Sellers Have To Get Realistic With Their Pricing
Chicago Business reports from Illinois. “Dashing hopes that the housing slump would soon bottom out, new-home sales in the Chicago area fell even faster in the first quarter as the market meltdown spread from the suburbs to the city. Residential developers in the Chicago area sold 5,341 homes in the quarter, down 35% from a year earlier and the weakest showing in more than 11 years, according to a report.”
“‘Everybody was waiting for spring,’ when buyers re-emerge, but ‘it just didn’t come,’” says Tracy Cross, president of a Schaumburg-based real estate consulting firm. ‘This is definitely the steepest downturn we’ve seen’ since the early 1980s.”
“Recovery now appears further away, particularly in the city, where developers continue to build despite the precipitous drop in sales.”
“‘We’ve seen continued softening in April,’ says Dan Star, Illinois division president for Dallas-based Centex Corp.. ‘Traffic is down. Contracts are down. I think this will go on for another six months or year or longer.’”
“The supply of unsold condominiums in downtown high-rises under construction is growing even as demand is declining. Speculators have all but disappeared from the market. And developers are likely to face stiff competition from the resale market, as thousands of owners of recently built condos put their units back up for sale, Mr. Cross says.”
“‘You should see continued erosion in the city,’ he says.”
The Beacon News from Illinois. “The vast flow of people moving west into Kendall and Kane counties have insulated the area, although there’s no denying things have slowed even here, said Dee Rechenmacher, a Realtor with Pilmer Real Estate and president of the Aurora Tri-County Association of Realtors.”
“‘This time last year, I had many multiple-offer situations,’ Rechenmacher said. That hasn’t happened yet this year, even though the traditional home-buying season is well under way.”
“That doesn’t mean houses are doomed to languish on the market for months, she said, but ’sellers have to get realistic with their pricing.’”
“Buyers now have the upper hand in the market, agreed real-estate expert Chip Wagner of the Headrick-Wagner Appraisal Group in Naperville. ‘The investors pretty much left the market once the interest rates started creeping up,’ Wagner said. And the entire Fox Valley area is now over-supplied with homes.”
“Perhaps buoyed by the area’s status as the second-fastest-growing county in America, developers nearly doubled their building permit requests last year in Yorkville.”
“The city now has more than a 12-month supply of houses on the market. Realtors said that level of supply makes for intense competition on prices, between new and existing homes, with the latter often being forced to sell for little more than owners originally paid.”
The Rockford Register Star from Illinois. “Clarice bought a home on Rockford’s near west side in 2005 with her then-fiance, Anthony. When it came time to sign for the home, they were looking at a mortgage of 11.85 percent, more than double what then was the national average of 5.65 percent for a 30-year mortgage.”
“‘I didn’t want to take the keys. I was crying. I didn’t want the house, not at that price,’ Clarice said. The Register Star agreed not to use the couple’s last name. ‘But we prayed and my husband said, ‘God wants us to have this house.’”
“The couple couldn’t make even their first payment. Within six months, the financial institution that had bought their loan started foreclosure proceedings.”
“Foreclosures increased 38 percent between 2005 and 2006 in Boone Winnebago and Ogle counties, from 661 to 912, according to county records.”
“Put another way: 7,190 homes and condominiums sold in the Rock River Valley in 2006, meaning it’s possible nearly 13 percent sold because the owner no longer could afford the home. A look at the foreclosures filed in Winnebago County by ZIP code since the start of 2006 showed no areas are immune.”
“Marve Stockert, executive director of the Illinois Association of Mortgage Brokers, which has about 1,000 member institutions, said there is no doubt 2007 is going to be a tough year. ‘In the next 12 to 15 months, people are all of a sudden going to see their payments go up 15 percent,’ Stockert said. ‘People are going to be stretched way beyond their limits.’”
“Todd Kudlacik of Byron, who, according to a Register Star database of real estate transactions, has bought 81 homes and sold 74 homes on Rockford’s west side since the beginning of 2005 through his Rockford-based company, said the market on the west side of Rockford is going to be flooded with homes for sale, cheap.”
“‘The foreclosures have already happened,’ Kudlacik said. ‘What’s going on now is banks are building a portfolio of houses and they are going to turn them loose all at once.’”
“Kudlacik said this is actually the worst time to get into home restoration. ‘There aren’t many buyers out there when you are finished,’ he said. ‘I bought a group of seven foreclosure houses last week and I walked through and saw that three had been rehabbed. The owners bought them, poured a bunch of money into them, got over their heads and lost them.’”
The Pioneer Press from Minnesota. “The West Side Flats condo project (is) going back to the drawing board. 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. Lower-priced condos still sell, while the West Side Flats condos were priced from $250,000 to more than $1 million.”
“The news should not be taken as a sign that the Mississippi River falls short as a selling point for development and St. Paul in general, said Patrick Seeb, executive director of the St. Paul Riverfront Corp. ‘We’re in the middle of a pretty profound slowdown in the housing market,’ he said.”
Lereah to leave NAR - no kidding!
http://www.marketwatch.com/news/story/economist-lereah-leave-nar-join/story.aspx?guid=%7B72027104%2D9CCD%2D458F%2D907B%2DBDF80DA9BE9E%7D
“You won’t have David Lereah to kick around anymore!”
Because of the lack of comments on this subject, I am concluding that DL lost his relevance several months ago.
Congratulations, the best news I heard today.
Wonder who will fill the shoes?
Baghdad Bob?
Nigel Swaby.
dave wluka
dave wluka
Leslie Appleton-Young
or, Ron Shuffield. But I think Diane Swonk would do a better job of making delusional predictions.
I doubt LAY would be able to fill the position.
She seems to have had a “come to Jesus” moment in the past few months with her prediction that we haven’t seen the worst of it yet.
They need a complete moron to fill it.
Ever seen “Hudsucker Proxy”?
Chuck Ponzi
http://www.socalbubble.com
oh damn.. what about all the wonderful books that he wrote??
