Local Market Observations!
What do you see in your housing market this weekend? Inventory? “The billboard along I-85 says it all: more than 110,000 homes for sale in metro Atlanta. Newly released figures indicate sales of new homes in Atlanta are down significantly. In north Atlanta, new housing sales have slumped more than 22 percent. That means there is plenty of inventory as well as competition. It’s a buyer’s market. But what do you do if you are a seller?”
“‘I had a great couple that came to look at it (our house), but they have two places to sell,’ said potential home seller Kevin McKelvy in north Buckhead. ‘They can’t move into a new place until they sell the old one, so they are kind of stuck.’”
Industry worries? “The slumping housing market is going to hamper Chicago’s economy over the next several months. ‘I’ve been in housing for over 30 years. I’ve never seen it go this long and this steep at any point in my career,’ says Tracy Cross, president of Schaumburg-based real estate consultancy Tracy Cross & Associates Inc.”
Lending clampdowns? “State banking regulators ordered American Home Mortgage Corp. Friday to cease all new lending in Connecticut and threatened it with a $1 million fine, after the Long Island-based company abruptly laid off about 6,250 people nationwide, roughly 90 percent of its workforce.”
“Between mid-February and the end of July, American and affiliates made commitments to fund hundreds of other mortgages in Connecticut that had not reached closing, Connecticut Banking Commissioner Howard F. Pitkin said. Massachusetts’ Division of Banks ordered the company to cease business there on Thursday.”
“New York and New Jersey have taken similar action. ‘We don’t want them making loans,’ Pitkin said.”
More foreclosures? “In the first six months this year, foreclosure filings throughout Vermont increased 24 percent compared to the same period last year, according to data collected by the state.”
“‘There is no question that they have popped up,’ said Tom Candon, the Department of Banking, Insurance, Securities & Health Care Administration’s deputy commissioner of banking.”
“Joshua Lobe, who represents lenders in foreclosure proceedings throughout state, said the filings have accelerated throughout Vermont much more quickly than in Chittenden County. Through July, the law firm filed 34 percent more foreclosures than last year, he said. ‘Our census is a reasonable snapshot at what I think goes on statewide,’ Lobe said. ‘The increase is dramatic.’”
Went to see the Padres play at PetCo park a few nights ago. What a change I saw in the billboards around the stadium since 2005! Gone were billboards for REIC firms such as home builders (TOL, KBH, etc) and lenders (LEND, NEW, etc). In their place were ads for Japanese economic mainstays (Seiko, Sony, Toyota ,etc).
Hey GS, I am now living in SD (92108). Awhile back you said if I wanted to drive around and see some large amounts of standing inventory I should check out where you live. Where was that again. I accepted a job in Del Mar at a nice school there and was amazed at the size and price of the houses near this school, incredible…my bet is less than half of the people living around that school could really afford to live there. Cheers…good to be back in SD…
Welcome back, dukes!
If you want to see inventory, try Oceanside, especially the 92057 zip (northeast). Lots of homes for sale & looks like at least half (?) are short sales or foreclosures in some areas.
Welcome back, Dukes. I have a feeling our area is not the only place where you could find lots of standing inventory, as SD has 131 “New Home Communities” to choose from:
http://sdhomessearch.signonsandiego.com/NewHomes/searchindex.asp
Nonetheless, I am in 92127; from Oceanside, either take I-78 east
I-15 South, then head west on Camino Del Norte, which turns into Camino Del Sur out where the really big ($1m+) brand new McMansions are to be found. Alternatively, take I-5 south to I-56 east, then head north on Camino Del Sur. You will be astonished at (1) the number of recently built McMansions in the area (I am guessing 5000 since 1998, but that is just a guess) and (2) the virtually-unlimited amount of never-built land already graded for new McMansion construction. If you take I-78, you will see similar such areas in Carlsbad.
Thanks CaRenter and GS, it is good to be back in the land of carne asada burritos! I will check out the areas you mentioned. In Del Mar, near Ashley Falls Rd, I was amazed by the size and prices of homes. I have no desire to live in a neighborhood like that. If I can eventually find a little 1950’s house in N.Park (near Morley Field), or S.Park in a decent area for a good price, that is the plan for me.
I notice a lot more houses going on the market these days. people were saying that they should take their houses off and wait for the rebound only two months ago. I think they finally admit to the seven year rule; bottom in 2012. so better put your house up now and hope for the best price.
2012 yes, but 2008 - come on! I know news travels fast nowadays but these folks (like the woman from Schaumburg in the story above) have got to be kidding?
Local condo market in my part of Chicago is growing more unstable. Just had a $13M foreclosure on a failed conversion nearby. Another major three tower project still looks empty - no lights at night - despite being 60% “sold”. If anything, it is the vintage buildings that still sell. A friend of mine in my buidling’s same tier, however, has had his unit on sale since the Fourth of July with not one single offer. Even so, he said he’ll hold his price until Labor Day - and then re-evaluate. I know, I know - but it wasn’t worth wasting my breath.
