Community Changes As A Result Of The Housing Bubble
Readers suggested a topic on local housing bubble fallout. “I’d like to hear from HBBers on the changes (good or bad) that have taken place in their communities as a result of the housing bubble. Sprawling new developments are obvious, but what about some of the other, more subtle (or not so subtle) changes like demographic shifts, closing or opening schools, traffic patterns, loss of a favorite small business, etc?”
“Just the other day, I was driving down the eastern shore of Tampa Bay and saw that Cox Lumber is shut down and boarded up, a casualty of the housing bubble. We’ve had boat ramps and bait & tackle businesses get swallowed up, traffic medians put in to re-route familiar patterns (thanks a pantload, Lennar). This past spring, the familiar scent of orange blossoms was gone from the air, due to the fact that a number of groves in the area were sold off to developers.”
One wrote, “One thing I’ve noticed in So Ca, and being a member of The International Council Of Shooping Centers ,is the amount of designer malls that were built during this latest bubble. (Doesn’t the world have enough shopping centers already!)”
“Now we are looking at leasing in more of a survival mode. Even the yuppies have decided that if its all made in China, why not just buy it at Target.”
Another saw, “Here is the change I’m seeing locally: Multiple families living in one home. Not that common (yet), but some homes have far too many cars. I even see this in Palos Verdes. Kids never leave the nest as its too expensive to buy anywhere in the south bay. I’m talking kids about to hit 40!?!”
One from New York, “In NYC the good news; the most new housing production since the 1960s, middle class people willing to live in more city neighborhoods, a temporary boost to public finances due to real estate transfer taxes.”
“Unlike elsewhere, new housing quality may have actually increased here, as developers who formerly only built in established affluent neighborhoods (and made people take crap to get that location) attempted to attract people to less desirable locations with the quality and amenities in their buildings.”
“The bad news; people who grew up in the city but didn’t attend college priced out by college graduates from elsewhere, loss of economic competitiveness due to higher real estate prices than elsewhere. I believe people and businesses may stop coming here if the prices do not fall. While NYC banked the extra tax revenue, the State of New York blew it, and will be coming after us for tax increases and service cuts.”
From California. “The housing bubble has made land so valuable around W. LA that they’re tearing down surfshops, malls, old houses, anything they can get their hands on (they=developers) to build CONDOS. I shudder every time I see a new condo dev’t going up, because I know it’s going to mean more traffic, less retail/pedestrian space, and more single/DINK yuppies moving in.”
One from Illinois, “In Chicago, which is very neighborhood-centric, development happens at different speeds. Some neighborhoods have been completely transformed since I moved here a decade ago, some have remained largely the same.”
“In the now quite-gentrified Wicker Park neighborhood to the south of me, for example, little was done for years to protect older residential buildings. Lots of frame houses, classic Chicago bungalows, and two / three flats were razed to make room for ugly-ass new construction — the kind we all know will not age well.”
“Lots of arts spaces, small restaurants and the like were driven out of the area by ever-increasing rents and taxes. Many of the small businesses that remain in that neighborhood either have built-in hipster appeal … or have owned the property for years. Lots of old-timers cashed out and more elsewhere, too.”
“I’m hoping that the bursting bubble will save my neighborhood from the same fate — it’s a neighborhood on the verge, and it would be a crying shame if it lost its character.”
And from Virginia. “Here in the D.C. area, formerly dicey areas in Va. close in to downtown have become much more expensive, since the rise of the far-flung exurbs has made traffic much worse, really just in the last 10 years or so.”
“And those exurbs that suddenly sprouted up in the last five years. Lawdy! They’ve managed to pave over pretty much everything in Va. within 50 miles of D.C.”
From Georgia. “In the Atlanta area the main impact I have seen due to the bubble has been the deterioration of once stable lower middle class to middle class neighborhoods. People trying to raise children in a true middle class environment have had to gamble on exotic loans in order to live in safe family areas. Those who didn’t want to take the risk with a mortgage have had no choice but to live with low life crack heads & drunks as neighbors and hope that their children survive.”
“Another adverse impact is the continued deterioration of traffic congestion. Traffic in the NW metro area was nightmarish because of this for 6 hours. So it has become prudent to avoid the interstates if you want to get anywhere alive & on time.”
One from the road, “Had to go into (shudder,) Bakersplat today and saw three dedicated billboards along Hwy 58 touting reduced prices in new housing developments. These were not ads with ‘price reduced’ slapped across them, but boards specifically advertising $50,000 off, etc.”
“Still a lot of new industrial starts and commercial building going on. Saw a new (empty,) office complex on Truxton Extension with its windows shattered. In-town traffic seems to be easing, though, so maybe folks are leaving town for (dare I say it,) Oklahoma?”
And Minnesota, “In the Minneapolis-St. Paul area, the recent housing bubble has created an unsustainable retail construction blitz. When the music stops in this musical chairs game, there will not only be some very po’d J6P, but also a lot of commercial developers/landlords/out of business tennents.”
“We’ve also seen many local small businesses dissapear completely. Many local hardware stores and coffee shops… gone in 60 seconds after the big box stores and chains moved in. Customer traffic at most of these big box stores appears to be down significantly compared with 6-12 months ago (not a scientific statistical analysis, just a personal anecdotal observation).”
“Also spoke with family from the St. Cloud MN area… one told me about an ATV/Snowmobile/Farm Implement dealer (one of the largest in the Midwest, if not the entire U.S. in terms of gross sales) manager who told him that if it weren’t for the John Deere farm implement division, that they would be in the red due to virtually non-existent sales of ATVs and Snowmobiles. Seems sales are down significantly from 05-06.”
“Again, seems to follow a very similar pattern whereby home-mortgage slaves used their HATM (house ATM) to withdraw funds.”
And on the media, “I live in the Bay Area and am amazed how quiet the media is about the housing market here. I never read about the slow market in San Francisco or environs. I still hear how the Bay Area is so different; there are so many brilliant, well-paid people living here that the prices will never go down. Why do I see so many houses on the market for months and months, then?”
