Price Decreases Are Good News
In Business Las Vegas reports from Nevada. “The price of resale homes fell sharply in May, but a Las Vegas-based analyst said the price drops are needed to reduce the glut of homes on the market. Dennis Smith of Las Vegas-based HomeBuilders Research reported that the median price of resale homes in May dropped $7,000 from April or 2.5 percent to $278,000. That’s $11,000 lower than the price in May 2006, Smith reported.”
“‘It might be strange to call these price decreases good news. However, given the market conditions, it might indicate that some folks are finally facing reality and pricing their listings so they will sell,’ Smith said. ‘This is needed to bring down the resale inventory.’”
“Smith reported there were 2,587 resales in May, bringing the yearly total to 6,600, a drop of nearly 35 percent from the first five months of 2006. Given the pace of nearly 2,500 resales a month, Smith said Las Vegas could finish the year at a total of less than 30,000.”
“That would mean a drop of 11,900, or 28 percent, from the 2006 number, Smith said. And the 2006 resale number was itself a 28 percent decline from 2005, he said.”
“In the new home market, the median price was $308,874 in May, a year-to-year decrease of $14,156 or 4.4 percent, Smith said. When omitting mid-rise and high-rise condos and condo conversions, the median price for new homes was $309,990, a drop of $29,000 or 8.5 percent from last year, he said.”
“There were 8,253 (new Home) sales through the first five months, a year-to-year decline of nearly 44 percent, he said.”
“In an indication of the effects of higher credit requirements by lenders, the average cancellation rate in many parts of the valley was 31 percent, up from 26 percent where it had been most of the year, Smith said. Many buyers have been frozen out of the market because they don’t have credit scores of 700 or higher, he said.”
“‘How many young potential buyers have a 650 to 700 credit score, but are being rejected?’ Smith asked. ‘I don’t know the answer to the question, but I assume that’s a very large number.’”
“For nearly 30 years, Richard Rizzo has seen much of the development in Las Vegas from the ground up.”
“Q: What about challenges of laborers? A: ‘People have criticized me for saying there is a limitation for how much this community can absorb construction work. I don’t see how all that’s being planned can get built in a reasonable period of time without some kind of order as to how it goes forth.’”
“‘What that does for me is give me great concern that there may be others making commitments out there that can’t be supported and that’s only a passageway to failure. Hopefully, the market will drive them to a point where they say, ‘I can’t afford it, it’s too expensive right now and I don’t have confidence you can get it done. I will just have to wait.’ That seems to have happened with some degree to the condo market, which has been so successful as an investment product.’”
“‘It is not a condo market as we traditionally know it. The ones that were designed for the locals to live and reside in were too expensive. They didn’t fit. Those who had already taken reservations had to back off and the other ones just went away.’”
“‘The majority of those units are not true condo units. People like you and I are not going to move into those units. They are buying them as an investment. As I understand, certain people are buying blocks of them, five and six of them. You can only use them from what I understand six weeks out of the year. The rest of the time you have to put them back in the pool or leave them empty.’”
“‘So with the occupancy rate over 90 percent, the chances are you are going to able to rent the damn thing. It is a good gamble. Even if you are paying premium prices for it, they are getting premium rents. You can justify the numbers as an investment but not to live there. The salary structure of this community doesn’t support somebody paying $800 to $1,000 a square foot for a place to live. They can’t afford it.’”
“Q: What about the condo market? A: ‘The ones that came first got overcommitted. They ended up starting them and not really knowing what their market was. Panorama is a good example of that. Look at the prices on those things.’”
“Q: What about the residential market? A: ‘The residential market in Las Vegas has suffered from overbuilding. The prices on single-family units are reducing themselves 15 to 20 percent. Meanwhile, the condo prices have to be up here. I think they are less attractive than they were even a year ago until you absorb some of this single-family residential stuff that is underpriced right now.’”
The Arizona Republic. “Pinal County is taking a big breath. Coming down from two years of dizzying growth, Pinal now finds itself trying to get a grip on development before the next tidal wave of growth strikes.”
“Starting around 2004, growth blindsided Pinal County. People entered lotteries fighting for homes in the newest master-planned communities. The county issued a record-breaking 18,700 permits for new single-family houses in 2005.”
“It’s a different picture today. From a peak of 1,785 sales in the second quarter of 2005, Pinal’s resale market dipped to 840 transactions in the first quarter of this year.”
