Local Market Observations!
What do you see in your local housing market this weekend? Lending problems? “‘I have never seen it as bad as this in 16 years. It can’t have bottomed out, there are still all those bad loans out there,’ said Margaret Massitti, a real estate broker in Cleveland, Ohio. ‘People just walked away from their homes. Now it’s worse. One buyer had agreed a mortgage on a two-bedroom home, he had agreed to put down 5 per cent [deposit]. Last week, the lender now says he no longer qualifies.’”
Lower appraisals? “‘We have noticed recently that the incidence of down valuations has increased over the last couple of months, as the market has slowed down. Most down valuations have been in the 5 per cent to 10 per cent range, with the occasional one which is much heavier,’ said independent mortgage broker Ray Boulger.”
“James Scott-Lee, spokesman for The Royal Institution of Chartered Surveyors, confirmed: ‘Surveyors need to look at the whole market and not just the particular property. Because prices are cooling, we may well see more instances of down valuations.’”
Signs of contagion? “Some of Canada’s biggest subprime mortgage lenders are pulling out of areas of the business, at least temporarily, indicating that problems in the commercial paper market have spilled over to affect some Canadian consumers.”
“Jim Murphy, CEO of the Canadian Association of Accredited Mortgage Professionals, said ‘this really has nothing to do with the Canadian real estate market.’”
“It stems from the problems in the commercial paper market, which are the result of trouble in the U.S., he said. The housing market in Canada is still strong, and the changes are only applying to new applicants, he said.”
Or foreclosures? “As foreclosures surge both nationally and in New Hampshire, a local organization that has helped many people purchase their own homes is also offering free counseling on how to hold on to them.”
“As to the scope of the problem, ‘I’ve never seen anything like this before,’ said foreclosure counselor Gail Engle, who had 26 years of experience with a local bank prior to joining the land trust back in May.”
Media reaction? “With the mortgage meltdown, foreclosures on the rise and property values in freefall, TLC’s ‘Property Ladder’ and about a half-dozen other shows have started to address the downturn. Nets like TLC, HGTV and Bravo are now running into the real-life dramas among homeowners and real estate flippers as the market moves from boom to bust.”
“‘We’re starting to see it now in the stuff we’re filming,’ says Brant Pinvidic, TLC’s senior VP of programming. ‘It’s gone from, ‘Oh, I can get so much money for my house’ to, ‘Oh my goodness, what if I don’t sell my house?’”
“‘We’re starting to see it now in the stuff we’re filming,’ says Brant Pinvidic, TLC’s senior VP of programming. ‘It’s gone from, ‘Oh, I can get so much money for my house’ to, ‘Oh my goodness, what if I don’t sell my house?’”
The United States of Plan B
OMG I love this! I troll the HGTV boards when I need a schadefreud fix. Those flipping enablers are really delusional.
Let me know when one of those shows is going to have some DB taking it in the a$$.
They had one not long ago, can’t remember if it was HGTV or TLC. It was a story about two young flippers who bought a house in one of the worst neighborhoods in the Sacramento area, didn’t pay for an inspection, ended up needing to replace all the plumbing and wiring and of course they redid the kitchen and bathroom and the usual flipper crap. The house really did look cute afterward, but that didn’t fix the neighborhood. In 2005, they would have made at least 30K on the deal. I don’t know when they filmed, probably this past winter from the looks of it, but they were unable to sell the house at the end of the show even after lowering the price to where they were losing 15K on the deal.
I kept wondering how long it was going to take for these shows to starting becoming more “reality” than “fantasy.”
I would always check the year for the show and when it would show 2007, I would shake my head if they got it flipped, and figured the filming had to be old.
It’s still happening in Sacramento. I went to an open house last week and argued with the RE agent, who told me that some young “investors” who own 12 houses were considering buying the overpriced fab 40s house we were in. She thinks they’re brilliant. The neighbors two doors down just closed on a FSBO duplex they’re buying as an “investment.” Some “investors” are rehabbing a five-unit complex two blocks from my house that closed in April for a million bucks (sold for $300,000 ten years ago). A school teacher at the gym told me that she and her husband are looking for a fixer to flip. I’m speechless at the persistent stupidity out there. Probably none of these idiots’ loans will reset until 2010 at the earliest. We have a long way to go.
annette: When they show the show being 2007, that’s the air-date. It’s safe to assume that it was filmed at least 12 months prior. The 2008 series will be the start of “holy sh!t!” shows.
“Jim Murphy, CEO of the Canadian Association of Accredited Mortgage Professionals, said ‘this really has nothing to do with the Canadian real estate market.’”
“It stems from the problems in the commercial paper market, which are the result of trouble in the U.S., he said. The housing market in Canada is still strong, and the changes are only applying to new applicants, he said.”
- Jim is a dumbass. The world follows the USA. It is pretty narrow minded to think that they can enjoy ‘American Idol’, Simpsons, Hummers, Rap music, Hamburgers, 100% financing (No Doc),etc - and still be immune to our occasional hiccup in the economy etc.
I concur. Jim is in fact a dumbass. “The changes are only applying to new applicants”…so…who is it that sets the price of the market, Jim? It’s like a guy who has just watched three dominoes get knocked over, and he seems to think the fourth will just remain upright as it’s struck by the third. Wouldn’t expect anything less from a “mortgage professional”.
“It’s like a guy who has just watched three dominoes get knocked over, and he seems to think the fourth will just remain upright as it’s struck by the third.”
Good analogy, and easy to remember.
I had drinks with a mortgage broker friend in Guelph, Ontario (suburb of Toronto) last weekend. She claimed that what I saw as rampant overbuilding in the small, depressing university town was necessary to meet the rising demand for housing. The next day, I visited my sister-in-law, a reception in a real estate office, who claimed that the market was visibly slowing down and that buyers were scarce. I wonder if the two differing points of view have anything to do with the fact that one of them, my sister-in-law, earns the same amount of money regardless of how many houses are sold, as opposed to the mortgage broker who is on commission.
Upton Sinclair said, “It is difficult to get a man to understand something when his job depends on not understanding it. “
“…most of the flips chronicled — even ones that went horribly wrong, with expensive delays and costly errors — ultimately resulted in a big sale and a rich profit for the homeowner.”
This is what killed me about these shows. The flippers who were the most clueless—the ones who turned a 10-week flip into a 10-month flip–ultimately made the most money due to the market’s continuous ascent.
They did a special on TV one night and showed clips from some of the flipper shows. They interviewed some people who were on those shows. A lot didn’t own the properties, many were never sold, and a lot of the work was staged. So in other words most of it was just TV and not actually real life. That’s entertainment, and some people were stupid enought to believe it.
Hmmm, sounds like the “phrogging” someone told me about the other day.
Some of our property programs will be revamped and redone, and some will be replaced,” he says. “We’ll mimic and tailor our shows to what the real people in this country are feeling.”
The shows still aren’t hurting for participants, despite the credit crackdown — yet. And if fewer novices can secure loans in the volatile Southern California market — where many of these productions are based — shows like “Property Ladder” will hit the road more often.
“More than half of our flips this season were out of California,” Kemp says. “If you want to flip in this market, you can. But you need to really be on top of things.”
Adds Pinvidic: “Surprisingly enough, there are always people who want to give it a shot. Everyone has an inflated idea of what their skills are and what they can accomplish.”
I want to scream, but I reach for aspirin instead.
‘Everyone has an inflated idea of what their skills are and what they can accomplish.”
- Years ago, a large insurance company conducted a large research project to find out the common thread of drivers and accidents.
The conclusion was, ‘Drivers think that they are better drivers than they actually are.’
Another study by a brokerage firm study investors and their skill as investors.
The conclusion, ‘Investors are unskilled and UNAWARE OF IT!’ They confidently continue to get hammered.
That statement applies to professional investors as well. I think John Bogle quotes a figure of ~80% of fund managers underperform the benchmark of index funds.
Especially if you consider his yelping in response to the Barron’s piece on him, I would daresay that Jim Cramer is another example of an “underperformer”.
I wouldn’t follow any of his investment advice, however, but Cramer does make me laugh.
Perhaps TLC’s ‘Property Ladder’ should be reincarnated as “Property Pit.”
“Property Chute”. A lot of people are about to hit that next to last square that drops you all the way to the bottom of the board.
I like that one better. For a double entendre, market some small gag parachutes with “Property ‘Chute” stenciled on them. “Yo, investor! don’t forget your chute!”
A home I am watching in SW Ohio was listed for $57K “more” than they paid for it 2 years ago. They listed it 3 months ago.
Now they are advertising “Reduced for quick sale”. They reduced the listed price by $4K .
A builder has a new spec home that has been on the market for almost a year. He has not reduced the price by even $1 !
At this rate the decline in prices is going to take years
It’ll take years all right, and that’s fine with me. Let them bleed a very slow death. Every month they don’t find a buyer is another month of interest payments.
Wow I’m from NE Ohio and in our area prices have gone up 1-2% a year or stayed flat during the boom,. SW Ohio must think they’re CA and FL.
Personally, I think the “It’ll take years” philosophy was valid until August, 2007, when the world realized it was sleeping with a coyote and needed to chew its collective arm off to get away.
Now that real down payments will be required, for increasingly good reason (keeping buyer skin in the game as prices decline by 20%), things are different and will never go back to the ways of the past 5-7 years. IMHO.