“Just for fun, I looked did a search for houses for sale in Burlingame, which is an expensive suburb of San Francisco. The cheapest ones are in the $1.1 range. I looked up a bunch of them on zillow.com, and found that most of them were purchased within the last 11 months to 4 years. I wonder if these are people who went in over their heads and now need to sell. I think most people would say that this was impossible in a rich place like Burlingame.”
As described in the post, West LA had an increasing zeal for building condos. Coupled with increasing prices that pushed people farther and farther away from where they’d actually like to be, it had created traffic problems of epic proportions. Traffic has always been an undesirable feature of living in LA, but over the last three or four years, it’s become horrendous. Santa Monica stands out as an area where many people now work (due to huge new developments) but can no longer afford to live. Traffic coming West on the 10 is staggeringly bad as they commute in from far-off places.
I am doing the cabinets for an 18 unit condo project in Santa Monica. The contractor / developer said that it was the last project to get approval under the old rules of paying ‘displaced’ occupants 25k each to relocate. The new payout is about triple that and has kabashed many new projects.
Surface street traffic has become ludicrous as well. Just try driving from north Santa Monica to anywhere south of Pico in the afternoon. Or try driving west on Santa Monica Blvd to the business district almost any time. Gridlock City, WLA.
I moved out of West L.A (Texas + Barrington) a couple of years ago because of the traffic. I’m not even considering moving back due to the traffic - little streets that once got little traffic are now ‘rat runs’ from one of the Boulevards to the other. But then, land use is probably 5 - 6 times denser than it used to be, even as recently as 2000, due to the explosion of condo building.
Every single little SFR on Texas Ave has been knocked down to build condo units - we actually went and looked at one two xmas’s ago - nice place (around 1800 sq ft), but with an asking price of $950K a bit too rich for our blood.
Went past the same condo unit a couple of weeks ago in the dark - maybe one or two of them have lights on. Guess $950K was a bit too rich for most people, too.
smlandlord, one of the last days I was in LA, I dropped off a video at Vidiots on Pico for a friend on San Vicente and 7th. It took forever. Honestly, it made it easier to contemplate my move.
Here, here. It took me 45 minutes to get from 16th Street and Olympic to the SM Airport around 6pm one day. Why ANYONE would take a job in SM if they needed to travel east astounds me. That city is literally gridlocked - even compared to the 405.
And now the yuppy scum are ruining the Santa Monica Place, turning it into some kind of open air deck, eat sushi while you gaze at the ocean. A-holes.
I drive from Lawndale (near Redondo Beach) to Santa Monica for my tech job. At rush hour in the morning it can take nearly an hour by freeway. It was never like this, It’s totally gone nuts over the last 6 years or so!
I’m renting in Honolulu waiting for prices to go down on condos. The market here isn’t quite as robust as a couple years ago, but to my disappointment it’s holding up pretty well. Prices are still ridiculously high. I’m hoping that bargains will start popping up soon.
BobR,
Sadly, you will probably not have a bottom before 2011.
Got popcorn?
Neil
2011? Why so long?
imho honolulu is more japanese than us…or japanese $, i should say. i think it is not different, just on a slightly different timeline
The Southbay is home to a lot of strong hands and past history. The strong hands mean realtivly fewer forced sales to drag down comps. History shows in the past bubbles; people moved back to the southbay when prices dropped thinking bargins had developed. Then as slowdowns in jobs and population flight finally take hold prices do crash.
The smooth looking lins showing price declines for LA just don’t show that the big drops in the south bay didn’t stick until two to three years after everyone else.
Neil and I are sensing a similar pattern; but I think employment shocks will come earlier.
As far as the Bay Area goes it really is a Tale of Two Markets. The crap (read
Don’t know what happened to the post above:
As far as the Bay Area goes it really is a Tale of Two Markets. The crap (read
Try rephrasing, maybe crap (read) {} is some weird PHP function that’s causing havoc
Thanks Kirk. Actually it’s more embarrassing than that. I used a “less than” sign in the text which caused html to cut off the rest of the post. I’ll just put my tail between my legs and waddle on over to sdcia for the rest of the day.
As far as the Bay Area goes it really is a Tale of Two Markets. The crap (read “less than” $1M) just sits while the demand for more expensive homes remains. That being said DOM definitely is increasing and short sales are popping up. But the hubris remains:
http://tinyurl.com/2mdmjw
This place might sit for a while. Or it might get an offer tomorrow. I ceased being surprised a long time ago.
–
Yes, it is a Tale of two markets — the top 10% income earners, mostly due to Scam Options, and the bottom 90%. The high-end market zip codes are holding up well and have demand. The rest are seeing price declines and huge decline in sales.
Jas
Was surprised to see an Ethan Allen home furnishing store closed up on Rand Rd. just south of Palatine Rd. in Palatine, IL last weekend.
In Chicago’s exurbia near Union, IL was happy to see that crapbox subdivisions had not crept too close to the Illinois Railway Museum. One developer, however, is shamelessly calling his development “Railway Estates” - evoking the long established museum. Years ago the I.R.M. was keen for donations to snap up adjoining real estate before farmers sold out. Hopefully this bust will take the heat off a while longer. Plenty of signs along the roadways though advertising exurban developments.
Closer to home, (posted in bits earlier this week) Angel’s restuarant @ Clark & Balmoral in Andersonville closed in July - due to escalating rents brought on by gentrification.
One last general Chicagoland observation - traffic this summer has become more dangerous than ever. Virtually every walking trip to work and the store yields a close call with harried drivers. Its awfully anecdotal but people sure seem like something’s chasing them - something mighty big.
“Railway Estates”
The area I live in is also suffering from cutsie deveopment names (my favorite is Gay Mountain).
Ooo! Ooo! I want to live on Hernia Dr!