“‘We’re at a trot now instead of a full-fledged run,’ said Sandie Smith, one of three Pinal County supervisors.”
“The housing market continues to slow in metropolitan Phoenix, but the area still ranks third in the nation for home building. According to the National Association of Home Builders, Phoenix ranks behind only Atlanta and Houston for the number of single-family home permits issued this year.”
“The Valley’s high spot in the home-building ranks comes even as housing permits fell 22 percent this year from 2006’s pace, according to (analyst) RL Brown.”
“Metro Phoenix beat out Atlanta to be the top home-building market in 2004 and ‘05, but, in retrospect, that wasn’t necessarily a good thing. At least 30 percent of the homes built during the market’s high point a couple of years ago were bought by investors who either didn’t move into them or found renters.”
“Those empty homes are now hurting some neighborhoods and their home values as investors can’t sell and their houses fall into foreclosure.”
“As the housing boom faded in metro Phoenix, building slowed, and the area slipped in the national rankings. Here again, the slowdown could be seen as a good thing since there are plenty of already built new homes sitting unsold.”
“Housing analysts estimate anywhere from 10,000 to 20,000 speculatively built houses are sitting empty in the Valley.”
“Some investors signed deals putting very little down, and when the market slowed, they walked away from that earnest money, leaving builders with the house. Other new homes haven’t sold because buyers can’t sell their existing homes and close on the new ones.”
“Brown is currently revising his forecast for home building in metro Phoenix downward.”
“In January, he had estimated 41,000 single-family permits would be issued in metro Phoenix this year. In 2006, there were 42,460 new home permits issued. In 2005, there were 63,570, but how many of those went to investors who artificially inflated demand?”
“‘Even with 35,000 or 36,000 single-family permits in a year, Phoenix still has a heckuva housing market,’ Brown said.”
‘Even if you are paying premium prices for it, they are getting premium rents. You can justify the numbers as an investment but not to live there. The salary structure of this community doesn’t support somebody paying $800 to $1,000 a square foot for a place to live.’
Clueless industry veterans are probably the reason markets are so overbuilt. If these condos were such good investments as rentals, they wouldn’t be for sale.
‘Like the rest of the country, Arizona has been hurt by declines in the real estate market. The state is No. 2 in the nation for subprime loans and state economists say the sagging housing market will crimp job growth for at least another year.’
‘The Arizona State Land Department still holds thousands of acres of prime northeast Valley land, but it has yet to schedule auctions to dispose of it. Not a single northeast Phoenix parcel is on the schedule for July or August, although eight parcels are on a presale list posted on the department’s Web site.’
‘Those parcels, all east of Cave Creek Road, will add almost 1,700 acres to the inventory of developable property when they are sold. Of the eight parcels, most have target dates of 2007. Some are targeted for 2008, and one parcel, 600 acres on the northeast corner of Pinnacle Peak and Cave Creek roads, was tentatively listed for sale in 2006.’
‘Obviously, that did not happen. A big slowdown in the housing market, which forced the land department to postpone some schedule sales, has pushed the calendar back.’
The Arizona Republic article states that 30% of new homes sold in Phoenix were sold to investors who never lived in them or rent the properties out. How many of the remaining new homes were bought by people who live in the house but bought as investors?
My guess is that 30%- 50% of new homes sold in Phoenix were bought by speculators. This means a ton of for sale homes for years to come.
I’ve just read that the median price for new homes in the Phoenix MSA is $250,000, which is $10,000 less than the median sales price for existing homes. Looks like the builders may be undercutting the existing home market.
Ben, there must be a misunderstanding. when I was there in November I was assured by many Phoenecians that there is no buildable land anywhere in the boundless desert surrounding Phoenix.
I looked out and saw a mirage… endless amounts of undeveloped land that evidently wasn’t there.
now somehow, a newspaper is writing about the mystical fantasy-land that I saw in my dream!
it boggles the mind.
How about the new law that Aunt Janet just signed today? Employeers have to run new hires through the state database to verify citizenship. If they hire illegals, big fines and suspension of business license. Multiple offenses and they are forever banned from doing business in AZ.
I love it, but what is it going to do to the state’s population? I suspect lots of illegals will be moving to greener emloyment pastures.
Finally, a government is targeting the right people in the illegal alien problem. Way to go, Arizona.
I’m interested to see how this plays out as well. There are areas in Arizona I’d actually be interested in living in sometime in the future, but I usually scratched them off my list due to the huge illegal immigrant problem.
