Post Local Market Observations Here!
What do you see in your housing market this weekend? An auction? “The auctioning of a large condo conversion project in Baltimore County drew a crowd of gawkers yesterday but only one bid, from the foreclosing lender. It is one of at least three local projects owned by Triton Real Estate Partners that have been or are scheduled to be auctioned.”
“Auctioneer Daniel Billig, standing on the steps of one of the renovated Colonial-style buildings, practically pleaded for more bids. ‘You can give me one-million-500-thousand,’ Billig said through a loudspeaker. ‘You won’t insult me.’”
“Tim Dobson, whose family rents an apartment there, mused about the conversion plans, and about how hindsight is always 20-20. A sign at the complex promised that a pool and clubhouse were ‘Coming Soon!’ but everything is up in the air now, he said. ‘I feel sorry for the guys that bought the condos,’ he said.”
Slowing sales? “According to statistics from the New York State Association of Realtors, 35 single-family homes were sold in Cayuga County in March, down from 56 reported during the same month a year earlier.”
“‘It’s the slowest its been in five years,’ said associate broker David Young, who’s been in real estate for five years. Young sells property in four counties, Cayuga, Onondaga, Seneca and Wayne, and said Cayuga has been stagnant this year.”
“‘Auburn was on fire this time last year,’ he said.”
Some statistics? “The ratio between house prices and rental rates in several of China’s leading cities has soared well above levels that often indicate a property bubble, the Xinhua agency said on Saturday.”
“An increase in house prices not matched by a rising rental market can signal an unsustainable price spiral, the researcher said. ‘The international warning line is 1-to-200. Once the ratio goes over the line, the market is in danger of a bubble,’ the report quoted Shan Jingjing saying.”
“In the downtown areas of the four cities Xinhua listed, however, the ratio had already reached between 1-to-270 and 1-to-400, the report added.”
A fire sale? “A hedge fund made a $58-million winning bid for the remaining mortgage portfolio of bankrupt sub-prime lender New Century Financial, the fund and New Century creditors said Friday.”
“Ellington Management Group’s bid amounted to only 34 cents on the dollar. The portfolio includes home loans and mortgage securities with a face value of $170 million.”
“Many of the loans are in default, and ’some are probably worth nothing,’ said Larry Penn, vice chairman of Ellington.”
Some statistics? “The ratio between house prices and rental rates in several of China’s leading cities has soared well above levels that often indicate a property bubble, the Xinhua agency said on Saturday.”
Check it out, China’s press is more honest than ours.
That is a consequence of having a well-educated populace. It makes it harder for the MSM to propagate lies.
Umm, kudos to Xinhua for allowing some truth to filter through to the masses in this case, but China leaves a great deal to be desired on that front as a whole.
The Empire of Lies: The twenty-first century will not belong to China.
http://www.city-journal.org/html/17_2_china.html
I visited a Matthews development here in Bakersfield, Ca. A 1550 sq ft home “house of the wk on sale for 239k” normally 291K. Poor souls; who would buy not on sale? I also visited a development besides a major freeway: at least 8 of the ten homes that were built had over grown lawns and were already in disrepair. Definetly a bedroom community for angelinos. The bleeding will not stop here. Lowest building permits in 7 yrs. Median income household 45k median price 300k. I asked the sales rep what the profit margins were on these homes and she said she did not know. I think buyers have the right to know such things. what say you?
“what say you?”
They’d just lie about it. Builders have made obscene profits during the bubble. They can cut those margins way back and still keep their subs employed, which, combined with lower costs for many building materials, will allow them to undercut reseller prices almost indefinitely. IMO.
Yes , call the subs and tell them to lower their bids by 10-20%. Where have I heard that before?
I asked the sales rep what the profit margins were on these homes and she said she did not know. I think buyers have the right to know such things. what say you?
I think that is a little to much, they will lie to you anyway. Are you going to Buy or just trying to rake the guy over the coals for your own info?
Hopefully b, rake over coals.
Up here in Yolo co., I’d seriously consider a 3/2 1550 for 239K. The most you can get around here for 239k is a 800 sqft 2/1 built in 70s without a washer/dryer hook up for the unit and 300 mo HOA fees. **smacks head on desk repeatedly**
Inventory, per Zip Realty:
TAMPA
01/21/07 59,865
02/24/07 62,658
03/24/07 63,931
04/21/07 64,299
05/05/07 63,694
MIAMI/FTL
01/21/07 103,131
02/24/07 109,638
03/24/07 111,863
04/21/07 114,582
05/05/07 114,204
ORLANDO
01/21/07 32,341
02/24/07 34,398
03/24/07 35,971
04/21/07 37,267
05/05/07 37,450
PHILA
01/21/07 32,698
02/24/07 32,552
03/24/07 33,729
04/21/07 35,898
05/05/07 36,900
ATLANTA
01/21/07 57,620
02/24/07 61,895
03/24/07 65,107
04/21/07 69,753
05/05/07 70,867
BOSTON
01/21/07 42,170
02/24/07 42,870
03/24/07 45,429
04/21/07 48,789
05/05/07 50,566
BALT.
01/21/07 46,025
02/24/07 45,877
03/24/07 49,506
04/21/07 55,686
05/05/07 58,033
hmmm…very interesting.
Phila’s inventory has steadily increased from Jan 21 thru today. By about 10 percent. That’s not supposed to happen after the Super Bowl or in the springtime when the daffodills bloom and the robins chirp or squawk or whatever it is those little ba$tards do.
Waiting for that Spring Bounce, waiting…tapping fingers, waiting some more…
These numbers are wrong. Didn’t you hear the NAR’s talking point that inventory dropped from February to March?
Do you have the inventory for New York City?
Alas, Frank you ask too much. NYC doesn’t participate in the MLS system, which makes inventory very hard to track. But here’s a minor-leauge example of what’s happening:
Last year I tracked listings that popped up with the word “sale” on nyc craigslist. They ranged in the month of April around 3000-4000 listings each day I searched. This April, they range around 5000-6000 each day — the topping over 6,000 is a very new thing btw - happened only in the past couple of months. (many more listings come up under the word “family” –as in one family, 2-family etc but I just used ’sale’ to capture different kinds of properties.)
Los Angeles?
It looks like East Coast real estate always goes up — at least in terms of used home for sale inventory…
In case this wasn’t posted.
Ditech.com to move loan processing to Phoenix
Costa Mesa-based Ditech.com is moving its loan processing operations to Phoenix and is asking 175 employees in Orange County if they want to apply for positions there or leave the company.
The move is designed to save money, said Stephen Dupont, a spokesman for Ditech. He said 471 employees will remain in Costa Mesa, mostly sales personnel tied to its call center. Here’s a release:
Ditech.com, a subsidiary of GMAC Financial Services, will relocate its Consumer Services Operations group from its Costa Mesa, Calif., facility to its Phoenix, Ariz., facility. The intent of the decision is to increase operational efficiencies and to reduce overall operational costs.
As part of the decision, Ditech will relocate approximately 175 positions from Costa Mesa to Phoenix. Affected employees in Costa Mesa will be offered the opportunity to apply for similar positions in Phoenix. Current employees in Costa Mesa who choose not to relocate will be offered severance packages, including outplacement services. The company will continue to maintain its sales and administrative operations in Costa Mesa.