“I just don’t think we have what it takes to prick the bubble… I don’t think prices are going to fall, and I don’t think they’re even going to be flat.”
Diane C. Swonk, chief economist at Mesirow Financial in Chicago
New York Times, “Trading Places: Real Estate Instead of Dot-Coms” 3/25/05
“Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors says that ‘South Florida is working off of a totally new economic model than any of us have ever experienced in the past.’ He predicts that a limited supply of land coupled with demand from baby boomers and foreigners will prolong the boom indefinitely.”
New York Times, “Trading Places: Real Estate Instead of Dot-Coms” 3/25/05
“Will the good times last another year? Gary [Watts] doesn’t hesitate. ‘Fifteen percent is pretty much in the bag for Orange County in 2006,’ he says. ‘It’s impossible for prices to go down this year.’”
“Byron Alvarez of the REMAX Real Estate Center, a 27-year real estate veteran, expects prices to jump by 10 percent or more in 2008… Experts believe Northern California home prices will start to rise again over the next 18 months. Waiting for rock bottom, however, could be risky.”
Reporter John Lobertini, “NorCal Real Estate Market Heating Up, Realtors Say” KPIX-TV April 5, 2006, 6:47 pm
YEP
We had our amusement, we’re really past him.
Actually, its going to be hard for any of us to take Realtors ™ seriously anymore. Yes, the Sheeple will listen to them… but with how TV is now making fun of Realtors ™ and making them the evil bastards the hero counters…
We will be in a new world for the next few years.
Got popcorn?
Neil
“Move Inc. provides homebuyers and renters with information about real estate and communities before, during and after a move…”
With DL on board, will anyone really trust the “information”?
NAR probably told him months ago to start looking for a new job. When the whole country laughs at you every time you make a statement, its time to “Move” on.
His advice would “MOVE” you into a cardboard box.
“NAR probably told him months ago to start looking for a new job.”
I don’t agree with this statement. The way I see it is old Davey-Boy is getting OUT! He has made bogus prediction after bogus prediction, now he wants some anonymity - he is a scum-bag.
He’s getting into the right biz. There will be a lot of people moving out of their foreclosed homes into apartments.
There will certainly be many thousands of available properties in Chicago to rent. This market is so over-extended and overbuilt already. Plus, there’s another 15 condo towers due for completion by Spring 2008. I guess we’ll be competing with Miami for half-completed buildings.
I don’t know if you watch the year-over-year metro real estate sales map/report that appears every Sunday in the Tribune. A few weeks back, every neighborhood along the Lincoln Ave. corridor from downtown to Skokie showed sales price declines of $10-$20. And many of those are nice neighborhoods, too! Portage Park, Jefferson Park, etc.
So much for it being only the South Side that will take it on the chin. Prices in several suburbs also are dropping - such as Western Springs, Itasca and Glenview ($28K year-over year in Western Springs, a very nice, leafy commuter suburb).
The day is drawing nearer when I’ll ask my landlord to drop my rent from $700/mo. to $680/mo. or so. And this is in Ravenswood no less (near Wilson & California) in a 2-bed 2-bath! While I’m living on the cheap, I think there will soon be better deals out there. I’ll get some comps to show them and ask them if the time and money they’ll need to spend looking for a new tenant is worth $240-270/yr.
That’s $10-$20 thousand, obviously.
Did you see this Trib article today about shrinking amount of rentals?
http://www.chicagotribune.com/news/local/chi-0704290304apr30,1,7491523.story?coll=chi-news-hed
Certainly the purpose-built rentals are shrinking, but I wonder how many are coming back on the rental market?
Yes, I read it earlier today, but I don’t believe it. First of all, it’s the Tribune…hardly a non-biased third-party entity when the subject is real estate. If the Trib is basing its claim using the quantity of for-rent advertising as a base point, then that’s part of the problem. Anyone who has rented in Chicago for any length of time knows that upwards of 1/3 of all properties available for rent at any given time are not advertised. The good deals are never advertised in this town - to get one, you drive around the neighborhoods you like and call the phone numbers affixed to the buildings themselves.
Chicago’s population [the legal population, at least] is shrinking, down 80,000 since 2001. That’s 80,000 fewer people to live in single family homes, condos, rentals. Who is going to be living in the thousands of new for-sale properties scheduled to pop up all over the city? 80,000 fewer people? (That’s what - maybe 40,000 properties worth of people?). Granted, some of the new property buyers are buying weekend/second homes in the city, but that trend is dissipating as lending requirements return to some semblance of sanity, HELOC money dries up and the massive gains in real estate values slow drastically or disappear altogether.
There’s empty stuff all over the city. So many ‘50% sold!’ signs. They are everywhere, many faded from exposure to the elements. And most are seemingly printed by the same printing company! Do flippers and owners buy these signs at Menards?
I don’t know - he spouted exactly what his NAR masters wanted him to spout. I don’t think they are getting rid of him. I hope noone is expecting anything better from his replacement because it just isn’t NAR’s jobto promote the truth.
A good follow on for DL would have been White House Press Secretary. He’d be perfect.
I love the fact that MOVE is down on this announcement (not that much yet but we can always hope it craters like New Century).
Theses aren’t the guys who got bombed by the police in ‘85 are they? http://en.wikipedia.org/wiki/MOVE
Maybe we should chip in a buy him lunch or something. He has nmade the last year or so very entertaining.
maybe he has to paint and primp his stuff in FL
why would they hire a dufus that told people to get long on stocks in late 99
The realwhores probably blame the downturn on him!
Like a rat leaving a sinking ship.
He got the axe. The new venture is a face-saver. This won’t change NAR’s bad reputation as spinmeisters and bubble-blowers. They should still be added in every lawsuit against a Realtor who got someone into a home whose value has collapsed.
Looks to me the NAR realized they need higher firepower to fight to stay above water while the Titanic sinks. Lereah is a spent cartridge. Time to bring someone else on board to use up their untarnished credibility.
