Local Market Observations!
What do you see in your local housing market this weekend? For sale signs? “The number of homes for sale in central Ohio continued to skyrocket in August, the Columbus Board of Realtors said yesterday. More than 4,500 houses were added last month to the inventory of homes for sale in the board’s MLS. There were 19,789 houses for sale last month locally, the board said. That’s 83 percent more than were for sale five years ago, said Brad Bennett, president of the Realtors board.”
Developers in trouble? “Greater Des Moines’ residential real estate market has shown signs recently that some developers may be the next casualties in a market already reeling from foreclosures. The recent foreclosures on developers may be just the tip of a much larger iceberg, say attorneys familiar with the cases.”
“‘I think there are a lot of developers who are in serious trouble,’ said Don Neiman, one of three bankruptcy trustees for the southern district of Iowa. ‘(Those developers) haven’t filed yet, but I would expect them to file Chapter 11. I’m surprised we haven’t seen these file yet; we’re just waiting for the other shoe to drop.’”
“‘Once the house of cards starts coming down, once one lender forecloses on one development, that causes defaults in other loan agreements, and they’ve all got guarantees, and it just starts ratcheting down,’ said Matt Cronin, a Des Moines attorney. The end result, Cronin said, may be further decreases in property values.”
“South Korea’s mid-sized construction companies are collapsing like houses of cards, intensifying fears of a looming liquidity crunch in Asia’s third-largest banking market.”
“‘This is a critical moment,’ said Chung Dong-joo of the Korea House Builders’ Association. ‘We call this a ‘bankruptcy surplus’, as companies have the ability to raise capital but are going bankrupt because of the high number of unsold apartment units.’”
Foreclosure avoidance? “Sheryl Christman allegedly had a plan that would give her what her mortgage company wouldn’t; a way out. Four days shy of losing her 3-year-old home to foreclosure, Christman allegedly set the $150,000 residence on fire Sept. 1, Kent County sheriff’s officials said.”
“Christman was arraigned Friday on a felony arson count that is punishable by up to 20 years in prison. She is being held in the county jail on a $20,000 cash bond.”
“‘That much fire that quick, you almost have to be suspicious of its origin,’ said Russ Jansen, the Gaines Township fire chief. ‘We just wanted some sort of an explanation, and that never came. For us, this is really the first time we’ve seen anything like this.’”
Signs of speculation? “Real estate broker Anne Marie Moriarty told me that seven Irish investors had already bought in the development, with the prospect of more to come.”
“‘Many of my clients are really fearless - they believe in buying in property and knowing that they are always going to make money in New York City, they will buy multiple apartments at one time,’ she said.”
Patty-o Go Broke
“Real estate broker Anne Marie Moriarty told me that seven Irish investors had already bought in the development, with the prospect of more to come.”
“‘Many of my clients are really fearless - they believe in buying in property and knowing that they are always going to make money in New York City, they will buy multiple apartments at one time,’ she said.”
There are old investors and there are bold investors, but there are no old, bold investors.
If the Macklowe’s go bust on their CRE loans, with 5 billion due in January,for buildings they bought for 7.6 billion at 110% LTV with only 50 million down in the spring, we could see some ground shaking. There’s a handful of families, the Macklowes, the Roses, the Tischmans, who own vast tracts of Manhattan RE, both residential and commercial, and the Macklowe’s loans are recourse.
I read a big portfolio buy by Tishman in Chicago is not going the way they had planned and they will have to hold onto it and use the income rather than sell it.
Mcaccklowe went crazy with the credit card buying and developing the last few years. I kept wondering where is he getting all of the cash for these overpriced buys. I know there a re a lot of hedge funds who need office space and money is not a factor, location, view and prestige is. But there is a limit to everything.
“The number of homes for sale in central Ohio continued to skyrocket in August, the Columbus Board of Realtors said yesterday. More than 4,500 houses were added last month to the inventory of homes for sale in the board’s MLS. There were 19,789 houses for sale last month locally, the board said. That’s 83 percent more than were for sale five years ago, said Brad Bennett, president of the Realtors board.”
Columbus and a lot of the the larger cities in OH bubbled, but not like the rest of the country. Their prices definitely need to drop. Many small areas around the state barely rose or stayed stagnant. Of course Columbus gets the lion’s share of tax money for infrastructure, so that could have something to do with it.
Market update:
1. More and more random people we meet (supermarket, etc.) congratulate us on renting, as opposed to looking at us funny and telling us that we can buy with no money down.
2. We are in the process of moving into a house that is 500 square feet bigger, has a bigger yard (as opposed to no yard), is in the same neighborhood, for the same rent. You can thank the housing market for this one. It was on the market for the past 6 months, but at the price we would have offered (a little above rent equivilent), we thought “why bother?”. After a few drops out of escrow, the owner put it up for rent. Sweeeeeeeeeeet.
Congrats!!!
Wait a while for comps to drop even further in your hood and then try to negotiate a lease to own deal.
