Local Market Observations!
What do you see in your housing market this weekend? Statistics? Inventory? “According to statistics compiled by the Northwest MLS, the average sale price of a home in King County in June actually fell from May. And there are more homes on the market in King County compared with last year, giving buyers a little more breathing room. According to the NWMLS, there are 12,282 active listings, which compares with 8,011 in June 2006, which is an increase of more than 53 percent.”
Or foreclosures? “Foreclosures continue to rise on Long Island, as the lure of sub-prime mortgage rates puts more homeowners behind the eight ball. There was an increase of nearly 35 percent in scheduled auction sales over the last two months here, according to Pat Ammirati, general manager of Long Island Profiles.”
“The number of bank notices has more than doubled over last year, Ammirati said.” “In North Hempstead, there were eight sales of foreclosure properties totaling about $1 million in all of 2006; this year, there are already eight foreclosure sales totaling $8.7 million.”
Construction trends? “The slow housing market continues to be a drain on Newport Beach homebuilder William Lyon Homes Inc. William Lyon posted an 11% year-over-year decrease in new home orders in the second quarter. Home orders were down sharply in Arizona and Nevada.”
“Turning home orders into actual sales continues to be a challenge for the company. William Lyon closed on 548 homes companywide in second quarter, down 29% from a year ago. In California, home closings decreased 32%. That’s a 5% drop from the first quarter.”
“The company’s cancellation rate remains troublesome. The cancellation rate for the quarter was 32%, up 7% from the first quarter.”
“The traditionally strong spring housing market turned out to be a dud for local builders. New-home sales in Dallas-Fort Worth were down more than 17 percent in the quarter ended June 30.”
“At the end of June, about 13,000 single-family homes were under construction in North Texas, according to Metrostudy. Just under 11,000 vacant new homes in the D-FW area were recorded in June. While sales dropped, the number of homes on the market rose 8 percent, topping 50,000 houses for sale in North Texas.”
Tighter lending? “Fannie Mae and Freddie Mac have tightened their policies for purchasing high-priced, high-risk home loans from lenders amid stress in the housing market. The policies issued Friday by the two government-sponsored companies were in response to a directive from the federal agency that regulates the mortgage finance giants.”
“U.S. state officials plan to issue guidance next week to tighten subprime mortgage lending by brokers and originators not regulated by the federal government, the Conference of State Bank Supervisors said on Friday.”
“So far about 27 states and the District of Colombia plan to adopt the guidance within 48 hours after it is issued on Tuesday. No state has indicated that it will not eventually adopt it, they said.”
“The states issued the same standards as federal regulators when adopting nontraditional mortgage guidance last November. They are expected to do the same with the subprime guidance.”
I keep noticing more walls going up, around the perimeter of stalled housing projects of say 25 to 50 houses, here in the Central Valley…
A wall is a cheap way to hide things, I suppose.
Fresno and Clovis have gobs of them.
SD ziprealty.com inventory of used SFRs & condos is creeping towards the psychologically important 20,000 mark (112 homes away — could be there by next Saturday…)
“Your search has returned the first 200 of 19888 homes”
Stucco-Is this why year to year prices in SD not going down much…the $400K to 500K homes are not selling because the subprime meltdown and the the only ones who have money can still buy a million dollar home-thus skewing the average?
“U.S. state officials plan to issue guidance next week to tighten subprime mortgage lending by brokers and originators not regulated by the federal government, the Conference of State Bank Supervisors said on Friday.”
Does this mean that only Federal govt lenders will be in the subprime lending business going forward (e.g., “reformed” FHA)?
There are 44,226 homes for sale in
Seattle and Surrounding Areas as of 4 minutes ago.
12,927 listings for King County alone (per Windermere).
Inventory in Costa Mesa, CA has dropped a bit in recent weeks. I’ve seen some of the for-sale signs come down, but with no obvious signs the place was actually sold. I just haven’t seen much signs of sales activity around here at all. One property took their for-sale sign down last week, but the junky old car sitting out on the front lawn remains. Sales are clearly low around this town, but the signs around town (fake garage sale, open house, etc.) are in full force.
I have noticed inventory in So Cal has not spiked like last year. I believe there are several factors here, including:
1. The growing numbers of FB’s who canot sell because they are upsidedown on their mortgages, both because they are are only paying the minimum ‘Option’ payment currently and their balances are growing.
2. The issue of lenders trying to withhold their foreclosed inventory from the market
3. Those who believe if they wait prices will go up again. The press is doing a bang up job of marketing the numbers showing prices are climbing fast (Median BS).