“I suspect lots of illegals will be moving to greener emloyment pastures.”
One can hope.
I have made the remarkable discovery that even people with multiple university degrees can spray for weeds and prune their own palo verde trees. . . even help out their older relatives with these chores now and again.
I have yet to hire an illegal alien to help me with yard work. In fact, the only Spanish-surnamed guy I’ve hired to help with this stuff gets LIVID if you bring up illegal immigration. So, when I’m around Frank, I Just. Don’t. Go. There.
That follows. Legal immigration is such a difficult process that legal immigrants are the most resentful of those who want to jump the queue. Who can blame them, really? It costs years and moolah to immigrate under the system…
They can even clean their own toilets. MSCS 1990 California State University, Chico.
The Veto Queen signed that bill? My goodness, what is this state coming to?
OTOH, Janet probably read the tea leaves, and they said, “Sign this, or your not going to be this state’s next U.S. Senator.”
‘I suspect lots of illegals will be moving to greener emloyment pastures.’
You must have CA in mind. This past week I heard an interview on the radio where a state congressman was trying to push legislation where stores like HomeDepot would have to feed and take care of those migrants looking for work while standing out in front of their business.
wtf? NOW I have heard everything!
I’ll just go stand outside Spago. They will have to give me a free entree and dessert. And I I need to use the facilities, they will need to let me do so.
It’s true:
http://hosted.ap.org/dynamic/stories/I/IMMIGRATION_DAY_LABOR?SITE=WSPATV&SECTION=NATIONAL&TEMPLATE=DEFAULT&CTIME=2007-06-27-03-12-24
The last sentence is my fav - makes you really feel for them:
“”If you want to build and make tons of money from our community, we’re going to want something in return,” Macias said.”
Wow…
speaking of quotes…totally OT:
My fave quote of the wk - Bill Gross, Newport B!tch, CA
“…The companies gave the mortgage bonds investment-grade ratings, duped by the “six-inch hooker heels” of collateral that can’t be trusted, he said.”
How about calling the cops on them for soliciting?
If I were in charge at Home Depot, and the city made this requirement, I would provide the required facilities, and then have security out there checking citizenship papers to ensure my company was not violating state and federal legal worker laws.
Welcome to the brave new world of Mexican politics.
Today they will want private enterprise to provide food, shelter, medical, etc… to all illegals who know where to loiter. Tomorrow the politicians will expect stuffed envelopes for granting private enterprise access to reliable electricity, access to reliable water, etc…
Just like in Mexico.
Got 10% down?
Ahg ya bastages are sending em to LA
It will hasten the brazen destruction of the once golden state. It is the deserved punishment for the socialist policies for several decades. Perhaps it will be the catalyst that turns things around and allows the few remaining taxpayers to take back California.
No kidding. At times I miss living in the state of my birth, California (lived there for 25 years). And then everytime I go back home to visit the majority of my relatives who still live there, and see the excessive pricing on homes, gas, taxes, and on top of that illegal immigrants turning that once gorgeous state into a 3rd World shithole I get pissed and leave happy.
Sometimes I feel guilty for bailing out, but seriously, enough is enough.
This is a housing bubble blog. it makes sick reading all this stuff about immigrants, and complaining yada, yada blah. It is not their fault that housing went throughthe roof. It all began in the White house with their stupid war. let’s make people believe they can all afford a house even though they have never saved to get one and their low int rates. thanks a lot Greenspan! genius
How about the new law that Aunt Janet just signed today? Employeers have to run new hires through the state database to verify citizenship.
The Democrat Party is making more and more common sense laws. Did I say that? I hope you are right. This could be significant. This could be voted down by the supreme court (Republican?). Good grief. I thought the Democrats were looking for more voters because they tend to want socialism - more gubment programs. I’m on my second drink of red wine.
This is great for Arizona. Bad for California taxpayers and good for California politicians.
“‘The majority of those units are not true condo units. People like you and I are not going to move into those units. They are buying them as an investment. As I understand, certain people are buying blocks of them, five and six of them. You can only use them from what I understand six weeks out of the year. The rest of the time you have to put them back in the pool or leave them empty.’”
“The majority of those units are not true condo units” is a waste of words.. it’s a time-share.
..which makes me wonder how the Grand Sierra (MGM aka Reno Hilton) in Reno is doin lately. As of last Jan or so, their “condos” were being offered at minimum of $250,000 for a 30 day max per-year occupancy of a converted hotel room… had contracts on about 25% if i recall.