Better than Subprime Boulevard
“One last general Chicagoland observation - traffic this summer has become more dangerous than ever. Virtually every walking trip to work and the store yields a close call with harried drivers. Its awfully anecdotal but people sure seem like something’s chasing them - something mighty big.”
John,
I’ve noticed the same in Oak Park, especially on weekends, but just put it down to frenzied shoppers looking for parking. Maybe you’re right.
The oldest furniture store in STL is closing-
http://www.myfoxstl.com/myfox/pages/Business/Detail?contentId=4154332&version=1&locale=EN-US&layoutCode=VSTY&pageId=4.2.1
Ben, we need the gold blog back….if it hits $800 will you reactivate?
Watcher, didn’t you mean “when it hits $800″?
Gold and oil completely decoupled from the stock market this week. Gold, oil and the yen are all screaming, “you better not cut rates”. That jobs report, be damned. The Fed is in serious trouble. If they cut by 50bps we might see oil at $90 and gas at $4 per gallon. How is the average joe going to like that?
This is an awful mess. Gold and silver will rise now that they are seen as the only safe investments. It may not be rational but they will benefit handsomely from the Fed’s stupidity. But something tells me the Big Boys loaded up in advance, knowing how this would play out. The Big Boys don’t lose money. Their insider info makes them very able to spot trends before they happen. They know that metals will soar at this point.
I was trying to be discreet but you blew my cover. Been a HBB gold bug from way back, one of the original gold posse round here. I hope the nagging by me and the rest of the posse encouraged some other readers to load up as well. That dip last month was some opportunity; good luck to all.
And I’m not really a gold bug but the writing is on the wall and it’s written in big, clear letters.
Downside seems minimal and Upside seems limitless…
Gold stocks decoupled. Gold (the metal) is not coupled to the stock market, although it sometimes seems that way when everything is getting hammered.
NYC, you say: “it may not be rational”.
I believe that the metals rising is completely rational. All one needs to realize is that the buffoons who control the purse strings are in trouble. What have they always done when they were in trouble? Yes, they attempt to bail out markets by flooding them with liquidity. The rise of the metals is simply a way to profit from what most of us know is coming. This time however, it may just be on a world scale. This will cause paper currencies to decrease in value. The metals have been a nice place to be the last few years and they will continue to be that way.
All I meant was that it is not up to me to determine if it is rational or not. Last I checked I was not god, or anything closely resembling a deity. It makes sense to me that gold should rise but that doesn’t mean it’s rational. That’s my clarification of that statement. Sorry if I confused anybody.
It’s irrational in the sense of Warren Buffett’s famous 1998 quote:
“It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”
It’s irrational in the sense of Warren Buffett’s famous 1998 quote:
“It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”
True, but it’s still been real money for thousands of years. More interestingly, what can be said of paper money. It gets created out of thin air by the touch of a few computer keystrokes. Then the money masters all stand around beating their chests saying look at all the prosperity we have created. Anyone on this planet should be scratching their head…
You never know with Warren and metals. Berkshire owned the largest above ground stock of silver in the world for many years.
Because silver has a myriad industrial applications.
A big, flying under the radar, impact of this housing bubble is on extended families. I grew up in a Southern California suburb with about a fairly large extended family of 10-12 households living in the same general vicinity (within LA, San Diego, Riverside, and San Bernardino counties).
As prices doubled and tripled in the last 7 years, these families have had been increasingly moving (literally) in different directions.
Those who own a home outright, like our parents, were not affected much by the bubble (other than feeling “wealthier” perhaps), and continue living in their homes.
Younger families which were already in a home pre-2001, either have plans to move, or have already cashed in and moved to lower cost-of-living areas such as AZ, WA, NV, NC, CO, and even OK.
Younger families which were renting, have also moved away, or are increasingly feeling the squeeze by staying put in So Cal. I expect nearly all of them to move out of CA at some point, or perhaps move out to less desireable CA areas like High Desert or further out.
Then, there were a few who jumped during the bubble and bought because “CA homes prices always go up”. I am concerned these may be foreclosure casualties in the next 1-2 years.
A net result is this once close-nit family, is now spread across the US or those who remain are paradoxically, either very rich or very poor.
” either very rich or very poor.”
Following the American trend. It has spread to other countries too.
Jas
You know Jas, you should be living in India in a lower caste.
Or perhaps in China where the wealth is spread more evenly.
Perhaps you were thinking Russia?
Or is it grand old Europe?
This is spreading to America, not from America.
I saw a documentary on the the housing bubble crash in Ireland (released around May 2007.
I saw a documentary on the the housing bubble crash in Ireland (released around May 2007.
You can find it on the torrents @ Prperty crash Ireland
They have many financial, economics, real estate experts from Ireland discussing the looming real estate crash in Ireland that has bee going on for the last serval months.
ejamie writer the truth. With an extraordinary amount of effort I moved my family from LA to Seattle, leaving behind many friends and family. I have a little girl and it was a painful situation for us to leave my mother as they are very close. My mom was very hurt by our decision. However, she recently came up to visit and kept repeating that she totally gets why she moved. Rather than living in a lame stucco apartment in a so-so area, we live in a gorgeous craftsman house in a nice neighborhood.
Wow lionel…good move.
Best of luck!
Thanks, Lilll, it’s an odd sensation to be constantly aspiring to a certain level of comfort in LA, and then, in one fell swoop, you achieve it simply by moving. Seattle’s not for everyone, especially if you’re accustomed to the winters in LA, but boy, it seems to be a good move for us. (My freakish wife is even looking forward to winter.)
As some of you may already know–we relocated from NW FL to Wisconsin. (Yeah…long story).
We rented a 1200 sq ft home w/basement in the Village of Eagle. It’s a small subdivision, about 9-10 years old. Neighbors across the street have mom (60), two daughters, three grandchildren and five cars!
Now, Wisconsin is conservative by most measures. Three homes on our street our bankrupt, 2 in foreclosure and 6-8 for sale signs.