Congrats. The thing that worries me however on situations like yours is coming home one day and finding that the bank is foreclosing on the house because the owner is upside down. And all your stuff is sitting on the curb.
Same thing happened after the San Francisco Loma Prieta quake a few years ago. Houses with red tags and no quake insurance started spontaneously combusting all over the city over the next several years. Expect to see more of the same after this earthquake and aftershocks settle down a little more and people become more desperate.
Ben! What can I get this for if the bubble bursts in Sedona? $13M is a little out of my price range!
http://www.luxist.com/2007/09/20/sedona-serenity-estate-of-the-day/
Nice place, but a very crowded market.
Gorgeous million dollarviews, but a very strange badly designed modern house. I dont think it blends in very wellThere are much better modern houses in Sedona.
(I moved this from the Bits Blog to LMO here, since it is market intelligence on Sacramento)
Auctions are not selling houses in Sacramento. Maybe they will try giving them away next time!
The July 22 auction in Sacramento by Hudson & Marshall listed 61 homes for bid in Sacramento County. 60 days later, only 11 have closed escrow and 11 are “pending”. 34 houses are back on the market in MLS.
So much for “selling a home in 5 minutes, instead of 5 months.”
http://sacrealstats.blogspot.com/2007/09/july-22-auction-results.html
So, and of the 11 that closed, 6 were 100% financed, 3 more were 90-95% financed! As pointed out in the post, many of these look like candidates to be foreclosed on again soon.
When you insert Des Moines into the greater housing bubble, it gives you an idea of how massive this white elephant economy of ours, really is.
“Greater Des Moines’ residential real estate market has shown signs recently that some developers may be the next casualties in a market already reeling from foreclosures. The recent foreclosures on developers may be just the tip of a much larger iceberg, say attorneys familiar with the cases.”
Apparently, it’s different in Dallas - Ha, Ha, Ha!!!!
“Moody’s: Dallas may dodge home price slump”
http://tinyurl.com/3×93d2
“Dallas will probably dodge home price declines as a result of the housing shakeout, a new forecast predicts.”
In fact, they are predicting that Dallas prices will trend upwards. Moody’s is always so spot on with their predictions
Rudekarl is still predicting a Dallas meltdown. This is, afterall, the home of the $30K/yr millionaire. These folks are so leveraged trying to keep up with the Joneses, that when prices stagnate or go down, and the resets hit - say goodbye to Big “D”
I own rental properties around DFW. I usually buy new construction, but I have not bought anything in over one year simply because I cannot find any deals, even with recent incentives. Rents are about the same as they were three years ago (though vacancies are down), but one cannot find any new construction where monthly rent is equal to 1% of the purchase price. E.g., I purchased houses a few years ago for 110k (after incentives and a price reduction instead of a realtor commission) that would rent for 1.2k. Now, even after incentives/commission, a house that would rent for 1.2k costs at least 135k.
I wonder what will happen to certain subdivisions that would not exist but for subprime. I looked at one the other day in south Dallas (35 and I20) that was half done and I cannot imagine it getting finished. Rough neighborhood on the edge of the freeway (literally), 95+% subprime. Salesman was terrible, 22 year old college student, who agreed that he could not see how they will sell out the subdivision.
Still, I am not sure houses in DFW could fall all that much, though they do appear to be building a whole bunch of condos in Uptown. The ratio of property tax and insurance to total payments prevented creative financing from having too much of an impact.
Am I the only DFW-area resident who has noticed a huge increase in the number of cars with out-of-state plates cruising area roads? Florida, Indiana, Michigan and, especially, California are represented.
These newcomers seem to believe things will be better here. However, I doubt many of them realize that without a recognizable skill (i.e. bankruptcy lawyer), or willingness to perform hard labor (i.e. roughnecking), they’ll be no better off than they were before.
Even renting here is no guarantee of economic security:
http://www.star-telegram.com/arlington_news/story/242450.html
I think there is more opportunity in Dallas and Ft Worth than in many other cities, but burned flippers, failed mortgage brokers and underemployed real estate agents better think twice before packing up the U-Hall.
After reading the article in your link, I keep wondering why it behooves foreclosers to move tenants out of a 40-unit building. I can understand moving tenants out of a HOUSE on foreclosure — any potential buyer might want to move in. But surely the buyer of a 40-unit building is likely to keep on renting out all the units, unless he/she wants to tear down the building (why).
I suspect the loan company wanted everybody out for the same reason the former owner got foreclosed–the property wouldn’t cash flow. If you take a look at a local TV report about the situation
http://cbs11tv.com/local/local_story_262193846.html
and watch the video, it becomes apparent that not all tenants were current on their rent. September rent should have been paid by Sept 1st. Maybe it was just easier to clear everybody out and start from scratch than try to evict non-payees one at a time. This complex is near UT Arlington, so maybe the lender will pitch it to potential buyers as off-campus housing.
As a footnote, the manager at my apartment complex left notices on everybody’s doors a few days ago warning that partial rent/utility payments will not be accepted. It appears units occupied by financially marginal tenants can kill a property just as quickly as vacant units.