4. Those who believe they are better off in a Prop 13 state not moving even if they could sell.
They continue to try to convert any downtown office space they can into condos. I think the death of fiveninejohn.com is official. The place looks awful and no work is taking place on it. The development at beatwilliam.com is an awful idea that I hope the Corcoran Group chokes on. I placed a call on the new development at 45 John. They actually called me back and really seemed to want my wife and I to check it out. I guess it is not all pre-sold. This is another ridiculous idea being packaged as “luxury living”. John Street and “luxury living” have as much in common as George Bush and MENSA. The districtny.com building is a seriously stupid project. It is right outside the Fulton Street subway station. That is just a beautiful place to drop $1.5 million on a condo. Yes, these places are all walking distance to Wall Street but come on, the prices are insane. I expect more of these developments to join 59 John Street on the trash heap.
I absolutely agree with you especially with the two projects you mentioned on John Street. I lived down there about 2 years ago and it was the dreggs. Except for a few NYU kids at 127 John, No nightime activity. No restaurants. No Fun.
Cheers
I live on the far Upper West Side, but like to follow the local market. NYCityBoy, what is happening to 59 John St? I had visited a sales person there about a year ago. My thoughts at the time were that it was a nothing special building…
143 MLS listings in Pullman, WA
— 43 pending (most pending for > 2 months)
— 18 closings over the past month (busiest mo of year)
— 3 pendings flipped back to active this week
– A minimum of 20 FSBO’s that we know of, without actively looking. On the whole FSBO’s are grossly overpriced and rarely sell.
Historically,
A good one came into the office this week. A guy I went to high school with sold some land in Bozeman to a so called contractor. The deal was financed by the land owner, the contactor was going to pay off the land owner when the homes were sold. The contractor started building four homes, then ran out of money. So he skipped town. The land owner wanted us to start working on foreclosing the property. It’s real fine mess, four half built homes, with all sorts of leins on them.
So is there a widespread recognition in Bozeman that the market is in trouble? The folks I know trying to sell have had no looks, no nibbles, nothing. A guy who flips lots has been left holding the bag on his last purchases (almost impossible to sell a lot in Bozeman these days). But in talked to friends not actively involved in RE, they just seem to be vaguely aware that things have “slowed a bit”. No realization that 2000 homes for sale (most vacant) in a valley with 50k residents is HUGE.
“But in talked to friends not actively involved in RE, they just seem to be vaguely aware that things have “slowed a bit”. No realization that 2000 homes for sale (most vacant) in a valley with 50k residents is HUGE.”
That’s the thing with this bust. Unless someone is actively searching for information on housing, it’s flown under the radar, as the MSM barely even hints at trouble. You’ve really got to dig around to find what’s happening. Of course, the gazillion for sale signs are hard to ignore. But many people have no clue as to what’s really happening. There will be quite a rude awakening at some point, I’m sure.
Nobody around here wants to believe there are any sort of problems. The newspapers have almost no stories on the real estate market outside of the state, only puff piece on the local markets. To me it seems like in Bozeman the problems are starting at the upper end of the market. The condo and townhouses seem to still be selling but spec homes are sitting. Although about three weeks ago there was a condo sale on some place on Kagy near the campus, $99,000 for the weekend only. Riding my bike around town, I notice a lot of homes with for sale signs, are vacant.
Many speculators who actually have some money infested the high end vacation areas. That’s why there are vast amounts of very expensive, vacant properties on the market in Tahoe, as well as the mountain areas in MT, CO, WY and ID. They’re nothing but high end flips that flopped. Alot of these people can afford to bring cash to the table, and many will. Others will ride the properties down, never sharing their blunders with friends, etc.
Bozeman’s economy is so dependent on construction that as long as the pay checks are still coming from the builders, the work-a-bee’s can still make the condo payments. So on the surface things still look fine. It’s when building slows down, the low end market will get hurt. Another thing, the news media is really bad around here, they still act like they did when the Anaconda Company owned all the major newspapers. They do not report bad news about Montana, it’s a tradition that’s 100 years old.
My growing sense is that outside of the outrageously bubbly places like CA, people are still buying at the bottom end of the market if they can afford to do so (thinking they are getting a bargain off list) and the top of the market is also getting sales–but in the vast middle there is little movement.
Duane, Isn’t it amazing that they are STILL building in the Gallatin Valley. There must be a couple of years worth of vacant inventory at this point, but they just keep going and going and going…. Same story here in Pullman I would add, just at a much reduced scale.