I am guessing the bubble chart will look very much like the gold price chart from 1980. A huge spike, then flat for a decade or more at about where it started in 2000 or so… 2012 is probably about right for the bottom of the cycle, although by then other factors may come into play that makes the matter even worse. For example, today a CA foreclosure may represent a $100K loss to a lender. In 2012 such a loss may average $300K or more in effect magnifying the effect.
And you got inflation on top of any nominal price drops. If the latecomers to the party got it wrong in post-2005, I see the converse underpricing as plausible. The 3x income gauge is best though IMHO. Add in the PITI and replacement/maintenance cost controls and house prices will have some bottom in there I guess.
BZH homes slashed $100k off local homes today. FIRE SALE!!
http://finance.yahoo.com/q?s=bzh
That should help expedite their bankruptcy.
Expedite others to walk away too.
Do you think fools who previously bought will try and file lawsuits against BZH and others for dropping prices? (although dropping prices is perfectly legal.)
If I buy a pricey item from a local business, don’t I have the right to have a retro-active mark down should that item go onsale within a reasonable amount of time? Fair is fair.
“If I buy a pricey item from a local business, don’t I have the right to have a retro-active mark down ”
Unless it’s part of the purchase agreement, NO.
Anyone taken a look at “Broker Outpost” in the last few days? Wow! If you happen to be a realtor or a broker, reading the comments by brokers concerning the future of the real estate industry might put you into deep (real deep) depression. If one reads between the lines, it looks the realtor/broker business is a very fast approaching gigantic train wreck. Not soon enough as far as I’m concerned. How does it go? Oh, yeah. You reap what you sow…..
That industry will be in depression mode for 3-5 years.
There won’t be any “industry” of this type in 3 to 5 days. If you want a loan, go to the bank and apply. The go-go days of the mortgage broker are GONE.
it looks the realtor/broker business is a very fast approaching gigantic train wrec
Weep no tears for these arrogant schmucks. They are all complicit in the evolving carnage.
They loved crooked appraisers and bogus underwriting.
There is a special place in hell awaiting all of them.
That was one of the few places I knew to look for the bulls of the market. Not looking like that anymore. I figured once that site changed the changes would start happening. I am still looking for a place to buy and what to invest my money in in the stock market.
“The slumping housing market is going to hamper Chicago’s economy over the next several months. ”
He wishes. Try several years.
What have been your local observations Shaun? A few of mine are posted further up this thread. Folks I run into around town seem to know something is afoot, but they remain largely detached and out of touch - summer doldrums.
From a housing market standpoint at least, I think the tide has finally turned here in chicago–most everybody I’ve talked to recently actually agrees with me now that things are slow and bad. Much different from even the beginning of the year. when the topic comes up everyone mentioning how many more signs are up everywhere. the “perfect houses” in my neck of the woods (oak park, river forest) seem to be selling yet if priced right, but most of the older home stock are taking a long time with fairly deep discounts. More like 2004 prices. I should say there are few teardowns that were rebuilt in the area, priced way high (900K plus) and nothing has sold as of yet.
Friend trying to sell a condo in Rogers Park since January–absolutely nothing doing out there. So many condos that are exactly the same around the same price, and new rehabs are undercutting the prices.
From a housing market standpoint at least, I think the tide has finally turned here in chicago–most everybody I’ve talked to recently actually agrees with me now that things are slow and bad. Much different from even the beginning of the year. when the topic comes up everyone mentioning how many more signs are up everywhere. the “perfect houses” in my neck of the woods (oak park, river forest) seem to be selling yet if priced right, but most of the older home stock are taking a long time with fairly deep discounts. More like 2004 prices. I should say there are few teardowns that were rebuilt in the area, priced way high (900K plus) and nothing has sold as of yet.
Friend trying to sell a condo in Rogers Park since January–absolutely nothing doing out there. So many condos that are exactly the same around the same price, and new rehabs are undercutting the prices.
Steve W and John, I am in Oak Park too and we’re beginning to see short sales at Realtor.com while some houses on the 800 block of S Grove are selling just above the sales price of 2002. These houses are empty so they might be foreclosures.
–
As Americans we are trained to think big. So, how about several decades? It would take that much time to get out of the Greater Depression. Bigger the “bankers’ mischief” bigger and longer the depression to follow. It is that simple.
Jas
From San Antonio (where it’s different, of course):
http://www.mysanantonio.com/business/realestate/stories/MYSA080407.01G.SoggySummer.2724b55.html
“And it’s not just the new-home market that’s taking a hit.
Industry experts think at least part of the slowdown in existing-home sales can be blamed on the recent stormy weather, although tightening in the mortgage lending industry is also to blame.
June-to-June sales of existing homes were down by 17 percent this year.
And the number of pre-owned homes on the market has soared to 12,190, a 72 percent increase in listings since this time last summer.
“I think the wet spring and summer have had an effect,” said Travis Kessler, CEO of the San Antonio Board of Realtors. ”
It’s the weather!
Again!