The decision will reduce employment at Ditech’s Costa Mesa facility from 652 to approximately 471, and will increase employment at the company’s Phoenix facility from about 30 to about 205. The relocation will be completed by July 31, 2007.
Oh please don’t tell the realtors in Arizona that there might be 150 new jobs coming to Phoenix . This will be gounds for a rally in the market …he he .
Smart move by Ditech. I’m impressed by the speed of the move. Any bets on how long until those other OC employees are either shown the door or offered jobs in Phoenix?
OC will show the signs of the pain soon. (Ok, post Warren act 60 days… although I heard New Century didn’t honor. Rumor or fact?)
Its getting a little speed (not much, but you can see a little).
Got popcorn?
Neil
I live in the Harborview area of Newport Beach. Most people here are in La La land. Prices have dropped maybe 10% from peak. We have 1337 homes in our onclave. Price on these homes are 1.2 to 4.0 million on the high side. 46% of households (414) earn $150Kor more (seems low to me for cost). I expect a 50%
decline in prices over 6 years. People hate me for my veiws.
“People hate me for my veiws.”
Because you’re right and it is going to cost them that they didn’t think likewise in time. Ya pays yer dime an’ ya takes yer chance. Reminds me of the”crab theory” that used to be a part of the Franklin Day Planner training. People love to get ahead together and if they fall, they want to all fall together; woe be unto the smart ass who tries to get ahead of the pack.
Affected employees in Costa Mesa will be offered the opportunity to apply for similar positions in Phoenix.
Notice that this isn’t an employee transfer, it’s a job transfer. IOW, they can reapply for their old jobs at reduced wages, ala Circuit City.
McMansions for sale everywhere.
Who’s the market when every boomer in the world is lookin’ to downsize and every Gen X,Y, Z’er has been scammed into $50/$100k worth of education debt?
The FHA would like to ask you, the taxpayer, to help enable low income buyers to purchase those McMansions. Let’s hope the Senate “Just Says NO” to the House once again.
——————————————————————————
U.S. House panel passes FHA reform
Thu May 3, 2007 4:15pm ET28
WASHINGTON, May 3 (Reuters) -
…
The House of Representatives Financial Services Committee approved by a vote of 45 to 19 a bill to reform the Federal Housing Administration, which guarantees loans to low-income borrowers and helps them qualify for low interest rates from lenders.
…
Last summer, a measure very similar to the one debated this week passed the entire U.S. House of Representatives by a vote of 415 to 7, but fell flat in the Senate.
http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2007-05-03T201502Z_01_N03371163_RTRIDST_0_USA-CONGRESS-FHA.XML
415 to 7? Bailout apparently is a bi-partisan notion.
Why not just close up the FHA? Who needs it, anyway?
Use its budget for this year to fund the bailout. Next year its budget is returned to the taxpayers.
FHA goes away and no one notices.
A large number of people need it - but they do not and will not ever be able to qualify. The FHA budget shows surpluses (California has asked that the surplus be turned over to it, since very few houses in California are FHA), the rest of the HUD budget is for social programs (Inner city rehabs, Section 8, Income assistance and myriad other social programs - without which this country would be far worse off)
I encourage all to read the OMB’s
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
2007 White House Budget of the United States
press release
http://tinyurl.com/3dhhzo
“Over the past three years, FHA’s volume has fallen by about 70 percent as a result of the growth in the sub-prime market. The inability of FHA to keep pace with advances in mortgage products and increases in housing prices has resulted in further volume drops.”
“Premiums for FHA mortgage insurance currently do not vary according to a borrower’s credit risk or the expected cost from defaults, causing better borrowers to subsidize weaker borrowers. This has driven safer borrowers to seek alternatives offered in the conventional market and pay higher prices than they would have if offered FHA risk-based pricing. The Budget proposes tiered risk-based pricing to address this issue, which will decrease homebuyers’ costs, and thereby increase access to homeownership. This type of pricing will enable borrowers to know why they are paying certain costs and how to lower them.”
I know exnvmortgagebroker was and is not worried about an FHA bailout, Mrincomestream is no longer worried and I have other things to worry about. LIke will I get enough rain this summer. A much more pressing worry.
Did exnvmortgagebroker ever follow through and explain why exactly we shouldn’t be angry about this? Because it sounds pretty bad to me.
ZipRealty.com’s SD county inventory (SFRs+condos) is poised to broach 18,000 by next weekend (it has been increasing by 220 homes a week on average since Feb 1).
“Your search has returned the first 200 of 17856 homes”
Sounds like you’re going to get a deal over there GS, FHA shenanigans or not?
I am not sure how much of a deal it will be if I have to wait until 2012 or later for prices to stop slowly deflating.
All properties don’t deflate at equal rates, just find a really motivated seller and be done with it.
That time is a few years out. Most sellers here are clueless. For example, there are over 200 SFRs of vastly different description currently listed on the SD MLS at prices between $599,000 and $600,000. Apparently almost everyone here thinks their home is worth $600,000. I will not buy until denial gives way to acceptance (and there are the anger, bargaining and depression phases these sellers will have to go through first).
The stages of grief Kuebler-Ross identified are:
* Denial (this isn’t happening to me!)
* Anger (why is this happening to me?)
* Bargaining (I promise I’ll be a better person if…)
* Depression (I don’t care anymore)
* Acceptance (I’m ready for whatever comes)
http://www.cancersurvivors.org/Coping/end%20term/stages.htm
GS: it will be a great deal in five years, assuming you don’t get sick worrying in the meantime. Enjoy the ride down.
I don’t worry too much or lose sleep over the housing bust, though I am somewhat concerned about protecting savings during a War on Savers. Once I get the latter issue sorted out to my satisfaction, I will sleep even better.
I’m late to the conversation and in need of enlightenment. What “War on Savers?”
As for saving, there’s a war on saving now in progress. The war has been declared by the Federal Reserve. With this nation now saddled with $38 trillion in total debt, there’s no backing off, there’s no inhaling, there’s no easing up, there’s no correcting. The thought of a severe recession is terrifying to the men who run the Federal Reserve. The thought of deflation sends the Fed into a panic.
Huge and rising levels of debt can only be “handled” by perpetual inflation. Today, relative to the current mountain of debt, there are no savings. This nation couldn’t take a severe recession.
http://www.investmentrarities.com/thebestofrr09-22-03.html
Not sure if this post went through…
BEST OF RICHARD RUSSELL
September 22, 2003 — There’s a silent war in progress. I call it “the war on savers.”
http://www.investmentrarities.com/thebestofrr09-22-03.html
Just did another enlightening ziprealty.com search:
“All SFRs + Condos”:
Your search has returned the first 200 of 17886 homes
“SFRs + Condos w/ year built = 1998-2007″
Your search has returned the first 200 of 5078 homes
So 5,078/17,886 X 100% = 28% of the homes currently listed on the SD County used-home market were built during the bubble. I guess they aren’t making ‘em like they used to, if people are moving out of nearly-new homes in droves…
“Your search has returned the first 200 of 17911 homes”
The weekend has ended with SD ZipRealty.com inventory a short strike away from another inventory milestone of 18,000 SFRs+condos (up 20% from over 3 1/2 months time).
Mortgage Equity Extractions: Where’s the Beef?
http://wallstreetexaminer.com/blogs/winter/?p=746
“Even more astonishing was that 82% of these new mortgages were for cash outs of 5% or more than the old mortgage.”
