. It wasn’t my doing at all. I’m sure that those proposing a bailout for subprime borrowers, who are also not at fault, will engineer one for me too. We simply CANNOT have people losing money on investments in this country—it’s un-American.

Comment by grubner
2007-04-28 11:44:35

The bailout I deserve is a bit more complex. Its like the one my new housing bubble lab rat, Jeff over at the ’ SDCIA Message Board needs. The losses I have on some investments are negatively effecting my hypothetical gains on other investments. So I deserve to be bailed out of my losing positions so they don’t effect my profitable positions.

Comment by nova_renter
2007-04-28 12:11:08

I need a bailout for my divorce. Lifecycle expenditures, that is…

Comment by Darrell_in_PHX
2007-04-28 12:08:58

I had WorldCom stock. Bernie Ebers was lieing to me, and now sits in jail for it. If anyone deserves a bailout, it is me. Where’s my check for $25K?

Comment by CA renter
2007-04-28 14:07:48

Since the govt is trying to frame this as “keeping people in their homes” as opposed to bailing out morons with bad investments…I want the govt to “fix” my payments for 30 years, just like they are doing with the FBs. Renters can get “priced out” of their ***homes*** just the same as mortgage holders with ARMs.

I hereby demand the govt pay for any rent increases for the next 30 years!!!

Comment by sm_landlord
2007-04-28 15:17:35

Just go on Section 8, and wish will be fulfilled.

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Comment by agitated in sd
2007-04-28 18:57:46

“I hereby demand the govt pay for any rent increases for the next 30 years”

here here

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Comment by Carolina W
2007-04-28 18:42:30

I think a lot of us are reading this board because we saw this all happen 6 years ago…in tech stocks. I’m with you bro…

Comment by agitated in sd
2007-04-28 18:55:15

“I had WorldCom stock. Bernie Ebers was lieing to me, and now sits in jail for it. If anyone deserves a bailout, it is me. Where’s my check for $25K?”

ditto here

Comment by Nick
2007-04-28 10:28:50

Increased inventory here in Juneau, AK. Housing is expensive (I’d guess the median asking price for SFH/condo is ~300K) compared to local incomes. Affordable housing is a big issue around here–there’s little buildable land in private hands (most land is wetland, mountainside, and/or owned by Feds, state of AK or city). City is growing slowly, and most new housing is higher-end.

We moved here from Ca Bay Area in 2005, so we are equity refugees, I guess. We sold 1350 sq ft house with view in very good neighborhood for $775K, bought 2850 sq ft house with view in very good neighborhood here for low 500s. There is much more selection of existing houses now than there was when we bought two years ago. I do worry about this house losing value, although houses seem to sell quickly in our neighborhood.

Comment by ShaunT79
2007-04-28 11:07:51

Why are you worried about your house losing value? Lower property taxes? Less debt slaves around you? Do you not plan to actually pay for your home?

Comment by Nick
2007-04-28 13:29:12

Paying for the house is not a problem–we are not leveraged. I’d rather not lose money if/when we eventually sell it, of course.

Comment by In Colorado
2007-04-28 11:53:28

500K for a

Comment by In Colorado
2007-04-28 11:56:25

OK I’ll try again. I forget that I cant use less than or greater than symbols:

500K for a less than 3000 sq ft house in Alaska? What does an igloo go for? 200K?

Comment by Nick
2007-04-28 13:37:26

Juneau is in SE Alaska–maritime climate. We live in a rainforest: no igloos around here, although we did get over 200″ of snow this winter. For $200K or less you can get an 850 sq ft 2 BR condo.

As for the size of the house, we may downsize eventually. Heating empty rooms is a serious bummer considering the cost of heating oil.

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Comment by In Colorado
2007-04-28 18:19:32

A former boss used to live in Anchorage. He did some kind of government work that involved travelling to semi remote stations. He told me a story of how once their truck got a flat when it was 60 below (not far from Anchorage). They had a portable heater in the back, but the propane tank was frozen. They had to bring it inside the passenger compartment to thaw it out. Once that was done they started the heater and changed the tire. He quit his job shortly after that and came back to “balmy” Colorado.

Comment by dukes
2007-04-29 08:03:45

“As for the size of the house, we may downsize eventually. Heating empty rooms is a serious bummer considering the cost of heating oil.”

Why buy such a big house then? Did you NOT consider things like this before you purchased?

Comment by scdave
2007-04-29 08:50:07

Home sizes get a bad rap at times at least on this blog….We have a large home for a large family..We had a blast with all the baseball teams, volyball teams, etc. socializing at our home….Besides that we have a large extended family (50+) and gather together during holidays…Nothing wrong with a large home IMO as long as its not a ego stroke…..

Comment by Nick
2007-04-29 09:55:41

First of all, the house is not that big by modern (McMansion) standards–it’s 2850 sq ft. I is larger than average for this area, however. With a family of four, 2 kids in school, we were mostly buying the neighborhood. We would have been happy with something a little smaller (say ~2200-2400 sq ft), but this was what was available in this neighborhood at the time we needed to buy. We have no regrets about buying here, and the house is great for entertaining the neighborhood kids, etc. Once the kids are out of the house, we may downsize, or (my other brainstorm) we could invest in a geothermal heat pump, which would probably cut our heating bill by 2/3. If we decide we’re living here for the long term, the capital investment would make sense. It would also be the green choice, since electricity here is all hydro. Space heating would go from major CO2 emissions (heating with oil) to almost zero.

Comment by JCM
2007-04-29 11:56:55

For $200K or less you can get an 850 sq ft 2 BR condo.


Comment by Orlando Native
2007-04-28 10:29:52

been tracking MLS inventory in the Metro orlando area (TriCounty area encompassing Orange, Seminole and Osceola Counties) since Feb 2006.

Date MLS Inventory Single Family Inventory
2/9/06 13883 10164
2/9/07 22989 16079
4/28/07 25792 18125

This doesn’t count alot of FSBO. Personally, I think it’s going to get worse. I have a vendor that is a process server. He’s been so busy lately serving foreclosure lawsuits. This real estate market is not rebounding for at least 6-9 years.