My husband and I drive countless miles looking for *the right house* (although we’re toughing it out, waiting for a haircut). All over this beautiful land we see housing developments flop, McM empty, flopped condo’s (for sale signs by the thousands). And on and on.
I ask myself how many are testing the water, but everyday it seems apparent most folks over Heloc’d or ATM’d and have no choice but to list. And these are CONSERVATIVE people, by most standards!
Happy Saturday,
Leigh
The Midwest lost its mind, along with the coastal baboons. Minnesota and Wisconsin are in for a world of hurt. They think it’s “different” this time and they are right.
Time will eventually prove the agrument that the Midwest is insulated because of its inherent conservatism to be a canard. All the stories from OH, IN, and MI indicate that while the price declines will not be as spectacular as those on the coasts - any recovery will be an awful lot slower in coming. That’s where the real pain will be - in the coming decade in which the Midwest, unable to support its population with manufacturing ever again, must now compete directly with the coasts for any rebound in service, tech, and financial jobs - and even these will be slow in coming.
Bottom line: in the 2010’s the rust belt will be competing globally for fewer and fewer high paying jobs - and the Midwest will be going up against some awfully tough players in the form of the coasts and the Sunbelt. Anyone care to place any bets on who wins?
John,
Up to now I’d have agreed that the price declines in the Midwest won’t be as spectacular as the coasts. In dollar terms I’d agree, but percentage wise, I’m not so sure now.
For example, Detroit currently leads the big city price declines at 11 percent yoy. Also, I posted a link earlier today on one of the other posts from the Detroit News where 55 percent of mortgages in Detroit itself in 2006 were subprime, and for Wayne County as a whole it was 67 percent. I am assuming other counties in the area were somewhat similar. Seems to me this combined with everything else going on here will make the percentages look as bad as anywhere else.
And I do agree with you that it will take longer for this area to rebound. Michigan’s real competition isn’t India and China. It’s Alabama, the Carolinas, Texas etc. That’s why as soon as my youngest graduates, I’m outta here.
edgewaterjohn paints a rather bleak picture for the midwest but, I must agree, the job creation now and in the future will be in the service and retail sector (baring a recession) not known for high wages.
Um, this is a decidedly myopic view. When the US economy falls into recession, the Chinese yuan will be forced to strengthen, the US dollar will weaken and US exports will dramatically rise leading to a Midwest (where the manufacturing infrastructure already exists) resurgence before a bubble-area rise.
‘ And these are CONSERVATIVE people, by most standards!’
- I tend to disagree. Half of my relatives live around Muncie In and they are very conservative in that area … but most people are products of the media. If the media states ‘Buy now or miss the boat’ for 3 - 4 continuous years the deed is done. There is a bubble in Indiana for goodness sake - drank the koolaid at the White Castle ….
Speaking of media… has anyone noticed the sudden lack of easy credit car ads. It used to be every dealer in Phoenix was running those “Bruised credit - no problem - we have a loan for you” ads. I haven’t seen any in weeks. Looks like the subprime mess is forcing tighter credit all around.
Please expand on the “Indiana bubble”.
Downtown San Diego: Ground level luxury condos with graffiti scribbled on the for sale signs. “Luxury Living” “Thug Life”.
Traffic is now horrific. I wonder if it’s because of all of the people now working two jobs. Or maybe mortgage brokers and realtors driving around to fill out job applications.
Just moved to Pasadena and the bubble mentality is still strong here.
…graffiti scribbled on the for sale signs. “Luxury Living” “Thug Life”.
Ya, gotta love their sense of humor!
I live in Pacific Beach, a San Diego beach community that has historically been a place that college and just out of college aged people move and live until they start a family, at which point they move out to the suburbs or up to La Jolla or North County. (The main reason being that the community is centered around young peoples’ lifestyles: a lot of bars, tattoo parlors, restaurants, etc. Not the most kid friendly place and the schools in the neighborhood are less than desirable, from what I hear.)
Anywho, during the last five years, the 20-somethings that live here (myself included) bought condos instead of renting them. And now that the market has turned, selling and moving out is not nearly as easy. For example, I see many more strollers and young families here now than I did when I moved here in 2000. The eateries opening up lately have been focusing more on food and atmosphere than just as a place to go drink. And we are getting more family-oriented businesses in the area: daycare, clothing shops with goods for the whole family, and so on.
My wife and I really like living here, so we’re hoping that this neighborhood gentrifies into a young family area and loses the allure that brings in 20-somethings who want to party and get smashed. Of course, after the incident at the beach this Labor Day Weekend, this idyllic fantasy may still be a few years off…
No offense Scott, but I can’t stand PB. It is so hard to get in and out of, and there are just so many a$$holes running around all over the place. I don’t have any idea how a couple or a person older than 30 can live there and actually enjoy it.
You are still in your 20’s, wait a couple of years, the traffic and the drunken idiots will start to get to you.
No offense taken, PB is not for everyone.
Many people settle down in cookie cutter subdivisions, but I cannot imagine living there. To each his own.
PB is getting a lot better, at least where we live. We don’t go down to the beach often. Usually we’re east of Ingraham. It’s getting better over time. Less trash on the street, less parties, and so forth. What we love about PB is that it is walkable and active. It isn’t people who are driving half a mile to the grocery store, then another quarter mile to the dry cleaners, then a quarter mile to the video store, then a half mile back to their walled in subdivisions. We are able to walk everywhere. I drive my car maybe twice a week (I work from home). I’ve owned it since 2000 and have put under 50,000 miles on it, and that includes multiple drives from San Diego to Denver and back and one from San Diego to Chicago and back.
We are almost 30 (29 and 28) and are do enjoy our little neck of the neighborhood.
I am no fan of cookie cutter neighborhoods either. I spent time in OB, and even with its seedy side, I still prefer it over PB.
I am looking to buy in North or South Park when all is said and done, that could be 2 years from now.
OB seems a bit too seedy for me.
My wife and I were looking at homes in North Park back in 2005 (which is when I found this blog). North Park has its charms, but as you note it’s still way overpriced. Not too familiar with South Park.
