Like An Instant Brick Wall On The Roadrunner Show
The Wilmington Star reports from North Carolina. “The tightened home lending standards are having an impact on the local real estate market. ‘You ‘have to really make sure you’re pricing properly,’ said Pete Frandano, principal at Southport Realty. ‘Sellers need to lower their expectations from two years ago,’ Frandano said, pointing out that we’re in a cycle where the market heavily favors the buyer.”
“In New Hanover County, a nominal number of closings have fallen through because of mortgage problems, said broker Lenora Norris. But she sees a pent-up demand for homes here, despite the sizable inventory of homes for sale.”
“‘California is a big market for us. They’re paying cash,’ Norris said. ‘That type of client has helped us to maintain our property values.’”
“‘The easy money has gone away,’ said Chris Hutchens, a loan officer in Wilmington. ‘Two years ago anybody could have gotten a 100 percent loan on a second home or investment property. Most could get 95 percent to 100 percent (mortgages) on stated income.’”
“‘Appraisals are being looked at carefully and cautiously, especially in high loan-to-value loans,’ or those with low down payments, Hutchens said.”
“Among other potential homeowners most affected by tighter lending standards are the self-employed. Stated-income were an answer. The self-employed can still get a mortgage, but ‘you will be asked for more down or more documentation,’ Hutchens said. ‘And just signing your name will be a thing of the past.’”
The Journal Now from North Carolina. “Don Jud, an emeritus professor of economics at UNC Greensboro, is not surprised by the price slowdown in Winston-Salem. The main culprit, he reckons, is that there are too many homes being built to meet immediate demand.”
“‘No question, the market is slowing,’ he said. ‘It’s too much inventory.’ Builders, he said, were simply too optimistic and ‘overextended.’”
The Sun News from South Carolina. “Prices for oceanfront condominiums along the Grand Strand have been on a roller coaster in recent years, and have now plunged to levels seen three years ago before the condo boom.”
“‘We’re exactly where we were three years ago. If we’re not there, we’re really darn close. It’s like we erased the spike,’ said Mark Loomis, a real estate agent who specializes in oceanfront condos.”
“Case in point: Camelot by the Sea, a themed 230-unit condo tower that opened in 2001 in Myrtle Beach, sold a one bedroom unit in January 2005 for $209,900. The sales topped out at $345,000 six months later. In June, one sold for $176,000 - lower than the 2005 price.”
“Loomis said he sold a condo at $169,900 in August of 2004…that closed in March 2005. That summer, he had a buyer who wanted to purchase his client’s unit for $260,000. They passed up the offer. A year later, the same condo had an offer of $200,000. His clients said that was way too low and passed again.”
“Now, the condo is listed for $157,900, $12,000 less than what the client bought it for initially. That condo took only 10 days to go under contract for the low $157,900 price, which proves that buyers are out there, Loomis said.”
“The fall in prices turned a potential $90,100 profit if the client had sold in 2005 into a $12,000 loss.”
“The tide of the condo boom turned so quickly few saw it coming. ‘It’s like an instant brick wall on the roadrunner show and there’s no skid marks,’ Loomis said.”
“Loomis said that basic economics dictates that prices may still have room to fall because inventory is still slowly rising.”
From Online Athens in Georgia. “Athens residents and officials were aghast when they saw plans for a proposed 264-acre, 425-house subdivision on rural Newton Bridge Road.”
“‘This one scares me to death,’ north Athens resident Jim Spencer said. Athens-Clarke planning commissioner Karen Middendorf agreed at a meeting Thursday night. ‘To put this thing in that area is just a very, very bad idea,’ Middendorf said.”
“At least a half-dozen suburban subdivisions of more than 100 single-family homes are coming down in the pipe in Athens. And that’s not even counting already-approved developments like Oak Grove on Jefferson Road or Creekside on Atlanta Highway, urban infill houses, student apartments or Gameday-style downtown condominiums.”
“If built, the six subdivisions recently approved or currently under review by planners would add about 2,000 houses to a county that already has a surplus of almost 4,000 residential units, according to the Athens-Clarke Planning Department. At the current pace of development, that surplus will grow to almost 14,000 units in 2020.”
“Despite the recent downturn in the housing market, houses just keep on coming in Clarke County and the surrounding region. And county officials are at a loss about how to rebalance the market and ramp down development to match Athens’ modest 1.3 percent annual population growth.”
“‘All I know for sure is, in my opinion, we don’t need to be approving houses when we have 900-plus houses on the market,’ said Athens-Clarke Commissioner Doug Lowry, a real estate agent. ‘We are way overbuilt in Athens.’”
“Athens real estate broker Michelle DeRepentigny and David Hamilton, co-chairman of a committee that’s dealing with housing for Athens-Clarke’s new 10-year comprehensive plan, laid overbuilding at the feet of developers who ‘flip’ or sell properties to other developers and take out new construction loans to stay afloat in hopes that the market rebounds.”
“‘They just have to keep going and keep going and keep going until they have to stop,’ Hamilton said. ‘They have to keep the ball rolling on those things, because once it stops, it all comes crashing down.’”
