Sellers Are Bringing Their Checkbooks To Closings
The Aurora Sentinel reports from Colorado. “It’s a buyer’s market in Aurora as foreclosures in 2007 are outpacing the number of residents who lost their homes in 2006. local real estate experts say. At the end of March 2006, Adams County had 1,094 foreclosures. In the first three months of this year 1,456 homes went into foreclosure, a 33 percent increase. As of April 24, Arapahoe County had 2,015 foreclosures. At the end of last April, the county had seen 1,545, according to officials.”
“‘There’s a lot of great deals out there for buyers but there’s also a lot of doom and gloom,’ real estate agent Sunny Banka told the city’s Code Enforcement committee.”
“Rather than walk away from a sale with a profit, home sellers are bringing their checkbooks to closings, said Banka, who has worked in the Aurora real estate market for 29 years.”
“Homes sold this year in northwest Aurora had an average price tag of $111,250, down $19,000 from last year, according to Banka’s data. Houses in southeast Aurora bucked the trend, selling for an average of $313,153 in 2006 and $396,443 this year, although well below the average asking price of $430,806, according to the same data.”
“‘New construction is in serious trouble,’ Banka said, adding that she’s recently seen large home building companies lay off staff and close up offices in the area.”
“Councilman Bob Broom called the report ‘gloomy’ and despite her enthusiasm for the up tick in home sales, Banka agreed, saying: ‘I think we’re in for another tough year.’”
The Gazette from Colorado. “The pace of home construction continued to slide last month, forcing some builders to lower their sights on the number of houses they hope to sell and some subcontractors to look outside the area to find more work.”
“In April, 257 singlefamily building permits were issued in El Paso County, a one-third drop when compared with the same month a year ago, according to the Pikes Peak Regional Building Department.”
“Tom Adams, a VP for Colorado Springs-based Keller Homes, suggested many homeowners also took out second mortgages and used the money on vacations, cars or other personal items. The result is that some owners haven’t built up equity. When they go to sell, they have too much debt and don’t have a nest egg to use to move up into a newer, larger home, Adams said.”
“That hurts Keller, which builds pricier homes in several upper-end subdivisions such as Flying Horse and Pine Creek on the Springs’ north side.”
“Keller has lowered this year’s sales goals by 35 percent when compared with early 2006, Adams said. Keller also eliminated about 20 jobs through attrition and layoffs last year, he said.”
“‘We’re meeting our sales goals, but our sales goals have been greatly pared back from years past,’ Adams said. ‘We really had to adjust to this marketplace.’”
From Arizona State University. “From a high of 1,785 recorded sales in second quarter 2005, the Pinal County resale market has steadily declined to 840 transactions in the first quarter of 2007, compared to 1,110 sales for first quarter 2006 and 1,435 in 2005.”
“Much like the sales activity, the median price has steadily eroded from $220,000 in fourth quarter 2005 to $204,600 in first quarter 2007.”
“‘In order to reduce inventories, new home builders have been aggressively pursuing buyers through incentives. The new home has become a strong competitive and attractive alternative to the resale home in Pinal County,’ said ASU’s Jay Butler. ‘Thus, there are many reasons for the slowing market and issues that will have to be overcome for any future recovery.’”
The East Valley Tribune from Arizona. “A massive gated development in the works for Pinal County will bring a private golf course and nearly 2,400 homes to the Queen Creek area with sales beginning by the fall.”
“Work on the more than one-square-mile project by Shea Homes, called Encanterra, is already under way at the southeast corner of Gantzel and Combs roads.”
“The largest hurdles areas like Pinal County and the far West Valley are facing are traffic congestion and rising energy costs, said Jay Butler, who heads up the Realty Studies department at ASU.”
“Builders will return to a more traditional way of selling, emphasizing locations, amenities and home designs, Butler said. ‘How do they go back and differentiate themselves from their competition?’ he said. ‘The market may be smaller. The market may be more selective.’”
Bloomberg reports on Arizona. “Rachael Babinchak, a real estate agent, is trying to rent an investment property she bought for $224,000 last May in Phoenix, after home prices climbed 26 percent from a year earlier. Since then, demand has dropped because of a glut of for-sale properties and prices have ’softened,’ she said.”
“Babinchak is asking $1,100 a month for the two-bedroom house on the north side of the city, with a one-car garage, a pool and a hot tub. The average rent in Phoenix was $756 in the first quarter and the vacancy rate was 7 percent, exceeding the national average, according to Reis.”
“‘I didn’t buy an investment property with the hopes of being a landlord, but I’m not going to get a good price right now,” Babinchak said. As soon as the real estate market rebounds, she said she’ll put the property back up for sale.”
‘Four bills seeking to stem foreclosures in the state moved closer to final approval Wednesday. Critics, including the Colorado Mortgage Lenders Association, argued that ‘for the benefit of the borrower’ created a fiduciary obligation that wasn’t practical or enforceable.’
‘Senate Bill 203 would convert the state’s mortgage-broker registration system to a licensing system, and Senate Bill 85, which would make it a serious crime to pressure an appraiser or to falsify an appraisal.’
‘Lenders initiated more than 28,000 foreclosures in the state last year, including more than 19,000 in the Denver area.’
well YA KNOW ……..No one is going to ask about bailing out FB in tonights REPUB dee batez…..
Do you not know how to spell “debates”?
Deebatez is what da Repubs are goona doo 2 nite
The last thing they want to do is Upset the public and talk about the Housing Bust and people being tossed to the street..and Bailouts
well maybe Ron Paul….sad we have such poor choices for president.