No UTA student would be caught dead in that complex unless he was shot dead trying to buy drugs. The city tried to shutdown the complex next door due to the drug problems. Not a nice neighborhood. I suspect, there might be some Section 8 or Katrina people that the new owners want to get rid of.
If DFW escapes unscathed, it will be because of Californians coming here and buying homes that they think are cheap. My sister sold her house to Californians for much more than it was worth. They thought they got a steal. You can find many cheap homes among the used housing stock in the surburbs, but many of the new developments are ridiculously priced.
It won’t. That Morning Snooze article wasn’t even worth comment. I put it in the kitty’s litter box.
I remember an arson spike being predicted on this blog back in the Spring. What’s next?
Bill,
Our family lost nearly everything in a ‘91 fire–I was tramatized
into a catatonic state for days! People were so compassionate, and continued to remind us that we were fortunate to have each other…I couldn’t agree more!
I can’t imagine deliberately setting a fire! Sigh.
Hey, Bill, I just wanted to apologize for my response to your post in yesterday’s Florida thread. I thought you were taking a swipe at me, until tampaesq called my attention to how I had worded my post. Your response was actually quite funny. My face is still a deep shade of red over that. Sorry for the misunderstanding.
Wow. Now that’s class and grace. Thought that was gone in his society. I see why I have found a kindred home here.
Palmetto,
I’m still waiting for your apology over your gratuitous swipes at me during the infamous “single mother threat”, implying that anyone who is upset at fathers and mothers who don’t live up to their responsibilities is a closet child molestor. Apparently you have a habit of smearing people you disagree with.
No problem, palmetto. I should have put a smiley face emoticon after my original comment.
Your “(I’m one of them)” juxtaposition was a hoot!
“What’s next?”
Charcoal prices headed lower.
Houses in our neighborhood have gone from $400,000 down to $318,000 (bank owned homes). Most sellers are not budging much though.
Southern CA.
They will.
House on corner starts as FSBO
Months later listed with century 21 with “Great Price” Sign
Months later listed with “Reduced Price” Sign
Meanwhile house directly across goes up for sale, ouch .
There are seven houses for sale on my street. They’ve progressed the same way, except that two of them now have “For Rent” signs out front. The last house to sell went three months ago as an REO at 15% below current asking prices.
This is so depressing.
http://www.seenyhomes.com/propertysearch/propertydetail.aspx?MLSNumber=*982564&MLSMarketCode=LongIslandNY&MinLat=40.751971&MinLon=-73.937559&MaxLat=40.768224&MaxLon=-73.913612
$1mil! for this POS in a crappy area of Astoria/LIC
Things are STILL overpriced here by 50%-60% at least.
Don’t know if we can wait for prices to come down to earth. We might just move out of NY.
that is truly a remarkably overpriced POS. and i agree that it WILL be reduced by 50% before the botom is reached — although maybe not for another 2 or 3 years.
why not wait it out, ed? it just may take another 3-5 years before the bargains really start to pop up in nyc. and you’ll just overpay somewhere else as well.
real estate is very, VERY sticky on the way down. the bottom may not be hit for another 5+ years.
Hey ed,
if you can, rent. Stay mobile. No way to tell how this will play out, but being able to move to take advantage of situations, and not being stuck in a neighborhood or city will be a serious financial advantage. IMO
craptastic!
I’ve had my eye on a nice condo tower since it opened this spring. A unit that I like was purchased for $410k and then immediately relisted at $780k. It’s now down to $660k. A different unit in the building is having an open house tomorrow - I plan to go to and check it out. The owner is trying to double their money in the span of a few months as well.
Not strictly housing related, but I’ve been watching some stuff on eBay recently - vintage cars and vintage wristwatches. It is looking like items with starting bids right around what they would sell for 6 months ago are expiring with 0 bids, but items with low starting bids are selling with lots of bids, just at much much lower prices. For example, a 1969 Mercedes 280 SL convertible sold for about $22,000 with 23 bids a few days ago, while 5 of them with starting bids of $40,000 expired with no bids. An old Tissot watch I saw ended with a winning bid of $90ish, while the same watch listed by someone else with a starting bid of $600 expired with no bids.
One thing that makes me chuckle is that in both houses and eBay items, sellers are still saying how rare their item is when there are dozens available at once. Ignore that half the homes on this block are for sale, this is a rarely available home in an exclusive neighborhood!
One more thing… A friend of mine has a closing scheduled for next Friday. It’s probably going to fall through because the buyer is having trouble getting financing. That means her purchase of her next house is going to fall through - she needs the sale to qualify for her financing. The seller of that house is in the same boat.
Three failed home sales with just one buyer failing to get financing!
This is quite common. Years ago like many suburban housewife my mom sold RE. Not full but almost like a hobby, a way to pick up some extra money. I remember her telling stories of one failed deal impacting a string of 10 - 15 deals.
