The Gold Rush Market Is Over
The Billings Gazette reports from Montana. “Chuck Pointer has been burned once and hopes he doesn’t get burned again. Pointer moved to Billings from Boston more than a year ago. With the East Coast market already in a tailspin, he had missed his window of opportunity for selling his property there. ‘If I had sold that (Boston) house a year before, it would have sold in the first week for $30,000 more than I’d get now,’ he said.”
“Meanwhile, he started looking at places in Boise. Then, in late July, Pointer noticed asking prices in Boise beginning to falter. A house listed for $299,000 two months ago was recently reduced to $269,000, he said.”
“But Pointer wasn’t biting. His Billings home still hasn’t sold. After a couple of offers that didn’t pan out, he’s dropped his asking price by $10,000. ‘At what point do you just say ‘What’s it going to take to sell the house?’ he said. ‘I wish they could come to me with that answer.’”
“With the national housing market in a dive that threatens to drag the economy down with it, the Billings market seems to be chugging along nicely, even if it’s at a slower pace.”
“‘It’s more of a normal market,’ said broker Laura Odegaard. ‘The past five years haven’t seen the normal market of good times and bad times. Everything was good.’”
“Several local real estate agents point to a pause last fall when Billings-area buyers turned cautious. ‘People were nervous,’ said Rod Wilson, the president of the Billings Association of Realtors. ‘All of the sudden there’s a spin out there.’”
“Billings, like some of the hotter markets, has witnessed an uptick in foreclosures. Until recently, said Wayne Nelson, president of Stockman Bank’s Heights office, foreclosures were virtually nonexistent. ‘It was hard to make a bad loan, things were cruising along so good,’ he said.”
The Idaho Statesman. “Unconventional loans designed to give people a shot at home ownership appear to be coming back to haunt some Idahoans, industry experts say. The number of Idaho homes in foreclosure during the first half of 2007 rose 21 percent to 1,418, compared with 1,174 during the same period a year ago.”
“The number of filings against those properties rose 91 percent from a year ago, according to RealtyTrac.”
“One local attorney said that some foreclosures were the result of what is referred to as ‘flippers.’ ‘Now that the gold rush market we were experiencing is over, these people are falling on their bottoms,’ said Boise attorney Holger Uhl.”
The Olympian from Washington. “Nate and Lee Szczublewski of Olympia experienced firsthand the rapidly changing requirements of qualifying for a home loan when they bought their first house in May. The Szczublewskis, who have good credit, first qualified for a mortgage that didn’t require a down payment, said real estate agent Ted Leland.”
“But that didn’t last long, he said. Suddenly, the Szczublewskis needed to come up with a down payment of five percent, he said. ‘Another week and they would’ve had to put 10 percent down,’ Leland said.”
“Vaughn Marston, owner of Versata Home Loans of Lacey, said he has never seen changes this dramatic in the mortgage business. ‘It has been years since we worked this hard,’ Marston said. This year business is expected to be down about 50 percent, he said. ‘My hunch is that we may not have seen the worst of it yet,’ said Marston.”
“To make other home loans work, it might simply mean good credit, combined with a large down payment, said senior loan officer Randy Luke of Olympia. ‘If you get too far outside those parameters, it may not work,’ Luke said.”
The Winnipeg Sun from Canada. “It has smashed records, defied expectations and baffled buyers. But experts say Winnipeg’s sizzling housing market won’t cool off any time soon.”
“Wes Schollenberg, president of the Winnipeg Realtors Association, said…the association looks set to reach a record annual sales total of $2 billion for 2007. ‘We’re shooting for $2 billion and we don’t expect any drop-off,’ said Schollenberg.”
“Gary Bachman of Century 21 Canada agreed the hot market has defied tradition. ‘It’s hard to imagine but every month gets better,’ said Bachman. ‘This is now the seventh year and in the past housing would go through cycles every five years. A house is now a good, solid investment.’”
The Edmonton Journal from Canada. “Flattening prices and a record inventory of unsold homes are giving new power to buyers in Edmonton’s changing housing market. ‘The advantage has definitely moved from the seller to the buyer,’ Richard Goatcher, senior analyst at Canada Mortgage and Housing Corp., said Tuesday.”
“The relative stability, after prices rose 46 per cent in the previous 12 months, reflects a dramatic reversal of supply and demand.”
