It Will Be A Summer Of More Markdowns
The Indystar reports from Indiana. “Across the metro area, the pace of existing home sales declined again in May. Throughout the nine-county Indianapolis area, 2,941 existing houses and condominiums changed hands last month, 10.3 percent fewer than in May 2006. Real estate veterans suggest the sluggish market reflects the hangover left from the excesses a few years ago: Developers overbuilt on new tracts, lessening consumer interest in older homes, said G.B. Landrigan, head of Indianapolis real estate firm Landrigan & Co.”
“Buyers flooded the home market, attracted by low interest rates. From 2004 to 2006, nearly 170,000 existing metro-area homes changed hands, about double the sales volume in any three-year period a decade ago.”
“Indianapolis’ soaring foreclosure rate poured homes on the market. Early in 2006, the metro area ranked first nationwide in foreclosures.”
“‘I have never, in my 35 years in the industry, seen the market the way it is. I won’t say it is being soft, but it is being inconsistent,’ said H. James Litten, president of Tucker’s residential real estate services division.”
“Average sales prices also have declined. In May, the typical home changed hands for $145,200, down 2.5 percent from a year earlier, Litten said. He noted the average this year has been brought down by foreclosed properties selling at an average of about $70,000.”
The Indianapolis Business Journal. “Buyers in the market for million-dollar homes can afford to be choosy these days, as the softness in the overall market extends to the high end, real estate agents say.”
“‘With the market like it is, we won’t buy if it’s not exactly what we want,’ said Harris Turner. ‘We are not in a rush at all.’”
The Oakland Press from Michigan. “More than 7,000 Oakland County homeowners could lose their homes to foreclosure by the end of the year, the highest level ever, and housing values on average are flat to falling because of it, Oakland County says. The county recorded 4,881 foreclosures last year.”
“‘These are properties that are hitting the market and dragging down prices,’ said Dave Hieber, the county assessor.”
“‘The decline in market value will probably result in us having the worst year we’ve had in 30 years in value growth,’ said Deputy Oakland County Executive Robert Daddow.”
The Journal Sentinel from Wisconsin. “Sellers started to get the hint last month: It may not be worth it to put a house onto a glutted market. New real estate listings rose a mere one-half of 1 percent from a year ago, according to Metro MLS. Meanwhile, sales dragged for houses already listed, falling 11.2% below May 2006.”
“‘It’s the worst in my eight years,’ said Jennifer Buzzell, broker based in Waukesha.”
“She and other brokers report that a domino effect is building: Each buyer puts down an offer contingent on the sale of his or her own home.”
“‘A lot of my deals are four and five people deep,’ Buzzell said. ‘I have sold a property to a lady, whose house I now have on the market, which I’ve sold to a guy, and none of the deals will close until his house sells.’”
The Star Tribune from Minnesota. “High hopes for a stellar spring housing market were dashed by a mixed sales report for May, according to data released Tuesday by Twin Cities-area Realtor groups.”
“The number of closed home sales last month was nearly 15 percent lower than last year at this time, one of the steepest annual declines in several months.”
“Last month, prospective buyers took advantage of the combination of slowing sales and high inventory to shop for bargains. Accordingly, May’s median sale price for Twin Cities-area homes dropped slightly.”
“That report noted that while prices have fallen in recent months, the housing market has outpaced the rate of inflation: Between 1998 and the first nine months of 2006 the consumer price index rose 24 percent while the median sale price of houses in Minnesota increased 85 percent.”
The Pioneer Press. “The Twin Cities housing market continues to trudge through a serious correction, with would-be buyers largely shrugging as rising foreclosures add to record for-sale inventories. Tougher lending standards and rising mortgage interest rates threaten to dampen activity further.”
“With less than a month to July 4, the sluggish activity spells trouble for the summer dog days ahead. ‘It will be a summer of more markdowns,’ predicts Steve Shea, owner of Sunset Realty in Maplewood. ‘It’s going to take this market a couple of years to clean out.’”
“Buyers seem indifferent to the deals; sellers sweat out a market flooded with a record 33,898 active listings. Those listings do not include all of the 9,300 newly built homes (excluding condos) either already built and sitting empty or under construction, said Ryan Jones, who manages the Plymouth office of MetroStudy.”
“To be sure, homes have continued to sell in the Twin Cities. Closed sales, pending sales and the median sales price for May in the metro area were up from April. But they were all down year over year. And the area’s prime spring selling season was flat-out disappointing.”