My parents had to get a bridge loan to make their sale and purchase work in the mid 80’s. Not sure if I would risk that in this market.
I discouraged it with my former clients even if they owned their first house outright. It gets expensive with double taxes, maintenance, insurance and utilities. Plus one has to sit empty, and my feeling is empty houses deteriorate fast. One couple did it anyway and it took them a whole year to sell the first one. It was an hour from the second one and they had to run over to check on it, mow the lawn, etc.
“Christman was arraigned Friday on a felony arson count that is punishable by up to 20 years in prison. She is being held in the county jail on a $20,000 cash bond.”
“‘That much fire that quick, you almost have to be suspicious of its origin,’ said Russ Jansen, the Gaines Township fire chief. ‘We just wanted some sort of an explanation, and that never came. For us, this is really the first time we’ve seen anything like this.’”
Well she got rid of her problem…and put a new roof over her head at the same time..it may have bars..but hey.. home sweet home!
Not only that she has 3 meals, a room and clothes all free.
Her incarceration isn’t “free” - the taxpayers will shell out $40,000 a year to keep this FB-arsonist behind bars, not to mention the costs of the investigation & prosecution, and the years of post-sentence welfare we’ll be springing for because no one will want to hire a convicted arsonist. We won’t even mention the higher insurance premiums.
Sammy, I realize that. It was a joke. Chill Sammy
And after they shell out $40k in one year to keep her incarcerated, they’ll shell out another $70-80k to keep her incarcerated for the remainder of the year. (Costs ~$110k to keep someone incarcerated in a medium or high security prison. One of the reason the “club fed” minimum security prisons survive is that they’re only $50-60k/year/prisoner.)
Well she got rid of her problem…and put a new roof over her head at the same time..it may have bars..but hey.. home sweet home!
Good one. Plus she gets 3 squares a day, free rent and earns a pay check. Only in America.
Arson activity is bullish for home prices. The NAR will soon add the arson rate to its monthly metrics:
“If arson maintains its current pace we expect the resulting inventory reduction to drive a rebound in home prices by the spring of ‘08.”—-Larry Yun
the only freestanding single family mansion in manhattan, on riverside drive and 106th st., had been gradually reduced over the last 2 years: originally listed at $29m, then $27m, then $25m, and then $23m.
it has now been re-listed at $30m.
so much for any reductions at the top end of manhattan real estate.
however, i think there is much truth to the nabe-by-nabe widely varying prognostications recently published in new york magazine. i expect most of the outer boroughs to crash, and harlem and certain outlying manhattan nabes will be hit hard, while the gold coast nabes of manhattan will increasingly be seen as good bargains to europeans as the dollar continues its descent.
Hey Manhattanite, I think you mean the white marble one on 107th.
Hard sell, it fronts the side of 107th, and opens grandly right to the sidewalk. No private garden, no protected area, just a very low wall…much too exposed to passerby. Jim Rodgers townhouse is next door..it ain’t sold either.
yup, on 107th, made of limestone, designed by the architect wm tuthill, who designed carnegie hall. i think it’s rather ghoulish. there is a bit of a garden around it, and the wall just needs a bit of broken glass along the top….
it sold in 1979 to the current owner for $379K. that’s an 80x appreciation?????
the mansion which was on sale for $15m on the south corner of 106 & rsd was actually much, much nicer. don’t know if it sold….
Agreed, I think that one is spectacular, and it has a private garden. Wasn’t Bronfman the previous owner?
that’s funny! i thought bronfman had bought the 107th st. mansion, but i then read recently that the columbia law prof had owned it for 30 years.
could be! i wonder if it sold….
we should really post some photos of these babies, but folks — just check out the >$1.2M upper west side of the nytimes real estate section. it’s free w/registration. see what manhattan living is really like … or at least what spike and I would really like it to be
Saw Cadillac Flats late last night. I work in affordable housing and am familar with the area. IMHO, once again the politicians have failed in their duty to protect the vulnerable. And, don’t get me wrong, I believe in the capitalistic system, just not the way it is being played. Fair markets are anything but with fraud, lies and misinformation from government sources. rant off
That said, here is some background for Napa.
From city planning meeting “…applicant agrees to increase the number of inclusionary units to 6 with 3 sold at prices affordable at 100% of the median income and 3 at 120% of the median income The letter also agrees that the upper floor units will be sold for no more than $320,000 and the lower floor units for no more than $300,000.
The applicant also offers a $16,000 discount for existing tenants and closing costs of no more than $4,000 to be paid by the applicant for a total of discount of $20,000 The elderly tenants will be given a choice to purchase their unit at a substantial discount or to
continue renting under a lifetime tenancy agreement. “ (Not sure how this works but it is at least a nod to affordability and not kicking grandma out to the curb)
From http://www.nlihc.org/oor/oor2006/pdf/CA.pdf
Napa FMR for a two bedroom $1,112
Income needed $44,480
Area Median $75,000 (so about 4x median to buy, makes that $16K discount look ‘mighty fine’, wouldn’t ya say)
Napa Valley Register Article Thursday, November 17, 2005 By KEVIN COURTNEY Register Business Editor
“Two-bedroom apartments at Cadillac Flats, which now rent for nearly $1,000 a month, would reportedly be sold for between $325,000 and $350,000.”