CMLA “…argued that ‘for the benefit of the borrower’ created a fiduciary obligation that wasn’t practical or enforceable.’…”
Yes, the first test of a new loan program is always “Is the the loan program that makes me the most commission dollars?”
fyi,
most of the investors that we deal with have axed the stated w-2 programs altogether. the logic is that a self-employed borrower may have complex financial considerations in stating their income, but a salaried person is a salaried person, it is what it is. since colorado and several other states are planning on making “mortgage fraud” a felony, everyone is running for the exits. i think that this is a serious chunk of the buying public that just got shut out of the market, much like the subprime 100% loans.
How about a law requiring full documentation and qualifying the borrower based on the full amortizing interest rate vs teasers (no “liar loans”/NINJAs)?
http://www.chicagotribune.com/news/local/wisconsin/chi-ap-wi-odd–deadtour,1,2272298.story
“Couple finds dead woman’s body during Janesville home tour”
How does a realtor spin this one?
Proven “forever” house.
Try this link
“People are just dying to get into homes here”
*dieing* darn my crappy spelling!
You were right the first time. You’re not a bad speller, you just lack confidence in your ability to spell, lol.
“Be the first to find a dead woman’s body in your home and win a free trip to Disneyland.”
They can have her house when they pry it from her cold, dead fingers.
That was best.
talk about taking forever to sell…. how about THE REST OF YOUR LIFE
Anyone buying a house better expect to DIE IN IT. (idea is its impossible to sell)
loyal staff
Every house has a story!
Ooooh! This one is a murder mystery.
How about a house “to die for”?
“‘I didn’t buy an investment property with the hopes of being a landlord, but I’m not going to get a good price right now,’’ Babinchak said. As soon as the real estate market rebounds, she said she’ll put the property back up for sale.”
“As soon as” might not come quick enough for some people…
Truely.
So many people think the Great Housing Recovery is just around the corner. The more I read and the more I hear, I’m convinced that this “rebound” will take years. Years! I’m thinking over 75% of sellers do not have 6 months before they are in serious trouble.
Actually she is correct in her statement, just not logical. What Babinchak means is that after the 50% drop and finally when it gains the 3% or 4%, She’ll put it back up for sale.
Houses go up in value over time because of inflation. People that say their “investment” property increased in value by 2% and think their getting a good deal don’t get it. Inflation is usually around 3% but with the Bush/Bernanke wonder twins asleep at the wheel currently inflation is probably around 6%.
So yes houses do tend to gain in price over time. But, If the gain in price is less than the increase in inflation you’ve purchased a diminishing value asset.
Yep. This is tomorrows foreclosure in the making. Meanwhile, make sure you keep feeding that gator - he’s a hungry SOB.
This is the “logic du jour”. It can only be described as riding ones house all the way to the bottom. Have fun!
Slim Pickens on the bomb….
Remember back in 2000 when the NASDAQ was at 5084, it is at 2500 now!
and real inflation is up what 50% since then?
The real estate market is going to die unless we do something. Clap your hands! Clap your hands and say, ‘I believe housing prices only go up!’
C’mon, clap louder!
What’s the matter with you? You call that clapping?!?
Nice going! You killed it! Loser!!!
Well, happy landlording, honey!
Not yet. First, she’s got to find a renter willing to over-pay for rental. Until then, just a wanna-be landlord in a sea of other wanna-be-wish-they-weren’t landlords.
I smell gator meat.
:Rachael Babinchak, a real estate agent, is trying to rent an investment property she bought for $224,000 last May in Phoenix, after home prices climbed 26 percent from a year earlier. Since then, demand has dropped because of a glut of for-sale properties and prices have “softened,” she said.
Babinchak is asking $1,100 a month for the two-bedroom house on the north side of the city, with a one-car garage, a pool and a hot tub. The average rent in Phoenix was $756 in the first quarter and the vacancy rate was 7 percent, exceeding the national average, according to Reis. ”
Hello lady:
Potential upside: Prices may, just maybe stabalize. Meaning you can sell the same amount a year from now that it could sell for now. All indications are the opposite, but they may somehow, magically stop dropping.
Upside: Nil
Downside:
I guess that depends how much she owes. If there is no equity, then I guess the loss is the $500 a month that she’s losing on the dif between rent and costs.
Wait… I just saw the only real upside potential. Offer a low rent, but require a huge deposit. Don’t make any payments. Keep collecting rent until the bank comes and forecloses.
Sure, it is criminal, but there is SOOOO much criminal fraud going on, they can’t get everyone.
“Sure, it is criminal, but there is SOOOO much criminal fraud going on, they can’t get everyone. ”
True, and those that are “good” will have to pay higher city/state/county taxes to fund the new jails they’re going to have to build. Great.
This market will likely stay rational longer than most people can stay solvent.
I thought the saying was something like, people exuberance last much longer than market solvency. ? Please correct me if I’m wrong.
““Babinchak is asking $1,100 a month for the two-bedroom house on the north side of the city…”
I looked up her house. So, she paid $224K in May 2006 to someone who paid $178K in September 2005. Late 2005 is the point where the Phoenix price run-up had just about petered out; paying that much in mid-2006 was not so smart. In September 1999, it sold for $77K.
77000*(1.035^8) = 101394
So it’s a 100K house.
I don’t know what the big deal is about paying $224K in 2006 for a 20 year old home, all of her realtor friends said Phoenix would continue infinite appreciation at 20% to 30% a year, or an instant 50% appreciaton after she finished the books and tapes from the infomercial.
Sorry sweety, no caribbean cruise for you this year.
“Keller Homes has lowered this year’s sales goals by 35 percent when compared with early 2006, Adams said. Keller also eliminated about 20 jobs through attrition and layoffs last year, he said.”
Mr Adams better change his forecast for lower sales to 60%.
