What Goes Up Can Come Down, And It Usually Does
The Herald Tribune reports from Florida. “A large banner hanging outside the Toledo Club Apartments on one of the main arteries in this city attests to distorted condition of the local rental market. The words on the banner read: ‘Free Rent.’”
“‘There is an abundance of rentals out there,’ said Donata Noone, a rental specialist with ERA Sun Coast Real Estate. ‘Buyers bought homes and condos when the market was good. They then tried to flip them, but realized they couldn’t and decided to rent them instead.’”
“With hundreds of houses, condos and apartments for rent in North Port, not every owner has been able to find a tenant. So rents are plummeting, and so are rental standards.”
“‘We’re talking to people we would not have considered two years ago,’ said Linda Haese, who is trying to rent two new 1,800-square-foot houses. ‘These are people who don’t have deposit money, but are willing to put $25 aside every month. As long as they don’t have a criminal record, we’re willing to say OK.’”
“‘Rents are coming way down because of supply,’ said Karen St. Pierre, a rental specialist with ERA Advantage Realty. ‘A 1,800-square-foot house without a pool that rented for $1,400 a year and a half ago is now renting from $900 to $1,000 a month.’”
“That represents a 36 percent drop and has created a wave of resentment among investors, who have seen their taxes and insurance bills move rapidly in the opposite direction.”
“‘Some owners are going crazy,’” said Noone. ‘They say they need the higher rent or they’ll go bankrupt.’”
“Haese, who is trying to rent two houses in North Port, said she attends investor club meetings where she hears horror stories about owners who have been unable to rent houses for as long as five months.”
“‘They’re just not dropping their prices fast enough,’ said Haese, who is offering her houses for just under $1,100 per month.”
“Haese said she is not making money at that level, and she would like to sell, but the market is glutted with houses for sale. ‘I think it will be five or six years before I can get out,’ she said.”
“For people looking to rent houses in North Port, the situation could not be better. They are being offered new houses with swimming pools at ridiculously low prices.”
“‘It makes much more sense to rent than to buy right now,’ said Dennis Black, a Port Charlotte appraiser. ‘A renter will pay 60 percent of what it costs to own.’”
“Because of the dramatic downturn in the real estate market, home builders are now replacing scrub jays as the most endangered species in this once rapidly growing city.”
“‘We’re in a recession,’ said Richard Gebing, who manages the North Port operation of Fort Myers-based Raymond Building Supply. ‘And this is not going to be a soft landing.’”
“The fundamental problem facing North Port is the oversupply of homes choking the market.”
“One in 10 houses is for sale or embroiled in some stage of foreclosure. Builders themselves are holding more than 400 homes that they built on speculation, said Dennis Black, a Port Charlotte appraiser who recently completed an exhaustive study of the North Port housing market and who interviewed individual builders to collect his data.”
“‘By their own admission, they are also sitting on as many as 500 vacant lots,’ he said.”
“‘It’s a ghost town for sure,’ said Marla Peters, the owner of Fort Myers-based DMI Construction. ‘I was driving though North Port the other day. It’s a ghost town. There’s a lot of downward pressure on new homes and existing homes.’”
“More than 50 companies were building houses in North Port at the height of the boom, but county property records show that only half that number remain active today. Some have quietly backed out of town, while others, including Grover Brothers and Webster Homes, face an ever-increasing number of liens filed by unpaid vendors and subcontractors.”
“Greg Leach of Heron Cove Construction blames real estate investors for the problems builders are facing. ‘I think the investors have treated us as builders quite inequitably,’ Leach said. ‘The investors have forced builders into bankruptcy.’”
“Leach’s own experience is that nine out of 10 investors are walking away from contractual obligations.”
“‘After the economy came apart, people started losing interest,’ Leach said. ‘They kind of got themselves between a rock and a hard place. They were leveraging their equity and their primary residence to have a spec home built, just to get in on it, without realizing what goes up can come down, too, and it usually does. People should not have gotten into this situation with their rose-colored glasses on.’”
The News Press. “Three hundred and fifty Lee County homes sit in some stage of construction — half-built, a pile of dirt, or unlivable.”
“Their owners are making interest payments on construction loans they can’t close. They’re facing tens of thousands of dollars in liens.”
“The owners blame contractor, Merit Homes Inc., for taking years to complete the jobs and not paying subcontractors, while the company’s owners spent millions buying land in Florida and North Carolina, according to documents.”
“Dan Norden, a real estate agent in Fort Myers, took a dozen or more client/investors to Merit to build homes. On one in Lehigh Acres, Merit received $30,000 to pull permits and begin work, but nothing was done, he said. The lot is vacant, a mound of dirt.”
“The permits sat for a year at the Lee County Building Department until they expired. The owner decided to walk away and let the bank repossess the property.”
“‘The client is going to let it go,” Norden said. ‘There’s nothing else he can do.’”
“Two of George Kaloudis’ Lehigh Acres homes are at a standstill. ‘They took on too many homes,’ Kaloudis said, speculating that the company may have grown too fast. ‘They were a 50-home builder in 2004 and a 500-home builder in 2005.’”
The Palm Beach Post. “The mood at last week’s Southeast Building Conference here was somber. The home building industry is going through tough times, and no one knows precisely when things will get better.”
“‘I’ve never seen a market like this,’ said economist Mark Zandi of Moody’s Economy.com.”
“‘Raise prices,’ said (CEO) Ara Hovnanian. ‘Buyers aren’t buying because they think you’re going to lower prices again. There’s interest but there’s fear. Raise prices 3-4 percent. And quit giving discounts.’”
From CBS 4. “Investing in South Florida real estate used to be a great way to make some great money but the softening South Florida market is in state of flux right now.”
“‘We’ve had several open houses. Very few people have come by,’ Dick Weiss told CBS4’s David Sutta.”
“Weiss and his wife have been trying to sell their Pinecrest home in Southwest Miami-Dade, which sits on an acre of land, for more than six months. ‘A couple of years ago it would have sold in 7 days. We’re optimistic that it will sell,’ said Weiss.”
“Two years ago, there were 12,000 homes for sale in Miami-Dade and Broward Counties. Today that number is 78,000 homes for sale, which is an increase of 650 percent.”
“Despite the fact that the Weiss’ home is in a great location, they are dropping the price $100,000 below appraised value in hopes of getting the right person in the door. ‘We feel we have as good a shot at selling as anybody else. So we have to stay optimistic,’ said Weiss.”