Comment by Darrell_in_PHX
2007-04-28 10:30:59

My fiancee was out to dinner with a couple friends, and they drove past the new, still-under-construction home that one of them is buying. She talked about what a great deal she got because of the upgrades and other considerations (cash back at closing for landscaping, decorating and furnishing).

One of the other friends mentions she’d love to move closer to work from her current home out on the outskirts because the traffic has gotten so bad with all the continuing development. However, she doesn’t think she can sell her current house for what she owes.

That’s okay, says the first lady, they have a program where instead of extras, they’ll buy your first home for whatever you owe, and do $0 down financing on the new one.

Great, existing houses are now used cars…. Push, pull or drag it in, and we’ll pay it off for you!

Home Builders are desperate!

Comment by jtie
2007-04-28 10:55:45

that’s interesting, and funny.

Comment by AnonyRuss
2007-04-28 11:08:35

Someone here mentioned that there were some advertisements for people to use their income tax refunds towards a house purchase, which is also reminds one of car dealer ads. Maybe the recent credit tightening has eliminated that particular lending “program.”

Comment by Army No. Va.
2007-04-28 15:21:15

Can I do this for a $150K new house and sell them my $2 million house? :-)
(Disclaimer - I don’t have a $2m house).

Comment by Darrell_in_PHX
2007-04-28 19:11:17

Yes, but just like when the auto dealers pay off your old car, they’re going to add whatever you are upside down on the first house, to the second. So, you’re buying that $150K house $650K.

Comment by in Colorado
2007-04-28 21:40:58

Plus keep in mind that the 2-3K dealers promise you for your 1K junker is covered by the difference between MSRP and invoice price. Don’t expect to pay invoice for that new car AND get 3K for that old Chevette.

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Comment by Darrell_in_PHX
2007-04-29 08:12:04

Not to mention getting to pay sales tax on the pay off amount.

Let’s take an example….

You bought the first car for $20K, but with no down, you rolled sales tax and doc fee and such into the loan. You drive it for 2 years, and it is no longer the newest and nicest of all of your friends… So you want to trade it in on a new car.

Well, you owe $15K, but the car is only worht $10K. So, you go back to the dealership. They sell you a car for $25K, and use $5K of that to pay off the old car. If you’d walked in without a trade in, you could have gotten the car for $20K.

So, instead of paying sales tax on $20K you could have bought the car for, you have to pay sales tax on the $25K that you paid so they could pay off you old car.

My fear is that people will stop doing this. That would dry up the supply of 2 year old cars that I can buy at half-price and drive for the next 8 years.

Comment by tj & the bear
2007-04-28 23:44:26

That’s okay, says the first lady, they have a program where instead of extras, they’ll buy your first home for whatever you owe, and do $0 down financing on the new one.

I believe I predicted this at least a year ago on this very blog.

Comment by burster
2007-04-28 10:33:30

I am keeping track of housing prices in the range of 150k to 275k in Georgetown and Lexington, Kentucky. For the first time since I started watching the market in November of 2006, several houses have come down in price 10k to 20k at once rather than the typical erosion of 2k to 3k.

Comment by CarrieAnn
2007-04-28 12:55:07

South of Syracuse:

I’ve finally seen some big reductions. A home which started at $599k last summer now down to $499k….the last reduction was from $569k.

Another home which started at $379k now down to $299k. There was one reduction earlier this month at $339k or $329k.

A third started at $429k now down to $299k although this one is misleading. It was originally offered with 40 acres of land. Now it’s being offered w/3.

Inventory is in fact lower than last year which is interesting because once July 4th hits, its all over around here. The area is dead while everyone is on vacation.

Comment by sean_from_NVA
2007-04-28 10:33:30

Well I have been watching the realestate in the city of Manassas Park Va. All I can say is nothing is moving. 189 properties forsale covering the whole price range from the high 600’s to low 200’s. Some houses and condos from last year are still forsale but with another agent. People can’t undersatand what is happening. I keep you guys updated with the info.

Comment by dcrenter
2007-04-28 13:46:17

Isn’t it amazing how these same people never questioned when property values tripled in 4 years? Greed is so blind.

Comment by flatffplan
2007-04-28 10:33:36

22151 N VA
13% off peak 05/05
now staedy w decent low end stuff moving

Comment by dude
2007-04-28 10:33:56

Palmdale 93552 median ASKING has finally started dropping. It’s down 3.8% over the last 30 days. Only 29 sales in the whole zip last month putting us at 17+ months of inventory.

Comment by desmo
2007-04-28 11:09:49

Palmdale 93552 median ASKING has finally started dropping. It’s down 3.8% over the last 30 days

Pretty soon it will start dropping faster then Blue Star Airlines in the movie Wall Street, except there won’t be that english dude to bail anybody out.

Comment by Bill in Carolina
2007-04-28 11:52:17

My community is a gated, golf course community with some waterfront on a large lake. The population is almost all 55 and up, but it’s not a requirement. Although the community opened in the 1970s, there are still some unbuilt, resale lots. Compared to other, newer communities on the lake, prices are significantly lower and the monthly fees are amazingly low.

The community had been in the resale doldrums until 2004. We were even able to buy a foreclosure in the spring of 2005. But from mid-2005 through 2006, sales and prices took off. I’m sure that’s what prompted local builders to buy vacant lots and start spec homes on them. I’m even aware of a resident who speculated by buying three lots and contracting to have a spec house built on one of them.

It now looks like they bought at the near-term top. Sales have slowed dramatically since December, both for new and resale. There has been very little in the way of price reductions, but it will be interesting to see how long sellers hold out. Thank goodness we paid so little for our foreclosure, even after adding the rehab and updating costs.

Comment by AnonyRuss
2007-04-28 10:45:33

I’m not sure if this MarketWatch article was posted elsewhere at HBB.

Title: “Flippers flop as hot housing markets cool in Vegas, elsewhere”

Interesting Line: “The day Schwartz reserved his home, the sales staff was raising prices $20,000 after every fifth buyer came inside. The $500,000 house he and his wife were eyeing had shot up to $540,000 by the time they sat down. Somehow, it still seemed like a good deal.”