About Mr. Adams…
He’s creepy and kooky
The loans, mysterious and spooky
He’s all together ooky
The Adams travesty
His homes look like museums
So few people come to see them
They really are a bad dream
The Adams travesty…
“‘We’re meeting our sales goals, but our sales goals have been greatly pared back from years past,’ Adams said. ‘We really had to adjust to this marketplace.’”
Well, there’s a moving double-speaking target. “Goals” are being met, but hell, that goal could be just one house. Without knowing what “goals” they had, that statement means nothing.
Goalposts on wheels.
First you shoot the arrow - then you draw the target.
I have friends trying to sell in Maricopa. They have knocked off 20% from their original price since they went on the market a month ago. Not a single person has even dropped by to look. They’re good people who have not tapped their equity or bought over their heads. They are simply trapped in a horrible market where hundreds of other people and builders are selling and where no new buyers really want to buy. Tough to watch, but what can you do?
Don’t be like your trying-to-sell friends, that’s what you can do.
Tough to watch? How long have they owned the property? Oh, they’re entitled to 200K in profit, I forgot.
They’ve been in for about three years. They still have some equity, so I’m sure they still have room to cut even more. I’ve tried to pass along hints that they need to do whatever they can to unload that puppy, but I don’t think they understand what that’s going to take. Circumstances in their lives have dictated a move out of state. They’re still in the mindset that they want to make enough money to put a down payment on a new house. I’m trying to get the point across that they need to forget profit and simply avoid financial catastrophe.
Some people don’t want to listen. It’s still hard to watch people you know and like make horrible decisions.
“They’re still in the mindset that they want to make enough money to put a down payment on a new house.”
So, they’re in a hurry to buy the moment they get to their next place? Screw ‘em.
Screw ‘em.
If I told you the market in which they were planning on buying next, you would have added a few exclamation points to that succinct reply.
Hint: it’s also in Ben’s compilation above…
Tell them to rent.
And they should get their old house off their hands ASAP. Every week a hefty price decrease, kind of a Dutch auction.
Their problem is that they’re competing with all the new homes that are still being dumped. Oh, and being 35 miles from the center of town. If they think that the new homes are really going for whatever the sale contract says, they are dead wrong. The new home builders are throwing in all kinds of extras, and payng closing costs, HOA fees, etc.
If I were selling, I’d go WAY low ball, like 50% off the market. Get several bids, bid them up to the REAL market price, and see who is willing to put up the biggest deposit that they don’t get back should the house fall out of contract due to their inability to get a loan or sell their existing.
That way, if the house does fall out, the deposit covers the hit bringing it back to market a few months later, after the new home builders have again dropped their prices. Besides, the deposit is part of their down, so increases their ability to get the loan.
If they can’t put down a deposit, then they probably can’t put down a down payment, meaning they can’t get a loan, so are just wasting your time.
Right now there are still PLENTY of people buying. If your friends had, initially, priced their home at the correct price and THEN dropped it 20% they would have sold immediately. The problem with your friends is that they are just as caught up in this whole frenzy as the people that “bought over their heads.”
If they weren’t they’d recognize this for what it is and would not have started so high. They may not have participated in the run up but they sure sound like they want to participate in the rewards. I’m sure if you told them to check the comps and then price their property just slightly below they would be adamantly opposed…. because THEIR property is way better than the others OR they’re simply not about to GIVE IT AWAY!
Yes…… “what can you do?” indeed !
Ok I’m going Devil’s advocate here. If it were me and I had a solid loan, plenty of equity, and really did not need to sale then you bet I’d be right in there trying to find some sucker that was willing to pay me the $200+ per sqft! No skin off my teeth to have some strangers tooling through every once in a while. People..er..Idiots are still buying even to this day. I see lots and lots of sales signs with the little SOLD or Sale Pending stickers plastered across them. For those that remember the couple that were featured in Cnn.Money from Visalia CA? they were transfering to New York and [she] had the house in her name only. They were in this stupid lottery to buy a home and didn’t even get to pick out which model they wanted? Drove by there yesterday and some greater fool finally bought it. I’m sure it was nowhere near the $369,000 they wanted but I will find out.
I don’t think the “correct” price for a home in Maricopa is one at which any person who bought in a year starting with ‘200_’ can afford to sell. In this case, the mantra of “location, location, location” is all too true.
To find the CORRECT price ANYWHERE still requires the same technique. And it’s not what you’re suggesting… to go by year or location. As NOTMISSINGIT has verified… there are still PLENTY of buyers willing to buy. It’s public record what they are willing to spend. Research this information and, AGAIN, just to make sure, (if you honestly and truly want to sell) price your property JUST under this.
Horrible market?!?! Prices are 3x what they were 8 years ago
Right now you’d be lucky to sell a home in Maricopa for 1999 prices. It’s Game Over down there.
Did home even exist in Maricopa in 1999?
Hopefully they bought before the boom and can afford to keep lowering until it sells. If they bought during, well that’s just unfortunate, but not much they can do if they must sell.
This scenario is going to play out repeatedly in the coming years.
Traditionally it has taken 5 - 7 years of owning to sell without losing money. They should take their loss, shut up, and move on with their lives. It’s getting late in the day and my sympathy for humanity is at a low.
It’s just the 4pm sugar low.
Go eat more chicken parm.
That was a really good sandwich. But now it’s almost beer time. I wish all of my HBB buddies were here today. The weather is absolutely beautiful in NYC today. Staying inside and working has made me angry. I’ve been staring out the window at that beautiful blue sky. A couple Brooklyn Lagers and even the FBs won’t seem so bad to me.
I feel this way about buying sometimes. Buy, take my loss, shut up and move in to the house that my wife wants (and get laid again - can I say that, Ben?).