“July saw 4,463 new listings and only 1,565 sales — the lowest July sales in five years. Inventory of unsold homes soared to a record of 8,183 units, more than four times the 1,856 unsold units in July 2006.”
“The supply of resale homes is swollen by sellers moving to new homes, Goatcher said. Supply also may be bloated by speculators who are trying to flip for quick profits, and by longer-term investors whose rental incomes are relatively low compared to housing prices.”
“Outside of MLS, ComFree reported Tuesday an inventory of 2,696 homes listed for sale by owner, compared to 277 sales in July.”
“ComFree presidents Travis and Erin Holowach reported ‘unnecessary panic’ among would-be sellers. ‘Ultimately, Edmonton home sellers will be successful but they do need to be a bit more patient in the current market,’ they said.”
The Anchorage Daily News from Alaska. “Two years ago, at the height of the building boom in the Matanuska-Susitna Borough, Rex Turner launched a sprawling housing development just outside Wasilla.”
“Today, The Ranch occupies the center of a real estate slump. Turner targeted the market for homes priced from $240,000 to $450,000, now the slowest segment of the Mat-Su residential market. Instead of hundreds of homes, there are just three dozen, with a dozen more under way. Stop signs and fire hydrants rise from empty lots and dirt roads.”
“In June 2005, Turner marketing director Gary Gearhart said the developer hoped to start work that summer on 108 homes, with another 84 under way by early 2006.”
“‘Obviously, that’s not happened,’ said Gearhart. ‘It just slowed down. There was so much inventory came on the market.’”
“Gearhart blamed the slowdown on a glut of new construction. But he also cited an inventory of existing homes that flooded the market two years ago, when homeowners took advantage of low interest rates and skyrocketing home values to ‘make a ton of money’ on resale.”
“Private appraisers have certainly seen home prices decline in the last year, said Appraiser Pat Check in Wasilla. Check recently reviewed a home the borough assessed last year at $240,000, an amount she couldn’t justify today as an asking price. Usually, assessed value falls at or below appraised values.”
“‘We’re all seeing sales where the price is below the assessment,’ Check said. ‘That’s scary.’”
“One Realtor described homes over $225,000 as ‘death’ in the current market, but others said that $250,000 was a better cutoff and ‘death’ was a bit strong. ‘There’s a lot of them on the market and not so many buyers up in those price ranges,’ said Russell Joyce, president of the Valley Board of Realtors.”
“The health of the Anchorage real estate market is on the mind of many, with some feeling it is a buyer’s market. This opinion seems heavily influenced by national news, which overshadows our local perspective.”
“Is Anchorage following the national trend, or do local issues create a different outlook for our real estate market?”
“Nationally, many real estate markets began to experience extreme double-digit appreciation over the next five years. As the frenzy fed on itself, ‘flipping’ and subprime loans artificially inflated the market. National news currently makes you feel that most of the United States is in the middle of a massive correction. It is not.”
“Once again Anchorage is counter to many other states, as shown by modest increases in the average sales price from $233,496 in 2003 to $259,531 in 2004, then $291,013 in 2005 and $315,156 in 2006 to $331,137 as of June this year.”
“Between 2001 and 2005, increasing appreciation coupled with low selection and low rates stimulated multiple offers. Unfortunately, this is what sellers in the Anchorage real estate market grew accustomed to as normal.”
“Last summer, this changed nationally and affected us locally. Nationally, the bubble began to burst in overinflated markets. Locally, it caused some hesitation in our real estate marketplace.”
“So what do we do now? If you don’t have to sell now, don’t. If you do have to sell, realize that it will take more work to sell quickly. First, price it right. The days of an overstimulated market are gone. You can no longer price your property high and wait for the market to catch up to your value.”
“If you are a buyer, now is a great time to buy…If you make a low offer, understand that you may help a competing buyer look even better to the sellers. While it is not a buyer’s market, it is a good time to buy. It is a lot like buying produce in Anchorage right now: The prices are not cheap, but you’ll sure love the choices.”
‘The house construction and sales industry in Regina and Saskatoon continues to be on fire, as indicated by two new reports released Thursday. One report said housing starts in Regina were up by 46.3 per cent in July, with 139 starts compared with 95 in July last year.’
‘Saskatchewan ‘is the big story,’ said Neil Killips, an economist with Statistics Canada who noted there is little sign of the house-construction industry cooling off in Regina or Saskatoon.’
