Prices Went Too Far Too Fast
It’s desk clearing time for this blogger. “Linda Moore has noticed a sense of apathy settling into the Manatee County real estate market, and she is determined to shake things up one neighborhood at a time. ‘Things have quieted down everywhere,’ said Moore, an agent on Anna Maria Island.”
“Moore, who has one listing on Palmetto Point, called the Realtors who are selling 30 more houses in the neighborhood and urged them to have open houses this weekend. Their solution: a mega open house. Twenty of the 31 houses for sale in Palmetto Point will be open to the public from 2 to 4 p.m. Sunday.”
“‘We’ll have refreshments, and we’re putting out balloons and signs,’ Moore said.”
“The monthly business confidence index released today by Associated Industries of Massachusetts showed confidence among employers statewide slipping three points in June. One of the factors causing uncertainty is the condition of the housing market in Massachusetts, said Andre Mayer, senior VP for communications and research at Associated Industries.”
“‘Housing prices are certainly down. There have been repeated signs that people will say ‘oh, the worst is over,’ but then it’s not,’ he said.”
“Home foreclosures are on the rise in Coweta County, and the highest reported cases in the metro region are on the south side of Atlanta, according to the Atlanta Regional Commission.”
“‘I think the most important, salient feature of the issue is that it is a national issue, and when we examined foreclosure rates in the state of Georgia, rates were highest on the south side,’ said Mike Alexander, chief of the ARC research division. ‘Across the board, the number of foreclosures has increased,’ he said.”
“Panama City is in the midst of an unprecedented real estate boom. More than 30,000 units worth about $5.7 billion have come on the market since last July, according to Prima Panama.”
“‘Panama looked like a good investment and a place to have a good time,’ says Jim Buckley, while admiring the view. ‘You don’t need a lot of sense to see that it will increase in property value.’”
“As a housing crunch escalates in Yellowknife, questions are being raised about some government-owned houses that are sitting empty on prime real estate.”
“‘You’d probably put it on the market, and probably that day or that evening…you’d probably have six, seven people putting in offers,’ real estate agent James Clarke told CBC News.”
“A for sale sign went up on a big two-storey home you pass daily on the way to work. A sold sign was stuck up the next day. The smart bungalow down the street was put up for sale and sold two days later.”
“Some call it a real estate boom. Merv Rayner, president of the Moose Jaw Real Estate Board, cautiously refrains from using that term. ‘Moose Jaw prices have been depressed for a long time,’ he says. ‘Finally Moose Jaw is catching up.’”
“I am the writer of the letter (June 15) headlined as, ‘Only realtors gaining.’ Apparently, this title has led to some misconceptions about the entire point of my letter, which was to merely point out that rising house prices are not necessarily beneficial to Regina residents.”
“The entire point of my letter was to just bring about the fact that there is an obviously downside to housing price increases: a higher cost of living. More money spent on homes means less money for other things. Exactly how does that benefit Regina residents or businesses?”
“Bangkok is undergoing a condominium-building boom that brings to mind the go-getting expansion in the 1990s - and memories of the bubble that followed.”
“In the past six months, inquiries from prospective buyers have fallen by 40 percent, said Ian Soo, managing director of a high-end real estate agency in Bangkok. ‘We’re probably one of the most aggressive agencies in central Bangkok and, if we’re experiencing quiet times, other agencies are probably experiencing something similar or worse,’ the British transplant said. ‘It’s a buyers’ market out there.’”
“Chennai real estate is now on a downward slide. Prices of land, apartments and even commercial rentals, particularly that of IT buildings, have come down by about 15 per cent. Builders and promoters confirm this.”
“Land in Sriperumbudur, which was selling at Rs.7 lakh to 8 lakh per ground, has come down to Rs.5 lakh to 5.5 lakh. Layouts promoted at Vadkapattu, which were selling thick and fast, are stagnating. About 25 per cent of the plots in many layouts, priced at Rs. 650 per sq.ft., remains unsold even after months.”
“The stagnation is visible. Not that the big builders are finding it easy. One of the upmarket builders near Navalur has about 50 per cent of his apartments unsold. Last year’s euphoria has died down.”
“In what traditionally has been a strong home-selling season, the metro Denver real estate market has remained flat. ‘We’re just kind of bouncing along,’ said Larry McGee of the Berkshire Group. ‘It’s not terrible. It is almost exactly even with a year ago.’”
“While it may be flat, Colorado’s housing market is faring better than that of much of the nation, said Jeff Thredgold, an economist with Vectra Bank Colorado.”
“‘The national media would have people believe that the housing market is getting absolutely trashed,’ he said. ‘It’s really tied to the fact that prices went too far too fast over the last five or six years.’”
Another great week! My thanks to those who support this blog. Please check back this weekend for news, your market observations and topics.
check back this weekend .. ?! are you kdding me .. I have no life - I refresh this blog every other minute. Thank god for this catheter & dominoes pizza.
Now for another hit o the housing crack pipe … I quit Patrick.Net cold turkey only to have this monkey on my back. Damn you Ben Jones !
” I have no life - I refresh this blog every other minute. Thank god for this catheter & dominoes pizza.”
Oh, lordy…can’t…breathe…laughing…gasping…for..air…
ROTFLMAO..
don’t do a catheter (pain!) - try depends like the crazed astronaut!
Thanks, Ben - best -most informed-blog on the net.
All- No yellow banner, but any small amt helps so if you regularly get info here, please flip Ben some cash
You could always try one of these: http://www.stadiumpal.com/
OMG, do men actually wear those to sporting events?
Not that it’s a bad idea, just a bit…different.
One thing that has seldom be mentioned in this housing fiasco is the affect it having on future generations. Homeowners I know in San Diego seem to think that all mira mesa condos should sell for a million bucks in a few years, but doesn’t seem to care that their own children will have to leave the area if housing doesn’t readjust to fundamentals. What short-sightedness. I have watched as young families with children have disappeared from what were subvisions of families 5 years ago. I’m not sure where the families with children go, somewhere in the midwest the schools must be growing rapidly. Anyway as each family leaves they are replaced by senior citizen’s or by young DINK’s who probably will never be able to have children and continue to finance their monster mortgages. Come on short-sighted homeowners, consider the nightmare your own children, nieces and nephews will have to face if these absurd prices don’t drastically adjust, they’ll be moving to Gary, Indiana or living with a houseful of roommates for the rest of their lives.
gascap, that’s part of the sociological aspects of the bubble that I am interested in and mentioned in the Weekend Topics thread. Neighborhood demographic shifts.
Would be a great topic -
I know I picked a stable place, low turnover, not attractive to ‘relo packages’ because I also don’t live on a McCrapbox cul-de-sac w/50 families with kids.
Stable, quiet, regular mixed homes. Just the way I like it. Wasn’t too bubblicious and since low turnover, low chance of ppl w/toxic mortages - unless they heloc’d themselves to he11. In that case, they would deserve what they get.
palmetto, my other question is where are all the condo homeowners? I was downtown SD at the game last week and observed that the new condo towers are about 10% occupied. I’m not talking about counting lights from a distance, I’m talking about being close enough to count condos which actually have blinds/furniture/stuff in them. Where are the people?
gascap, when I wuz a pup, this was one of my favorite songs (1965).