$20K price rise every 5th buyer. Yeah, no mania/no bubble. Of course, they were dumb enough to camp out and wait in line for the privilege of overpaying.



Comment by Lionel
2007-04-28 10:49:40

LA Times RE section seems to get thicker and thicker every week. One ad today touted “timed sprinklers!” Wow! Where do I sign?

Comment by bubbleglum
2007-04-28 11:05:44

I’m holding out for the automatic squirrel feeder.

Comment by homoaner
2007-04-29 11:14:16


Comment by cassiopeia
2007-04-28 11:07:40

LA Times RE section seems to get thicker and thicker every week.

I notice that too, Lionel, the magazine keeps getting heavier, but the asking prices are still unreal. We have a long way to go. The bits I get from realtor friends is still the old “if you price it right, it’s going to sell”, but a realtors concept of “right pricing” is laughable to me. All you can do is wait.

Comment by sm_landlord
2007-04-28 15:31:28

The Realtors have to advertise, this is their prime selling season, and a lot of stuff is on the market.

The asking prices are still orbiting somewhere outside of Uranus, but from a brief venture outside today, I can see that a couple of condos have “In Escrow” signs up, so something must still be moving (so to speak).

I am continually blown away that people will pay so much money for a converted apartment. Even if they’re paying as little as $550K (doubtful) for a two bedroom apartment, that’s almost twice as expensive per unit as buying an entire apartment building in the same neighborhood, even at today’s extreme cap rate multiples for apartments. Those buyers are going to get hammered unless they plan to live in those converted apartments until the next bubble peaks. Even then, they’ll get pounded once inflation is figured in.

Comment by Scott
2007-04-29 15:57:47

Sure, $550k for a condo conversion may seem like a lot, but at least they’re no longer THROWING THEIR MONEY AWAY on rent!!!11!!!!1!

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Comment by Walker
2007-04-28 11:13:24

Upstate New York (Ithaca). Was driving around the country of Tompkins county the other day with my fiance. I noticed that there were a quite a few “for sale” signs and many “price reduced” signs. The really interesting thing was that there were a fair number of “sold” signs, but never if there was a house on the property. Empty land seems to be the only thing selling (but it is selling well).

Comment by CarrieAnn
2007-04-28 13:05:16

Walker do you know who is buying this land up? WE had NYC investors at our local auctions last year (farmland south of Syr). I was assuming it was ethanol based interest.

Local real estate blog had an interesting post that most out of town investors in City of Syracuse itself are trying to get back out but that has more to do w/crime and high vacancy rates on rentals.


Comment 586

Comment by CarrieAnn
2007-04-29 11:39:04

I got some info out of my own Sunday paper-the Syracuse Post Standard.

Natural gas production in the state has tripled with between 2000 and 2005, most permits pulled were in my home county. The article also mentions “several recent wells in the Southern Tier have hit major reserviors”.

In Fredonia (on the western border), “one small step was taken toward establighing a willow-based energy industry”. (Paraphrased) Commercial nurseries are being set up to create cuttings to plant 6000 acres of shrub willows in the upcoming years. These cuttings would fuel the Lyonsdale Biomass facility, a 19-megawattt power plant in Lewis County. This year the company is expected to plant 200 acres. This could explain why at least some farmland is being bought up.

Comment by passthebubbly
2007-04-28 11:21:24

Chicago Gold Coast: Three weeks ago a high floor, lake view 1br on Lake Shore Drive hit the market at 249k. MLS# is 06465146.

At the time I thought it was right about on the market. I don’t mean “fairly priced”, mind you, but at a price that would sell in a few days near the offer.

It’s still on the the market, but at 246k. The 3k reduction isn’t a big deal, but it says the seller is willing to bargain.

Typical 1brs in this neighborhood now clear around $200k, probably a bit below.

Comment by mugsy
2007-04-28 11:48:11

Corpus Christi, TX: Listings have broken the all time high number and 2 “upscale” sections of town (Southside and Padre Island) have hit all time listing highs. These two sections listings have doubled in number since February 2006. Prices starting to come down but nothing drastic yet. Highest listing category city wide with 406 listings is $150-200K price range.

Prices may seem affordable here compared to Cali, NY, etc but please remember to factor in 3% property tax AND approximately $200-300 for windstorm insurance monthly. Flood insurance through FEMA will cost you another $50 a month. Also, the average home price here is $180K but the average income is only about $44K.
I imagine the booom here during 2003-2005 was fueled by subprime money.

Comment by skip
2007-04-28 13:26:55

I was in Port Aranasas last October and was shocked to see a house listed for $800k, not even on the beach. Who would have that sort of money in Port A is beyond me…

Comment by Flic
2007-04-28 12:02:17

There was supposed to be an auction today in downtown Sarasota, FL for several townhouses and a few were absolute. It was cancelled due to the very low interest. Wow, when you can’t even get interest on an absolute auction you know it’s bad…..

Comment by Cobradriver
2007-04-28 13:00:31


I work in Sarasota…About 100 employees in my building. It has been pretty quiet lately about house values. I was talking with a couple of people and i have a strange feeling a LOT of them are upside down as of now. I also used to get harrased about my 1k dollar Neon with faded paint. Not so much any more….

It is nice to be able to put away 3-5k every month and not be stuck in a house…


Comment by Army No. Va.
2007-04-28 15:32:03

Yep, I worked at IBM in Austin during the 1980s. In 1985 all people would talk about was houses. Secretaries were flipping houses 3 or 4 at a time. By 1988, people were reading 2 pages of 4 point font of RTC homes. Everyone talked about the Cowboys or technology…bring up housing, you got groans, or it will come back soon, or they just walked away.

BTW, until we see a year’s worth a multiple pages of REO/RTC homes and the lists getting shorter, we are not at a bottom. Or whatever the equivalent is this time. Your mileage will vary by location and city to some degree - it is somewhat different in different places/neighborhoods as it was in the Austin area in 1985-92.