‘In Saskatoon prices were up by a nation-leading 8.8 per cent in one month. ‘We have no doubt there will be a slowdown,’ Caton said, adding prices can’t keeping growing in Saskatchewan forever the way they have in the past year.’
‘But there ‘will not be a collapse,’ Caton said, adding the housing market in Saskatchewan will likely have a soft landing when the pace of price increases eventually slows down a bit.’
‘But there ‘will not be a collapse,’ Caton said, adding the housing market in Saskatchewan will likely have a soft landing when the pace of price increases eventually slows down a bit.’
Yup, everyone wants to live in Saskatoon!
(And besides, there’re running out of land in Saskatachewan.)
Is there no way someone can forewarn all 200,000 Saskatonians that they must act now to escape the same fate as the rest of the world is suffering?
by email? dogsled?
Oh yeah, it was on the top of my list of places to move after college. San Diego, Miami, Palm Beach, and Saskatoon.
Saskatoon was just too much of a fast lifestyle for me, I couldn’t imagine living in an area with that much going on every night.
Now I think that I have heard everything; everyone wants to live in an area that I can’t even reliably locate within 500 miles on a US map.
Saskatoon is like Cedar Rapids…
Just not as exciting~
Oh, come on. Not as exciting as the City of Five Seasons? CR is the only city in the nation with a logo that looks exactly like a toilet brush.
Roll over Grant Wood…
When I saw Outkast at the Hammerstein (2002?) I sat next to some lady who was vacationing with her lesbian lover. She claimed to be some city dignitary. Anyway, she and her lover got WASTED and her girlfriend started barfing in a popcorn bag. Before she left, she threw me her card and said, if you’re ever in Saskatoon and need anything, give me a call.
After this thread I found her card and did the google:
http://lenoreswystun.com/
Dude, Saskatoon may actually be an awesome place if everyone parties like Lenore.
Muggy, if you lived in Sakatoon, you’d party like Lenore too.
Now I think that I have heard everything; everyone wants to live in an area that I can’t even reliably locate within 500 miles on a US map
I think you meant a Canadian map. You’ll have a very hard time locating Saskatoon on a US map.
I’ve been to Saskatoon and lovely Regina, they make Duluth, MN look balmy and upscale
When there’s a bubble in Winnipeg, it’s run it’s course. Game over.
Truer words were never said, Bantering. The best thing my parents ever did was hightail it out of Winnipeg for LA a year before I was born. I was back there a few years ago for my grandmother’s funeral. It was April and there was about three feet of snow on the ground. Miserable, miserable place. Of course you could always visit in the summer, when mosquitoes the size of humming birds carry off kittens and small children.
And Regina?! Same funeral, 20F out, wind blowing per usual, I’m freezing my goolies off, and here arrives my cousin from Regina, wearing cargo shorts and a T-shirt. She’s mystified I could find the weather cold.
During the viewing, my sister and I, in a fit of morbid humor, started making up postcards for the place with mottos like - Winnipeg, where you go to die.
Europeans consider Winnipeg to be hip, certainly more hip than Minneapolis. Better curling leagues, too, I hear.
Which Europeans? I want names.
Regina is the armpit of civilization. Trust me on this. I visit relatives there twice a year. One recently told me that prices would continue to go up because the baby boomers were coming. They aren’t making more land in the province of Saskatchewan and everyone wants to live there.
California had a very different Gold Rush, from the one way back when…
1849: The world rushes into California, leaves with wealth
2001-2006: Californians leave with wealth, to other states
“Wealthifest Destiiny”
“‘At what point do you just say ‘What’s it going to take to sell the house?’ he said. ‘I wish they could come to me with that answer.’”
Lower your price even more, you cupcake. Really, it’s not rocket science. Buyers don’t care about the price you “want to” or “have to” get.
When you lower it enough, “they will come!”
How can you ask the guy to lower his price? He’s entitled to his perceived peak price, isn’t he?
Funny thing is, if he sold at the $30,000 less price prior to the peak, he’d be feeling dang smart for getting out in time. What a dufus. Instead he’ll keep chasing the market down with his sense of entitlement.
OK, he did actually sell the first one. But I think when he sells the Billings home, he should pay the person he buys from in Boise $299,000, not the new $269,000 price. It’s only fair - after all, why should the Boise seller get “burned”?
I’m guessing he actually made money on his Boston sale. How does that constitute getting “burned” anyway?
““Meanwhile, he started looking at places in Boise.”