“‘Raise prices,’ said (CEO) Ara Hovnanian. ‘Buyers aren’t buying because they think you’re going to lower prices again. There’s interest but there’s fear. Raise prices 3-4 percent. And quit giving discounts.’”
Classic! That would work for about 5 seconds. The fundamentals call for a 50% decrease in prices, it has nothing to do with buyers waiting for price decreases to stop. Talk about being in total denial.
That is either a statement of collusion and price fixing, or a deparate man hoping to get his competitors to listen to his advice while he drops his prices.
From the second Herald Tribune article.
“Ignoring the laws of supply and demand, those builders churned out far more homes than were needed during the boom…”
So if supply exceeds demand, you RAISE prices???
Of course, and raise rents! Those greedy renting bastards need to buy our houses!
sell it to blackfein@goldman.
Ok Ara - you go first.
Why does everyone think this is such a dumb idea? If he can convince all the other homebuilders to raise prices, then his houses will look like a better deal by comparison, and he will gain market share.
Why does everyone think this is such a dumb idea? If he can convince all the other homebuilders to raise prices, then his houses will look like a better deal by comparison, and he will gain market share.
Do the math and research and you will find the answer to your question!
1. All it takes is just one greedy bastard to lower prices and sell off his inventory before the others react. Then the whole scheme collapses. Greed (by dropping prices below your competitors) is one of the ways that capitalism is supposed to work.
2. People can’t really afford current home prices (especially in parts of Florida?) anyways…and with the continuing credit contraction and associated decline of sub-prime and alt-a lending, who will be left to buy these homes at an EVEN GREATER price?
Your method works only as long as Ara is planning to be the first to undercut everyone if/when they get ballsy/stupid enough to raise prices.
Look at it this way…until the past two years, prices WERE going up…but sales slowed anyways. People just couldn’t justify spending that kind of money on Hov(el)nanians at those prices.
I hope they do go this route, it will just pile up even more inventory.
Yup, basic Game Theory 101.
“‘Raise prices,’ said (CEO) Ara Hovnanian. ‘Buyers aren’t buying because they think you’re going to lower prices again. There’s interest but there’s fear. Raise prices 3-4 percent. And quit giving discounts.’”
….And don’t forget to have your chapter 7 bankrupcy papers prepared and ready to file Ara Hovnanian, because you are going to need them if you follow your advice. The real cause of the consumer not purchasing your homes is they are no longer affordable!
Ha ha ha ha! Hovnanian are the ones LOWERING prices out here! What’s he talking about?!?
Some of my friends are getting burned royally after buying from HOV at over $300k, and now Hovnanian is selling the exact same model with the same “trimmings” for $250k!
Not that I feel too sorry for these friends. They were in it purely for easy flippin’ money. Unfortunately, now they are wanting to flip their place and move again, and it’s looking they’ll lose $60k + commissions, and then only IF they can find a buyer who wants a pre-ownewd house in that new Hovnanian development.
You know what’s really annoying - if you click through and actually find the Palm Beach Post piece (the link didn’t work for me but it’s the first hit you’ll get searching for Hovnanian), you’ll see the reporter so blatantly cheerleading it made me want to choke someone. The paragraph before the “raise prices” paragraph in the article reads:
Getting back to Ara Hovnanian, we see him at every major home building industry event. He is generous with his time and his wisdom. He’s not pushy, and he doesn’t yell above the fray. But builders would do well to listen to him when he quietly leans forward and offers an opinion.
In short, the writer (I don’t want to call her a “reporter”, which doesn’t seem to apply here), linda_rawls@pbpost.com, is actively advocating that the builders collude to raise prices. I’m sure she’d appreciate hearing alternative viewpoints…
“‘Raise prices,’ said (CEO) Ara Hovnanian. ‘Buyers aren’t buying because they think you’re going to lower prices again. There’s interest but there’s fear. Raise prices 3-4 percent. And quit giving discounts.’”
Let us assume she was asking flippers to raise their prices by this much so that Hovnian has a better chance of selling their stock of housing…
“‘Some owners are going crazy,’” said Noone. ‘They say they need the higher rent or they’ll go bankrupt.’”
As if Mr. Market gives a rat’s tail about what anybody “needs.” Sheesh.
DC_Too,
Yep. The market is turning into a bitch. I am in Port Charlotte,just a couple of miles south of North Port. A nice house on my street just rented last week for 700.00/month. Had been empty for 6+ months. Pool/yard/everything tossed in. The only thing saving the owner is the place is paid for.
It is gonna be a long,hot,end to summer here in Florida…
Chris
Oh my god that’s cheap. Here in Palm Beach county, a “nice” house will get about 1200-1500 a month. The home I am in for 2K a month last sold for 550K, to give you an idea of where the price/rent ratios stand.
700/mo for a home. My god, how far does this market stand to fall. That means that the FMV of that home is probably about 100-120K (at the most, based on a rent/price ratio). Any idea what the home last sold for?
better email this $700 deal to your landlord -roflow
That’s cheaper than my rent in Upstate NY (900/month for house, barn and 10 wooded acres). I wasn’t aware you could get much cheaper than Upstate NY.
I pay $700/mo. for a 2/2 here in Chicago (Ravenswood). There’s always good deals to be found. Don’t look in the papers or go through an agent - drive the neighborhoods and ring doorbells direct.
$900 and $1050 is way too much to pay to rent in Upstate N.Y. or Philly. Ask for a reduction or look for a better deal if the numbers work (rent, utilities, cost to move, transportation, etc.). Start looking at foreclosed properties in good neighborhoods and contact the owners. Many will cut you a deal.
It’s easy.
Better deals are out there.
I would not recommend renting a property that is undergonig foreclosure unless you plan to move again very soon.
Not for 2000 sq ft in Ithaca. Trust me.
I pay $700/mo. for a 2/2 here in Chicago (Ravenswood).
That’s a really good deal. I was paying about that for a 1/1 garden apartment two blocks from Wrigley Field in 1993.
That’s way cheaper rent than in my area (outside Philly). Renting is still better than buying around here, but to get a sfh with a pool no less for $700? No way around here. My 2BR, 1.5BA 1000 sq. ft. townhouse (not new - maybe 20 years old) is $1050.
“900 and $1050 is way too much to pay to rent in Upstate N.Y.”
Right on the money. I’d say thats 50% by any measure.
$700 a month is a good deal. I have a friend renting a $400k house for $650 a month. I don’t see dirt cheap rentals lasting once the market bottoms out then buying will become the better deal.