Or maybe there was a power struggle and L.A.-Y. won the day
Now THAT would be fun to see - L.A.-Y. as NAR “Chief eCONomist.”
LIErah- we’re not done w you
anyone have a list of FL properties ?
hope all condos bought in 05
and NASD 1999
after all it’’s what he told other to buy
what a dufus
Ding Dong The Witch Is Dead!
Just who is buying homes in struggling markets these days? This is the thing that really perplexes me. We keep seeing all these horror storries of people losing homes, and rising foreclosures, yet sales still continue.
Even in places like Las Vegas, where 1 in 30 homes is undergoing foreclosure, the median prices are only seeing minor erosion. It’s not as if sales have ceased. Sure, sales in Palm Beach, Phoenix, and Las Vegas might be down, but not by 70% or 90%. Clearly, SOMEONE is still out there buying (with lenders willing to stump up the cash).
Does this mean that the bottom of this cycle is just going to be pretty mild?
Well, I’ll confess to having just bought a house, though PDX metro isn’t struggling in the same way as so many others are right now. Our decision to buy was made for lifestyle reasons, and we went very conservative with the finances (30 year fixed rate, spent less than 2/3rds what we could “qualify for” by buying a simple small house in an older/”not hot” neighborhood, payment would be doable, though tight, on just one of our incomes, etc.). However, I don’t know how many people like my family are out there….
Me too. Job relocation. Couldn’t find a place to rent that was workable (I looked). Some relo benefits only available if I bought relatively quickly. One move is hard enough, can’t imagine doing this again near term… by ourselves. Drove as tough of a bargain as I could; but figure I’m still in for an equity haricut, but the new place will make a nice place to live either way. We keep saying housing should be a place to live, not an ivestment- right?
Congrats to both you and Olivia on your purchases.
Provided you continue not to regard your home as an investment, you should be fine. In fact, if your credit is good, you’re already way ahead of most people, even if you take a bit of a haircut during the next few years.
Keep your other costs low, don’t spend much in home outfitting and upgrades - no $5,000 vertical blinds, etc. - and stay disciplined as you invest 10-15 percent a month in diversified investments. Discipline and persistence wins the money game (the absence of which is why most FBs are FBs).
sniglet,
Honestly here in Port Charlotte nobody is buying. There is more stuff on the market than you can shake a stick at. Why ?? Banks have not started dumping REO onto the market yet.
Example…The house at the end of my street was foreclosed 15 months ago. It has not been put on the market yet. I have a feeling once prices start dropping its gonna be a bloodbath…
Chris
this is BIG
recently one poster had a story about the bank withholding the 1099
to the FB/ long after foreclosure
wow
Sometimes the FLs are as deslusional as the FB about the “Spring bounce.” Or maybe they’re trying to avoid bank examiners telling it’s time to go now.
Phoenix inventory is now over 60K. More for sale than selling.
Phoenix inventory is now over 60K. More for sale than selling.
34% purchased to “diversify their investments”. Clearly the sheeple still think this is nothing more than a speed bump. A certain amount of activity is always going to present - people get transferred, married, divorced (hate to see what happens to this stat in the next few years). We’re still in the denial stage but the fear is almost palpable from some. Like the realor who bought ads on both sides of every gas pump at a station I used last week. It shouldn’t be too much longer now, the graph of resets Credit Suisse put out shows this summer being a doozy starting in April.
I’ve got one better. I found a home for sale flyer on my windshield at the mall last weekend. Overpriced! Bawahahah!
The people that I know that are selling and re-buying are VPs, business owners, surgeons, former DC types, former stockbrokers. Many are equity nomads, but many have lived in this town for generations, and are quite well to do, often living with the windfall from industrious parents or grandparents.
The truth is there are those among us that are hardly struggling. Just because the masses aren’t getting paid doesn’t mean no one is.
(For anyone new to my posts, this isn’t a boast. I’m in a well-to-do town but my ties to money are one too many generations away….I even paid for 100% of my own education which I often find snubbed for being too little. So, here, I just watch and take notes.)
“‘Everybody was waiting for spring,’ when buyers re-emerge, but ‘it just didn’t come,’”
Chance the Gardener: Yes. In the garden, growth has it seasons. First comes spring and summer, but then we have fall and winter. And then we get spring and summer again.
Ahhh…Cote’s much awaited Spring Sting.
Also:
“I’ve seen this before…are you going to have to close the house?”
“‘I didn’t want to take the keys. I was crying. I didn’t want the house, not at that price,’ Clarice said. The Register Star agreed not to use the couple’s last name. ‘But we prayed and my husband said, ‘God wants us to have this house.’”
I hope that there is a special place in Hell for the phony “prosperity” preachers who delude their flocks with the false promise that “God wants you to be rich!”
for those of you that think a deity is on your team…
Every wehrmacht soldier proudly wore a belt buckle that proclaimed “Gott Mit Uns”
Jesus H. Christ that woman’s husband is stupid!
She married him.
Quote: >>
That is one big donkey-ass move of the couple. Gee… God wants them to have this house. Sure it aint my God because my God is smart, intelligent, omnipotent, omnipresent and whatever else that a God can entitled to.
Damn, can’t even make the first payment… Sure is pathetic like a rain-soaked cat !
Jesus H. Christ that woman’s husband is stupid!
I call BS on their ‘praying’ - theirs was a FIRST payment default!
‘God wants us to have this house.’
Somehow, I don’t think God is in the housing business!
In my Father’s house are many rooms, I go to prepare a place for you.
My father is a rich man,
He wears a rich man’s cloak.
Gave me the keys to his kingdom coming,
Gave me a cup of gold.
He said, “I have many mansions,
And there are many rooms to see,
but I left by the back door,
and I threw away the key.”
-U2
He’s listening to the wrong voices…
And now God wants you to be foreclosed on.
No, no, no. It was Suzanne who wanted them to have that house! She researched it!
“And the sheeple bowed and prayed
to the neon god they made.”