…
“Evidence is also strong that housing prices have dropped 2-5% since year end 2006, adding more fuel to a contagion.”
Appraisal fraud has to be alive and well to reconcile rising MEW valuations with dropping home prices.
The pressure on top policymakers (FOMC folks) to reflate the bubble before falling prices obviate further MEW lending must be immense!
Ashland, OR: Median Sales price in April down 10% YOY. Same county-wide.
Inventory slowly climbing. Days on market increasing. Sales prices still in the “wishing price” category.
We’re a little behind the curve here in Oregon, but I think Jackson county is slowly starting to face reality. While Ashland is “special,” the house prices here have been buoyed by the same forces that are now reversing everywhere.
Things should get interesting in the fall!
I think it’s creeping north from CA, and should encompass OR and WA soon. Rural WA home prices are laughable when compared to incomes. Real estate was the only thing keeping the economies going. In one particular county, there are 181 listings for homes on land between 1 and 5 acres. There are 10 pending, or roughly 5.5%. Most of these are on the lower end of the price spectrum. Not all of them will close, as it seems that mostly low income individuals are trying to jump in. Inventories continue to increase, and certain listings are approaching one year on the market.
My house was on the market for 10 months in Olympia Washington. Very upscale neighborhood, 1/2 acre, single story 4 br/2.5 ba, 2700 sq ft. I sold it for 505K. Now I can take 30K and pay down educational debt and sit on 100K cash until So. Cal. becomes more reasonable. Renting in the meantime in Rancho Cucamonga.
I’m in Portland, and we seem to be in the same place. I’ve watched some new condo developments in the burbs sit at the ready-to-pour-foundations point for some time. Ballpark, I would have to say building activity has dropped at least 50% from last year. This site has me looking forward to the Sunday paper and its real estate ads. Many “Move in for only $X per month” ads now - anything to keep prices up. “Free” furniture and cars are becoming more popular.
Land that sat all last year is sporting sold signs.
Another lake view home sold in 13 days. This is lake view not lake front….lake fronts not moving so much….$25k/yr taxes maybe?
Home w/big price drop that I mentioned last week sold w/in days ($100k less than original list price last year).
I have started to hear mumbles that things are slow. One realtor online said the (Syracuse) “market sucks”.
Take a look at the number of new High Rise Conods being constructed in the Pearl, South Waterfront, Nothwest 23rd and down town. Building activity has not dropped in fact the builders are franticly trying to get the new towers completed and pre-sold. Not to mention all the inventory of McMansions in the south west and out on Bull Mountain. Check the local fish wrapper for the $450 for two year deals on a 500K note they are pedaling. Portland is just getting poised to have a huge inventory spike late this summer.
DENIAL, of there being any significant problem with real estate, is the best description of what is occurring in Massachusetts and metro-Boston. Local print media particularly the Boston Globe, which depends to a large degree on real estate advertising, has in recent weeks been proclaming a turnaround market rebound situation - which is very strange since all last year they invariably paraded on an endless stream of experts claiming the market was holding steady -with the exception of rare articles pointing out some problems.
The Cape Cod Times article (cited in this blog yesterday) which added a bit more realism may indicate some of the print media is finally being forced to conced the obvious.
Another local barometer is weekend Boston radio show 96.9 FM “BEST MONEY SHOW” which goes on the air at 2.00 pm today - where host/real estate lawyer Rick Shaffer announced last week - that “we are not going to see a bust in the bubble” and (apparently longer term) “prices will continue to go up” and strong economic segments such as “healthcare and tech” will keep the market strong, and anyone claiming otherwise is “dead wrong”
He was inspired by a front page article in the Boston Globe in a major top of the fold front page story last week saying healthcare and tech were very strong - with Massachusetts (which happens to now have newly elected ultra-liberal Globe favorite Gov Patrick in charge of the state) had a purported growth rate for the 1st quarter running at 4 times the national average
It appears the Globe does not understand the fact (or is intentionally ignoring) that the credit bubble unwinding (regardless of economic fundamentals) itself is creating huge problems in regards to real estate valuations
Most sellers in Boston Metro are still holding within 5% of late 2005 bubble highs, and brokers, supported by local media, are hoping buyers don’t notice that the bubble is in huge trouble.
If healthcare is booming, then sickness is too…I think that may
end up being a wash in the long run…If the boomers are in the
hospital, they are not buying homes.
Healthcare is what will part the boomers from their money, rather than passing it on to their kids. You watch.
It’s not healthcare, it’s retirement home/nursing home care.
It’ll be both. My in-laws have insurance and yet spend $800/month on prescriptions (of course, she has a taste for brand names rather than generics.) And they are ready to move out of a senior housing apartment for which they were paying $3700/month. They can’t get by without help from the kids.
Harry D~
Of course the BG has to cheer lead the market. Goddamn RE section in the Sunday edition is bigger than the rest of the paper.
Anecdotal evidence of where we are at……..
Some woman came to do an appraisal of my parent’s place on the northshore for estate tax purposes.
All she did during the entire inspection process was whine about having NO COMPARABLES for the report.
WTF? What’s your problem dearie…The Globe says otherwise!
Stable market my azz.
hd74man-
Sorry to hear about your parent.
Kimberly Blanton reports on the real estate topics at the Globe and I’ve emailed her asking her to do a story about how a taxpayer bailout would be unfair. Irresponsible borrowers and unscrupulous lenders should suffer the consquences of their actions. No story yet….
‘Prices still going up’. E. Kennedy teaching swimming lessons.Big Dig budget right on schedule. Pick out the biggest lie and send in with cracker jack box. hehehehehehehe
I just checked the Warren Group Website for Boston-area stats (am moving back there in June) and average selling prices seem all over the place. For example, Cambridge SFHs are down to $742.5K (from $975K in Jan. - March 2006), while condos are up (to $435K from $404K in 2006). In Lexington, both SFHs and condos are down (SFHs from $743K to $645; condos from $409K to $275K). In Boston, both SFHs and condos are up (SFHs from $1.725K to $1.927K, condos from $485K to $545K). See:
http://rers.thewarrengroup.com/
Northern VA Realtor:
Spring market is officially over, 18 listings last weekend, no showings.
http://novabubblefallout.blogspot.com/
9701 LAFAYETTE AVE
MANASSAS, VA 20109
List Price: $259,900
Prior Sale: $450,000 4/10/2006
Listing Date: 04/14/07
-42.2%
18174 CAMDENHURST DR
GAINESVILLE, VA 20155
List Price: $459,900
Prior Sale: $703,000 05/17/06
Listing Date: 04/24/07
-34.6%
3820 LIGHTFOOT ST #318
CHANTILLY, VA 20151
List Price: $284,900
Prior Sale: $430,000 11/22/2005
Listing Date: 03/17/07
-33.7%
129 WILLOW PL
STERLING, VA 20164
List Price: $239,900
Prior Sale: $352,000 01/09/2006
Listing Date: 04/27/07
-31.8%
2307 OLD TRAIL DR
RESTON, VA 20191
List Price: $349,900
Prior Sale: $510,000 11/14/2005
Listing Date: 01/11/07
-31.4%
RE in Manassas in May is moving more like Molasses in January.
Nice play on words….very true though. I track the Nova inventories, and they are starting to sprout up like a pack of hemorrhoids.