“It is pretty narrow minded to think that they can enjoy ‘American Idol’, Simpsons, Hummers, Rap music, Hamburgers, 100% financing (No Doc),etc - and still be immune to our occasional hiccup in the economy etc.”
You don’t know what you’re talking about. You have probably never even been to Canada.
At least we Canadians don’t live in cities (like many of yours) that look like they’re in the Third World. Public poverty and private wealth…
Was in Florida in early July and served breakfast in Cocoa Beach by a one-toothed waitress. Poor dear couldn’t afford to fix her teeth. Working poor and all.
And then we looked out and saw Cape Kennedy across the bay…couldn’t help but muse about the “socialized space program” but no decent health care for the masses. Shameful.
So, you’re the dumbass(es)
Yes we all know its better in Canada and everyone is moving there right now.
Everybody can’t move to Canada because they are a bit smarter about immigration. They have a point system. Preference is given to more education and having a job waiting for you.
Point one. IMHO, any place north of North Dakota is no place to live–visit maybe. I’ve still got cold-sensitive fingers and toes from too many frostbites in Chicago.
Second point. Canada’s gun laws suck the hind teat.
Third point. The U.S. *is* de-evolving onto a 3rd world banana republic. So where’m I gonna go? I’m not made of money.
The U.S. *is* de-evolving onto a 3rd world banana republic. So where’m I gonna go? I’m not made of money.
I’m too old now, but if I were in my late 20’s or 30’s I’d be headin’ to Austrailia. Solid, good natured people, who will prosper on the back of the Chinese Dragon.
Gotta leave the firearms behind though.
But WTF, ya can’t have everything.
I have been thinking about this. My job skillset is well suited to work there. I have the contacts and my wife would be employable there. We have talked about it, but wer’e almost fifty, have elderly parents who would be very affected, and that just seems like a big change.
We are keeping the door open and carefully watching how things develop here. I have talked to some of my young relatives recently and have been advising them about how to internationalize their skills and attitudes so that they can make the move more easily. My fifteen tear old nephew does not have much of a future here–he is very bright I am hoping he is listening. My primary goal there is to keep him away from the military. I would hate to see his life placed in the hands of such deranged government.
If the draft ever is re-instituted in this country Canada can count on a huge influx.
Nope, it’s actually Jim that’s the dumbass.
The rest of the world has been growing by sucking off America and swallowing every last drop… Now America turns all flaccid, the world starves. Anytime a cheerleader of a Ponzi scheme says something like “the changes are only applying to new applicants”, you know the party is over. Without new entrants into the scheme, it collapses.
If you go to my website and click on the “miracles” link, you will see that regardless of nationality, American or Canadian, some people are just too clueless to get their teeth fixed. I’ll summerize for those of you who don’t want to go there. Diane Duyser, the Virgin Mary Grilled cheese sandwich lady, was paid $28,000 by the Golden Palace online casino for her miracle sandwich. She is as toothless as they come, but did she use any of the money to fix her teeth? No. But, she got a tattoo. Fred Whan, a Canadian, also had a brush with fame by burning what he thought was the image of Jesus onto a fish stick. If what Snick says is true, Fred ought to have been able to get his teeth fixed with the help of OHIP. Oh, that’s right. Snick is a dumbass. Canadian public health DOESN’T COVER DENTAL.
Your right snick, Canandians certainly are more travelled. They have to be, since they have to come to the US to get the CAT scans and heart surguries they need to live! Please inform your fellow Canadians that there is no need to come to the US for health care, cause you said so!
In Vancouver, BC petty crime is rampant! Granted, few are being gunned down, but if it isn’t bolted down it’s fair game especially in downtown.
Snick you apparently don’t even vacation in Canada. Why would you expect anybody in the US to?
Yes but BC (aka Bubble Central) is the “best place on earth”. I know because it says so on the licence plates!
BTW Vancouver has California prices with much lower incomes. But all the local gurus say that prices can’t go down, no matter what happens in the US, because …drum roll… the Olympics are coming!
Actually, all the Hong Kong money came ahead of ‘97. Remains to be seen when/if it leaves. For now, folks are not selling because prices always go up
Snick, if we socialized our health care system, which would probably cause it to deteriote rapidly (just look at the veterans hospitals which are already run by the govt), then where would all the Canadians go to have their surgeries performed??
So all of America can be judged by a single waitress in Cocoa Beach?
Yeah, and America is narrow minded… (disclaimer: this is a shot at him, not all Canadians - many of whom are good friends of mine)
AMERICAN CONSUMER LOOKS INTO THE ABYSS
Buckling under soaring debt payments and plunging home equity, how much longer can the ‘fabled’ U.S. Shopper carry the weight of the economy?
“Financial markets have been badly shaken by trouble stemming from the housing slump, but some analysts say the full impact on the underlying U.S. economy has yet to be felt. Add in the recent gut-wrenching volatility in the stock market and the belated tightening in credit standard, the chances of the first consumer-led recession since 1991 is ticking ever higher as consumers move to rebuild their tattered savings.
“We are now in a serious housing recession,” said Susan Wachter, professor of real estate at the University of Pennsylvania’s Wharton School in Philadelphia. “The increase in wealth that came through refinancing was what took us out of the 2000 recession. The real concern is that we’ll go down the same way we came up, which is that housing prices will cause consumers to pull in and stop spending and that will throw us into a recession. But that hasn’t happened yet and we won’t see whether that happens for another three to six months.”
Edmonton Journal
http://tinyurl.com/2mlwnz
No worries, J6P still has his credit cards.
How can refinancing produce an increase in wealth?? Such people are professors? At Wharton?
I thought the same thing. For shame - what does that say about our schools if a professor THERE is so stupid?
The Donald and Ivanka Trump both graduated from Wharton.
It is late in the day, but: “U.S. News and World Report has repeatedly ranked Wharton’s real estate MBA program as the top in the nation.” (Wharton www). Someone would like to interview them?
“The increase in wealth that came through refinancing….”
There was an increase in wealth, it just wasn’t for the folks sucking it from the ATM.
“How can refinancing produce an increase in wealth??”
Give me your HELOC cash for my POS flip. Increase of wealth…for me!
Boston’s highest paid hedgie ($200 mil last year), one Mr. James Pallotta, who just lost $400 million out of his $8.5 Raptor Fund noted in a letter to investor’s reported in today’s Globe…
“It is now our view that a consumer recession is likely if not happening already.”
He further warned, “All bets are off in a recession or characterized by fear of a recession.
IT’S HERE AND IT’S GONNA BE A HUM-DINGER.
Expect an escalation of Mid-East carnage to distract public reaction.
What does await us after Labor Day? A sharp recession? A wider war? Both? What do the elitist pols and intellectuals have in store?
One thing is for certain, the consumer is facing an uphill battle for the first time in decades and it couldn’t come at a worse time. Think of all those service and retail jobs hanging percariously by the fraying strands of the HELOC rope.
““All bets are off in a recession or characterized by fear of a recession.”
What a typical cop-out. The inevitable recession arrives and all of these rats will say, “Because of the recession that we could not possibly have foreseen, ALL BETS ARE OFF.”
Could’a foreseen it right here on Ben’s blog, fella. Plain as day, reiterated over and over for the past couple of years — including a darned good estimate of the timing.
RE: ““All bets are off in a recession or characterized by fear of a recession.”
Point of the post being, even the rats are abandoning the dump because all the garbage is gone.
“The increase in wealth that came through refinancing was what took us out of the 2000 recession.
Like we’ve all been saying, people think they are wealthy, because they can buy things. For some reason they don’t consider that’s it’s on borrowed money.
Yes the housing slump has been going on for 18 months, but what they failed to note is that lending has just been curtailed in the last few weeks. Wait until that catches up to all the people that want to heloc. Remember, they still think their house is worth what it was in the first half of ‘05. Then we’ll see how much the consumer buys.
Simply put — extracting “equity” from one’s home in the form of cash that is then spent on depreciating assets such as cars/boats and/or vacation does NOT and NEVER did increase one’s wealth. On a net asset basis, one’s net worth actually DECREASES when this occurs. How is this not apparent? Effin’ idiots.
“Extracting equity” from one’s home is simply going into debt, using your house as collateral.
It is greed tinged with lack of self control that entices people to do something so stupid in order to purchase optional goods and services.
It appears that Dr. Wachter has been an academic all her life, not so much burdened by the difficulties of real-life choices and risks that people outside “the academy” have to make every day.
http://www.wharton.upenn.edu/faculty/wachter.html
Really interesting as a renter down here in Ft Lauderdale.
Went out with the wife last night, met a couple who are renting a two bedroom condo blocks from the beach for 1200/month. So I told them they must be happy renting right now, but they totally disagreed, saying that NOW is the time to buy, because prices are going to skyrocket in a couple years…
I go to the bank to convert a CD, and because I had a 30 minute wait–don’t know if it was on purpose–a mortgage broker came up trying to sell me a mortgage because, she said, “It’s a great time to buy.” I also got a call the other day from the same bank trying to sell a mortgage… I just don’t get it.
I read this blog religiously and absolutley agree 100% with everyone on here (and signed the petition, BTW), but I feel like a freak talking to people on the outside, who in turn seem like complete idiots to me… since they don’t share our “opinions.”
Plus the fact that everyone was so damn rude today, everywhere I go the service is hostile, shockingly rude and really disturbing, from the bank to the supermarket, you name it… something seems a bit surreal here.