If he’s lucky he won’t find anything in Boise. I have a friend staying the summer at her daughter’s house in Boise. She says there’s so much smog there she doesn’t even like to leave the house. “I can’t wait to get out of here. And I’m not coming back!” she said.
Interest only no down house 2004 $500,000
Take out 125% heloc 2005 $100,000
Price falls 20% 2007 upside down -$120,000.00
Sense of entitlement priceless.
Get rid of your realtor and her commission fee. Drop it at least by that much (3%-6%) and knock a few more points off of it.
“‘At what point do you just say ‘What’s it going to take to sell the house?’ he said. ‘I wish they could come to me with that answer.’”
I wish these asshats would come HERE with such idiotic questions.
If you have time to watch this, it’s kinda good LOL. It basically says, the market is screwed. There will be at least a 20% correction in the market.
http://www.youtube.com/watch?v=LugWn_4p7R4
OT: Tremors in MANHATTAN?
http://tinyurl.com/2rbe2e
Say it ain’t so!
On this, watch 1:50 to 2:20. He is predicting DOOM.
http://www.youtube.com/watch?v=LugWn_4p7R4
A Pointer on how to almost complete your very own housing bubble trifecta…
“Chuck Pointer has been burned once and hopes he doesn’t get burned again. Pointer moved to Billings from Boston more than a year ago. With the East Coast market already in a tailspin, he had missed his window of opportunity for selling his property there. ‘If I had sold that (Boston) house a year before, it would have sold in the first week for $30,000 more than I’d get now,’ he said.”
“Meanwhile, he started looking at places in Boise. Then, in late July, Pointer noticed asking prices in Boise beginning to falter. A house listed for $299,000 two months ago was recently reduced to $269,000, he said.”
“But Pointer wasn’t biting. His Billings home still hasn’t sold. After a couple of offers that didn’t pan out, he’s dropped his asking price by $10,000. ‘At what point do you just say ‘What’s it going to take to sell the house?’ he said. ‘I wish they could come to me with that answer.’”
“But that didn’t last long, he said. Suddenly, the Szczublewskis needed to come up with a down payment of five percent, he said. ‘Another week and they would’ve had to put 10 percent down,’ Leland said.”
But what about the American dream/right of buying property with zero of your own cash?
It’s like Americans’ minds have been normalized to expecting housing prices double what they were five years ago, and that you can always buy a house for no money down, and that house prices always go up.
When I try to talk to people about why we are renting, the conversation ineveitably turns to the simple matter of price:
Me: “Could you afford your current house if you had to buy it now as a first time buyer?”
Them: “No, but that’s not the point. Houses here cost $600,000 now.”
Me: “How much did they cost 5 years ago?”
Them: “About $300,000…but that was five years ago. Today they cost $600,000.”
The reasoning they give is that they cost that much now because they just DO cost that much, everyone knows that, and where have I been, on Mars or something, what is so wrong with me that I don’t get the concept?
It amazes me the “them” argument.
Me: “We’re renting as it saves us $2,500/month”
Them: “But you’re missing out equity gains.”
Me: “But didn’t we just agree homes are going to drop a little in price?”
Them: “But not everyone buys with your reasoning.”
I kid you not, I had that conversation. I’m convinced 90% of Americans cannot do 8th grade math.
When I first started these blogs I thought sheeple was rather demeaning. Now? Sheeple is too nice to describe too many people; maybe my patience for idiots has gone to zero.
Got popcorn?
Neil
Szczublewski me away too…
Amen!!! Neil. I have a friend with two master degrees and he cannot figure things out. I think we have to get back to degrees in Common Sense! But I do not know what unjiversity is offering them.
Love popcorn….
“I have a friend with two master degrees and he cannot figure things out.”
But too many of them were walked through Grad school with their damned hand held. Not me. i actually asked questions during grad school. But I guess that is a character trait. Being opinionated and demanding did not make very many professors happy. Always fun to hear them go, “uh. . . “
Awesome Ben!
First time in my life I advised my cousin not to do something that is buy a half mill house in this market.
I explained to them all the possibilities, HBB and “local”BB for their city.
Two Master degrees……
What do you guys think they did?
Well, you may not have led the horse quite to the water, but I’d say they bought anyway. Dolts if they did!