Right now it is office buildings, even though there is vacant office space all over town. The Hardee’s just got torn down, guess what going to be built In it’s place. An office building. I think the building goes on because of the local banks. Their still making constuction loans. Check out bankrate.com you will find Bozeman banks have a very large amount of their loans as constructon loans. One bank, the one that was robbed twice last year, on West Main, was started by a family that are major builders around here. I was told by a member of that family, they started the bank because they were tired of banks rejecting their loan request. Sort of like Empire Savings and Loan in Texas, the one that failed and started the s&l crisis of the 1980’s.
I just browsed through the SF less than 1 ac listings for Bozeman and saw a couple dozen homes that were on the market last year–and vacant. I tracked them all last spring/summer/fall as I walked to and from work. But asking prices have hardly budged. How long do you think these folks are going to bleed $2-3/k per month before throwing in the towel?
i don’t know, the last housing bust, it started the fall of 1979, it was’t untill the spring of 1985 that people started panicing. And it took till 1987 for the paper to start admitting there were big problems with the local economy.
I saw that someone is building duplexes in Three Forks of all places. It will be a first for that town.
I can understand the need for attached housing out there, certainly very little spare land out at Three Forks.
Pullman is a quiet area, way off the beaten path. How is Spokane doing in comparison?
I haven’t followed Spokane closely, but they seem to be in a similar situation. Basically all of eastern WA saw dramatic appreciation very late in the bubble due to speculation from the coast. For example, we know a couple with two young kids, stay at home wife and husband is in grad school. They moved here from CA, thought WOW houses are cheap and bought TWO! One to live in and one to rent out and flip. They are moving this summer and now have two homes to sell into a dead market.
Parents buying junior a house for college (in some cases up to $300k for a house that junior will share with a bunch of undergrads), short timers buying rather than renting, and in Spokane more direct speculation from distant buyers.
I keep wondering if the Horrible House is on the market.
This is a house for which you could not open the front door all the way because it was blocked by the stairs— only the first of many problems.
We came across the UP of michigan a couple of days ago. Saw lots of forsale signs on the lakeshore just outside of Mackinaw City, MI prior to the bridge (last 20 miles or so). Also visited Niagara Falls yesterday and stayed on the Canadian side right along the river. Several estate type homes forsale along the “Niagara on the lake” drive towards lake Huron. Definitely “Bubblicious”.
Augur,
Niagara on the Lake, is a wealthy and beautiful small town in Canada, often used by film crews out of Toronto to double for a New England town. RE there started skywards when Hong Kong money started to pour in and buy hotels, restuarant and homes 10 years ago. Lots of hockey pros own lakefront estates there. From Fort Erie onwards, property is far higher than American equivalents across the lake.And with the loonie now at near-parity with the US dollar, it is even more expensive. But it is Chinese investment that really drives the prices there.
“But it is Chinese investment that really drives the prices there. ”
That’s what people say about why prices in Vancouver, British Columbia, Canada are going up. Local incomes do not support the current prices.
Auger,
Are you headed to the Adirondacks at all? I’d be interested in a recent first hand report if you go. My husband came home with a Adirondack resident friend story of someone being approached by an out of stater offering $800k for their camp. It wasn’t even for sale. Last year when I went up it wasn’t bubbly at all. Wondering how things were holding. Hd74, have you been up this year?
Here in little Juneau, AK, inventory is up significantly since January–from 130s to over 200 according to the local realtors’ website. This doesn’t count FSBO & some discount broker listings. In our higher-end subdivision, large house on corner has been on the market for months, reduced asking from 649K to 629K to 619K to 609K. Median asking price around here is ~300K, and there aren’t many buyers in the 600K range. Sellers of above house are relocating, so I’ll be curious to see what they are willing to do in order to unload the house.
600k up there! Just plain nuts!
Gorgeous area, but I agree, nutso price.
Gorgeous for 3 months between May and September. T
I love it year round. But then again, I love rain…
Update: Broker came by this evening and put ’sold’ sign up. I’d love to know what it sold for, but you can’t necessarily get that information up here.
As to the Juneau weather: it’s crappy so much of the time that when the sun finally comes out everyone is outside smiling.
Well I hate hot weather and Juneau has a maritime weather. Doesnt get too cold nor hot. Isnt the summers like 50-75 degrees and the winters how cold? 20? 30? 40?
Yes, Juneau has maritime climate, and very wet. Summer is typically 50s-60s, occasionally over 70. Winter temps may stay below freezing for weeks at a time, but we don’t have the bitter cold of the interior. Fall is the most dreary–weeks of rain with increasing darkness; it can get very depressing. Spring is (typically) the best weather. Summer gets gradually wetter into the fall, and can include long rainy stretches. This past winter was very snowy (204″)–about double normal. We had a few nights of -10F, but temps were usually well above 0 (15-35).