Everyone’s Gone to The Moon
( Jonathan King )
Streets full of people, all alone
Rows full of houses, never home
Church full of singing, out of tune
Everyone’s gone to the moon
Eyes full of sorrow, never wet
Hands full of money, all in debt
Sun disappears in the middle of June
Everyone’s gone to the moon
Long time ago, life had begun
Everyone went to the sun
Hearts full of motors, painted green
Mouths full of chocolate-covered cream
Hands that can only lift a spoon
Everyone’s gone to the moon
Everyone’s gone to the moon
Everyone’s gone to the moon
This is one of my favorites:
Yuppies in the Sky
(Tom Paxton)
One night as I was walking down Columbus Avenue
The sushi bars were shuttered, and the dark cantina too
I stood there in the darkness as an empty cab rolled by
When all at once I heard the sound of yuppies in the sky
The herd came down Columbus for as far as I could see
The men were wearing polo and the women wore esprit
Each yuppie had a Walkman, and as each one passed me by
I saw their sad expressions and I heard their mournful cry
Condos for sale, Condos to buy, Oh Yuppies in the sky
Condos for sale, Condos to buy, Oh Yuppies in the sky
Each one was wearing running shoes upon the ghostly deck
And each one had a cotton sweater wrapped around his neck
They all held out their credit cards and tried in vain to buy
But all the stores were shuttered to the yuppies in the sky
I’d seen them in commercials sailing boats and playing ball
Pouring beer for one another, crying, “Why not have it all”
Now I saw their ghostly progress down Columbus Avenue
I heard their cries for mercy and it chilled me through and through
All the salad bars were empty, all the quiche Lorraine was gone
I heard the yuppies crying as they vanished in the dawn
Calling brand names to each other, they faded from my view
They’d be networking forever down Columbus Avenue
The shift isn’t permanent. When all those senior’s equity disappears along with their retirement & benefits; when their savings and Social Security are inflated away; when their cost of living (especially for health care) skyrockets… they’ll be forced to sell and move to the sticks themselves.
“the sticks”
rivers and streams, small airports, BIG HIGHWAY, few people…
kinda like paradise for a lot of folks.
Heck yeah!
If my husband didn’t have to work in Los Angeles, I’d be outta there, sitting on my veranda, looking over my land and my gardens, somewhere very far away from big cities. I’ve always loved country life…
In the meantime, I can only wait until I can find an under 2000 sq ft house, on a big lot, in L.A, for less than 1 million frikking dollars….
Hey, I grew up in “the sticks” so I say that with affection!
We saw A LOT families with kids in Phoenix and Scottsdale AZ. This is where CA middle class relocated, among other places like Austin TX. Amazing to go to the malls and Whole Foods and see various age groups.
Not to criticize CA or anything, but most older people discovered 10 years ago that if they forced families with children out by raising home costs, they could lower their property taxes due to declining school enrollments. Unfortunately, this short-sightedness resulted in illegals and their kids moving in and renting in packs (10 cars in front of the house sort of thing). The costliness of educating these kids (bilingual this and that plus free or reduced-cost lunches and after-school programs) is costing homeowners way more than if they just let home prices gradually increase yet still remain affordable.
Of course, I am not even factoring in the burden (of the above) on the courts (family law, criminal law, & juvenile criminal/dependency)
Anyway, people in AZ seem quite happy to be there.
~Misstrial
Yes, and it looks like the gov has caught wise to her new constituency. I was wondering what possessed her to pass a law cracking down on employers of illegal immigrants. Your post just gave me a flash of insight. Wow, that’s what I call politically savvy. She sure knows how to bend with the wind.
Misstrial I agree. Our rental house is in a neighborhood full of families. Many are from California who seem very happy here. Housing prices are coming down with cost of living already a fraction of California. The powers at be seem to be very concerned with making this city a place with jobs and a good quality of life. It is unbelievably hot during the summer but has 9 months of about as perfect of weather as you can find. I think there will continue to be a flow of families to Phoenix.
Famlies come to Pheonix when water flows from the Colorado. Water, Food, and Money.,.,
I left out ENERGY.,..
cause when that dries uo, it culls the weak out.
there kids just wait for them to die so they can take over the homes, and then HELOC the hell of them……….
That has been perhaps the most puzzling/alarming/disgusting thing about this run-up to me: how anxious and gleeful the average American homeowner has been at the prospect of absolutely SCREWING their own children.
People have been on a serious disconnect the past several years. I can’t wait for things to “correct”- both financially and philosophically- and at this point do not care one whit what has to happen to get us back to a semblance of sanity.
Not giving a da*n whether your children can ever afford a house just so you can feel rich- is this one of the dictionary definitions of “ammoral”?
From what I’ve seen, it seems the people who cheer on ever-rising housing costs are the recent (and fairly young) buyers.
The older people (60s+, some in their 50s), tend to agree that housing is overpriced & tell us that we are smart to rent & wait it out. They say, “yep, we’ve seen this all before & prices always come back down.”
They also complain about their children not being able to buy a house here.
Should also mention these tend to be the kind of people who have long-ago paid off their homes & live debt-free. The ones who want rising prices are the ones who continually HELOC their “equity” away.
My dad (67) and I were having a conversation about govt spending. We need to cut taxes, says he. With a $300 bn deficit? asks I. CUT spending says he. So I lay out the budget. 90% goes to defense, VA, Social Security, Medicare, interest on the debt, jails. Cut where? We’d have to cut EVERYTHING else 100% to cut the deficit. Oh, well, there is no need to worry about the deficit….. Sure, just dump every higher interest payments on me and my kids. No problem. His parents dumped it on him, so he dumped it on me, and I’m supposed to be content to pass it on to my kids?
There are over 30,000 “earmarks” on Congress’ plate…..maybe start cutting there?
I assume they aren’t interested in renting for life. I don’t blame them, I want to jump into home ownership and ill be leaving south FL even if prices drop because many other reasons im tired of FL. The grass really is greener in the northeast. northwest PA is looking very good and even todays price is very reasonable.
Here is a good one I found a moment ago in the Craigslist in Atlanta!
“Let me start off by saying that I am completley out of my element writing this post. Desperate times call for drastic measures. I have recently found myself unemployed and a new homeowner all rolled up into one. I’m not trying to sell myself for a mortgage payment but I’m definitley looking for a knight and shining armor. I know this comes across as extremely gold diggerish, but let me re-iterate this is not something I make a habit of. I’m just looking for someone to sweep me out of my foreclosure.”
I thinkg I will lie to her and tell her I can help her out and then I will wait for the bank to sell the house! Hahahhahah ahha.
Sounds like you could get the house with her as the upgrade.
BB - is she REALLY an upgrade? Sounds like a liability, not an asset!
She spend So much time “Buying” her new interest only “home” she forgot about showing up for “work”
you go girlfriend… she needa man who has J-O-B
OK Land Lord
With a name like ” LORD ” you are her knight in shining armor.
Could this be David Crisp?
http://dallas.craigslist.org/wan/368074296.html
The lisiting has been removed!?
txchick57
Whenever you post craiglist here it disappear with in a short time. Happened so many times that I’ve seen here.
Next time, please copy the contents (atleast imp part) along with the link for the benefit of the bloggers here
It only takes 5 flags from unique IP addresses to remove a post. When evil local property management company posts on craigslist, I have some scripts I wrote where I can instantly have their postings removed. I’ve never, ever used it for anything else. Just the one company. My favorite correspondence with them “3 of the coin-op dryers won’t dry 3 towels after a full cycle” “We don’t see a problem, the machines are very profitable”
I shalt not let the evil mortgage company get away with attacking this unwitty maiden, I shalt save her and impale he upon my own sword.
sa-worde
sorry — I should proof read — “he” — should be “her”
Their solution: a mega open house. Twenty of the 31 houses for sale in Palmetto Point will be open to the public from 2 to 4 p.m. Sunday.”