Oh, and somewhat related. My coworkers’ daughter going broke in Denver. Her hubby just landed something in KC, and they already got an offer on their place (how that happened, I dunno - we’ll see if it actually goes through). Turns out, they are still going to look at BUYING something in KC. I asked why. “Because they plan on staying and they have kids”. I said weak excuse. I’ve also said, time and again, about how bad housing is, and she’s apparently told them that, but they don’t care. We’ll see if they can get a loan, since they have NO money, have had utilities shut off in the last few months, and are living on credit, without technically having jobs right now. I think they’d be lucky to get an apt.
‘It’s hard to imagine but every month gets better,’ said Bachman. ‘This is now the seventh year and in the past housing would go through cycles every five years. A house is now a good, solid investment.’”
Dear Mr. Bachman,
B-b-b-baby, you ain’t seen nothin’ yet. You ain’t been around.
Luv,
Jen
A house is now a good, solid investment.’”
Yes, the house I will eventually buy from some FB or lender once the bottom is in, will likely be a decent investment. However, I’m buying it to LIVE THERE AND RAISE A FAMILY, which is the best investment there can possibly be. No crapbox tract-housing for me!
While this is just anecdotal information, this shows how bad it is in western NY. This coworker of my girlfriend has been in the western NY real estate business for about 20 years and reports as follow:
“My sale for the xxx died because of an Engineer’s inspection so I won’t be listing their townhouse just yet and by the time xxx gets her townhouse painted after her move, God only knows when that will go up…. this is very SCARY…. and the banks did this to all of us allowing all of this 100% financing with low credit scores, low LTV’s and now with all of these foreclosures, sub prime lending is a JOKE…buyers are slim and so is inventory and people just don’t get it about overpricing their homes with decline in market value…..I literally did nothing in June and July and thought I was looking at a decent August and no go…and my pipe line is at the end of it’s life….we’re going to brutally suffer this market, except for the “HOT SHOTS” in the business that always survive….”
It appears that this bubble is not “contained” to just the hot spots.
There are some small developments that have languished at less than 50% capacity for over a year and I still don’t see price reductions. While these 160 unit developments are not near the size of hot spots, it is an indication that dropping prices seems to be difficult for many who were just trying to get rich quick :>)
This blog has certainly been an eye opener for me into the housing bubble. I just thought I was insane thinking there would be a bubble until I found this great site.
“It has smashed records, defied expectations and baffled buyers. But experts say Winnipeg’s sizzling housing market won’t cool off any time soon.”
U.S. Market 2008 “Where did the buyers all go ?”
Canadian Market 2009 “Where did all the buyers go, eh ?”
OT, but The San Francisco Chronicle devoted their business section to a series of articles on the mortgage meltdown…short sales, MBS market disappearing, jumbo loans hard to get, etc. This is huge, as the Bay Area seems to have kool-aid running through the water pipes.
Anyone with a big adjustable mortgage should be very, very afraid.
Those water pipes are starting to freeze up, as far as I can tell. It will be time for the world’s central bankers to fire up their blow torches again come Monday morning.
On second thought, the problem is not really that the pipes are frozen. Rather, they are clogged with sumpprime sewage. Could someone please notify Roto-Rooter to schedule and early-Monday morning “house call?”
http://en.wikipedia.org/wiki/Roto-Rooter
The problem is we’re about to have an event like half-time at the superbowl (or world’s cup): There is about to be a whole lot of flushing going on. The pressure is building…
You don’t want to be anywhere nearby when the main sewage pipe blows.
Got… yuck?
Neil
That is another wrinkle to all this I did not think about…in another 3 months the temperature in parts of the country will be dropping below freezing, and all those unheated abondoned houses are going to start to have pipes breaking…what fun. That might encourage the bankers to sell the REOs at any price.
Another wrinkle that I thought about the other day is the amount of new landlords of the last few years. All these folks who jumped in to buy investment property without considering what it means to actually be a ” landlord” . Case in point, say they are one of the ones who actually has a tenant. How will they react when alot of decent people lose their job in the consumer recession. Will they say it’s strictly business and throw them out when they can’t pay, or will they give them a chance to make it, provided they do have reserve cash to carry them. Alot of investors are going to be dealing with emotional dilemmas they never dreamed of.
that inspired another inkling of an idea about how to make some profit off of this..
depending on the winter climate, draining vacant REO water systems.. although i’m no plumber, seems like not a lot of tools, inventory, time or skill would be involved.