My two cents.
I’ve noticed that here in the SF Bay Area, service quality has also gone down recently. There’s much more rudeness and poor service than normal. I wonder how many of these folks are FB’s or were counting on their house to fund their dream retirement?
I tend to reflect on being in the middle of the Texas bust when thinking about things like this. It was surreal, and nobody talked about it. Things changed enourmously, yet we were all so caught up in reacting to it, that a ‘big picture’ examination didn’t happen for years.
I’ve always known that we would see some negative societal effect as things unwind, but it is to be expected and put up with.
What I’ve noticed is all of a sudden, people I talk to ‘knew’ housing was in a bubble all along and express their digust at the mess.
You can never go wrong overestimating the effect of economic hardship on individuals, families, communities.
“What I’ve noticed is all of a sudden, people I talk to ‘knew’ housing was in a bubble all along and express their digust at the mess.”
Yep. The same people who were preaching real estate only goes up, are now starting to say they “knew this was coming”. I can’t stand these types. They go through life taking credit for others intelligence and hard work, suffering from a complete lack of intelligence and resolve.
On a evolutionary basis, there are considerable advantages for an individual to subsume itself to the herd…else, there would never be such as thing as herd ‘mentality’, either for buffalo or people.
On the other hand, the evidence is pretty much in that some dinosaurs use to migrate in herds, and these are all gone now.
I have not had this experience, but I have had several now ask “how did you know.” MIL called the other night about some funds she was in and told my wife XXXX is right again (I got her out of the way of the tech bubble–and I am a money idiot compared to the people on here–how could people NOT see these things for what they are?)
how could people NOT see these things for what they are?
————————–
I’ve asked myself this question a thousand times. What seemed so **very obvious** (stock bubble & housing/credit bubble) truly wasn’t seen by most people on the street.
Why? Because humans NEED to live in societies. We are herd animals — and that’s not intended as an insult.
IMHO, most of the people on this blog are likely to be non-conformists. Probably weren’t jocks or cheerleaders in high school, didn’t follow the latest fashion trends or drive certain cars because, “everybody has one.”
What is obvious to non-conformists (who don’t concern themselves with what everyone else is doing or thinking) is totally camouflaged when looked at through the eyes of sheeple. They honestly don’t seem to see foolish behavior and illogical occurences for what they are.
RE: Plus the fact that everyone was so damn rude today, everywhere I go the service is hostile, shockingly rude and really disturbing, from the bank to the supermarket, you name it… something seems a bit surreal here.
Just to let you know your not along, I’ve been thinking the same thing as I go about my day to day business. It’s a cesspool out there. Totally abnormal.
I think people are financially and pyschologically stressed to the max, and feel totally impotent to do anything about it.
So they take it out on the nearest stranger.
Management better take note.
I get treated rudely by a biz, I never go back.
I know that here in Vancouver, I’m just happy to see anybody behind the service counter. Frequently, deli counters at grocery stores are shut-down for the evening because one worker calls in sick.
If you’re lucky, you’ll have a server who speaks English. The last coffee server I dealt with actually spoke English but was basically deaf. Nice lady, though.
Managers here have to hire just about anyone to fill their low-wage entry positions. Many companies are having repeated job fairs.
The folks at the farmer’s market were pretty nice this morning. But then, they are the originators of their goods and reap the benefits of their sales - not $X per hour help.
And I admire them for their smiles. I had only been out of the house for a few minutes and I was already cranky from the heat.
DC is a fetid swamp. Same goes for the immediate surrounding areas, like Montgomery County Maryland. Though I guess it was a good day for the local high school cheerleaders to do a “free” car wash. The signs said they worked for tips. All in short shorts and bikini tops. Kind of disturbing, actually.
“Though I guess it was a good day for the local high school cheerleaders to do a “free” car wash. The signs said they worked for tips. All in short shorts and bikini tops. Kind of disturbing, actually.”
A gambit that has been used endlessly, and quite successfully, since the beginning of time. Polly, I don’t think they were angling for, or counting on, your business or tips. It’s all in odds and probability. Smart marketing — sorry you were offended.
RE: All in short shorts and bikini tops.
Sex sells, even at the HS carwash.
Quite disturbing, especially if your daughter is the one bending over with the sponge doin’ a pedofile’s tires.
Beggar’s all…
“Kind of disturbing, actually.”
You need to pay a visit the third world.
I had a surreal conversation about 3 weeks ago with my daughter-in-law’s mother. This woman makes less than half what I do, but she spends about twice what I do on clothes, make-up, health club membership, cars, vacation to Hawaii, etc. (Gotta say she looks fantastic, though!)
Topic came up because my son has lost all the 30K equity he put into his home, plus about another 70K to boot. So, the conversation starts because we are talking about this fact: my son and her daughter just lost a ton of money on their “investment”.
She asks me what I pay on rent ($1550) and gasps and says “My god, you could buy a house for that much!”, to which I reply that yes, I can buy a house in a very bad neighborhood OR a nice house with a very bad loan. But I can’t buy a nice house with a 30 year fixed-rate mortgage. (The place I’m renting is in an upscale community, and it would cost me over 3K per month if I were to purchase a similar place right now.)
“But you are losing money by renting! Think of the equity that you aren’t building!”
And I pointed out that the kids just LOST 100K. This is why we’re talking, see, because the kids just LOST Frakkin’ 100K.
And she STILL didn’t get it.
Cmyst,
You need to understand that with her (as with most people ) cause-and-effect are just not “there” for her. She probably is not stupid per se. She doesn’t get cause-and-effect, or if she understands it she doesn’t think it has anything to do with “real life”.
BTW, good move with the renting.
Roidy
No, ACH, she’s stupid. Cmyst, I’m sorry that you have to deal with her idiocy. I’m looking forward hearing about the $250,000 beautiful house you will be buying in two to three years with a monthly payment of $1200 that will cover mortgage, taxes, and insurance.
Could well be that d-i-l’s mother isn’t the one bringin’ home the bacon and didn’t get married because of her investment acumen.
Ft. Lauderdale Renter, this is new to you, the rudeness in soth FLA? We just left there (Pembroke Pines) in June after two years. Rudest people I’ve ever met and I have lived all over, coast to coast and even overseas and south Florida wins, hands down. Service is awful, that’s why Miami has failed to earn a coveted five star hotel rating, the service is too bad. All those expensive shi-shi hotels and none are 5 star. And the area won, for the second year in a row, an insurance company’s rating (Allstate maybe?) for rudest drivers! It was in the Herald. Plus all the political and police corruption, the failing schools, the sweltering weather, the nation’s highest rate of AIDS, illiteracy and child poverty, makes it just a nasty place to live. Those last few problems were for Miami-Dade county but I’m sure those problems stop at the Broward county line… Whenever I’d complain about the rudeness or anything else that was wrong with things in south Florida, I always heard the exact same two things: “it’s worse in Miami” and, “what are you going to do? It’s like that everywhere.” No, actually no, it’s not. The happiest my family has ever been thus far was the day we moved out. Did a little happy dance and popped champagne when we crossed the state line. Sorry that you are experiencing it Ft. L renter, but get used to it. Folks are nicer further north and on the west coast of FLA. Tough skin and good luck.
I could not agree with you more regarding the rudeness of people in South Florida. I lived in Ft. Lauderdale for two years and could not wait to get back to California. The absolute arrogance of the people in South Florida that were in any way connected to real estate was beyond belief. Talk about kharma, those people in particular are really going to reap what they sowed.
I concur. Coming from MD/DC area this was a real culture shock ofr me.
Think what we need is a good ole fashioned recession to make people appreciate their jobs (the ones that will still have one)….I’m sure you’ll notice a big difference in people’s attitude once it happens.
I live in So. Cal, where we are absolutely flooded with illegals that work in the low-end service sector (McDonalds, Burger King, etc), and I’ve always noticed that their attitude while serving me was, more often than not, less than pleasant.
Recently though, with all the threats coming out from the govt. regarding cracking down on illegals, it seems that their attitude has changed a bit. I even get smiles now when I order a whopper from the drive thru. It’s almost like a bell has gone off in their head, and they finally realize they are lucky to be super size-ing my order for me.
“everywhere I go the service is hostile, shockingly rude and really disturbing, …”
Here, in Mass, I see a lot of angry landscapers and contractors driving around aggressively in large, fancy pickup trucks.
Also, a few weeks ago, I saw a hand painted roadwork sign. In other words, one of the workers scrawled “Caution, Road Work Ahead” in spray paint on a piece of broken plywood. I haven’t seen that since 1992 or so. This time was just a local road, but in 1992 it was actually a marker for a temporary highway entrance somewhere along the NY/NJ border.
I’m right with you IamSam. I’ve been taking my recently-widowed mom to the bank lately. All she wanted to do was transfer my dad’s IRA to the bank and put it in a CD. They forced her to do the transfer through the bank’s “investment division” and tried to sell her a variable annuity (she’s almost 80 years old.) Finally after weeks of delays, we went back two days ago and completed two hours’ worth of paperwork to transfer the IRA out of the investment divison, back to the bank and into a CD. Everybody’s trying to screw customers out of fees and commissions.
