August 10, 2007

Where’s The Bottom In Arizona?

A report from Arizona State University. “The local resale housing market continues its uninspiring trend. With 4,330 recorded sales in July 2007, the activity was well below last year’s 5,545 transactions. While the current level of activity brings much needed stability, the 2007 year-to-date total of 33,510 homes is well below the 41,835 for 2006 year to date and 68,235 sales for 2005 year to date.”

“Increasing inventories of new homes and foreclosures are providing a competitive and attractive alternative to the resale home in many areas of the market.”

“‘New home builders have been aggressively pursuing buyers through incentives, thus, the 2007 resale housing market is showing signs of increasing weaknesses that could drive it below the current expectations of it being a good year,’ said Jay Butler, director of Realty Studies in ASU’s Morrison School of Management and Agribusiness.”

The East Valley Tribune. “The market’s continued erosion stems in part from the rising number of homeowners who are defaulting on monthly mortgage payments. ‘Overall, it’s getting more difficult to get financing,’ Butler said. ‘Lenders are scared.’”

“Some Valley buyers thought they qualified for a loan, only to have those deals fall through because of stricter standards, Butler said. Other buyers are remaining on the sidelines to see if prices will continue falling, he said.”

“More foreclosure properties have also hit the market, adding to the more than 50,000 homes already for sale in the Valley. Earlier in the year, industry observers predicted that the Valley would see home sales in the high 60,000’s or low 70,000’s this year, he said.”

“Now, ‘most forecasts are out the window,’ he said.”

The Arizona Republic. “The median price for housing resales in Ahwatukee Foothills dropped to $343,000 in July, a 14 percent decline from a year earlier. Jay Butler said the housing market continued an ‘uninspiring trend’ in July.”

“He said medians continue to bounce around from month to month, but in general are falling. Median prices elsewhere in the Southeast Valley: Chandler, up 2.6 percent to $308,375; Gilbert, down 6 percent to $314,500; Mesa, down 3 percent to $242,000.”

From AZ Family in Arizona. “For an area that continues to see more and more houses going up, experts say many of their values are less and less every day. ‘It’s an unsure market. Nobody can tell what’s going to happen,’ said Realtor Ben Garrett.”

“While the average sale cost has actually gone up about $14,000, the average value has dropped from $179 to $171 per square foot.”

“‘And that’s giving a false sense of security that this market’s continuing to rise when it’s really not,’ he said. ‘The cost per square foot is getting less and people are getting less for their houses when they’re selling them than they were the year before.’”

“Garrett said during this same week in 2005, more than 2,100 homes sold throughout the Valley. In 2006, 1,200 sold. This year, only 713 have sold. And in addition to the sluggish market, there has been a flood of foreclosures, about 27,000 Valleywide so far this year.”

“Foreclosure notices rose an average 183 percent in Chandler and Sun Lakes in the first six months of this year compared to the same period a year earlier. Areas of Chandler in ZIP codes 85225 and 85249 were hardest hit.”

“Notices also jumped 240 percent in Gilbert and Ahwatukee Foothills, 116 percent in Mesa and 97 percent in Tempe, according to The Information Market.”

“Homeowners are struggling throughout the Phoenix area. The Arizona Regional MLS said about 19,000 homes were on the market in June in the Southeast Valley, but only 1,973 sold.”

“Mike Foley, a Realtor since 1978 who works in Chandler, said the fringe areas were hit harder because there are more newer homes purchased in the last few years.”

“Barry Kramer, owner of Keller Williams Realty Ahwatukee Foothills, agrees. He said people having the most trouble are those who bought in the last year o two, or investors.”

“‘The majority were investors and those who bought late in the cycle and they overbought,’ he said. ‘They got into the game late, and they didn’t do their homework. They got a little greedy.’”

“Chandler Realtor Mike Foley wants buyers and sellers to know that eventually the market will recover. He has been through four cycles like this. He remembers in the late 1980s when ‘homes in Ahwatukee sat unfinished for two or three years. Their 2-by-4s turned black.’”

“Wade Denman, a Mesa Realtor, started seeing so many homeowners in trouble he expanded his business to include a division to deal just with foreclosures. ‘We’re helping people get out of these situations by getting them to investors,’ he said.”

The Yuma Sun from Arizona. “Far too often these days, people’s ‘exotic’ financing is turning their dream of home ownership into the nightmare of homelessness.”

“It’s a trend seen across Yuma County and across the nation as the real estate bubble has burst into a flood of foreclosures.”

“The increasing foreclosure rate can be seen in the public notices of The Sun in the number of listings for foreclosed homes being auctioned. From January through July, there were 292 such listings, about 100 more than during the same period in 2006.”