On another note………
On the http://www.city-data.com/forum blog for SA, people are sooooooo excited about all the Californians moving here. (I figure they must be broke or something to move here)
For those of you who have not looked at that website (we call it the “stupid blog” around this house), it’s hilariously disheartening to see how stupid people can be. It’s a rare bird who will stick their neck out and discuss the reality of the housing situation……since said neck will be promptly chopped off……..boosterism rules.
“For those of you who have not looked at that website (we call it the “stupid blog” around this house), it’s hilariously disheartening to see how stupid people can be. It’s a rare bird who will stick their neck out and discuss the reality of the housing situation……since said neck will be promptly chopped off……..boosterism rules.”
That is the WORST forum ever. I was spreading the bubble word and got censored, warned, and had many of my posts deleted by a moderator who didn’t like hearing about the possibility of price declines since he had recently purchased a house. Total shill site with realtors openly advertising their services, trying to drum up new clients. On a scale of 1 to 10, it’s a 0.
The Florida Blog of city-data is much more realistic with most people now accepting the crash and no longer denying it. There are a couple of real screw balls including a really obnoxious realtor who as of late has gotten really quiet.
Other than that most people are now posting freely on the topic without getting slammed anymore.
I have posted the link for this site many times.
Clipped from the SA forum. Sums up the bubble “Just Do It” mentality:
‘I did a closing with an out of state investor who bought six properties in four days. I asked him where these houses were, and he shrugged his shoulders and said, “uh, in the suburbs I guess”. He bought soley on price, had hired his agent as a property manager, and never planned to set foot here again. I would love to see how his properties are doing!’
I saw lots of these types in the ‘87-’89 boom. Lotsa lawyers, independant businessmen, realtors, etc…Many were what I considered smart people.
Dirt bag tenants and severe anti-landlord laws soon taught them the errors of their ways.
This dude is about to learn a severe lesson in absentee ownership.
In the “Massachusetts” forum, 2 seperate threads about the exodus of young families from the state were deleted.
On the other hand, I’ve found city-data useful for information on things that aren’t related to housing. I wouldn’t ask anyone here to recommend a Black hair salon in Minneapolis.
City-data.com is run by realtors.
When I used to post on the NM forum and give my honest views of NM/Las Cruces, I would get flamed.
One thread in particular (Californians: Thinking of Moving to New Mexico? Think Again”) had to be locked by the Moderators due to the venom people were spewing at me. These posters (who I suspect are realtors or homeowners with something at stake) would accept nothing less than a “life is perfect” recitation of all the “wonderful” attributes of Las Cruces/NM.
As most here on this Blog know, I will give my honest views on anywhere, even on SLO, CA, and everywhere else I’ve lived in CA, including Newport Beach and the rest of OC.
But on city-data be prepared to cheerlead or else. Good grief, so they ask $500k for their dump and do not anyone to objectively review the city/county/state??? Give me a break.
~Misstrial
Oh well, good luck getting mortgages in NM or San Antonio.
Wouldn’t want to.
A former resident of San Antonio (a consumer law atty no less) told me that SA is known as “the armpit” of Texas.
~Misstrial
he clearly has not spent any time in El Paso, Lubbock, Amarillo as the absense of deodorant is more pungent in those locales.
I passed through Amarillo once in my life. I did not see one tree. That poor place was like a wasteland.
Has he been to Beaumont?
Misstrial - I’d be interested in hearing about CA to NM transplantation since I’ve been offered a job in Santa Fe. I’ve had to move a lot during my career but NM is a new state to me.
You can do a search for my posts on city-data forum. My username is/was “Cali-girl”. I posted lots of helpful tidbits specifically for Californians. Check under the New Mexico forum. ALB and Santa Fe have subforums but I do not recall posting on those.
~Misstrial
The inventory in Santa Fe is growing. Very slow over $600k, still very hot under $400k as retirees are still lined up for a slice of paradise and coming with cash. Moratoriums keep the ugly tract homes out, so it least it looks good.
I might sell and move for better schools. Any one have an opinion on Austin, TX vs Boulder, CO? I never liked Texans, but I hear Austin is not Texas.
New Mexico, paradise? Hah!
heavybear- cant help ya.
My long posts did not take.
“slice of paradise”??? Are you a realtor or broker???
Perhaps inventory increases are due to people finding out that Santa Fe, the state capitol of NM is also a “sanctuary city” for nationals from another country. This is amazing considering that Gov. Richardson is running for the Oval Office.
As I have posted before on city-data forum, and I will say it here, Santa Feans think they are really something special even if their city is strictly third-rate. Formerly thought of as an “artists community” and a former (decades ago) home to the long-dead artist Georgia O’Keefe, Santa Fe “art” is basically kitschy, tacky pottery and artifact replica - sort of. Lots of crime there and in Albuquerque due to foreign nationals who the Gov. (running for U.S. Prez) welcomes.
Even on city-data.com, Santa Feans & Albuquerque people acknowledge this problem that is worsening.
NM is the worst run state I have ever lived in. Californians: move there at your own risk.
~Misstrial
“NM is the worst run state I have ever lived in. Californians: move there at your own risk.”