Hey, Scooter Libby … is free to… sell his house in DC and run naked in the Cayman Islands…with his…”friends”
How sweet! 2008 is not going to be very kind to home-sellers or …Republicans.
I have to say I’m disgusted but not surprised.
I have been reading this blog and following real estate in general. These price reductions are miniscule compared to the run up we have had. Maybe we will not even have a correction (certainly not the 50% that people on this blog are expecting) ….just a long period of consolidation.
Just being pragmatic. No I am not a homeowner and will probably rent for a long time.
Laffer on krudlow says CA is screwed for years but he’s cool, hangin in TN, yo
Check out this article (Part I of a series), interesting comments on parallels between this RE bubble and the last one in CA:
http://www.elliottwave.com/features/default.aspx?cat=mw&articleid=3171
This is from the writer of the south bay beach cities bubble blog here in L.A. (http://sbbeachbubble.blogspot.com/).
….Phoenix still has a heckuva housing market,’ Brown said.
What is Mr. Brown smoking?
Brownie, you’re doing a heck of a job.
Heh heh…”heckuva job, Brownie”.
Whatever Mr. Brown is smoking, I want a puff. Just one. Pretty-please?
“As the housing boom faded in metro Phoenix, building slowed, and the area slipped in the national rankings. Here again, the slowdown could be seen as a good thing since there are plenty of already built new homes sitting unsold.”
“Housing analysts estimate anywhere from 10,000 to 20,000 speculatively built houses are sitting empty in the Valley.”
“‘Even with 35,000 or 36,000 single-family permits in a year, Phoenix still has a heckuva housing market,’ Brown said.”
So its good to slow down, but we are not really slowing down. Got it.
OT: Chimp commutes Libby sentence.
“I respect the jury’s verdict,” Bush said in a statement. “But I have concluded that the prison sentence given to Mr. Libby is excessive. Therefore, I am commuting the portion of Mr. Libby’s sentence that required him to spend thirty months in prison.”
Outrageous. I want to throw up.
Re-read the list of Clinton’s last-minute pardons and you WILL throw up.
Doesn’t make it right this time, either.
Not to mention he was paid very well for them as well.
Should have been a pardon. That was a political witchhunt from the get go.
amen
LOLOL
Pass the peace pipe.
You can’t be friggin serious.
“hould have been a pardon. That was a political witchhunt from the get go.”
‘ll have to ask my friendly neighborhood judge about that. I thought that perjury was bad. Guess I was wrong. I can’t wait until it is OK to give the judge a wedgie in court, too.
Its not too surprising from a man with no integrity whatsoever. I guess he figured his reputation can’t be any worse at this point.
Well, if the admin won’t enforce the laws, you can’t expect them to send their friends to jail, just because a jury and some judge convicted them. Who do you think owns this country, anyways?
I’m looking forward now to jury duty in 2 weeks, can’t wait to tell the prosecutor during the voir dire that I am unable convict anybody of anything since the white house has instructed us that the DOJ and the courts don’t matter–its who your friends are. Why should I take time off from work to participate in a charade? I’ve got a business to run.
AMEN!
“….Why should I take time off from work to participate in a charade? I’ve got a business to run……”
Oh, ……no, no-no.
You will be serving for sure with that argument. Remember, there has to be a greater detriment to society/you - for your non-service, than your selection to the jury.
Your mother is dying in Wisconsin, and your plans to be at her bedside are already paid. You have a nonrefundable flight ticket in the morning(or, trial date affected). You would love nothing better than to serve your country, county and community…..but damn the luck, family duty is calling…..
Your half-brother from Bakersfield is meeting you at the airport, when he gets off night patrol in his city…..IF, he is finished with all the reports on the ‘Dirt Bags’ he has arrested this last week.
“If this does not meet with the courts calendar your honor, I’ll change my plans….”
(Better yet, just wait and there is a good likelihood 15 + non-workers will be selected and you can get back to work….)
LOL, absolutely true.
Though it does say clearly to the Big Boys on Wall Street, no worries. No matter, the DOJ will not be looking into any of their doings.
And with mortgage fraud rampant, all the guys who profited have to be smiling. What are the odds that a discredited DOJ will be able to make cases against these guys? I’m waiting to see if Fitzgerald quits.
“It might be strange to call these price decreases good news.”
‘Strange’ to whom?