“In July alone, there were 57 listings, more than double the number in July 2006 when there were an estimated 25.”

“‘You have people who are trying to support their families and suddenly find themselves homeless,’ said Vicki Bardo, president of the Yuma Association of Realtors. ‘There’s a huge frustration level. It’s a terrible situation we’re in right now.’”

“It’s a result of the number of people in the last few years who turned to nontraditional loans to buy a house, said Derek Egeberg, a mortgage adviser with First Magnus Home Loans.”

“In 2002, he said, 72 percent of home loans nationwide ‘were the plain vanilla variety,’ with the buyer qualifying for a regular loan by demonstrating he or she could afford the mortgage payments.”

“In 2006, 40 percent of all loans were ‘a hodge podge of nonconforming loans,’ he said. ‘There was a big effort to get people into houses where they didn’t belong,’ he said.”

“Another problem coming up, Bardo said, is that the huge inflation of home values has come to a halt. With the tighter mortgage market, people may not be able to get refinanced, they can’t afford the higher payments and they can’t sell the house at a break-even price. So they walk away.”

“‘Once you get behind, the mortgage company won’t take a partial payment. When you wait until the foreclosure is filed, the lender just wants you out. It is their money,’ advised Bardo.”

“The latest phase of a plan to bring thousands of homes, shops and offices to Gilbert is taking shape with two new housing subdivisions in the works. Longtime farmer Jeff Cooley plans to put 900 homes near the southeast corner of Williams Field and Recker roads, as part of the massive Cooley Station development.”

“Cooley’s family set plans in motion nearly a decade ago to transform 950 acres of farmland into some 4,000 homes and more than 2,000 apartments and condominiums.”

“‘This is kind of now our last hurrah,’ he said. Construction could begin as early as next summer with sales starting the following fall.”

“Still, how long Eldon Point and the larger Cooley Station development take to build will depend on the state of the real estate market, Cooley said. ‘We hope, maybe, within the latter part of 2008 things will start picking up again and stabilizing,’ he said. ‘The problem now is where’s the bottom?’”

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Comment by Ben Jones
2007-08-10 06:45:23

ASU is still covering all their bases:

‘As the resale market follows a more traditional pattern, there are increasing risks that the market could move even lower, driven by geopolitical risks and tighter mortgage underwriting guidelines.’

Comment by Michael Fink
2007-08-10 06:59:19

Geopolitical risks are to blame for the return to traditional lending standards? Now I have truly heard everything.

How about this; “Now that people feel they may actually have to pay for the home they purchase, they have become more concerned about taking on 10X their income as debt”. Or “Now that the housing gravy train is over we need prices to fall 50% to get back to normal affordability”.

That would be much more accurate!

Comment by augur-inn
2007-08-10 08:34:57

Hey Ben, Can you start a thread on today’s credit action debacle? The bits n bucket is pretty full and there is all kinds of great stuff being reported that needs to be posted! I.E. CNBC just reported a MONEY MARKET fund in Europe is down 26% due to holding subprime CDO’s. Holy Smokes!

Comment by Ben Jones
2007-08-10 09:54:07


Comment by Ozarkian from Saratoga, CA
2007-08-10 06:50:25

What’s happening in Prescott, AZ?

Comment by Ben Jones
2007-08-10 06:53:05

I hear it’s a wipeout.

Comment by Chad
2007-08-10 07:32:20


Comment by Catherine
2007-08-10 09:04:32

Report from Preskit…
Huge inventory.
Pendings (what few there are) falling out of escrow left and right.
Notice of Trustee sales fill the classifieds
Lots of stuff for sale…jet skis, quads, construction trucks, wedding rings, etc.

Comment by aladinsane
2007-08-10 09:25:54

Serf’s Up… (1984 style)

Comment by Jim
2007-08-10 09:12:05

Things are tanking in Prescott as well. My wife is a realtor. Nothing is selling near to ask and prices seem to be down about twenty percent in the last year. Of course you always have the deniers out there that have some ridiculous 2005 bubble price on their garage Mahal that hasn’t had a showing on it for ten months because the realtor says, Hang in there, it’ll get better! Amazing, 273 billion printed out of thin air by the Fed and the ECB. Markets are still tanking. I guess a quarter of a trillion doesn’t get you what it used to!

Comment by flatffplan
2007-08-10 06:50:42

what MSA is down the most ?
Tampa ,Denver or ??????