I hear so many (mainly those tied to the real estate sales) say the “Now is a good time to buy a house” - since prices have fallen. I remember 1980 when gold was at $800 an ounce. When it fell to $600, people then said it was a good time to buy. It WAS - if you didn’t mind watching your investment go to below $400 and stay there for years. We are now in the same boat (the Titanic) with regard to real estate. It’s a GREAT time to buy if you don’t mind watching your investment go down another 10-30%. And the one HUGE difference is that when people were buying gold, they weren’t taking out huge loans to finance it. The leverage - that real estate agents have proclaimed to be such a benefit for years - now works against buyers (e.g. buy a $300,000 home with 5% ($15,000) down. Home value goes down 20% to $240,000. My $15K investment just lost 400%! ($60,000)) So if those numbers look good - it is a WONDERFUL time to buy.
“But that didn’t last long, he said. Suddenly, the Szczublewskis needed to come up with a down payment of five percent, he said. ‘Another week and they would’ve had to put 10 percent down,’ Leland said.”
Lucky the Slobinskis! Instead of missing the last of the easy money, they got to catch a falling knife just before the sumprime credit pumping system broke down.
P.S. Professor Bear is having a hard time with a spelling issue: Is the proper spelling “sumprime” or “sumpprime?”
Ben,
Thanks for the Canada comments. In my opinion, we are about 2 years behind the US in the housing cycle. So picture “hot markets” in 2005 and you will understand the media reporting and the bubble-denial mentality in Canada. It’s different here! haha.
Yes, as a former Winnipeger now living in Toronto, I appreciate the Canadian news. I’ve been reading this site several times a day for two years. Thanks to everyone for reducing my work productivity!
This is hilarious.
http://forum.brokeroutpost.com/loans/forum/2/152509.htm
Borrower has 680 credit score and can document his income, ratio’s are in the low 40’s and has a stable work history. Borrower had home up for sale and actually had a number of offers; howevcer, he refuses to come of his price and prefers to keep home another 2-3 years. It appears he put tons of upgrades and belives he should get the cost aln labor back plus some.
Does Fannie,Freddie, or FHA care how long property has been of MLS?
“It has smashed records, defied expectations and baffled buyers. But experts say Winnipeg’s sizzling housing market won’t cool off any time soon.”
Should have read:
“But shills say Winnipeg’s sizzling housing market won’t cool off any time soon.”
“Ernest Williams, a part-time Realtor in El Sobrante, has a client in escrow on a home in Vallejo. In late May, the client was prequalified for a loan up to $450,000 with nothing down and no income verification. The client has “impeccable credit” and a FICO score over 750, Williams says.
On June 29, the client offered $417,000 for the house and his offer was accepted.
When the mortgage broker submitted his application to a lender the last week in July, he was turned down. The application was submitted to two more lenders last week and was rejected.
“He was declined because they wouldn’t do stated-income loans above 90 percent anymore,” Williams says.
“If he provided full documentation for his income, he wouldn’t qualify for the loan because he doesn’t make enough money,” Williams says.”
Cry me a river.
http://tinyurl.com/2g4zr3 (SF Chronicle)
“Today, The Ranch occupies the center of a real estate slump. Turner targeted the market for homes priced from $240,000 to $450,000, now the slowest segment of the Mat-Su residential market. Instead of hundreds of homes, there are just three dozen, with a dozen more under way. Stop signs and fire hydrants rise from empty lots and dirt roads.”
“In June 2005, Turner marketing director Gary Gearhart said the developer hoped to start work that summer on 108 homes, with another 84 under way by early 2006.”
“‘Obviously, that’s not happened,’ said Gearhart. ‘It just slowed down. There was so much inventory came on the market.’”
“Gearhart blamed the slowdown on a glut of new construction. But he also cited an inventory of existing homes that flooded the market two years ago, when homeowners took advantage of low interest rates and skyrocketing home values to ‘make a ton of money’ on resale.”
No, Gearhart, YOU’RE the problem.
“If you are a buyer, now is a great time to buy…If you make a low offer, understand that you may help a competing buyer look even better to the sellers.”
Did that sound like realtor-speak for “please do not put in a low-ball offer as I am tired of presenting them and want a higher commission?” What a bunch of rubbish. Instead of honestly acknowledging the downturn, they are now creating a false sense of competition in the buyer’s market. I hope no one is drinking that kool-aid.
“If you are a buyer, now is a great time to buy…If you make a low offer, understand that you may help a competing buyer look even better to the sellers.”