“New houses still are selling for now, though sometimes at a discount. Existing houses for sale are bearing the brunt of a slow real estate market. ‘The new construction has been very competitive and … the resales are lagging,’ said DeRepentigny.”
“Lowry said he wonders whether the construction boom will stop, or the market will collapse completely as homeowners with adjustable-rate mortgages find they can’t keep up with higher interest rates and developers continue to flip properties in an effort to stay afloat.”
“‘We don’t know what the bottom looks like,’ Lowry said. ‘I can’t tell you what the turnaround looks like.’”
The St Petersburg Times from Florida. “Jill Jackson, a single mom and apartment renter with an annual take-home pay of about $24,000, managed to go on an incredible real estate buying binge last year.”
“In the span of 10 weeks, she bought 10 properties. She did not put a single penny down, borrowing the price for all 10 by signing for mortgage loans totaling $1.84-million. The investment plan seemed too good to be true. And it was.”
“A year later, Jackson’s portfolio has collapsed like a house of cards, with every one of the 10 properties in foreclosure and Jackson’s credit wrecked. The 31-year-old says she was foolish to fall for the get-rich-quick scheme pitched to her by a church acquaintance.”
“‘I didn’t know what I was doing,’ Jackson acknowledges. ‘I don’t have any background in real estate.’”
“Beginning with three closings on a single day in February 2006, Jackson says she followed the Investors Outlet instructions, buying 10 properties she never had seen. She paid about $700,000 more for the portfolio than the county property appraiser said the properties were worth, a premium of 61 percent.”
“‘This is a snapshot of what’s happening in every village, town, city and county in America,’ said Ralph R. Roberts, a real estate broker. ‘A lot of unassuming young men and women are being induced to be straw buyers.’”
“As before her foray into real estate investment, Jackson lives in a second-floor apartment in St. Petersburgand owns no real estate. She says she has been hurt by the investment fiasco and the accompanying newspaper publicity but has learned from it.” “‘I didn’t wish for it to turn out this way,’ she says. ‘I know a lot more now.’”
The Palm Beach Post from Florida. “The number of property owners fighting to lower their tax bills is expected to grow by as much as 40 percent this year — the highest number of challenges in more than a decade.”
“County Commissioner Jess Santamaria said he plans to challenge the value of all of the residential investment property he owns. Residents who feel their values are too high should do the same, he said.”
“‘The prices are artificial,’ Santamaria said. ‘Between 2002 and 2005 they spiraled to double and triple the value on paper. But those were artificial values. Now we are starting to come down to reality. The prices may still continue to drop until they become realistic, and until then you’ll have to contest it.’”
‘Despite the recent downturn in the housing market, houses just keep on coming in Clarke County and the surrounding region. And county officials are at a loss about how to rebalance the market and ramp down development to match Athens’ modest 1.3 percent annual population growth.’
Attention MSM: the reason they keep building into the oversupply is because prices are still artificially high due to the housing bubble.
what is most stunning about this whole bubble is how the extreme overbuilding hits every little corner of every little podunk ‘burb countrywide…nobody around to BUY these things.
True. When I first started looking into it, it was amazing how widespread things had gotten by 2005. This is a big reason the PTB should have known something was wrong.
Per your book comment on the bits thread: you truly have documented what will be a major historical event in our history. Your book may be a textbook 100 years from now. You have so much to draw on! We will all buy a copy or three!
PTB? Publicly traded builders?
Thanks.
Jas
Powers That Be = PTB
I think that is one of the key items that is being forgotten when it come to the bubble. Much of the new housing inventory available today was built on the premises that “anyone” could get a loan. Now with lending standard tightened and “easy money” gone. Who is going to buy all this excess inventory???
I know I sound like a broken record, but without enough paying customers what will happen is section 8 housing.
Got 10% down?
Agreed, a lot of this is going to be section 8–and then those local pols who okayed all the developers’ plans are going to wonder where the property tax dollars are going to come from. Just like the builders ate their seed corn, the politicians have taken upfront money to destroy their own tax base.
Being a Californian, sometimes it’s hard to understand the “California Cargo Cult” mentality, that seems to exist in the more prime equity refugee states, like the Carolinas…
In the not too distant future, will they build moving trucks out of sticks and paper mache’ Californians, trying to entice us back?
“the reason they keep building into the oversupply is because prices are still artificially high due to the housing bubble. ”
EXACTLY!!! People here (PHX) that are trying to sell are VERY upset that the builders are undercutting them. Hello! Don’t buy for 2x the cost of land+construction, and then you won’t have to worry about the builder undercutting you by 30-40%.
Builders will stop building when they can’t sell for more than cost of construction.
–
I think that the builders are suffering from the pipeline problem. It takes 18-30 months from conception to completing the sales. In some cases it takes years where the approval process and buying all the lots can take more than 5 years!