No, you can’t…but I can:
Mikey(2), eat a big money real estate loss by buying the house your wife wants, and get laid again.
Once or twice, anyhow.
phillygal - “Once or twice, anyhow:” that’s what I figured, too. If it would guarantee something on a regular basis, I’d give it more consideration. Now if the NAR could guarantee that, I think there’d be a good chance for a quick recovery to the housing market. btw - drove around and saw a bunch of “sold” signs today
Mickey(2)
I guess there is something worse than buying a house for more than it is worth.
Take it on credit if you can.
btw - drove around and saw a bunch of “sold” signs today
You posted that a house near you sold for much less than initially asked. So, 1) you don’t know what the homes sold for, and 2) this really is the peak selling season for families seeking a new home. They have to get settled before the next school year starts. and 3) who knows how many of those homes under contract will actually close?
I’m going to guess that the extra inventory indicates that selling prices are flat, if not actually lower. The only way to discover is to check the public records in a couple months.
Don’t get discouraged…and trust your gut!
It will take this bust to disabuse people of this “house as investment” mentality. When we sold our first southern California house in 1998 (bought in 1993 when prices were low), we asked/got only 12% above what we paid five years earlier. And we had made improvements and had to move, so we basically broke even. But we thought of the house as a place to live, so no regrets. It was our first house, and we loved it because we went through painful eviction at the worst possible time to accommodate our landlord’s son, who wanted to live in his mom’s house. The only advantages to buying a house are having a fixed monthly payment for 15 years and not having to worry about being evicted, which means that today’s typical house-owner has no advantages at all.
I used to be really worried about getting kicked out or evicted. I have enough $$ now hat I cna put a new deposit if I need to. My worries now are more like I like the place and the LL might decide to sell.
Of course it will be a serrious trick to get my deposit back from him.
I know what you are talking about. My honest well intention roommate is trap too. The way I look at this situation is, you are entitle to one bad fanancial mistake in life and no more. Lets say a year from now you and I ask our friends if they still think RE will always go up. Their answer will determine if they have learned, and tragically or thankfully our relationship with them as well.
Here we go: Schumer wants aid for subprime borrowers.
Democratic Senator wants $300 million to help borrowers avoid foreclosure.
http://money.cnn.com/2007/05/03/real_estate/schumer.reut/index.htm?source=yahoo_quote
Please email your Senators and Congressman/woman, and Senator Schumer directly.
$300 million…..
that ought fix everything
that ought fix everything…..in a few neighborhoods in Queens.
Why?
How come you never see that kind of concern for people that are behind on their taxes?
I actually applaud this effort. There are a couple of large spreads in chappaqua I have my eye on. Normally I’d never be able to afford them because they are well over 30x income, but with this new ‘pay what you can’ program, I’m pretty sure I can swing it.
My email to Senator Martinez and Senator Nelson (his was slightly different to reflect his Democratic status), my representatives from Florida:
I read today that your Senator Schumer from New York is proposing to give $300,000,000 to community groups that help subprime borrowers try to save their homes from foreclosure. What do you think about his plan?
I am also wondering if his fellow Democratic Senators plan on expanding these types of programs to other groups of people that made terrible and reckless financial decisions. For instance, during the late 90’s, I made the mistake of investing into a number of now-worthless Dot.com stocks. How about giving $300M to groups that will help me with my foolish investments?
Similarly, a co-worker of mine was dumb enough to lease a 7-Series BMW despite her $35,000 annual salaries. Since she isn’t able to make the lease payments, the finance company is threatening to take her car. How about $300M to groups that help fools who lease cars that they can’t afford?
My parents, who are approaching retirement, have over $75,000 in credit card debt. They ran up that debt by simply spending more on a monthly basis than they were making. Can you please also provide $300M to groups that will help morons who consistently spend more than they make?
I apologize for being sarcastic. However, I hope that you can see my point. People constantly make poor financial decisions — decisions that ultimately have terrible impacts on individuals, families, and the economy on a whole.
As someone who once made foolish financial decisions, I empathize with people who make these terrible decisions. However, it is not the responsibility of the Federal Government or its taxpayers to rescue these people from their poor financial decisions.
Just as it would be ridiculous for the Federal Government to transfer money from prudent T-Bill investors to bail out morons like me who invested in Dot.com craze, it’s outrageous to transfer money from prudent 30-year-fixed-mortage holders to bail out reckless over-spenders who bought homes that were beyond their means with subprime ARMs.
I hope you and your fellow Republicans agree. Can you let me know if you do so I can make future voting decisions?
Thank you.
Andres.
I can’t stop laughing.
You see this?
http://www.thebostonchannel.com/news/13228876/detail.html?taf=bos
Wait until this hits the national news.
People, besides us here, are starting to realize how bad this thing could get and are going to do what ever they can to prop it up.
Holy crap…that is the end of any loans or borrowing in Taxachusetts.
Might as well squat after that. No payments, no taxes, no foreclosures…..happy days.
Yep, no foreclosure means live for free, right?
Crap like this will make the market worse in the long run. Lending will be greatly reduced or altogether stopped. Talk about a way to destroy a market.
Wow, a true to life mob ochlocracy- who’da thunk?
What if it turns out the FB was just pushing the date of reckoning a few months until the State discovers FB was a “primary residence” outta state liar loan flipper? They gonna dock the FB for those few months, plus fines for wasting the State’s time?
Didn’t think so.
Next will be the 3-6 month moratorium on car repossessions, credit card revoking and tax payments.
Actually paying bills will become strictly voluntary
If Mass would just make a declaration that monopoly money is now real, that would solve the problem too. Those $500 bills would really come in handy right now. Also, leaping sales of the board game would jump start the economy. Everybody wins!
We already use monopoly money. They’re called Federal Reserve Notes.