Comment by Mike
2007-08-10 06:54:32

No need to point out what’s going on with property in most of the US “once hot” markets. If you want to blow your mind, check out the Brokers Outpost and read the postings under “Fraud Running Rampant”. Jeeez! Remember, these are brokers reporting these stories or should I say horror stories. I knew fraud was running wild in the real estate industry but this is worse than I thought.

Comment by ex-nnvmtgbrkr
2007-08-10 08:38:42

Way, waaaaay worse than you thought. Trust me.

Comment by Front Range Bob
2007-08-10 08:48:49


Comment by mrincomestream
2007-08-10 10:34:04


They have no clue… the surface hasn’t even been scratched.

Comment by S-crow
2007-08-10 09:04:18

I believe if you dumb fraud down to “fibbing,” it happened on an enormous scale.

Comment by arroyogrande
2007-08-10 06:59:38

“Chandler Realtor Mike Foley wants buyers and sellers to know that eventually the market will recover. He has been through four cycles like this.”

Mike Foley has been through four cycles like this? So he’s been through four cycles where the economy was “booming”, interest rates were at historic lows, ‘inflation’ was ‘low’, and ‘unemployment’ was at ‘all-time lows’, while foreclosures and NODs were at all time highs and the credit market was contracting faster than a imploding neutron star?

Four times before? Wow.

Comment by flatffplan
2007-08-10 07:19:32

roflow- IT IS different this time !

Comment by Chad
2007-08-10 07:33:53

aka Father Time

Comment by Darrell_in_PHX
2007-08-10 07:36:10

He’s been through 4 cycles where house prices have doubled in a three year period of time? Where 40% of loans were sub-prime or Alt-A. Where median house prices was 5x medain income?


Comment by ginster
2007-08-10 09:52:04

Excellent! There has never been such a boom. The bust is likely to be of equal or greater value!

Comment by Brian
2007-08-10 08:56:41

Mike is 278 years old.

Comment by zee_in_phx
2007-08-10 10:40:16

i was reading something about chaos theory and cycles the other day, and the author mentioned something about looking out for the 100 year cycle in the financial market, every body knows about the 7 odd year business cycle, and maybe even have experienced a multi-decade long cycle, but the century long cycle is like the 100 - 150 year flood. Our current situation reminds me of a perfect storm in the brewing stage with whistles blowing out the kettle. Now that IS gonna leave a mark.

got cash?

Comment by Sobay
2007-08-10 07:03:25

‘ Other buyers are remaining on the sidelines to see if prices will continue falling, he said.”

- Those buyers supposedly ‘Waiting’ on the sidelines will probably find that they ‘Won’t Qualify’ for a fully amortized loan of the future.

Comment by Bill In Phoenix
2007-08-10 15:19:01

Since reading about the no doc loan problem about the guy with $500,000 in the California thread, I am becoming convinced you are right. Seems you have to have a stable income history. Even if you were unemployed for 5 months in 2001-2002, but fully employed after that, I would betcha they would hold the 5 months against you. You’d best have lots of cash. T-bills, anyone?

Comment by arroyogrande
2007-08-10 07:04:03

“Another problem coming up, Bardo said, is that the huge inflation of home values has come to a halt.”

Interesting…is it a “problem” when a huge inflation of meat values comes to a halt? Is it a “problem” when a huge inflation of bread values comes to a halt? Or gasoline? Or clothes?

Get a clue…it’s not a ‘problem’ for those wanting to *buy* a house.

Comment by Darrell_in_PHX
2007-08-10 07:40:47

It is a problem because the only way people can afford their houses is to refi every two years to teaser rates.

Comment by lavi d
2007-08-10 11:55:20

‘You have people who are trying to support their families and suddenly find themselves homeless,’ said Vicki Bardo…

Yes, because, once you’ve bought a house, you are no longer allowed to rent if you should somehow lose that house.


Comment by aladinsane
2007-08-10 07:13:11

“Now, ‘most forecasts are out the window,’ he said.”

Defenestrated: throw through or out of the window


Comment by polly
2007-08-10 09:08:37

Defenestration is one of the best words ever. What a great thing if we can bring it into common usage.

“So, what is going on with the market/house prices/credit accessibility?”

“Defenestration. Big time.”

Comment by txchick57
2007-08-10 07:27:25

Bits Bucket is getting a little long and I know all you like this guy

Comment by wmbz
2007-08-10 07:47:55

I’m going to write him in, and I don’t think it’s a waste of time. The rest of the crowd certainly is a waste of time though. IMO.

Comment by awaiting wipeout
2007-08-10 08:42:43

Ron Paul is a statesman, not a political celebrity. I use to subscribe to “The Freedom Report” -his newsletter(via snail mail), but my periodical pile is growing, no time.