Worse run than Alaska? Where ALL of our congressunits are under investigation, along with about 1/5 of the State Legislature? They ought to move the capitol into a prison and save the moving expenses…
Hah! Maybe the Trump Organization can hold a Legislator’s Pageant where they can compete for criminal histories
NM & AK could possibly be crowned Criminal Legislator 2007 and 1st Runner-Up respectively.
~Misstrial
“NM is the worst run state I have ever lived in. Californians: move there at your own risk.”
I read a story in the newspaper while visiting Albuquerque back in 2000, and it indicated that the rate of births out of wedlock in NM was over 50%.
Yes this is true. One NM atty I know adopted 3 children due to this phenomena. He told me “adoption-available babies are this state’s best export.”
~Misstrial
Oops, saw you already scrolled down. I’m in SD so it’s not like the ratio of illegal immigrants to law abiding people will change much. SD is not exactly a well-run city, either. It used to officially be America’s Finest City. Now SD is Enron-by-the-Sea because a parade of supposedly fiscally sensible Republican mayors screwed up and now the city is broke despite record amounts of property tax & tourism. In 2006 the SEC nailed the city for securities fraud. We’re also home to recently jailed congressman Duke Cunningham. At least this stuff happens on a smaller scale in NM.
But SD, CA and NM political problems are a drop in the bucket compared to what happens in TX.
Well, we moved to New Mexico from California and are very happy here. Interestingly enough, many of our neighbors and co-workers are also former Californians.
From one Stan to another Stan: I’m a Brit and quite like Austin but I am not qualified to compare it to Boulder. If you are thinking of living there, why not spend a long weekend there to see if it fits your lifestyle. Make sure you get a weekday as weekends may be different.
I am also not sure of your line of work.
San Diego builder Mayfair homes going under?
I live outside of Prince William County and blog about Northern VA. If a person purchased in 2005-2006, the likelihood that if they sell now they’ll sell at a 25% loss is growing. The worst cases are between 30-40%. There doesn’t seem to be any letup in the continual listings of foreclosures and short sales.
In our neighborhood of new identical houses (we rent), the last sale went through in early 2006 for $735K. This year came another sale (although 14 houses had tried in that time frame to sell). The sales price was $540K. (It was purchased in 2003 for $500,000, and the county has a tax assessment of $700K). It was an identical house to the $735K house. The prior owners moved out before they lowered the price, though. There’s a lot of anger here about those sellers who “bring down property values”.
The other story on the $500K to $540K house is that the young owners had an interest-only loan. For three years, they paid exhorbitantly over renting, and ended up with nearly nothing after commissions.
And the ones who don’t sell, can afford their mortgages and continue to pay them, will be depressed.
The couple who got away with nothing may have learned a very good lesson. I hope the fact that they didn’t actually loose money doesn’t keep them from absorbing it.
wow- 22151 steady for a year now at 2005 pricing 12% off peak
we are a bus ride to the printing press
This seems to partially confirm my theory: that the declines would start on the outside and move inward towards DC.
The second part of my theory is that condos would get crushed first in DC, and it would eventually spread up the ladder at the same time that the declines were spreading from the exurbs inward.
Any news on DC condos? There are so many of them and so much flipping going on, that I would think we will eventually see a wholesale slaughter.
Definitely. 1-2 years ago, there wasn’t anything i could afford even as far out as manassas. Now, I’m seeing stuff i would buy in my price range as close in as Alexandria. Its definatley a closing circle.
James,
The availability of houses in the lower price-ranges closer in is why it’s continuing to get even worse for sellers out in the exurbs.
ituip.com has been predicting this pattern for about 3 years
I continue to watch the listings in my hometown in Minnesota. Most of the listings, especially the foreclosures, are still listed at ridiculous prices. They are just kidding themselves.
The home of a high school friend has been on the market for two months. When it first listed I laughed at the price. It is in line with other listings and that is what makes it laughable. Four weeks ago they dropped the price $10,000. Today they dropped it another $10,000. They are still about $50,000 higher than what can be justified but they are showing that they are more realistic than the rest.
The bridge collapse will severely harm the last of the Minnesota selling season. I am fortunate not to know anybody that was hurt on that bridge. That is a very busy area. Clouseau could attest to that. Nobody on either side of the river, near that bridge, is going to want to buy. That is a blow the Twin Cities market did not need. Things will get much worse.
Especially If the govmint has Big monetary incentive to get the new bridge finished asap, they will work 24/7 to get at that bonus.
=========================
Nobody on either side of the river, near that bridge, is going to want to buy.
We might have a new winner.
http://www.williambeaver.com/williambeaver.html
This one might dethrone 59 John Street as the worst idea in my neighborhood. Be@william (the Corcoran Group) is also challenging for that title. I love the name the Beaver House but this is a ridiculously priced project located about 2 blocks from the Stock Exchange. This is not a great neighborhood to live in. Check out these prices. Asinine.