“Backed by the full faith and credit of some biga$$ guns!”
After that, they’ll let gays get married.
Naa…never.
MA, a peoples republic
can you get a loan there now ?
anyone know a mort broker in MA ?
“ask them not to forclose”……………
“ASK”
This “effort” is utterly and completely meaningless. All it will do is accelerate the foreclosure process in MA. A lender, knowing it may get dragged out a bit will just pull the trigger more quickly.
Welcome to the state of Massachusetts politics. Empty gestures are a political art form here….only in this case, this gesture will simply make things worse for all concerned.
The division will then call the lender and ask them not to foreclose.
supposed to nest under jag’s comment.
This moratorium doesn’t look like it has any enforcement capability.
“The division will then call the lender and ask them not to forclose.”
The multi-national banker-lenders will then call “division” back and tell them to “Kindly go Phuck Themselves.”
my thoughts exactly
So I open my door to my enemies
And I ask could we wipe the slate clean
but they tell me to please go f#ck myself
You know you just can’t win
Another FB anthem.
Lender: “I’d be happy not to foreclose. However, the borrower owes me $5,000 at the moment. As soon as you pay me the amount owed, I’ll rescind the foreclosure. Perhaps you can just add the $5,000 to his/her tax bill next year…..”
Should be interesting to see how it plays out. Will the lenders get their asses kicked or will it be the FBs? I guess the fair way for this to proceed is on a case-by-case basis, although I’m finding it hard to find sympathy for any of the borrowers; flipper, oldster, idiot or otherwise. Does anybody trust anyone in the RE industry?
The true beauty of the article is the advertisement of a mortgage which is obviously “Predatory” in the article text.
Brilliant!
LOL. Bandaid for a severed limb
I like the ad I get on the page with that article:
“Mortgage Rates Fall Again! $510,000 mortgage for under $1698/Month!”
God I’m sick to death of hearing these retards trumpet every one millionth-basis-point drop in rates thanks to price-insensitive MBS buying from foreign central bagho-I mean banks.
This is not the real thing. It’s not legislation. “ask” is the key word. Publicity and smoke.
Woo! Another 60 days before eviction. Now they can rip out and hawk the copper wires at their leisure.
“‘There’s a lot of great deals out there for buyers but there’s also a lot of doom and gloom,’ real estate agent Sunny Banka told the city’s Code Enforcement committee.”
Sounds to me like there is a lot of risk for buyers to catch a falling knife out there.
Unfortunately, Sunny fell off the wagon again…
Bear, I just checked in on the reno realty blog. It looks like Angela DiMauro, Loan Queen is no longer a contributor.
Also, they are a little confused by David Leareah’s exit:
WTF is Lereah up to?
“Bear, I just checked in on the reno realty blog. It looks like Angela DiMauro, Loan Queen is no longer a contributor.”
After she put her foot in her mouth and swallowed it, Diane quickly realized the importance of distancing herself from such a blithering imbecile.
WTF?
Does ANYBODY in real estate just talk straight? Or are both sides of their mouths gaping open like a blowfish?
I ran into someone I knew in college. I remember speficially the last time we talked - August 2005. He was telling me how great investing in property is, how he has 3 houses and flipping them, making a fortune, etc. I should totally get into it, make tons of money! (this is in Phoenix)
At the time, i was a second year law student, so even eating Top Ramen was a luxury for me.
I ran into him at the grocery store on Saturday. He asked how i was doing, i said i’m busy with a new job (assistant attorney for the city) and learning the ropes. I asked him how the real estate flipping is going.
“oh great man, i’m renting out two properties, my girlfriend is renting out two as well - the market is going to go crazy again in 2010″.
I didnt have the heart to say all the things i have learned carefully studying the Bubble over the past year. Nice guy, but i think he’s hurting financially.
“oh great man, i’m renting out two properties, my girlfriend is renting out two as well - the market is going to go crazy again in 2010″
Does friend have three years worth of alligator food?
2010,sounds like he taking the long view
they will be lucky if they even get though just the excess inventory in Phoenix by 2010…
then add another 5 to 7 years of flatness after that easy
What he really meant
“oh great man, i’m losing money on two properties, my girlfriend is losing money on two as well - If the market doesn’t go crazy again by 2010 I’ll be bankrupt”
I’m guessing that he is underwater - He bought in August 2005, so i assume he got it when prices were at the peark here in Phoenix. I cant see him making money as a landlord.
A couple questions:
Did friend and his GF intend to flip properties, or did they go in as landlords?
Did they put down a significant downpayment on their RE purchases?
No one buying at that point in time in Phoenix went in as a landlord. If they weren’t buying for a primary residence or a true second home (rare), they were flat-out gambling! As many have previously stated, none of these type purchasers should use the term “investor” … speculator or gambler is the only proper way they should be identified.
I’m guessing that he is underwater
Easy to find out:
http://recorder.maricopa.gov/recdocdata/
If I had just a nickel for every “investor” I’ve talked to or heard about who now thinks it’s genius to rent “their” property in Phoenix, I’d probably be able to get that bitchin’ ranch in New Mexico and a couple of llamas.
Jeffrey - you mind sending me an email? I’m considering applying for an attorney job with the City. albrt_alligator@yahoo.com.
I am not surprised that the Denver metropolitan market keeps sliding. The big lie is still that this is only a “foreclosure problem” and that only the low end housing will be affected. Eventually, to everyone’s surprise…. it will be everywhere.
My mother-in-law’s little old house in Washington Park recently was newly assessed by the county at $475,000 from its last assessment of $350,000. It is an 1100 square foot, two bedroom, two bath house which has not been updated since like 1945. The bedrooms are probably about 9 by 9. But the land is worth…..$425,000 for the tiny lot that it is on. Gosh, that would mean it should rent for about $3500 per month. Try about $1200 if you are lucky in our rental market. That would give it a market price of about $100,000, $50,000 for the house and $50,000 for the land.