Nice, a little S&G.
Well… maybe God gave them 6 months of free rent living in that house. In this case, I blame the lender. Did anything to get that $500 commision. Let the buyer of this toxic loan eat cake.
Hindsight is 20/20, but would be kind of fun to provide free booze to some homeless bum, clean them up, shave and haircut, then put them in a suit. Stroll into some lender in La Jolla, have him apply for a liar loan on some overpriced La Jolla home. You pay the bum free booze while you live there rent free hob-knobbing with the elite for 6 months while the lender starts the foreclosure process. lol. I bet somewhere this scam has been played.
It wouldn’t surprise me a bit if that scenerio has played itself out.
It’s worse - last year there was an LA Times story about a broker pushing through a loan for a guy who DIED before the date the loan was (fraudulently) closed.
It has long been said that all you need is a pulse to get a loan. Apparently in LA you don’t even need that.
My brother-in-law bought a new $45K truck from a SoCal Ford Dealer, no money down,rebates everything…..
Six weeks after he passed away
Ford Credit called my sister a few months later, wanting to know when he was going to make payments, or where the truck was.
Dude, the press has been full of these “shell buyers”. Okay, not true bums. Just people with okay credit reports. You pay them a few hundred to a few thousand dollars. They sign the laons. You tell them you’re going to pay the bills and resell the home. It will only be in their name a month or two.
What you don’t tell them is that you are getting many thousands of dollars “cash back” at the closing, and not really paying the loan, and they’re going to have a foreclosure on their record.
Living in the place for a few months is small potato to the cash back at closing.
Where is that Carlton Sheets? Make him give us his class list, and then arrest anyone that “got rich” using his “cash back at closing” methodolgy of wealth generation.
Darrell_in_PHX: You forgot to mention those scam artists that targeted some church congregation somewhere! Quite often, these confidence scams involve the use of religion for that little extra bit of credence that gets their scams going over the hump.
In South Central Kentucky they use fundamental Christianity to sell oil related “investments” without disclosing the true risks of wildcat drilling.
Got 10% down?
“The couple couldn’t make even their first payment. Within six months, the financial institution that had bought their loan started foreclosure proceedings.”
THEY COULDN’T EVEN MAKE THEIR FIRST PAYMENT?!?! Apparently God didn’t want them to have a calculator.
hmmm god does not appear to have wanted them to have the house after all, since if he had he would have provided them winning lottery numbers.
You are right about that.
“Knowledge is power and I went into this with no knowledge,” Anthony said. “I relied on people who didn’t have our best interests at heart, but in the end we signed the papers. We didn’t know where to turn to ask questions. We’ve learned there are lots of resources out there. You have to get the knowledge and then you have to apply it.”
Wow! You mean God didn’t have your best interests at heart?
God helps those who help themselves…….
The good thing is since God is the ultimate power and respect in this universe, he can forgive all the blames that Earthy mortals put on him. If I were God (and I do not mean this as a heresy or disrepect), I surely will not let the blame on that idiotic couple to fall on me. Hey, you made your bed and you will sleep on it…
Boy, this Earth needs a good cleansing pretty soon. This certainly is a good candidate for the Darwin’s award.
Billy Graham once said, If God doesn’t deal with America soon, he’ll have to apologize to Sodom and Gomorroh (sp?) -
Maybe the housing bubble is his way…
God wants, God gets!
This is very typical of the Rockford population, by the way.
Hehehe… the only reason I ever became aware of the existence of Rockford, IL, was “Chicken George” on Big Brother’s inaugural season in the US.
Rockford is hometown of well-loved second-tier rock band Cheap Trick. I had several of their LPs back in the day.
Rockford is also the hometown of Ed Viesturs, probably the greatest American high-altitude mountaineer (Everest, K2, etc., you get the idea…).
http://en.wikipedia.org/wiki/Ed_Viesturs
Ed’s one cool cat…
I have a good friend from Rockford. She could tell lots of stories about the locals.
Salvation comes through suffering. God’s just trying to throw them a bone.
Faith-based financial decisions
My guess is Satan caused a dropout in the husband’s cellphone conversation with God.
Was God supposed to make the payments, too?
God wanted them to learn a lesson about financial responsibility.
Maybe God was was pulling for the lender.
God was really the mortgage broker and realtor in disguise - who promptly sold his soul to the devil…
I bet Jesus gets really bored of people blaming him for making idiotic financial decisions in his name.
Let’s face it, he’s got more important things on his plate at the moment, than the creation of another pair of FBs…
Jesus saves, but apparently the faithful just spend, spend,spend.
LMAO…reminds me of when my whack-job of a mother came to me screaming because she found birth control pills in my purse. Her defense for going through my purse was “God told me to.”
Sorry for being off-topic…
God is not a Realtwhore.
‘I hope that there is a special place in Hell for the phony “prosperity” preachers who delude their flocks with the false promise that “God wants you to be rich!” ‘
I agree 100% Colorado! I think it was taught so the preachers could live the good life instead of that out dated Mother Theresa model.
And I have much disdain for the flip side of that theory…that those who are not prosperous must have made God unhappy and deserve every hardship they endure. I’m not talking about charity. I’m talking every person w/in a church being considered important…not just the wealthy. It’s funny they quote the Bible left and right but not the passages about respecting the poor and showing them simple kindness.
I don’t know about the rest of you but even though the plight of the RE industry woes grows daily I find myself blah who gives a s**t attitude. The only thing that lights up a spark now and then are little cameos about real people and the problems created by their stupidity. I guess it’s because most areas are in a denial phase and that has to be worked through for things to pick up again for the next downward phase. Can’t wait for the summer heat to crank up those cooling bills.
President “Bobby”: Spring and summer.
Chance the Gardener: Yes.
President “Bobby”: Then fall and winter.
Chance the Gardener: Yes.
Benjamin Rand: I think what our insightful young friend is saying is that we welcome the inevitable seasons of nature, but we’re upset by the seasons of our economy.