It is great to see how many stupid developments are finishing up in my neighborhood, just as the hedge funds are getting clobbered. The hedge fund guys are to NYC what the baby boomers are to Florida. I hope they have a Plan B. Plan A looks to be hosed.
http://tinyurl.com/2fysqu
NYCboy:
Does this look bizzare to you.. a walk in closet off the bathroom?
http://www.williambeaver.com/B-07-46.pdf
Just horrible use of space, they assume a flat screen tv and you might be able to walk in the bedroom if you had a king bed with 2 dressers…
NEW YUPPIE TERM: Murphy Office………neet kewl
Wow. I didn’t even look at this. That is just an awful plan. I bet the hedge fund boys are dying to spend $1 million on that beauty.
The sales office for this development is located in the building that was the setting for the Denzel Washington movie, “The Inside Man”. Watch that movie and let me know if that looks like a neighborhood where you would want to spend a million dollars.
http://www.williambeaver.com/J-41-46.pdf
This one is EVEN WORSE……the wasted space, front door opens into the Kitchen, how can you or your friends watch your plasma tv with that seating arraignment?
2 Bathrooom TUBS for a 1 bedroom……they stupidity has finally reached it pinnacle….
a walk in closet off the bathroom?
Maybe it’s a laundry area. I’m curious about the thing next to the toilet that looks like a skylight.
‘ Newly released figures indicate sales of new homes in Atlanta are down significantly. In north Atlanta, new housing sales have slumped more than 22 percent. That means there is plenty of inventory as well as competition.’
- I hope that this will not affect all of the TV Flipper shows that are featured down there. Big money to be made flipping in Atlanta -not!
I was told a story about the Atlanta housing market this past week. I can’t reveal the details because of the source of the story. Let’s just say some of the local banks in Atlanta will end up owning a lot of real estate. Their market is dead or dying. Expect that 110,000 number to continue to climb, if they count REOs.
I wonder how many of us are sitting on a pile of cash and that is why we are so excited about a crash? I hope to pick up a cheap condo in Aspen and maybe some land with a river running through it in NM. I heard so many stories of bargains during the RTC years, this time I am ready!!
My pile certainly isn’t that big.
Will there ever be a “cheap” condo in Aspen?
When the housing is less expensive, what will be the true worth of my pile? Should I just buy some platinum now?
I’m trying to keep my sister from making a mistake in the Bay Area. My 5.875% 30 year fixed from four years ago (10-12 years left!) looks great these days, and we bought the place in 2000/added a mfg. home in 2003. We plan to live there 30 more years at least. So I read out of interest and a desire to help my friends.
Stan,
I’ve been buying $2300 to $2600 worth of savings bonds and municipal bonds per month since early 2002 and I definitely will consider opportunities when they appear. I’m in no hurry to buy and think the bottom in my areas of interest will be 2012. I’m looking for coastal property with ocean views and will consider mountain property with acreage and plenty of well water. I keep watch on various places between San Diego and central Oregon on the coast. For now prices are too high. I think some of the nice places will be 50% of their 2005 prices by 2012.
Aspen, Vail, and Jackson Hole will also be nice. I look at Jackson Hole every now and then too.
Hard to service Aspen, Jackson Hole and these places with consumer goods and gasoline if the balloon goes up. Can’t grow a tomato there either.
You best want a 4-5 acres of scrubland and a woodlot to grow tomatoes, raise some goats and chickens and “disappear”.
Those consumer driven retreats will be the first to die in any deflationary depression along with the crime, lack of services, etc. that will come with it.
It’s hard to find workers when they have nowhere to live. Affordable housing is a must EVERYWHERE. Last time I checked, the elitist pigs didn’t feed themselves.
What? The commoners should have a place to live? A place that isn’t a drug and crime infested pit? Why, that is not following the “New American” mindset of getting rich by hosing others.
What a great post!
~Misstrial
Are you a realtor? If not, you sure sound like one.
Using terminology such as: “slice of paradise,” “sitting on a pile of cash,” and “retirees from California lined up,” sure seem odd to me.
At least on this blog.
As for me, I will keep my “pile of cash” for the time being and for the foreseeable future.
~Misstrial
MISSY- You are a weird control bird.
A realtor, me? That is hilarious!! I cant stand those fleas.
I have a ton of cash from a sale in 2005 and if I can get out of my other house I will have even more–hence, I cheer for the return of the RTC and some real bargains. I am certainly not putting it in stocks.
No need to make personal accusations.
However, glad to know that you are in a position to look for fire-sale prices.
So am I.
~Misstrial
A few people around here are well positioned to take advantage of the situation..
I detect some excitement in your “voice” and i’d caution to be completely sober about all purchases.
No matter how easily it may have come, bestow the highest respect on your money, lest you and it become soon parted..
I posted this in the bit bucket a few days ago, but it relevant to my local market (Santa Monica), so I’ll post it again here:
Brokers to Westside elite accused of fraud
2 Beverly Hills agents and appraisers are indicted in a scam that allegedly inflated home prices and loan amounts.
“Two high-profile Beverly Hills real estate agents and two licensed appraisers were indicted Thursday on charges of joining in a sophisticated scheme that lenders said cost them more than $40 million in fraudulent loans for homes in some of Southern California’s most expensive neighborhoods.”