This is a sort of follow up to the cost of living discussions we started yesterday. We have a really good handle on prices now thanks to multiple listing services. What we don’t really have is an appreciation for how wage movements are occurring across the nation. Let begin by looking at custodian and cashier jobs at universities, entry level starting wage
Custodians
Vanderbilt $8.60 (contact to increase to 10.18 in 1 yr)
U of Kentucky $8.78
U of SC $8.95
U of Kansas $10.00
U of Ok $8.35
Iowa St Univ $10.69
UCDavis $10.25
UCSB $10.03
Clerk/Cashier
Vanderbilt $8.70 (on-campus barista wage 8.70 to 11.20)
U of Kentucky $8.75
U of SC $ n/a
U of Kansas $8.74
U of Ok $7.80
Iowa St Univ $ n/a
UCDavis $8.75
UCSB $8.74
You’d be surprised to know that those were full-time and with pretty full benefit packages. The institution I really wanted to include was Stanford. I couldn’t find the wage data, I did find out that almost every service job except higher managers provided no benefits. Someone correct me if I’m mistaken.
Looks like Lawrence is the place to live. Not only do they have the highest entry-level wages, but I would bet they have the cheapest housing prices (might have some competition from U of OK and U of K).
Exactly though I have a preference for Iowa State. $10.69 hr in Ames will get you very far for little education and a willingness to work.
$1600 per month from which to pay Social Security, rent, utilities, food, clothing, transportation, etc. No wonder people can’t save.
Actually, Lawrence’s costs, while not expensive, are considerably more than nearby Topeka. Topeka has far more jobs and a new house in a nice neighborhood can be had for well under $200K.
There must be something that people want to steal, in Kansas.
Orange County, California buyers - do you want the house or not? Pricing to buy, from an Orange County, CA Realtor blog:
http://activerain.com/blogsview/184533/Orange-County-Home-Buyers
“Ultimately, the home seller and the home buyer are asking the same question—What’s the right price?…
The answer to the buyer’s question-”What do you think is the lowest price they’ll take for this house?” Simply, let’s look at the facts and write the best offer we can to get you that house. And, as your agent, may I ask you a question? Do you want to just make an offer or do you want to buy the house?”
AG,
Just got back from a trip to SoCal. In the last 8 months (when I left) the houses in Yorba Linda/Anaheim Hills have come down in asking prices, probably about $50-75K. Back in 2006 you couldn’t find a house for less than $600K, unless it was extremely small or outdated. Now there seem to be many of those, with MSN Realty showing 50 SFHs between $550-600K.
I doubt the old ($575,000 - $624,876) method of listing is really working, but old habits die hard. For those of you not in SoCal, the seller’s “wishing” price is the highest, while the teaser price is the lowest.
Too bad these sellers didn’t get their act together sooner, now it’s got to go a lot lower IMO.
Lip
“The answer to the buyer’s question-”What do you think is the lowest price they’ll take for this house?” Simply, let’s look at the facts and write the best offer we can to get you that house. And, as your agent, may I ask you a question? Do you want to just make an offer or do you want to buy the house?”
Does this real estate person remember their agency classes at all? Sounds like they’re counseling clients with the seller’s interest in mind.
“Your agent” means that he/she has a fiduciary relationship with the buyers. I assume they signed the disclosure form affirming that fact. i.e. I work for *you*.
Sounds like this agent is working for himself/herself or is too damn arrogant/lazy to present an offer they feel might get rejected. What a POS.
So-called “buyer’s agents” are paid a commission on the sales price and are therefore working for the seller. They are not paid by the buyer and have no fiduciary responsibility to the buyer.
Isn’t that obvious?
No, buyers agents are responsible to the buyer. Something goes wrong, they are on the hook, from the buyer. I don’t see how commision affects that. A contract is a contract.
AG — right:
“Then, ignoring all the facts will ask, ‘What do you think is the lowest price they’ll take for this house?’”
What facts, lady? Spit them out, right here and now in your column/blog post. Are you talking about asking price per square foot relative to both most-recent-sold price per square foot and estimated brand new and shiny cost per square foot on a teardown lot?
I really hate it when people refer, literally, to the unambiguous phrase “the facts” and then do not even define those facts, much less give exhibits.
“Do you want to just make an offer or do you want to buy the house?”
Uh, neither.
Sing it with me now… Real Estate doesn’t always go up!
Today’s Craigslist SD find:
-$121K since purchase for $650K in 2004, not counting all the ‘improvements’. Now listed at $529K. Bonus points on this one for managing to strip all the craft out of a craftsman interior in the name of ‘upgrades’ at the same time.
http://sandiego.craigslist.org/rfs/405672331.html
I’ve also heard of a scam that takes advantage of all the empty homes for sale. Lockboxes are being cut off and replaced with one belonging to the scammer, who then rents the house as a vacation rental for a bit.
And for the high end of the market, here’s another home in Rancho Santa Fe that’s now listed for $515K below the original $2,010,000 purchase price back in 2004.
http://sandiego.craigslist.org/rfs/405731799.html
It makes me sad when remodelers put the doors and various other craftsman stuff in Craig’s List Free section or list them for sale. I always think dude you ruined a cool house.
OMG tell me about it.
I found a complete wall of gorgeous 1910 built-in cabinets (11′w by 8′h) that some knob bonnet removed from an old building, hardwood, glass, and original hardware. I’d buy it in a hot second but I have zero place to store it or use it currently. If I owned, I be on my way to pick them up, cash in hand.
Too right. It makes me sick to see solid details and cabinetry stripped out for veneer and/or melamine. Painting over all the old woodwork and pulling out the built-ins to make these places seem bigger gets extra scorn points from me as well.
….Because you know that all of those original Crafsman features have been replaced with cheap “Meditterranean” features.
Those Craftman’s features were the best thing these little houses had going from them. Most of those houses are pretty small and on postage stamp lots. They are usually about 600 to 800 sq ft maybe 1000 and the lots are really small 2000 to 3000.
I love the part about designer concrete
Haha….they have a 24 hour hotline setup for interested parties. Someone should call in the middle of the night…wake up the realwhore, and find out about that “designer concrete”.
Who needs Comedy Central when we have post like this on this blog! LMAO
No eternal reward will forgive us now for wasting the dawn…
Texas Radio in the song refers to high powered Meskin’ stations during the 60’s, that blasted the southwest.
Ben’s flavor is more like ex-Texas Internet and the Blogbeat
http://www.youtube.com/watch?v=9WjVGchGbnE&mode=related&search=
God I love blaring that song with the windows down!!!!!
Some songs you just can’t play loud enough.
Some Realtors in the area are seeing a bump up in sales, and are looking to call a bottom here on the central coast. It’s all up from here (despite little to no sub-prime loan programs, decimated alt-a programs, and prime jumbo rates of around 7%-8%)!
Funny, I don’t recall them calling a “top” when sales first declined. Why not?
I’m not sure what’s happening in SLO County, but here in Santa Barbara County sales are real slow, both north and south county. Things are slow all over. Construction has taken a dive. The bottom to this thing is a couple of years away.
All B.S. A sale here, a sale there, pretty soon you’ve got a recession.
Comment by OK_Land_lord
2007-08-25 10:10:26
“Yes we all know its better in Canada and everyone is moving there right now.
”
Not unless you (and others) attain enough “points” as immigrants. What can you offer us?
Je parle francais et je voudrais habiter au Canada.
Am I in?
Actually, I think you do get extra points for speaking both of Canada’s official languages. Not as many for the second one as you do for the first one, but I think there is some additional help.
Having completed your education with several advanced degrees helps even more.
I believe you’re right on that. Would a prospective immigrant have to take some kind of language competency test to prove their fluency?
To practice in any province, I’d have to take another bar exam, and I just don’t have the energy to relearn everything I didn’t learn in school the first time around.
We stand on guard for Thee!!!!
Hockey fan?
Too much HNIC.
Yes, but if you are an Anti-American, Arab terrorist who celebrated on Sept. 11, you get a free pass to Canada. Then you can later cross the border and earn your righteous place with God. Please, get real.
Hate to say this as a “Canadian”, but you probably are much closer to the truth than you think. This country allows so many uneducated and “refugee” types in under the guise of being politically correct that it is no longer the country i grew up in by at least a country mile. In the cities there is so much gang related crime that a lot of “normal” people are insecure and the typical criminal sentence is little if anything with double time off for days served in remand. Sorry if this too OT but i do think it relevant to the overall discussion.
NEW BUILD HOMES RANGING FROM 954sqft TO 2144sqft STARTING AT $114,990!
http://phoenix.craigslist.org/rfs/405730319.html
New Home Builders are going to be going as low as they have to. This will absolutely kill (already has in fact) the REO market in the Phoenix area. Many are listed here for less than $100 per sq ft which will draw many SoCal residents to our area. This isn’t a highly desired area, but it’s not that far from Phoenix.
Lip
Yuck, but could HBs flood the market with this kind of stuff nationwide - just to keep alive? One HBBer said not long ago that housing would eventually become a commodity as a result of this bust. Your link makes that seem not so far fetched. One thing’s for certain - no need for an agent to sell/buy houses priced like those.
My point was the HBs can go a lot lower than the homeowners. A lot of them have the land, the infrastructure in, so they’ll do what they do. Also, with So Cal so close, people leaving find this fairly attractive is the past history tells us anything. In the OC you can look at similar sizes, 40 years older, for $550k or more.