Chance the Gardener: Yes! There will be growth in the spring!
Benjamin Rand: Hmm!
Chance the Gardener: Hmm!
President “Bobby”: Hm. Well, Mr. Gardner, I must admit that is one of the most refreshing and optimistic statements I’ve heard in a very, very long time.
[Benjamin Rand applauds]
President “Bobby”: I admire your good, solid sense. That’s precisely what we lack on Capitol Hill.
I really liked the Rand tomb at the end. Right off the dollar bill.
I liked the scene where Shirley McLean was… you know, and Chance says “I like to watch”. And the crooked lawyer who was trying to get into politics sh-tting himself when he saw Chance as some big spokesman and then worrying that his career was over before it started.
You just knew a quarter like this was in the offing for Chicago. It is going to get very ugly before it gets better
The number of brick facia, cinder block condos currently under development in Chicago is astounding. Yeah, I’d love to live in some tiny island with a wrought iron gate around it surrounded on all sides by homes and low rent apartment buildings filled to the brim with illegal aliens. (Priced from the $300’s) I’d really like to know who is buying these flats?
Here in Rogers Park, several of these new buildings had no luck with sales and have now put up “For Rent” signs. Two 12 uniters on Greenleaf across from a ghetto school playground went Rental. Then, suddenly, they built another 6 units right next door. I’m sure they’ll have more luck with these.
I drive by a complex of condos that just started about 2 months ago about 3 blocks north of I-90 on California Avenue. Across the street is an apartment building filled with illegals. They congregate near the main entrance to the aparment building just 25 feet away from this brand new “luxury” building. I just don’t see how and why anyone would want to live there.
Reminder: Rogers Park sucks.
Captain David Lereah is abandoning the USS RealEstate and LEAVING the ship ?
To HELL with the MUSIC and RUN for the LIFEBOATS MATES !
LIFEBOATS ?!….Where ARE the DAMNED Lifeboats ???!
Munch munch munch
We wave from the lifeboats to the people shouting from the decks…
Got popcorn?
Neil
EXCELLENT.
Voted best comment of the day
Comment by Neil
2007-04-30 11:47:41
Munch munch munch
We wave from the lifeboats to the people shouting from the decks…
Got popcorn?
“Traffic is down. Contracts are down. I think this will go on for another six months or year or longer.”
Multiple choice: How long wiull this go on for?
A) six months
B) a year
C) longer
Make sure you use a #2 pencil.
C)
looks like the realistic answer.
but a)
could be sellers option.
Even this kind of presentation is decieptful. Obviously, 6 months or a year are not even contenders.
How about
A) 3 Years
B) 5 Years
C) 10 Years
D) Longer
Just to put it in perspective that this is not a temporary situation, but a wholesale market crash which will in all probability last as long going down as it took going up
Japan 14+
In real terms: forever
I don’t know. The idea that people will never be this stupid again seems as unlikely as the idea that prices never go down. Of course this kind of extreeme rarified stupidity only comes once in a lifetime for most people.
“Peterson added that another barrier to sales is price. Lower-priced condos still sell, while the West Side Flats condos were priced from $250,000 to more than $1 million.”
That’s funny - in Austin, our new downtown condos are priced in this range and they are still considered affordable.
I’m trying to think what the West Side Flats are. Is that near Plato Blvd? There is no way in Hades that anything considered the West Side of St. Paul should be this high-priced. That is not fine city living. It is boring and scary after dark. So what if the Excel Center is over there? This is just another example of the stupidity taking place. They were smart to cancel this abomination.
“There is no way in Hades that anything considered the West Side of St. Paul should be this high-priced.”
You forget - it’s different there. It’s gonna be built alongside the mighty Mississippi!
The city is also gung-ho to redevelop the old Koch Refinery petroleum storage land near West 7th as another ‘urban village’ high-rise development, despite the fact that the property’s owner (ExxonMobil) argued the land was too polluted to be considered for residential housing. The city went ahead and eminent-domained the land so they can put people in contact with hazardous waste. Ironically, these same city leaders who pushed this through support a total smoking ban in the city. Can you say, “ironic”?
I do brownfield redevelopment and have been involved with many projects similar to the one you describe. Virtually all of them are redeveloped for future commercial/industrial use, not residential. Why? The cleanup criteria that must be met for residential use are much, much more difficult to meet, and the costs can only be described as staggering. My guess is this particular project never gets off the ground.
“But we prayed and my husband said god wants us to have this house.” Looks like god was out to lunch when they were praying. Oh, boy. With the religious right whack jobs praying for help in this mess we are really in trouble. BTW, the small “g” in god was on purpose.
“‘I didn’t want to take the keys. I was crying. I didn’t want the house, not at that price,’ Clarice said. The Register Star agreed not to use the couple’s last name. ‘But we prayed and my husband said, ‘God wants us to have this house.’”
Ha Ha Ha Ha. With all the things going on in the world does this idiot really think that all God had to worry about was wanting them to buy this house. Fools. Utter fools.
This attitude is a lot more common than one might think:
http://en.wikipedia.org/wiki/Prosperity_Gospel
Sounds like Clarice is suffering from “shear” terror.
“And how do we begin to covet, Clarice? Do we seek out things to covet? Make an effort to answer now.”
“Lambs. The lambs were screaming.”
Speaking of condo’s, how about this story? I think it’ll take quite a wild imagination to figure out all the ways the RE-meltdown will affect the economy. Contained, yeah right…..
http://realtytimes.com/rtcpages/20070430_foreclosures.htm
“Question: Our condominium is in trouble. Many of our owners obtained those “favorable” interest only rates a couple of years ago, and now that their monthly payment has increased, their units are being foreclosed upon. This is putting a burden on the rest of us, since those owners are no longer paying their condominium fees. We are a small association with a tight budget. The developer left us with very little reserves, and now we are struggling to keep alive financially. What should we do?
Answer: You have raised a serious question, which unfortunately not too many people are focusing upon. There has been a lot of press about the increasing foreclosure rate, and how that impacts on homeowners.