“Sellers, of course, feel urgent. They organize condo crawls, online foreclosure auctions, progressive open houses that stage appetizers through desserts at different houses.”
“Pulte Homes Inc., a major home builder in the metro area, announced Tuesday that from June 22 to June 24, buyers using Pulte Mortgage will get 10 percent off all homes plus $10,000 toward closing costs.”
“Karen Wilson, broker in St. Paul, said move-up buyers simply cannot sell their current houses given all the competition. Whatever the exact reason, buyers lack urgency. ‘They think they have all the time in the world,’ Greene said.”
‘Home buyer activity in the Twin Cities housing market remains relatively slow, according to the Minneapolis Area Association of Realtors (MAAR). Most areas in the region, including Chaska, have seen some sort of decline, the MAAR press release stated.’
‘Year-to-date, Chaska home sales are behind 2006’s pace by 19.9 percent. For the entire Twin Cities region, closed sales are down 14.2 percent year to date and 14.7 percent down comparing May of this year to May of 2006.’
‘Buyers aren’t returning to the fold as quickly as many of us predicted and everyone had hoped,’ stated Deb Greene, president of MAAR.’
Yes, these are the places that will take the BIGGEST beating. Chaska is at least 30 miles away from downtown Minneapolis, and the traffic is very grim.
At least in LA you have 3-5 lanes each way of stopped traffic.
Driving from Chaska, it is 1 lane each way, with no other detour to get into town.
and half of the time you also have stoplights to contend with.
Mpls traffic is not that bad really (compared to other big metros), but commuting from Chaska to Mpls might take 1.5 hours each way.
and it’s just bland subdivision with mcmansions after bland subdivision with mcmansions… There is nothing to distinguish it from any of the other rediculous suburbs (like eden Prairie, Chanhassen, shakopee, etc)
“‘Year-to-date, Chaska home sales are behind 2006’s pace by 19.9 percent.”
And yet the geniuses running Chaska approved two humongous new housing developments that will put thousands more empty homes on the glutted market. And add to the already heavy local traffic, too. One major rural highway runs through Chaska, and it’s seeing closures and detours while they’re doing heavy construction on the housing sites. In the meantime, the governor vetoed a bill that would’ve increased our gas tax to fund our severely underbuilt, overstressed, antiquated metro highway system. I hope the rich folks living in Chaska appreciate saving that nickel a gallon while burning gas waiting in bumper-to-bumper traffic every day.
“Karen Wilson, broker in St. Paul, said move-up buyers simply cannot sell their current houses given all the competition. Whatever the exact reason, buyers lack urgency. ‘They think they have all the time in the world,’ Greene said.”
Ms. Greene, are you trying to tell me they DON’T have all the time in the world? Perhaps you could explain further.
THis woman makes me want to say:
Jane, you ignorant slut!
When do I have to buy a house? Never. I do have all the time in the world.
We’ll, they do have limited lifespans
By the way I do have all the time in the world to watch homes go into foreclosure.
“…buyers lack urgency. ‘They think they have all the time in the world”
These people act like the inventory is going away tomorrow. It keeps gowing Karen! It’s a game of chicken. I’m driving a Peterbuilt with a cow catcher and the sellers are driving Pintos.
Minneapolis itself has clearly slowed from the frenetic pace of the past.
That said, I have to admit that anecdotally I am not seeing that many homes for sale in my neighborhood. There are usually 0, 1, or rarely 2 houses for sale per block.
This is in stark contrast to years past where I would sometimes see 3 or more houses for sale on some blocks.
That said, I’ve heard from my coworkers who live in the more outskirts of the metro area that the further suburbs are choking with inventory, and that the nearer suburbs are also not doing as well.
The areas really getting killed (as predicted by myself and others)
1) exurban construction
2) condos, especially new
3) new SFHs in the 2nd/3rd tier suburbs.
4) the crappy areas of town itself that didn’t finish gentrifying(specifically, North Minneapolis, our version of “south central LA” but nowhere near as bad)
the big question now: how long until that impacts the more central areas
HIC,
My wife and I are moving to the Twin Cities next month, and have been watching the St. Paul market closely for the past few. We’re going into a rental home, but we’ve been surprised to find that in the neighborhoods we’ve been watching (Mac-Groveland, Crocus Hill, Merriam Park), renting isn’t much of a bargain over purchasing. We’re considering buying mid-winter, when prices typically dip along with the temperatures, and, although we expect prices to drop further in those neighborhoods, we expect them to hold their value better than suburban condos or exurban McMansions. We’re also looking to buy a non-updated older home, circa 1880-1930, so as not to pay for someone else’s design decisions made with the benefit of a home-equity loan, then do the improving ourselves. Do you or other Twin Citians have any other tips about ways to minimize the downside risk? Thanks.