“Despite the fact that the Weiss’ home is in a great location, they are dropping the price $100,000 below appraised value in hopes of getting the right person in the door. ‘We feel we have as good a shot at selling as anybody else. So we have to stay optimistic,’ said Weiss.”
Yeah, really lends credence to the notion that real estate “investing” is so much safer than the stock market. Ummm . . . last time I looked you didn’t have to sell below the market to dump a stock, nor did you have to beg someone to buy it, nor did you have to rent it out for less than your carrying cost. Wonder what it will take to cleanse the populace of this mindset.
Nor do you (generally) borrow 95% of the cost of the stock to buy it. If you did, a 5% correction would wipe you out. Oh well…..
That’s the real “problem” with RE investing. You are borrowing most (or all) of the cost of a home; your using so much leverage that a tiny move in the market can totally unwind your position. Also, the transaction costs and carrying costs are insane (compared to other investment vehicles).
Once again (someone is going to hit me for repeating this so much, but oh well, I can take it) if traditional “leverage” numbers come back into play (20% down for good credit, 10% of perfect) it will be a total meltdown. The only thing that let this get this crazy was the total removal of downpayments; when you have to actually put 50K into a 500K home the merry go round will have offically stopped.
I agree. I think it’s easier to borrow for a house than to buy stocks on margin, so it’s a more popular (and more stupid) investment for the sheeples.
One of the reasons for the great depression was that too many people were buying on margin and couldn’t cover when the market dropped. It’s happening all over again.
There was also “innovation” in real estate lending in the 1920’s - “balloon mortgages” they were called - very low payments for usually five years, then the whole principle balance came due. Everyone said he’d sell (at a profit, of course) before the notes came due, or, “I’ll just refinance!”
The movie and the book ended exactly the same…..
“There was also “innovation” in real estate lending in the 1920’s”
Talk to GetStucco about that, he knows all about it.
Back in 2002, when this real estate bubble first got my attention, I read two very good histories on the great depression.
In a nutshell: “déjà vu all over again”. Only this time real estate speculation is probably more widespread geographically. On the plus side, the plethora of government spending programs we now have in place will probably keep things from crashing too hard.
But Ara Hovnanian said they should raise prices. (I guess so he can lower his and get out)
‘A couple of years ago it would have sold in 7 days. We’re optimistic that it will sell,’ said Weiss.”
Time marches on and things change, Buckwheat. A couple of years ago I turned 43. I’m optimistic that I’ll turn 43 again next year. I’ll let you know how that works out for me. Keep me posted on your pending sale…
“‘Raise prices,’ said (CEO) Ara Hovnanian. ‘Buyers aren’t buying because they think you’re going to lower prices again. There’s interest but there’s fear. Raise prices 3-4 percent. And quit giving discounts.’”
Yes raise prices, that will get the suckers back into the game and think we have hit bottom. Henry Hank Paulson and Ben Bernanke can call the bottom and maybe people will believe it is the bottom just because they said so. I am sorry, but all 3 have no credibility. In fact it is negative, just do the opposite of what they say and you’ll be better off.
P.S. On the North Port note. It is spreading north and south into Sarasota / Bradenton and down to Ft Myers. Tampa and St. Pete are already being sucked into that black hole. It’s like a plague spreading across Florida. No one is immune to this disaster. If a Hurricane hits this year, we’re screwed.
Here’s the funny thing. Why is it that all the so called “experts” are saying we’re close a “bottom,” while just a few years ago none of them dared to say we were close to a “top”???
Because “expert” is defined as someone with a vested interest in the business - no sales = no paycheck = “expert.”
“If a Hurricane hits this year… If?
The mere idea of a hurricane hitting Florida is…”inconceivable.”
Such an event would indeed be “unexpected” and real estate experts would be “surprised” by the sudden appearance of a hurricane during hurricane season- especially in Florida!!
An “expert” is defined as anyone from out of town.
in addition, ara can go f&%^ himself. he was the one whining like a baby for the last six months ’cause the party’s over.
Someone should tar and feather him for building all those ugly, pos houses.
The only supprise is watching house prices plummet and insurance soar! LOL
I do not think that word means what you think it means!
lol
P.S. On the North Port note. It is spreading north and south into Sarasota / Bradenton and down to Ft Myers. Tampa and St. Pete are already being sucked into that black hole. It’s like a plague spreading across Florida. No one is immune to this disaster. If a Hurricane hits this year, we’re screwed.
It is the red tide of the housing market spreading up both coasts of Florida. If a hurricane enters the Gulf of Mexico, expect oil prices to hit $100 and if one does hit Florida, expect all of the insurance companies to pull out leaving the state owned and operated insurance company Citizens to be the only insurance company left that will insure homes.
Fortunately I live in a neighborhood that is basically built out and sold with the exception of one home which is being completed in the next 4 or 5 months. All of the homes sold to people who are living in them except one which the flipper is still trying to make a profit.
The builder recently lowered the asking price on the home being built by 16.5% and I’m sure is flexible on that price. The flipper has been lowering the price bit by bit but has not been able to sell in over 1 year.
The neighborhood is very desirable which is why everything is sold out and there is basically no inventory, but the reason the flipper is not selling is what we talk about all the time on this board, they are not willing to sell “at the market” and the builder is.
I’m sure as usual the builder will sell before the flipper. From what I understand, their carrying costs have been $3,000/month during the last 18 months, ouch.
Alligators are known to grow quite large in Florida.
Just wait until they see how easy it is to sell a house that’s been rented for a few years. Even good renters wear out carpets and cabinets, some decent folks smoke. Then there are the others…just watch and weep after you serve them an eviction notice.
Renting is not a good option for stuck investors. They’ll find out soon enough. If you paid too much to sell it, you paid way too much to rent it.
Back in the Denver oil boom days I heard about a tenant who grass sodded inside his rental condo. He was from the Sahara and obviously impressed by the delicate green blades. The brown water seeping downstairs was a slight problem.
Add to your comment this observations, “‘it makes much more sense to rent than to buy right now,’ said Dennis Black, a Port Charlotte appraiser. ‘A renter will pay 60 percent of what it costs to own.’” Specu-flipping-landlords are going to bleed a slow painful financial death.
‘These are people who don’t have deposit money, but are willing to put $25 aside every month. As long as they don’t have a criminal record, we’re willing to say OK.’”
Anyone who can fog a mirror can now rent a house.
That truly speaks to the desperation of these people now, and how quickly it has changed.
When I got into my home (~9 months ago), I got a very good deal, but the owner was not willing to talk (and had rejected other offers that did not comply) to anyone who could not come up with first, last, and security. After signing the papers, and handing over the check for 6K to the RE agent; she looked at me and said “I could have sold you that home and you can keep your 6K downpayment” (because I would have qualified for a 110% loan at the time).