I am living in Paris now so I don’t have that good recent gage on the Denver market right now.
Wash Park is a yuppie enclave, the rest of the Denver metro area is way more affordable, but has also been in a slump since 2000. There are a few areas like Wash Park, Cherry Creek and LoDo that aren’t following the trends, but most of the metro area is not doing well. Denver, Adams and Arapahoe counties are really hurting, they make up over half of all the foreclosures in the entire state.
Those Denver Squares are pricey. I guess if you work downtown and want to be really close to the office.
What did suprise me were the prices in SE Aurora. 400K? They must be 5000 st ft Mc Mansions. But even then, In Aurora?
Hows Boulder holding up? i haven’t seen any neg stories about the People’s Republic. Is it truly different there?
Prices seem to have come down a bit, but I have not seen any firesales or forests of for-sale signs yet. It’s different here.
So far it would appear people are trying to just quietly ride it out. Perhaps the average owner has/had a bit more equity than average here?
I *am* wondering if being a relatively small town with a relatively big college will keep rents up significantly compared to what would otherwise happen with a big drop in sales demand?
The OFHEO stats ranked it as one of the worst markets in the US not too long ago.
If you take Smokey Hill road out from the Tech Center area there are a lot of large houses that are in the city of Aurora, but aren’t anywhere near the same kinds of areas that make up the East Colfax part of Aurora. I haven’t lived in Denver for 9 years now, but that was the trend when I was there. I imagine they just kept building larger and larger houses just like every where else.
“I am living in Paris now so I don’t have that good recent gage …”
Hows the weather… I heard Texas is nice this time of year…
It is warm here now. I would say the lows are about 60 and the highs are about 78. That is hot for this time. The young women are out sunbathing on the Champ de Mars so I cannot complain.
“The young women are out sunbathing on the Champ de Mars …”
Oh, that all sounds so very nice… but you still can’t get “American Fries” there, now can you? Ha!
Actually, you can get McDonald’s fries in many places but I have not tried them so I couldn’t say whether they are American. Since I haven’t eaten them in the U.S. in about 25 years, I probably wouldn’t know in any case.
I’m enjoying this cultural exchange between imploder and hubrispie. I think I’d rather hang out with imploder - he’s funny. Health is important, but an order of delicious McDonald’s fries won’t kill you, hubrispie.
I live in Northern Colorado. I just got my 2006 property valuation (they value every 2 years) the assessed value went DOWN $10,000 from 203k to 193k. I’ve lived in this house since 2000 and for the 2000 valuation they tried to value it at $20k over what I paid for it.
This is the first time I’ve seen appraised values go down, although since last summer I’ve seen houses sell for less than appraised values.
My wife has been trying to convince me to buy a bigger house, and keeps looking at properties based on what she thinks we can get for our house. I was trying to tell her she’s being a bit optimistic. I think she’s starting to believe me.
For whatever reason, the yuppies think that Washington Park is the place. It is nice but basically it was working class housing built for industrial workers at the Gates Rubber Plant during WWII. The houses are small on small lots. They are generally well built but nothing special. I guess that worker housing is now between $450,000 and $2,000,000.
Why is it that the wives are always pushing for the bigger houses? I told my wife (I think someone here advised me to do this) that if she wants a bigger house that she needs to go out and get a job that will cover the increased mortgage payment, taxes, and loss of value that we would inevitably sustain. She’s starting to agree with me on my assessment of housing prices.
Mikey(2): This wife cleans her own house, and therefore likes less square footage. Maybe you can try that tactic with your wife.
If you do decide to move up to a bigger house, be sure to have Suzanne research it first.
I was at the gym today- they have a TV on but the sound was off. A Century 21 ad came on, and it started out with the words:
“Get the gold” (or something like that)
and I fantasized that the voiceover “The RE market is a piece of sh*t, so now Century 21 is into gold sales. Aladinsane rearched it”
Striictly fools gold.
Babinchak said. As soon as the real estate market rebounds, she said she’ll put the property back up for sale.”
And when cows fly and kristie alley loses 100 pounds……
Rebound in phoenix? Good luck. There is so much construction going on. I drive by this condo project in Mesa once in a while, and it’s in a really crappy part of Mesa - Cash checking places on every corner. The Condos are in a gated community, but the “backyard” is so close to the property wall that you literally could not to a jumping jack back there. Its laughable.
Larry Kudlow is right. I have never been so embarassed to be an American…
I’m embarrassed that Kudlow is an American, anyway.
“There’s a terrible affordable housing crisis in this country,” Frank said Wednesday. “Adding to the supply of housing is very important.”
Yep, inventory is what the market needs. 50K homes by the time they are done.
http://tinyurl.com/33zrx9
‘Our proposal brings the sheriff back into town.’
— Sen. Charles Schumer, D-N.Y
yea, Sheriff John. Engineer Bill and Chucko will probably show up soon too….
The Sheriff is the guy who serves the eviction notice.
Put another candle on the birthday cake, the birthday cake…
(You’d have to be from the city of angles and boomerish, to get it)
Was one of my favorit shows as a kid. Just missed the prize when they read B-day names. Current day, Hobo Kelly could give away a house made of junk.
“but I’m not going to get a good price right now,’’
or later, Asswipe! wait til the bank makes you an offer. In the mean time, enjoy the negative cash flow.
“‘I didn’t buy an investment property with the hopes of being a landlord, but I’m not going to get a good price right now,’’ Babinchak said. As soon as the real estate market rebounds, she said she’ll put the property back up for sale.”