“renting isn’t much of a bargain over purchasing” … well, if it’s ANY cheaper than purchasing, you can certainly limit your downside risk by remaining a renter as long as possible, i.e., until buying is clearly cheaper than renting ! If the inventory is growing, there’s a good chance rents will go DOWN not up.
I live in Chaska, so I’m really an X-urb location. Still, I’ve been reading this blog for 2 years, and watching what’s been going down here in the MSP. My concern is that by buying a non-updated, you’re going to put yourself in a tough situation- Yes, contractors will soon be much cheaper, but the craziness that went down over the last several years means a lot of folks have already done the updates- especially in the better areas of STP. Why not find a true Kendra Todd GF flipper with the New Furnace, New Storm Windows and Central Air? Paint and Interior are pretty easy compared to pulling out a coal chute. I have a good friend who bought a “circa 1928″ west of Cretin- Oh my God, was that a drafty house before new windows. Global warning be damned, it still gets a mite chilly here in the Winter. Anyway, where you are looking, all the GF’s made their interiors look like Pottery Barn/Rest Hardware photoshoots anyway. As long as you are good with that, you’re golden.
as long as they price the renovated home correctly.
it’s hard to find this.
the renovated homes are selling for SIGNIFICANT amounts more than comparable non-renovated homes.
goes like this:
renovate kitchen: $15,000
renovate bathroom: $8,000
new windos: $7,000
central air: $5,000
time to resell: jack the price up $150,000
Agreed, but if you’ve been reading this blog, you know that you have time on your side in the MSP! (Especially in Feb of 2008 or 2009.)
“renting isn’t much of a bargain over purchasing”
This, in a nutshell, is why I am not sure that our housing will take a precipitous fall. Many of the quality in-city neighborhoods are like this. PITI payments are approximate to rent, or perhaps a slight bit more.
The mac-groveland area is beautiful IMO. Many people like living near Summit Avenue especially near the various colleges.
My tips for minimizing the downside risk:
1) buy with the intention of not making a single cent over the next decade (or more). this way, you’re buying a home, not an investment. I really don’t think that Mpls/SP proper will fall as much as other metros (or as much as the ‘burbs), because that’s NOT where our speculation was (except new), but it may fall or stay stagnant for over a decade.
2) buy AFTER you’ve been here for a while, so you can further refine which neighborhood you want to LIVE in longterm
3) buy a home you can comfortably afford, hopefully on 1 salary.
4) don’t buy new construction. Period. It is all at least 2x the price of comparable older homes, and Mpls/SP is a city that has lots of BEAUTIFUL 100 yr homes (my home is 1909). The older homes are also so much more character. The new stuff is cheap (quality)
5) I wouldn’t buy a recent redo. The recent redo’s are priced high, partly because people refinanced in order to do the renovation, and thus they “need” to sell at a higher price. also, I question some of the renovations done of late, in terms of code and quality.
6) watch neighborhood CLOSELY, down to the actual street. Mpls/SP is a very odd metro area. You have GREAT neighborhoods just steps away from so-so ones. so the exact block you live on is important. As example, the stretch of Summit/Grand/Selby is all pretty nice, especially near Macalaster College, and especially by the Cathedral. But near the highway (94) it isn’t so nice, so stay south of Summit if possible. once you cross Summit to the north, it degrades.
That said, even the “bad” neighborhoods here pale in comparison to “bad” neighborhoods in comparable sized cities. The “bad” neighborhoods just to the north of Summit are more poor and working class, with a little extra petty crime. Whereas the homes south of Summit are phenominal. And of course there’s all in between.
I would be more cautios NORTH of Highway 94 in that area though. A lot of the homes there are very cheap, but some of them are in truly bad neighborhoods, some are working class neighborhoods, but you can’t tell just by looking. Live around there a while and you’ll figure out which is which.