“‘We’ll have refreshments, and we’re putting out balloons and signs,’ Moore said.”
I hope that they will have cupcakes and BBQ squirrels on the menu. Actually this is a great idea. We can get free food and make fun of the realtor in a ‘Mega” manner. Wish i was in FL to take advantage of the fun. Would need to have one of the “Mr. Housing Bubble t-shirts” to wear.
Hopefully the refreshing beverage they serve won’t be rotting sludge from the likely unkempt swimming pools.
Maybe I’ll swing down there and check it out. During the brief time I lived in Sanford, (2005) they did a similar thing in the historic district during the fall. All those stately old Florida re-habbed homes. It was actually kind of interesting. Some people would deck out their homes with antiques and old collectibles and old time music playing in the background and lookers and prospective buyers would wander in and out of the houses up and down the streets. Problem was, some of those great old Florida homes were right on top of crack houses. Weird. Sanford was really a trip. So much potential, yet I have a feeling that 2005 was its peak.
Nothing makes me want to buy a house more than balloons.
Seriously though, showing how bad it is out there by having 30 open houses is not the brightest idea. One might get the idea it is a buyers market after all and decide to wait.
“‘We’ll have refreshments, and we’re putting out balloons and signs,’ Moore said.”
Wait a minute. I just want to confirm this before I get in the car and drive over. There WILL be balloons and signs? Count me in!! I don’t get out of bed for anything less than balloons and signs.
– Judge Smales
“You’ll get nothing and like it!”
Mega open houses. What a stupid concept. How about lower prices you sh!tstains?
loved the shitst@#n
comment
reminds of the plametto
wet fart
With the credit and hedgie financial worlds reeling, housing semi comatose and on life support, IT will take more than open houses, cupcakes and REIC koolaid to sell overpriced POS.
Bring ON the dancing squirrels
Hiya, mikey! Those dancing squirrels will look like little dancing gray sticks in the Florida afternoon thundershowers, with their fur all plastered against their bodies. That is, if they don’t get zapped by lightning.
ROTFL
I love the touch of the BBQ squirrels. Florida is falling apart and they think better marketing will solve the slow sales? Ummm… not.
I’m just curious what will be said in 90 days… that’s about how long it will take all of this hedge fund nervousness to “trickle down” to very tight credit. The investment banks have already made their July decisions and they probably won’t be able to back peddle fast enough for August. But for September…
Just think about it.
I have to buy one of those Mr. Housing buble T-shirts.
Got popcorn?
Neil
somewhat OT,, but related:
If one wanted to take out a non-collateralized loan would you all recommend to do it soon?
Short answer: yes.
HELL YES!
Bankers are about to tighten up so much they’ll have pucker butt. You cannot cut off hedge fund dispersements without scaring the customer base. Now… the customers aren’t really that scared… yet.
Got popcorn?
Neil
thanks for your quick responses! I guess we all depend on catheters and dominos
thanks for the quick responses!
Crazy Credit, sometimes, watching what is going on, I feel like a fool for being debt-free. Sometimes the evil angel on one shoulder says “Pssst, max out the cards. Pay cash for a shack off the beaten path. Buy gold. What can they do about it, ruin your credit score? Who cares? Will it really matter in a couple of years? Will the card issuer even be in business?”
I wonder if there will be mass forgiveness of debt and a whole new system of solidly backed money, with the FED kicked out on its fat posterior.
I’m wondering that too. I would not put my house up on anything (like HELOC) If I take out 15-20 at 6.5% for 5 years - what the hay? I would not max out anyting on a variable rate, but low fixed? Maybe not a problem. Interest rates are still ok
Worst thing would be if you lost your job - could not pay anything. I guess if you need to do something - say leaky roof - DO IT. But I wouldn’t take out $$ and sit on it for no reason.
“I wonder if there will be mass forgiveness of debt and a whole new system of solidly backed money, with the FED kicked out on its fat posterior.”
Good one.
Let’s see, they could do that at a big loss to themselves and their friends…OR…they could use the new bankruptcy law to create a nation of indentured servants that will make being rich even more enjoyable. I wonder which one they’ll choose?
I’m going to get out my tinfoil hat and say that mass debt forgiveness would only be feasible if it comes with a complimentary (and mandatory) biometric ID and a paycheck in “World currency”. And that’s AFTER the existing dollars were used to put all the currently underwater assets in the hands of those with a proven ability to “manage” money.
classic MBA “case study”…
lemme take a shot….
food grows where water flows…
Better marketing - as in, listening to the market and lowering prices - would solve slow sales. Stupid “marketing” like balloons and squirrels - dancing or otherwise - won’t.
Can’t wait for those mega open houses to come to my area, they sound like fun!
Got free tickets to the fair for going to an open house last week and they were giving out Starbucks gift cards in Seattle a year ago. But this mega open house dealy sounds really festive!
“We’ll have refreshments…”
One word (or is it two?): KOOL-AID!
Just got back from Panama City yesterday - anyone who wants to chase the bubble should head to latin america. I wanted to puke - all I heard about from every gringo I ran into was about how they just bought some land/a hotel/a farm/a condo, etc. etc.
It was like deja vu california 2005
Don’t those south-of-the-border countries periodically get the urge to nationalize foreign holdings? And don’t these hotshot “investors” factor such things into their decisionmaking?
Oh, man, Slim, you said a mouthful. Nothing says dead meat like a naive American abroad south of the border. Not just Americans, I had a Brit buddy years ago who used to enjoy being footloose and fancy free in the Bahamas. He bought some apartments there and they got “nationalized”. The local constabulary showed up one day and “discovered” drugs on the property. Turned out, he’d pissed off some local girl who worked as a maid.
“corn stabulary”
the dont come a callin in Kansas….just in SOUTH AMERICA….
if they didnt get the apartments, they made the currency worthless…
just like the dollar….
It was like deja vu california 2005
More like Florida 1925.
Got popcorn?
Neil
im havin dejavu all over agin.
I told you all that Panama was the new Costa Rica several mos ago (as MBA).
This real estate thing is everywhere and people who want to ’scoop’ stuff like multiplying cockroaches.
I dont know who crazy credit is?
all this talk about some sort of real estate money thing.
People just can’t leave well enough alone, can they? Everything has to be upgraded, rehabbed, developed.
And most of these people think that the locals want them there. As if being a good person is enough.
Hell, my mom’s a GREAT person but I don’t want her moving in next door.
/rant off.
if your moms house burnt down, does she live next door or dowstairs in the guest bedroom?
You have a family room?
I saw a house hunters program a few months back where a couple who was priced out of Hawaii decided to buy a house in Nicaragua. They still ended up paying somwehere north of 250K. I couldn’t believe it. Nicaragua for that much money? If that’s not a sign of a worldwide bubble, I don’t know what is.
if you have a quater of MILLION dollars……you can do ANYTHING YOU WANT FOR CASH
“Nicaragua for that much money? If that’s not a sign of a worldwide bubble, I don’t know what is.”
I’ll tell you what is a bigger sign: $400k for a condo in Tuh-Tuh-TEEEE-HWANA, Mexico.
Probably a cash-back deal, and the cash was spent on drugs.
There’s only one reason gringos go to Tijuana. Okay, two. Drugs n’ hookers.
Oh, and the condo boom alluded to in the article is seriously out of control - this is a country whose rural areas are depressingly poor, yet the capital city has a mall to rival any in Los Angeles, and more skyscrapers than any west coast US city.