Comment by Flic
2007-04-29 08:05:46


I work in downtown as well but just signed a 1 yr lease on a house in Lakewood Ranch. Nice to be able to go from a 1000 sq/ft apt to a 2500 sq/ft house for just $200/month more. The atmosphere has changed a lot in the last year. I was made fun of for being a renter in 2005 and now people think I’m a genius although I’m careful about what I say anymore. No, it really didn’t take a genius to see what was going on in FL….just a little common sense!

Comment by Cobradriver
2007-04-29 10:07:58


My manager bought 20 plus years ago in Lakewood ranch…
I had a nice long discussion with him last tues. I cant write on this board what he thinks of the area now . From my understanding residents want to subdivde the large lots and try to make a buck…I actually do the older parents gig. We built a in law apartment on the back of the parents house. I am responsible for the house and all our rentals when they disappear for weeks at a time with the r.v. No wife/kids so what the hell….


P.S.-I work right off I/75 at Bee Ridge….

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Comment by Army No. Va.
2007-04-28 15:27:32

People probably don’t believe it is absolute.

Comment by Former FB
2007-04-28 18:38:43

My guess would be that the cancellation of the auction was the new way to avoid selling it for actual market price.

Comment by Chip
2007-04-28 19:22:01

That’s a reasonable guess, IMO.

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Comment by GetStucco
2007-04-28 12:16:01

SFR median list price volatility in 92127 (Rancho Bernardo W / San Diego):

These are rough estimates of median list prices off ziprealty.com from Feb 1, 2007 to date:

Feb 1 - April 14: $1,395,000 (no volatility to speak of)
April 24: $1,315,000 ($90K drop in just over 1 week)
April 28: $1,331,200 (bounces back up by $16,200 over a couple of days)

Not sure what, if anything is going on here, but I find it interesting how the median listing price was very stable over the first couple of months, then suddenly appeared to shake loose over the past couple of weeks.

Also quite noteworthy: Median SFR SALE price in March 2007 for 92127 was $850,000. The gap between median list and median sale price is clearly not sustainable.

Comment by CA renter
2007-04-28 16:24:19

North County San Diego:

Slowly rising inventory, growing a bit more rapidly in the past month. Inventory levels are about the same as last year.

Prices in the higher-end neighborhoods are holding fairly steady. They’ve been at around the same level since mid-2004 +/-. Homes are selling, in general, within 60 days, some at higher than 2005/2006 prices. These are clueless buyers, as you see other homes dropping from 2005 levels. I’d say these are mostly buyers from out of town, who have no clue about historic valuations (I think this is a BIG part of the bubble in So Cal — no historical reference point for these people).

The lower end appreciated at least 10-20% into 2005, but is now back to early 2004 to late 2003 prices. Foreclosures are coming on more rapidly, especially in the lower-end/starter neighborhoods. While there are some foreclosures in the better neighborhoods, they are not nearly as rampant.

Example: in our old, starter-’hood (where we sold in 2004), there are foreclosures on almost every street (small neighborhood). Additionally, there are a number of homes for sale, listed at break-even prices. They will not sell, and will likely become future F/Cs.

Still seeing too many 100% LTV mortgages out there & hearing too many ads for suicide loans. This needs to tighten up considerably before we really see price slides, IMHO.

Comment by agitated in sd
2007-04-29 07:57:49

a person who rents in san diego told me he saw a letter posted saying a condo in that building was selling for 75k less than everybody else paid. i asked him why the letter he said to calm down the other owners. is this normal?

Comment by philly_guy
2007-04-29 09:30:35

don’t know if its normal, but reading that letter must not have had a calming effect on the other owners!

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Comment by GetStucco
2007-04-29 11:13:00

Interesting note: Some recently-sold homes that used to show up w/sale price information on the SD County Assessor’s web site have mysteriously disappeared from the information data base. (This brings to mind those old Soviet-era photographs which would sometimes resurface with one fewer individual depicted, as former leaders who fell out of favor were deleted from the record.) Is Gregory Smith trying to hide information which would support reassessment appeals?

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Comment by GetStucco
2007-04-29 11:20:15

Just now checked the median ziprealty.com listing price for 92127 once again; here is the exact median-list-price house’s listing. The median was $1,395,000 a couple of weeks ago, so it has dropped by over $85,000 in a very short period of time.

I am guessing that almost everything built from 2000 on that is now on the market is either a flipper trying to get through the exit door, or someone who used high-risk financing to get into a house they can’t afford, and who now realizes that they got stucco.
7968 ENTRADA LAZANJA SD - Rancho Bernardo, 92127
$1,309,900 - $1,309,900

Beds: 4 | Baths: 5 | Square Ft: 4,453 | Lot Size: N/A

Yr. Blt: 2004 | Listing Date: 02/08/07

Comment by GetStucco
2007-04-29 11:38:27

P.S. For anyone who is interested in tracking the median home price in a particular zip code where there are under 400 homes listed, it is very easy to do so on ziprealty.com. Here is the recipe:

1) Select SFR, condos, or whatever combination of homes, land etc. that you want to look at. (I suggest looking at SFRs and condos separately, as you thereby limit the range of quality variation in your sample, and get a better impression of the price level.)

2) Sort the homes on list price (doesn’t matter whether increasing or decreasing).

3) If the number of homes is odd, add one and divide by two; this is the rank number of the median-priced home. If the number is even, divide by two, then average the price of this home in the rank order with the next-highest-priced home to get the median.

So for instance, with the current 92127 listings, there are 231 SFRs listed, so the median is rank number 116 (= 232/2), which I show above.

So long as there are under 400 homes in the subgroup you are looking at, the above approach lets you compute the exact median list price on current ziprealty.com inventory.

Comment by GetStucco
2007-04-29 11:51:26

Listing price humor on San Diego MLS:

1) Median list SFR price = $599,000.

2) Number of SFRs listed between $599,000 and $600,000 is over 200 homes. Can there really be that many homes in SD which are worth exactly $600,000?

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Comment by GetStucco
2007-04-29 19:39:47

Here is another listing from 92127:

9829 FALCON BLUFF STREET SD - Rancho Bernardo, 92127
$900,000 - $1,000,876

Beds: 5 | Baths: 5 | Square Ft: 4,014 | Lot Size: N/A

Yr. Blt: 2002 | Listing Date: 04/12/07

Description: Seller will entertain offers between $900,000-$1,000,876. Beautiful plan 1 ryland heritage with…
$900,000 / 4014 = $224 / sqft. I would not suggest paying over $224 / sqft for a home in 92127, unless you want to try and catch a falling knife.