‘Hot’ weather here is sunny and over 70. On a sunny, 60 degree day, the kids in the neighborhood will be found sunning themselves in bathing suits and running through sprinklers as if it were an 85 degree day in LA.
Butte County, CA (1.5 hours no. of Sacramento)
Residential Listings:
Chico: 754 listings 161 pending (21%)
Paradise/Magalia: 622 listings 91 pending(14.6%)
Oroville: 724 listings 67 pending 9%
“According to statistics compiled by the Northwest MLS, the average sale price of a home in King County in June actually fell from May
Would all HBB bloggers that have been here over a year take note,
this real estate market is crashing unlike any previous ones. The “average” or “mean” or “number for sale” does not acurately show the divergence of higher price properties in well located areas
(remember Location, Location, Location) are doing very well. The demand for college grads has bumped their starting salaries to the highest ever, and that means the educated are doing well and staying employed. The upper priced houses on the LA Westside and Pacific Palisades are selling well. The foreclosures that are occuring here are from the speculators, not the homeoner. If employment of the educated stays strong, the higher priced houses in the best neighborhoods are a long way from collapsing. The figures reported as average, mean, or numbers for sale are meaningless. What is your higher priced neighborhood doing?
The higher end neighborhoods will drop too, but they will be the last to drop. The bottom falls out first, then the move up market, and with this the support for the upper end erodes.
At the end of the day, virtually no one on a salary can truly afford a million dollar home (not without selling an $800k home first), and only a fraction of the people currently living in “million dollar homes” could afford to buy their own homes.
Thats what I hear. If most cant afford their own houses, why would anyone buy at those prices? Ill be buying when nice houses drop below $100k
Unfortunately some of us live in cities that are all “higher end”. There’s little to nothing in San Francisco under 600,000, except shoddily-built condos next to a freeway.
Here’s a new condo conversion that has come on the market in my neck of the woods (W. Chicago ‘burbs):
http://tinyurl.com/2xcwby
The 2/1s are listed at $279,900. For this price you also get to watch the Union Pacific west line right in your front yard.
Here’s a spec house that has been on the market for 3 years:
http://chicago.craigslist.org/wcl/rfs/370090006.html
Note that it says “home has added flood protection”. This is because this house had 9 feet (that’s right feet) of water in its basement after we had some large rains last October. The tenants that were in there at the time were not too happy.
“The tenants that were in there at the time were not too happy”
I see their point. Why waste good money on flood protection when they coulda added a diving board.
Do the builders still strip off and sell the top soil before building? That’s what they did when I lived there, so you are just left with an inch or two of soil over clay to (not) absorb the rain.
There are more soil problems related to tract building — a biggie is soil compaction from the heavy equipment. Some few enlightened localities have insisted on ameliorative techniques but they tend to be costly and resisted by developers and most local politicians are clueless ( Wisconsin is the only state that has recently partially enacted building standards to lessen the problem). Go through most any subdivision built in the last 40 years and you will see how bad the problem really is. It isn’t the topsoil mining that has created stunted trees that should be far bigger and healthier based on age. Subsoil compaction amongst other nasties stops moisture percolation and trees literally are dying of thirst and can’t extract the subsoil nutrients they require — if not that then they often are drowning from too much moisture coming at them too rapidly in the loosened soil from their planting. It isn’t only that the houses are so poorly built — even the ground on the lots they occupy has been destroyed for generations.
test….
This house isn’t in a tract. It’s infill construction on a tear-down lot. The problem is that it sits on the lowest point in an already soggy neighborhood. Everyone in this neighborhood has drains in their backyards to drain the excess water.
Just a silly question Kathy — in all my 35 years in construction I’ve only seen two houses that had over 9′ deep basements. One, a mansion, that was built about 1870 that had a double basement — the second, another custom mansion from about 100 years later that had an exceptionally high basement to accommodate dog pens….. in most houses, even those with abnormally deep basements, a flood of 9′ would totally fill the basement and have lapping water a foot deep on the first floor — no wonder the basement tenants were unhappy since they minimally needed hookah gear to even enter:-)
This house probably has a 9 ft basement. That seems to be pretty standard on new construction around here. Although we do know someone who has a 12 ft basement.
The tenants occupied the whole house. The basement is unfinished. From what I heard the tenants were building a custom house in another part of town and had stored a lot of personal possessions in the basement.
I’m here in Coral Springs, Florida. Had lunch with a co-worker who is fixing up a 2nd home he bought to flip. He assured us that he had spoken with two realtors who said we had reached bottom and the market was on the way up. Geez, this guy has to be really gullable cause I could tell he really believed it. He isn’t doing any independent research. What a dolt.