Panama City is touted as a prime place for people to retire abroad. I would be very cautious about retiring anywhere in South or Cental America, except maybe for Chile.
Watch it on Chile, Palmetto.
I have an acquaintance who just moved back to the States after two years down there. And, oh, is she glad to be HOME. She couldn’t believe the level of incompetence down there.
No worries, Slim, I’ll go down with the ship here in the US, if that’s what it comes to. I truly love this country, screwed up as it is. It has been very, very good to me. Wish I could do more for it.
TRAIN LEAVING ON TRACK 4.
ALL ABOARD.
“Bangkok is undergoing a condominium-building boom that brings to mind the go-getting expansion in the 1990s - and memories of the bubble that followed.”
There is a Yul Brenner joke in here somewhere. I’m just too fried on a Friday afternoon to figure it out.
how about this one?
“When I am dead and buried, on my tombstone I would like to have it written, “I have arrived.” Because when you feel that you have arrived, you are dead.”
everbodys just getting somewhere..
even when they go to Amarillo Texas….or get there from
somwhere…
BEN….DOOOD, YOU NEED TO GET A LIFE. YOU ARE POSTING ARTICLES ABOUT CHENNAI (INDIA) REAL ESTATE
India has bubble bigger than California/Florida.
By sheer chance I bought 1200 sqft plot in Bangalore in 1997 for 400,000 Rs and it was going for 2,800,000 Rs in 2006.
TY. My niece is in India, Bangalore, on a TDY, losing money as we speak on her CA home. Thanks for the real reality check. All puns intended. Good job, desi
wow, so you made five bucks US after 9 years, haha
Say what? This is a bigger fiasco than you think. All real estate is local. I mean loco.
bayarea_guyy…
that is the point. the housing boom is WORLDWIDE.
I am a very big traveller. EVERY single city I’ve been to in the last 5 years has had an unprecedented boom and also significant building.
Every place is “different”, every place touts itself as “everybody want’s to live here”. They all “are running out of land”.
Many of the places (like Chennai) I have never heard of, yet “everybody wants to live there.
Same with countless other American Cities I had previously barely ever heard of, like Bend Oregon, St. George Utah, Taos, Queens Creek AZ, Temecula Ca, Duluth MN, and the list goes on and on.
Even San Francisco… it has its good points (I’m born and bred there, but left in late 1990’s) but the fact is that it is severely overvalued, as are a lot of the surrounding areas all the way out to Davis/Sacramento and up into Marin and down through to San Jose and Santa Cruz and so on…
I see the same thing, (whether in South Africa, Asia, South America or the Upper Peninsula): preposterous real estate prices relative to local incomes. 10 years ago a small farm in the UP (800 acres) would cost less than 200K, now agricultural land prices make it uneconomical to farm. The ROI is negative.
“Upper Peninsula”
Michigan?
Yes, MI. Above the bridge=Yooper (UPer), Below the bridge=Troll.
Ya, you betcha!
FARGO
Hoz
Are you talking about the Upper Pennisula of MIchigan? I’ve looked up there on the west side with SFH and the market seems to be dropping in price. But could be missing something.
The price is dropping, but in the last decade it went up ~2000%. I know buffoons that payed over a million dollars to be on Lake Superior. There are no jobs in the UP (Michigan) mining is shut down, forestry is shut down, Walmart isn’t even a presence - the nearest Walmart is 40 Minutes away. (maybe that makes it worth a million an acre for undeveloped land on a lake that you can’t swim in ).
Try Houghton Real Estate they are pretty decent
http://www.keweenawrealestate.com/
They also have some listings on the lake…. LOL
I think the whole state is for sale.
if you can boil the water and drink it, AND grow crops….
money does not matter…
The large sums of dollars flowing towards natural resources is a function of the fear associated with the percieved DISTANCE from said resources.
I spoke with a MI transplant recently here in OC. He was fishing - looked like he was a “mighty bit peckish” and needed to catch some food to eat. I asked him where he was from (older guy, spoke with an accent) and he told me from Detroit area, he was here hoping to find work. He had a spooked look on his face like he’d seen the face of the Devil, eyes wide open and blood drained from his face, and said “it’s dead there - there’s no more jobs out there, it’s finished”.
It’s starting to sound a lot like
Christmasworld depression.I am just impressed that Ben is able to dig up articles about real estate boom from the remotest corners of the world. I guess he needs to post something to keep the blog going
Nobody’s ever heard of any of the damn cities in India because they changed all the names. Chennai is Madras.
India is a woman who can never be known….paul in florida.
Yes this is what get Me about …..” Everyone wants to Live here”.
And why is it that everyone wants to live here? Most of America has never been to Your town, and also just about as likely to never have even heard of Your Town.
Why is it that all these People want to Pack up and Move and leave Behind Jobs, Family and Friends to come and buy an overpriced POS in Your Neighborhood? Something You told them or they read in the Paper?
Well just take out a Couple more Ads, I’m sure all the Boomers will be Right Down. As for Me , I’ve just gotten more Confused, as with Everyone wants to Live in Florida, Cali, Ariz, NM, SC, NY ,TX, and even Utah, etc. I just don’t know where to Go.
I never Realized there were so many perfect Towns in the World where everyone wants to Be. Man this S***S.
You said it!! Up until five or six years ago, the southern end of Hillsborough County, Florida, was a joke. It was basically a dumping ground for whatever the rest of the county didn’t want. Ruskin, Wimauma, these were places even people in the county never heard of. “Where’s that? Oh yeah, that’s where they grow tomatoes. Oh yeah, I think I went fishing there once.”
All of a sudden, it’s the promised land around here with prices to go along. My hand to God, I could have purchased a little 2/1 concrete block in a modest but halfway OK neighborhood in 2000 for $50,000. Now, they want $150,000 for the same POS.
I feel bad cause you left out ROSEBURG OREGON…..
the perfect town…..you wished you loved on the Umpqua, eating the steelhead, swimming every summer evening, watching the old cars rally, working, rainsing a family, vsiting with FAMILY
it is different everywhere…..
just dont move to oregon, please…
Hi Vozworth,
Was through Roseburg a week ago. I forgot how beautiful the whole Umpqua area is. Spent a week there in the late 70s.
I just had to add this
An acquaintance of mine bought a home or two in phoenix AZ in 99/00 and was able to sell in 2004. He transferred the money to india and bought property there. There was roumor that he had FBI enquiries due to the large amount of transfer
Another one a brother of ex colleague is a small time builder here in Toaks. He built a condo development 24 units and was unable to sell towards the end of 2005. He formed a company/(LLC) took some loans transferred unsold units and be done with it
My ex colleague also tells me that this guy his brother owns/built several shopping complexes in hyderabad(india) with the money he made between 99-2004.
I noticed S/W guys india were buying a home/plot or two every year because the return on investment -bank interest rate was so low and “real estate always goes up”
I know several people who bought flats in india(condos- multistory) as investment and rent they get is less than interest on fixed deposit because “you dont loose money on homes/land”
may be they are right, cash looses because of inflation , where as land appreciates atleast equal to inflation and hence worth it
RE can keep up with inflation when it is bought at reasonable prices. When you overpay for anything, you are a greater risk of losing money. It took over 50 years for land prices in florida to recover from the 1920’s RE bubble. Gold reached $800 in 1981. Now it is struggling to reach $700
Gold, an investment as hedge against inflation?
a “Flight to quality?”
a “Store of value?”
cash looses,
see thats the deal.. you can make DOLLARS, but when you move them, and you are not associated with big money..
the pigmen want to know….