I smiled and politely told her that unless the owner was willing to accept 1/2 what he paid, there is nothing she could offer me that would possibly make me consider buying my rental home.
“‘It makes much more sense to rent than to buy right now,’ said Dennis Black, a Port Charlotte appraiser. ‘A renter will pay 60 percent of what it costs to own.’”
The renter is paying market rate, not 60% of what it costs to own. The owner is paying 167% of what it costs to rent.
Yep. I said here a couple of years ago that the rental market for housing is a much more efficient one for setting prices so the specuvestors who were thinking that rents would somehow rise to meet sales prices were going to be sorely dissapointed.
Because renters don’t have fancy models that factor in positive HPA as a universal law of physics
Typical nonsense. I’m on the apartment side of things, and the office manager was giddy at the prospect of being the only apt. complex in the area (the rest went condos). I told her to expect severe competition on rents from specu-flippers (love that term) to which she said ‘in my 15 years of experience I’ve never lowered rents’. Well that time finally came, and people are seeing rents reduced. If I don’t have at least a 10% ($85 reduction) this year, I’m moving into a specu-flipper place.
Rents rising to meet home prices - hehehehehehehehehehe
What if none of the sellers were willing to rent for realistic prices? Would everyone simply relocate? I find it interesting that those sellers are being realistic on rent but not to sell.
“‘We’re talking to people we would not have considered two years ago,’ said Linda Haese, who is trying to rent two new 1,800-square-foot houses. ‘These are people who don’t have deposit money, but are willing to put $25 aside every month. As long as they don’t have a criminal record, we’re willing to say OK.’”
We’re doing the same thing here in California …the difference is we don’t require the $25.00 saved per month - we ask if they can say ‘Thank you’ in english.
Ha!
So, don’t leave us in suspense… can they?
A renter burned down my house. Luckily it was insured.
Meth lab, heh?
My dad used to be a landlord long ago and the tenants were always breaking things.
“Three hundred and fifty Lee County homes sit in some stage of construction — half-built, a pile of dirt, or unlivable.”
“Their owners are making interest payments on construction loans they can’t close. They’re facing tens of thousands of dollars in liens.”
The other day I asked a local politico what was happenning with our township’s newest luxury condo development. He said that the builder hasn’t even dug a hole for the swimming pool yet, because of a “cash crunch”.
If anyone reading here is considering buying at The Hollow at Fox Valley, be aware that you probably will never see the swimming pool and club house that you have paid for. Without a lawsuit, anyway.
but stay tuned for the auction!!!!!
Update on my friend who bought 5 of these houses in Cape Coral and Ft Myers and then sold them to all of her friends, family and church in the Bay Area. She was unable to borrow any more money to BUY MORE HOUSES in this area, is now in foreclosure on one in Ft Myers and putting the rest of her properties in land trusts. In a mere few weeks she has gone from saying “those 200k houses will be back up to $356K by January” with absolute certainty to “well Robert Allen (RE seminar leader) lost all of his money several times too before he struck it rich.”
And here are some more fun facts about Robert Allen:
http://www.johntreed.com/Reedgururating.html#anchor496881
Oh please stop posting John Reed’s web site. HE IS NOT what you think. He’s trying to SELL HIS investment seminar/books/tapes etc by bashing the other guys. Yes, they are full of it, but so is Johnny gReed.
“Greg Leach of Heron Cove Construction blames real estate investors for the problems builders are facing. ‘I think the investors have treated us as builders quite inequitably,’ Leach said. ‘The investors have forced builders into bankruptcy.’”
Cry me a river jackass, all the builders were looking the other way as they took deposists from investors for multiple houses and lied to the real owners how many investors there were. Now your poor planning and greed have come back to haunt you.
Had he hired someone like me to research his market, Greg wouldn’t be crying and complaining. What’s more, he might have been properly hedged for the downturn and laughing all the way to the bank while his competitors bled. Guys like Greg never listen nor do they value a little market research, however.
My take on people in the construction business: When they were younger, they were the boys who could never sit still in class. And I’ll bet that some of them would have been classified as having poor impulse control, which is a symptom of ADD.
This, IMHO, is why they tend to be resistant to things like researching markets, performing feasibility analyses, and proper hedging for downturns. Those are activities that require seatwork. And thinking.
These guys would rather be DOING something, anything. So, on the go, pounding nails, running saws, etc. And that’s their downfall.
My take on people in the construction business: When they were younger, they were the boys who could never sit still in class. And I’ll bet that some of them would have been classified as having poor impulse control, which is a symptom of ADD.
LOL!
I work with contractors everyday and your desription flashed many many contractors faces before my eyes! They probably were exactly as you described them.
- They ALL have one thing in common… sign new jobs and GET A DEPOSIT to begin the new job. Of course this money floats the old projects!
I used to teach computers at Colorado Mountain College. A lot of my class was made up of construction guys who were aging or injured and trying to make a new career. They did OK, generally, if I could make the examples relevant to what they knew (spreadsheets of building costs, etc.).
How did they do with C++ programming?
The published apartment occupancy rate in Jacksonville (first coast apartment association) has fallen from 96% occupied to 93% occupied between June 06 and June 07. That is a tremendous loss over a one year period. The occupancy rate and rents are both falling at an unbelievable rate here in Jacksonville due to massive overbuilding in the condo market. Many local condo projects are changing into apartments due to lack of sales. With this happening, we will more than likely fall into the occupancy panic zone of 90% later this year.
Falling occupency rates, stagnant and falling house values, companies shedding jobs….
Yep, the good people of Florida are getting to know another side of America. Welcome to Ohio.
Yep, the good people of Florida are getting to know another side of America. Welcome to Ohio.
Oh No! I thought I got transfered to Florida 22 years ago.
Same in Tampa. The complex I live in has never been more empty. I get at least one door hanger a week practically begging for resident referrals, and $500 off next months’ rent if someone signs. There are four people moving out in my building in the next month. Two to rent condos, one out of state, and the other to a cheaper complex.
Heard something on the news last night about a housing summit here in LA this coming October - anyone know anything about this? (Wondering if I should go wear a sandwich board there…)
Could you be referring to this summit?
I don’t think so, they specifically said it was to be held here in L.A. in October 2007 and mentioned L.A.’s mayor in connection with the event…
Looks like we are getting a “the rich are getting richer and the poor are getting poorer” situation with some variations on the theme in the property market.