Comment by Inspired
2007-04-28 12:17:14

Just in from Vegas:
Long time L V Auctioneer Deiro &Assoc., after advertising for a month drew a whopping 20 bidders or curiosity lookers showed up in the planned community known as Summerlin.
The property for sale was competing with four others on the same block, in a quiet gated community of 100+ homes. Sq ft 2577, back yard opened to a County park 40 -50ft.below, mostly a walking or biking trail, great view to the LVBlvd.
Taxes 3277, mo. assoc 45 & 50. Built in 1995.
Auctioneer opened with $500,000….and moved lower looking for bids. Teasing the bid cards, Deiro tried to sell the property with, “this is a $100,000 less than other similar listings in the neighborhood. “The Last time this model sold it went @ $545,000. Finally,(after 10 minutes) 1 bidder stepped up and rang out “$425,000″. We have 425 can we have 430? $430? 430? do we have a 430?Will someone give $427.5? can we hear a 450? Auction lasted 10 minutes.
Well that didn’t work? looks like a 9% drop in Q1 was only an early salvo!

Comment by aladinsane
2007-04-28 12:48:59

Auctioneers will start to be really evasive, as far as taking on overvalued/unwanted real estate, in the future.

Those in the auction game have an innate art for knowing markets.

They are enormous Egoists and hate to fail in front of a less than adoring crowd~

Bruises them up, a bit.

Comment by Army No. Va.
2007-04-28 15:36:45

And wastes their time unless they take a 5% fee regardless if it sells. If the latter, you are welcome to bring me all you want…just need the auctioneer’s license :-)

Reminds me something I saw on eBay. Guy had a low grade coin for sale worth perhaps $30. He listed it for $50….paying about $1.50 in fees when it didn’t sell. He listed it more than 20 times until someone bought it at $35.

Comment by Cobradriver
2007-04-28 12:39:48

Some market observations from Florida…

I went to th EAA airshow/Sun-N-Fun last weekend at Lakeland airport. The show was pretty dead. Strike that,the comment made to me by a volunteer was “The worst turnout in 15 plus years”
2 years ago you could not walk thru the vendor hangers. This year the place was almost empty.

At least the Marine F-18 that gave the flight demo brought back memories about El Toro from 20 years ago. Oh yeah,they are still bad a$$ when on the after burner : ) .

The amount of high dollar developments along I/75 boggle my mind. I was down and back to Ft. Meyers this a.m. from Port Charlotte. It is hard to put into words. Let me say this. East of I/75 is a area that was developed in the EARLY 60’s. This area is probably 20-30 square MILES. Paved and ready to go. Guess what ?? No houses….kinda cool actually…

But just remeber “Florida isn’t making any more land” ……


O.K. I is done…


Comment by palmetto
2007-04-28 13:55:40

SouthShore Tampa Bay. Drove through a few developments off Shell Point Road in Ruskin, looking for the one that failed and went Section 8. I think I found it, judging from what I saw. Saw a few moving trucks unloading stuff. Weird. From what I could see, it’s a mix of people that bought before the failure, new Section 8 residents, empty and half built homes. I have no idea how that works, but I have a feeling it is going to end badly.

And I can safely say that a once quiet, spacious, semi-rural area of Florida has now been “third worldized”. Gulag crapshacks all crammed in together with phony facades, neighborhoods already deteriorating and they haven’t even been built out yet. It was completely depressing.

Comment by tl
2007-04-28 18:45:36


I live in Philly, but I’m in Miami for the weekend. Driving down I-95 through Miami, my girlfriend counted THIRTY-ONE separate condo towers under construction. THIRTY-ONE????!!!

It’s an amazing site, and make one say “What the f**k??!!”

Comment by arlingtonva
2007-04-29 01:42:08

I was in Miami too. I’ll bet the skyline will look dramatically different in just a few years.

Comment by tl
2007-04-29 10:57:44

Actually, I think the opposite. I’d imagine that a lot of those projects are halted due to market conditions and lenders no longer wanting to finance the developers’ money-losing projects. Some of those projects may sit unfinished for years.

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Comment by JCM
2007-04-29 12:07:53


Most of the projects are already more than 50% built. They will see it through to the end. Now, as to those units actually being occupied by end users, that’s something else.

I plan on buying myself one of these condos in 2-3 years. I will buy on Miami Beach for 50% off.

Comment by tj & the bear
2007-04-28 23:51:57

Regarding your tag… would that be an AH-1?

Comment by Cobradriver
2007-04-29 09:57:31


Nope I have a 427 cobra kit car I built 7 years ago…I worked on RF4-B’s in the Corps…


Comment by GPBlank
2007-04-28 13:05:00

Here’s a new twist on builder incentives that was in last weeks Detroit Freep. Because it’s so difficult to sell your old house the builder buys it. Great way to screw older neighborhoods while populating McMansionville.


Comment by Tango in Uniform
2007-04-28 14:03:34

I checked out a local Real Estate Investment Club in Billings, MT. About 25 people. Interestingly, there were many first-timers, “heard about real estate investing and just wanted to look into it.” Some people landlording for years, some flipping.

The guest speaker was a lender and Senior VP at a local bank. He was talking about in-house loans, mostly for fix-and-flippers. And I was very surprised at how strict their loan standards were. Manual underwriting (FICO alone won’t get you in), no more than 75% LTV, current rates are 9% (adjusts after 3 years). Not surprisingly, they’ve only had 1 foreclosure (on a commercial property) in 10 years.

But this man did mention that owner-occupied, “secondary market” loans that can be sold have a much lower interest rate. The reason? Because “Once I sell it, it’s gone and I don’t have to worry about it anymore.” I wanted to ask if he would make low-DP loans at such low interest rates if it was *his* money. And if not, then is there maybe a possibility that somebody up the line isn’t properly factoring in risk?