He drank the Jim Jones Kool-Aid
His flip will flop and he will lose money, maybe get foreclosed.
I still watch our last duty station, Oak Harbor, WA with morbid fascination. We bought new construction in ‘03 for $225,000 (4/2.5, 2300sf) and sold in ‘06 for $340,000. It took us 2 months and we snapped up the first contract we got (listing price $350,000). Previous sales (last 6 mo) of our model were $350K and $355K. There are currently 2 homes for sale in our old neighborhood same model as ours. They are $334K and $329K and have been just sitting since mid May. The funny part is that BAH rates (an adjustable housing pay given to military) were $1239/mo for an O-3 rank in ‘03 and have only gone up to $1328 in ‘07. Other than the Navy the largest employer is WalMart so there are no high paying jobs for spouses. There is nothing special about Oak Harbor and it will be returning to reality soon!
Test
Sorry, looks like my comment did show up.
Yes, Kathy. After you tested it and it appeared, that means it worked:)
A few anectdotes (because I love reading others, so I thought it was my turn to share):
Menifee, CA: A close friend bought out there several years ago for about $235,000. Was even lucky enough to get a JOB up there so no commute. Decides she wants to live back down in North County again so she quits her job, gets a new one down here and now has a, what, three hour commute every day. She is happy that she can now buy in Vista for around $400,000 does not see the disconnect in putting her Menifee home up for sale for $465,000. Frustrated and has already fired two Realtors.
Temecula, CA: Another friend bought 15 acres in Missourri and is planning to move out there at the end of summer. I’m very happy for her, seems like a great place to raise kids. Her house is up for $450,000 and can’t drop below $430,000 because that’s what they owe. Took all the HELOC money out and “put it right back into the house but nobody cares”. Competing with new homes under $400,000.
Vista, CA: My mom’s neighbor refi’d his house for $503,000. Took the money and bought back east somewhere where they had great new jobs. Wanted to sell to me for $485,000 but would drop to $450,000 if I acted fast. Screamed at my mother on her driveway when I wouldn’t go for it. The house was first listed for $435,000 and has now been reduced to $419,000.
Oceanside, CA: I was at a barbecue the other night when a man comes up to the door asking for Mr or Mrs. X. “We’re the renters” my friends explained. The man left his card, saying the house was in foreclosure but he thought he could help. Not sure what the truth is there, but have some very upset friends in that house! The landlord owns FOUR other houses here and up north somewhere.
And me? Happily renting in Oceanside, four blocks from the beach. I’ve been reading this blog and others for a couple of years now, ever since I realized that there was no way everyone around me was THIS rich. Thank you all for the great comments and eye-opening education!
Excellent anecdotal reports and likely a sure sign of the coming unwind as this thing gathers speed. It seems that the real estate story is more a one on one thing, much unlike stocks which trade by name and company so that so far the real estate story is horribly diffused and away from the mainstream until such time as there is enough true anecdotal “evidence” to create enough fear and concern community by community. It would be great to get some more on the ground anecdotal stories from others.
And it’s things like this that will kill people’s perceptions, no matter how much the MSM “whistles past the graveyard”.
I used to think all those people were rich with their $200k a year jobs or they got some other huge windfall but I now know the truth, they are in deep debt with suicide loans
You and me both. Styx’s “Grand Illusion” comes to mind here.
June San Diego foreclosure stats:
http://tinyurl.com/36muja
“Even when adjusting for San Diego’s growth, as the graph to the right shows, there were more NODs and NOTs filed in June than in any month during the entire 1990s housing bust.”
“The mistake was to assume that job losses were the only potential cause of forced selling. The currently sky-high foreclosure rate in the face of positive job growth demonstrates very clearly that they were not. This time, the forced selling has been the result of years of speculative risk-taking by both borrowers and lenders.”
“Considering that high-risk loans were still being granted in spades until fairly recently, and considering that such mortgages often take years before resetting into the realm of unaffordability, it seems reasonable to assume that the foreclosure rate will remain elevated for some time to come.”
I’m interested in some day getting a second (or maybe first) home in the mountains of VA or NC. So last year I started keeping track of inventories, and am seeing some odd anomalies in the number of SFH for sale (stats from realtor.com - going from south to north):
Location 2006 2007
Brevard, NC 175 338 up 90%
Asheville 727 935 up 30%
Boone 310 301 down 3%
Blacksburg, VA 155 163 up 5%
Harrisonburg 203 245 up 20%
Luray 172 226 up 30%
So it looks like the southern NC mountains, and the northern VA mountains’ inventories are up a lot, but the band between is not. Interesting.