It is VERY EASY here in Mpls/SP to find a home that is near comparable rent. It is also very easy to be taken to the cleaners.
the most overpriced stuff BY FAR:
1. new condos
2. new SFHs
3. far out exurban areas (like Chaska, Chanhassen… or on the SP side places like Hudson Wisconsin and Woodbury)
4. recent total makeovers.
But most importantly, live here for a while before buying. You’ll find that the neighborhoods are quite different, but subtle. Mpls/SP is a subtle area… so a top notch neighborhood might look just like a working class neighborhood, at first glance. As example, my ‘hood (East Lake Harriet) is a “hot” ‘hood. Only a few blocks from my house are mansions ($5Mill). Only a few blocks the other way, are homes that look just like mine but cost half as much… but are also a little more sketchy.
Good luck! and welcome! Minnesotans are very low key people… it’s hard to “break in” but once you do you’ll have friends for life.
I’d say north of 94 west of Lexington is pretty much ok - it’s east of Lexington that I start to worry (as a young white female alone).
You may want to expand to Highland Park and maybe South Minneapolis, depending on how much inventory you see. one of my coworkers has been looking for a 3+ br in Highland/Mac Groveland/Merriam for more than a year now and hasn’t found anything large enough priced right.
Yup- I’ll agree with House Inspector Clouseau- on all points. FYI- I bought my 1998 built 4/3/3-Car pre-bubble in 1999. I wouldn’t dream of moving out here right now- major hits are yet to come.
Sorry- I’m in Chaska- the X-urb of X-urbs.
“renting isn’t much of a bargain over purchasing”
“This, in a nutshell, is why I am not sure that our housing will take a precipitous fall. Many of the quality in-city neighborhoods -are like this. PITI payments are approximate to rent, or perhaps a slight bit more.”
Check out the East Metro. You can rent a nice lakeshore home on White Bear Lake for $2500/mo. You can rent a 3BR/3BA in Woodbury for $2200/mo. You can rent perfectly decent 3 BR/ 1-2 BA WWII-era ramblers in White Bear Lake, Maplewood, N. St. Paul, and East St. Paul for $1000-$1200/mo. Those rates are roughly *half* the monthly PITI for those same homes based on current valuations.
“The mac-groveland area is beautiful IMO. Many people like living near Summit Avenue especially near the various colleges.”
But many people hate living near the various colleges, because it’s filled with student housing and the accompanying noise, vandalism, parties, and especially on-street parking issues.
“But most importantly, live here for a while before buying. You’ll find that the neighborhoods are quite different, but subtle.”
A very good point. What at first glance may seem to be miles of similar-appearing neighborhoods will turn out to be areas with noticeably different subcultures. I live in a neighborhood that is predominantly first-generation homeowners and their now-adult kids who bought their family home from the folks. Everyone knows each other, there’s almost no children, and being native-born Minnesotans of Scandinavian/European descent, we still tend to be kinda reserved, so it’s pretty darned quiet. But the neighborhood across the lake from us has turned over much more, so it’s now primarily young, lower-income families with kids, many of whom are recent immigrants. So it’s a noisier, more talkative and overall more outgoing atmosphere over there compared to us old codgers.
“4) don’t buy new construction. Period. It is all at least 2x the price of comparable older homes, and Mpls/SP is a city that has lots of BEAUTIFUL 100 yr homes (my home is 1909). The older homes are also so much more character. The new stuff is cheap (quality)”
I have an older home, and I like the construction in older homes. But if you buy one, be sure to get a competent inspector to really look it over. Houses that old can have lead paint, lead piping, asbestos and (leaking?) underground oil tanks. And there could be a radon problem in Minn. if there is a basement.
Old houses also have old plaster and old wiring. I once lived in a triple-decker that was build around 1900. The kitchen had 5 outlets, but every other room had 2. Every time I used the microwave, I blew fuses.
“in the neighborhoods we’ve been watching (Mac-Groveland, Crocus Hill, Merriam Park), renting isn’t much of a bargain over purchasing.”
I’m not terribly surprised. You picked the trendy St. Paul neighborhoods. There’s a lot of demand there through all parts of the housing spectrum (rental, high-end, starter).
I’ve a cousin who just bought a home in Mac-Groveland - nothing special - 3 BR, 1 BA, 7-foot wide enclosed porch, no A/C, single car garage, *right* on a major street, tiny front yard, and way too close to the bars, bistros, and other noisy party spots for my taste - yet she paid about $270K for it. She knew she could get a much nicer house in a much quieter neighborhood for a lot less in other neighborhoods, but she likes telling people she lives in that neighborhood (snob factor strikes again).