WHATS UPEE, WHEN EVERYTHINGS UPEE>
Those guys had better look out… you can pretty regularly see articles in the world financial press on the Indian housing bubble… prices have rising well above what is sustainable by wages there (sound familiar…) and a collapse is coming soon.
thank ben,
I read the bio, the Chang Mai house is probably a sweet deal, but
ONLY IF YOU SPEND TIMNE SMOKING OPIUM IN THE GO DEN TRI ANGU
As a housing crunch escalates in Yellowknife, questions are being raised about some government-owned houses that are sitting empty on prime real estate.”
Although I have never been to Yellowknife, I have been very interested in visiting there one day to see the Aurora Borealis (northern lights). It is a city of 18,000 people on the shores of the Great Slave Lake. It is very isolated from any other population center (nearest probably being Edmonton at least 1000 miles away). There is a road that does go all the way there, and an airport with regular flights. I guess there can be a shortage of usable buildings for housing, especially considering the sub-zero temperatures for around 6 months of the year. But could not be a shortage of land. It may be also difficult to get materials there quickly due to the isolation of the area. I do hope to visit there. I had pictured renting a houseboat to sit on the lake and still have sunlight at midnight. Or some winter fun in complete isolation (but damn cold). If a housing bubble is there, it has to be really wide spread.
Oh, you have got to be kidding… There is a housing Bubble in YELLOWKNIFE?!?! Yellowknife, Canada - the place that I look up on weather.com when it is “winter” here in Maryland just to be amazed at what a REAL winter is like! Yellowknife… What, are they running out of cold, empty tundra or something?! Wow… this Bubble is like nothing else. How long until somebody starts complaining about land shortages on Mars or something?
I remember a year or two ago at the height of the boom, a friend of mine and I looked around on one of the big, national real estate listing webpages to see how far the real estate Bubble went. In particular, we were looking for McMansions and other such new houses that were absurdly out of line with incomes in the area. When we reached North Dakota and realized that there was a Bubble there, we were shocked! The only place we saw no McMansions or other such wonders of modern real estate was Camden, New Jersey! For those who know anything about Camden (much less for those of us who have actually passed through that nightmare city), you’ll understand why that place might be immune to the Bubble. On the other hand, I think I read something a few weeks back about criminals there engaging in mortgage fraud instead of selling drugs because it was more profitable… hmmm….
A friend used to live there several years ago. She described Yellowknife as extremely isolated, bitterly cold, with nearly nothing to do there most months of the year but drink. As I understand it, there are good paying jobs to be had, but nothing to spend the money on… except RE it would now seem.
The problem in Yellowknife is probably not the bubble, it probably is the ol’ boom/bust cycles like we have here in Alaska. It is a major gold and diamond mining area. IIRC, it also used to be the site of uranium mines.
My personal favorite area of Western Canada is the Yukon, actually. Compared to Yellowknife, the Yukon is the height of sophistication.
The mercury hit 119 here today…
Where?
Low Sierras
California, somewhere near the Sierras, if I’m not mistaken.
Thanks, used to live in Mohave Valley. 119 could happen in April/May.
Why don’t we just colonize Mercury? To me, same difference…
C’mon now. If you lived on Mercury you would vaporize just like home equity.
Thanks for the answer on Newmont. My suspicion was the same, when BHP pulled the same stunt on cobalt the price jumped 300% in 1 year - there was none available.
go long Gold? I think thats the short answer.
golongold
no golawngold
im confused
“Linda Moore has noticed a sense of apathy settling into the Manatee County real estate market, and she is determined to shake things up one neighborhood at a time. ‘Things have quieted down everywhere,’ said Moore, an agent on Anna Maria Island.”
“‘We’ll have refreshments, and we’re putting out balloons and signs,’ Moore said.”
Bwaa haa hhaaaa…hahahahaha ahhhahhh….cough…..sputter…
bwaaaa hahahahahahahaha…….hahahahhaaaaaaa
“Twenty of the 31 houses for sale in Palmetto Point will be open to the public from 2 to 4 p.m. Sunday.”
Red Pill, you are exactly right to laugh at this. I wonder how long this realtor has lived in Manatee County? Has she ever spent a summer here? If she has, she should know better. First rule of thumb during the summer in Florida: NEVER have an event after 2:00pm. Why? It is the height of the humid heat and thunderstorms have a way of moving in. Oh, and also, the Tampa Bay area (of which Manatee is a part) just happens to be the lightning capital of the US. Those balloons will be deflated and the signs will be soggy. People will NOT want to drive from house to house in the rain and dodge puddles and lightning bolts from car to front door. Not to mention, with the summer afternoon showers pissing down, the houses will not show to best advantage. But hey, for anyone thinking of attending the event, it will be a good opportunity to check out the drainage in the area.
The folks who run estate sales in Florida know this. 8:00am to 1:00pm on weekends, that’s prime time. After 1:00pm, fageddaboudit.
Once in a while, I would like to see the journalists follow up on these stories. Tell us how the open houses went? Did people even show?? Did any offers come in?
why would they do that? that would actually be an expose, instead of the fluff pieces they are ex[ected to turn out.
I know how to get them moving .. Drop the asking prices 40% and they will most likely sell. No need for coolaid or baloons, just reasonable prices… Of course assuming in that particular the houses would even be reasonable discounted 40%.
Anna Maria Island is a slice of paradise. The Island is a throwback to the 50’s and 60’s, with restricted development and very little fast food or other signs of modern life. Yes, there will be a real estate correction, but that Island will see more development in its future because it is a special place.
20 houses in 120 minutes….
sounds like the waste of 6 minutes….over and over and….
sockpuppett momment
ITS DIFFERENT IN [insert ANNA MARIA ISLAND]
vozworth,
Perhaps from your point of view, no place is more cherished than any other. I said that the real estate market would correct there, so I don’t understand your bait commet. But if you have ever visited Anna Maria Island, you would understand my point. We are not talking Cape Coral or Palmetto, FL here. Just a mixed income community that attracts people from all over the world for its laid back beach lifestyle. By your standards, do you have any preference for where you live? If not, may I suggest a nice doublewide. It’s cheaper.
Thank you Ben for including an article on a slide happening in India. Since my wife is from India, I have been interested in that area. Chennai is the one place on mainland India that got affected by the Dec 2005 tsunami. I was in India (other side and far inland 2500 miles away) at that time. People here were picturing us being in trouble since I was unable to call and say we were OK (similiar to be in CA when a hurricane hits FL).
“The entire point of my letter was to just bring about the fact that there is an obviously downside to housing price increases: a higher cost of living. More money spent on homes means less money for other things. Exactly how does that benefit Regina residents or businesses?”
Why hasn’t there been more of this sort of talk? Extremely high housing prices don’t benefit society as a whole. Sure, credit cards can pick up the slack for a time, but there is an end to consumer credit at some point.
I don’t know why, but I wish there was more talk of it. People (in general and in the press) all talk of rising house prices as if it is always a great thing. But when the price of anything else goes up (whether food, gas, clothes, travel, etc.), that’s a bad thing. Somehow they always seem to equate a house with an investment, without understanding that a house is merely a necessary consumable (shelter) like all of the other things, and it is not like a stock.
This is true, but many folks have become wealthy as a result of real estate holdings. There are occasionally times (today) when real estate is a terrible investment, but historically it has done quite well with healthy 6 - 8 % gains each year. When this bubble is finished, I suspect the gains that remain are going to be inline with historic norms.
GH:
That is an interesting comment on 6-8% gains. Do you have the reference?