I sold a condo in West Hollywood a few years ago because I thought the top was in. In the next 2 years that condo went through the roof (never try and pick the top!) and last time I looked, a similar condo sold for $800,000 AND it’s holding it’s value even during the downturn. In the same year I sold a townhouse in a good part of Northridge, ca. That also went through the roof value wise AFTER I sold. I checked the values in that area and discovered it’s come off it’s 2005 high but not by much. Nothing like the Florida stories we hear about.
Of course, a tsunami of selling could arrive in California at some point (especially if we hit a recession which I think we will) but it’s interesting to see the property values in Florida going rapidly (very rapidly) into the toilet but the more affluent parts of some of the bigger cities holding prices at the 2005 levels.
I have a friend who rents in the area where I owned the condo and he said rents are NOT going down. I have a feeling the main driver of values in any area is “quality” of employment. In West Hollywood, ca. the average income is pretty high because the entertainment industry money flows. The majority are gay in that area (not that there’s anything wrong with that!) and thus have no heavy expenses like having children which means saving for college, etc, and also having a no-income stay at home wife.
As for where I live now in Thousand Oaks, ca, there are lots of big tech companies (and more moving in and the office buildings are going up everywhere) and other large corporations like Amgen, Blue Cross, etc. and, again, the wage/salary scale is way up there. There has been a slight drop in values in this area but not like Florida. Declines being $25,000 to $40,000 on average from 2005 values with the lower values getting hit the hardest. Those home owners with crappy paying jobs.
I’m not familiar with Florida but I suspect it’s simply a case of prices declining because of one or two things. Affordability being #1 because the job “quality” is low and the decline of sub-prime being #2. Hambuger flippers, house cleaners and gardeners cannot afford $300,000 homes on $18,000 a year and they have no clout when it comes to wage demands. On the other hand, those who can demand a higher income because they have a special talent, just ask for more money or look around for bigger paying jobs if they don’t get it. If they need/want your talent - they will pay. My wife does some part time accounting for a company which employs artists for video games. They make on average around $80,000 a year + they get all the benefits like 401k and medical + they get a bonus (large sometimes) if a particular video game is a success. Most hover around the $100,000 + income range. However, the company is ALWAYS losing employees who find a higher paying positions. If you have a “talent” you can demand a higher income. Thus, you can keep up with the cost of living and the cost of property.
A now bankrupt and struggling to survive ex-mortgage broker I know who rode the sub-prime wave and skimmed big bucks for several years, is having big life-style problems simply surviving financially and went to Colorado to look for work recently but came back and said it’s a bigger basket case (for good paying employment where you don’t really have a skill and I personally don’t consider mortgage brokers skilled) than California. Thus, the rich get richer and keep what they have - the poor get poorer and lose what they have.
Just because salaries are way up there, it shouldn’t mean this “pseudo-rich” idiots living in West LA and Thousand Oaks drive the prices of homes up amongst themselves. I mean really, watching this from the outside is laughable…a bunch of desperate morons outbidding each other, renting from each other, jacking the prices up against each other.
Sorry to say the minority of people are wealthy…the rest are on borrowed time, one paycheck away from pain, and leasing everything they “own.” Most of those industries you mentioned are making money out of nothing..hot air industries if you ask me. Particularly the entertainment industry…were caviar parties and champagne fests somehow end up paying peoples mortgages.
Those “West LA” and “Thousand Oaks” latte drinking losers I unfortunately have to encounter occosionallty flossing in their BMWs are some of the biggest clowns I’ve seen around here. My wife and I make over $200K right now but we don’t live like these idiots do. I’d still not pay the prices they pay for the “privilege” of being in the “in-crowd.”
Really..what a bunch of repugnant losers.
Hey, I live in Thousand Oaks! I resemble that remark.
I don’t think it’s a T.O. or W. Hollywood thing. You find shallow piece of sh$t people all over So Cal.
Couldn’t agree more. I live in T/O, can afford to buy a new BMW every 6 months for cash if I wanted and I have enough money to live 3 lifetimes without working but I drive a 12 year old car (Toyota) a I get my “latte’s” at McDonalds. The 59 cents senior deal. There’s a Starbucks opposite the McDonalds but I’ve never been indside and I sure as hell wouldn’t pay $4 for a coffee BUT, if someone wants to, it’s their money. That statement about T/O and West Hollywood was so black and white. What dumbass making $100,000 + a year would want to live in a toilet like Compton, ca. (gangland) just because they thought people in West Hollywood or any other nice area were “losers”. Stupid comment.
(for good paying employment where you don’t really have a skill and I personally don’t consider mortgage brokers skilled)
Mortgage brokers are bottom feeders. These ass-clowns float from bubble to bubble, temporarily displacing those people who are more qualified but they all get their comeuppance. I know a couple mortgage brokers, and their collective IQ would barely top 100.
MIKE:
Not it’s not a stupid comment…you have to first understand what I meant before stating what’s stupid and isn’t.
I’ll try again….just because you make alot of money doesn’t mean you need to run to T/O and West LA and be a dumbass an pay for an overpriced POS. Do you now?
Even if I had all the money in the world, I’d still not want to live those overly shallow areas of LA…those idiots can keep outscrewing each other till kingdom come.
We appreciate is tourist dollars here in Colorado.
I’m guessing here but it sounds like “Mike” is saying market conditions are different in the Hollywood area. Maybe they are, but that supply and demand theory usually wins in the end. When that happens, the supply of the “rich getting richer” people will also decline as will salaries. Just my convoluted thinking though.
Hollywood isn’t jsut movies. Seems to be a very concetrated area where consumer marketing orginates, (there SF & NYC). When consumer spending sags, marketing budgets eventually get cut. The beemer drivin’, latte sippin, hollow shells will wish they weren’t in the negative savings rate cowd.
The problem with your argument is that you assume home prices went sky high because of incomes–they didn’t. Prices went up because of ridiculously easy credit, a slosh bucket of liquidity and greed.
Prices will go back down as credit contracts, and the resultant recession will lower those high incomes. The timing is just different for different areas. In LA, prices are already going down in the exurbs, and the slowdown will move toward the center. Just be patient.
Monthly payments on that easy credit has to be covered. My point was not to equate home prices with incomes, but I can see how that would be taken as so.
The engine has fallen through the broken trestle and into the ravine. All is well in the cars to the rear.
Maybe a weekend topic, but related.