As for the local market, this lender’s view was that Montana was “insulated” from the problems in the larger national market. He said that local bank standards were more conservative, thus we never got too irrational and we would be spared a downturn. He did admit that getting a 125% LTV HELOC was possible at US Bank downtown, but apparently didn’t think toxic loans from Wells Fargo and Countrywide made up a large portion of the market.

During the Q&A, one guy kept asking questions about where the “hot” parts of Billings were for real estate. Later, he said that he was from Utah and wanted to invest here.

I talked to the guy and his buddy afterwards. They had moved here from Utah several months ago, I think in part because the Utah market seemed to be cooling. Now they’re working on subdividing and who knows what else to take advantage of the “hot” Montana market.

These guys asked me about my investing status. “Oh, I rent,” I said. “it’s much less expensive now.” Utah guy: “We’ve got all kinds of deals, we can get you into a house.” Me: “No thanks, I’m young and renting is cheap.” Utah guy: “You need to get started while you’re young! We have a net worth of two million dollars now. When you buy a house you’re building equity” Me: “OK. I rent a house for $500. You find me a place where interest, taxes, and insurance are less than $500, then we’ll talk.” Utah Guy:”You should at least try and become a landlord.” Me: “It’s nearly impossible to find a cash-flowing house in this town.” Utah guy: “But even if you break even or lose money, you’re still coming out ahead…”

They threw up every RE softball you’ve ever heard, and I knocked ‘em all down easily. Finally the one guy said, exasperated, “What are you doing here at a real estate investment club?” I smiled and said to myself, “Personal Research, and the existence of people like you is showing me that it’s a very bad time to buy!”

Comment by CA renter
2007-04-28 14:20:41

Good for you, Tango! Glad to know it’s “different there”.

Good post! :)

Comment by Tango in Uniform
2007-04-28 14:36:53

Maybe it is different here, nobody seems to know (or they aren’t telling). Anecdotally, sales seem to be fairly brisk if the asking price is reasonable. High-end spec homes are headed for a train wreck, though. My main RE stat source has not updated since January. And January showed a 3.6% drop in mean sale price from December.

My next video is coming out soon.

Comment by Groundhogday
2007-04-28 14:45:04

I’ll be looking forward to your next video. Billings does sound a bit like Pullman, WA. Less expensive homes still move quickly here, but the $300k+ spec homes sprouting up like mushrooms aren’t selling at all. And despite an abundance of lots for development, almost all spec builders are targeting the high end: big McMansions with granite countertops, and “luxury” condos.

Yes, luxury condos in Pullman, WA home of the national lentil festival. :-)

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Comment by lost in utah
2007-04-28 17:10:10

Oh bury me not on the LOAN prairie - your video is really really good, reminds me of a lot of W. Colorado

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Comment by arroyogrande
2007-04-29 11:42:11

“But even if you break even or lose money, you’re still coming out ahead…”

Yeah, Jeff on the SDCIA board thought that too, as short as six months ago.

Comment by Duane Lapinski
2007-04-29 14:47:44

In some spare moments while at the Clerk and Recorders office in Gallitan County I checked the number of mortages writen by Wells Fargo, Washington Mutual , Countywide, and Citifinacial.
2000 6.2%
2001 16.1%
2002 17.6%
2003 18.2%
2004 15.6%
2005 14.0%
2006 14.2%
These are % of total number mortages writen in Gallitan County Montana.
The precent drops in 2005 and 2006 because Washington Mutual sold their branch in Bozeman. I haven’t had a chance to do the math, but it looks like Gmac, New Century, Aegis, and Decision One took up the slack. Would you asked the senior v.p. how significant these numbers are.

Comment by Tango in Uniform
2007-04-29 16:27:38


Can you e-mail me at the address on my web page (click on my name)? I’d like to discuss Montana RE more with you. Thanks!

Comment by Sammy Schadenfreude
2007-04-28 15:43:07

A neighbor a few doors down is getting ready to put his place on the market, so I asked if I could look at it before he listed with a realtor. I was not impressed. He had had it appraised for over $300,000, which he might have pulled down in 2005 but not now, IMHO. Anyway, I told him I wasn’t interested, and then proceeded to tell him why I’m planning on renting for the next year. It was apparent that while a prospective realtor had told him the local (Colorado Springs) market had “flattened,” he had no inkling of everything that had changed since 2005. He had not even heard of the subprime implosion, and looked shocked when I told him that as of March, roughly a third or more prospective buyers have effectively been locked out of the market due to being subprimes or alt-As. I mentioned some other local stats - inventory up 26% YOY, foreclosures up 45% YOU, sales down 11% YOY - all March figures; April will be worse.

In short, I think this guy might be fairly representative of a very large chunk of the local sellers, who remain blissfully ignorant of the bursting RE bubble and have imbibed deeply of the “it flattened out but won’t fall” kool-aid spouted by the local NAR minions.

While the signs and portends point to a perfect storm, the panicked stampede for the exits that many in here, including me, believe will be inevitable, is certainly not imminent. Most sellers seem to have no idea of what’s bearing down on them, and the local realtors, appraisers, and mortgage brokers are still not providing reality checks. Looks like a many more months of bubble-sitting ahead.

Comment by HarryD
2007-04-28 16:16:47

Apparently Boston and metro region should not have any significant problems - per at least one local commentator:

On 96.9 FM BEST MONEY SHOW host/real estate lawyer Rick Shaffer announced today at 2:15 (eastern standard time) - that “we are not going to see a bust in the bubble” “prices will continue to go up” (apparently he means longer term) and strong economic segments such as “healthcare and tech” will keep the market strong, and anyone claiming otherwise is “dead wrong”

Comment by jag
2007-04-29 08:15:37

Rick should tell that to my neighbor who’s cut his price 100k/20% with no luck for over a year…..

Comment by lost in utah
2007-04-28 17:23:15

Just visited a lot of houses here in Montrose and Delta, Colorado - big open house day sponsored by Wells Fargo Mort. - first time ever.

At every single house (54) - I was the only one there. The deal started at 1 p .m. and almost every one said I was the first one there, no matter what time I arrived. I was being followed around by three cars full of what appeared to be the women of an extended family, though.