I just moved out of PB about a week ago. The drunk 20 somethings will move away as gentrification due to the growing wealth divide takes over. But they’ll still visit, until they ban alcohol on the beach, at which point the local youth based economy will completely collapse.
The nouveau-prohibitionists trying to ban booze may want to be careful what they ask for. I always assumed PB would morph into a downtown on the beach but with the eminent ban on alcohol it’ll end up being a retirement community trying unsuccessfully to compete with La Jolla.
I hope PB morphs into a middle class segment of young families (30 something year olds with children). Historically it’s been populated by 20-somethings and the elderly who moved here many moons ago.
If PB morphs into anything, I hope it turns into a Point Loma-like area. OB is too dirty, La Jolla is too stuck up, North County is too far away from anything, downtown is still too crime ridden and homeless ridden.
One from New York, “In NYC the good news; the most new housing production since the 1960s, middle class people willing to live in more city neighborhoods, a temporary boost to public finances due to real estate transfer taxes.”
“Unlike elsewhere, new housing quality may have actually increased here, as developers who formerly only built in established affluent neighborhoods (and made people take crap to get that location) attempted to attract people to less desirable locations with the quality and amenities in their buildings.”
Taking the 7 train through Queens the other day made me think, yet again, that most of Queens should be nuked. It is just awful to look at from the 7. The funniest part of the trip, all the way to Main Street Flushing, was seeing the “luxury condos” being erected amidst all of the crappy old housing that looks like it could fall down at any moment. The boroughs are in for a world of hurt. That includes Manhattan and the borough of New Jersey.
NYCityboy, Queens has ALWAYS been an eyesore! At least as long as I can remember, which goes back to the early ’60s. Once upon a time, Queens was a pastoral, pretty place, but that started to change around World War 2. Now it’s ugly, ugly, ugly, except for a few nice spots that have held out - so far.
Even the “nice parts” of Queens (i.e Forest Hills, Rego Park, Jamaica Estates) seem a lot seedier over the last 10 years.
Outer boroughs are just a jumbled mess. Driving the Van Wyck is like driving the lunar surface. Overpriced nasty looking RE everywhere.
I suggest you dig into the statistics on Manhattan. You might be surprised by what you find. It has *never* been through a “world of hurt”.
A cousin has her house up for sale. Got an offer and the potential buyers asked for a price reduction, closing costs, plus 5% for a down payment. I guess now that lenders are (finally!) requiring down payments the buyers who don’t have the money are expecting to get it from the sellers. But I thought that lenders needed to see that the buyers had the cash on hand, not received it via loans or “gifts”.
Sellers probably won’t be allowed to give downpayments to buyers. That, legally is supposed to be stated in the contract and if they get caught it’s fraud. Plus sellers will not be allowed to add it onto the cost of the property.
So it’s stated in the contract. The house is assessed at a certain amount (which the lender agrees with), but it’s being sold to the buyer at a lower amount, the difference being a gift of equity from the seller to the buyer, which is used as an instant down payment. There ya go.
I’ve done that, as have friends of mine. The lenders in each case had no problem with it, as long as the buyer and seller agreed to sign a document stating it was a gift, not a loan.
Me thinks that lenders won’t be okay with that forever.
I see what you’re saying, I just don’t see how a lender would be ok with that in a falling market. It’s a phantom number.
Live in Downtown Sacramento, CA in an area called Midtown (18 years). Some marketing wizard has started calling it “the Grid”. Quite a few older houses. Some Victorians with a few being converted to multi-family. Apartment complexes and fourplexes mixed in. The rest are small older single family homes. Definitely a mix. Lots of trees. It’s walkable and bikeable and a pleasant place.
Prices have tripled since housing took off (SFH $150K became $450K at the top of boom). All of a sudden, after years of being viewed as an urban blighted area, people wanted to live downtown again. Once it was deemed a safe place and either hip or cool, the yuck came. The gentrification crowed and the CONDOS! (btw…building high end condo homes right next to a big Salvation Army center and Blue Diamond factory….what idiots!
When it was cheap, it was young people. College students, musicians, artists, etc. The little bars would have live shows. Coffee shops would be a fun place to hang.
Now that the yuck is here….live music has been stopped because the neighbors who paid 500K for a house say they can hear it from the bar down the street late at night. No longer cheap for college students, artists, or musicians. Now older folks with kids, SUVs, etc. Way more cars, traffic, and now parking problems.
This is going somewhere, so bear with. The area has ceased to be the community it was. It’s become a shopping scheme with every non-residential space turned into either a boutique or a wannabe hip, cool, or upscale restaurant.
The new motto is “Eat, Walk, Shop the Grid” or something vapid like that.
Even though I’m 40 y.o. now I want some fundamentals back. Bring back the crime so people in the suburbs/exurbs will be scared and stay out. Bring back the young and creative crowd. Nix the eateries and retail and restore the studios & music venues.
Sorry for the long post. But, that’s what happened to my neighborhood. Lost its’ edge.
Rob,
I hear you. I live on the West Side of Manhattan, and we have been getting malled for a while now…all the small shops, bookstores, weird, specialty places are gone, replaced by the Chains, Gap, Banana, Victoria’s Secret, et. al. who are now being run out by the banks. No lie. Every bank in America now feels it must take a corner of Broadway, complete with huge logos, a few ATMs and a couple of employees behind a desk. The guy who owns Zabars owns a lot of commercial RE in this nabe, and he’s kicking out what’s left, a Korean market, a Malaysian restaurant and a florist just this summer–apparently he’d rather hold the space empty for a while in hopes of another bank, than renew leases for small businesses, though all of those he kicked out have been here for at least 10 years. Kills the neighborhood though.
Rents are getting attrocious for small biz, period , in Manhattan. I think they will begin to affect housing here via companies being forced to scale back
I live in an established neighborhood in the Tampa Bay region. I wrote of our sudden coyote problem caused by too much construction but we have what seems to be a foreclosure and I’m watching three Flippers all who bought in December 2005. We have a lot of houses for sale, too many to really watch, so I’m just watching the three.