I hope she’ll enjoy the twenty-somethings puking on her sidewalk and whizzing in her shrubs while staggering home to their rentals at night, especially while college is in session. And hearing the subwoofers booming from the heavy traffic passing ten feet from her porch.
Many thanks to each of you — House Inspector Clouseau, ifrpilot, Homoaner, and Hillary especially — for the information and advice and the welcome to the area. We’re coming in from bubbly Boston, and are excited about the move to a saner pair of cities. See you at the State Fair….
A friend/colleague of mine is in the situation of having two houses in the Twin Cities. One ones a fixer-upper that they lived in before she went to grad school, the other was bought as a place for a close relative who have severe health problems (long story…). Last I heard they are pretty despondent… they want to finish fixing them up and unloading them and are already looking at losing all of their downpayments. And they haven’t sold them yet. I expect them to unload them soon at a big discount and they probably will have to bring a wad of cash to the table to sell. Not pretty. After hearing their tale, I wouldn’t be too eager to buy in the TC.
No Buyers. No, house prices are way to high to buy now.
So keep dreaming of a sale realtor.
“Pulte Homes Inc., a major home builder in the metro area, announced Tuesday that from June 22 to June 24, buyers using Pulte Mortgage will get 10 percent off all homes plus $10,000 toward closing costs.”
Why not just cut price?
domi, I’ve seen you here before, so I think you know the answer: Pulte doesn’t want previous buyers screeching about other people getting the same thing for less than they paid. Plus, they are using the device of a “time-limited offer” (June 22-24 for God’s sake?!?!) to pressure some fools into a quick buying decision.
One might argue that a 10% cut is a price reduction–although maybe it’s not the price listed in advertizing.
“sellers sweat out a market flooded with a record 33,898 active listings. Those listings do not include all of the 9,300 newly built homes (excluding condos) either already built and sitting empty or under construction,”
Twin Cities is toast! Over 43,000 houses for sale…is that more than Phoenix? At least they aren’t making any more land, just more houses.
New motto for Minny…
“Land of nearly 10,000 empty houses”
For perspective, that is twice as many homes as are on the market in Las Vegas. I nominate Twin Cities for bubble epicenter of the week.
I think Phoenix has more than 50,000 active listings.
yes, 53 something
showoff.
“The number of closed home sales last month was nearly 15 percent lower than last year at this time”
This would jive with what I’m seeing anecdotally. That said, again, I would hardly call a 15% decline in sales catastrophic, especially when we note that 2005 and 2006 were banner years.
I still have to think in the back of my mind, is there any way we will turn out anything like Vegas, Phoenix, SoFl, San Diego? We never saw such heated speculation, and it would seem people can hold onto their homes at today’s prices.
no doubt we also are prime bubble land. But as time has wore on I am refining my expectations for price drops somewhat. I now think that inflation will do most of the damage to the MSP market and that nominally we may only fall 20% tops. (again, not including new condos, SFHs, and far out suburban/exurban development which will fall much further)
“I now think that inflation will do most of the damage to the MSP market and that nominally we may only fall 20% tops.”
The bursting of the 1980s Twin Cities housing bubble led to an average 30% decline in home values in Ramsey County. I lived through that one, which is why I figured a 30% drop again this time would be a reasonable bet. Now, I don’t know. We’re only seeing the beginning of the impact of adjustable mortgage resets, we’re at an all time housing inventory high, median wages are dropping, unemployment is up, and *nobody* has any cash saved to ride out rough patches. It just might go lower this time.
You aren’t at the bottom of the real estate market until several key indicators occur. First, fathers tell their sons emphatically that they should rent, and never to buy real estate. Second, there are only a few Real Estate Agents left in town, and they spend their afternoons in a somnolent repose (in the 1940’s, you could walk onto the floor of the New York Stock Exchange and see brokers sleeping on the benches. The stock market didn’t regain its 1929 high again for 25 years). Third, there are no real estate books on the shelves at Borders and real estate shows are no longer shown on TV. Fourth, the only kind of mortgage you can get requires 20% down and a 30 year term. Until all those factors occur, there is still plenty of room for sales volume and price to decline.
Thanks for pointing that out, George. I’ve been known to silence the “in the long run, you’re best off in the stock market” cheerleaders by saying, “1929 to 1954.”