I started at the 1.3 mil range - golf course, tacky, overdone, make you wear booties over your shoes (can I tell you how sick I am of granite except in its natural state?) - then ended up at a really cool remodeled schoolhouse that the owners bought a year ago and were trying to flip for a cool 150k - nice, though (they told me while the realtor wasn’t around that they were selling because they couldn’t afford the place, 5000 sq. ft.). I asked every realtor how the market was doing, all except one said just great (she was more honest and said, “It’s kinda flat.”). I really liked one house (400k for a 50s standard ranch) - I told the realtor to let me know if they ever lowered the price (it’s been on the mkt since last fall) - she looked dubious and said not likely.

I verified my hunch that I was the only one around by looking at the number of cookies left on the plates - not even touched.

The kool-aid was pretty much gone, though.

Comment by lost in utah
2007-04-28 17:25:04

PS They were asking 680k for the schoolhouse, just a big brick two story box way out in BFE, nice though.

Comment by Falconsitter
2007-04-28 21:33:56

Is “BFE” an ICAO identifier? :)

Comment by ahansen
2007-04-28 17:25:43

Quick note from the Bakersplat outlier…

POS #1 Listed 19 months for $259,000 sold 3.20.07 for $123,000
POS #2 Listed 25 months for $289,000 sold 3.27.07 for $169,000

Zillow, amazingly reactive, shows my property down $37,000 for the 30 day period, most likely based on these two sales. Tee hee.

Comment by Chip
2007-04-28 19:42:43

That’s potentially encouraging. Zillow wasn’t getting any kudos this week, relative to the perceived slowness of their updates in a declining market.

Comment by jag
2007-04-29 08:18:01

Knocked my value down 18% over the last year…..not too far off what’s going on around most of Boston

Comment by Daisy in AZ
2007-04-29 09:20:53

I’m beginning to see Zestimates lower than asking prices in Tucson. Not by nearly enough, but at least headed the right way.

Comment by Carolina W
2007-04-28 18:49:55

Upstate (upper left corner) of SC:
Wile E. Coyote moment. Prices have been climbing steeply the past 2 years as relocators from high cost markets (mainly FLA) moved here to escape housing armageddon. The bubble slide…
Now, Wile E. has gone over that cliff and seems to be frozen in mid-air as sellers hold out for the big price jumps and buyers are pausing.
Waiting for the little circles of clouds and the poof as Wile E. drops suddenly. I hope I’m right that the big fancy houses will drop in price in the next two years or my wife is gonna kill me for making her wait…

Comment by invest3
2007-04-28 19:41:08

I dropped by a $350k open house last weekend in STL County and the realtor told me the sellers had just lowered the price by $5k. Was I supposed to be impressed? Oooooo, a 2% reduction (almost)! A $50k drop would be a good start. The houses that are in good shape and priced right do seem to be moving, although there are a lot of stale donuts out there.

Comment by Darrell_in_PHX
2007-04-29 08:14:20

Wait until the sub-prime and Alt-A borrowers realize that they can no longer get the loan they were hoping to get. Those “under contract” houses will be coming back to the market in huge numbers!

Comment by 85249 is Toast
2007-04-29 08:31:03

No kidding. Sometimes I get the feeling that all these FBs are digging themselves deeper and deeper into debt without even realizing it. It’s like the don’t acknowledge that HELOCs are loans and not free money. Once the spigot runs dry, the weeping and gnashing of teeth will commence.

Comment by GetStucco
2007-04-29 08:11:08

Buy now in San Diego and lock in a high Prop 13 assessment forever!
“There is a very limited area” of decline today, focused primarily on recently purchased condominiums and condo conversions. “It’s limited in scope because values haven’t dropped that much.”

– GREGORY SMITH, county assessor


Comment by GetStucco
2007-04-29 08:13:04

I should have said “high Prop 13 basis.” Assessments can only go down if you bought when prices were lower. Those who bought SD homes in 2005 get to live with high assessments that don’t adjust down if prices fall.

Comment by Casa$Loco
2007-04-29 08:21:50

59,971 homes for sale in Phoenix Metro according to Zip. Unreal.

Comment by Darrell_in_PHX
2007-04-29 08:34:04

Does Zip include FSBO and bank owned? MLS reports I’ve seen “only” show 53,000 listings. Up from 48,000 last month… rising at 1000 a week.

And we’re just at the tip of the foreclosure iceburg.

Comment by 85249 is Toast
2007-04-29 08:42:22

The numbers from Zip include Pinal county as well, so that includes bubbly places like Maricopa, QC, Coolidge, and Casa Grande.

Comment by Darrell_in_PHX
2007-04-29 08:46:31

ahhh… gotcha

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Comment by 85249 is Toast
2007-04-29 08:26:22

I’m sure ocrenter will update his foreclosure tracking blog in the next day or two to note this, but take a look at the latest foreclosure numbers for Maricopa/Pinal counties from foreclosure.com:

Foreclosures: 3843
Preforeclosures: 6341
Ratio of FC to Pre-FC: 60.6%

These are up from 3/30 when the numbers were 2747, 5616, and 48.9% respectively. Hoo boy!

Comment by Darrell_in_PHX
2007-04-29 08:29:03

Speaking of MSM. The local paper and a local tv station team up to run a web site called AZCentral. They have this “AZ House Values page”… that hasn’t been updated in a month.

They also have a real estate blogger…. that spins EVERY story as positivly as possible, unles there is no positive spin, in which case it doesn’t get blogged.

Check out her 4/26 blog entry… and my response.

Just this morning on the local politics talk show, a donkey says “people are considering to come to AZ because of affordable housing”.

AFFORDABLE HOUSING???? Are you paying attention? Our housing affordability index has gone from 150 to 75 in the last 3 years. That’ what happens when prices double but wages are stagnant. Sorry, but if the median household can’t afford the median house, that is NOT affordable.

9,000 people a month trading their CA drivers licenses for AZ ones. Oh, is that why there is a 10 month supply of houses on the market, listings rising VERY fast( MLS listings heading up at 1000 a week), and vacancy rates at historic high levels.