Ron Paul is an MD/ Congressman/ Austrian School Of Economics guy. Bright and honest.

Comment by flatffplan
2007-08-10 08:56:39

he’s LP
why not join that
yet to meet anyone in that party w/o an advanced degree
law,finance etc….

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Comment by Bill In Phoenix
2007-08-10 15:27:23

I’m registered Libertarian. it’s reassuring that most of us are in agreement that Ron Paul is the best of the mainstream candidates.

Comment by Tom
2007-08-10 07:30:04

This poor guy is losing his home to CFC.

Comment by Chad
2007-08-10 07:45:08

I expect this guy to be holding a sign by Christmas that says, “Will work 4 food”. Good thing he’s in a warm climate.

Comment by Darrell_in_PHX
2007-08-10 07:32:35

Putting two stories together…. 27000 foeclosures in “the valley” (greater Phoenix). 33000 sells in all of the state.

I thing we’re DANGEROUSLY close to the point where there are more foreclosures than sells.

And still, the builders build. Every commercial break has ads from builders…. come buy, even with $0 down.

Some guy on a board yesterday was bragging he just bought a new home in Queen Creek for 40% off the price of the list prices of houses listed around him. Hope he enjoys living in a neighborhood where 75%-85% of houses are bank owned and empty while his city and county gubments are in bankkruptcy.

Comment by Chrisinpnw
2007-08-10 07:42:47

Would any of you locals care to comment on Tucson? My wife and I are interested in zip 85739 or the north area. Thanks in advance for any local knowledge.

Comment by Lip
2007-08-10 08:00:57

Not a local, but I work down there.

This is a beautiful area where there should be some good deals coming down the road.

I would encourage you to take a look at another area as well. Go to downtown, take Speedway Blvd WEST about 4 miles on the way to Old Tucson. Right around the International Safari Club there are some beautiful homes, a little pricey right now, but the view from there if AWESOME. From this area you can see forever. The zip code is 85745

Comment by Mike
2007-08-10 08:02:56

Doesn’t matter what zip code you are looking at. The real estate industry is in a dangerous mess. In these circumstances, you have to treat anything to do with real estate the same way you would if you were trading on the US stock market (the greatest ponzi scheme on earth). Step to one side and go to cash. Unfortunately, your cash isn’t so great either if it’s the US dollar which is starting to resemble confetti but at least you have government handling things (power of the printing press) as opposed to the shiesters like mortgage brokers and realtors. ANYONE who fools around with buying or selling property at this point is gambling. Wait for the dust to settle. Don’t get suckered into dead car bounces. Wait until late 2009 at least - IF we don’t hit a serious recession which is very possible. Don’t try and catch a falling knife. When this is all over and the horror stories have all come to the surface, people/investors will be sh*t scared of real estate and once prices bottom they will stasy there for years with very small moves. That’s until the next train load (generation) of suckers arrives.

Comment by Colorado Shadow
2007-08-10 10:19:56

“Don’t get suckered into dead car bounces”

I realize this was a typo, but did anyone else get an image of a repossessed car sitting on a flatbed truck pulling away from an FB’ers McMansion, complete with a dying lawn and a “PRICE REDUCED” for-sale sign?

Comment by Houstonstan
2007-08-10 08:10:06

Chris : This is a blog is bearish in interim term RE in every format. Mortgage market is in the process of freezing up with tighter qualification requirements across the board.

Go ahead and buy BUT be prepared to live your decision. You’ll be the proud owner of an illiquid assett that will probably go down in value rapidly. Nature of your neighbourhood may also change.

Comment by Chrisinpnw
2007-08-10 08:22:58

Thanks, you are right of course, but we sold at the top in 2005. We are now retired & want to buy maybe early next year. I hope to get a good deal in an established retirement area. Yes, the prices will go down more, but I have to enjoy it while I can and will be paying cash.

Comment by The Dude
2007-08-10 08:49:19

“Yes, the prices will go down more, but I have to enjoy it while I can and will be paying cash.”

….did the same thing a few months ago. If it goes down, it goes down. I bought the house I like, in the place I want to be. As long as your house is just that…..a house, and not part of your retirement….what difference does it make? Enjoy yourself and best wishes.

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Comment by sfbubblebuyer
2007-08-10 11:01:39

My parents live in the Green Valley area, and it’s pretty nice out that way, with a very good elder care hospital in the area. Dunno what prices are like now, but they built out there back in 2001-2.