“‘Even with 35,000 or 36,000 single-family permits in a year, Phoenix still has a heckuva housing market,’ Brown said.”
Fahgeddabout it…..you got 60k houses listed that aint moving an area that has low income on the median and you are building 35k houses into this dismal situation? We now need a “Real American Home Builder” award. Here’s to you Real American Home Builder, you laugh in the face of an over inflated market and huge inventories with one word…build!
Goldilocks is alive and well……………….
“Paulson sees U.S. housing downturn near end”
This guy has to be dreaming.
http://www.reuters.com:80/article/newsOne/idUSWBT00722520070702
Repeat after me, Mr. Paulson:
Hope is not a strategy, hope is not a strategy, hope is not…..
Unless, of course, you’re the chaplain.
He should have stayed on Wall Street but I do find his commentary amusing. He’s calling a bottom in the market but has no idea when an upturn will begin. I dunno, but isn’t the time you call a bottom when there is “an upturn”, that’s how a bottom becomes a bottom….
Paulson is writing himself into history a la herbert hoover, the Harvard Economic whatever and that Yale Professor. I completly forgot those guy’s names.
Irving Fisher, of “permanently high plateau” fame.
Hey i just read on cnn.com:
Treasury Secretary Henry Paulson said Monday the U.S. housing market correction was “at or near the bottom,” although it could be some time before an upturn.
Paulson, who was chairman of Goldman Sachs Group Inc. (Charts, Fortune 500) before taking the top Treasury post last year, said he monitors financial markets closely, and aside from the subprime situation, they remain healthy.
“Markets are volatile,” he said. “I haven’t seen a single thing that surprises me - it’s hard to surprise me.”
I wonder if sticking a pole in his ass would’nt surprise him either.
I tell ya what I am no fan of China in fact I hate them and their cheap plastic and the way they cheat at capitalism and poison everything. However, I believe they had an economic minister the other day who they executed for doing a poor job…I wonder how that would shut these ass clowns up if their job was literally their life. Maybe we need to start taking fingers or something to get these people back in line, and fer fucs sake get blinky the wonder cat out of the Presidency!! Christ lets impeach him already the guy is a disgrace to everything that is American.
Nice that VEIEX went up 2% today. 10% “red” China. BwaHaHaHaHa!
China cheating at capitalism is no different than the USA cheating at capitalism. Everybody does it. We just rarely hear about it when we do it.
And I agree 100% on impeachment, although the Hague is really where this Bush Crime Family belongs. All of them.
Why would a pole surprise him. He already has his head there.
please LOL I can’t breath anymore LOL
“Despite downturn, Valley is No. 3 in home building”
Another rah rah article from The Arizona Republic. I guess it is safe to assume that Jay Butler, ASU, the Phoenix Mayor’s Office and the Arizona Republic will be cheering r.e. all the way into the coming depression…
“‘The majority of those units are not true condo units. People like you and I are not going to move into those units. They are buying them as an investment”
but then:
“‘So with the occupancy rate over 90 percent, the chances are you are going to able to rent the damn thing. It is a good gamble”
so is it an investment, or a gamble? I feel that those are 2 completely different ideas!
and my favorite:
“Even if you are paying premium prices for it, they are getting premium rents.”
will they continue to get premium rents as 10’s of thousands of new units come on board?
Seriously, the logic is just mindnumbing. It makes me want to slam my head into a wall. ugh.
Yeah, that one made my head hurt so I stopped reading it. (”Doctor it hurts when I touch my arm.” “Well, stop touching your arm.”)
By occupancy rate, does he mean owner occupancy? But he just said that people “like me and you” aren’t moving into them, they’re renting them out. Am I missing something?
He’s talking about Condo Hotels, where owner can only use unit 6 weeks out of the year rest of the time it is rented out like a hotel room and he’s claiming these types of “Contels” are occupied 90% of the time by vacationers and so make sense, due to that fact, as an investment….. hard to believe….
“‘How many young potential buyers have a 650 to 700 credit score, but are being rejected?’ Smith asked. ‘I don’t know the answer to the question, but I assume that’s a very large number.’”
Sorry, but I have to call B.S. on this one. Last time checked, DU & LP (FNMA & Freddie automated underwiting systems) were both still spitting out approvals for those with decent credit, downpayments and payment ratios at 28% and debt ratios at 36%.