I find this interesting, as it explains some of the truly nutty prices that I have seen around here on some of the high-end houses. I have been gaping at the prices paid recently, with $2 million houses going off at $3.5-$4 million.
“Some Westside agents have said that during the recent housing boom they were often approached by prospective buyers who sought to exploit rising real estate prices by getting sellers and their agents to agree to inflated home prices. Some of the schemes involved listing hundreds of thousands of dollars in nonrecurring closing costs as part of the loan amount.”
Hopefully these indictments will put a stop to this… or am I engaging in wishful thinking here?
Hopefully these indictments will put a stop to this… or am I engaging in wishful thinking here?
All the fraud helped boost values to allow HELOC’s which is the only thing keepin’ people financially afloat for the last decade.
Government at all levels, while warned, chose to turn a blind eye.
Legal squad will do squat.
Fraudsters will get Business Chamber of Commerce awards.
Speaking of Chicago, did we ever hear the outcome of the new condo sale last month that instead of a line featured free PDAs for potential buyers to submit a bid?
I bid $1.
YAY! Free PDAs for all.
Apparently 80 people fell for this stupidity and overpaid for a condo. They still have about 200 units to sell though.
One of the problems is Wall Street is still saying we have record earnings. Wait till the consumer runs out of money. Oh, that is happening now. Won’t be reported for another quarter or two. Also, many are booking phantom income that really isn’t there.
They need to change the accounting rules that you can only book income when you get the cash.
I ain’t buying any big ticket items for quite a while. Anybody here planning a new car, appliances, house renovation,etc?
I’m renovating right now, but I like to used reclaimed building materials, used appliances, and anything else that cuts out the big box stores. I try to use the mom and pops for fasteners, adhesives, etc.
No.
Absolutely not! No way! The powder’s gotta be kept dry - now more than ever.
Most of our renovations are a result of hand me down materials from in-laws who continue to update.
Does anyone know how much cash is in circulation right now? Is it enough for our govmint to crack its nut? When will Bernanke show up in that helicopter? Can you say “hyperinflation?”
The cable business shows this morning mostly said that the worries over the “credit crunch” are overblown, that foreclosures were only .7% of the total housing market, and that all the bad news for the housing and financial stocks are priced in. One guest even said that “the home builders are down 75% from their highs, really, how much lower can they go?”, implying that if you bought now, five years from now you’ll be happy you did.
I know foreclosures are rising but will they really have that much impact on the overall housing market? And will there be a credit crunch? Many guests on the show said the Fed now must lower rates.
Big credit crunch. No Refi’s. Slowing spending. Profits shrinking.
If Ben Bernanke cuts rates, as Cramer is begging him to do, sure the market will take off and shorts will be squeezed, but it doesn’t solve the problem. Just delays the impending crash and makes it that much worse.
That was Ben Stein and some other asshat bloviating a bunch of nonsense.
Brinker is calling for cuts too. My belief in real estate and foreclosures is we have the marginal buyers left and if they can jumpstart the turnover needed for vacant/foreclosed/you-name-it properties, then we get a stalemate and mashing of gears in real estate. Anyone care to guess how many years that can go on for?
if they can not jumpstart
In last week’s local observations, I noted the increasing number of small business failures I saw in the Bradenton/Sarasota area. I’m seeing more of that in Central Florida, too — most notably several small restaurants. It makes sense, unfortunately for the proprietors — my income hasn’t gone up squat, but my gas and food bills are much higher than one and two years ago, so we eat out less — not because we want to eat out less — budget funding gets to zero before the end of the month.
Seeing that here in San Diego, too.
As I’ve noted before, commercial properties (strip malls & large industrial complexes) seem to have many more “for lease” signs up. In fact, it looks like at least 80% of the properties around here have at least one vacancy. Many have 70%+ vacancies. Not good…
I delight in seeing all of the vacant commercial space. The price gouging has been such that the little guy can’t even keep his doors open anymore. Let the property owners burn cash for a while, then they’ll lower accordingly.
BTW, good to see your post, Chip. I haven’t been able to read all the threads lately, but didn’t see you for a while.
Thanks very much, CA — I’ve been tied up with family matters and out of town much of the last month, so posted very sparsely.
No business vacancies (of any noticeable numbers) yet in San Luis Obispo, CA, but I am going into stores of all stripes and many times I am the only one in there. Same with doc/dentist: I am the only one in the waiting room or there is just one other person. Patient exam rooms are empty too. Eeerie.
Did go into Miner’s Hardware on Los Osos Valley Rd today and lots of elderly folk buying.
Home prices are still too high though prices have been reduced. Prices still out of whack with fundamentals like wages.
~Misstrial
SLO has been that way for 40+ yrs. Like SB or Carmel, it always sold for a premium to eages. It too is becoming a retirement villaghe with drunk cal poly kids sharign your downtown. Ahhh. I miss those burger nights at SLO Brew. Is TA’s still open?
“SLO has been that way for 40+ yrs.”
No, its worse.
For burgers, most people these days go to the Firestone Grill on Higuera (yes, owned by the Firestones) or to Mo’s BBQ. Mother’s Tavern is still open - which is a shock considering the civil suits they’ve faced.