Yeah, you and about 10,000 other realtors in the greater Phoenix area, not to mention probably 50,000 other bagholders in California.
She’ll no doubt enjoy being a landlord. For the next five years, at least.
“I didn’t buy an investment property”, CORRECT you flipped it to some MBS dipshit. You sold your credit for a comission, a lottery ticket and one huge pain in your ass till it’s all done.
NEW fires 2,000 more while CEO cries in conference call. BAHAHAHAHAHHAHAHAHAHAHAHAHA
http://blogs.ocregister.com/mortgage/archives/2007/05/new_century_gets_no_bids_lays.html
http://www.mercurynews.com/breakingnews/ci_5810259?nclick_check=1
“Morrice said, his voice quivering at times.”
LMFAO!!!!
Cry me a river bitch!
What’s he crying for? It’s not like he’s going to have to go to the rapey prison for his crimes.
Bah, he’s looking at a few years in Lewisboro PA, then out on probation at the worst. Easy street too probably with all that dough he must have stashed away. He should suck it up, crybaby!
It’s possible the guy actually had some remorse for his mistakes. Wouldn’t that be nice for a change? We all make mistakes, we just don’t all get rich doing it.
I doubt it. He is a crook!
He cashed out millions in options and is trying to act like he cares.
You’re very kind, Climber, but I doubt that he’s remorseful.
Read the comments
http://blogs.ocregister.com/mortgage/archives/2007/05/new_ce
ntury_gets_no_bids_lays.html
fixed link
“I hope everyone is taking notes. You are witnessing the collapse of PAX Americana. Our country will soon feel the incredible pain from our over indebted country. And from one former Republican, I hope everyone takes notes on who was in charge of the Presidence, House of Representatives, the Supreme Court, the Senate and the Governorship. Who is in charge of the SEC and the Federal Reserve, Republican appointees. Buy gold, save your money, we will need it!”
Preach it!
Is he advocating that we vote out the “presidence” and supreme court? Uh huh, someone needs remedial high schooling (and in this country, that’s pretty sad).
Totally OT:
Don’t one of you guys live in Sedona?
I’m supposed to vacation there in August and someone told me it was the monsoon season there - can that possibly be true?
I really would appreciate feedback on this crucial issue since i’m about to rent a house there for two weeks in August.
Thanks for feedback.
I used to do that in the summer too but I did it in July. Man, it’s hot up there in the summer, but I loved it.
Thanks TXchick - so the rains are not such a big deal? We love the hot weather, would you recommend Sedona in late August for hiking, golf, etc.?
I live in Phoenix. Sedona is a beautiful place. August is monsoon season but that should not bother you. They are brief storms in the evenings. Actually fairly enjoyable, in my opinion.
Just don’t be outside in one of them. They throw off a lot of killer lightning bolts.
I witnessed two lightning bolts hit an electric pole in Dallas last night. 5 seconds apart. It made a tremendous noise and then the poles start sparking like fireworks. That was scary.
I was up walking towards Mount Whitney in July of 1990, when all hell broke loose and I became an unwilling lightning voyeur…
A beautiful summer day, starting out at the portal, turned into Mother Nature’s (always bat’s last) version of fireworks.
I must have had a hundred lightning strikes happen within 200 yards of me, no place to run, no place to hide.
One person was killed on the summit that day.
Scary stuff, kids.
Early 80’s in the Black Forest south of Denver, storm comes in fast and lightning starts striking all around. You could tell it was going to hit because of the electricity tingling all over your body. Absolutely zero time between flash and boom. We could smell freshly scorched wood. Frightening. Exciting as hell, but frightening.
Thanks - I appreciate the feedback.
The Monsoon is actually really cool, it’s just some crazy weather for a couple of hours.
Remember the Stupid Motorist Law - if you are rescused by the Fire Department for trying to cross a flooded street or wash, you get billed for everything involved in the rescue.
Monsoons are beautiful blessings.
It’s the lightening that can be dicey.
As long as you’re not out hiking, you’ll enjoy it very much.
The smell of a wet desert is something everyone should experience.
Don’t schedule your flight for late afternoon or early evening. Other than that it should be OK. We’ve actually been having pseudo-monsoon weather all spring.
“Tom Adams, a VP for Colorado Springs-based Keller Homes, suggested many homeowners also took out second mortgages and used the money on vacations, cars or other personal items. The result is that some owners haven’t built up equity. When they go to sell, they have too much debt and don’t have a nest egg to use to move up into a newer, larger home, Adams said.”
He’s right about the first part, but he has overlooked the why. Springs has lost a butt load of tech jobs these past 5 years. A lot of those laid off folks wound up with lower paying jobs, so they borrowed to keep up their lifestyle, hoping for better times to return soon. Also, there wasn’t that much appreciation in Springs. A 250K house in 2000 might fetch 300K today.
Some of us laid off tech workers that were in Colorado Springs are now in other cities.
Sometimes I think that the Colorado tech bust had a silver lining: we didn’t get the pricing run up that our Rocky Mountain neighbors did. Who would have thought that houses would cost more in Bozeman than Ft. Collins. As I always tell my freinds in San Diego, you can get a pretty nice house in the Loveland/Ft. Collins area in the low 200’s. A comparable house in the Escondido/San Marcos areas would have commanded 600K at the peak, much more in areas like Rancho Bernardo, Scripps Ranch or Poway.
“Homes sold this year in northwest Aurora had an average price tag of $111,250, down $19,000 from last year, according to Banka’s data. Houses in southeast Aurora bucked the trend, selling for an average of $313,153 in 2006 and $396,443 this year, although well below the average asking price of $430,806, according to the same data.”