But you are describing the “ripple” effect that foreclosures have on the rest of the community….”
“Our condominium is in trouble. Many of our owners obtained those “favorable” interest only rates a couple of years ago, and now that their monthly payment has increased, their units are being foreclosed upon. This is putting a burden on the rest of us, since those owners are no longer paying their condominium fees. We are a small association with a tight budget. The developer left us with very little reserves, and now we are struggling to keep alive financially. What should we do? ”
Answer….
Having moved past denial stage and anger stage, you are now in the bargaining stage. You’re looking for a solution.
You’re locked into an overpriced condo, with overpriced condo association fees, and as more foreclosures hit, you’re going to have to raise the condo association fees, pushing even more people into foreclosure. Viscious cycle. To get some of those units to sell, you’re going to have to agree to give the new borrowers reduced fees. Meaning not only will you have paid more for your unit, but you’ll be paying more for association fees as well.
Or, you can walk away like all your neighbors.
The next stage of grief will be depression. Hopefully you’ll escape this phase without throwing yourself off the roof of your overpriced condo with overpriced association fees.
If you do survive the depression phase, eventually you’ll reach the acceptance phase. By then, there will be a new portion of the market that is again a bubble. Could be stocks. Could be bonds. Could be commodities. Maybe something else. You’ll quickly forget the lesson of real estate, and quickly throw assets at that bubble, sure it will be THE way to get rich quick.
When the bank/lender forecloses on the property, how do they avoid also assuming the liabilities (hoa dues and such)? Couldn’t the HOA turn the tables and foreclose against the bank? I have no idea how that all works…
And how did the husband know that God wanted them to have the house? Did God actually speak to the husband or something? No.
The husband just decided to act as God’s spokesman. That’s what.
I hope god keeps his mouth shut when this moronic couple asks him if they should reproduce.
The husband just decided to act as God’s spokesman.
Like so many do on so many different topics/issues/problems/etc.
Frankly, I think God was telling them they SHOULDN’T have the house being that they couldn’t even make the first payment. But lots of folk have a hard time believing God’s answer, sometimes, is “No”.
But the Prosperity Gospel advocates insist that He ALWAYS says yes. Maybe the lenders belong to these cults as well, which might explain ther recent propensity to always say yes as well.
I SAID “HOSED”, not “HOUSED”, ya friggin dolt. Next time listen up! G.
I mean, did god say, “Sure, buy the house, you need it, I got a pickup truck, I’ll help you move in.”
Or was there just a long silence.
Thought so.
I have meet more than a few folks who insist that they have 1 on 1’s with God on a regular basis.
And don’t get me wrong. I believe in mystical experiences and the miraculous. I just don’t believe that they are common everyday events.
..more commonly known as schitzophrenia…hearing voices in your head is a sign of mental illness, no matter who you think is talking to you….
I wouldn’t go as far as claiming that all those people are schizophrenic. Perhaps more of a case of the wanted to hear an affirmative so much that they deluded themselves into believing that they did.
the prosperity people are usually VERY careful to say they didn’t hear an actual voice, but God spoke to their heart. I admit that sometimes God speaks to my heart, he/she says, get a clue.
No, my tongue was firmly in my cheek.
….but, then again…
The prosperity people are usually VERY careful to say they didn’t hear an actual voice, but the Tooth Fairy spoke to their heart. I admit that sometimes the Tooth Fairy speaks to my heart, he/she says, get a clue.
God has lost my number. That said, it’s not unlisted.
God’s a better investor than to get into an overpriced McMansion…
God speaking: WTF? 690k for a POS worth maybe 200k in today’s market? You been drinkin Benedictine or what? Say what???
Having a little medical incident, I felt the presence of God in my life—but the basic message was to be a more kind and loving person, not go buy something.
I have no doubt that they do have 1 on 1 sessions talking to God. But they do all the talking. God does not talk to them.
Nor does he tell them what they should or should not do.
‘But we prayed and my husband said, ‘God wants us to have this house.’”
Theist never pass up an opportunity to make themselves and their god absolute fools. Maybe they mistook santa to be god?
Theist never pass up an opportunity to make themselves and their god absolute fools.
And Atheist never pass up an opportunity to ridicule them for it. Where lies the greater Hubris?
It’s been a long time since I was last at church, but I do seem to remember that God was not overly keen on people spending their lives chasing material wealth. So I don’t think it is a necessarily an atheist position to point out the wrongheadedness of this couple’s actions, or their lame justification - ‘god wants it’ - for it.
It might not be the most christian thing either. But we are all sinners, ya know.
Folks, maybe we are getting closer to the panic stage here.
People are now starting to bargain with God about houses. Kind of like they try to bargain with God when they learn they have an incurable disease.
This may signal that panic is becoming more widespread. The more FB types try to bargain with god the closere we come to the bottom, allthough that will take a long long time.
But this was bargaining to get in, not get out. It’s when they say, “dear lord get me out of this monstrous mcmansion and I will never again (fill in the blank)…” That’s when we are in the next phase.
God wants me to have a free vacation to Hawaii…
First he needs to let Ladanian Tomlinson or whomever score a touchdown
If you are a doctor in America and a pusher of pills, some pharmaceutical outfit may very well answer your prayers.
Got 10% down?
We saw that over the weekend with the article of the people in El Paso that needed to sell. They buried a statute of a saint in their backyard, and blessed the house with holy water.
All that, and a $20K price reduction still didn’t get their house to sell. Imagine!
Which level of the Kubler-Ross scale are we at now?
Shock stage: Initial paralysis at hearing the bad news.
Denial stage: Trying to avoid the inevitable.
Anger stage: Frustrated outpouring of bottled-up emotion.
Bargaining stage: Seeking in vain for a way out.
Depression stage: Final realization of the inevitable.
Testing stage: Seeking realistic solutions.
Acceptance stage: Finally finding the way forward.