From Wikipedia
“A large molasses treacle tank burst and a wave of molasses ran through the streets at an estimated 35 mph (56 km/h), killing 21 and injuring 150.”
Boston Molasses Flood
January 15, 1919
Wouldn’t THAT look good on an epitaph! LOL
BOSTON METRO basicaly still in denial of there being any significant problem with real estate. Local print media (particularly the Boston Globe) which depends to a large degree on real estate advertising, has in recent weeks been proclaming a turnaround market rebound situation - which is very strange since all last year they invariably paraded on an endless stream of experts claiming the market was holding steady -with the exception of rare articles pointing out some problems.
The Cape Cod Times article (cited in this blog yesterday) which added a bit more realism may indicate some of the print media is finally being forced to conced the obvious.
Note that Boston radio show 96.9 FM “BEST MONEY SHOW” which goes on the air at 2.00 pm today - host/real estate lawyer Rick Shaffer announced last week - that “we are not going to see a bust in the bubble” and (apparently longer term) “prices will continue to go up” and strong economic segments such as “healthcare and tech” will keep the market strong, and anyone claiming otherwise is “dead wrong”
He was inspired by a front page article in the Boston Globe in a major (top of the fold) front page story last week saying healthcare and tech were very strong - with Massachusetts (which happens to now have newly elected ultra-liberal Globe favorite Gov Patrick in charge of the state) had a purported growth rate for the 1st quarter running at 4 times the national average
It appears the Globe does not understand the fact (or is intentionally ignoring) that the credit bubble unwinding (regardless of economic fundamentals) itself is creating huge problems in regards to real estate valuations
Most sellers in Boston Metro are still holding within 5% of late 2005 bubble highs, and brokers, supported by local media, are hoping buyers don’t notice that the bubble is in huge trouble.
At least your media admits there is a bubble, Here (Bozeman Mt.) the local media has printed hardly an story about the sub-prime mess. In a Monday business supplement, they had a story writen some local realtor saying there is no problem with sub-prime loan in Bozeman. No numbers, no facts, just her oppinion. The records at the Clerk and Recorders Office are all on computer. It is easy to find the total number of mortages, and how many are from any one company. In might be a shock to their readers that for three years, 2003,04 ,05; 20% of the motages in the county were form one of top 25 sub-prime orginators. If you got your news only from The Bozeman Daily Chronicle, you would think that the housing bubble is only happening in Los Vegas. But you can read puff piece, after puff piece about some developer, and their new development. This while the real estate section and the supplements get thicker and thicker.
That wouldn’t shock me at all Duane. Most of our acquaintances in Bozeman had some sort of option, interest only, ARM, whatever. And most of our acquaintances were relatively well educated, at least semi-professionally employed. I learned to keep my mouth shut at parties because the moment I said something like “I can’t believe how many idiots out there are getting into exotic mortgages”, it would turn out that the person standing next to me was one of those idiots.
Rationale: “Buy now, however you can, because it is only going to go up and you won’t be able to buy later.” Even here in tiny, off-the-beaten-track Pullman 30-50% of morgages originated from 2003-2005 were no down ARMs (sources: local builder and local credit union lender).
Ellington Management Group’s bid amounted to only 34 cents on the dollar. The portfolio includes home loans and mortgage securities with a face value of $170 million.”
“only 34 cents on the dollar” … if you bought a home in 2005 this could become your new return on your home value.
So…
It’s prettty safe to say that attempting to off houses, via the auction route, is pretty much finished?
From the Baltimore condo auction article:
“If the market hadn’t turned, this would have been a hit,” he added. “These units are so affordable.”
There’s a South Philly saying: “If my aunt had balls, she’d be my uncle.”
(oh wait a minute…I have an aunt who does have balls…)
Hermaphrodite?
No, just Uncle Rose.
She’s very assertive, to put it kindly.
Never seen assertive women here on the left coast that bore any resemblance to the over the top northeast stereotype…
It’s what toughens up the men in the Northeast. Dealing with harsh winters and überwomen will unsoften a guy right quick.
Tampa, FL
Just noticed all construction equipment is gone from Trump Tower site. Just an empty weed-filled lot with a chain-link fence. Guess they won’t be finished by ‘08.
I posted this in the Florida thread by accident. For context, a recent LATimes story mentioned that potential new car customers are backing out because of mortgage resets. Then this:
Featured quote from today’s LATimes business section:
“It appeared to us that consumers were just frozen”
–Brad Bradshaw
Nissan Motor Co.’s North American sales and marketing chief, to Reuters after his company reported an 18% decline in U.S. sales in April.
It appears to me that the pain is spreading from the housing market to other large consumer purchases. Nothing we didn’t expect, but now we are seeing evidence reported.
Apparently nobody in the Baltimore area with a subprime loan who is facing foreclosure is responsible for their dilemma…even though half the mortgages in this area last year were subprime. They were all victims of predatory lending. Speculators and the like don’t exist around here…
http://tinyurl.com/2qpyjj
Nikki — I assume your last sentence is meant to be sarcastic, but to set the record straight, households buying $600,000 homes on $30,000 are speculators, whether or not they are sufficiently aware of the fact.
“$30,000 household incomes”
I guess you didn’t click on the link.
Sorry — was in a hurry earlier. I guess we agree on one basic point, which is that borrowers share in the responsibility for buying stuff they cannot afford, a point which seems lost on Demo-ratic Congressmen who are rushing to push through unpublicized subprime bailout programs before much more SHTF.
GS, you’re getting just about as boring and repetitive with your demo-ratic stuff as Jas Jain was just before the end.
“boring and repetitive”
Repetitionem mater studiorum.
dieomos,
I guess I owe regular readers like you an apology for being boring and repetitive, but I want to make sure that nobody who reads here misses how the Demo-rats, who represent themselves as the party of the poor and oppressed, are actively selling out the middle-class taxpayer to the financiers on Wall Street.
I was just thinking that right now would be a fantastic time for hedge funds to “invest” in housing which will be just inside the proposed FHA limit once the Demo-ratic Congressmen get their bailout passed. They could then sell their investment homes to low-income buyers newly qualified to buy even more expensive homes they cannot afford, and transfer the liability for future foreclosures to the U.S. taxpayer through the FHA guarantee.
Campaign contributions would flow freely to reward the Demo-rats who pushed through the bailout bill, and low-income buyers would get to live for several years in homes they cannot afford until they get foreclosed a few years down the road, at which point in time another “Save Our Homes” bailout could be ramrodded through the legislative process.
What do you think? I believe this investment model has some promise.
diemos,
Are you taking the day off? I was hoping you could come up with an exciting and original response to offset the boring repetitiveness of my post, but I see that no thoughts are flowing forth from your keypad.
Sorry GS, my reply is lost in moderation hell. Perhaps you might take that hint and stop using your cutsey spelling of “the party that cannot be named” to bypass those filters. Ben has repeatedly asked that partisan politics be kept off the blog.
I agree with Ben. I only mention particular political parties in the event of one-sided backing of bad policy measures, like the proposal to turn the FHA into a government sponsored subprime lender.
and that’s the problem. The “other party that cannot be named” voted for it whole heartedly as it allowed them to cynically hide their bailout for their finance industry buddies. But somehow you never mention that equally true fact. That’s when analysis turns into partisanship.