Jas
In general builders work on short term construction loans. As long as they can service their debt they keep building even if they are losing money. Its better if they want to rise again later to pay back the banks all the way down. Even on the downside the name of the game is to transfer as much of the losses as possible to the consumer. Banks will be able to lend on the same house many times in the future if it gets built.
“…the reason they keep building into the oversupply is because prices are still artificially high due to the housing bubble.”
I’d imagine the savviest builders in most areas continue to get sales contracts, too, because they’ve had huge margins and will underprice stubborn used-home sellers all the way to the bottom.
A used property I follow has been priced at $500,000 for the past six months. They just cut the price by $1,500. Six months ago, Bear Stearns hadn’t happened, the credit market seize-up hadn’t happened — yet this seller is pricing as if everything is the same as in 2006 or earlier. Doubtless there are many like this one, and that is what is keeping at least some of the builders fed, IMO.
You know they’re pricing not on market conditions but on what they “need” to clear on the sale. GOOD LUCK sucker.
I had heard 2 stories of builder bail-outs in the Syracuse region:
Regarding the yearly Parade of Homes that just opened this week. PoHs is a collection of home models by different builders in a single neighborhood: “Some of the homes are barely decorated and most like Sciuga’s newest model the Wellsley have been built in previous parades. I was talking to one of the other builders and they said this parade almost didn’t happen and was only held to bail out Sal Sciuga, who owns the development, that was just sitting going bust.”
The other thing I found out was questioning the double listing of a home on the local realtor site. It appeared once at $199,000 w/1.75 acres and a second time at $999,000 w/147 acres. It seems the property is owned by a builder that has decided against going forward with his plans.
“while questioning” keep getting interrupted…sorry
Ben,
It appears you accidentally used a news article from 2004…
“‘California is a big market for us. They’re paying cash,’ Norris said. ‘That type of client has helped us to maintain our property values.’”
“‘The prices are artificial,’ Santamaria said. ‘Between 2002 and 2005 they spiraled to double and triple the value on paper. But those were artificial values.”
Then why are do they all feel entitled to those “values” when they try to sell?
County Commissioner Jess Santamaria said he plans to challenge the value of all of the residential investment property he owns. Residents who feel their values are too high should do the same, he said.”
“‘The prices are artificial,’ Santamaria said.
- Jess has a real dilemma. He wants to brag to his friends about the value of his ‘real estate empire’ …. then he has to fight the tax man on the value!
Jess, have you no conscience.
Jess has no conscience and soon will take quite a hit to his pocket. There had better be an outside auditor on the Mayor’s spending of local funds…
Got popcorn?
Neil
Well, I’m sure Jess didn’t mind the rising valuations back when he was a “real estate developer.” Only now does he choose to speak with a forked tongue when the bubble is impacting his bottom line and he can’t ditch his “investments” for various reasons.
“Then why are do they all feel entitled to those “values” when they try to sell?”
Because:
“This is a nice neighborhood, everyone wants to live here”
“We’ve been discovered for the gem that we are, and now rich people want to live here.”
“My house is now worth a lot more, and I’m not just going to give it away.”
‘“My house is now worth a lot more, and I’m not just going to give it away.”
- Please stop it - LOL!
That is my number one denial statement…I never get tired of that one!
That is a good one.
However, my favorite is anything dealing with the baby boomers. Guess what folks, they were either smart and will buy retirement property based on values, or else they already have 3 properties and the 401k is dry. (In other words, so much for early retirement.)
Got popcorn?
Neil
Not all houses are created equal, and the ones that shine will drop as much in value, along with the dogs…
Set your sights on something nice, when you decide to pounce~
I’m pretty sure his is the nicest one in the neighborhood also.
“I’m not just going to give it away”
Of all the memorable phrases from the housing bubble, I think this one is at the top of my list. It combines a jaw-dropping amount of delusion, greed, stupitidy and arrogance into just a few words.
Not the best time to misspell “stupidity”… Martha, where’s my coffee?
LMAO!!
“The fall in prices turned a potential $90,100 profit if the client had sold in 2005 into a $12,000 loss.”
Gotta lov them RE folk. They like to marginalize the downside while magnifying the upside. Somehow they just can’t put that 6% commission in the loss column.
“New houses still are selling for now, though sometimes at a discount. Existing houses for sale are bearing the brunt of a slow real estate market. ‘The new construction has been very competitive and … the resales are lagging,’ said DeRepentigny.”
I love seeing this in print. People who bought to resell are locked in while the builders continue to find the next pigeon by dropping prices and they themselves are being boxed in by the evaporating mortge market. It’s like the Chinese game of GO. Greed is still fuelling the market.
“‘California is a big market for us. They’re paying cash,’ Norris said. ‘That type of client has helped us to maintain our property values.’”
Geez. It’s like all the states in the lower 50 are depending on Californians to prop up their values. I don’t think there are enough Californians to go around.