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Comment by ex-WA
2007-08-10 10:18:14

Tucson prices are still ridiculous. It seems like 90% of the inventory is owned by “investors” who still have wishing prices 30% more than they bought for in 05, although my wife claims prices are coming down slowly. On the street where we’re renting, the same houses have been on the market for > 6 months (a couple for a year at least). A sign may go away briefly, but then another sign from a different RE co. goes up on the same house. If you can stand the heat and the occasional scorpion in your house, I’d wait another year at least before looking in Tucson.

Comment by Darrell_in_PHX
2007-08-10 07:43:06

The Donald on CNBC begging the fed to emergency drop rates 1%. Begging people not to “just walk away”.

He’s done….

Comment by Chad
2007-08-10 07:46:30

Again? Maybe this time around he will be too old to come back from his failures.

Comment by Darrell_in_PHX
2007-08-10 07:46:30

Mark Hanes tossed him a softball about Freddie and Fannie raising their limits… Of course… But please stay in your house! Go back to the bank and work out a deal. Don’t jsut walk away.

“I think we’re in for a recession. If the fed doesn’t drop rates, we’re in for much worse than a depression. The world is in for a world of hurt.”

Sided with Cramer on the tyrade.. DROP RATES or it will be much worse than a recession and it will last a long time.

Unfortunatly, I agree with him
I see 2 choices.
1) mass inflation (stagflation)
2) greater depression.

Comment by Chad
2007-08-10 07:47:55

I am not so sure that these two are mutually exclusive.

Comment by flatffplan
2007-08-10 07:57:23

STAGflation is for me

2007-08-10 08:17:50

Folks, there is no negotiation or forbearance anymore. The CDO market used FASB accounting to create special purpose off-balance sheet entities to service mortgages. According to rules of FASB, these entities CANNOT negotiate, only service mortgages algorithmically. So you are current or you are in default. No forbearance.

Comment by Sobay
2007-08-10 07:46:46

I just submitted a proposal for custom cabinets on one of Dons Pet Projects - a 1920’s house in Beverly Hills. Of course if I am awarded the job I will refer to him as Mr Trump.

Comment by arroyogrande
2007-08-10 07:54:33

The Don…losing money on Casinos and Kendra Todd, wow, good judgment. (Side note: how do you lose money on CASINOS? It’s like owning your own printing press.)

Comment by wmbz
2007-08-10 07:54:45

Oh a whole lot of people will walk. Who the heck is going to hold on to a upside down butt backwards POS with their payments going up and market value going down. There won’t be much jingle mail( that costs 42cents) they’ll just leave the keys and walk.

Comment by Darrell_in_PHX
2007-08-10 08:03:47

I’d wait for the Sherif to come kick me out, leave, then come back an hour later. It will probably take the bank a year to figure out you are still there.

Comment by Chad
2007-08-10 08:05:37

Bingo, we’re going to have a heck of a lot of squatters in the years to come.

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Comment by Arizona Slim
2007-08-10 08:30:36

This is already happening in my neighborhood. House for sale down the street and ’round the corner. The real estate agency is also trying to rent the place. (Do we detect a cash flow problem here?)

But, oops, they left the place unlocked, and a “guest” got in and took up residence in one of the bedrooms. He was reported to the local constabulary. I’m told that the house has since been secured.

Comment by Ghostwriter
2007-08-10 14:06:18

Happened to a realtor I know here in Ohio and she had to go to court and do a formal 60 day eviction notice on the squatter. She couldn’t just have the cops throw them out. Tell me our laws are not upside down.

Comment by Onosurf
2007-08-10 07:55:14

It would be to easy to quote The Donald. But, he’s dust.

Comment by santacruzsux
2007-08-10 08:50:16

Let that short fingered vulgarian twist in the wind!

Comment by ginster
2007-08-10 10:00:26

CNBC should have a special economic session staring Jim Cramer and the Donald.

Comment by Neil
2007-08-10 10:12:47

I have a little side science project to reanimate the dead beaver on his head. How it takes its revenge could be interesting. Can you tell I don’t respect the Donald?

Hey, how are those homes doing in Palos Verdes? Sold a 2nd one yet? So many multi-million dollar spec homes… I won’t be able to afford one, but oh boy will it drive down the price of homes above what I want… Bwaaa haaa ha!

Got popcorn?

Comment by Chrisusc
2007-08-10 12:10:24

Yes, RPV and PP and Hermosa and Redondo, all immune to housing busts…LMAO

Comment by Bill In Phoenix
2007-08-10 15:35:17

Chris, I’m keeping a watch on the prices in those areas, as well as Manhattan Beach. Nice to be in the cat bird seat now! Or at least in the easy chair munching popcorn as Neil is doing!

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Comment by Chrisusc
2007-08-10 16:37:14

Hey if we don’t have a depression I might be moving there too…

Comment by Chad
2007-08-10 07:55:57

Okay, a couple of updates on personal anecdotes.