They all did what I call the Flipper Special - granite, stainless steel, etc., and they’re all asking too much. One paid $310,000 and are asking $419,000. They were asking $429,000 then put Price reduced! Motivated seller!
What’s weird is that they are advertising on Zillow and must know how overpriced they are. Their Zestimate has dropped steadily and is now $317,000 yet they insist their house is worth way more than they are asking. They did replace kitchen cabinets, carpet, tile, windows, and had the house professionally painted and landscaped, so they are going to lose money.
Also, a house did sell recently. A larger house on the lake - $262,000. Yow!
Lakefront in Tampa for $262,000? wow - it is really must be getting bad
We’re in Eatonton Georgia on Lake Oconee–2 hours from Atlanta and 2 hours from Augusta. When we were looking for houses in April I asked the realtor why everything was so expensive–3/2 off the lake and no land for 190,000. She said it was different here! This is a community of second homes and people buying here are very wealthy. So we rented. On the lake townhome, 3/2.5, 1600 sq. ft. 1100 a month. Said he’d sell it to us, owner financing, for 200,000. No thanks.
Since then, a whole subdivision went back to the banks with about 1/4 of the homes built. Two subdivisions are ready to go with stone signs, paved roads, pipes sticking out, and absolutely no activity. Townhomes on the lake for 400 to 800,000 are everywhere. And the only apartment complex in town has just converted to condos. You could rent a 3/2 for $800 a month but now they’re selling them for over 150,000.
Boats and jet skis are for sale everywhere. The ReMax office next to us has a Chrysler Seabring convertable sitting with a for sale sign on it. The Coldwell Banker office had a Cadillac Escalade with two jet skis trailered to it–all for sale. The boat dealership has a red BMW convertable for sale outside. The ATV and motorcycle shop has a new Dodge Charger and a souped up Dodge truck with for sale signs on them. A local grocery store that sold high end organic stuff and angus beef, for the rich folk, has gone out of business along with the three other businesses attached to it. Whole shopping plazas in this town consist of housing related businesses. Across the street–realtor office, lighting store, paint store, plumbing store. Down the road (brand new not even finished building)—rug store, bed store, wallpaper/paint, lighting, furniture (high end), etc.
I’ll go out on a limb and say that the two counties that straddle the lake region have about 40,000 people TOTAL. Doing a quick Realtor.com search I found 2088 properties for sale, 1308 of them are over 200,000, and 335 of them are townhomes or condos. Can you say Ruh-Roh?
Great report on Atlanta area. Thanks Alison!
Funny how I never knew that every area thought they were “special” and “different” until I came to bloggerville and met up with all of you. Thanks Ben!
Same story in Pinellas County. I drove by a credit union today and there were all kinds of toys for sale in the parking lot - repos, no doubt.
Too bad I’m not in the market for any of that junk, it’d be a great time to buy.
Here’s one from my personal stash (this is almost one year old!):
http://i117.photobucket.com/albums/o72/muggyFL/BuyMyCar.jpg
Muggy,
I used to live in Oldsmar. How is Pinellas going? It was crowded when I got there in ‘99. Pinellas was impossible when I left in ‘06. Still, I do miss Florida sometimes. I’m in Louisiana now.
Roidy
wow, great story, wow
This is something that will certainly change communities.
http://tinyurl.com/yquoja
They will all be blaming everybody, but themselves, for their current predicament. It is the current Oprah-inspired victimization mentality that now comprises the American way.
Absolutely amazing that they assign less blame to the borrowers themselves than to brokers, lenders, and the Fed.
None of the current disaster would have occurred if people hadn’t lied about their incomes, borrowed more than they could afford, and if they hadn’t reneged on their obligations.
Yes, the brokers, lenders, and Fed all added fuel to the fire, but ultimately the vast, vast majority of the blame rests with the borrowers themselves. And they are in many cases the ones now getting off scot-free, because they made zero downpayments and hence are losing nothing.
Great article in the Las Vegas Sun today titled: Real Estate Ride, from Big Buck to Banckruptcy. Talks about the #1 Realtor in Las Vegas filing for banckruptcy. This part of the article is amazing,
“”Dague recounts the glory years in numbers of home sales. “In ‘05, we closed 6,000 sales, 5,945 to be exact,” he said. “In ‘06, 3,700 sales. In ‘07, we’ll do probably around 2,000.”
Last month, there were about 1,300 home sales in the Las Vegas area; that was divided among 1,400 real estate offices”"
Less than one sale per real estate OFFICE last month.
Man it is getting bad here fast. One plus (other than lower prices) will be that I do not have to see anymore liscense plates on Hummers and BMWs that say “REGUY” or “SELL4U” or any more of that crap.
Article Link:http://www.lasvegassun.com/sunbin/stories/sun/2007/sep/08/566640424.html
Capo de Blogo tuti Capo
How is the casino business being affected by all of this?
I believe Casino revenues are stable or up slightly. I know the casino companies are doing very well but I believe that is due to the project in China more than LV. I own a business here in LV and suprisingly have seen no effect on my sales, we will see how long that holds up.
Room rates in LV are still pretty high.
I remember the early 90s when there were tons of bargains due to the sluggish CA economy.
I was visiting LV over the weekend and was in the Tourneau store. Overheard one slick looking salesman talking to another and lamenting how 3 years ago his “closure rate” was 50% and now it was less than 20%…I guess the market for high end watches is slowing.
Changes in Glenwood Springs, Colorado - used to live up the valley where the ski are is (Ski Sunlight) - there’s a beautiful large field where I used to pasture my horses, and in the winter it was home to a very large herd of elk. Photographers and townspeople would come out to see them, often you’d see five or six bulls with HUGE racks, and I mean HUGE - major beautiful animals.
Now filled with ugly McMansions going for 1 mil plus. Exclusive crap.