Now that you have described the real estate market in some small midwestern town. How will you know it’s bottom in a major metro?
I’ve posted this before, but IMO, the only number that matters is the S&P/Case-Shiller home price index (hence the REIC never whispers its name). Until this index bottoms, meaning, that when it again begins rising month-to-month for an extended period of time (8 - 12 months), we’ve probably hit bottom.
This is the only housing index that trades (CME), has an extended history, adjusts to same-to-same houses, and is publicly available. Yet, the MSM rarely brings this index up in their realtor interviews or in their articles discussing housing. Why? Seems it should always be mentioned, as it is the only unbiased indicator available.
out, damned bold.
Also, you know when the bottom is hit, you will see on beat up pickup trucks with faded constuction company signs this bumper sticker; ” Dear god, please grant us another housing boom, this time we won’t piss the money away”
“Sellers, of course, feel urgent. They organize condo crawls, online foreclosure auctions, progressive open houses that stage appetizers through desserts at different houses.”
Ha,ha,ha! Were’s the popcorn? Remember when they azzwipes were asking buyers to sign squirrel feeding agreements? I’d low ball their butt’s and require that they do my lawn and toe nails for two years.
“I’d low ball their butt’s and require that they do my lawn and toe nails for two years.”
Now that’s what i’m talking about.
condo crawls,
Sounds creepy.
These attempts to lure buyers to their open houses are lame. If you really wanted to feast, you had to be invited to a brokers’ open - not for the public, just agents - and that’s where the filet mignon was served and adult beverages flowed freely. New construction only. (there were some perks to being trapped in the REIC during the boom!)
Condo Crawl???
How exactly does that work, I’ve never seen or heard of that being done before.
“Condo Crawl???”
here in minneapolis we have the “Parade of Homes” It occurs 2x per year. I know it occurs elsewhere as well, but in Mpls it is a BIG thing… Tons of people participate. It’s for the builders to show off their new homes/etc.
They expanded the Parade Of Homes, and now we have “Easy Street”
Easy Street is basically what I think they’re referring to by “condo crawl”. All the developers get together, and they list all their condos together in one book. Then the book is put together and left at local gas stations (Holiday Stations). You then can just go from condo to condo to condo, to find “just the right one”.
To my knowledge, Easy Street never took off like Parade of Homes did here.
(mainly because most Parade of Homes people are looky-loos that want to see what $2 million homes look like inside. )
We used to love Parade of Homes, and went every year. This year though, it became high pressure sales tactic, so we abandoned it. (the developers are starving). Also, the new developments are getting SOOOO far out there now… they used to be 10-15 miles out, now they’re 30-45 miles out…
Tucson actually has an Easy Street. I used to live close by.
Our parade of homes this year also had last years homes still unsold. The news stations really played up this fact.
wmbz asks “Where’s the popcorn?” My guess is, in a parade of open houses going from appetizers to dessert, the popcorn would be at the second house. It’s an appetizer of sorts, but they probably have to serve crab quiche at the first house to make you think the whole meal is going to be worth while. (Neil?)
Oh, It might be worth skipping the food bringing one’s own popcorn.
Got popcorn?
Neil
“She and other brokers report that a domino effect is building: Each buyer puts down an offer contingent on the sale of his or her own home.”
“‘A lot of my deals are four and five people deep,’ Buzzell said. ‘I have sold a property to a lady, whose house I now have on the market, which I’ve sold to a guy, and none of the deals will close until his house sells.’
About two months ago I told my wife that there may be a huge opportunity for a new type of real estate business - the “mutually beneficial property ladder system” or some such marketing mumbo-jumbo name (maybe “Golden Ladder Realty” to get everybody excited). It goes like this:
Let’s say you have a guy selling a house for a million dollars, that he bought for $550K in 2001. The contracted buyer of that house needs to sell his $760K house first, to a guy that needs to sell his $520K house first, to a guy that needs to sell his $380K house first, to a guy that needs to sell his $195K condo first, to a first-time buyer than can’t come up with the $40K downpayment. If the deal goes through the realtor who set them all up walks away with $60K commission on the first house alone, and the owner of that house walks away with $390K profit, but the whole thing is held up by the guy on the bottom not having a measly $40K?
The answer here is obvious, if you can get over the fact that every value is inflated and all perceptions are clouded (which HBB’ers can’t). Think relative value instead of absolute, and everybody’s happy.
If you see a “Golden Ladder Realty” doing business in the Phoenix metro in the next few months you’ll know who it is.