But this guy would have us all believe that “deserving” borrowers were being turned down by the banks en masse. No, what he really means to say is that people with decent credit but big dreams are trying for homes more than they can afford and the banks are starting to say no. But this is a good thing as it means prices will be correcting, because as many here have predicted, with no financing prices will come back to normal income guidelines of affordability.
sorry should have stated “…no toxic financing,” in last sentence
down payments!!!!!
The people being turned down are the ones that don’t have enough to put down.
Right on, there’s no such thing a “deserving” borrower or even a deserving anything for that matter. The four words that set you free:
Nobody owes you anything.
“Nobody owes you anything….”
I know you meant that from the “entitlement” perspective (and I completely agree), but I think it has another meaning as well. You are truly free, not just when you don’t owe, but when you can say……
‘And nobody owes me anything’.
(okay, excuse me…. The bong is comin’ around again…..)
“Pinal now finds itself trying to get a grip on development before the next tidal wave of growth strikes.”
Don’t worry Pinal county, you’ll have plenty of time to find you grip before the next tidal wave of growth strikes. However, there is a good chance you might your grip (and more) with the impending tsunami of foreclosures.
your grip … might lose
(yikes, it’s been a long day)
“Those empty homes are now hurting some neighborhoods and their home values as investors can’t sell and their houses fall into foreclosure.”
“As the housing boom faded in metro Phoenix, building slowed, and the area slipped in the national rankings. Here again, the slowdown could be seen as a good thing since there are plenty of already built new homes sitting unsold.”
Ok, which is it? Is it the “hurting neighborhoods” or “new homes sitting unsold”?
Criminy. Every. single. day. dumber. and dumber.
empty homes = bad.
Building more houses that would sit empty since there are already empty houses = bad.
Slowing down the building = good.
Stopping building would be better for home values, but that ain’t gonna happen. So, 42,000 more houses that will sit empty is better than 63,000 new houses that will sit empty.
Sleepless_near_Seattle:
The occupancy Rizzo is refering to is the hotel occupancy in Vegas which is currently 90-95%. Hotel/Condos are quite different than a typical Condo. As Rizzo said you can only live in them for maybe 6 weeks out of a year the rest of the time they are rented out to hotel guests. IMHO this is a great move by the casinos letting investors buy their rooms shouldering their expansion and thus lowering their risk.
House Inspector Clouseau:
It’s just semantics. An investment is just a bet or gamble on a future outcome whether it is a stock, commodity, RE, precious metals, art…. (BTW: You’re just fooling yourself if you think otherwise) So there really is no contradiction with Rizzo’s statements using investment and gamble to mean the same thing.
Ben Jones:
You’re confusing Condos with Hotel/Condos here in Vegas if you would’ve read the article carefully you would have understood this. As Rizzo points out these Hotel/Condos are holding up much better than traditional Condos as investors bet that this rental investment will pay-off because of the high hotel occupancy rate.
Disclosure:
I’ve lived in Vegas for the past 13 years, I’m a renter and will continue to rent as I’m betting that home/condo prices will continue to fall for many years to come. Also I think the investors in these Hotel/Condos are going to get burned badly as the 90% occupancy rate will surely fall because the number of hotel rooms here in Vegas will be increasing nearly 50% over the next few years throw in a nasty recession and occupancy will be much lower.
I did read the article and IMO condo/tels are even dumber than condos as an investment. Think about it. If it was such a good deal, why would they even sell them?
I don’t have an opinion on the viability of condo/tels, but the issue is not whether or not they should sell them, but return on investment (ROI). This is what rational businesses are trying to maximize. New or creative products can stimulate demand and thus provide a chance to increase ROI. Whether they are dumb as an investment is not logically related to whether or not they would sell them.
“It’s just semantics. An investment is just a bet or gamble on a future outcome whether it is a stock, commodity, RE, precious metals, art…. ”
Those are all speculations if you are buying in hopes of selling later for a higher price.
Buy a stock for the dividend, you’re an investor. Buy a bond for its interest rate, you’re an investor. Buy precious metal to turn it into jewelry, you’re an investor.
Rent a factory, fill it with machenery, hire workers to crank out widgets in hope you can sell them at a proft, you’re an investor.
Buy something in hopes of selling later at a higher price, without major improvements, you’re a speculator.
Yes, there is a degree of gambling in each. However, as an investor, there is usually more thought and planning than just “I hope I get lucky and the price goes up” involved.