Comment by AnonyRuss
2007-04-29 09:55:25

Darrell_in_PHX, if you really want to hear some Phoenix RE pimping, listening to 960AM on the radio from 12noon to 2pm on Saturdays. While I understand that it is just a local real estate infomercial-type show and I should not pay attention, I can not help but listen to the lies and spin a couple of times per month. Within 10 minutes, I am yelling at the radio.


Comment by ockurt
2007-04-29 09:30:57

Hi all, observations from the LA area

Housing market a multilevel affair


Comment by ockurt
2007-04-29 09:39:36

The IE, SoCal area

Inland Empire feels housing market’s pain


Comment by ockurt
2007-04-29 09:43:34

Lansner blog: Insider Q&A gets Cal State Fullerton’s housing outlook


Comment by AK-LA
2007-04-29 09:45:36

Yesterday we got a call from the realtor who helped us sell in ‘05. Says he was “just thinking of us”. Aww….. He must be pretty lonely these days.

Comment by ockurt
2007-04-29 09:53:50

This is interesting.

Insider Q&A on pulse of loan market, depth of correction


Comment by aNYCdj
2007-04-29 10:29:25

Oh this is so PITIFUL: Life Coach is that sort of new agey type fleece?


The day Schwartz reserved his home, the sales staff was raising prices $20,000 after every fifth buyer came inside. The $500,000 house he and his wife were eyeing had shot up to $540,000 by the time they sat down. Somehow, it still seemed like a good deal.

“Everybody was thinking, ‘Hey it’s not the end of the world, because the homes across town are selling for $720,000. We have almost $200,000 in equity in the house and it isn’t even built yet,’” Schwartz said.

He and his wife put down $5,000 on a home that would end up costing $560,000 with upgrades.

While the Schwartzes were able to cancel before closing on a property that suddenly was worth only $490,000 — and recoup their deposit on a legal technicality — others were less fortunate.

Schwartz, a 44-year-old life coach, said he “narrowly escaped financial disaster.” But the effects of the housing crunch would reverberate for years, he said, something he expects to see among the clients he coaches to succeed in their lives and careers.

“There’s going to be a lot of depression, a lot of anger. A lot drinking, gambling, and desperate stuff going on.”

Comment by GetStucco
2007-04-29 11:07:59

“There’s going to be a lot of depression, a lot of anger. A lot drinking, gambling, and desperate stuff going on.”

In other words, life in Las Vegas will pretty much go on the same as always, despite the real estate bust.

Comment by ronin
2007-04-29 11:42:40

Perhaps a new specialty is called for: the life coach’s life coach.

Comment by Gadfly
2007-04-30 08:13:36

If only Chris Farley was still with us. I can just see this as a SNL skit . . . .

Comment by Pete
2007-04-29 17:50:31

Hmm, his occupation is “life coach” and his “investments” are in real estate. In other words, his entire life revolves around bullshit. A perfect mark for a real estate scam.

Comment by P'cola Popper
2007-04-29 11:11:06

Georgia Flipper Being Floridacuted!
Pensacola, Florida

Update on my mother’s neighborhood in P’cola. New house hit the market located across the street from “Truck Central” if you read my post from last weekend. Search of the property records turns up an owner from Alpharetta, Georgia who purchased the house January 1, 2006 for $248,000 made the usual “flip this house” renovations and has now put the house back on the market at $249,900! This guy must be a disciple of CS! If you recall there was a comparable house that sold for $170,00 recently and there is a foreclosure next to “hood watch” for $158,000. I predict this flip will be a major flop!

MLS#327385 List price $249,900 for 1,785 sq. feet brick house

Sales History:
January 2006 $248,000
February 1999 $102,000
January 1974 $36,900

Comment by GetStucco
2007-04-29 13:39:31

Last night my wife and I attended a fund-raiser auction for our daughter’s middle school (92127 / Poway district). We have attended similar functions every year since our kids have been in school.

Well, this year was a lot different than last:

1) Last year, the same function was dominated by real estate industry people, who had a major role in contributing money to keep the price of dinner down to $25/plate. This year, due to the sudden absence of REIC representatives, dinner was $50/plate and attendance was down by maybe 2/3.

2) My wife used a similar bidding strategy as she always employs, making early bids on a number of silent auction items in the hopes of being the highest bidder on at least a few. This year, almost nobody outbid her, and she learned all about the “winner’s curse,” which can be especially problematic when all the local homeowners suddenly have no housing ATM money to play the big spender role. We accidently bought over $500 worth of stuff we don’t really need (she was aiming for maybe $200!). Luckily without owning an alligator, we could afford the financial shock on the school’s behalf.

Comment by Claudia
2007-04-29 17:03:15

The house next door to us is for sale. Two years ago, it was appraised at $850K. It’s been up for sale for a little over a week now and I hear they have three offers. The price? $570K.

Comment by BubbleButt
2007-04-29 17:10:39

Where is it??

Comment by Claudia
2007-04-29 17:22:38

SoCal, north of Los Angeles.

Comment by Pondering the Mess
2007-04-29 17:51:01

Somebody mentioned how the FB’s are digging themselves deeper with each month. It is amazing how many nitwit FB’s I’ve run into who actually believe that debt = wealth, equity = money in the bank, and if somebody says your house is “worth” a fortune, than you are rich! They’ll all learn the truth soon enough, I hope!

Comment by tj & the bear
2007-04-29 19:10:50

The spinners in Burbank have newly modified signs for the Entourage condo development — “up to $15K in incentives!”. [They are priced "from the mid 300's".]

Comment by philly_info
2007-04-30 15:30:28

It’s kind of weird watching the number of expensive homes available on the main line of philadelphia go up. There are 160 for sale right now in Lower Merion over $800k, and that’s a huge number (I think it was 48 at this time two years ago).

The $400k stuff is still saleable, but the $800k+ stuff is not. Most of it is junk, but even the good stuff is not selling. Of course it’s overpriced by about 40%. There’s a few small builders with 2~3 properties who look like they’ve had it (headed to bankruptcy). The agents say that “you can’t lose on the main line”, but it’s a fool me once kind of things with buyers. They aren’t falling for it.

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