Prefer the elk, wonder where they go now? May the developer rot in hell,as well as those who bought there. Throw in the county comissioners for approving this ugly craphole project against protest by the townspeople.
That sucks. I always loved the drive from Glenwood Springs up the valley to where I lived in Woody Creek. I’d like to go back one of these days to see what it’s like around there, but I think I might be in for some disappointment with all the development.
2005: San Diego home owners were house-proud, and universally eager to brag about how much money their homes were earning for them.
2007: Nobody much wants to talk about the subject of housing any more (and I have enough sense to steer clear of it myself!).
“(and I have enough sense to steer clear of it myself!)”
Stucco, there is no f—ing way do I believe that you can bite your tongue when the subject of real estate comes up. Not unless you stuff a mouse trap down your pants and I’m not talking one of those glue thingies.
I don’t think NYCityBoy is the only one to address Professor Bear as “Stucco.” If Prof Bear is indeed the SD commentator formerly known as Get Stucco, I wish he would change his screen name back, or at least call himself “Professor Get Stucco.”
Communities changes?
Well every few months I drive down to Tucson for some personal business at my bank. It’s been about 6 months. So while driving southeast on I-10 near the Casa Grande outlet malls, I was shocked to see Target, Kohls, Bed Bath and Beyond, Dillards, and JC Penneys have sprung up next to the hundreds of stucco boxes that were planted there a year or two ago. Are those shops going to steal business from the outlet malls? I suppose they expect to get business from Casa Grande and Maricopa FBs with nothing better to do but get into more credit card debt. Three years ago that side of I-10 was farmland, if I recall correctly.
In my old neighborhood, stated income liar loans enabled several drug dealers to buy homes and bring a steady stream of traffic to their places all thru the night. Thanks, Countrywide! May you rot in hell.
“Thanks, Countrywide! May you rot in hell.”
I feel the same way. Grosse Pointe rarely had foreclosures. Now there a few streets with multiple foreclosures. The areas we call the cabbage patch used to be young families starting out, saving for a home. Well, we all know this group got suckered into zero down I/O’s in suburban McMansions. Now instead, the stable renters have been replaced with some Sec. 8. Even the nice, larger homes are having a hard time….as some people want even bigger McCrap out in the burbs next to the big box stores and the Applebee’s in mediocre school districts. Then there are those that moved into some of the nice larger older homes during the loose lending era, stretched thin, with no idea what it takes to maintain one of these old houses, ultimately going into foreclosure because they had no skin in the game. On top of that the surrounding Detroit neighborhoods have gone to hell in a hand basket fast. The city residency requirement for workers was repealed and the school district was a mess so they took flight to the burbs too, financed by easy money. What replaced those residents - people buying for cash out mortgage fraud. The mortgage lending of this last decade has screwed up many beautiful old neighborhoods. We’ll survive this because it is a beautiful lakefront community with great parks, schools and quality built homes, and a good majority are not leveraged to the hilt. But it will take a while to clear out the excesses of the past few years.
Small Austin report. Seeing more chain stores built. One force the movement of a favorite taco place with plenty of character (giant lady on the roof) off to some knoll behind it.
Traffic is ridiculous - the down town is almost unusable during some hours. One is better off parking in the park and then walking in.
The skyline is definitely changing with the building of four (or more) high rise condo’s. They are basically boxing in the park and lake - it is beginning to remind me of Central Park in NYC. I don’t think they have a chance of selling anything in them - the ones that are already built have empty parking lots at night.
Austin is pretty quirky but it is losing it’s flavor to chain stores and big box stores.
Austin is pretty quirky but it is losing it’s flavor to chain stores and big box stores.
What’s quirky about Austin other than they call the local street bums “drag worms”?
Gainesville has lost so many trees that the microclimate has actually changed. Gainesville used to be cooler in the summer than many No. Cen. Fla. towns. Now it’s about the same.
Hundreds, if not thousands, of trees have been cut down in the city and surrounding county, replaced with shoddy flipper developments. The developers have to save some trees and replace some percentage of the trees they destroy by law, but young trees have a funny habit of dying in a stark, dry, compacted soil environment. They also just don’t cool the surface the way a mature shade tree does.
The sick, sad irony is that most of this new inventory is not moving, and what little did was sold with suicide loans that the unhappy FB’s of are desperately trying to get out of. “FOR RENT FOR SALE”.
The east side suffered less in terms of teardowns and crap building (with the exception of Ironwood area, where the city for NO REASON EXCEPT CARL TURLINGTON OWNS LAND THERE decided to give tax breaks for development. BTW this lovely area is near a toxic chemical plume and underneath the airspace of the airport. Oops.
East side has a worse problem: black on black fraud. Most of the rip-off refis happened on the east side. Now, I know first-hand from someone who took at a home equity loan to start a business, lost his investment, and is now having some fun … er … with the higher rate (though he claims he can afford it; also, he got the loan from a bank, not a RE or LO co), but I also know from my passengers and from what I personally saw in the neighborhood that seniors were being targeted by mortgage scammers. The east side is going to be hit hard by the foreclosures.
fraud is fraud - I do not think any kind is more heinous than another…greedy/immoral feed off suckers/fools. doesn’t matter what color.
Burnt Store Rd. Punta Gorda, FL home of Tern Bay a proposed development of 1,500 homes, hotel, restaurants, golf course and marina.
Today, the golf and sales office closed 20 homes built and 12 sold and project discontinued
Greetings from Dover, DE -
As always, we are way off the radar, but we do exist and are also affected by all of this.
Central Delaware has always been primarily rural with Dover, the state capital in the center. Dover has the state governement, an air force base and light industry - Platex, Kraft and Proctor and Gamble. It has constantly grown for the past 50 years. Recently, it has seen more rapid growth and changes.