Here in Nashville, our local paper said that one out of ten homebuyers relocating to Nashville are from California and Florida. Several of the counties outside Nashville have doubled their population in the last 15 years, and we have had comisurate appretiation of real estate. I’m hoping for all of us here that given the continuing influx of folks from outpriced areas the new loan restrictions are in just in time to only slightly deflate, but not burst, the local bubble. However, from April to July of this year there was a 30% increase of housing supply in the Nashville area. So, yes, we are hoping to grab and retain a lot of ex-Californians to maintain our price levels to replace buyers who no longer qualify for loans.
I specialize in relocations from Florida..the problem however with Florida currently, is that many want to relocated but simply can’t as the housing slump in the state is one the worst in the nation. Again, the pebble in the water effect..if they can’t sell..they can’t buy…Thus inventory of new housing in states like TN,GA and NC will go up..
Yes, Annette, that IS the problem. The real estate market has frozen up. I know people who want to leave FLA and can’t, because their homes won’t sell. RE agents here blame the taxes and insurance for this, but that’s a load of horsepuckey. Taxes and insurance go down when prices do, DUH!
‘ many want to relocated but simply can’t as the housing slump in the state is one the worst in the nation’
- ditto that for So Cal. Houses are not selling here and the farther east you go the worse it is. I question all of these stories of the Cali folks propping up the local RE markets.
“I question all of these stories of the Cali folks propping upthe local RE markets.”
So do I. What they say may have been true up until last year, but now we’re entering the era of Interesting Times.
That was always a REIC trick, even at the peak of the craze. If it wasn’t CA, it was Europeans, etc.
Sobay,
I question if the California relocations can continue… but do remember, half the people rent in SoCal. So if its displaced renters (like me one day)… they can pay cash! And if they bought “pre-bubble” and were smart enough to make their home the best value on the block… they can easily buy cash.
So please take some of our surplus population! Yes, I California is predominately losing jobs paying above the median wage. Cest la vie. Oh wait, their homes are in the areas I might want to buy!
The relocations are far from done.
Got popcorn?
Neil
“Yes, I California is predominately losing jobs paying above the median wage. ”
That’s one of the many benefits for illegal immigration………lowering wages for everyone.
The people that sell the “benefits” of illegal migrations should get a grip on reality. Say good-bye California.
“Jill Jackson, a single mom and apartment renter with an annual take-home pay of about $24,000, managed to go on an incredible real estate buying binge last year.”
“In the span of 10 weeks, she bought 10 properties. She did not put a single penny down, borrowing the price for all 10 by signing for mortgage loans totaling $1.84-million. The investment plan seemed too good to be true. And it was.”
Jackson, Jill… had quite a thrill
And ended up under water
The market fell down and broke her crown
And bankruptcy came tumbling after…
LOL! Good play on the old nursery rime! Could you do it with the Andrew Dice Clay version?
When talking about North Carolina you can’t leave out Charlotte. Charlotte IS suburban hell. The building is really ludicrous. The developers own Charlotte lock, stock and barrel. They never get turned down.
Just look at the NBA arena for an example of the strength of local developers. A referendum turned that down, I believe, 58 - 42 percent. The local gub’ment came out and immediately said, “that was a non-binding resolution”. Nobody wanted the NBA back in Charlotte. George Shinn had infuriated everybody in Charlotte. But the arena is in and still they draw poorly.
The Charlotte suburbs are the most pedestrian unfriendly mess I’ve ever seen. But all you Yankees, keep heading down, thinking it’s nirvana. To quote Dr. Zeus, “you might not like what you find”.
Dr. Zaius: You are right, I have always known about man. From the evidence, I believe his wisdom must walk hand and hand with his idiocy. His emotions must rule his brain. He must be a warlike creature who gives battle to everything around him, even himself.
Dr. Zaius: You are right…
Alad, how long have you been waiting for that Dr. Zaius reference? One of the classics.
Been waitin’ awhile…
One of my favorite sci fi movies.
“In New Hanover County, a nominal number of closings have fallen through because of mortgage problems, said broker Lenora Norris. But she sees a pent-up demand for homes here, despite the sizable inventory of homes for sale.”
“Pent up demand”? Translation: If only we could go back to giving people with no money and poor credit loans for more than they can afford, the pent up demand could be alleviated.
–
“‘California is a big market for us. They’re paying cash,’ Norris said. ‘That type of client has helped us to maintain our property values.’”
Think about all the Californians who missed, or are missing, the boat – cashing out and moving to much cheaper area.
Earlier this year, I met a San Diego RE agent, in his late 60s, who moved there from up north and bought a condo in 2003 with the intention of selling in 3-4 years at good profit and moving to a cheaper area to retire. He conceded that that wasn’t going to happen.
Jas
“Jill Jackson, a single mom and apartment renter with an annual take-home pay of about $24,000, managed to go on an incredible real estate buying binge last year.”
“In the span of 10 weeks, she bought 10 properties. She did not put a single penny down, borrowing the price for all 10 by signing for mortgage loans totaling $1.84-million. The investment plan seemed too good to be true. And it was.”
Stories like this are almost beyond belief, even worse than the $14,000/year strawberry picker buying the $700,000 home.
If Casey’s wife leaves him, Jill might be perfect.