I chide you only because your insights and analysis are usually excellent and I hate having to skip over your comments, which I’ve started to do whenever I see “that word”.
diemos,
Don’t worry, pal, the near-term part of this FHA bailout story will end in the next couple of weeks. Either it will pass the Senate, and become another source of long-term damage to the U.S. economy (which the good Lord knows is already on thin ice) or it will die in the Senate as a similar bill did last summer. And I will continue to only bring up political party names (or cutesy spellings thereof) when I see one side of the aisle mentioned in the media as disproportionately backing bad policies. I want to make sure that blame for bad policies is assigned where blame is due.
Very well. Let us all join together to hope that this idiocy dies a quick and well deserved death and that those responsible are identified and pilloried. Let us pray that our Senators acquire backbones and do what’s right for the country.
(Oh lord, we are so doomed.)
Bring back the GOP!
Anecdote: A house in my area (W. Hollywood, CA) just went on the market for $1.8 million. Looked it up on property shark, it last sold for $1.2M in mid 2005. So here’s at least one person who thinks he’s going to get a 50% return from what was arguably the national peak price time. Oh, and it’s a 2 bedroom. Hmm, $900k per bedroom, sounds good, where do I sign? Am I allowed to tip the seller for helping me out?
keep track of this please. I love to see people get their commupance. We’ll see.
It’ll probably be sold in a month or so for 1.5M, things don’t seem to be slowing in LA area.
It fools gold here in L.A… Sort of like biting into a rotten M&M.
Call it what you want, but there are still a lot of buyers, and a lot of renters too…I just advertised a vacancy and got a huge response.
Not rising either.LA is flat and has been for the past year and a half. I sold for 1.2 summer 2005. Sold in a week. My old house recently came on the market again (with no improvements) and sold for …guess what?…1.2 mil. (after 3 mos on the market)
deb posted a report over at CR that showed sales off the cliff and declining rapidly. Whatever GFs are out there are the last.
The real estate market is healthy in Mass. No problems. No Bubble.
News Flash: Massachusetts legislature to place moratorium on foreclosures.
(eyes rolling up, good grief)
Denial; that’s what’s going on here in southern New Mexico.
Buyers should have a competent home inspection performed with an eye open for termites. Be especially careful if the Seller is a Realtor. Do not go with the Home Inspection Service or Pest Inspector recommended by the Realtor (Seller’s Agent).
And for an area that lies in the flood zone of the Rio Grande, prices are still waaay too high. And factor in the fact that there are very, very few storm drains. Thing is, the locals really believe in the catch basin (gravity) theory of flood control. Problem is, and I witnessed this, the flooding tends always to circumvent the catch basins and stays in the streets. Walls are easily washed away since they are not built to earthquake standards (rebar enforced) - just cement grouting piled on top of rocks piled on top of each other.
~Misstrial
The pilings upon which most buildings of centuries old Boston’s Back Bay buildings were built upon are rotting due to falling water tables.
The cost to cure is to the moon.
Buyer beware.
Well, they needed a new boondoggle to trump the “big dig”.
I just returned from my honeymoon in the Poconos (Marshalls Creek/Stroudsburg, PA) and this is a very nice area I will admit, but suffers from an overload of real estate agents, builders, etc….just real estate signs and businesses galore. One of the locals told me she was considering leaving because it no longer has the same feel that it once had prior to the housing bubble. Seems as though many NY/NJ people have relocated there to escape high taxes and home prices, but commute 1.5 hours (if there is no traffic) to their jobs.
“Seems as though many NY/NJ people have relocated there to escape high taxes and home prices, but commute 1.5 hours (if there is no traffic) to their jobs.”
This is a phenomenon repeated throughout the country. People flee the high housing prices and move to the less expensive outskirts leaving few buyers for the higher priced properties. Who is going to buy all of the expensive stuff?
1) the people that realize the mistake of living so far from work and come back.
-or-
2) The places don’t stay expensive if nobody buys them.
You’re on your honeymoon counting realtors???
Now there’s a real estate junkie!
The purest expression of blogger dedication. Way to go, Steph.
Here’s the tale of the smart neighbor today. My parents live in an Alexandria, Va. Pulte development called Seminary Ridge — almost all 4 br, 2.5 bath colonials built in the early ’70s in a convenient, quiet area. Houses originally sold in the 70-80k range.
Around 2005 or so, we finally started seeing fairly standard houses in the neighborhood sell for over a million bucks. (There had been a few houses built on extra large lots, with susbstantial additions that had topped the $1mil mark earlier — but around 2005 is when we finally say just-plain-old-nicely-maintained houses fetch 7 figures).
That has been a kind of sticky point — seen a few at 1,075,000 typre pricing in recent years - that kind of thing. Usually only about one or two for sale in the development at any given time.
Now there are three — one for a straight million that has been on the market for a month or so. Not a great house, not a bad one. There’s another that recently went “pending” listed at $980,000 (don’t know what contract price was) — and then, we see a neighbor’s house, across the street from my parents house on the quietest, best cul-de-sac in the place — and, it’s a gem. I figured it would be a million at least, maybe more — as it is definitely more desirable than the others — but the neighbor across the street is a sharp guy — and the house is listed for $949,000. (And they’ll make plenty — they’ve lived there at least 10 or 12 years, I believe)
I’m not saying the house is a great deal, and I’m not saying these kinds of houses in my folks neighborhood won’t be fetching $100k less two years from now — but one thing I do know: this house is going to sell a lot quicker than the current million dollar baby still on the market (and also the 980k one if the contract eventuall falls through).
AND, when the prime house sells for $949K it will set the new “High Bar” for price in the area…Appraisals on the overpriced properties now become a problem…
zpz,
Yes, smart people like this will definitely lead prices down (and fast). This guy is simply blazing the trail, showing others how it’s done.
South Florida: I had vertical blinds installed this morning. I casually asked the guy if he’s busy these days. He said that he’s super busy installing blinds in new houses. The installer went on to say that these are all high end “mini mansions” in Coral Springs and Parkland that were bought up by speculators to flip and now that they can’t sell they’re renting them out to cover some of their expenses. The tenants are demanding window coverings because “sure as hell I’m not putting up blinds in your house…”
Many wannabe flippers are now taking Landlording 101 at the University of Hard Knocks . Too bad the RE hypster books didn’t have a few chapters on that.
Interesting research. When our lease was coming up for renewal, we looked at some large SFRs, to compare. Most had either no window treatments or very inadequate ones. I would never lease an unfurnished place for a year+ unless it had nice window treatments.
“Many of the loans are in default, and ’some are probably worth nothing,’ said Larry Penn, vice chairman of Ellington.”
We’ll find out what they are worth after the Demo-rats get their FHA subprime bailout proposal through. I expect some future campaign contributions coming to Demo-ratic Congressmen from the likes of Mr. Penn.
In Rancho Bernardo West (SD 92127), the number of listings has increased from 200 to 238 (19%) over the past three months, while the median list price has dropped from over $1,400,000 near the start of February to right around $1,300,000 as of this weekend ($1,304,950 to be exact), for a 6.8% drop in list price.
Given the median list price has dropped by 6.8% in response to a 19% increase in listings over a short time period (when the supply of homes is nearly constant), we can estimate the price elasticity of demand as
-(% change in price)/(% change in quantity) = 6.8/19 = 0.358.
As in, they haven’t had enough pain yet. Turn it up, Igor!