“Tighter lending? “Fannie Mae and Freddie Mac have tightened their policies for purchasing high-priced, high-risk home loans from lenders amid stress in the housing market.”
Will this help put an end to the neg-am crap? I’m still seeing advertisements from Quicken loans and the like touting $300k mortgages for less than $900 per month. Until this rot is rooted out, the sheeple keep on eating it up.
Out of town banker calls Realtor friend’s office for a BOV (broker’s opinion of value), a cheap ($50 - $100) version of an appraisal on two addresses the bank owns in a Cleveland, Ohio suburb. Friend shocked to see that one is now a vacant lot, the other is a boarded up, burned hulk of an old crack house. Both had mortgages of over 60k less than two years ago. When advised of this, banker said it didnt surprise him. Wonder how much the bank will get back on these mini - tsunamis?
I think I read somewhere that if you live in various parts of Cleveland and have a good car its worth more than your house.
That’s very true about Cleveland.
This is also true in Detroit.
Oak Harbor, WA., spring/summer RE market is a bust. Lots of RE signs and more “price reduced” sign riders. Agents are starting to cry about the slow market. The past five years have priced decent, middle class homes, in Oak Harbor out of the reach of “smart” people.
This caught my eye. I just had to share.
Nice to get two reports from Oak Harbor this week.
Things continue humming on downward in B’ham and Seattle. It’s fun to go to the open houses on Sunday and compare what you can get now for what you got 1/2 year ago for the same amount of $$.
It’ll take a real shakeup though for most people to realize clearly what’s going on right under their noses. Friends homes in both cities still haven’t sold in spite of price drops. But they’re confident they’ll get their (new) price “eventually”.
BTW, anybody else here distressed about the amount of older homes that have been destroyed by clueless flippers in the past few years?
The MLS is full of 1930/40’s houses with the beautiful kitchen cabinets pulled out and replaced by those cheap Home Depot pieces of crap. I’ve even seen tons of totally destroyed bathrooms and kitchens. You can tell it’s a flipper when the bozo went through and takes closeup pix of their “handiwork” instead of showing the whole room. Closeups of a new sink, closeups of the new fixture on the ceiling, closeups of the new door, etc.
The waste and trashing of beautiful old aesthetics is disgusting . Guess that’s what happens when you turn a whole housing market over to a bunch of speculating idiots.
Thanks Fed, lenders, and everybody else who contribute to the wholesale trashing of American homes and neighborhoods (not to mention the economy of course).
I’m at my daughter’s in Glenwood Springs, CO in a wonderful house built in 1950. Knotty pine everything, solid doors, wonderful handmade wood valances, very comfortable, solid, has a feel to it that I’ve never felt in a new house.
Yes, you’re absolutely correct. I know some friends who have a 1930s house below Amazon’s HQ (the old hospital) that has the original kitchen (gorgeous tile countertops & backspashes) and bathrooms too (all done in tile, really beautiful work and still holding up 70+ years later!). The house I think has been in one family for decades before my friends bought it 15 years ago or so.
Real Estate Auction
Pensacola, Florida
July 14, 2007
http://www.andersonrealestateauctions.com/auction_list.php
I would estimate that approximately 100 people were present for the auction which was a full house. The crowd seemed to be made up of a mix of local “Playas”, owners, and tourists. Most of the people seemed to know each other with a great deal of glad handing and market chit chat.
The auctioneer did a good job of advertising locally and distributed an informative Bidder Information Packet highlighting the properties offered. Properties were available for inspection prior to the auction. The auctioneer kept things lively and moved the properties and bidding along without undue pressure. Per the information packet the auctioneer was to receive 10% on top of the winning bid paid by the buyer. Registered bidders were required to post a $10,000 LC or certified check to participate in the bidding.
Bidding was anything but heated with only two to three bidders on the vast majority of properties. Nobody stormed out cussing nor did any of the winners jump for joy. A couple of times I thought I heard GS whispering, “Winner’s Curse” and “Ouch! Falling Knife”.
I noticed a couple of tricky things at the auction…
Three waterfront lots were offered individually in order to determine each lot’s price and then the group as a whole was offered with the starting bid the aggregate of their individual prices. There were no bids for the group and the lots reverted back to the individual bidders. When the individual lots were offered the highest bidder got to apply his/her bid to the lot or lots of his/her choice which resulted in two rounds of bidding. In the first round a woman bid $850K and picked the two smaller lots on offer i.e. $850K each. The second round was won by a fresh bidder who took a 1.12 acre waterfront lot for $785K vs. the woman who took two 0.608 acre lots for $850K each. Seems to me the woman paid twice as much for her lot on an acreage basis. I cannot see any material difference in the lots based on the information provided other than size. All three are located side by side and have approximately 120 ft of waterfront. Maybe she was a ringer to set up the sale of the third lot? These lots sold for about 60% below their prior listing price on the Pensacola MLS.