I want one of those 63,000 empty homes. I know that the desert land is running out. They might hit the Mars looking land up there in Hurricane UT. Maybe they can’t build because the rest of the desert is owned by the Native American reservations? Then they more casinos? Then the homedebtors can try one last chance to save their Mc$hitbox? I long for those 115F with no shade and no AC days. NNNNOOOOOOTTTTTT.
Today at 6:30 pm driving home my Toyota Matrix registered the outside air temperature at 112 degrees. Love it! I should have rolled down the windows. This is AZ at its finest. The rest of you are (w)ussies.
It was 112 in St George UT today. Going up to 115 by Thurs. Dont even want to think what it is in Mesquite NV. But hey, Its a DRY HEAT.
Doesnt matter, anything over 95 degrees can kill you. 112 degrees is like being in the attic or in the car on a hot summer day here in south FL. Feels like an oven!
But… but… need 2 leave ca… EVERYONE is moving here! Or there! Or wherever! Surely, you must realize that 10,000 people a day move to empty, desolate wastelands in the desert. Not people like you or me - people who don’t need jobs! Or water! Or who bring enough home-grown drugs to not need either… for a while! Buy your piece of wasteland now, because they aren’t making anymore!
Hahahaha… if it weren’t so true, it would be funnier, but still!
Good one PTM - don’t take a chance on being the last person to move to the most desolate place on earth!
I move to where the money is. And I rent. In the future when I buy real estate, I will buy in the far north rainy area and I will buy in a southern (dry) area. One of them will be paradise. Why worry?
Vegas is currently under drought-watch. Lake Mead has dropped 70 ft since 2000.
I understand that they are searching for other sources of water, but the whole southwest is in a drought.
Los Angeles only received a fraction of normal rainfall so far this year.
Something like a drought might help put the final nail in the real estate coffin for places like Vegas.
Something like a drought might help put the final nail in the real estate coffin for places like Vegas.
Well if global warming holds true, Florida will be under 10 feet of water in 75 years. So I guess buy if you want, but don’t think your great grandkids will still own it.
Probably not. North Florida is as high as 300 feet above sea level. We may see the keys and parts of southern FL underwater as those lands are only a few feet above sea level.
Some nice, mild July 4th holiday weather for those lucky enough to live in the desert southwest.
According to Accuweather: Wednesday: Las Vegas 114, Phoenix 116, Needles 119, Salton City 119. Thursday - Salton City 120, Death Valley 126. But, heck, all these places are already discovered. I’m thinking a luxury condo development near Amboy could have promise.
AccuWeather and “The Weather Channel” are for the scientifically illiterate public. Which would you rather have, the real source or just a stupid figurehead reading from the experts?
http://www.nws.noaa.gov/
I gave up altogether on the weather channel. You have to sit through at least 1/2 hour and many commercials just to get to the forecast for your own area. Much easier to get it straight from the horses mouth.
Got 10% down?
Haven’t you heard the message?
Big Government like NOAA is incompetent, wasteful full of tax-eating communist bureaucrats. Surely the strapping private enterprise of WeatherChannel.com will squash the pathetic gubbermint apparatchiks.
OK seriously. I just clicked on the NOAA.gov site for San Diego.
It has something quiet that’s really new and amazing.
You can click on your exact location on the map and it will provide a forecast. No it is NOT just finding the nearest ’station’ for which it emits a standard forecast. It appears to to be interpolating or fitting among the fields in the computer simulations or something—like what a scientist woudl want.
Since I live near the coast clicking just a little bit in and out DOES make a difference on the forecast highs.
I clicked on the very point of La Jolla/bird Rock: forecast for tuesday, high of 70.
I clicked on something close to my house (Morena & balboa roughly)—high 75.
Intersection of I-8 and I-15, high 83.
In my experience, that distribution is very common & reasonable.
No ZZYZX is the new boom town. http://ludb.clui.org/ex/i/CA4922/
Just look at all the great things this area has to offer. PS I excaped this meth infested, death trap roads, sun scorched, wind blown, cresote bush coverd hell hole 2 years ago. http://www.proland.com/barstow.asp
Just look at the potential in the area. P.S. I escaped this cresote bush covered, meth infested, roads of death, He!! hole 2 years ago. http://www.proland.com/barstow.asp
Then moved to Utah?
Pondering - and 11,000 are leaving the place that 10,000 are moving too. And there is unlimited births, immigrations, deaths, etc. I am happy with the ONE house I have in Albuquerque. It is hot enough here - and plenty of desert. I couldn’t handle that Phoenix wasteland heat. And, plenty of wasteland here in the Land of Enchantment.