Ha! Everything comes crashing down, for the simple want of a paperclip. Love it!
“‘A lot of my deals are four and five people deep,’ Buzzell said. ‘I have sold a property to a lady, whose house I now have on the market, which I’ve sold to a guy, and none of the deals will close until his house sells.’
I’m wondering if that is what is happening here in Pullman, WA. Homes that sold in mid to late spring have been sitting in the “pending” phase forever. When it gets to be 3 months pending you suspect a contingency must be holding things up.
I’ve recorded all of the “pending sales” and we’ll see where they are in a month.
Indy has to be the cheapest per cubit, per happy biz climate pricing anywhere
and falling
flatff, make that “per square cubit,” I just checked, cubit is a measure of length. (Now we all know something new.)
uh, I think Noah’s ark was measured in cubits, if I recall properly ???!!!!
“Average sales prices also have declined. In May, the typical home changed hands for $145,200, down 2.5 percent from a year earlier, Litten said. He noted the average this year has been brought down by foreclosed properties selling at an average of about $70,000.”
The wages are low and can not even support 145k homes. The fact that the forclosures are 70k reveals the real pricing.
I think you need to check Northeast Indiana (Fort Wayne). The median price there through the first five months (around 2700 sales) is $ 94,000. I think it is hard to find a cheaper place….
She was 22 and tired of exotic dancing for a living. So Irene Thomas bet her future on real estate, hoping that becoming a landlord would be her first step toward exiting the stage.
You just can’t make this stuff up!
http://www.startribune.com/462/story/1236301.html
“Her credit ruined, she now says she was duped by a group of real estate insiders who sold houses at inflated prices.”
Let’s face it, she duped herself — she didn’t need any help!
Worthless with out pictures of the stripper…boooo!!!!
The path of the rightous man is beset on all sides by the inequities of the the selfish and the tyranny of of evil men. Blessed is he who in the name of charity and good will shepherds the weak through the valley of darkness, for he is truly his brothers keeper and and finder of lost children. And I will strike down upon thee with great vengeance and furious anger those who attempt to poison my brothers. And you will know my name is the Lord when I lay down my vengeance upon thee.
Maybe she should get a blog and her own group of supporterz
Something tells me she’d have an easier time of it.
How are things in Bloomington, Indiana. My brother-in-law is out there buying residential and commercial property and is mortgaged to the hilt in both. We were discussing the economy and he told me its business as usual in Bloomington and then quickly changed the topic. Is that really the case ?
Bloomington is the quintessential college town. The largest employer by far is Indiana Univ which provides stable, but certainly not high paying jobs. There has been an influx of retirees within the last 10 to 15 years that has provided some RE fizz, but it will never compete with other retiree magnets since it is the midwest after all which means winters are colder than FL, and there isn’t much in the way of attractions that aren’t tied somehow into IU. Don’t get me wrong, it’s a great place to attend school, but do you want to spend all your time doing what 18-22 year olds want to do?
Because of the stable employment base, there won’t be a crash, but I cannot imagine what would provide the fuel for a lot of speculation. People in Bloomington believe that “it’s different here” in a big way, but only when you look out in a 30-40 mile radius because there is nothing else that comes close to what it offers. It’s not much different from any other college town that supports a university with ~35,000 students like Ann Arbor, Iowa City, Champaign Urbana or Madison WI.
The market for student rental houses is decent, but the downside lies in the fact that students are known to occasionally, you know, throw big parties in them and that tends to increase the ole wear and tear. Of course, there are several other mom-and-pop landlords all trying to do the same thing, and there are a couple of fairly large organizations (Cook Financial comes to mind) that actually have a marketing budget and something resembling a brand identity as they have been doing this for a long time.
I don’t know much about commercial. The downtown looks much the same as it did 15 years ago, and there hasn’t been much building as far as I can tell. There seems to be a considerable amount of tenant turnover as bars go from new to trendy to old in a short amount of time. There always seem to be a bunch of clothing stores that cater to the women that go through the same cycle too.
Thanks a lot. From what I gather my BIL is involved in building high end lofts in a semi commercial/residential building on East Third St in a historical laundry building.
Must be east of Indiana Ave more toward the PO and downtown, because west of that intersection is all frat and sorority houses.