Dear Jill,
Sorry to be hear about your hurt from the investment fiasco. God sure works in mysterious ways. But I wonder why He would let you close on 10 unseen properties and take on 1.84 million dollars in debt? Oh well, just keep trusting Him.
By the way, would you also pray this morning that He’ll unfreeze the commercial paper market so the whole economic system doesn’t collapse. Thanks.
Sincerely, your church acquaintance
I had a good chuckle at this one becasue this is my MIL’s attitude in a nutshell. Everything (good or bad) that happens in her life is “G_d’s will.” I pretty sure, though, that He or She didn’t show up at the closings for all those houses she is now selling or fueled the greed that prompted buying them in the first place. I don’t think I’ll ask her to pray to get the commerical paper market unfrozen, although it would be fun to get her reaction.
I had on a reality show where mixed martial artists compete for a contract with the UFC promotion and one of them said that he knew that he was going to win because God had brought him there for a purpose.
I found myself yelling at the TV, “Yes numbn!ts. God brought you here for a purpose. He brought you here to be broken and humbled and to finally realize that God, creator of the universe, doesn’t spend 24 hours a day hovering over your shoulder making sure your life goes exactly the way you want.”
Talk about an entitlement mentality.
I don’t know where you live, but I have never heard so many people use the “Jesus excuse” as I have here in Florida, especially the Tampa Bay Area. Even many of my relatives pull this nonsense. It makes me furious, it’s completely ridiculous, and makes you sound like a Baker Act candidate.
I don’t care if it rains or freezes
I got me a plastic Jeebus
Sitting on the dashboard of my truck
Oh yeah….Ed Rush!
Goes well with another 60s classic from John Prine that still rings true:
“”But your flag decal won’t get you
Into Heaven any more.
We’re already overcrowded
From your dirty little war.
Now Jesus don’t like killin’
No matter what the reason’s for,
And your flag decal won’t get you
Into Heaven any more.”
Does anybody think this women should get off the hook for 10 fraudulent loans . It’s not good enough that somebody like this women says they didn’t know what they were doing .I want to know how much money this straw buyer was given for going in on this scheme . When you make 24K a year in income you can’t say you didn’t know what you were doing ,especially sight unseen property purchases . The FBI should look at how much her bank balances increased after the purchases .
The church congregations in FL must be doing some serious overtime, praying that the fountain of overnight wealth may be restored so that all of God’s children may once again rejoice with all of God’s bounty.
Got 10% down?
I believe you will find by further investigation that this woman purchased the inflated ghetto properties of the church “pastor”.
He convinced her to get on the “property ladder’, but buying all the ghetto houses he purchased, or had contracted as a pass-through. He is thanking God. or maybe his god. Both should be prosecuted for Fraud.
Dear Jill
Sorry to hear about your financial problems but you must not worry. The politicians are going to rescue you and the banks by sliding their greasy little fingers into the wallets of those who have saved, avoided being sucked into the bubble by using common sense. Of course, the banks will always be rescued. Try buying mining shares next time. The ones being touted by telemarketers.
If 2007 is random brick walls on the road, wait until 2008, when the anvils and boxes of ACME TNT start falling from the sky. Then the show is going to get really exciting!
“ACME TNT”
The double loan reset wave packs the punch of Marvin Martian’s “Eludium Q-36 Explosive Space Modulator”.
–
“The sales topped out at $345,000 six months later. In June, one sold for $176,000 - lower than the 2005 price.”
That is an almost 50% downer. This show is coming to a neighborhood near you — from Carolinas to California.
In Tehachapi, the listings to pending ratio was 1.2 in spring of 2005 and now it is 14.7. With 2 years worth of inventory (quite a few pending wouldn’t close) it is only a matter of time before prices will fall at least 50% from the 2005 peak. I say, some time next year. There was severe overbuilding of SFH here, as is the case in many areas where land was easily available for building. Where land was an issue the condo-mania took over.
Jas
JJ,
That is an almost 50% downer. This show is coming to a neighborhood near you — from Carolinas to California.
VERY FUNNY
“Tehachapi”
I don’t know where they are getting the water. I attended some special nonpublic meetings in Kern Co. 20 yrs ago saying that their was limited water for a certain growth in population and Tehachapi and Bakersfield have far exceeded that.
–
Yes, water is an issue and will limit growth if nothing else does. At some point most of CA would have to wrestle with the problem. So far, the new wells are coming up wet.
BTW, I heard that someone sold 1,000 acres with no water rights, i.e., the seller, a long-time owner in the area, would provide water to any future residents if homes were built on the land. I predict no homes will be built on that land for decades. It should be illegal to sell land without the right to water underneath. No?
Jas
50% price cut! Right now I feel like a crocodile in the Serengeti river waiting for the wildebeests to cross. The water is beginning to foam and I can sense their fear, as I slowly glide forward seeking the weak, the lame, and the sick. I also feel good about something else: The long wait before the rains has been worth it.