So. looks like the price was negotiated doen by the city and an owner occupancy clause is to be added.
OC
Something doesn’t add up. http://www.richmondamerican.com
has an ad in todays OC Register listing their Bungalows on Bay St. development at reduced prices (was high 800k, now 690k), but on the website it claims that development is sold out. Aside from the foolishness of buying almost zero lot line McMansions at these prices I wonder if some of the contracts fell out of escrow and thus the ad today.
Other developers are reducing prices here and I am now seeing downward movement in condo/twnhse wishing prices. Also seeing Bank Owned ads and lots of “help me before foreclosure” listings in the paper.
The direction is right, but wishing prices still too high for me.
Delay starting homes “Could be because of housing market?”
http://www.latimes.com/news/local/la-me-lennar22sep22,1,3166433.story?coll=la-headlines-california&ctrack=1&cset=true
400 new San Pedro condos being sold as rentals. Developer gave up trying to get $400 for 1 bdr. when only 15 % sold: http://www.dailybreeze.com/news/articles/9944551.html
oops, down, not doen. Also, not clear on which price point is for affordable, inclusionary units and where asking price for non-affordable units will be set.
Get this–uneffing believable!
http://www.jsonline.com/story/index.aspx?id=665261
Subdivision lots to be auctioned
The sheriff’s foreclosure auction is scheduled for 1 p.m. Oct. 22 on about 85 vacant lots comprising roughly 30 acres in the Maple Lawns subdivision. The foreclosure auction is to be at the Ozaukee County Justice Center…
Maple Lawns LLC, owned by Grafton developer Lew Herro, wants the sheriff’s sale to be on a lot-by-lot basis, and the creditors want to sell the entire property, said attorney Alan Deutch, who is representing Herro.
Let’s see if I understand this correctly. Creditors (OWNERS) want to sell the property in entirety.
FAILED developer wants to sell lots individually.
Care to gander who will win? Let’s play lawsuit!
Ya just can’t make this stuff up.
Oh…I forgot to mention whomever buys this beauty is responsible for finishing the retention pond for stormwater runoff!
Not housing related, but I’ve been seeing more and more dented cars in my area. Possibly people are keeping their insurance settlement money to pay other bills, or have dropped collision in order to save money.
Or maybe all those sign twirlers are distracting drivers leading to increased fender benders?
“…more dented cars…”
Interesting — I am too. Not a huge increase, but noticeable. Hadn’t made any connection before your comment.
Or maybe they can’t come up with the deductible. We have State Farm and last winter when my husband had an accident during an ice storm the ins co paid the body shop and we dropped our deductible check off there also. They may not be giving the checks to the owners anymore unless they sign off not having the work done.
Probably you guys are just seeing my car around more. It’s a dented, old, POS. And yes, I don’t have collision.
Atlanta–
In the bubble years, the population of Atlanta has increased from about 3 million to about 4 million and continues to grow. The local water reservoirs were built in the 1960s when the population was less than 1 million. No improvements to the water sources have been made since then. One of Atlanta’s two main water sources, Lake Alatoona, is now running dry. Lake levels are falling ONE FOOT PER WEEK. The lake may dry up entirely. Two metro counties with a combined population of 700,000 have total outdoor watering bans due to the problems with Lake Alatoona. Yes, we are in a drought this year (something that has become more and more frequent as more and more trees are mowed down for development). Meanwhile development goes on, unchecked by anything other than market conditions. And if the lake runs dry there will be NO WATER for a large area of suburban Atlanta. How do you live in a place without water? What direction will property values go WITHOUT WATER?
What’s the value of a house, where you turn on the faucet…
And nothing comes out?
Kid Clu,
I think this will be major, and not just in Atlanta. Developers built with no concern for water tables…expect the southwest, to be really hit with this…overbuilding in an arid environment.
Kid Clu-
You need to look at this in context. The southeast has had a drought this summer with very little rain.
Certainly population growth places strains on water supplies, but you need to look at in in the context of a drought year.
It will rain again.
Tell that to Lake Chad
Our small town (pop 5000) even put a moratorium on building until they added more wells and a new water treatment plant.
Republic, MO (suburb of Springfield, MO, in the Ozarks, SW MO)
Reputable source (a hairdresser who has lots of real estate agents as clients) told me that she listens to their chatter and hears that there are 500 houses for sale in Republic, 300 of them vacant (mostly in new subdivisions). Republic has a total population of 9,000 people!
Let’s see, assuming that there are on average 3 people per household, and 80% live in houses, not apartments, that would put the occupied housing stock at 2400. 200 of those are occupied and for sale, and there are 300 more unoccupied and for sale = 2700 total houses in Republic. For sale total would then be 19% of the total homes and for sale unoccupied would be 11% of the total homes. Doesn’t this seem like it might be a problem? (Please correct my math if I made a mistake.)