“…the HBs can go a lot lower than the homeowners…”
As they say, “You ain’t heard the half of it.” Homebuilders made huge profits during the boom, a fact that will not be volunteered. Between their ability to absorb a cut in profit margin, the reduction in cost of most materials and in virtually all labor, and the fire-sale reduction in land prices, I believe that new homes will continue to destroy the hopes of wishful used-home sellers in any area of the US that still has buildable land available. As in, DESTROY. Major pain is coming soon, to a town near you.
Well I wish the friggin banks would get with the program and start off loading their REOs! The bastards apparently refuse to play ball until forced to do so. The second that the REOs hit the MLS in any significant number it is game,set,match for the RE industry, including the builders!
geez. those homes are so ugly its unbelieveable. there’s absolutely no thought put into the street appearance of the house - just one big ugly garage door.
These structures are also known as garages with an attach house.
I believe it’s fair to show people from out of state where Maricopa City actually is. IMHO, it hardly has much to do with Phoenix… Its location is about as bad as Queen Creek’s, if not worse, so it’s not that surprising that houses (particularly specs) would cost as much as they do because there’re in the middle of nowhere.
http://www.hometownlocator.com/City/Maricopa-Arizona.cfm
Report from the Virginia suburbs of Washington, D.C.:
Check out this street of recently built townhouses littered with short sales and foreclosures in Falls Church, VA. Here are all of the units currently for sale:
3506 ELLERY CIR - $604,900: “$65k price improvement**bank owned**end unit*never occupied**” [Purchased for $717,815 in 2006.]
3576 ELLERY CIR - $580,000: “Don’t delay… Price s/l/a/s/h/e/d… A whopping $39,000… Bank owner wants this home sold now!!!” [Purchased for $700,000 in 2005.]
3571 ELLERY CIR - $629,500: “Bank-0wned end unit townhouse w/1 car garage” [Purchased for $656,100 in 2005, then for $712,000 in 2006.]
3507 ELLERY CIR - $629,900: “Brand new edgemont ryan luxury end unit townhome!” [Purchased for $655,000 in 2006.]
3500 ELLERY CIR - $620,000: “*make offer*lender will ratify contract*” [Purchased for $693,000 in 2006.]
3553 ELLERY CIR - $519,900: “priced to sell! *bank foreclosure*” [Purchased for $691,000 in 2005. The lowest priced unit in the development. Remember, lowest price sells first and sets comps.]
3559 ELLERY CIR - $659,900: “Great opportunity to own a property in falls church with a very exciting price.” [Purchased for $652,000 in 2005. This seller obviously hasn't gotten the memo that the bubble is over. With the identical unit at 3553 above asking $519,900, this delusional seller hasn't a hope in the world.]
3565 ELLERY CIR - $699,000: “Just plain gorgeous!!!” [Purchased for $673,000 in 2005. Oops, make that two sellers that didn't get the memo.]
Of the 8 units currently for sale, 5 of them are foreclosures or short sales and 6 of them are selling for substantially less than the last sales price.
It’s interesting to note that even if a buyer were interested at these reduced-but-still-overinflated prices, he would have difficulty obtaining financing due to the high number of foreclosures in the neighborhood.
I’d guess that their prices will ultimately drop to the low 200’s by the time this bubble is fully deflated. As shocking as that sounds (to those still in denial, at least), that will bring prices back in line with their historical relationship with fundamentals such as rents.
Holy Mole’
There is a development near that is going to explode like that in about 18 mos. The first shockwaves are now being felt as these people all signed contracts in late 05 or 06. Prices for the same models are down 65k to 350k as of today.
That’s way inside The Beltway, boys and girls, and the corner of 7 (Leesburg Pike) and 244 (Columbia Pike). This aint no Manassas or far-out exurb!
“and the” = “at the”
That area is not so good actually. It’s right near Culmore and Seven Corners.
I wouldn’t take the chance of living there.
Pimmit Hills is also inside the beltway and I wouldn’t live there either.
There are pockets of bad neighborhoods inside the beltway that resemble Herndon and Sterling. Bad news is this one.
My prediction: they will sit b/c of the location and because of the current lending environment and eventually go for less than 150k after the builder goes belly-up. Unless the builder can afford to rent at current rents in the area (not the best) and eat the loss for five years.
Here’s the list for 3565 Ellery:
http://tinyurl.com/2582y4
typical townhouse - should and will go lower than 250k
Case-Schiller same-house house price index data (XL File):
http://www2.standardandpoors.com/portal/site/sp/en/us/page.article/0,0,0,0,1145923002722.html
San Diego hit its peak in hit it’s peak in November 2005.
Los Angeles hit its peak in September 2006.
San Francisco hit its peak in May 2006.
Miami hit its peak in December 2006.
Phoenix hit its peak in June 2006.
Tampa hit its peak in July 2006.
Boston hit its peak in September 2005.
Las Vegas hit its peak in August 2006.
New York hit its peak in April 2006.
Seattle - no peak as of May 2007.
Portland - no peak as of May 2007.
(Standard disclaimers apply, look up Case-Schiller methodology to better understand the data):
http://tinyurl.com/3cz3kg
Based upon my experience in Pullman, WA I’m calling a May 2007 peak for the Pacific Northwest. That is when our market suddenly ground to a halt so I’m guessing it is a regional thing.
My guess is that the is early next year. We are finally seeing some of the older condos (’80s) reduce in asking prices. SFH, especially on east side of king county, continue to do well.
Although, i am starting to see a lot of rental postings on bulletin boards at work - which we really did not see the last few years.
Here’s an interesting graphic from the NYT. It shows Seattle and Portland off-peak already, in inflation-adjusted terms.
Missoula may be just past the peak. In July, median home prices were 2% less than they were in June. They were still a little higher than last July, but almost nothing is moving. It will be interesting to see how the August numbers look. I expect the median to fall quite a bit b/c of cutback on jumbo loans.
Here’s the link to the NYT graphic. http://www.nytimes.com/interactive/2007/08/25/business/20070826_HOUSING_GRAPHIC.html#
See also the related story http://www.nytimes.com/2007/08/26/business/26housing.html?_r=1&hp&oref=slogin
I’m not sure you’re reading the NY Times chart correctly. From what I can tell, the RATE of price increase in Portland and Seattle already peaked and has begun to decline, but ACTUAL house prices have not begun to decline.
A price decline is indicated when the rate of increase drops below 0%, and that hasn’t happened yet in PDX or SEA.
But maybe I’m reading the chart wrong.
“From what I can tell, the RATE of price increase”
The FAQ on Standard and Poor’s web site says that the index is a measure of house prices, not deltas (changes).
And now, digging deeper, the methodology statement says it *is* the change (delta) in price…or seems to imply it. However, if you look at data for Los Angeles in the late 80’s/early 90s, during the last downturn, you can see that the index is positive for the whole time, but takes a dip to “less possitive” at around the time of the last housing recession. The index starts heading down (while remaining positive) in 1990, and bottoms out in 1996/1997 or so. Now I *know* that house prices went down in LA at this time, so I am forced to conclude that since the index didn’t go negative during this time, but *does* show a ‘dip’, the index measures relative house prices (relative to what, I’m not sure), and not changes in house prices.
From what I can tell, all the NY Times is doing is taking the C-S data (a measure of house prices) and calculating an annual rate of median price growth (positive or negative) for each of the 19 housing markets (adjusted for inflation). So the NY Times chart is displaying housing price changes relative to the previous year.
I don’t think the C-S index itself measures relative house prices (rates of change), it measures absolute house prices.
According to the NY Times chart, 15 surveyed housing markets are experiencing NEGATIVE price growth: SF, LA, SD, PHX, LV, Minneapolis, Chicago, Detroit, Cleveland, Boston, NYC, DC, Denver, Tampa, and Miami.
4 of the 19 cities surveyed are still experiencing price growth: Portland, Seattle, Charlotte and Atlanta. (Although Atlanta’s price growth is nearing zero).
These four cities are definitely on the backslope of price increases (rates of annual price increases have topped out).
Interestingly, according to the chart, Portland and Atlanta are the only ones of the 19 cities that have NOT experienced price declines during the years in which data is available. (PDX data goes back to 1988, ATL data goes back to 1992.)
It is interesting to note that the 20+% of annual increase in Portland house prices reached in 06 is only slightly higher than the 20+% rate of increase reached in 1990. Prices didn’t go negative at any point following the peak in 1990.
If price growth does go negative this time around, it will be a historical occasion. I know that if prices do go down, especially in the more desirable close-in areas, there are a lot of people my age (late 20s) itching to buy in. We’ll see if they’re able to get mortgages, though. If they can’t get mortgages, they’ll have to keep renting.
Right now rental rates are going up, and rental markets are tightening up, especially in close-in neighborhoods. The cost to rent a house similar to ours (bought in Dec 04, fixed 30 yr) is about $100 less per month than our PITI.
Signs of contagion? “Some of Canada’s biggest subprime mortgage lenders are pulling out of areas of the business, at least temporarily, indicating that problems in the commercial paper market have spilled over to affect some Canadian consumers.”
“Jim Murphy, CEO of the Canadian Association of Accredited Mortgage Professionals, said ‘this really has nothing to do with the Canadian real estate market.’”
http://tinyurl.com/yp9wkv
Liquidity crunch hits T-bill market in Canada…
Ewen Mackenzie has been trading securities for nearly three decades, half of that as head of his Thornhill, Ont., investment firm. And he’s always been able to buy short-term government treasury bills — until Friday.