The woman I work with whose daughter in Denver got her phone shut off? The hubby quit his job, and now their trying to sell (in Denver, HAHAHA!), and move to KC. Why in the world would you quit the job first?

Another woman here, just bought a house in Council Bluffs for 180K. Just put theirs on the market (with nothing moving). Got an offer already, too low for them (they’re asking 125K for the old place), and also rec’d a higher counter. They still didn’t accept, and the “buyer” walked!! I just wanted to scream in her face, “You should have taken it, jackass!” It is not in a nice part of town, either. Plus, I don’t think they wrote a contingency into their purchase agreement on the new place “upon sale of our current residence”. Even with her and spouse working, I think 180K for the new place might have been a stretch. We’ll see if they actually get approved for the loan. They might be off the hook after all.

Comment by In Colorado
2007-08-10 09:09:00

Why in the world would you quit the job first?

He’s just covering up that he was fired.

Comment by flatffplan
2007-08-10 07:56:02

roflow- they’re armed w a comb !
SEC combing Wall St books for subprime losses

Comment by Darrell_in_PHX
2007-08-10 08:04:36

Fed second injection of $16 billion, all taking MBSs.

Comment by Darrell_in_PHX
2007-08-10 08:08:05

So…these are the helicopter drops we’ve been expecting. The fed is paying off the MBS losses by just inventing money to buy them. Right?

Comment by technovelist
2007-08-10 20:09:20


Comment by Chad
2007-08-10 08:13:25

Hence the bounce back up. God, they’re devaluing the dollar my the minute. Go Ben, go!

Cue dramatic and heroic helicopter scene.

Comment by Chad
2007-08-10 08:22:27

Just reminded myself of “Team America, World Police”

“America, F^ck Yeah”
“Comin’ again, to save the motherf^ckin’ day yeah”

Comment by ginster
2007-08-10 10:03:37

I can just see Helicopter Ben in camos.

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Comment by lavi d
2007-08-10 12:09:18

America, F^ck Yeah

dirka dirka!
muhammed jihad!

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Comment by Patricio
2007-08-10 08:06:00

I hope we are a little off on our predictions, I mean if we were to go through a depression again I just don’t think that this generation will be able to cope. When I say cope I mean work menial jobs, build infrastructure, be the back bone of the economy. Instead I think it will be pray on the weak and what can you steal mentality, and I for one will not be a victim if that should happen. However, I hope the over all economy is strong enough to stop that from happening, recession why I think it is impossible to not avoid something worse would probably be our hour to be like Rome. If that happens….which I hope it doesn’t I am off to the harbor “grabbing” a sail boat and getting the hell outta this place.

Comment by Brian
2007-08-10 09:10:07

“work menial jobs, build infrastructure be the back bone of the economy”

Thats the ‘positive spin’ put out in our history books and TV about the last Depression. Sure there was plenty of it going on, but just as much praying on the weak and stealing was happening in the 30’s. Hell, I encourage the riotous behavior - the sooner those types kill each other off the better for us all. Just hide for about 6 months and not only will the population be much less but the overall gene-pool will be greatly improved.

Also, not to start a debate (no one will ever really be able to say for sure), but WWII is what pulled us out of the Great Depression, not the public-works spending. Many argue very peruasively that the Gov’t attempts to pull us from the Depression actually prolonged it.

Comment by Arizona Slim
2007-08-10 09:16:03

Recall that that organized crime got a big boost during the 1930s.

Comment by flatffplan
2007-08-10 09:20:32

10-4, fed raised 300 basis points in 33 ? to stop a run on gold= roflow

Comment by Dogonit
2007-08-10 09:37:47

I recently read an interesting twist to the claim that the it was WWII that pulled as out of the Great Depression. I always assumed it was the increase in government spending that pulled us out of the GP, but the most important impact on the US economy (at least the recovery of the labor market), may have been the fact that WWII removed many millions of men from the labor market WHILE the economy also picked up steam. The effects on the European labor market were even greater, with the added economic bonus that millions of Europeans would never return to the labor market (as their death rates dwarfed those of the U.S.) - of course, the destruction of the European infrastructure, industry, and government revenue streams delayed their post war economic recovery a bit.

Comment by M gal
2007-08-10 09:57:09

The labor market effect was much less than the huge increase in government spending (for the war). This eclipsed anything Roosevelt ever did on the homefront.

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Comment by Pen
2007-08-10 08:07:27


Could anything that’s going on this week with the Markets, the Fed, etc. result in home prices being propper up indefinately?

or are homes prices toast, no matter what happens?