Town of Republic, MO official website
Wikipedia entry on Republic, MO
I drove around the Eastbluff community in Newport Beach. Open House signs were everywhere. Ridiculous prices still for those condos, $800K+. I saw an abolute dump right on the back bay. It needed to be completely gutted and redone: $1,214,000. Then on Monday, I looked at this home in the Bluebird Canyon area of Laguna Beach, which is where I’m from and want to return to someday:
http://www.movoto.com/real-estate/homes-for-sale/CA/Laguna-Beach/802-Bluebird-Dr-203_L23970.htm
It, too, needs to be completely gutted and redone, needs completely new landscaping, no ocean view at all and to top it off, it’s at a busy
intersection. Last year, a wreck up the street from this was listed at $1,400,000, but sold for around $850,000. I’d take this one for $600,000 — and I have the cash
Must be a nice area, but what a joke of a price. You’d pay $600k for that!? I wouldn’t even pay $300k. Unbelievable.
http://www.sothebysrealty.com/PropertyDetails.aspx?R=104079868&D=*Virginia*&Ntx=mode%2bmatchallpartial&Dx=mode%2bmatchallpartial&Ntk=PropertySearch&Nty=1&N=12+149&Ntt=*Virginia*&PSeq=0&Dn=0&Ns=P_USDPrice%7c1&No=-1
Why would anyone build a spec house like this? The neighboring houses are ca. 1960 ranch houses on big lots…….
This POS round the corner from me has been for sale since I moved here over 2 years ago. It took them forever to put the finishing touches on it, but they appear now to have finished, finally. They changed real estate agent. Originally it was up for for $12 or $13 million (or maybe it was $15 million) but now they want $17.5 million. Maybe if they don’t sell it now they should go for $20 million; after all they need to recoup interest on the financing and maintain their profit targets.
Otherwise a lot of $2+ million ugly boxy McMansions with vinyl siding and faux stone exterior are replacing ranch houses that were purchased for ~$700 k in 2005. The spec ones go up really fast while the ones that appear to be purchased by someone for teardown followed by occupancy seem to drag on.
What a cozy house. It looks like #$%& hotel.
Houston Texas inner city is still holding up. Ive practiced banking and real estate law since 1978 so ive seen the cycles. Med center/Rice u area is selling at all time highs for both dirt and homes, but the market is docs who practice in the med center and upper management/lawyers/entrepeneurs who ride the toy train downtown. credit is still cheap and available.
On the big buck high end there is a concerted push to get loans in place for development. Lots of 100% money for offices and retail, but the lenders are looking closer and requiring miniscule equity now-probably to look like prudent bankers if the feds ever show.
The issue will be when the retail and office is completed and looking to fill up-the demand doesnt seem to be there. Big Oil is being careful with hiring this time around-I get the feeling they dont believe $80 POB. Oil still drives this town-forget about the diversified job base chamber of commerce propoganda.
Tex chick will disagree but as I know the numbers the inner city nice areas are still holding up.
I expect Housto real estate to soften as the US goes into recession next year> The outer areas-Katy, friendswood, Sugarland, Sienna plantation will suffer first and the pain move toward downtown, just as it did 1983-1992.
Pablo - I live near heights and I see a lot of McTownhouses sitting North of 59. I agree that the Med Center still has potential for development, but my Mrs works in one of the main hospitals. From what I understand, changes are happening in what Federal Govt. pays for under Medicare/Medicaid. This is leading to big budget problems for the hospitals.
A little off topic, but I have a question and didn’t know where else to post it.
We have been patiently waiting (for 11 years) to buy a house. We thought we might actually be getting close now that the market seems to be going downhill. However, my husband now feels that the government may be stupid and try to inflate their way out of this mess, and if that is the case then we might as well go ahead and purchase now. We can afford it, and we wouldn’t be stretching our budget or needing crazy financing (not that any is available now) and that we should just concede, and not worry that prices may go down later as long as we can make our mortgage payments and we don’t plan on moving ever if we can help it. (We’re “stay put” kind of people).
I was just curious, after the rate cut this week, what others thought about this and whether there are those who also are thinking along the same lines as my husband.
Thanks in advance for any responses.
You don’t say where you live, but my advice is free (probably more than it’s worth).
Buy land and build. Land prices come down first and fast in downturns, then building costs drop as materials then contractors prices drop. Even architects have to eat during a downturn.
We live in Colorado. We can’t afford to buy land and build. Custom houses are much more expensive then “out of the box” tract housing around here. Although, if we had the money, I’d love to custom build something.
Just back from a trip to Jackson, WY, to see the beautiful Grand Tetons and Yellowstone.
The local paper is funny - nothing, absolutly nothing for under $1 million.
No, wait a minute, a 2-acre ‘wooded’ plot for….$750K - ie no infrastructure, and a whole bunch of trees to remove before you can even build.
And here I was, thinking L.A was insane…
Lovely part of the world, though.