Like scores of other fixed-income investors, Mr. Mackenzie was looking to park money in one of the safest spots in Canada — government-backed bills. But when he called one of the Big Five banks Friday to place about $250,000 in 30-day and 90-day T-bills, he was told they weren’t available.
The experience illustrates just how rattled investors are. Their aversion to the perceived risk of anything connected with non-bank asset-backed commercial paper (ABCP) means many are fleeing money market funds altogether for the haven of government-backed securities.
“I’ve been in this business for 28 years and I’ve never heard of anything like that before,” said Mr. Mackenzie, who runs Ewen Mackenzie Investment Advisors Ltd. “I can only surmise that individual investors are bailing out of money market funds and buying Treasury bills and maybe they’ve bought them all up.”
Um…isn’t asset backed commerical paper tied to mortgages?
Now that the red hot summer sales season is sliding into the lukewarm fall sales season, SD’s ZipRealty.com inventory of SFRs+Condos appears to be steadily pulling away from the psychologically-important 20,000 level. The inventory growth rate has apparently picked up again since the credit crunch of early August.
“Your search has returned the first 200 of 20734 homes”
I’ve noticed that it’s really been picking up lately too. Inventory has been growing by 50 to 100 homes in the last week. Are they rushing for the exits now?
Considering how much there is to chose from I’m blown away by sellers wishing prices. For instance this house http://tinyurl.com/yw4te6 Why would anyone pay $675,000 for this dated 50’s house in Serra Mesa? I’ve seen nicer houses on bigger lots in Penaquitos for less and it’s a much nicer, newer neighborhood with better schools. They have maintained the home which is better than half of the homeowners in Serra Mesa but it is too big and overimproved for the neighborhood. $675k in a neighborhood of $400k to $500k houses isn’t going to fly in a down market. The list of 23 *cough, choke* improvements cracked me up. Do they actually think that huge ugly bar taking up half the living room is a special feature I’d like to pay more money for? And seriously the dimmer switch and light fixture, is that even worth mentioning?
Just returned from a trip to Bozeman, MT and have an update:
14 residential MLS RE transactions in the month of July for Bozeman (historically the biggest RE month of the year). 1106 properties on the MLS for Bozeman, or 6.5 years of inventory.
These homes sold at an average of 20% below list price.
Major housing development on S 19th went belly up.
New developments still going in all over the valley, but not much home building as far as I could see (grading, roads, streetlights, a couple of model homes, then nothing). Perhaps those that live in Bozeman could fill in with more detail as I couldn’t drive every road.
I spent 30 min in a traffic jam Th AM trying to get from Belgrade to Four Corners–so much for that small town quality of life.
EVERYONE I talked to acknowledged that Bozeman RE had crashed. But… their neighborhood/home was unique and therefore immune.
So far there has not been ANY coverage of this train wreck by the Bozeman Chronicle. This paper publishes police reports of public urination, but couldn’t find the space to mention the first big RE development bankruptcy since the 1980’s!
Realty Times still categorizes Gallatin Valley as a “sellers market” based upon a rising median price.
All of this happened before the August credit crunch. Given the extent to which the local economy is dependent upon residential RE construction/sales, Bozeman is going to completely implode over the next couple of years. Foreclosures, bankruptcy, vacant homes, shops/eateries will close, collapsing municiple services, unemployment and a declining population. Bozeman has just experienced an unimaginable boom and now this little city will experience an unimaginable bust.
“This paper publishes police reports of public urination, but couldn’t find the space to mention the first big RE development bankruptcy since the 1980’s!”
Ghd,
It’s always good to know what a local newspaper considers important.
Wow, GHD. Interesting! We in Missoula are getting no coverage either. We’ve had terrible fires, but I have a hunch that’s not the only reason.
I know a group of people that have actually been calling and harrassing the Bozeman Chronicle, trying to get them to cover the housing market collapse–but no luck to date. The “Comical” is so dependent upon RE advertising that they refuse to cover the down turn. A year from now there won’t be any RE advertising, so then perhaps we’ll seem some journalism from the local paper.
The Missoulian is hearing from folks, too, but no go. I think our best chance is the Independent doing one of their no-holds-barred-exposes.
Remember the article from Whitefish that Ben posted last month — the one that ended with a realtor or someone talking about a couple of bankruptcy-related suicides? The Missoulian ran part of that article — the optimistic bits, of course. No mention of the suicides.
Even without much coverage, there is a buzz about it. One of my colleagues told me yesterday that her friend, a realtor, has had one deal fall apart twice b/c of funding. I have heard similar stories from a mortgage broker.
In January, the story was that everything over $300K was taking a long time to sell. Now they talk about $200-250.
And, oh yes, in 2005 Countrywide was the #1 lender in Missoula County, followed by Wells Fargo. Last month, when I asked a loan officer at WF how much of their lending would be affected by no longer writing subprime, he said — most of it.
The other big lenders who’ve tanked or are on their way down (New Century, American Home Mortgage, etc etc) all had a big part of the local market.
If you have access to ###s for Missoula, I’d love to know them. All I know is from MOR, which says July median was 2% down from June.
Sorry, I don’t have any connections in Missoula. At least the fire smoke had cleared when I drove through last Wednesday.
Yes, we’re having gorgeous weather now — a perfect day for open houses.
Yup. I bought my truck in Bozeman a few years back and the sales manager remarked about the tremendous growth but also that there weren’t enough jobs outside RE to support it long term. He had been in the Gallatin Valley all his life and experienced the previous downturn.
My biggest gripe with the real estate boom has been how it has completely robbed the soul of once small and charming communities. Bozeman is no exception, once a nice little cow town, now just another hollow city with financial problems. Sigh.
Here’s an article on the Flathead Valley in MT. http://www.newwest.net/index.php/city/article/montana_tip_toes_around_housing_lull/C396/L396/
There’s no bubble there. Just 23-27 months of inventory.
Montana sales only down 7.1% ? That certainly isn’t the case for the Gallatin Valley so the rest of the state must be making up the difference?
It does seem that Missoula and the Flathead region are lagging the Bozeman downturn. But who the heck can trust NAR statistics?
Canucks are a delusional lot.. They think they are something they are not.. Deep down they have a serious inferiority complex vis-a-vis the US.. They are much more racist [but not open about it].. They keep spouting some stuff about multiculturalism but do not hire non-whites or give them equal treatment.. Look at the number of non-whites in senior management, good paying jobs and businesses in the USA.. Compare that to canada.. Rigged and fake UN statistics does not fool anyone.. The only saving grace of canadian system is reasonably good taxpayer funded healthcare.. But then all western countries other than the US have it..
These people do not even have good paying jobs for their own, that is why so many of them move to the US.. Read some real statistics..
Over 80% of canadian trade is with the USA, and it is mostly natural resouces and stuff made by US owned plants.. If in this recession THE US economy gets it in the knees, the canuck economy will get it in the balls - with a pair of rusty shears.. It will take a 6-9 month lag, but they are in for this particular ‘elective surgery’ [could not resist the pun]
And mortage fraud, stated income loans, negative amortization, 40 year mortgages are alive and well in canada. And yes, the 30 years mortgage rates adjust every five years here.. Even for almost all prime buyers..
Hope you canucks enjoy this elective surgery.. You will be after china, uk,
RE: If in this recession THE US economy gets it in the knees, the canuck economy will get it in the balls - with a pair of rusty shears..
I take it this is why a Canadian Loonie is now worth more than a US greenback when only 2 years ago it was worth 60 cents ?
I take it this is why a Canadian Loonie is now worth more than a US greenback when only 2 years ago it was worth 60 cents ?
BINGO.
“Over 80% of canadian trade is with the USA, and it is mostly natural resouces…”
Gosh, poor Canada, with all that oil, coal, uranium, gold, nickel, etc. Whatever WILL they do with it all if we don’t buy it. Wait… is it possible that… other countries might want to buy this stuff… nah…
The fools. Why don’t they move to importing most of their manufactured goods and natural resources like we in the US, in exchange for CDOs. If they then cut their health care, they would have enough cash to start a couple of pointless wars, too.
Canucks are a delusional lot.. They think they are something they are not.. Deep down they have a serious inferiority complex vis-a-vis the US.. They are much more racist [but not open about it].. They keep spouting some stuff about multiculturalism but do not hire non-whites or give them equal treatment.. Look at the number of non-whites in senior management, good paying jobs and businesses in the USA.. Compare that to canada.. Rigged and fake UN statistics does not fool anyone.. The only saving grace of canadian system is reasonably good taxpayer funded healthcare.. But then all western countries other than the US have it..
These people do not even have good paying jobs for their own, that is why so many of them move to the US.. Read some real statistics..
Over 80% of canadian trade is with the USA, and it is mostly natural resouces and stuff made by US owned plants.. If in this recession THE US economy gets it in the knees, the canuck economy will get it in the balls - with a pair of rusty shears.. It will take a 6-9 month lag, but they are in for this particular ‘elective surgery’ [could not resist the pun]
And mortage fraud, stated income loans, negative amortization, 40 year mortgages are alive and well in canada. And yes, the 30 years mortgage rates adjust every five years here.. Even for almost all prime buyers..
Hope you canucks enjoy this elective surgery.. You will be after china, uk,
My wife was born in Montreal. Her first language is French. She is the biggest bigot I know. She also has a very foul mouth. 5 foot 105 lb blonde.