Comment by Darrell_in_PHX
2007-08-10 08:11:11

It could(most likely will) cause inflation… so house prices will be flat while wages and prices of everything else doubles around them to “catch up”.

Comment by barbara_7
2007-08-10 08:54:04

with globalization, wages are going nowhere for a long time

Comment by In Colorado
2007-08-10 09:11:50

This is my concern about using inflation to monetize the debt.

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Comment by Legal Eagle
2007-08-10 08:22:53

I’m in eviction court right now. I write this post from my blackberry. The case before the bench is some non-english speaking FB who filed a pro se eviction against a non-rent paying tenant. The tenant got a free legal aid lawyer and he is seriously complicating this eviction for the FB. The FB is so stupid he won’t even pay 500 for a lawyer to make the case go somewhere. I bet the tenant lives there for free for the next 3 months and drives the FB into foreclosure.

Comment by phillygal
2007-08-10 08:29:49

newb LL make big mistake

Comment by txchick57
2007-08-10 08:32:12

are you in California? That sort of thing used to be common there; along with serial and abusive bankruptcy filings to stop evictions as well.

Comment by arroyogrande
2007-08-10 08:34:57

For more, just rent the DVD of the movie “Pacific Heights”…

Comment by flatffplan
2007-08-10 09:21:40

the ll should be able to shoot em
property rights

Comment by Chrisusc
2007-08-10 12:12:43


Comment by phillygal
2007-08-10 08:27:31

“Cooley’s family set plans in motion nearly a decade ago to transform 950 acres of farmland into some 4,000 homes and more than 2,000 apartments and condominiums.”

TFA states that developer recognizes the market is better for multi-family now, so THs will be built first. They seem to think the market will have bottomed out by late 2008, and then sales will pick up again.

I can’t see how this planned community will ever see the light of day, given credit crunch and soft market. Also am hoping current conditions will stall if not postpone indefinitely similar plans for a “Town Center” in my backyard.

Comment by Chad
2007-08-10 09:27:20

Zero activity in a couple of months on one of those “town centers” in Omaha, right next the the Mutual of Omaha tower.

Another small townhouse project on about 48th and Dodge seems to be dead in the water. Old buildings torn down, ground graded, no activity.

Yet another condo tower that was to take the place of the old Union Pacific building downtown seems to be stalled. Started demo on the building, and now there seems to be nothing. Some truly idiotic comments in this article.

A small condo building called “80 Dodge” seems to be running full steam, though.

Comment by Paul in Jax
2007-08-10 10:26:21

Everything’s a f****** “Vibrant urban experience.” The only people who want a vibrant urban experience in Omaha (or Jacksonville) are drug-addled under-30s who can’t afford what the developers are selling. Nobody grown up (i.e., w/money) is still looking for a vibrant urban experience, except in a handful of cities, and Omaha ain’t one of ‘em. There’s still a lot of relearning to be done.

Comment by Chad
2007-08-10 11:30:16

“Everything’s a f****** “Vibrant urban experience”

And the developers out in West O tout “A relaxed suburban atmosphere”. Agree with the demographic comment. And all of these idiot developers want to sell condos for $200K plus. What a joke.

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Comment by flatffplan
2007-08-10 08:55:17

is this the most useless report ?
Consumer Confidence Rebounds in August AP

Comment by legal eagle
2007-08-10 09:02:54

I’m in Chicago, C(r)ook County, Illinois. Of note, my FB across the street prolonged his foreclosure for 2.5 years without making a single mortgage or rent payment. It was a nice house in great neighborhood too. The courts are very FB friendly, judges around here have very little sympathies for the banks. Someday when I have more time I’ll do a long post about foreclosure. My firm has a foreclosure dept. and it is real tough to get these fb’s out of their homes. It doesn’( help if the name of the plaintiff is a 25 word long cryptically named trust held by the servicer on behalf of the MBS owners. Like the judges almost even care about hedge funds!!!

Comment by ET-chicago
2007-08-10 09:18:00

i knew that it’s tough to evict a tenant here, but didn’t realize the foreclosure process could be so drawn out as well.

did you see this in forbes the other day?

forbes link

45% of loans are ARMs here.

Comment by flatffplan
2007-08-10 09:24:43

wow, it’s still snowing there- helps the comps to NOT be current

Comment by Legal Eagle
2007-08-10 09:32:37

Here’s the name of a plaintiff in a foreclosure I defended (as opposed to representing the banks 99% of the time):

Wells Fargo Bank N.A. as Trustee, In trust for the registered holders of Park Place Securites, Inc., Asset-Backed Pass-Through Certificates Series 2005-WLL1. Now isn’t that a sympathetic sounding plaintiff?