~Misstrial
Vetinary office in Irvine,CA was deserted yesterday. Very unusual. I guess Fido’s teeth cleaning appointments are getting further apart.
That’s why hyperinflation will not work. One can only inflate away the problem if everything goes up, including salaries. Salaries are not going up, at least nowhere near as fast as inflation, and if Helicopter Ben decides to hyperinflate, the rich will get the extra money and we’ll have $10 a gallon gas and yet about the same salary as before. The end result would be far worse than the fallout from the housing Bubble, so let’s pray they don’t try to hyperinflate.
Continued realtor (or seller) cluelessness in Humboldt. The median income for a household is $27,276,
Just listed for sale: $639,000
ZESTIMATE™: $422,779
Sale History: 02/21/1995: $150,000
Willow Creek, CA 3/2 1,830 sq ft 1.5 acres
http://tinyurl.com/yrqxxg
This kind of stupidity is going to lead to 80% price reductions, especially in a no jobs/no work/low pay area like northern California.
That 639K house will eventually become a 150K or less house again…just all the paper against it will be worthless. 300-400K plus “equity” losses will just be it. No more coffee shops and granite kitchen counters.
There is one coffee shop in Willow creek, that I remember.
My advice to this seller would be - if not HELOC:ed - lower the price, take the money, and run. But the fantasy of instant richess lives on. This bubble was such a scam. Sickening.
“This kind of stupidity is going to lead to 80% price reductions, especially in a no jobs/no work/low pay area like northern California.”
That’s the problem with most CA cities; local incomes cannot support local housing prices.
I had to look at that photo twice to not think it was some kind of base housing unit. No earthquakes in that part of CA, or is the cash crop trade that well-paying?
No cash crop. Just lots of Kool-Aid.
Here in flyover country, Northern Ohio, Countrywide is still pushing 100% Ameridream type financing; 620 score, no bkrupcy in last year, but at higher rates….7.5 to 11 !!. Mtg brokers would rather get buyers into FHA’s…..no more housing inspections with 100 point checklists, just decent basic house without the roof falling in…. at less than 7% !!
Local Multiple listing service seems to have plateaued at 27000+ listings for all typs of re, beginning to see more forclosures and short sales in “better” suburbs. Florida better not count on too many snowbirds this year.
Carlos
Remember though, Carlos, it’s all full doc now. No more stated loans, and that means lower prices. Subprime wasn’t the problem, stated income loans were the primary driver for the spike in home prices.
Hey Guys What do you think of this ad on Craigslist:
CREATIVE MARKETING PERSON FOR HIGH END HOMES
Villanova Heights is a development of 15 new homes in the Riverdale section of the Bronx. The homes have market values in the $5 million to $10 million range. The homes are not being offered for sale. Rather, they are being offered for lease – either furnished or unfurnished.
The monthly rentals will be in the range of $35,000. The Villanova Heights marketing plan is unique. We are seeking a creative, diligent individual to help us develop the marketing plan.
What kind of person or company would rent a home for $35,000 a month? How would you locate and solicit those persons or companies? Those are the questions that we want applicants to consider and answer when responding to this offer of employment.
In order to be considered for employment we ask that you do the following:
1. Read and study carefully our website. http://www.villanovaheights.com
2. Write us a couple of paragraphs as to how you would locate
individuals or companies who might be candidates for the
leasing of these homes. Please do not exceed one page in
length.)
3. Email the above, together with your resume.
We would appreciate knowing a range of your salary requirements. Jefitzgerald@lawfitz.com
Dean of Yale architecture school has his name on this development. What does he see in this area?
It’s on the highest point in all of NYC but i guess zoning wouldn’t allow a 20-30-50 story tower and sell for millions per apartment, with a 50 mile view
Riverdale has always been a very well-off neighborhood, but this project is still pretty unusual.
Riverdale is quite nice.
Pullman, WA is limping to the end of summer with 136 homes still on the market, 36 or so with pending offers (many have been pending for months). Normally, at this time of year there are 20-30 homes total left on the market as 90%+ of annuals sale close between March and August.
I also spotted a very strange ad in the local newspaper classifieds this week. Someone is listing a large, 7 mo old custom Pullman home for $735k on craigslist! This list price is more than anything I’ve seen on the MLS over the past two years by $100k.
http://pullman.craigslist.org/rfs/373978644.html
Not only are these folks to cash-strapped to pay a broker, but they also had a large yard sale last weekend to sell most of their furniture, etc… The funny thing was that they were trying to sell used furniture in their driveway at furniture store prices.
Clearly someone got into more home than they could really afford. I don’t know how it works in other markets, but trying to sell this sort of home in this market using craiglist and the classifieds smacks of stupid desperation.
Looks like the FB’ers, Karyn and Jeff, are screwed big time. They are the walking dead. OWP
North County San Diego:
In one of life’s odd twists of fate, both of my parents passed away within the past three weeks. I now have to sell a SFH in Oceanside & a mobile home (senior park) in San Marcos.