Was out and about this morning, and took the impression that Robert Cote’s silent spring has arrived. Though the number of SD county listings is up by close to 20% already since January 31, there were no for sale signs on every street corner, no open house signs and no realtor-mobiles in evidence anywhere along my route. I am guessing the realtors are staying at home this weekend to avoid having to feed gasoline into those Escalade gas tanks.
Cote’s a genius.
I miss his posts.
Is Everyone staying home this weekend?
I’ve never had an easier time driving around the south bay on a Saturday. We were able to complete one more errand than normal thanks to lighter traffic. Our favorite breakfast place was walk in rather than a 20 minute wait…
This is two weekends in a row. Don’t get me wrong, as we’re doing last minute wedding errands I’m happy to be able to zip around! The one exception is Cosco, the crowds were normal… But Sams club had no wait (one didn’t carry what we needed… so we went into the other).
Is it due to the kids having spring break? (But that should increase the crowds…). Ok, educate me bloggers, what’s happening?
Got popcorn?
Neil
Gas is, uh, really expensive.
Neil — I was thinking along similar lines while out and about with my boys yesterday.
San Diego has not yet advanced to the 21st Century’s innovation of “smart traffic lights” (people are so wealthy here that they don’t mind wasting their leisure time staring at red lights). Consequently, the lights are timed for “typical” traffic conditions. Typically a couple of years ago, the cross traffic would have kept on flowing up until the point when the light changed, but now there is a long pregnant pause every time you get stuck at a stop light. Where have all the SUVs gone?
I do like SD’s three-section freeways, though.
My wife and I noticed the same in the Phoenix Area. We were finishing some shopping for our baby who’s due in about two weeks. Bell Rd and the West 101 loop are crazy during the weekends (this area is known as Arrowhead). I couldn’t believe how “dead” the streets and stores were. We ate lunch at Rubio’s and there is usually no where to sit. Today at 11:30, there were six people sitting inside and out! Parking lots were almost empty in front of all the stores along Bell Rd. We attributed this to the rise in gas prices but if you look at the bigger picture, money is getting much much tighter.
Inventory in Portland Maine is up 11% since the very end of last year. The figures below are for single family homes in Portland (04101, 04102 & 04103), Falmouth, Cumberland and North Yarmouth.
352 9/6/2005
394 9/19/2005
400 9/29/2005
425 11/3/2005
406 12/5/2005
352 1/3/2006
344 2/2/2006
345 3/3/2006
351 4/4/2006
409 6/4/2006
477 7/22/2006
467 9/9/2006
437 11/5/2006
355 12/15/2006
311 12/30/2006
269 2/2/2007
289 3/2/2007
321 4/5/2007
346 5/4/2007
The price bracket that has seen inventory rise the most is under $200,000. I’m not sure why.
13 9/6/2005
19 9/19/2005
19 9/29/2005
26 11/3/2005
30 12/5/2005
30 1/3/2006
25 2/2/2006
26 3/3/2006
23 4/4/2006
20 6/4/2006
19 7/22/2006
32 9/9/2006
40 11/5/2006
29 12/15/2006
29 12/30/2006
24 2/2/2007
15 3/2/2007
22 4/5/2007
27 5/4/2007
“The price bracket that has seen inventory rise the most is under $200,000. I’m not sure why.”
This is the bracket that would most immediately feel the effects of the subprime implosion.
Many, *many* for sale signs around the west hollywood area. I like to count them as I drive up crescent heights to my apt. Lots of open houses, saw a few properties with completely overgrown lawns. Even apt. complexes had up banners looking for tenants.
Construction seems to be going ahead as usual. Seen a few boarded up houses that I guess are going to be torn down and replaced with ??? Lots of condos going up.
The real estate section today was ginormous. Saw a few houses modestly marked down.
One open house was to rent or lease a nice house on Gardner north of hollywood. Saw like 3 for rent signs and some banners? or flags waving or something. The wierd thing is the latino family chilling on the porch, looked like the owners, but I would’ve expected to see them in Garden Grove, not that area of town. Flippers maybe? Come think of it, they’ve been trying to sell that place forever, I guess they wanna at least get a few bucks from rental.
All the for sale signs with the little boxes that have flyers seem to be full. I remember when these were *always* empty.
Interesting times.
One more observation regarding rural western WA. It seems like the mid range and high end is, for the most part, dead in the water. The majority of properties moving are the bottom of the barrell, which people are lining up to overpay for. It boggles the mind. Once the nicer properties come down in price, these recent GF’s are going to get hosed. It seems that there is still a “buy now or be priced out forever” mentality driving people to gobble up all of the garbage which would never sell in years past.
Price drops a bit and people rush in to grab the “deal”. Seeing that around here too.
It’s interesting that buyers are not quite putting 2 and 2 together. Price per square foot-wise, things have been dropping on a monthly basis. Seems like a no-brainer to just wait another month. Guess they’re not paying attention to the market.
There will be an auction of 32 Spring Lake Court condos in Anaheim on May 20th. The minimum bid is $240K which they claim is 40% off the original asking price. the number is 800 - 522 -6664 #7533. The website is http://www.springlakecourt.net. 2&3 bedrooms and 1 to 2 baths. I have a hunch that this is a apartment condo conversion.
LA’s Westside. I have been looking around for a nice 3 bed rental, house or condo. The 2 bed condo we rent is tight for the 4 of us, it’s been for a while, but the bubble is taking forever to deflate in LA. There is nothing even remotely decent for rent under $2,800 in this area. Saw one little barely over 1,000 sq foot Spanish in a so-so part of Beverlywood for $2,400. I would not pay more than 500. It was a dump, it made me depressed. Then I thought that even a dump like that without any redeeming quality would go for at least $700K in LA and you would still be better off renting it than buying it.
In the meantime, the real estate section of the LA Times seems to be on steroids. It doesn’t look at all as if prices have come down, but at least they are not going up any more. I am despondent.
I really have to question whether West LA will go down, I’m starting to doubt it…there is so much demand here, not make believe demand like in those ridiculous housing developments in the desert, but real demand, and the cache of this area has gone up so much in the last 10 years, you might unfortunately have to look to another area to find what you want. As far as buying, I think you’re best bet would be Mar Vista, the prices there are only, like, a little bit shocking, which is a lot better relatively speaking than Beverlywood, Brentwood, Santa Monica, etc.
laig, I have absolutely *no* doubt whatsoever it’ll go down — none. Gravity has not been denied, only delayed.
lainvestorgirl and cassiopeia: don’t encourage each other to buy anything. LA is the laggard this time around, but it crashed very nicely last time and will again. You two have to hang in there. I don’t want you to end up with a depreciating asset like the converted apartment condo my niece bought for $420K. Now she has no equity and can’t save any money (thanks lainvestorgirl for reassuring me yesterday that she’s probably not under water.)
cassiopeia, take a look at rentals in Westchester. I’m renting a newly remodeled 2 plus 2 home for about 3K incl gardener — much better quality of life than my westside apt was — enclosed back yard, plenty of parking, nice landscaping. Comp homes selling for 800K-1.1
It’s going to take a while if you’re looking to rent something nice. Quite a while. First, you have to wait for a substantial number of condo foreclosures. Then, you have to wait for the foreclosed condos to sit long enough to get the price down to about the same ballpark price/sq ft as an apartment building. Then, you have to wait for a strong buyer to come along, buy them up, and do a repartment conversion.