Has everyone noticed rents are dropping everywhere? Ok, maybe not in some of the cities in Texas… But everywhere I’m traveling for business, rents are on a slow decline. One hears about it in Ohio, Michigan, California, Las Vegas, Phoenix, and Florida… Some drops are dramatic, some are 2%…
Any major exceptions?
Got popcorn?
Neil
“With hundreds of houses, condos and apartments for rent in North Port, not every owner has been able to find a tenant. So rents are plummeting, and so are rental standards.”
Just a few months back we had people joining this blog to tell us that rents were going to go up. I’d like to hear from them now.
Dallas area rents are pretty flat - up less than 2% YoY. In other words, even here rents are falling after you adjust for inflation. That is in a market that didn’t grow apartment units at all last year as knockdowns exceeded new units completed. Many of those knockdowns are coming back as bigger buildings and the bulge of condos completing in the near future will surely contribute further to oversupply. There are just too many of them and they are aimed at the wrong part of the market so I expect to see a lot of them turn into rentals, either by the individual owners or in a reverse conversion back to apartments.
Haven’t seen a change in my area of the Philly `burbs (Horsham, Hatboro, Willow Grove). Not for privately owned places nor complexes.
Rents aren’t dropping where I live in South Tampa Hyde Park). I pay almost a thousand a month for a 600 sq foot 1 bedroom ANCIENT apartment with a tiny prehistoric kitchen, but there is never an end to the pretentious 20-somethings moving into this building (by twos and threes, to split the cost) because this neighborhood is supposedly fashionable, so there is no reason for the landlord to lower prices. Last year he raised the rents to cover his increase in taxes and insurance rates. I also have to pay 50% more for water than a year ago, because individual apartments are not metered, and evidently, the water used in the laundry room (where one pays to use the washers) and that used to water the lawn is included in the total, which is then divided between all the occupied apartments, with the larger apartments (mine is the biggest) paying more, regardless of how many people live in them. I also pay for individually for gas (which I don’t use), electricity, cable, and computer service. The landlord furnishes nothing. And I can’t run my bedroom air-conditioner and a computer or microwave or toaster at the same time, because it overloads the wiring. See how wonderful living in South Tampa can be?
Incredulous: If you’re nearing the end of your lease, hit the streets and look for “For Rent” signs. There are great deals to be had. You might have to leave Hyde Park though. Look in Palma Ceia/Virginia Park, or even those Post conversions in Hyde Park. A lot of people are trying to rent those - the unconverted Post complex (with lovely Crosstown views) is a complete rip-off though. I hate So/Ho Hyde Park - no parking, obnoxious people approx. my age with less than half the education and income driving leased luxury cars, trashy meat-market bars. The neighborhood is undeniably beautiful though if you can actually afford it. Try to find a newer building - even with the shoddy construction, at least you get a dishwasher and central AC, and the wiring is less likely to catch fire and burn the whole place down. Plus, most of the newer buildings have parking. I agree though that rental list prices aren’t going down, but they are typically negotiable. Good luck!
Thanks. I was thinking of Palma Ceia. The people here in Hyde Park are nauseating, and so fake. The youngest ones in my building all drive luxury cars; the rest enormous SUVS, but when I’ve seen inside their apartments, I’ve been appalled. They live like pigs. They’re absolutely filthy. But, they manage to eat out constantly at very pricey places, and to put on quite a show. Hyde Park is where all the young women go in hopes of finding rich boyfriends/husbands, and all the young guys pretending to have money go to pick up the stupid gold diggers. It used to be nice, before these dorks swarmed in and took it over. I wish they would swarm back out.
I hate going to that area. It’s exactly how you describe it. Preposterous, 20s and 30 somethings doing everything that is considered trendy without a clue. I went to a bar where they were having ‘doggy happy hour’ and the place was full on numchucks with their designer purses and dogs.
If this is the future of this country, we’re all screwed. I love the antiquated homes in SoHo, but hate the yuppies. ‘Nuff said.
“Comment by Moman
2007-07-17 13:09:38
“I hate going to that area. It’s exactly how you describe it. Preposterous, 20s and 30 somethings doing everything that is considered trendy without a clue. I went to a bar where they were having ‘doggy happy hour’ and the place was full on numchucks with their designer purses and dogs.
“If this is the future of this country, we’re all screwed. I love the antiquated homes in SoHo, but hate the yuppies. ‘Nuff said.”
I’m afraid it is the future of this country, or at least of Tampa. These are the twerps hoping to become Tampa’s biggies some day.
The apartments on South Howard next to Whaley’s–I can’t remember what they’re called, but they converted to condos shortly after being thrown up, actually had a flier, handwritten, that described them in big letters as “Trendy,” and this did the trick. They were instantly filled-up.
Incidentally, one of the workers at Blockbusters in the same neighborhood told me they had a terrible time with DVD thefts, which is why they switched to security box thingies. Funny for the allegedly most expensive and prosperous neighborhood in all of Tampa. All those posers ripping off DVDs because they can’t afford to buy them. Or perhaps, they’re just bored.
I am old enough to remember Ybor as theformer hippyville, artist, rundown but-with-character place full of brick buildings & thrift shops of the 80’s.
Watched with horror the complete transformation to mini-mardi-gras bar& party place in the 90’s.
Post divorce I rented 1/2 an upper floor of an historic (100yr old) former cigar factory close by in Palmetto Beach area. The bldg manager was baffled why anyone wanted to live in just a large empty warehouse type room, but happy to have me!
The lower 2 floors were 9-5 business, then it emptied out nights… closed weekends.
Ahh solitude. Loved that place , it was like a New York loft with Huge 15ft bay windows. probably at least 2000sq ft of giant hardwood wide open room.
I would go up on the roof & play some melancholy tunes on a silver trumpet at night, while enjoying the Tampa Skyline.
I think the building or at least the location was used in the movie ” The Punisher”, where Frank Castle takes refuge.
It’s located on 22nd St south. Still there, same shape few months ago on last visit.
Cool building
…individual apartments are not metered, and evidently, the water used in the laundry room (where one pays to use the washers)…is included in the total, which is then divided between all the occupied apartments, with the larger apartments (mine is the biggest) paying more, regardless of how many people live in them.
Same reason why I recently moved out of my old apartment but substitute “gas” for “water”. It was getting hit big-time to pay for other people’s gas usage (dryers, hot water, etc.).
Where I moved to, I pay for water and discovered - just after moving in - that the landscaping company uses MY outside faucet when they work there (I’m the only unit with an outside spigot). I promptly put a bibb lock on it to resolve that problem.