The reason I ask is that figure is a direct contradiction to the Case-Shiller index, which tends to support the view that real estate is a terrible investment. The authors tracked same home sales in numerous markets in both the US, and due to excellent record keeping, Amsterdam going back all the way to the early 1600s. The conclusion: real estate, historically, is not an investment but rather a hard-asset that tracks inflation.
http://www.chicagofed.org/news_and_conferences/conferences_and_events/files/2006_bsc_shiller.pdf
bayareagy - some of us have interest in areas all over the world. I for one appreciate pieces of information about any country. it goes to show how hard Ben really has worked to give a worldwide balance. My personal biggest interest is watching California go down. But it is great to learn about many places.
“my peronal biggest” isnt a short answer
it, the statement,
shows the level of competence.
“Some call it a real estate boom. Merv Rayner, president of the Moose Jaw Real Estate Board, cautiously refrains from using that term. ‘Moose Jaw prices have been depressed for a long time,’ he says. ‘Finally Moose Jaw is catching up.’”
The housing bubble is like an out of control wildfire which will only burn itself out after every city is demolished. Is there any area left untouched? I suppose Moose Jaw prices are “depressed” because they are still affordable for local wage earners. Another one bites the dust.
Saskatchewan and Alberta make some sense - oil shales - that’s big. Panama City makes some sense - location, canal (which is about to undergo major upgrade). But some things I just can’t wrap my brain around - $300+K in Queens Creek, AZ, $200K for an acre of inaccessible jungle in Costa Rica, $500K or more for condos in undesirable locations, and any six-digit price for something out in the middle of the Mojave Desert.
I worked with a guy who used to be a doctor down in Panama. He was missing the pinky finger on his left hand. Said he was lucky to have made it out alive.
you get it yet Paul in Florida?
“Give us zee money LEBOWSKI”
“THERE IS NOT FU#$ING MONEY, MAN.”
Saskatchewan does have heavy oil and oil sands (not oil shale), but it’s up north and is as far away from Moose Jaw as Yellowstone is. Americans often don’t realize how big Canadian provinces are - except for the little ones on the east coast they’re all as big as, or bigger than, Texas. And Sask has less than a million people.
Moose Jaw is in an agricultural area and the employment is almost all low paying food processing and related work. It’s just a small town smack in the middle of endless prairie, like its counterparts in the Dakotas and Nebraska.
So who’s buying? Locusts from neighboring Alberta who look at the ridiculous prices there and see Saskatchewan as “cheap”. Yes, it’s cheap for a reason. The good side of this is that the money spent by these fools from Alberta will go to work providing higher paying construction jobs in Saskatchewan, until they wake up and realize the place has no population growth and nobody is going to rent their houses, never mind buy them. And Moose Jaw and other cities in Sask will have cheaper housing in the long run.
I love seeing the international bubble stuff.
My cousin, who lives in Sweden, is visiting me right now. We started to talk about Real Estate. He explained how his home just outside of Stockholm has increased in value by about 400% in the past five years. However, he’s not worried that prices will drop in Stockholm because “things are different there” (that’s a direct quote!).
He explained that there is a large shortage of housing in the area and that typically homes sell within a week. He told a story about a home on his block that went up for sale and nearly a dozen families ended up bidding for it.
His stories sounded strikingly similar to events I witnessed here in South Florida back in 2005. Things were different here back then as well.
I like it as well…
It gives emphasis to the fact that this housing bubble is the Very First Worldwide bubble of any flavor.
Nitpick:
The late 1920’s investment bubble was worldwide too. It was brought on by rapid economic expansion enabled by electricity and easy credit.
We don’t learn…
Got popcorn?
Neil
hmmm this boom started in 97…about the same time as the internets became popular.
Is there a coinkydink?
the inernet is not plural
gitter done.
Actually, it is … but this blog can probably only be accessed by internet 1.
If you study at or work for a research institution, you probably use both internets 1 and 2 every day.
An internet is simply a WAN which uses the TCP/IP protocol.
Probably the worst depression in US history started around 1936-7. It lasted into the mid 1840’s and probably stimulated the Mexican American War. The depression was brought on by speculation in canal and railroad stocks. It also had the characteristic of hundreds of state chartered banks and rampant realestate speculation.
Andrew Jackson took on Nicholas Biddle of the Bank of the US and revoked their charter. This was done to quell massive speculation. Prices crashed.
Does any of this sound familiar? The result was a world wide depression. Revolutions in Europe in 1848 and the writting of the “Communist Manifestor” and “Das Kapital” by Marx. The slump remerged in 1859 just before the Civil War. One reason to preserve the Union was to make sure the indebted southerners paid their Union bankers in New York. They wanted to default. The
Crimean War broke out in Europe in 1857 with Russia, France and England the players.
Could this implosion get real serious? You bet.
“1936-7″
eighteen?
Ron Paul is our Andrew Jackson for this go around. He has beat McCain in fundraising, is just about tied with Romney, (setting aside Romney’s 9 Mil personal loan to his campaign) and Ron Paul still is sitting on his money.
That man will send Bernanke to the breadlines in a heartbeat.
Go America!!
Freedom!!
… and Koolaid in any flavor is still Koolaid.
Gatorfan, I don’t know a whole lot about Sweden, but isn’t it socialist? If so, aren’t people there sort of pegged as to what they can afford? I don’t know how that works, but it seems that socialism would be enough to dampen any bubble. Or does the gov subsidize the higher prices?
Possibly, or the other options is lunacy such as I believe in the Netherlands, where taxes go to inflate real estate prices, so everyone may as well buy (at 10x income or whatever) since everyone is forced to pay anyway.
ask your cousin a really impt question:
Are cab drivers buying 2-3 homes for “investments”?
If so, that housing ’shortage’ is a fallacy.
Sweden’s population growth is about 0.7% per year. Would not take much building to saturate the market for years…
I think Ben did a favor by noting that this bubble was global in nature, not just in California, or the US, or Europe.
There are many things that determine the price of a home, of course.
But the houses in developing countries are cheaper for a reason, people there just don’t make as much money as people here. But their cost of life is also less.
I recall a real story from a person who went to visit their country of origin. Hearing the price of an item, she bought it as it seemed cheap to her, relative speaking.
It was later determined that she had overpaid by about 4X.
A lot of people attempted to do the same with housing. They would see a house in San Francisco for $X. In Sacramento, the same house would look cheaper at $2/3X. Of course, the real price should have been $1/2X.
And then it balloons out of proportion, as housing in other places would look cheap to those with ‘equity to burn’. And to those in areas with undervalued housing would consider the rise in prices as ‘catching up’ to other areas.
After all, it has not been well publicized how wide this bubble became.
As stated in ‘The Incredibles’, if everyone is special, no one is.
All the places in California, the US, Europe, Asia, Latin America ARE NOT SPECIAL. Only some. And they should be priced accordingly.
“And then it balloons out of proportion, as housing in other places would look cheap to those with ‘equity to burn’. And to those in areas with undervalued housing would consider the rise in prices as ‘catching up’ to other areas.”
Great post and very good point. I think that’s what happened here in Florida, especially with New Yorkers, Californians and even the Brits.
I think that’s what happened here in Florida, especially with New Yorkers, Californians and even the Brits.
And Germans and…
And in Hawaii the Japanese have become net sellers…
I think this will all hold up until the Shanghai stock market tanks. That seems to be the unstable catalyst for this whole debacle (IMHO). Its also the most obvious candidate for a stock collapse to blame everything upon. A la 1929. Yikes… I’m scaring myself.