You might actually get an opportunity to buy a condo on the west side at a reasonable price before you see a decent choice of rentals at reasonable prices. That’s at least 12 months out though, probably longer.
Single family houses are even worse. I am looking for a 4/3 SFH with backyard to rent in a good neighborhood around here, and there is nothing I would live in below about $7500/month, a few over $8000, and the good stuff is $9000 and up.
Rather than becoming despondent, I am trying to focus on making the best of the place I’m living in. The last thing I want to do is rent from a bankrupt flipper and get kicked out when the foreclosure comes down. And I’m certainly not going to pay anything like the current prices for rental houses.
How can people afford $7500 plus per month????? That’s a huge amount of money to pay for RENT!!!!!!!!!!
smlandlord and all of you above, thanks for the advice. I’m taking to heart your suggestion that there might be better condos to buy sooner than good condos or homes for rent at a reasonable price. So many buildings have been going up that it makes sense to think that way. On the other hand, today I made my usual rounds of the open houses around, and, for the life of me, I cannot figure out how realtors and sellers decide to price their homes. Take this, two houses very comparable homes in the 90024 zip code. House 1 is 2400 sqft in livable condition but not wow, with a new kitchen and a cement backyard where you can barely fit a table. The lot is 5,600 sqft and the asking price 1.495 million (just reduced 100K). House 2 is 1800 sqft, in good condition, on a 7,100 sqft lot and the asking price is 1,355. I know they are both ridiculously expensive, but shouldn’t they be closer in price? Don’t they check what houses they are competing against?
No fair, by 7:30 LA time this board was so full of comments, and my eyes are barely opening…LOL.
lainvestorgirl, I sometimes feel the same way, but I think it will just take more time here. Outlying areas are already in distress, and it will march inward with WestLA being among the last to get hurt. But fundamentals can’t be denied forever. Even now, LA homes between 500K and 10 million are sitting and getting reduced (albeit marginally), though low end and very high (over 10 million) are going strong. I think we won’t see marked price weakening until 08, but it will happen.
Even now, LA homes between 500K and 10 million are sitting and getting reduced (albeit marginally).
True, plastic, in my zip 90024, I’ve seen the whole gamut of possibilities in the last couple of months. Overpriced homes that didn’t sell and were taken out of the market, overpriced homes that sat for a while and then sold, overpriced homes that sold in less than a month. If I had to say what is the really different thing right now in this area, I would say it is the fact that a couple of homes have not sold in over 3 months. But those that do sell, for whatever reasons, are still exorbitantly expensive. Go figure.
“‘Auburn was on fire this time last year,’ he said.”
OMFG… If you know Auburn, you know this is a double entendre.
Thought the same Muggy….on fire because they were giving them away too…due to crime and other problems. Probably being bought up by out of staters who didn’t understand the environment.
San Diegans have been repeatedly informed by the SD Union Tribune (main local paper) that we are “running out of land” and that everyone will pretty much live in apartments and condos in the future.
In stark contrast, today’s Home section, which normally is devoted primarily to news articles on the housing market, has a full two-pages worth of ad space devoted to maps showing the myriad new home developments that dot the San Diego county landscape. I have a hunch all of these homes are not condos, as their list prices for a 3BR in most of these “New Home Communities” appear to go from $600K on up. Just for good measure, the back page of the Home section is devoted to a full-page ad for Standard Pacific homes.
SD HAS NOT RUN OUT OF LAND OR SFRs, BUT THE SD UNION-TRIBUNE SEEMS TO BE RUNNING OUT OF NEWSPAPER SPACE DEVOTED TO NEWS, NOT REAL ESTATE ADVERTISING. I AM THINKING ABOUT CANCELING MY SUBSCRIPTION TO THIS PAPER, AS I FEEL MORE AND MORE LIKE I AM PAYING FOR TWO POUNDS WORTH OF REAL ESTATE AD COPY.
P.S. The two-pages of “New Home Communities” maps has this useful information:
Find New Homes on SignOnSanDiego.com
http://www.SignOnSanDiego.com click on Homes, New Homes, browse projects by area, price, size and builder…
http://sdhomessearch.signonsandiego.com/NewHomes/searchindex.asp
Shiller Home Price Indice Summary:
Index - City, State (trend)
370 - Los Angeles, CA (trend: down)
340 - San Diego, CA (trend: down)
320 - Miami, FL (trend: flat)
310 - San Francisco, CA (trend: down)
280 - Washington DC (trend: down)
270 - New York, NY (trend: down)
270 - Phoenix, AZ (trend: down)
270 - Tampa, FL (trend: down)
250 - Las Vegas, NV (trend: down)
240 - Boston, MA (trend: down)
240 - Seattle, WA (trend: up)
210 - Minneapolis, MN (trend: down)
195 - Chicago, IL (trend: flat)
190 - Portland, OR (trend: flat)
180 - Denver, CO (trend: down)
160 - Detroit, MI (trend: down)
160 - Atlanta, GA (trend: down)
145 - Charlotte, NC (trend: flat)
140 - Cleveland, OH (trend: down)
125 - Dallas, TX (trend: down)
Here is a cut and paste outlining the methodology:
The S&P/Case-Shiller Home Price Indices are based on observed changes in home prices. They are designed to measure increases or decreases in the market value of residential real estate in 20 defined MSAs (see Tables 1 and 1a below). In contrast, the indices are, specifically, not intended to measure recovery costs after disasters, construction or repair costs, or other such related items.
The indices are calculated monthly, using a three-month moving average algorithm. Home sales pairs are accumulated in rolling three-month periods, on which the repeat sales methodology is applied. The index point for each reporting month is based on sales pairs found for that month and the preceding two months. For example, the December 2005 index point is based on repeat sales data for October, November and December of 2005. This averaging methodology is used to offset delays that can occur in the flow of sales price data from county deed recorders and to keep sample sizes large enough to create meaningful price change averages.
All I can say is this:
1) Seattle prices have increased 240% in 10 years
2) We are the ONLY city still moving UP
3) Expect us to overtake places like Las Vegas and Tampa soon (those are big time bubbles but we are just moving into our “rightful place”)
There is no bubble in Seattle because the fact we are moving up only proves that Seattle is the most desirable place to live in the country. We are special. We are the only place in the country where they are “not building anymore land”…so BUY NOW or BE PRICED OUT FOREVER!!!! ITS A GREAT TIME TO INVEST IN SEATTLE RE!!! WOO HOO!!! KEEP THE WINE AND CHEESE PARTIES GOING!!!
This proves what I have been saying all along. Seattle is one of the last dominos to fall (although I didn’t know it was THE last one) and that you don’t want to be the only one standing tall when the music stops. At that point, everywhere else will look like a better buy than Seattle, and then we truly will be SPECIAL. The canary in the coal mine for Seattle will be the incoming vs outgoing U-Haul rates.