Here, the apartment management just lets us pay for all water they use. I think it’s ridiculous that I have to pay more for water then other renters with two and three people in their apartments, because my apartment, tiny as it is, is bigger than their apartments. And I have to pay for the water they use washing laundry in the laundry room??? Some of them have tons of laundry. I don’t do my laundry here. The landlord just keeps getting bolder and bolder with this junk.
Rents are pretty stable in my neighborhood of St. Paul, MN, but it looks like they’re slipping in the parts that aren’t as popular. Looks like I could get 10%+ off my rent if I was willing to move out of Highland/Mac Groveland.
Seattle is special! MSM reports rents are increasing.
http://seattletimes.nwsource.com/html/realestate/2003788343_rents15.html
http://seattlebubble.com/blog/
“I think the investors have treated us as builders quite inequitably…The investors have forced builders into bankruptcy…People should not have gotten into this situation with their rose-colored glasses on.”
Mr. Pot, I would like to introduce you to Ms. Kettle.
Here’s one from the Valley Advisor in Salinas:
“Bob Hammel, an agent with Century 21 Scenic Bay, knows of one case where a man offered a seller cash for a $700K home in Carmel. He’d been working out of the country, he claimed, and he’d have cash in 22 days. Once he moved in, the money never materialized, and it took the seller almost a year to get the man out.
Did that buyer happen to have been working in Nigeria, by chance?
To show how out of whack price vs rents are here in coastal San Diego, there’s a townhouse for rent for $2000 and a couple units down one for sale for $550,000. I’m waiting to see which goes first, I wouldn’t be surprises to see the one for sale. With HOA of $300 plus mello roos, you’re talking a mortgage payment of $4000 vs rent of $2000, which would you pick?
From the Valley Advisor:Percentage change in notices of default, from 2005 to may 2007:
King City: 130%; Greenfield: 218%; Soledad: 307%; Gonzales:133%; Toro Corridor: 667%; Seaside: 230%; Carmel Valley: 50%; Carmel: 80%; Pacific Grove: 80%; Monterey:133%; Marina:118%; North County:180%; North Salinas: 240%; East Salinas:282%; South Salinas:169%.
And with the subprime mess, and refinancing not an option, the percentage of NOD going into full-bore foreclosure is likely to be higher than it was before.
All of the homes sold to people who are living in them except one which the flipper…
I find it hard to believe that statement. Are you sure you live in Florida? If so, I’ll bet MY HOUSE you’re wrong.
“Haese said she is not making money at that level, and she would like to sell, but the market is glutted with houses for sale. ‘I think it will be five or six years before I can get out,’ she said.”
If you lower the price it can be faster
“We’re optimistic that it will sell, said Weiss.”
Ah yes, optimistic. Sorry, Dick, I gotta give you the black knight. Just keep telling yourself… It’s… only… a… flesh… wound…
http://tinyurl.com/y36wrf
“Greg Leach of Heron Cove Construction blames real estate investors for the problems builders are facing. ‘I think the investors have treated us as builders quite inequitably,’ Leach said. ‘The investors have forced builders into bankruptcy.’”
The investors did not force builders into bankruptcy, it was the builders greed and extremely poor business decisions that forced them into bankruptcy. The builders and realtors were the ones talking about the land shortages and thousands of people moving to Florida that helped fuel demand. The builders and realtors were not the ones complaining when contracts were being signed, but they were the ones who forgot about the fundamentals and due diligence thus creating their own problems!
Buyers skipping out on their contracts are crooks, so, yes, they are hurting builders. I don’t know of any other “investment” where one can get out of paying what one owes. Imagine trying this in a casino. The builders were greedy, but the buyers were even greedier, thinking they could flip their way to leisure. When they saw the market tank, instead of meeting their obligations and swallowing the bitter pill, they decided to walk, leaving many, many others holding the bag. These phony buyers belong in jail, possibly with the builders, realtors, mortgage brokers, etc., but they’re the first to cry victimhood and the first to demand bailouts.
Buyers belong in jail?? Not closing on the purchase as contracted is presumably a contract violation, and definitely can be pursued as a civil matter under contract law, but I don’t see how it could be construed as a criminal matter.
I don’t have a lot of sympathy for the injured builders. They should have known the risks of being heavily exposed in a cyclic industry, and if they did not choose to hedge reasonably against those risks, they get what they deserve.
Happens every cycle.
They’re not crooks, they’re smart. Why continue to buuy something that’s worth 20 or 30% less? That’s stupid. That’s throwing good money after bad.
And most RE contracts say that if the “buyer” doesn’t clsoe, they lose their escrow/earnest money/down payment as their total cost. Most often, the builder cannot force the buyer to close. Especially since the buyer can’t come up with the loan. How to you buy an overpriced McStucco house without a loan?
What? Is there no honor among
thievesspeculators??“‘Raise prices,’ said (CEO) Ara Hovnanian. ‘Buyers aren’t buying because they think you’re going to lower prices again. There’s interest but there’s fear. Raise prices 3-4 percent. And quit giving discounts.’”
But the scary thing is that the sheeple probably will keep buying. I’m concerned that this will never end. I’m not getting any younger here. We picked up and moved states just to have a shot at homeownership. But is is always _that much_ out of our reach.
Please, someone, everyone, convince me that this will end and prices will come back to reality despite builder collusion and even though the masses of idiots keep purchasing at highly inflated prices.
Please…
“But the scary thing is that the sheeple probably will keep buying.”
It doesn’t help that as I listen to my Sunday morning local talk radio there are RE Whores who buy hours of airtime and make it all sound like a legit DJ/call in show.. “We have a special guest, so and so RE investor guy…”
Caller: “Should I take equity out of my home and buy an investment property right now?”
Guest host: “Of course! It’s a great time to buy. Why don’t you call my assistant at 1-888-…etc etc.”
Unbelievable..and the callers keep calling.
Bet you’re listening to KFI… I love a lot of of their stuff, but the weekend RE “show” drives me insane…
Don’t sweat it brother. As you hoard cash, each day that goes by puts you in a position of greater strength. I will say that by the time the bottom is in, you won’t have the yearning to buy an albatross. I could be wrong though.
agree exeter. don’t worry at all. this downturn is a straight up crash. first time buyers can NOT get in at these prices, and thankfully, there’s no bogus financing to facilitate the further run up of prices. ball is in our court. patience.
don’t worry.. that delusional Hovnanian-tail ain’t gonna wag this dog.
One thing is if rents stayed this good.. why the need to ever buy? When you buy then you are stuck in one place, having to pay maintenance sometimes very large maintenance, taxes, fees etc.. Also if the quality of the neighborhood goes down, like many suites, or immigrant families piling five families per house it kills your property value. Meanwhile as a renter you can just look for a different spot a few years on.