That’s because everyone moving to Jackson is FROM Los Angeles. Jax Hole is the new Aspen for a lot of the Hollyweird crowd.
Jackson is unreal. Employers have to subsidize housing for many of their employees, else they won’t have enough people to do the work. The hospital has had trouble recruiting doctors. Some Jackson workers commute from Idaho across a winding mountain road. There was an article titled “Priced out of Paradise “A real estate analyst published a report last month [i.e. July 2007] saying the median sale price of a home in Jackson as of July 1 was nearly $1.18 million. That’s an increase of about 28 percent over last year’s median price of $920,000.” The director of the Housing Trust said, “there seems to be a lack of appreciation for the urgency of the situation in spite of the latest 28 percent increases in the median price of a home. As the problem gets worse, everyone will feel the direct impact affordable housing has on the quality of life and availability of services for every resident.” Maybe Dick Cheney will have to provide room & board for the chief of police & some of the paramedics at his estate there.
Same insanity in Steamboat Springs. Workers commute from not so nearby non ski resort towns.
As long as your money is in something that the Fed can’t inflate, I’d wait. Even if the “dollar” prices go to the moon, prices are almost certain to drop in real money.
The simple fact is prices can’t go up (or even remain where they are) unless:
a) wages go up
b) new ‘affordability’ schemes like the interest deduction are hatched by our wise friends in DC
c) lending standards and buyer expectations are permanently altered to allow 50%+ gross income to go to housing
d) 3rd-world immigrants are admitted to subdivide unsold stock into multifamily flats that can support the current high cost
did I miss anything?
Yes, you missed the Weimar Republic option.
From 1976-1980 (approx.) in Reno, house prices increased much as they have for the past several years. I sold a house I bought for $40K in 1977 for $90K in 1980. This was also the time of Jimmy Carter’s “stagflation”. How did this happen? For one thing, wages did go up. I got a 9% raise in 1979. You could get CD’s with yields of 16% back then. People exercised their own creativity. In order to sell my house, I had to be a partial lender. I carried the paper (second mortgage) for about 1/3 of the sales price @ 9% interest for 5 years (compared to the 15%-16% the banks wanted; no credit check or income verification). I was paid in full by the borrower in the 5 years. That’s how it can happen. Never underestimate human creativity.
My tennis partner commented to me that everyone in his neighborhood is remodeling their places and waking him up at 7:00 AM with all of the noise. Perhaps the shortage of construction workers is coming to an end.
Are sure sure that a lot of them are not just fighting?
In SFV in LA four more houses in my 10 block area have been bulldozed for mcmansions this week. All the builders are in my neighborhood, trandforming the sweet 40s bungalows into monster, zero lot line monoliths. They are profiting big time. Can’t wait until the music stops and they get caught with a dead flip. In the meantime, I reluctantly renewed my lease for my third year of living here,though I should be grateful. It’s for half the cost of owning. But I am poking around at reos, not making offers,just poking.
Some of the more stubborn sellers here in Kauai, HI are starting to now cut their prices 10% - 100K or more. About time. By end of winter they’ll have wished they had cut a lot more. This place is toast, and a lot of the sellers are agents.
I have a brother in who lives in HI since 1979. Last year on a visit here, in a complete state of RE crack cocaine induced psychosis went on to lecture me on how he’s gonna build another house on his adjoin lot because “He’s gonna retire a multi-millionare”. He bought a 3/4 acre lot and built a stucco box in 2001 for a cost of 300k. His claim last year was his investment was worth 750K minimum and only millionares can afford to live there now, and he’s one of them. The truth is he he’s a 70k/yr wage slave at the local hospital. I did some quick research using data from OFHEO and prices dropped in HI roughly 55% in the 90’s. Upon further research, the precipitous price drop there was due to the close proximity to Japan and japanese speculation. (Remember when the japs were paying 500% premiums on classic cars and vintage guitars in the late 80’s?) I haven’t discussed the topic with him since then but I did advise him NOT to speculate and build another box next to his existing one “because RE is a horrible investment”. He disputed my contention of course but I doubt there is much evidence to counter the fact that RE is in fact a horrible investment.
I hear ya. I almost need to wear special googles - when I hear these claims my eyes bug out and I end up chasing them as they roll down the street. Everyone here with property thinks declines won’t happen to them. Front page article in the Oahu paper this past week noted that foreclosures have tripled over the past year but - wait for it - other states are far worse. Heh heh, for now!
It takes many many months to sell a property here - probably 8 months to a year and thats if you agressively price it. Otherwise its going nowhere fast. Wages in hawaii by and large are awfully low, and I wouldn’t want to own a house that either wasn’t free and clear or within reach of some of the better paying jobs (70K/year like your brother). Beyond that, you are counting on some chump getting on a plane, coming here, falling in love with your property out of the thousands upon thousands in the islands for sale, and having a lot of money. Not bloody likely!