House down the street from me on the market for 6 months plus finally sold . . . to a couple from Chicago. No way any local would have paid within 30% of the asking price. I knew we were in trouble when I saw the new owners’ cars, both American made, one belching blue smoke out of the tailpipe.
There goes the neighborhood.
Called a reator to ask the price on a way-cool house (between Grand Junction, Colorado and Glenwood Springs) - she says it’s 850k. I told her to call me when the price dropped (after explaining to her how much income a person would need to buy that). Her reply (she was actually very nice) - well, the seller is no way gonna come down under 500k…
Within 10 seconds, price came down 250k. Ouch.
correction - 350k
In another 14 seconds, you could have gotten it for free!
dang! My mother always said I was too impetuous.
THAT is a great story.
Let’s hear more like that!
Probably what they owe. Easier to let the lender take it than take a loss on it.
Wait 6 months, and contact the lender and ask how much it would cost to take the REO off their books for them.
Whoa. Don’t brand new american cars do that? My chebby bought fairly new in 99 (97 with 15K miles) would belch out black smoke every morning when I started it. Took it to the chevy dealer, and he told me it was somewhat normal…. Wait until the warranty expires and then we will fix it. Now it is a dead whale in my driveway, and it costs more to fix, than what it is worth.
No more American cars in this household…. At least not from the major 3. My honda is made 90% here, and I have had no issues with it.
Even the Korean cars (Kia, Hyundai) are much more reliable than the junk coming out of the Big 3. And Chrysler messed up Benz, too.
Union hater. How are the big three supposed to pay retirement and healthcare costs for their retired workers if you’re no overpaying for their cars.
This is why the concept of pension and healthcare for retirees, while a very nice idea, can’t exist long-term. Once you’ve been in business long enough to have a lot of retireed workers, a company that doesn’t will come along, under cut you on value, and put you out of business….
Lather, rinse, repeat….
Well, you could fully fund the pensions from the get go so that in the future your company wasn’t at a competetive disadvantage, but that’s just crazy talk.
Comment by jim A
2007-04-30 12:55:59
Well, you could fully fund the pensions from the get go so that in the future your company wasn’t at a competetive disadvantage, but that’s just crazy talk
Exactly, but the bosses need their fix of bigger boats and houses so they raid the piggy bank and screw the next generation. Class description…Its all about you 101 taught at any Ivy league. Optional to Business Ethics.
Tell that to the UAW. Unions are the pimple on the ass of progress.
1) How do you know how much is “fully funded”? You have to assume certain things like ROI and inflation.
2) That just allows the competition that isn’t fully funding to out compeat you now instead of 50 years from now.
I’m truely not a big fan of government involvment. I’m a registered Libritarian and voted Libritarin in the last two elections.
My #1 choice would be to give people money and let them save themselves. However, people have shown to be stupid. They spend all their money, then go to the government with hand out.
Company funded retirement has also failed.
As has 401(k) since it throws a ton of money at markets, demanding unreasonable returns, causing bubble after bubble, and long-term losses to the most gready… that again go to government with their hand out.
So, as much as I hate government involvement, I really see no choice here. Government is going to have to take over. Turn Social Security BACK into what it was intended to be for its first 3 years… FORCE you to save, then give you your money back later. Too bad that plan only lasted 3 years.
Ditto Medical. I hate that every other option fails.
Okay… Let’s start with tort reform, slice the massive malpractice insurance, which is at least 25% of costs, from the system and see if that helps. if not, time for govt to step in there too.
GAWD I hate that I’m finally forced to admit that people need govt. Now we just need a govt. that is interested in real solutions instead of the next election.
“the bosses need their fix of bigger boats and houses so they raid the piggy bank and screw the next generation. Class description…Its all about you 101 taught at any Ivy league. Optional to Business Ethics. ”
Ethics are only as strong as the weakest link… which means none.
You can’t win the fight against the force of supply and demand. If there is demand than supply, prices rise. If more supply than demand, falling. Simple.
Ditto, you can’t figtht the forces of maximum ROI. If a company has one business segment that is making money, and one that is losing money, someone will come along, buy up the company, sell off the bits with value, and let the rest go under… Paying pensions creates a portion of the business that loses. So… it will get raided.
An anology. Was at dad’s a few months ago and a wildlife show was on. A pack of haienas went after a pack of antelope. They caught a young one, killed it and commenced to eat it. His wife (hard to call her step mom as they married when I was 30ish) says, “that was mean”.
“No”, says dad, “nature is neither mean nor kind, it is simply indifferent. It does what works.”
This applies to business as well. It is neither kind not mean. If it works, it happens. If not, not. Raiding pension funds works. Having pensions does not.
It sucks, but that is the reality. We need another solution.
Well I actually find myself pretty much agreeing with Darrell points 1.) and 2.). But the answer to “It’s difficult to anticipate the future,” isn’t “so we should give up all planning for it.” Those pensions were based upon two things. 1.) It is difficult to create a new car manufacturing business. 2.) the big three for the most part got the same deal from the UAW. If nobody new has a chance in the race, and everyone running is wearing the same clodhopper boots, it doesn’t matter if they slow you down. They simply never anticipated that imports would ever be other than a niche product when they made these agreements with the UAW.
As to your second post, I have to disagree. While scaling DOES mean that morality is different for corporations than individuals, it doesn’t mean that they are a priori amoral.
I drive a Toyota Corolla 1999’s originally bought from the dealer for 16.5K drive-out. I drive from Sugar Land, TX to Dallas, TX weekly to go to work and the car now had 157K miles on it. No problem. It’s a b*tch though when I enter the freeway ram and the SOB accelerate from 30 to 35 to 40 to 45 miles slowly. It does save me some gas, about 35 miles per gallon. And by the way, my house which is bought new in 1999’s for a 160K also in Sugar Land, TX with a 65K down payment, 15 years fixed at 7.65%, is about to be paid-off at the end of this year. I had been paying an extra $1,500 in principal for the last 2 years. It’s gonna be a long while if I ever purchase another house again after reading through this blog since 6 months ago. Damn, I wish I had bought a cheap-ass townhouse, 2 bedroom, 1 bath something like that for around 30K instead of spending 160K on my current house. I don’t need all 2,350 sq. feet in my house with 4 bedroom, 2.5 bath since we don’t have any kid yet (well not exactly, one is coming around October 2007’s…) I wish I had just rent instead of buying a house. Guess it is the trend, the image that your brothers and sisters, your friends have a house of their own, so I got to have one too… Not a BIG MISTAKE by any chance, but still a mistake. SHOULD HAVE RENT !!!