Go figure.
She also has a very foul mouth. 5 foot 105 lb blonde.
You musta got an Ottawa half breed.
All the French Canadian babes I ever ran with were dark complexioned brunettes with long legs and skinny azzes.
I am one of those Canucks who moved to the US for a job. Shortly after I arrived I was having dinner with a member of the consular staff who mentioned an interesting statistic. 75% of Canadian immigrants to the US return to Canada within 7 years. Me? That number turns out to be spot on as I am actively job hunting in Canada.
Many parts of the media have become dependent on the bubble -local newspapers for real estate and banking lending.
Subprime lenders are quoted as spending as little as $300 million to $600 every six months on internet advertising . These adds are a fulltime presence on my computer screen. so at the high end of these estimates $1.2 billion annaully and for the last few years the fastest growing advertiser
http://tinyurl.com/2posat
Late post. The BBC does a better job reporting Milwaukee’s HB then the Journal Sentinel!!!
“unconscionable contracts” - interesting idea.
I wonder how successful these lawsuits will become?
Completely anecdotal report from Las Vegas:
For the past several months, I’ve tried to keep an eye on neighborhoods for For Sale signs and such, and I’ve been a little surprised. There didn’t appear to be as many existing homes for sale as I had expected.
But over the last month, wow! For Sale signs all over the place, and I’ve even seen some Open House signs in the middle of the week. I’ve seen several houses with realty signs out front, and what appears to be foreclosure notices on the front door.
The S is hitting the fan, finally. Of course, the local newspaper here is ignoring the story as best it can. It prints some of the bad numbers, because it’s obligated to, but really doesn’t delve too deeply into it. It’s not interviewing anyone who’s on the cusp of foreclosure. They could do a whole section worth of stories if they wanted, but I’m sure they feel that would be the death knell for the market and they’d cut off a lot of RE advertising income. So they just continue to skim along the surface of the story.
– Judge Smales
“The man worthwhile, is the man who can smile, when his shorts are too tight in the seat”
Here in our community in Colorado, we noticed that there seemed to be less and less “Open House” signs lately. We thought maybe people pulled out of the market. We were starting to get a little disillusioned thinking that maybe our market wasn’t as oversaturated as it had been and that sales were picking up. But alas… I was reading our community newsletter and in the back there was a tiny little article that talked about the crackdown on people posting signs.. any kind of sign: singles Web sites, “We buy houses”, lost pets (that one made me sad… how are people supposed to get their pets back?!) and of course Open House and For Sale signs!! The HOA goes around and picks them up and takes them away. I had to laugh.
Hartford Courant prints sales by town in Friday’s paper. This past week a SHARP drop in sales in my town. Normally 10-15+ transactions. There were 3 or 4.
“Je parle francais et je voudrais habiter au Canada.
Am I in?”
Peut-etre.
“Deep down they have a serious inferiority complex vis-a-vis the US.”
Not quite, pal. You’re off your rocker.
Do you people know how much you are despised throughout the world?
US citizen and have no illusions about how much the rest of the world hates us.
“Not quite, pal…Do you people know how much you are despised throughout the world?”
If you *yourself* don’t have an inferiority complex, why would you respond with “Do you people know how much you are despised throughout the world”? Especially when a good deal of the world hates our government, but not the US people.
Yes, there are some jerks here in the US hurling concepts of superiority because they themselves don’t feel secure in themselves. However, when you do the same, it makes you look insecure as well.
I know I’m going to get flamed for this, but I’m reminded of the “rivalry” between the San Francisco bay Area and Los Angeles. I’ve lived in both areas for quite a while, and I didn’t know of the “rivalry” until I moved to SF. People in SF would bad mouth LA, say that they hated visiting there, that everyone there was ‘plastic’ and ‘fake’, blah blah blah. However, I have never met anyone (repeat, anyone) living in LA that has badmouthed SF. Now maybe SF is so perfect that there is nothing bad to say about it (*ahem*), but if that were the case, why would people in SF (blanket statement, I know) feel the need to badmouth Los Angeles so often? It always came across to me as a sense of insecurity.
In contrast, San Diego, a much smaller city than either of them, seems secure in itself, with no need to badmouth either.
In a way, the fixation with blaming the US for everything (including the Cambodian genocide under Pol Pot, etc.) seems less like trying to fix problems in the world, and more like trying to take the big guy down and wipe the (perceived) smug smile off of his face).
Canadians are generally treated very kindly in the US. We joke a little about our cousins to the north but essentially consider them to have the same roots as us and common interest (well that is a strech for some of the Quebecers). I find the level of badmouth in the other direction more severe, especially if I am in a group that forgets I am from the US. It does seem sophomoric as our paths are so intertwined.
Isn’t it obvious that the Loonie is up because mining products, oil and lumber have been part of this bubble? Things do not go toward the moon forever. Canadian debt is about on par with the US I think.
The future of the Canadian economy and the Real Estate prices vs the US make for entertaining discussion between me and my Canadian fiance. Though they are sure they are immune to our troubles, I am sure they will hate us for whatever happens.
Hey Snick, get a grip and look in the mirror a bit. You may not like what you see. Canada is just a hodge podge of small regions governed by a Federal Government that does what is wants and plays one region off against the other. Other than that none of the regions have anything in common with each other and in many cases people from one region hate people from other regions. Example - Eastern people hate Alberta; Albertans hate Eastern people, etc. etc. and so it was and so it always will be and BTW i am a “Canadian” and i do live in Canada.
Anecdotal evidence from Northern Virginia of a different kind.
I have been interested in trading in my CRV and purchasing a new car as I am at almost 100k miles. Hondas have a great reputation and I have many friends who have a variety of them that are chugging along reliably at 150k plus with no worries. Mine was a bit of a lemon but I had purchased an extended warranty with Geico that took care of a huge amount of repairs to the tune of 7k. My cut has been about 1.5k. So it is a lemon. I have a Marine mechanic friend who looked it over and said that the worst for this car is past so I’ve been this way and that way about whether or not to act now.
The reason I dove in the haggling pool is because of recent car sales reports that led me to believe that someone with a good credit score could work a pretty good deal.
The dealers are not budging too much yet but they are budging some. One Honda dealer had a separate lot with 2007 Pilots parked there they took me to where I could choose the color and package I wanted if I had chose to buy from them.
This has been going on for over a month and I loath haggling, but I’ve done my research and could pay for a car with cash if I wanted too but given what’s going on now in the world I’ve been struggling with waiting and picking up a car for much less knowing I will never get much for my CRV in the future.
So today I give one dealer a visit as my last visit. I’ve worked them all against one and other and I meet a nice gentleman who hails from the Carribbean Islands. He showed me every angle and difference of three different vehicles and was very nice and not too aggressive. His wife is a medical student doing her rotations and he is a car salesman and D.J.s at night at reggee clubs so they are doing o.k.
We are driving around and I tell him that my goal is to get a reliable vehicle with a fair value for my trade at the lowest price. I tell him all about the coming difficulties including housing and what not. I mention the banking issues of the last week.
Surprisingly, probably because of his personal situation, he states, “I think you are right there is definitely a recession coming if it isn’t already here.” I say, “Sales are bad?” He nodded his head with a solemn look.
So, unless the dealers get a bit more real I’m going to keep the CRV until it gives up the ghost. My Marine friend pointed me to a new mechanic who specializes in foriegn cars who I have met with. I told him he will have a loyal customer and I will provide a lot of referrals as long as he tells me only what NEEDS to be done to the car.
If I do have to buy a car in the short term, I’ll buy it from the Carribbean car salesman. At least the guy wasn’t talking any BS.
Friend of mine got a new job recently, and is back in the saddle, as it were, making more income than ever. So, he and a friend decide to go car shopping. They wanted to check out the new Lexus. I’m not sure exactly what he called it, but it was something like a limited series model in the 80K range.
Anyway, he said they had no intention of buy it, more they wanted to check the car out and lead-on the salesperson abit. So, after they got done looking at it and kicking the tires, they just said ‘thanks’ and started for the door.
Salesperson, immediately suggests a 10K drop in price, right off the top! Over 15% without batting an eye. My friend says, this model NEVER sells for less than full sticker, Lexus would have not considered such a reproach to their reputation in the past.
That just about sez volumes.
A Lexus is nothing more than a cheap Toyota. Enough said.
Used, Lexus’ are often cheaper than their Toyota counterparts. The perception is that you will spend more for parts on that used Lexus, but the truth is you can often use the Toyota parts in your Lexus anyway.
We almost bought the Lexus version of our truck that way, although every one we looked at had ugly gold trim.
is this a big dealer? alot of times companies give dealers rebates for moving so many cars. so while they might lose money on the sale they can make it up in the rebate.
but also wow
…’until it gives up the ghost’. I thought we only say that in German, ‘bis er den Geist aufgibt’?. Good article.
It is my Catholicism that retains that phrase from the Irish in my family mostly. My Grandmother, who lived through the Depression and her stories of that so that ring true in my mind today, always used that phrase and explained it as it related to various family stories.
Please no flaming my religion, that’s not what this blog is about. I was just responding to sagesse.
Other anecdotal evidence from this area: rents are coming down.