A beach house was sold to a mysterious “phone buyer” $100K above the starting price of $1M which per the auctioneer was also received by a “phone buyer”. Crickets were heard chirping in the auction room when the bid was put to the main hall’s bidders. No locals where biting on the beach house’s price. This sale seemed contrived to me.
During the sale of a couple of beach condos the auctioneer left the stage. Two guys near me commented that the auctioneer was probably talking about reducing/splitting his commission with the seller in order to get the sale to go through. Including the auctioneers commission of 10% I would estimate that the winning buyers picked up the condos at about 12% below the cheapest comparable condo listed on the Pensacola MLS not taking into consideration that the furniture was thrown into the deal. Please note there is a pretty wide range of wishing prices on the MLS for both the two and three bedroom condos. It seemed the auctioneer was able to work over the bidders on the Portofino condos which he wasn’t able to do on the other properties.
Although sellers were a bit disappointed in the prices received and there were a few gasps in the crowd (probably local owners) prices were higher then I was expecting which was disappointing for me. One positive I foresee is an adjustment to prices for properties listed in the MLS as owners come to realize and accept that the market has changed dramatically since 2005.
Properties Auctioned and Results:
1. Commercial Office Building – 3,600 sq. ft., two story, fully remodeled, downtown office building with 15 parking spaces. Starting bid $300K. Sold $610K. No comparative available from MLS.
2. Downtown Condominium (Commercial Unit) – 2,262 sq. ft., two story, fully remodeled, overlooking Marina and Pensacola Bay. No slip included. Starting bid $300K. Sold $450K. Bought June 2005 for $325K by seller per property records (I would speculate that the unit probably required significant repair after Hurricane Ivan by the seller).
3. Downtown Condominium (Residential) – 1,806 sq. ft., two story, fully remodeled, overlooking Marina and Pensacola Bay. No slip included. Starting bid $300K. Sold $450K. Bought July 2005 for $500K by seller per property records (I would speculate that the unit probably required significant repair after Hurricane Ivan by the seller).
4. Downtown cleared lot (Commercial) 0.42 acre, flat, cleared and located downtown. Starting bid $100K. Sold $220K. Bought September 2005 for $260K by seller per property records.
5. Beach House – 3,000 sq. ft., 4 bedroom, 3.5 baths, beachhouse located on Pensacola Beach (no waterfront but with unobstructed Gulf view) built in 2007. Starting bid $1M received by PHONE. Sold $1.1M by PHONE. Property records show the property being purchased July 2002 for $190K. Speculate the property was lot only or a damaged property.
6. Waterfront lot in Gulf Breeze – .608 acre with 121 ft of waterfront. Starting bid $800K. Sold $850K. Comparable property MLS # 324021 listed for $1.8M. Subjective: Excellent lot and excellent location.
7. Waterfront lot in Gulf Breeze - .608 acre with 120 ft of waterfront. Starting bid $800K. Sold $850K. Comparable property MLS # 324021 listed for $1.8M. Twin property directly adjacent to Property No. 6 listed above. Subjective: Excellent lot and excellent location.
8. Waterfront lot in Gulf Breeze – 1.12 acre with 117 ft of waterfront. Starting bid $700K. Sold $785K. Property directly adjacent to Property No. 7 above. Subjective: Excellent lot and excellent location.
9. Waterfront lot in Gulf Breeze – size unclear. Estimate about 0.15 acre on the Intercoastal. Starting bid $200K. Sold $210K. Subjective: Average quality lot.
10. Lot in Pensacola – 54.88×100x293×279 centrally located in small “upscale” gated community near local points of interest. Starting bid $150K. NO BIDS.
11. Lot in Pensacola – 50×279x278×152 centrally located in small “upscale” gated community near local points of interest. Starting bid $150K. Sold $200K. Comparable property MLS #327746 (101×73x62×109) list price $175K. Estimate that the property sold at auction is about twice the size of the property listed.
12. Lot in Pensacola – 104×125x77×32x103 centrally located in small “upscale” gated community near local points of interest. Starting bid $150K. NO BIDS.
13. Lot in Pensacola – 155×37x95×125x223×5 centrally located in small “upscale” gated community near local points of interest. Starting bid $150K. Sold $180K.