If these lofts are indeed high end then that would seem to price out the kiddies unless mom and dad want to shell out the big bucks. I don’t know who else would/could buy them other than young faculty members (maybe those who come from other schools on the coast) who want to do the urban hip thing. There isn’t much of a professional class to speak of there that hasn’t already bought. Maybe this is also aimed at the expected wave of baby boomer retirees that they always talk about.
Thanks again. From Google the development seems to be a brick building at 300 Third East into the Plaza at 3rd and Lincoln and called the Home Laundry Building.
Small world dept: My apt. from 89-91 was at 2nd and Lincoln — only 2 blocks away from what you describe. I remember that plaza but not an old laundry building. That location is close to the SW corner of campus near the law school. It’s not the kind of neighborhood that would draw in the expected wave of baby boomer retirees. Sounds more like it’s geared to grad or law students. Some of them have money (courtesy Bank of Mom and Dad), but most of them are getting by on loans just like anywhere else.
Maybe it’ll work out, but I wouldn’t bet my future on it. Now if your BIL wants to buy the Irish Lion, then by all means contact me so I can start to recoup all that $$$ I spent there.
I will ask
BTW the Irish Lion has a nice website and I will definitely visit when I am in the area. If you own it Congratulations.
Don’t own it, but sure wish that I did. I meant that if he was looking for someone else to go in on the deal, it would be the best chance that I’d ever get to recover the sums that I dropped in there after (or during) classes.
With less than a month to July 4, the sluggish activity spells trouble for the summer dog days ahead. ‘It will be a summer of more markdowns,’ predicts Steve Shea
I think that Steve is subtlely predicting that the next bubble to invest in will be in dog houses. We will be seeing the latest and greatest styles will be hyped at that BBQ featuring sauteed squirrels and cupcakes for dessert for the slow summer days in the realtor world.
Got cupcakes?
Maybe need to change my handle to Already Left CA and Happy about it.
This is reminiscent of that IBM commercial where the twenty somethings are sitting around their computer watching the sales start on their new web page. They see the ticker and start cheering for joy, then the numbers start clearly going higher and higher and they all know they can not absorb the demand. They all look at each other with dismay now and realize they are going to need help, I kind of feel like those characters in that commercial now. I wanted a price drop, however this is getting completely out of hand and it just started with scary depression like numbers now and we have no end in sight maybe in 2010 with banking reform…maybe. YIKES!!!
“‘With the market like it is, we won’t buy if it’s not exactly what we want,’ said Harris Turner. ‘We are not in a rush at all.’”
Aww, c’mon Harris, go ahead and buy - in 20 years you’ll be way ahead of the game.
She was 22 and tired of exotic dancing for a living. So Irene Thomas bet her future on real estate
Irene, there are other ways to get out of ‘dancing’. Try getting a normal, legitimate job. Sell cosmetics at a department store, get a restaurant serving job, etc. Something you can look yourself in the mirror and say I did an honest days living. Register for school and increase your earning capacity based on knowledge, education, and not selling yourself.
That’s like so 1970’s that’s not “hot”
The Journal Sentinel from Wisconsin. “Sellers started to get the hint last month: It may not be worth it to put a house onto a glutted market. New real estate listings rose a mere one-half of 1 percent from a year ago, according to Metro MLS. Meanwhile, sales dragged for houses already listed, falling 11.2% below May 2006.”
Wisconsin Sellers Get a HINT?…
Sheesh..Wisconsin is the 13th Highest in Home Equity Extractions (HEW) in the frigging Nation and they are DUE to have their share of Bankruptcies and Forclosures with Flips and “Creative Loans”.
The Homes and Wages may be much lower than on the Coasts and Hot Spots but these FBs and GFs are in for on Hell of a RIDE down the Slope REGARDLESS how the Journal Sentinel and the RE Media SPIN this CRASH.
HINT..These people DON’T even have a CLUE !
Condo’s Half Off In Fort Myers FLA:
http://www.winknews.com/news/local/7896352.html?video=YHI&t=a
If I bought one for 310K and the build is now selling them at auction for 14k I would be P I S S E D…
That video attached to that was hillarious. No vaseline…
“It’s not fair! They promised us they wouldn’t sell them for less than market value!…”
They didn’t…welcome to the new market.
(Watch the video…it’s worth the 2 minutes)
Condo’s Half Off In Fort Myers FLA:
http://www.winknews.com/news/local/7896352.html?video=YHI&t=a
If I bought one for 310K and the build is now selling them at auction for 145k I would be P I S S E D…