One thing about the southeastern states, we’d better start exploring alternative energy sources, and fast. And additionally learning how to construct or modify buildings and residences so that people can live without AC if need be. I’m not going to get into an argument about the causes of global warming. Whether real or man-made, it is definitely getting hotter during the summer in a number of areas of the country. So far, Florida has had its hottest, driest summer. And I don’t think corn and cow plops alone are going to save us. I’m also not going to argue about whether peak oil is fact or fiction. The point is, oil is not something we have much of here in the states and the quest for oil and resources has caused misery in much of the world. The southeastern states are really gonna suck if the AC goes out. Solar, and Tesla technology is what is needed.
It has always amazed me on my trips south how few modern houses were built with the heat in mind. Clearly the power would never go out nor would A/C become the expensive luxury it used to be. The old “shotgun” houses always seemed much more sensibly built.
Imagine our country w/o a/c?
“The old “shotgun” houses always seemed much more sensibly built.”
I agree with this.
peaked roof bald cypress cracker shacks under giant live oaks … definitely more sustainable
we have a lot of them in gainesville … they outlast the pine houses because termites think bald cypress wood is yucky
unfortunately, bald cypress grows slowly and the stocks were used up early in the 20th century
guess the seminoles had it right after all
“The old “shotgun” houses always seemed much more sensibly built”
You may find yourself…
Living in a shotgun shack…
And you may find yourself…
in another part of the world…
- Talking Heads
Song called, Once In a LIfetime…..
Song called, Once In a LIfetime…..
We are moving along with our solar project nicely and our price of electricity is pretty much locked in…
Despite whatever the price of oil goes up to, to power the grid.
Great idea. Let’s build new energy grids at the same time as soon as we’ve rebuilt Iraq.
Palmetto,
I have found it increasingly ironic that as we reach “peak oil” and prices are escalating, the free money escapades of the past few years have led to the development and purchase by American car buyers of the most ridiculously fuel INEFFICIENT vehicles since the 1960’s.
Hummers, Escalades, Navigators, Suburban-type vehicles are littering the highways, as every idiot who owns them thinks life will go on here in Bubble-land, just as it has in the past 5 years……..forever.
Anecdotally, I am seeing bike shop sales plummeting, fishing charters……….empty, thrift store attendance skyrocketing and many other retailers in trouble.
Idiot Bush will get lackey Bernanke to print us into oblivion to try and stave off the coming declines.
I fear my paper money is just that…………… paper.
Oil prices may fluctuate as demand adjusts to loss of income growth, but ultimately they will continue to rise and we are totally unprepared for the consequences.
if we are not buying enough oil so they can snow Ski in Saudi Arabi, they will find a way to lower the price. Trust me, when the Arab elite are not skiing, they will help US out.
For next year, Progress Energy’s traders have us locked into some good prices. Your fuel charge will go down if they’re your provider. In the long term, I think this may be the future:
http://www.stirlingenergy.com/
This is why I bought a house built in 1935. The redone attic will got hot as h*ll…but downstairs and the basement remain quite cool.
–
“Despite the recent downturn in the housing market, houses just keep on coming in Clarke County and the surrounding region. And county officials are at a loss about how to rebalance the market and ramp down development to match Athens’ modest 1.3 percent annual population growth.”
“‘All I know for sure is, in my opinion, we don’t need to be approving houses when we have 900-plus houses on the market,’ said Athens-Clarke Commissioner Doug Lowry, a real estate agent. ‘We are way overbuilt in Athens.’”
So, now it is govt.’s job to judge supply-demand? Free market or govt. controlled market? Make up your mind Mr. The problem was, and is, too many people playing with OPM when it came to building and lending.
Jas
“The tide of the condo boom turned so quickly few saw it coming. ‘It’s like an instant brick wall on the roadrunner show and there’s no skid marks,’ Loomis said.”
I nearly peed my pants! This is a HHB classic. The instant brick wall is funny, but topping it off with “no skid marks” is hilarious. Although, after the resets these buyers might find a few skid marks in their underwear.
Mrs. Jackson situation reminds me of Casey Serin’s situation. How many fell for this mortgage trap?
Bugs: “eh hey Ben, Daffy’s lost Wiley’s E. Acme catalog, I need to order something that will protect my wabbit hole from all this debris falling down from the sky…you wouldn’t have a extra copy would you?”
“California is a big market for us. They’re paying cash,’ Norris said. ‘That type of client has helped us to maintain our property values.”
Rich Californians with wads of cash…
Also known as middle class Californians with HELOC money, and an idea to make a killing on real estate speculation…
Also known as people with a wheelbarrow full of cash and a box full of stupid.
I wonder what part was Heloc and what part was moving there and discovering you could buy 2 houses with your chunk o’ equity, in toto?
Easy to discover anywhere outside of the Golden State, incidentally.
“‘Appraisals are being looked at carefully and cautiously, especially in high loan-to-value loans,’ or those with low down payments, Hutchens said.”
OK, I give — haven’t had any coffee yet — what is the difference between “high loan-to-value” and “low down payment?”
I thought the same thing….