Think of it this way - in less than 7 months - you will have no monthly payment for rent/mortgage. That’s a nice feeling.
Tx–
Haven’t been on much the last few weeks. Was thinking bout you last night hoping everything was ok (after those storms) Nice to see your posts again.
CA
The RE market is fast (rising) with loose credit or high employment situations but can get very illiquid during economic slowdowns or credit contraction. What sellars are seeing is the begining of a illiquid RE market brought on by a slowdown in credit and a overall lack of demand. When the RE market gets real illiquid you can’t give a house away! So this idea that sellers need to lower prices to bring back the market to 05 levels is very bogus IMHO. Instead the credit contractions will continue
combined with increased foreclosures+lack of demand means Banks will be stuck with REO’s in the coming years. The number of vacant homes forsale is a early indication of the trouble ahead.
“In Acqua Vista, Some Owners Under Water”
http://www.voiceofsandiego.org/articles/2007/04/30/news/03acquavista043007.txt
A story about condo’s in San Diego’s Little Italy:
“…But now, 14 of the building’s 383 units are in foreclosure, according to RealtyTrac. Thirty-eight units are on the market, some listed at a loss. A few brightly colored “for sale by owner” and “for lease” signs stand out against the neutral beige and peach building. Some analysts and Realtors familiar with the project say its appeal is dimmed by its apartment-like qualities, such as white refrigerators instead of stainless steel and a flooring option called “marnoleum” instead of tile in many units floors eight and below….”
Gasp! White refrigerator doors!!!
And here’s the best part. You just can’t make up this stuff:
“And because apartment projects have fewer required parking spots than condos, fewer spots were planned by the original builders. Now, because when you buy a condo you’re guaranteed at least one parking spot, the residents of the building have to have their cars ushered into an underground lot by a valet. And they pay for that valet in their homeowners association fees, which top $500 a month, even for a one-bedroom unit.”
You can’t even park your own car in your own spot! And I guess the valet expects a nice tip each time, since he didn’t scratch your car or smoke in it or worse….
Hey, I wonder what’s happening to all those “luxury” highrise condo complexes where the sales reps were throwing hors d’oeuvre and champagne parties at their open houses. Has anyone kept tabs on any of them?
BayQT~
My Ex wife bought a 1/2 Million Plus Luxury Condo in Chicago. ha ha ha
“WAY TO GO GOD !”
“Why This Slump Is Different
Foreclosures are rising fast, investors are sweating, and lenders are now bending over backwards to keep bad loans alive.”
http://www.businessweek.com/magazine/content/07_19/b4033053.htm
“First comes the reminder notice that a borrower is late on the mortgage payment. Then the phone calls start. Later a brochure arrives, maybe even a DVD, explaining the homeowner’s options. Around month four, there will be a knock on the door.
..
Don’t call them bill collectors. Today, the industry has a softer term, “debt counselors,” for the swelling ranks of people who are pounding the pavement trying to stem the tide of mortgage foreclosures.
…
There’s little relief in sight; in the first quarter, 2 million homeowners were at least 30 days late on their payments, an increase of 26% from last year, according to Moody’s Economy.com Inc.
…
UNDERWATER EPIDEMIC
Many of the homeowners in trouble are first-timers who bought recently or investors who got in over their heads. Vikki Kuick, a real estate agent in San Diego, has a listing on a three-bedroom condo that the owners bought as an investment property three years ago for $447,000. Payments on their adjustable-rate loans have since gone from about $2,000 a month to $3,800, while their tenant pays just $1,800. Kuick says she has an offer for $370,000, which she has taken to the couple’s lenders. If the lenders agree, the holder of the second mortgage would receive a token amount—as little as $1,000. “If it goes to foreclosure, [the second lender] may get zero,” she says.
For the first time in years, houses are hitting the market with asking prices below the value of their mortgages. Stretched owners are hoping for a so-called short sale, in which the lenders forgive the difference. National statistics are scarce, but according to a study performed for BusinessWeek by the online agency ZipRealty, there are 1,100 such listings in Miami, nearly 1,000 in Atlanta, and 700 in the Washington area. In Sacramento, real estate agent Patrick Hake counts 1,079, more than 10% of the total homes on the market. “If home values are falling, short sales are better because they can be done cheaper and quicker [than foreclosures],” says Kevin J. Kanouff, head of the bond group at mortgage consulting firm Clayton Holdings Inc.”
Ouch. “Pity the fool” (famous Butterfield Blues Band song). At least there are lots of good blues clubs there she can go to when she figures it all out.
above comment in reply to ”
My Ex wife bought a 1/2 Million Plus Luxury Condo in Chicago. ha ha ha”
In the Bridgeport and Brighton Park neighborhoods they are still building condo’s a t a breakneck rate, especially Durbin. Last week a builder knocked won an old frame on 35th street near Morgan a two flat to put up a 2 condo with business storefront next to the one he just finished building a month ago with none of the units sold. There are hundreds of units that have been built in the past year. And many of the buyers from last year are already looking to move their units. Who the hell is going to buy a $350,000 + condo in a neighborhood with no entertainment, no bars, no restaurants, no parking, gangbangers, and criminals just waiting to break into anyone’s car when they least suspect it?
And I bet many of these buildings have ‘50% Sold!’ signs in front of them, too. It’s a shame that about 1/2 of those 50% sold! have anyone actually living in them.