HEY WAIT A FRIGGEN SECOND. REAL ESTATE NEVER GOES DOWN.
LOL!!!!! Sorry NAR Chimps they do go down and the decline is going to be huge to get some reality back into house prices.
“‘I didn’t buy an investment property with the hopes of being a landlord, but I’m not going to get a good price right now,’’ Babinchak said. As soon as the real estate market rebounds, she said she’ll put the property back up for sale.”
Hey stupid fool. You better be prepared to have negative cashflow for a long time before you breakeven..DOLT!
There is no hope of break even durning her lifetime.
When you look at lost opprotunity cost and the compounding interest she would be much better off having never touched it!
Comment by HARM
2007-05-03 13:33:19
How about a law requiring full documentation and qualifying the borrower based on the full amortizing interest rate vs teasers (no “liar loans”/
HOW ABOUT A DOWN PAYMENT OF 20%?
THIS WOULD SHUT DOWN THIS PONZI SCHEME.
How bout making people pay their debt no matter what?
How? Someone that makes $20K a year has no chance of paying off a $200K debt. Interest alone is more than they earn.
How about dropping “means testing” from Chapter 7 bankruptcy (added to 2005’s bankruptcy ‘reform’ bill)? That way, even FBs who cannot mail in the keys (because they refi’d and/or HELOC’d into full-recourse loans) can get a “fresh start” without shafting all us responsible savers/taxpayers in the process?
Oh, wait. That would shaft the banksters and reckless, sleazy subprime lenders. Can’t have THAT in our brave new world of “Privatize profits, Socialize risks” now, can we?
I allways believed that this was the key flaw in our banking system. As soon as the banks put any onus of risk on anyone else it start a race (between banks) to the bottom we have seen time and again. If there was no way to hold a debtors feet to the fire banks wouldn’t make shitty loans and the very destructive and underappreciated misalocation of funds would be greatly reduced.
If a private borrower tell a lender FU that should be the end of the conversation. Pisses me off to think about public funds (civil infrastructure) used to help these lenders! F#$k them! Whey the hell is my problem (taxpayer) that you lent money to a deadbeat.
So your borrower didn’t pay you back? Why did you lend to him?… huh?… why? I’ll tell you why, you thought you could come into my court and waste taxpayer money sloving problems created by your shitty business practices.
Case denied! GTF outta here and don’t come back or I’ll hold you in contempt and lock you up durning you busy time in the check place 1st-5th and 15th-20th. I strongly suggest you don’t loan money to people that won’t pay you back and demand that when you do that you never bother this court about it again!
Aw, c’mon, Rich, don’t pull your punches. Tell us how you REALLY feel!
My agent (exurbs Northern VA) told me today that the spring market is over. She has 18 listings, and last weekend only 1 showing.
(HAL’s shutdown]
HAL: I’m afraid. I’m afraid, Dave. Dave, my mind is going. I can feel it. I can feel it. My mind is going. There is no question about it. I can feel it. I can feel it. I can feel it. I’m a… fraid. Good afternoon, gentlemen. I am a HAL 9000 computer. I became operational at the H.A.L. plant in Urbana, Illinois on the 12th of January 1992. My instructor was Mr. Langley, and he taught me to sing a song. If you’d like to hear it I can sing it for you.
Dave Bowman: Yes, I’d like to hear it, HAL. Sing it for me.
HAL: It’s called “Daisy.”
[sings while slowing down]
HAL: Daisy, Daisy, give me your answer do. I’m half crazy all for the love of you. It won’t be a stylish marriage, I can’t afford a carriage. But you’ll look sweet upon the seat of a bicycle built for two.
And what is the only story to make the local paper’s web portal today?
http://www.azcentral.com/community/scottsdale/articles/0503sr-biz0504realestate-ON.html
“Scottsdale’s redevelopment boom the past few years has brought several thousand new condominiums to downtown, most of them in a lofty price category of a $500,000 and up.
Sometimes way up.
That has some citizens wondering where the affordable lofts and condos are for people of normal means.”
Answer:
1) Be happy you can’t buy into this down market.
2) 3 months away when those $500K units are renting for $1000 a month.
UNDERSTATEMENT OF THE YEAR nomination….
“David H. Katkov, president of PMI Mortgage Insurance Co., a division of the PMI Group, said the swing back to the use of PMI grows not only out of weakness in the subprime market but also a sense in the industry that “some of the exotic mortgage types were inappropriate for many buyers” and that conventional mortgages with PMI made more sense.”
http://www.azcentral.com/business/articles/0503biz-mortgage03-ON.html
A SENSE in the industry that some mortgage types were inappropriate? Oh, is that where this term “preditory lending” came from.
These house flippers are nothing. Check out the story that Yahoo has posted about a cousin of “Tractor” Traylor buying apartment complexes in Traylor’s name to launder drug cash:
“There’s a lot of great deals out there for buyers but there’s also a lot of doom and gloom”
I’m trying to interpret this. In my experience reading up on RE, people refer to “doom and gloom” as what happens when suddenly, regulary people are able to afford a decent, palatable home.
To me, gloom is what I’m facing in Utah right now. “Gloom” is the fact that the tree-fort I built when I was 11 was built better than the only crap my husband and I can afford on a six figure household income…and it’s probably bigger too. Renting is miserable: neighbors control whether I get a good night’s sleep, I can’t have a pet, I feel like i’m in a hospital with stark white walls and cheap carpet that I am not allowed to upgrade…and we have NO tax deductions. Yet I prefer it to shoe-horning myself into 1200 sf of generic beige, cubic stucco. That, to me, is gloomy.
When they go to sell, they have too much debt and don’t have a nest egg to use to move up into a newer, larger home, Adams said.”
Isn’t the “move-up” market dead?