SD prices are over the top of the hill and appear to be headed down the other side of the roller coaster. I wonder if the velocity will pick up on the downhill side, as it does on a real roller coaster?
http://macromarkets.com/csi_housing/MSA/san_diego.asp
LA MSA prices are also on the downhill side of the big hill
http://macromarkets.com/csi_housing/MSA/los_angeles.asp
as are San Francisco MSA prices
http://macromarkets.com/csi_housing/MSA/san_francisco.asp
as are Tampa MSA prices
http://macromarkets.com/csi_housing/MSA/tampa.asp
as are New York City MSA prices
http://macromarkets.com/csi_housing/MSA/new_york.asp
as are Boston MSA prices
http://macromarkets.com/csi_housing/MSA/boston.asp
as are Cleveland MSA prices
http://macromarkets.com/csi_housing/MSA/cleveland.asp
as are Detroit MSA prices
http://macromarkets.com/csi_housing/MSA/detroit.asp
as are Minneapolis MSA prices
http://macromarkets.com/csi_housing/MSA/minneapolis.asp
as are Las Vegas MSA prices
http://macromarkets.com/csi_housing/MSA/las_vegas.asp .
The highly-correlated price movements in local housing markets across the U.S.A. is very striking, considering there is no national housing market.
Correlation really svcks during a real estate bust. Check out the one year correlations between these different indicators of housing market health and the S&P/Case-Shiller National Home Price Index (from their site), which happens to be down over the past year:
Correlation with S&P/Case-Shiller U.S. National Home Price Index
Market Indicator 1 Year 3 Year 5 Year Since 2000
Construction Spending 1.00 0.83 0.82 0.64
Supply of Homes -.97 -.81 -.57 -.11
Mortgage Applications 0.99 0.62 0.33 -.13
Housing Starts 0.98 0.69 0.50 0.28
Interpretation for those not versed in statistical theory:
1) The 1-year correlation between prices and construction spending, mortgage applications and housing starts is very close to 1 in each case, meaning these are all down along with prices.
2) The correlation of the supply of homes with prices is nearly -1, which means that the supply of homes steadily rose as prices fell.
All told, 2006 was an annus horribilis for the national U.S. housing market, and 2007 is shaping up to be still worse.
http://en.wikipedia.org/wiki/Annus_Horribilis
“2007 is shaping up to be still worse”
Worse? How about FAR WORSE!!!
From the SD Union-Tribune New Homes web site:
Search By Region
All San Diego County
North County Coastal (23 communities)
Central Coastal (2 communities)
Central Inland (25 communities)
North County Inland (36 communities)
East County (12 communities)
South County (20 communities)
South Riverside County (6 communities)
Imperial County (6 communities)
That adds up to 130 New Home Communities for San Diego County. New San Diego homes for everyone!!!
http://sdhomessearch.signonsandiego.com/NewHomes/searchindex.asp
Does anyone have ideas about how to figure out how many new homes are coming on line in the next couple of years for the average San Diego “New Home Community”? If, say, the average were 100 new SFRs per “Community”, that would represent 13,000 additional new homes — more than a doubling of the used-home SFR currently reported on the MLS (= 11,444 homes). That would knock prices down a bit! I am guessing 100 homes per “Community” is conservative, but I am not sure how to check this…
Here is a link to an article about the Rockville, Maryland property referred to in the Baltimore Sun article. http://gazette.net/stories/050407/businew211905_32327.shtml
Also, here is a link to the foreclosure auction. http://www.ajbillig.com/2007/monterey_montrose5901.htm
Ate dinner with some people in Manhattan Beach last night. One guy who lives on the west side told me, regarding prices, not to worry. He has a buddy who’s owned three properties on the LA West Side for the past twenty years. According to his buddy, real estate always goes up 8 percent a year so I should just buy. Another couple who bought with an interest only loan a few years ago (they are living way above their means) asked me if I was going to buy soon. I told them that they couldn’t pay me to buy right now because I think prices will drop. They looked at me like I was crazy. It’s my impression, at least in LA that a lot of people are still quite clueless about the possibility of a real estate price decline.
Why stop there? I doubt they have a clue about most things we discuss on this board. By the time you finished with them, they could’ve given Linda Blair lessons.
I can honestly say its changing here in NH. Prices area going down(maye 5-10 off peak) and I see more foreclosed homes. Bigger homes must have a tough time, there is a glut of them. Lower priced ones are doing better but they are definatley taking low ball offers. I’ve seen sales on 200 stuff finally sell for 180 and so forth. The municipal website sales section has gone from 6-8 pages a month to about 3-4. Still, if you list a reasonable price(still profitable if owned for atleast 4-5 years) it will sell.
Can’t remember what part of NH you’re in, “NH”. Is it the Nashua area?
Very interested in what’s going on in the Seacoast if anyone can provide info, anecdotes.
Oh, one thing I noticed in this am’s newspaper real estate listings. Looks like realtor’s are cutting corners with listing descriptions. Used to be about 6-7 lines w/no contractions. This am, many listings offered 3 lines of type only. I could barely read the descriptions which were all practically words consisting of 1/2 the consonants.
realtor’s equals realtors…..high strung today!
You’re right Carrie Ann. Those ads do cost a lot of money, and probably it cuts into the broker’s profits. A very good sign!
for contrast some local observations from the Netherlands:
homeprices are rising at 0-10% yoy, depending on which numbers you believe. It’s very difficult to see what is really going on, but there are less listings than one year ago. Many realtors are still pricing new listings at 50-100% above their previous sale price from a few years ago. If the sellers are lucky they still get away with such 50% yoy gains (especially in the higher end of the market) but many of these homes remain on the market for a long time.
My neighbour has his home on the market for more than a year now; he started out with asking price of EUR 675K (without a doubt because the realtor told him it would sell at that price within a few weeks, prestigious area here), dropped the price to 635K and then 575K early this year; it’s now listed at 545K and there have been just a few lookers in the last months. The seller already purchased a new apartment and moved many months ago; value of the old home was around EUR 130K some 15 years ago, so like many sellers in the Dutch market he must be sitting on huge profits…
What percent of the homes on the used home market in your area are of bubble-era construction vintage (1998-2007)? I suspect a high percentage of recent construction on the market is evidence of flippers (= non-end-users) trying to get out while the gettin’ is not yet terrible.
Here are some current examples (all SFRs) from North County San Diego zip codes:
built in the
zip code bubble-era total percentage
92127 209 239 87%
92128 20 176 11%
92129 18 92 20%
92130 115 181 64%
92064 57 209 27%
92067 83 208 40%
Greater SD 3508 11,444 31%
Most interesting! It appears that my zip code (92127) is swamped with recently built inventory (87%) — flippers flopping in droves! I guess that also explains why the March median sale price for 92127 reported by DataQuick ($850,000) is so low compared to the median list price on ziprealty.com ($1,309,900). That appears to be a $459,900 gap between median list and median recent sale price…
Front page news! Tucson’s MSM gets a clue! Here’s the lead story in today’s Arizona Daily Star:
http://www.azstarnet.com/dailystar/181747
And you’ll enjoy the comments that follow the story…
“Many homes are being sold only with the help of price reductions and incentives.”
Who’d have thought.
And the sidebar that tells people how to “sell in a glut” says everything but “cut the price and be prepared to cut it again.”
I live close to those condos that are foreclosing in Rockville, MD. Went by an open house today, asking price was basically the 2005 price. I have been doing some analysis of different addresses and I’m feeling angry that home prices could double and triple within just a few years, and discouraged that asking prices are still so high.
The sellers are hoping desperately that you’ll get discouraged and give in, before they go broke and give in.
SD ziprealty.com actually has 105 SFRs currently on the market listed at $300,000 or below, with over half listed since March 2007. However, the median SFR list price remains stuck at $599,000…
Don’t worry, NFW am I buying at these prices. I sold and got off the rollercoaster because I knew what was coming.