All I can figure is
1) high loan to value = low down and the appraisal is close to the agreed sell price.
2) low down = low down, but appraisal is for quite a bit more than sell price. Equity coming from appraisal not down payment.
“Two years ago anybody could have gotten a 100 percent loan on a second home or investment property. Most could get 95 percent to 100 percent (mortgages) on stated income.’””
Up to about 3 months ago, people were using stated income no money down loans as a low-cost, easy to get “bridge” loan. People that wanted to move to a new area would keep their current house, but purchase a new house with the stated income, no money down loan. Then they would sell their current house, thereby looking like a “no contingency” buyer to the person they were buying from…in other words, they would look “rich” because the purchase documents wouldn’t have the contingency of them selling their old house first.
However, those times are bye-bye. Now you actually have to sell your old house FIRST, or make the sale of your current house a contingency of the purchase of your new house. That in itself has tightened up sales, and thrown many sales out of escrow.
Now people don’t *look* so *rich*. It was all an illusion.
Jill Jackson’s back in the news! You go girl!
Is there something surprising about a person getting completely ripped off when they do business with criminals? Either Jill is a complete ignoranat fool or an accomplice to the crime.
If I recall correctly Invesor’s Outlet had that jingle on their website about “Don’t let those other guys steal your house! Yo, yo! Yo, yo!” Recent check of their website shows those homies have gone upscale. Love their Investor Information web page that contains this nugget under the “Profit Margin” section:
“For most people that invest into anything, including real estate, their profit margin (return on their investment) is the most important part of their transaction. That’s why I.O. is proud to say that you could and will make 12% to 30% return on every investment property that you purchase from I.O.
This is unlike the stock market, where every dollar that you invest is a risk going in. Even if your hard earned money sits in the bank for a long period of time, the bank will be happy to give you 0.01% interest at the end of every month, which is equivalent to pennies.”
http://www.investorsoutlet.com/information.html
“Beginning with three closings on a single day in February 2006, Jackson says she followed the Investors Outlet instructions, buying 10 properties…a premium of 61 percent.””
I wonder how much of that premium went back to her as “cash back at closing”. Maybe she didn’t do too bad?
Didn’t see your post but as you can see by my post above I agree with you . This investment group gave a cash back incentive to these straw buyers IMHO . Sometimes it’s amazing how little money it takes to get straw buyers to give up their name and identity on a investment scheme .Of course these criminals are going to hit the seminar circles ,churches ,and they even advertise their money lure on telephone poles /the internet .
Yesterday someone posted a listing where the seller was advertising a 200K cash back for a buyer of his over-priced home .
When it all comes out in the wash how much cash back fraud was going on in 2005 and 2006 ,it will be scary .
Hey, it’s Jill with some sweet cash back!
http://www.investorsoutlet.com/services.html
“Jill Jackson, a single mom and apartment renter with an annual take-home pay of about $24,000…. In the span of 10 weeks, she bought 10 properties. She did not put a single penny down, borrowing the price for all 10 by signing for mortgage loans totaling $1.84-million.”
The result of highly praised FRB unsupervised lending innovation. This behaviorial pattern would be stymied in the old system.
Old Cartoon Violence: Wile E. Coyote falling thousands of feet, survives somehow
New Cartoon Violence: Video Games… kill or be killed, and then hit the reset button and play again.
Loomis, the Myrtle Beach realtor, states that someone bought a condo which had lost value and that means that “Buyers are out there.” Nope. Greater Fools are out there. To be a lesser fool, buyers should wait AT LEAST 2 years from now.
What puzzles me is how these flippers ever made any money in the first place. Once in a while when I’m bored I watch one of those flipper shows on TV out of some perverse accident watching impulse.
Typically you have some young single type with absolutely NO construction or real estate experience pick up a shamble of a house. They dump $50 grand into it or something to that effect, then invite some clueless real estate agent in to give a 5-minute walk-through “appraisal” who then give suggests a possible listing price. The other night there was one that went as follows:
Purchase price: $910,000
Investments: $70,000
——————————–
Total cost: $980,000
Then the real estate agent after poking around for 5 minutes suggested a listing price of $1,050,000 and the happy flipper was giddy about his $70,000 profit.
With a calculator I’m guessing the real picture really looks like this:
Purchase price: $910,000
Closing costs (1.5%) $13,950 (probably stacked onto the loan amount)
Investments $70,000
Taxes and insurance for 6 months @ 2%: at least $5,000)
——————————
TOTAL investment $998,950 or right around $1,000,000
Then we have a possible listing price of $1,050,000 and in any ordinary market you can knock off about 5% from a realistic listing price and we also have the commission and closing costs. So our flipper’s sale price comes down to
Listing price: $1,050,000
Probable actual sale price $997,500
Real estate commission at 6%: $49,875
Net sale: $947,625
By the time he’s done he’ll probably have at least another few thousand in closing costs so we can probably round down to around $945,000.
Using the actual numbers from the show it looks to me like the guy is actually going to be losing at least $50 grand on his flip. And this is supposed to be one of the success stories.