Comment by ET-chicago
2007-08-10 10:08:57


what a cuddly name.

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Comment by txchick57
Comment by Arizona Slim
2007-08-10 09:17:45

Aren’t lofts (in old buildings) expensive to heat and cool?

Comment by Tom
2007-08-10 09:10:35

Woohoo! Fede only down 40 points after being down over 200. nice to see the FED bailoug out investors. There is no risk in the stock market with Jim Cramer begging for a bailout.



Comment by Crapburner
2007-08-10 09:22:00

I see the PPT boys are buying today and the Fed is printing money for the great corporate bailout….for awhile.

Fed buying FB’s mortgages…..then monetize the debt……

Comment by Tom
2007-08-10 09:24:20

The DOW just went positive. WTF? LOL

This is almost too funny to watch. If the FED’s printing press breaks or goes down for maintenance like all the refineries do, then the market is so screwed because that is the only thing keeping the market afloat. Plus investors thinknig the FED cutting interest rates a point will fix it all.

Comment by santacruzsux
2007-08-10 09:36:52

All is well, move along, nothing to see here! Pay no mind it is of no concern to you.

Comment by BP
2007-08-10 09:38:27

I think folks are banking on .50 to 1 point drop. I pray to god the folks are wrong.

Comment by Tom
2007-08-10 09:48:45

If they do that, kiss the dollar bye bye and the Carry Trade will unwind. Rates will jump through roofs because foreign banks will demand higher interest rates. What will that mean? Remember 18% rates back in 79-80?

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Comment by wmbz
2007-08-10 09:38:52

No surprise, now that the FED and central banks have come to the rescue. Watch it close up a 100 points, it’s all good… for Wall St. Complete BS of course, this ain’t gonna make the problems go away.

Comment by Tom
2007-08-10 09:21:58

I love TXCHIC’s contrarian thinking.

Comment by Jim
2007-08-10 09:28:35

Real Estate in Prescott sucks! Asking prices down about twenty percent in the last year. No buyers and too much inventory. Buy gold!

Comment by vegassoldin2005
2007-08-10 09:39:17

“‘The cost per square foot is getting less and people are getting less for their houses when they’re selling them than they were the year before.’”

But people are starting to get more for their money when they buy. Somebody wins, somebody loses.

Comment by M gal
2007-08-10 10:00:35

Yes, and at last we get numbers from the press other than median house price. Dollars per square foot! What a concept.

Comment by shadow7
2007-08-10 10:32:14

Investors still in denial. House closes for 990k and gets listed the next day for 1.5 million, i guess when it is raining outside people still don’t take a umbrella, they hope they won’t get wet???

Comment by rocketrob
2007-08-10 12:23:37

Reality is finally here, everything that has been written on this blog for years is happening in living color.

That said, I am so tired of new developments sprouting up around my house. A new on just broke ground Monday. There are now four 6500 home developments in Marana just NW of Tucson. At least there will be plenty of empty houses for all the homeless.

Come on mortgages go to 18%, come on prices - fall , stop this madness.

Comment by Civil
2007-08-10 14:33:06

A late addition to the post, but as Yuma is mentioned, it is worth noting that one local developer - the one that has always specialized in entry level homes - has one subdivision south of Yuma in Somerton in which he cannot build them fast enough to keep up with his waiting list. 955 sf single family homes on 5000 sf lots selling for $116,000 each. Up until 3 or 4 years ago he could sell these for $79,000 each and still make money - but still at $116000 each, they can provide a small yet affordable entry level home. Considering that 50 year old resale homes of the same size in town are still trying to sell for $150,000, these are quite the bargain. I think the developer is still even making $20K or so profit per home. This is the kind of home market that needs to re-emerge for home buying to make sense again.

Comment by Bill In Phoenix
2007-08-10 15:44:41

yeah but I wonder why would someone want to move to Yuma? Must be a poor man’s retirement place, as opposed to retiring in San Luis Obispo, which has good climate. What type of jobs can one find in Yuma to support $116,000 homes? Yuma is fine - in December, January, and February only, but too close to the border.

Comment by Civil
2007-08-10 17:22:14

I lived in Phoenix a couple of times and much prefer Yuma to it - it reminds me of the Phoenix of about 50 years ago, the same ag base, the same growth mentality (for better or worse), only with a river flowing through it that acutally has water in it. And the weather is not that bad in the summer - 110 and humid, who can complain?

Affording $116000 houses is not bad - just about pencils out to break even with renting at $800 a month or so. Need about a $15/hour job to afford.

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