Got popcorn?
Neil
Some here have made the parallel that the US has taken the UK’s role and China now has the US’s old position (late ’20’s). That doesn’t seem to bode well for anyone.
The bust is GLOBAL. Spain is a disaster right now. China is teetering. Even Mexico is looking overbuilt (hoping vainly for waves of retiring boomers…. sorry guys, they need to sell their US homes first).
We’ve never seen a bust like the one that’s coming. What happens when the whole world busts at once? Anyone?
major civil unrest, disruption of stuff people rely on.
possibly wars
“major civil unrest, disruption of stuff people rely on.
possibly wars”
We’ve got two out of three right now.
Well, I just keep on thinking more like LA during the riots. martial law, curfews, empty store shelves. Interruption of basic services. Your regular disaster scenario. It’s not that bad yet imo!
No, it isn’t that bad yet. We still have access to “stuff” and to basic services. But there is low key “civil unrest” IMHO and of course, there are wars. That’s what I meant by two out of three.
Crime rates are up in many areas across the nation. This, after a number of years with lower/steady rates.
The lower end is already feeling the recession because they don’t have inflated assets (stocks, houses, etc.) to distract them from reality (rising prices, lower wages).
From Ghost Busters:
Dr. Peter Venkman: This city is headed for a disaster of biblical proportions.
Mayor: What do you mean, “biblical”?
Dr Ray Stantz: What he means is Old Testament, Mr. Mayor, real wrath-of-God type stuff.
Dr. Peter Venkman: Exactly.
Dr Ray Stantz: Fire and brimstone coming down from the skies. Rivers and seas boiling.
Dr. Egon Spengler: Forty years of darkness. Earthquakes, volcanoes…
Winston Zeddemore: The dead rising from the grave.
Dr. Peter Venkman: Human sacrifice, dogs and cats living together - mass hysteria.
I, too, like reports from around the word - keep ‘em coming!
The UK is going through exactly the same housing bubble - especially in London. Banks and Building Societies are now offering mortgages at 7x income…all sorts of toxic loans being offered, etc, etc.
In my old ‘manor’, a part of Southeast London more known for its urban deprivation than anything else, you cannot find a house for less than 250K GBP - 10 years ago you would have been hard put to pay more than 100K GBP for the same place.
Sad part is, I was around for the UK housing crash in 89/90 - when house prices dropped like a stone by at least 33%. The only difference I can see this time, is that it’s going to be worse - at least back in 1989 mortgages were harder to get, and there were very few of the ‘creative financing’ packages you see today.
Jeff Threadgold is a for-hire economist hired gun. He actually works for himself and attaches his name to any local banks that will pay him. He is constantly talking up real estate in both Utah and Colorado. What a bunch of hot air.
He’s an eCONomist, then?
Panama City I believe has a law that requires American’s to have a pension before moving or buying property. In 2005 I did a search for wine property in chile, Canada, NZ and land prices had allready gone to the moon. Latin America has been in a land frenzy for several years. The world is running out of land, no question!
“Panama City I believe has a law that requires American’s to have a pension before moving or buying property.”
Really? We should have filled in the canal before we gave it back.
do we wear a sign that says “kick me”? we always bend over and help other nations and usually get just negativity in return
(laughs bitterly) DO NOT. GET ME. STARTED. If it was up to me, I’d pull every bit of foreign aid we had out there and recall every last product from China, including the Nikes off the little children’s feet. I took a look at one of those reconquista blogs recently. The seething contempt with which those folks hold the US for helping them is not to be believed. They think we’re idiots.
Yeah, like we just helped Irak to get a good part of their population blown up. Dude, pull your head out from where the sun don’t shine and get real. Other people/countries don’t like to be invaded by us. It’s that simple.
I think he means mainly humanitarian stuff - I do. Anyway, let’s not get chastised - this is a housing blog, not politics. Although I must say that everything seems to be completely intertwined these days. Certainly within 5 degrees of Kevin Bacon.
Yeah, I DO mean the humanitarian and quasi-humanitarian (blackmail). As to the Middle East, THE BIGGEST. BONER. EVER. I don’t even wanna go there.
That’s what’s frustrating about these blogs sometimes, some people can’t read and don’t have a clue what they’re attacking you about. They start biting your head off for agreeing with them. I’ve been on a couple of political blogs and the lack of communication and understanding is a complete joke. You see people on the same side just slaughtering each other with no idea what they’re arguing about. I think people are just pissed in general and need to get it off their chests.
It would be nice to pull back and take care of our own problems and let somebody else be the police. Let Europe or China or the multinationals take care of the nuts out there and we protect our own borders and clean up our own debt and streets.
Hey Mike. The Irak (as you spell it) situation isn’t as simple as you seem to think.
Amen, Jerry!!!
Ditto, Jerry and amen to that.
I believe that is incorrect. My best understanding is that pensionistas (>$500/mo. from gov’t or work pension) get special benefits in Panama, including discounted prices on most goods and services and the ability to claim residency. But non-resident non-pensioners can actually own with the same basic rights as Panamanians (unlike in Mexico) - they just have to leave the country every three months or so to keep their tourist visas legal.
My husband was in Panama in 2003 or 2004 (can’t remember exactly), and RE was already “hot” then. All the locals were talking about how Mick Jagger & high-flying celebs were “snapping up” land & building resorts, second homes, etc.
So glad Ben is showing this bubble as a **global credit bubble**. This has very little to do with availability of land, McMansions, high wages, etc.
It is ALL about how much money people are being given with which they can buy a piece of property. If the lenders are giving J6 $500K to buy a house…voila! starter/mid-level homes will suddenly cost $500K.
Why can’t people understand this?????
“‘We’ll have refreshments, and we’re putting out balloons and signs,’ Moore said.”
Refreshments AND balloons! Wow, I’ll be there with my checkbook!!!
So much money available to Hedge funds.
Unlike traditional mutual funds which have 401K/IRA investors and can’t invest with margin.
Hedge funds can literally write their own rules. They can margin with carry trade.
This is not going to end well for the little guy. And a few big guys are going to end up becoming little guys.
Not all markets were in a bubble. I just came back from the Raleigh-Durham, NC area. High paying jobs, nice area and you can still get a kick ass place for around $300K, 15 minutes from downtown on 1+ acres. A place like that on the same sized lot would run around $3+ million in Miami. To top it all off, the median income there is about double of what it is in Miami, WTF??? Miami is a huge crime ridden slum, mostly with people getting paid by the hour. Median income is around $26K a year…but I suppose you pay extra for living in paradise.
Note, Miami is the slum of Dade county. The rest of Dade county (Corral Gables, Coconut Grove, Miami Beach, etc. tend to be rather afluent)
Median income:
Raleigh-Durham -Chapel Hill Miami/Dade county
family size median
1 $48,860 $45,650
2 $55,840 $52,140
3 $62,280 $58,740
4 $69,800 $65,230
5 $75,380 $70,400
6 $80,970 $75,680
Median home price for:
Miami-Ft.Lauderdale-Miami Beach $385.3K (1st qt. 2007)
Raleigh-Cary $212.2 (1st qt. 2007)
Durham $177.3 (1st qt. 2007)
NC has 7% state income tax, about 1% property tax and 0.25% insuarance. FL has no income tax but outrageous property tax (about 2% of market value) and insurance (1-4% of market value).
…so much for the stats. I think the Raleigh-Durham market (and several others around the country) is still a safe bet. The blood letting will occur in places like Miami, Phoenix, Vegas, SoCal, DC and the north-east.