One of my best friends is a realtor of 20+ years. He’s seen the ups and downs. When I sold my house in a rapidly deteriorating neighborhood despite rising prices (clue) I had been randomly going to open houses on my own. This was early ‘05. I received the same old song from the showing realtors. “With your credit and equity we could put you into a payment and you could buy a house. Real estate never goes down in value.” I turned to my friend and he was a ‘real’ realtor and stated that he was not sure prices would rise and I had to consider being able to afford the loan on an 8%+ fixed. I could have done that but look at what has occurred since then.
What a mess. I would have been able to refinance b/c of the large downpayment, but how many people are out there in that situation? Most people I know are not like that.
I have been following rents b/c my lease is due in December and they are coming down by 100 pm clips for the last two months for comparible SFHs. Of course there are other comparibles that have huge asking prices but they won’t rent at that.
This is a massive mess. And unless the gov’t can inflate the bubble this entire thing is going to explode.
Again, I find myself reflecting on my old GM who was 68 when I was born. To this day I miss her even though she has been gone from me for 20 years. She and my parents imparted more wisdom that will be useful in this situation than anyone in my life.
nova
“Please no flaming my religion, that’s not what this blog is about. I was just responding to sagesse.”
We don’t flame anyone for their religious beliefs here…. unless your beliefs include burying a saint’s statue in your front yard so your overpriced house will sell.
Lesson #1: Haggle first–don’t mention the trade-in until the deal’s done. Then, it’s “Oh, by the way, I have this lovely Honda CRV that I was planning on selling to my nephew blah-blah-blah.”
Don’t give them an edge. They love to do the shell game thing with the real numbers of new car vs. trade-in. Don’t fall for it.
I just saw hundreds of Pulte signs dotting the streets in Carlsbad. They announce 50K Savings. So low 800’s take away 50K equals 750K
Whatcom County foreclosures have doubled in the past year. Interestingly, most of the doubling has occured in just the past 2 months.
And now for some really great news: An actual, livable, beautiful home in an good (by B’ham standards) ‘hood came on the market last week for 389K!! This is approximately 200K less than it would have sold for in the past couple years. In fact, it was such a smashing price (by bubble standards) that it was sold in one day. I fully expect the same type of home to go down to 180K, give or take, by the time this shakes out.
In other news, friends in B’ham and Seattle still chasing the market down, no bites for their ‘05/’06 priced homes. The Seattle 630K is now down to 550K. No way they’ll sell at that price. The B’ham 360K now down to 325K. Again, no way it’ll sell, especially when that beaut around the corner that’s 3 x the size and structurally sounder just went for 389K.
Observation from Kirkland, WA. Last night I was driving along Juanita Drive between St. Edward Park and downtown Kirkland (hadn’t driven this stretch in at least a year) and could NOT believe the number of lakefront properties for sale. These are high-priced properties! For those of you not familiar with Seattle, numerous Microsofties live in this particular area. Gotta go back soon during the day and take some pics of all of the “For Sale” signs for the HBB photo gallery.
Sad day. Just got a call from a friend I haven’t spoken to in over 5 years. Her husband, a hard-working construction worker, committed suicide today. He had been depressed over credit card collection agencies calling, no work, and foreclosure on his three properties. Is this what we’ve come to? I imagine that we’ll soon see some pharmaceutical company advertising mood elevators on TV and a rush of people to their doctors to see if some mind numbing drug is right for them. God bless all those who are in financial pain….
Pills won’t work.
That’s sad…he had the morals to care about his mistakes enough to be bummed about it, and it killed him. Meanwhile, those with no morals go bankrupt and walk away…tra la la.
What a shame. If only he could have stepped back and reassessed. It’s never that bad. Life goes on even after you’ve hit rock bottom. I know.
Moscow has come out on top for the second year being 34 percent more expensive to live in then New York City.
Top 10 Most Expensive Cities in the World For 2007
Moscow
London
Seoul
Tokyo
Hong Kong
Copenhagen
Geneva
Osaka
Zurich
Oslo
New York City came in at 15th spot, down from 10th last year. Los Angeles fell to 42nd spot, and San Francisco was 54th. The weak dollar contributed to the rapid moves down for United States cities.
http://www.therealestatebloggers.com/
Russia is awash in oil money…a billionaire there recently tried to buy a B-52 bomber from American servicemen because it was “such a cool plane”. That’s also how the Russians can resume the Soviet era long range bomber patrols (aimed at the US) that they had abandoned after the Soviet collapse. Fun stuff.
Here are my local market observations:
Just came back from Vermont. I saw fewer for sale signs than I did earlier in the year. Also far fewer For Rent signs. This was observed along Rt 14 from around Exit 3 off of 89, up through Barre. Back in the end of June I saw more for rent signs than I could ever remember in the ten years or so that I’ve been vacationing there.
I’ve noticed a trend in both NY and MA where the seller sets up a web site for their house, using the address as the url (i.e. 1maplestreet.com).
In my neighborhood in MA, there are relatively few homes for sale, in cheaper towns like Billerica, there is a ton of stuff. I noticed a rash of open houses today while doing errands.
Local market observation:
Spent some time in Ensenada, Mexico this past week. Hadn’t been down there since 2003. Wow! High-rise condo’s with “model now open” signs all down the coast. On the opposite side of the freeway from the ocean, all the land is graded into lots and the sales offices are open for the new SFR developments. All the real estate billboards and prices are in English only.
There were zero high rise buildings in this part of baja in 2003. This is all new construction. The architecture of the buildings is odd, ugly, and will not age well: The size of the buildings is like nothing I have seen anywhere except Las Vegas (and in photographs of Chinese apartment buildings). The buildings have sort of a Vegas-meets the Soviet Union sort of design. Enormous, built of concrete, there are windows facing the ocean but just very small - like 2′x2′ windows on the back side of the concrete buildings.
It looks like this construction was late to the party since it appears that they just completed most of them but they have no signs of life. Others are partially completed and many more - in some areas almost as far as the eye can see - have the ground graded and the sales office built but no further construction.
Most of the completed or partially completed buildings were around Tijuana and Rosarita. Down in Ensenada itself there were signs of groundbreaking on two highrises. Maybe they may stop construction on these due to the recent credit crunch.
There is a huge brand new Orange County style Home Depot ancored shopping center on the drive along the main rout South out of Ensenada (on the way to the Bufadora). These are large/”shiney and impressive” versions of each of these chain stores even by US upscale suburb/exurb standards.
The prices on the highest-end luxury condos (Trump Tijuana - not a joke) start in the mid-$300k’s for studio/1 br. I saw SFR’s starting in the mid-$200k’s and some signs for more basic condo’s starting as low as the low-mid-$100k’s.
One “bubble moment” that I won’t soon forget was seeing Trump’s big head on a billboard looming above the beggars and trinket sellers during the 1 1/2 hour wait in traffic to cross the Tijuana border back to the US yesterday.
The hubris of the baby boomers to think that they can be mini-south-of-the-border Trumps. Remember, in Mexico property should be discounted ($300k studios my a**!!!) because in addition to the regular risks of buying US property - you also get additional risks of even greater lack of consumer protection.
Local market observation:
Spent some time in Ensenada, Mexico this past week. Hadn’t been down there since 2003. Wow! High-rise condo’s with “model now open” signs all down the coast. On the opposite side of the freeway from the ocean, all the land is graded into lots and the sales offices are open for the new SFR developments. All the real estate billboards and prices are in English only.
There were zero high rise buildings in this part of baja in 2003. This is all new construction. The architecture of the buildings is odd, ugly, and will not age well: The size of the buildings is like nothing I have seen anywhere except Las Vegas (and in photographs of Chinese apartment buildings). The buildings have sort of a Vegas-meets the Soviet Union sort of design. Enormous, built of concrete, there are windows facing the ocean but just very small - like 2′x2′ windows on the back side of the concrete buildings.
It looks like this construction was late to the party since it appears that they just completed most of them but they have no signs of life. Others are partially completed and many more - in some areas almost as far as the eye can see - have the ground graded and the sales office built but no further construction.
Most of the completed or partially completed buildings were around Tijuana and Rosarita. Down in Ensenada itself there were signs of groundbreaking on two highrises. Maybe they may stop construction on these due to the recent credit crunch.
There is a huge brand new Orange County style Home Depot ancored shopping center on the drive along the main rout South out of Ensenada (on the way to the Bufadora). These are large/”shiney and impressive” versions of each of these chain stores even by US upscale suburb/exurb standards.
The prices on the highest-end luxury condos (Trump Tijuana - not a joke) start in the mid-$300k’s for studio/1 br. I saw SFR’s starting in the mid-$200k’s and some signs for more basic condo’s starting as low as the low-mid-$100k’s.
One “bubble moment” that I won’t soon forget was seeing Trump’s big head on a billboard looming above the beggars and trinket sellers during the 1 1/2 hour wait in traffic to cross the Tijuana border back to the US yesterday.
The hubris of the baby boomers to think that they can be mini-south-of-the-border Trumps. Remember, in Mexico property should be discounted ($300k studios my a**!!!) because in addition to the regular risks of buying US property - you also get additional risks of even greater lack of consumer protection.
Maybe the local will benefit from this hubris
From Bozeman, MT.
Saw a nice girl who works at the local cafe at World’s Market (sort of like Linen n’ Things but with packaged food), said she just brought a second house in Belgrade and is buying decor for the place. She is renting out her first a condo here in Bozeman. I think she watched one too many flipping shows, and at least one year behind the times. The only good thing is that she is young.