FWIW, I will be pricing the mobile home around 8% below mid-2004 price (and will move lower fairly quickly). The SFH will be priced just below 2004 levels (Realtor suggested price) and I plan to drop to 8% below 2004 price (about 20-25% below peak 2005 prices). Both are priced at or below lowest comps.
For all those who said prices wouldn’t drop 20%, much less 50%, prices are already there, and moving lower quickly.
Also, the older, starter neighborhoods are REALLY getting hammered. We’re seeing foreclosures on almost every street in some areas. Many streets have multiple foreclosures.
CA Renter,
My sincere condolences on your losses. I wish you all the best.
CA Renter: I am so sorry about your loss.
~Misstrial
CA Renter — sorry to post so late — will repeat tomorrow — condolences on the loss of your parents.
Sorry to hear about your parents.
It’s true that older neighborhoods are getting hammered but if you are truly priced to sell I don’t believe you will have a problem selling. People are all over anything that is halfway decent priced here in SD.
Thank you all for your kind words. It really is appreciated.
Best to you all!
My thoughts are with you CA Renter. Good luck with your sales.
I second that - having lost my mother and my father-in-law within 10 months of each other, last year, you have my deepest condolences.
And the best of luck with the sales, hoping they will be quick and relatively pain-free. You sound as if you have your head screwed on properly by pricing them appropriately - good luck.
“For all those who said prices wouldn’t drop 20%, much less 50%, prices are already there, and moving lower quickly.”
Prices are already “where”? 20% off or 50% off? It was hard to tell which you meant from your post. But thanks for the insight. I have not seen any reports to this effect in the MSM…
Definitely 20% from peak, if not more, and they are about to drop much more quickly from here on out, IMHO.
We were driving around today in North County and the number of “for sale” signs seems higher than we’ve ever seen before. Nothing is moving.
My sympathies, CA renter. I lost my dad last month. My mom is determined to stay in her house as long as possible, bless her heart. She wants to leave it to her six grandchildren, and says that she intends to live long enough for real estate to go up again. That means that I get to keep my mom for another 12 years, hopefully.
I’m sorry to hear about the loss of your dad. May your mom live many more happy, healthy years. Wishing you the best…
I’m seeing more (not fewer) For Sale signs in Arcadia, a section of Phoenix. Took a drive up a residential street between Thomas and Osborn west of 44th today and counted 4 for sale signs. Turned the corner to get back to 44th and found two more of those signs. Went north to 44th and Indian School and counted 2 more. On the way back to the office I drove south on 44th and down a few sidestreets - saw for sale signs on almost every street I looked at.
This is getting to look like my BRAC town at a military base in 1996 with for sale signs on every block.
Hello, I have been in the construction business my whole life and I can tell you right now I have NEVER seen it this bad ever. I’m now seeing entire subdivision plats sitting un sold one in the Bothell area all the workers are gone and no sales agents it’s like a ghost town I just don’t get why people keep saying its great here in the Seattle area, it’s not and getting worse by the day.
Ricko. The reason they’re saying that Seattle is “bucking the trend” is that median prices have continued to post gains YOY. Nevermind that the median is an illusion, inventories are exploding, and price per square foot is dropping. The MSM in Seattle is the markets biggest cheerleader. They wouldn’t want to let on that things might not be as great as they portray them to be, now would they?
“That means there is plenty of inventory as well as competition. It’s a buyer’s market. But what do you do if you are a seller?”
That’s a no brainer. You either lower your wishing price to market value, or take your home off the market. I suppose a third option would be to hold out indefinitely until a GF with bank comes along and offers to pay your wishing price, but this can get quite expensive, especially given the ever-dwindling supply of GFs with bank.
Saw plenty of sign twirlers on local street corners yesterday (San Diego / Rancho Bernardo 92127). They have branched out from their traditional domain of directing traffic towards condo conversion sales offices into trying to move brand new, never-lived-in $1m+ SFRs.
My wife noted that the unintentional bad signal of trying to market $1m+ homes with tactics where are often also used to entice passers-by into the nearest car wash facility. It is as though the builders believe these huge new tract home developments featuring 4br+/3ba+ 2500+ sqft McMansions are somehow hard to notice as you drive through the area.
Seeing more “FOR SALE or LEASE” signs around. Funny most of them also state Broker Owner. this is in Ahwatukee Phoenix.
And in Vancouver, Canada, my ex-wife’s neighbour listed her 1927 house on a 40′ lot for $1.2 million last Tuesday and it sold for about $ 1.4 million on Friday. Buyer is a young family that is going to keep the house and live in it. There was a tear down buyer at slightly higher but the old girl (93) that has lived in the house since the late 1930’s took slightly less as she didn’t want the house torn down. My ex’s house is slightly better so it likely would bring something like the same price. Maybe it is about time to revisit my past and see if the juices can be reinvigorated. Just kidding but i bought this house for my ex in 1985 for $ 185K…….. That is about a 8 bagger by my calcs over about 22 years……. Anyone thing this mania can possibly continue much longer???
Boston is still setting foreclosure records. A condo down the street from Hubby’s childhood home (Waverly Square, Belmont) is being auctioned off next month.