According to the census bureau estimates, Kent County grew by 13% to 144,000 people in the past 5 years. Not hyper-growth like Vegas, but among the fastest in the Mid-Atlantic. The media reports that there are 40,000 approved building lots in the county. Most of the national builders are now here. Strictly from observation, existing homes continue to sell and the new developments seem to be filling up.
Like other areas, there are tiny old towns with no commercial activity that are now attached to subdivisions. On rural roads, there are scattered strip shopping centers that are all anchored by ‘Happy Harry’s Discount Drugs’.
At this point, there is about 10 miles separating Central Delaware from the northern suburbs and about 10 miles separating it from the beach areas to the south. Otherwise, there is a very narrow suburb streching 150 miles from Philadelphia to Ocean City, MD. Sad to see it, but I guess it was inevitable.
The strange thing is that there is no new job creation other than real estate and local services. It seems that they are all retirees. Strange.
This stuff kills me. Grosse Pointe, and Shaker Heights in Ohio, two really beautiful places bombed by the housing scam. We don’t need no stinking terrorists, we’ve got homegrown greed, stupidity and fraud to undermine us.
Simon Property Group is putting in a huge premium outlet mall in our town after suing the town to use the land. It’s going to make a traffic mess. The expectation is that people will drive fifty miles in their SUVs to shop here. We’re already sandwiched by two cities that have loads of malls as it is.
I feel like a Premature Curmudgeon today, with apologies to the blog commentator who uses that screen name. My objection to many many of the comments above is, demographic change has always happened. It did not arrive suddenly with the biggest housing-price bubble in history. The price-to-rent ratio is at a level of unprecedented insanity, but this cannot be causing more traffic everywhere. Extended families have been broken up, apparently by housing prices, but the same thing happened in the past when patterns of industry or agriculture shifted.
Nor can I agree with Jas Jain’s comment that “very rich or very poor” is an “American trend” that is “spreading to other countries.” Quite the opposite: developing nations that used to have no middle class now do have one — the very people who are doing the jobs that used to be done by the American middle class.
Greetings from San Francisco,CA.
I’ve lived here all my life and over the last 10 years the amount of wealth in San Francisco and the Peninsula has grown astronomically. Lots of people I grew up with moved out because it was too expensive to live here. The only ones left are in tech or real estate. I’d say the biggest change is that all the soma ight industrial has somewhat disappeared.
Luckily the good night life was saved from condo developers by a concerted political effort by the San Francisco late night coalition. There is however less culture and a lot of what made San Francisco special has gotten a bit screwed up by all the “just moved here” nouveau-riche.
Mainly, the problem has been is that a lot of the national developers built stuff around here that isn’t “weird” or stylistically refined. It may have worked in Sacramento but San Francisco has always pushed form over function more than most places in the U.S.
A lot of the Peninsula and San Francisco, normally immune from tract home ugliness (with the notable exception of Daly City!) has gotten a lot of east bay ugly lately. A good example of this is in South San Francisco, “The Industrial City”. On the side of Mount Davidson there is a Mc Mansion development that took this very steep mountain side and terraced the place. Most San Francisco homes built on hills are built to be on hills. They have the garage at street level and the house extends down the hill for several stories underneath. These new McMansions however look like the lazy developer had built the same house on flat land in thirty other places and couldn’t be bothered so he just bulldozed.
On the bright side, the lack of land has pushed redevelopment into some of the more run-down areas in town. For instance, the Tenderloin shrunk a bit as high-security condos crept in around all the soup kitchens and pawn brokers.
In the town I’m looking to buy, I’ve seen lots of nice houses torn down, and larger homes built in their place. Repeat a few hundred times, and the town that was expensive to begin with, has now become obscenely expensive.
Fortunately, there are still many ‘normal’ houses left, and we’re hoping to nab one of them at the right price.
Before, you would find a complete POS on a nice 1/2 acre lot, and be competing with 2-3 builders who planned to bulldoze it and rebuild. They would be willing to pay $1M for the POS, knowing they can easily sell the new house for $2.5M. I think those days have all but come to an end, but there are no doubt builders out there still hunting for decent-sized lots.
Wow sounds like a mess in a lot of neighborhoods. I’m getting that same feeling now that you get when you feel a tornado coming…you can feel the electricity in the air. Something tells me that 2007 and further on will not be like the Great Depression; something much weirder is coming our way.
As for those who say that the upper Midwest is conservative and unable to stand up economically, I call BS on that. Sure Detroit is a #*##hole but most of the bigger cities are right now. I think the Midwest is much more resilient than the coasts or the Confederacy or the Mountain states mostly because 1. we don’t have much more to lose right now 2. we’re probably a much more tolerant bunch than most other parts of the Union 3. we aren’t as dependent on funds from Uncle Fed. Sure we get money from the Blue States/Red States, but then again who doesn’t? The southern Confederate states get tons of money back from DC (you people in New England and the Northeast are paying high taxes so Cletus and Ethel in FL don’t) and so do the Mountain states. Do you really think they are THAT sustainable? Yes the coasts are sustainable but don’t count the Midwest out.
Live Free or Die!
Greetings from Waco.
While we haven’t had much of a price bubble over the past few years, there certainly has been a construction bubble. Cookie-cutter subdivisions have been exploding to the northwest and southwest which are the more upscale newer subdivisions with nicer schools. The same big box malls with Bed Bath & Beyond type stores are cropping up all over.
My guess is that the construction boom is really going to hurt efforts to revitalize the central cities in many areas. With so much excess housing stock some of it is going to waste. Right now the surplus is mostly in the surburbs where the recent construction has happened and most of the flipper foreclosure activity is. But over time, I can’t imagine that all that surplus housing on the edges won’t pull more people out of the central cities. Why buy an older fixer upper in an aging neighborhood when nearly new houses in the burbs are being given away?
Without the housing bubble and construction boom I think we would have seen a lot more effort to revitalize aging neighborhoods. In the 70s and early 80s when interest rates were high and money was tight that was the route so many people took to get into home ownership. Today it just seems foolish to invest your sweat into such neighborhoods when so much new surplus housing is floating around.