Your brother has a decent cost basis, but he’s not going to be a multi-millionaire from real estate, or his job for that matter. Best way to shut up monkeys like this is to tell them to put it on the market for what they think its worth - they don’t have to sell, but they’ll find out what their house is truly worth. Types like that don’t have the cojones - and its an easy button to push.
looked out the window up here in ORegon.
Nuthin sellin.
Foreclosures have begun on the low hanging fruit. Sales at the biz are slowing, as are receivables……..the speed of the slowdown is rising.
Confidence has not returned in the PTB. When they start giving a little more of the straight dope, it might return, but slowly.
Population explosion in the Thousand Oaks area of Southern California. Just 8 short years ago when I moved here, you could park anywhere. Turning left or right at a major junction took seconds. Crime rate according to the Sherrif’s blotter in the local rag was limited to the occasional drunk, a couple of domestic disturbance calls, etc. The total reports filled a quarter of a page and sometimes, notr often, half a page. Jump forward 8 years. Filtering lights at every junction with long waits. Trying to find a parking spot in the supermarket means several tours around the lot,looking for someone pulling out. The crime blotter now takes up 2 pages. Break-ins, lot of vehicle robberies, etc. Street people filtering up from Los Angeles and the Valley. Now the damn panhandlers have arrived with their phony charity appeals standing outside every supermarket and getting in your face. Time for me to move further north I think.
Additional. There are Help Wanted ads everywhere in this area. For a long time I have fallen for the Bush b.s about “Full Employment” with an “Unemployment Rate of just 4.5%”. It sure looked that way with all the help ads. One on almost every restaurant window, supermarket window, and fast food joint. Then I suddenly realized why? Low income workers cannot afford to live here and with the price of gas, insurance, etc, even if they can afford a car the travel time and costs just don’t ad up. Of course, the main employers are CountryWide and Amgen who pay big incomes. $100,000 not being unusual plus Amgen paid out big bonus’s to their work force. I read recently that the “experts” think the cost of property in this area will decline about 20%. That’s all well and good but it would have to drop 50% to get people to move here who earn $20,000 to $30,000 a year. Just more of the Bush spin, lies, half truths and b.s about the economy.
Another Irrational Bush Hatred sufferer! welcome to the club!
I broke out of the concentration camp, that is the city of angles…
It’s much better on the outside looking in, than vice versa
Apropos to the comments above about DFW and the Clownifornians here, I feel this is worth a repost. Predicted years ago here and will happen on a large scale.
http://dallas.craigslist.org/com/427316980.html
Oh that is funny! I am an ex-californian and I rather like my cowboy hat.
The Section 8 Scam
I don’t know if this is true elsewhere, but this seems to be true in Gainesville:
Section 8 accepting apt complexes seem to be priced about, oh, 40% above non-Sec. 8 complexes.
For example, I pay $390 for a one bedroom in a quiet non-Sec. 8 apt. But the Sec. 8 down the street–older, worse reputation, maybe slightly larger apts inside but definitely seedier–goes for about $600 and up. Another example, in East Gainesville the Village Crossing complex starts at about $400. Some real losers and low-lifes living there, but them’s the breaks. Tiger Bay, which takes Section 8, just built, I think is at least $590 to start. Eastgate, which is way out of town, starts at $630, from what I saw last year. While Holly Heights, out of town but on the west unincorporated side, is $400 for a large rehab in a ‘hood with a lousy reputation.
I have never, ever spent as much on monthly rent in Gainesville as the nominal rents on the privately owned and operated Section 8’s! (City-owned complexes are different–usually cleaner and lower crime, much lower nominals, and a multi-year waiting list to get in.)
Seems to me that there’s some real money being made by charging the taxpayer well above market rates–never mind the property tax breaks for building the thing.
The sad thing is that some of these poor folks are not in on it but getting taken as well because the portion they pay is as high or higher than what they might pay if they found a cash rental and didn’t accept the voucher. OUCH!
I am not against WIC and ADFC at all, but Sec 8 always seemed a little weird to me. Like severely poorly managed or a stupid idea or something. (Eg, if you’re giving someone cash payments, they should be smart enough to pay their rent out of that … right?) If my suspicions are correct it may be ripoff Numero Dos (Numero Uno is false Medicaid billing).
Hi,
Two more houses for sale in my street of fewer than 40. These ones are conveniently located next door to each other, across the road, so yesterday I shuffled over for the open homes in my ugg boots, lookin’ trashy. Both are standard for this area pre-WW1 workers cottages, 4 to 6 rooms, with OK-sized back yards complete with rotting sheds and outhouses. Neither has a garage. Asking more than $350,000 for them, but no sales yet. They gave me a cupcake (laffs), and said that the response hadn’t been very good. I hinted that the price might be a little excessive, but NZ public opinion hasn’t caught up with that yet and their eyes glazed over. I went back home with another cupcake, and spent an hour on the porch knitting and observing. Only one couple came to view, and didn’t look enthused about either house. Hell, I hope the tide is turning, if only to make RE-bots STFU about architecturally-designed kitchens for 10 minutes.