ROTFL: I’m ok with that. IF there is a competing buyer, let them have it. Pardon me that when I’m informed there is a “bidding war” if I just walk.
There are more homes for sale than buyers. Eventually the sellers will realize that.
Got popcorn?
Neil
Anyone who buys now is a fool. Sellers are still clinging to their greed and delusions, and their enablers, the clueless NAR tools, are right there with them. When I look into the eyes of the realtors and see bitter unsuccess, and undisguished panic in the eyes of the sellers, THAT will be the time to launch into my “There’s never been a worse time to sell, real estate only goes down” demotivational speech as I deliver my shamelessly lowball offer. They’ll know, and they’ll know I know, that if they say no, I’ll take my creditworthy offer elsewhere - I won’t lack for choices.
Yes, this will be the new mantra. It’s disgusting. It tells you that real estate agents feel no fiduciary duty towards buyers. Can you see the lawsuits coming, as buyers think about who got them where they are now?
Sure someone with CASH may come along hankering to OVERPAY for a house. The rest of us mortals have to qualify for prime rates, then cross our fingers that bank appraisals will support our offers. So the pressure is down, not up.
They keep building EVERYWHERE! My husband and I drive around up here in Wisconsin and are amazed at all of the developments. I shake my head at the insanity of it all…I’m very afraid.
Great job Ben…I’ve been lurking here for about a year and would like to offer my sincerest thanks for the education you’ve provided to us.
Let me 2nd that. Ben, you have helped facilitate a amazing amount of education. When I first started googling “housing bubble” I ended up on a few other sites first, but they all pointed to this site as the core of the community. Well done.
Neil
“Chuck Pointer has been burned once and hopes he doesn’t get burned again. Pointer moved to Billings from Boston more than a year ago. ‘If I had sold that (Boston) house a year before, it would have sold in the first week for $30,000 more than I’d get now,’ he said…Meanwhile, he started looking at places in Boise. Then, in late July, Pointer noticed asking prices in Boise beginning to falter…But Pointer wasn’t biting. His Billings home still hasn’t sold.’At what point do you just say ‘What’s it going to take to sell the house?’ he said. ‘I wish they could come to me with that answer.’”
So Chuck Pointer just moves from town to town, buying up properties he has no hope of selling? This guy is as stupid as they come.
Austin TX seems to be showing early signs of slowing down. Acquaintance has house on the market but is not getting serious offers …
Acquaintance has house on the market but is not getting serious offers …
Define “not serious.” If they are 5% to 10% below his asking price, guess what, that is the new market price. Its happening everywhere.
Got popcorn?
Neil
Depends on his asking! If it’s 20% higher than last year’s comps (which I’m seeing around here), he should be leaping at offers just 5-10% off.
Sorry - misspoke. No offers - just lookers. Lots of folks want to come and look (and have long long lists of other places to go see).
“It is a lot like buying produce in Anchorage right now: The prices are not cheap, but you’ll sure love the choices.”
Yup, buying a house in Alaska is just like buying a sack of spuds.
I was thinking the guy is just more of a fruit.
I just viewed a statement by Benanke on paperdinero.com stating that subprime foreclosures will continue into next year.
Has anyone else seen this? Is it new? Or did it by me?
Wow, this Benanke dude must be some kind of prophet, making such a bold prediction.
Pay no heed, Greedhead Sellers, to that cold, vulture-shaped shadow wheeling leisurely overhead. This is just another one of my reconnaissance runs…I won’t be partaking in the feast until Spring 2008 at the earliest. So please continue with your pointless, delusional 1% reductions - I’ve got all the time & patience in the world, and it only gets better (for me, not you) from here.
Hey Sammy, there ‘ya are!
http://video.ft.com/viewfromthetop/
Good insight by Mort Zuckerman on the subprime meltdown
His comments on U.S. home prices are a bit dated — he talks about U.S. prices currently being “near the top” when in fact the top was in back in 2005 so far as most bubble markets are concerned; at this point it appears the market has reached a permanently high plateau. (NAR median statistics are a lagging indicator of market values at a turning point, for all the reasons discussed to death here.)
However, I like what Mr. Zuckerman had to say about the sumpprime lending sector:
“You will have a situation where everyone is rushing towards the door at the same time. There will be no orderly liquidation…”
“Its more serious than I originally said and no one knows just how serious it is” (when Mr. Zuckerman talks subprime contagion. )
I wish Ben had his own morning TV show!