I really don’t get the math here.
It’s nothing to do with math. Every boom and bust has taken the same path. Forget pre-2000 and after 2005. During 2001 and 2005 all math rules do not apply. In the Tulip mania boom and bust it was the same. In the dot com. boom and bust it was the same. Realtors and flipper and brokers were not fools. They were opportunists like muggers who roll drunks in dark parking lots or alleys. Eventually, they get caught as the realtors and brokers and flippers are getting caught today. The smart opportunists got in around 2002 and got out in early 2005. Unfortunately, most are not smart and didn’t get out.
For most, it was too tempting to just roll the dice again, and again….
The production maybe kicks in some money to the buyer to lessen any risk. In this day of low cost reality shows, what is $100,000 kickback from a network to get advertiser revenues? I don’t know. I still am puzzled by that ‘Lifestyles of the Rich and Famous’ series. I thought they featured mega-stars’ homes as a way to advertise them. Maybe vanity was always the culprit?
Did you add the mortgage payments during the flip? Those have to hurt on a $1M loan.
What always kills me about these shows is that you usually have some youngish 20-something “flipper” with no real clue about construction or real estate who is undertaking his “flip” and then there is usually some older general contractor who is doing the actual work and often doing a decent job. And I’m thinking to myself. That older 40-50-something general contractor who is doing the actual remodel work probably makes twice what the flipper makes with no risk. Who’s the smart one here? It’s never the experienced contractors who are doing the flips. I guess they know better.
““‘The easy money has gone away,’ said Chris Hutchens, a loan officer in Wilmington. ‘Two years ago anybody could have gotten a 100 percent loan on a second home or investment property. Most could get 95 percent to 100 percent (mortgages) on stated income.’”
This Hitchins is on the radio weekly and has been hawking 80/20’s, no money down, Helocs and 3/1, 5/1, 7/1 etc through a radio program talk show with his compnay Alpha mortgage for the last 5-7 years.
I am sure there are seriously thinking about turning in the Rolexes to the pawn shop, along with all of the other encumberances of obscene ostentatiousness. I wonder once these crooks get in bed for the night, if they think about how they have damaged society for their own gain, or do they dream of monetary sheep.
Wilmington is in serious trouble, over built, poor quality, with the most unlikely people owning 2-3 homes as speculation with no real jobs other than contruction. Lots and lots of California equity locusts here. The tax reassesments have not been done yet for the higher house prices( since 1998 because of the depressed hosuing market here in the past) so the eupghhoria of rising home prices is soon to yeild screams of unfair taxation and a flood of existing homes put on the markret.
Wilmington was one of the places identifeied by Lereah as a place for good investment that will yeild 38% short term gain.
Very little is selling now . Tons of houses on the market. The locals are priced out and refuse to buy in now.
One paper ran and article in the Wrightsville beach local rag quoting a local realtor smugly saying, “if you can’t afford to buy a house here then you need to move out as this is the beach and you should expect high housing prices”. That sort of attitude does not go over well with the locals.
Before the booom it was hard to sell a house here for years and years. Then the bubble tripled prices. Now on every block realestate lingers without a buyer or looker for months and months.
Yes there is some schadenfreude on my part but also sadness that the flovor of the place has been ruined by carpet baggers from within and the west.
The St Petersburg Times from Florida. “Jill Jackson, a single mom and apartment renter with an annual take-home pay of about $24,000, managed to go on an incredible real estate buying binge last year.”
“In the span of 10 weeks, she bought 10 properties. She did not put a single penny down, borrowing the price for all 10 by signing for mortgage loans totaling $1.84-million. The investment plan seemed too good to be true. And it was.”
hehehe…and some hedge fund has probably leveraged the mortgages on these collateral assets 10X via some sythentic derivative formula.
I’m sure Barney Frank will find a way to make everyone solvent again.
I’ve often wondered, what did Jill Jackson really lose? She didn’t put any money down for any of these purchases. She probably didn’t make any payments on any of these loans either. All she is out is bad credit for the next 5-7 years. It’s not like she will ever buy a house. She is a born to renter if there ever was one. She buys everything else with cash. She should at least make some attempt for restitution even if it is symbolic at best. You would think she received some money from Ken Rushing and William Andra Joel for being the strawbuyer. She should have to pay something for the damage she has contributed to. The state should also investigate Joel, Rushing, and the rest of the Rehabber’s Superstore crew.
From N.C.; Frandano said, “… a nominal number of closings have fallen through because of mortgage problems, said broker Lenora Norris. But she sees a pent-up demand for homes here… “
That’s REALTOR-Talk (pent-up demand). It sounds-like so 60-days-ago. It sounds like crap.
The fact that Ralph Roberts gets quoted about real estate troubles makes me think of the “pot calling the kettle black” line.
Man I hope they don’t try to rev up the housing bbubble again. I just want this #U($ to end….
Shoot- I tried to shoot you a link to an article about overbuilt markets that I thought you might enjoy, but it didn’t go through. Anyway, now it’s linked from my name, so hopefully that’ll work!