It is special here in Albuquerque NM. Everyone wants to move here. Yeah, right.
This is a nice place. For me, a big improvement over CA. But now seeing reduced prices on signs here now too. I am either hearing people think housing is now ‘terrible’ or complete bubble denial.
Attention flippers: Please do not come to Albuquerque and try to be the next Trump or Casey. Please go desicrate some other city with your toxic money.
If you just want a nice place to live and be a contributing member to society: Welcome to Albuquerque
Title of website: “I Will Buy Your Hose … Fast!”
http://www.mybestbuyhomes.com/
If these guys can’t proof read their main business webpage, how can people even trust them to deal with their houses?
“I Will Buy Your Hose … Fast!”
This guys business is obviously located on Santa Monica Blvd.
he must be on this blog - it is corrected!
“Umm..Hose….Howse…Live-box…Fu@@It! Real Estate!!!
Yeah, that’s the ticket!”
OT, Ron Paul has more cash than McCain:
http://blogs.abcnews.com/politicalradar/2007/07/ron-paul-tops-m.html
Anecdote about the state of housing in Temecula, California.
A friend of mine has been renting a house in Temeku Hills, an established development with some recent growth (finished all lots about two years ago). Its an OK community, but has little space between the homes. He rented his home for $1,825/ month back in July last year, but the ‘owners’ paid $465,000 for it. They are now about to go into foreclosure (July 25th) and offered to do short sale to my friend for $350,000! (the bank who holds the paper agreed to this amount). My friend declined because his credit is spotty and he could not get the rate he needed to make the payments pencil out. He is now getting ready to move to a larger, nicer home in the same development for $1,750 / month rent.
Love to hear about rents falling. That is a very good sign, IMHO (for bears).
Too bad he didn’t get a loan that worked out for him. At $350,000, assuming 100% financing at 6.5%, works out to be an economic cost of $1,900/month before taxes, insurance and tax savings. Since the tax savings are considerable, it sounds like the ownership cost and the rental cost are comparable. That is not a bad option for someone with better credit, and access to a reasonable loan.
Housing Hiccup May Kill Tax
By NEIL WAUGH, EDMONTON SUN
On Tuesday Premier Ed Stelmach’s Country Club Cabinet finally gets an excellent opportunity to turn their thumbs down on Edmonton Mayor Stephen Mandel and his Calgary counterpart Dave Bronconnier.
The Calgary Stampede cabinet meeting can’t come soon enough. Although to give Bronco his due, Howie appears to be the driving force behind the Minister’s Council on Municipal Sustainability report.
The Canadian Taxpayers Federation has already dumped on Mandel’s plan.
Alberta CFT director Scott Hennig has challenged the big city mayors to put the document’s controversial recommendations on the fall municipal election ballot and let the folks decide. Stelmach hinted recently that’s where he wants it to go.
“This is a big win for Alberta mayors,” Hennig winked. “Now the only thing standing in the way of these new taxes is permission from the taxpayers.”
And that got a lot less likely yesterday after the Edmonton and Calgary real estate boards released their June figures.
And the Mandel/Bronconnier dream of a 1% municipal real estate transfer tax (along with their wish list items of a hockey ticket tax, a hotel room tax and a $75-a-year vehicle registration surcharge) began quickly disappearing in the rearview mirror - possibly along with the housing boom.
“I don’t think it’s the beginning of the end,” winced Edmonton Realtors Association president Carolyn Pratt.
Calgary Real Estate Board president Ron Stanners preferred to call it a “shift to a normal market.” But both big city boards saw inventories of houses for sale balloon for the second straight month, and house prices flatten as a result.
Pratt described the 4,982 listings on the Edmonton board’s books (last June there were only 2,440) a “spike.”
But she couldn’t explain why so many Edmonton homeowners now want to squeeze the equity out of their property. The average price of the mythical single-family residence is still a phenomenal, possibly unsustainable, $417,265. That’s a 74% boost in the average residential price in the last 18 months.
The gnomes in the real estate board’s 142 Street bunker have clearly been working overtime to put a positive spin on things. Still, when you factor in the 2% dip in the average single family price, that’s a $9,000 drop in equity from what the same property would have sold for in May.
Condo prices tapered off slightly too, despite a 20% boost in sales over last month.
Pratt called it a “more balanced” market, adding there’s “less desperation” out there. At least for now.
In Calgary the “for sale” inventory jumped to 5,819 - a new record for the year. And the new listings were 20% higher than in June 2006. Single-family sales dropped 12% from May in what is usually the busiest month of the year.
As a result, the single-family price increase was an almost invisible 0.69% - a long way from last year, when prices roared and a house stayed on the market an average of only 15 days before it sold. Last month it was 29 days.
Statistics Canada came up with more disturbing numbers yesterday.
While commercial construction sites in western Canada are expected to be “humming” this summer because of a “surge” in building permits, the same can’t be said for the residential side of the business.
“The value of residential permits in Alberta fell 21.9% from a record level in April,” the Ottawa statsmen reported. “resulting in the second-weakest showing in 11 months.”
Not the best time to slap on a real estate tax. And why the idea will almost certainly get shot down at the Stampede cabinet meeting.
CTF’s Hennig is still challenging Mandel and Bronconnier to “put up or shut up,” and place the real estate tax on the October ballot. Hopefully next to their names so taxpayers can kill two political birds with one stone.
Update from the west side of LA. For the first time homes are coming on the market that are pre-bubble(i.e. Not for sale for almost ten years). I think the realization of a protracted drop ahead is hitting home.
PseudoOT, but I was travelling again on Alaska Airlines this week. Last week, when I was going to UC Irvine, I noticed that the in-flight magazine had shifted almost entirely to real-estate ads (relatively few hotel, etc ads, which is odd for an in-flight mag). So, this week I am travelling to Washington, and the new Alaska Airlines mag is out. And it was HUGE. Over half of it was devoted to an exclusive ‘Real Estate’ section. Pages of ads, and incredibly boosterish articles. I think desperation for out-of-state saviors is rising…
One of the articles would have given this group hysterics. It was about single women buying houses (they are 27% of starter home buyers). Of course it was boosterish to a hallucinogenic degree. One woman in the article basically said that men buy stocks to invest, women buy houses (!?!?!). Another woman was calling herself a ‘genius’ for ‘making’ $60k in when her condo went up in price; of course, she turned around, became an RE agent, and invested in several houses. Ouch.
I just did the tour-de-Washington (Seattle to Ellensburg to Pullman to Wenatchee) and there are new subdivisions going up all over rural Washington. And the general public opinion (even of people who and not anywhere near buying RE) is that prices are outrageous, sales are slowing and building standards are cr@p. One of my in-laws was off-hand commenting on a friend of hers who wants to sell her huge new house in Pullman, because of its poor design (not to mention the postage size lot. I guess they aren’t making any more land in the Palouse…)
Who is buying this stuff? Pullman is (or was) a town that consists basically of students, faculty, and staff of WSU, along with a bunch of wheat and lentil farmers. Yet the subdivisions have been springing up like mushrooms. But Pullman seems more believeable to me than such places as Moses Lake, Ephrata, etc (in the Central Washington desert, more than 150 miles from Seattle)- these places have extensive new subdivisions (located conveniently near the freeway and cattle feedlots…) of tightly packed houses going for $400k each. It boggles the mind. The Seattle newspaper at least admitting there was trouble in RE land, but, of course, it is but a temporary correction (ahem) and the bottom is in sight. I’ll bet the Washington builders know better, and are quaking in their boots…