Got popcorn?
Neil
Mort is counting on BB to lower the Fed funds rates and stem the “panic” (his word choice, not mine), which he notes has basically just broken out “over the past two weeks.” Funny thing is that from my viewpoint (this blog + google), not much has fundamentally changed in the past couple of weeks. The main noteworthy changes appear to be a flood of gloomy MSM reports that suddenly include the word “panic” with increasing frequency, plus lots of online video interviews with nervous-looking guys in suits like Mr. Zuckerman.
Check out this guy on SDCIA.com. He’s almost $10,000 a month negative cash flow, and he keeps buying properties. He uses his $150,000/yr income, from a programing job and HELOCs, to subsidize his renters. PTIEMANN could be the next Casey?
Sorry I forgot the link.
http://www.websitetoolbox.com/tool/post/sdcia/vpost?id=2020621&trail=60
This guy is insane. His exposure is beyond words. Properties in Las Vegas….Condo in San Diego…can you say bubble markets! Yet he seems happy and optimistic. Whatever he’s on I want some.
23 siddoo
anyone know how hard the IRS looks for someone w dual citizenship that sells a rental here and scoots to Italy ?
We have already traced your IP and someone should be knocking on your front door in a bit.. you may be well schooled in torture-resistance techniques, but we have ways of extracting information.
seriously tho, I’d guess it depends on the amount of money and how busy they are and a lot of other factors .. If it’s a serious concern, such an estimation seems like a job for a tax atty who is provided with all the details..
I keep thinking about Cramer’s nervous breakdown on that news show screaming about the Fed needing to do a rate cut. Others on this blog have said it would be a band aid. I agree. I’m a librarian and in 2001 did a grad school research report following the the 10 year evolution of the legislation passing the Roth Ira. I came across Greenspan testimony in front of a Senate Subcommittee from the the early 1990’s during the recession and bubble burst in CA (I was upside down for a couple of years in the Silicon Valley). I remember someone on the committee asking him why the banks were not easing up on credit. He basically responded that he had cut rates 5 times and he could not FORCE them to ease up. They were scared and tight credit prevailed. While I know the lending for this recent bubble did not necessarily come from traditional sources, I do not think that any institution in the position to lend, nor intelligent buyers in the position to buy are going to be spurred or calmed by a rate cut. Its going to get ugly and it needs to get ugly.
Six weeks ago I was offered a position at a college in FL. Four weeks later the position was rescinded because the State Legislature is going to whack the education budget. Thankfully I had not given notice at my current employer. A friend of mine works for a high tech company and two weeks ago every department was told they have to lay off one person.
Tina posted -
” A friend of mine works for a high tech company and two weeks ago every department was told they have to lay off one person. ”
I bet the cya moves ramp up big time now. Coworkers bringing in starbucks & donuts, extra time spent working w/out whining for overtime, no more petty bickering over mundane matters, all to project: ” DONT CUT ME BOSS, NAWSIRREE I”M MUCH MORE VALUABLE DEN DEM DERE FIELD HANDS” !!
followup comment:
I have never seen so many sign twirlers as this weekend here in north sacramento area. Seems every corner had someone w/a sign hawking more than just homes, like sandwhich shops, carwashes, condos, etc.
“Once again Anchorage is counter to many other states, as shown by modest increases in the average sales price from $233,496 in 2003 to $259,531 in 2004, then $291,013 in 2005 and $315,156 in 2006 to $331,137 as of June this year.”
Oh, yeah, that was only “modest” appreciation. 11%, then 12%, then 8%, then 5%. Wow, a downward trend of appreciation. So easy to see.
“While it is not a buyer’s market, it is a good time to buy.”
Uh, what?
“Last summer, this changed nationally and affected us locally. Nationally, the bubble began to burst in overinflated markets. Locally, it caused some hesitation in our real estate marketplace.”
Methinks that realtor/shills can’t help themselves when it comes to boosterism. Last month I heard from a Realtor in Fairbanks that the Interior market was slowing up (interest rates rising), but that the Anchorage market was well-known amongst agents in the state to be locking up (sale volumes dropping dramatically). Last week I talked with a general contractor who said that residential upgrades and commercial are going great in Anchorage, but residential building is DOA. The rise in median sale price is just the quicker disappearance of the lower end market, just like in LA and other bubble laggards.