Any updates on the dude that is renting out his Phoenix suburb house as a ‘hot vacation spot’?
Albuquerque has been getting plenty of rain. And, I am so glad to be out of Clownifornia.
From Reuters. “Mortgage finance companies Fannie Mae and Freddie Mac could face a multibillion dollar loss if subprime assets continue to mount, according to an analyst report.”
IF? Wrong question. Should be - HOW MUCH? HOW MANY BILLIONS?
don’t miss out
http://news.yahoo.com/s/ap/20070702/ap_on_re_us/town_for_sale
Vegas and DEATH Valley is only about 120 miles apart. Without all the dancing girls, condos and clowns, Death Valley doesn’t really amount to much, but then again, neither does Vegas WITH all that
shoot. The libertarian policies of Nevada make it very attractive to individualists such as me.
A 30 year old colleague and his wife here in the valley were set on buying a $500,000 home in the west Valley. I was both surprised and impressed when he told me that they decided to stay put and he asked me for advice on how to save money for the the next several years. Seems the young couple have a chunk of money they intended to put as a down payment. I suggested short term treasuries. Not all Gen-Y’s make mistakes. In fact, I hear more often their parents (boomers) encouraged a lot of their children to become financial slaves.
No way I’m gonna buy and pad someone’s retirement, either. I sold in late 2005 and have been sitting tight since. Everyone…friends, co-workers, parents in law, and even the boss, think its weird that as a former homeowner, that I want to continue to rent (and let some other homedebtor subsidize my lifestyle).
I won’t buy until real prices are down 40%…we’re down about 14% thus far, so I’m biding my time. I’ll let the fools who are burning cash and the greater fools who are buying send the market lower.
30 y/o is dead center of GenX. Babyboom = 46-65. GenX = 66-85.
GenY are 20 and under.
http://www.nytimes.com/2007/07/03/business/03home.html?hp
Part of you feels for these people, but part of you also questions why it doesn’t occur to them that what seems too good to be true, almost invariably is… the guy who thinks he’s going to get “quick money, repaired credit and a place to live without paying rent for a year” should have known better, and willful blindness is not an excuse…
“If someone wants to believe something, and you tell them that thing, they are going to believe it, no matter how ridiculous it is.”
That’s an unfortunate weakness of human nature. For too many people, the logical part of the brain is too often overruled by the emotional side.
Guess some California real estate is pretty tough. A whole town in CA for less than a common house in Palo Alto. What gives?
http://news.yahoo.com/s/ap/20070702/ap_on_re_us/town_for_sale
Did a quick search on it, the guy who bought it in Nov, 2006 killed himself. He was seriously ripped off by the mortgage broker who bought it in 2003/2004.
Looks like it is very remote & has a very tiny population (seeing anywhere from 18-30 people), no infrastructure, no gas, etc.
Maybe we could all go in on it & build a city. You know…”build it and they will come.”
Actually, sounds kinda neat & if I had all the money in the world, it would be fun to buy something like that.
“Housing analysts estimate anywhere from 10,000 to 20,000 speculatively built houses are sitting empty in the Valley.”
jeeze.. If you have no freakin idea, just admit it.
LOL, yeah I’d think you could at least get to within the nearest 1000.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aYLY0NRUQJh4&refer=home
““Smith reported there were 2,587 resales in May, bringing the yearly total to 6,600, a drop of nearly 35 percent from the first five months of 2006. Given the pace of nearly 2,500 resales a month, Smith said Las Vegas could finish the year at a total of less than 30,000.”
Say what?? How did the writer of this piece allow such a BS projection? First 5 months sales total 6,600, a 1,320/mo average, and yet we now assume the remaining 7 months will average 3,342 per month?
Well, 18,000 IS less than 30,000……
Let all those houses sit empty, the sun and heat will damage them then they will sell at 50-75% off. Who wants to live in a desert? Id rather stay in Florida than move to some wasteland.
Who wants to live in the desert? Those who don’t want to live where there are hurricanes, tornadoes, earthquakes, socialists, or ice storms.
Then you might like north Georgia or Tennessee. Tornados are everywhere so that can’t be avoided. Snow and ice is infrequent and what little snow melts away with the 45-70 degree January highs. Real winters are far north, like Minnesota, Dakotas, Montana, Wyoming, Maine and Canada.