14. Portofino Condo – 2,034 sq. ft. three bedroom condo located on Pensacola Beach. Starting bid $500K. Sold $725K with furniture. Lowest price three bedroom Portofino condo MLS # 323748 for $900K.
15. Portofino Condo – 1,333 sq. ft. two bedroom condo located on Pensacola Beach. Starting bid $300K. Sold $465K with furniture. Lowest price two bedroom Portofino condo MLS # 320295 for $570K.
Definitely some knife-catching going on, especially for this waterfront lots. I don’t care how nice they are, that’s way too much money. Any idea what they may have went for in the late 90’s?
So, what the heck do auctioneers really do to get the 10% fee?
Another home many thought was overpriced just sold this week. It went to buyers from downstate (Long Island) who had been living with relatives for the last few months while they waited for the right property to show up. The home has been on the market since 5/17. I’ll have to find out what the sale price was but there had been no reductions in list. Owners are headed to CT. They will be buying.
It’s an interesting dichotomy breaking out in this market. Lower end and 1st move up stuff is coming on at 10-20% lower prices. Realtors are encouraging buyers to be realistic and have marketing packages which help them come to this realistic view.
My friend who lives on a brand new very scenic road heard from her parents that a realtor told them their road is “unsellable”. It was the hottest address 2-3 years ago. Apparently not anymore, at least until they lower prices on the 3 already for sale.
There are too many properties that have sat for at least a year & haven’t come down much. I’m guessing these people are in trouble. I know one such couple that started at $899k (4000 sq ft home on lakefront) and are now down to $749k. In the meantime his FLa business (educational materials) had to be sold to one of his friends businesses and he will now be working for his friend. I know his home was re-mortgaged to help his business before he ended up selling. Maybe they can lower the price once the business sale is complete.
“Mobile-home millionaire”: Is this what they call a “rush to the bottom”? Nothing quite like speculating on soon-to-be trailer park trash…and best of all the speculators put it on their credit card! Anyone seeing the irony here? Portion of article with link:
“Mobile-home millionaire” may sound like part of a Jeff Foxworthy redneck joke routine, but the term defines the aspirations of hundreds of real estate investors.
Mobile homes offer ample opportunity for real estate investors to start small. Many owners of multiple mobile-home parks began by buying a single home. Many did so with a credit card, according to Doug Ottersburg, a New Mexico entrepreneur.
http://www.denverpost.com/business/ci_6373098
‘Ottersburg and his wife bought a home for $12,000 borrowed at 8 percent interest.’
Where do I sign up?
Here in Kauai homes sales are keeping pace with last year, but condo sales will come in probably around 1/3 of last year’s numbers, and land even worse, so the more speculative markets are getting hit. I still see lots of ads in the RE papers about 100% financing, no doc stated income loans. Prices across the board are still being reduced but nothing dramatic, yet. Frankly, I’ve been surprised with the high number of sales here this year which could be a part of a GMTFO movement on the mainland, I don’t know.
Any updates on Harmony Fl? A planned community with lots of DHorton homes? Friends have been trying to sell there for about 24 months now.
The new builds were cannibalizing the market even then..wondering how bad it’s gotten.
Here are some SD 92127 listings from current Ziprealty.com listings (zr) versus SD county assessor’s sales price data (sc):
(zr) 14382 CAMINITO LAZANJA SD - Rancho Bernardo, 92127 $1,679,000 - $1,679,000
(sc) 14382 CAMINITO LAZANJA $1,595,000 303 151 08 00 05-17-2005
Fantasized flipper gain = $1,679,000 - $1,595,000 = $84,000
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(zr) 14596 CAMINITO LAZANJA SD - Rancho Bernardo, 92127 $1,255,000 - $1,255,000
(sc) 14596 CAMINITO LAZANJA $1,095,000 303 130 23 00 08-01-2006
Fantasized flipper gain = $1,255,000 - $1,095,000 = $160,000
———————————————————————————–
(zr) 14445 CAMINITO LAZANJA SD - Rancho Bernardo, 92127 $995,000 - $995,000
Beds: 4 | Baths: 5 | Sq. Ft.: 3,861 | Lot Size: N/A
Year Built: 2003 | Listing Date: 05/22/07
Description: Short sale subject to lenders approval. Located in santaluz gated community with all ammenities (SIC)
(sc) 14445 CAMINITO LAZANJA $1,500,000 303 140 21 00 10-19-2006
Anticipated shortfall = $995,000 - $1,500,000 = - $505,000 (Ooo, ow, eee…)