Thats what I realized is if property prices never come down, I will rent in these great homes or condos for cheap prices, and have a mountain of cash and investments that are completely portable.
Well, we are tired of moving around so much. I look at homeownership as a stable, long-term shelter over my head. I don’t plan to move every few years or use my house as “an investment”. I’m just tired of being subject to my landlord’s whims, or having them sell the houses out from under me, or not being able to have pets, etc. Otherwise, yes, renting is still the best bet. I just want my life to start being my own as opposed to my landlord’s.
Then you will want to live somewhere such as NW Pennsylvania. Lots of $50k houses(at todays prices too!) This is what I plan to do. Rents are a good deal but when the market bottoms out, buying will probably be cheaper and I want to benefit from ownership stabality.
I love these sellers who swear that the house will sell outside of all the other wonderful homes that are for sale. Moved here to GA, from FL. We knew better about the market and put our old house up for sale before the foundation was even done on our new home. It still took 9 months. Another house in my new GA development was being bought by a couple from SFL as well. They put their house up for sale in April 07 with a expected closing on the new home in July 07. WHY? Because they believed that their house was “special.” They never sold and lost the hefty deposit on the new home(which I am sure they took out an equity line on the old house for the downpayment). Had another friend who bought here and only put the old house up for sale 2 weeks before he left. WHY? Because his house was “special.” Well it was so special that the price has been dropped by over 275K and still no offers. Ohhh the chill of two HUGE DOUBLE MORTGAGE PAYMENTS!!!!
[I sold a condo in West Hollywood a few years ago because I thought the top was in. In the next 2 years that condo went through the roof (never try and pick the top!) and last time I looked, a similar condo sold for $800,000 AND it’s holding it’s value even during the downturn.]
Obviously you didn’t do your homework or you’re not as smart as you think you are.
I planned my escape from florida in 2003, it’s very easy to get close to a bottom or top. IMO I got out dec 30, of 05, the peak was Jan of 05. I sold all of my Florida RE and another in GA, moved to an awesome lake in Alabama and watched it go up another 200k before it leveled off. So my reply to you is, you can get very close to a top or bottom if you do your homework.
[I’m not familiar with Florida but I suspect it’s simply a case of prices declining because of one or two things. Affordability being #1 because the job “quality” is low and the decline of sub-prime being #2. Hambuger flippers, house cleaners and gardeners cannot afford $300,000 homes on $18,000 a year and they have no clout when it comes to wage demands. On the other hand, those who can demand a higher income because they have a special talent, just ask for more money or look around for bigger paying jobs if they don’t get it. If they need/want your talent - they will pay. My wife does some part time accounting for a company which employs artists for video games. They make on average around $80,000 a year + they get all the benefits like 401k and medical + they get a bonus (large sometimes) if a particular video game is a success. Most hover around the $100,000 + income range. However, the company is ALWAYS losing employees who find a higher paying positions. If you have a “talent” you can demand a higher income. Thus, you can keep up with the cost of living and the cost of property.]
We shall see how your area does in a year or so when the people who play those comp games can’t afford them. We shall also see how those big tech companies will do in a recession. You are an idiot if you think your area in cal will not go down with most of that state. I guess you think you are better than other people who make less than you or never went to college. I used to laugh at my neighbors in florida that had 6-10 years of college as they were on their way to work every morning. I used to wave at a few every morning as they passed my house just to piss them off. I retired at 26, with no college or gifts, you are not as smart as you think you are. My old saying, If you are so smart why aren’t you retired?
GEEZUZ George, dont hold back now - tell us all how you REALLY feel about your regular guy success vs that smart aleck college crowd.
What an inferiority complex !
So, Senior George, what do you do all day that you don’t work now ? Do you go and play “Whack The Monkey” every two hours interval or what ? Are you FAT and UGLY since you don’t do anything at all ? …
“‘It’s a ghost town for sure,’ said Marla Peters, the owner of Fort Myers-based DMI Construction. ‘I was driving though North Port the other day. It’s a ghost town. There’s a lot of downward pressure on new homes and existing homes.’”
I propose an official anthem of the Florida Housing Bubble: “Ghost Town” by The Specials. Actually, it could apply to any bubble area.
http://www.youtube.com/watch?v=28TeUbYvXS0
“‘it makes much more sense to rent than to buy right now,’ said Dennis Black, a Port Charlotte appraiser. ‘A renter will pay 60 percent of what it costs to own.’”
As bad as this sounds, this is too high. I’m willing to bet that number does not include taxes and insurance. It’s more like renters pay 40% of what it would cost to own.
Ask around, do the math. You will see that I am right…
Rents are dropping as people are trying to save their “investments”. When these houses actually go into foreclosure, the tenants will be evicted. All the houses in foreclosure will be unavailable for rent, dropping number of available homes, supply down, rents up. Wait, now, let me finish
Now a year or two from now as the foreclosures come out of foreclosure, supply up, rents down. The ghetto will stay rented, the next level up will die, the next level will flourish, the next will die, etc all the way up. Why rent a 2/2 when for the same money you can get a 3/2, why rent in such and such area, when for the same money you get live in a nicer area. That’s why I see every other level/area dying. Also, why commute 2 hrs, when I can rent closer in for the same money, Xburbs die.
But there will be a window in about a year or so, it will last for a year or so, when rents will go up. Then LOOK OUT BELOW!!!!!
Renting a 4,400 SF Toll Brothers home in Las Vegas. Huge Pool, Spa, 1/2 acre lot; upgrades galore. Previously selling for $1.2M; after 6 months on market, owner decided to rent. Paying $3K mo rent.
Vegas is hurting badly folks–foreclosures are through the roof (over 25,000 homes in some state of foreclosure and the banks already own 8,000+ repos); this is on top of 28,000 homes for sale. Merely the tip of the iceburg folks… ARM resets are just starting and credit has much tightened. Bottom Line: Vegas’s housing market is going to get creamed!!
Don’t forget flippers and landlords to vote “NO” on the tax amendment which will only further your doward spiral for expenses and further impede the recovery. Not everyone in this state is a primary home owner. We are renters, and landlords and snowbirds too.
I just rented a place in Aventura for about 30% less of asking. 1,800 ft2 in a condo that was selling in pre-construction for $650K. I wonder what they’re worth now….?
George,
I have also an old saying, ego is the most useless thing in the universe…
How do those pork rinds and bud taste?