A Sub-Prime Year
The East Valley Tribune reports from Arizona. “Elliott Pollack, president of Scottsdale-based Elliott D. Pollack & Co., said the economy should avoid a recession, but the slow pace of growth may make it feel like a recession. ‘The economy is no longer running on eight cylinders but on three or four cylinders,’ he said. ‘So the economy will still be driving forward, but…it will be a sub-prime year.’”
“Potential new residents will have a harder time selling their homes in California or the Midwest, he said. The result is the housing market will remain weak for several years, he said. ‘This will take a while to resolve,’ he said of the housing slump. ‘The next few years could be ugly.’”
“(Analyst) R.L. Brown said a lack of consumer confidence is the biggest obstacle to a recovery in the housing market. ‘When a consumer has no confidence in a market, he doesn’t buy,’ Brown said. ‘He sits on his hands because no one wants to appear stupid in making a purchase decision.’”
“Brown said the Valley has a 15-month supply of new, resale and foreclosed houses that are available for buyers, even if there were no new construction. Housing is ‘dramatically’ overpriced for such a large inventory, he said.”
“‘Those of us in the industry need to recognize we are living in today’s marketplace,’ he said. ‘We must accept the market as it is.’”
The Arizona Republic. “‘How do I define a full recovery?’ Pollack asked a packed ballroom at the Arizona Biltmore. ‘Supply and demand is back to normal. We’ve absorbed that excess supply (of housing stock).’”
“Pollack estimated that an excess inventory of at least 40,000 homes exists in the Valley.”
“Caught in the midst of the housing market turmoil, real estate agent Tina Eacret held out as long as she could — using up her entire savings before deciding to go part time in December.”
“Eacret had lost roughly half of her database of 500 contacts to the new agents who flooded the Valley market in recent years, trying to capitalize on the boom. Even her most loyal clients opted to use friends and relatives who had gotten their licenses or obtained a license themselves.”
“‘I almost felt like I had failed, but I had to realize that it wasn’t just me,’ Eacret said. ‘Everybody’s going through it right now.’”
“Many of the real estate agents who jumped in during the housing frenzy are now out of a job, said Patti Crawford, director of Intero Real Estate’s foreclosure division in Mesa. Some didn’t hold on to the money they made at the height of the market, Crawford said.”
“‘I’m seeing a lot of real estate agents with their houses in foreclosure,’ she said.”
“But despite the exodus of some agents, hundreds of newcomers have streamed into the industry in recent months.”
“As a rising number of distressed borrowers falls into foreclosure, lenders are increasingly being forced to take back properties, which are typically then bought up by investors.”
“But with so many houses hitting the market after unsuccessful foreclosure auctions and lenders eager to clear the properties off of their books, savvy home buyers now have more chances to snap up houses at hefty discounts.”
“Patti Crawford, who runs a foreclosure division for Intero Real Estate in Mesa, said the buyers she works with are split fairly evenly between homeowners and investors. Her job is to market repossessed properties for lenders.”
“‘Regular homeowners want a good deal right now because they have been burned paying too much for their property in the past couple years,’ Crawford said.”
“An auction marketing firm will host a massive auction in Mesa next month with nearly 100 houses up for sale. Bids for the homes, some of which were previously valued at more than $300,000, will start as low as $89,000, according to Real Estate Disposition Corp.”
“Set for Oct. 14, the auction will include 44 Casa Grande and 53 city of Maricopa properties. The homes run as large as four bedrooms, three baths and have been previously valued up to nearly $355,000.”
The Sierra Vista Herald from Arizona. “In fiscal year 2007, the city issued 159 residential construction permits, a significant drop when compared with 537 the year before, according to Sierra Vista’s Community Development Department.”
“Robert Carreira, the center’s director, said that since the beginning of the city’s fiscal year 2008 on July 1 through the end of August, construction permits are down about 75 percent in Sierra Vista, in contrast with a slightly lower decline in Cochise County and a statewide decline closer to 50 percent.”
“‘I think what we’re seeing is a reflection of that now, and I think Sierra Vista’s drop in new construction in the first nine months of this calendar year dropped a little bit more than what we’ve seen in other areas,’ Carreira said. ‘I think that’s because we saw a bigger boom than in other areas.’”
“From his academic perspective, Carreira commented about the relevance and potential impact of the Federal Reserve’s lowering of interest rates by half a percentage point Tuesday.”
“Concerns are that the rate cuts will cause inflation and that it interferes with long-term market adjustment that should be allowed to run its course to correct the aftermath of ‘easy money policies’ of lowered borrowing standards that existed from 2003 through 2005, he said.”
“Carreira warned the Fed is merely prolonging or expanding the crisis by ‘pushing the day of reckoning further into the future,’ or ‘by encouraging more unwise lending and borrowing.’”
In Business Las Vegas from Nevada. “This is not a news flash. But the first numbers are coming out further clarifying the impact of the credit crunch on people’s ability to buy a new home.”
“Home Builders Research released its stats that show the cancellation rate on purchases of new homes in the valley jumped to 53 percent in August.”
“The rate had been closer to 30 percent two months ago before lenders starting tightening credit. ‘Buyers are certainly not canceling because they are changing their minds,’ said Dennis Smith, president of Home Builders Research. ‘They are canceling because something has changed in their monthly payments.’”
“The cancellation rates have been evident in homebuilders drastically dropping their prices in the last two to three months.”
“Smith reports Meritage Homes lowered prices in some of their subdivisions by $50,000. KB Home is now selling a 1,553-square-foot home for $174,990 ($112.68 per square foot) and an 1,898-square-foot home for $202,990 or $106.95 per square foot, Smith said.”
“The valley’s biggest cancellation rate was 77 percent in the south, followed by 60 percent in the east, Smith said. The southwest and northwest had a 48 percent and 47 percent cancellation rate, respectively. The cancellation rate in North Las Vegas was 43 percent, and Henderson had a 42 percent cancellation rate.”
“Las Vegas overbuilt? If you believe NuWire Investor, Las Vegas was the No. 1 ranked overbuilt market in the U.S. during 2007.”
“Smith said he doesn’t understand that assessment by NUWire. There is only about a six week supply of new homes because of cancellations and builders are cutting prices to get rid of them, Smith said.”
“The bigger oversupply is in the condo market where demand has softened, Smith said. More than 40 percent of resale homes on the market are vacant.”
“The Las Vegas Sun reported that Jimmy Dague, who has sold real estate in Las Vegas since 1978 and whose business was the No. 1 worldwide in sales for Century 21 in 2002 and 2006, filed for Chapter 11 bankruptcy protection from creditors while he reorganizes to pay his debts. Dague reported his sales fell 60 percent from 2005 to 2006.”
“The number of Nevada bankruptcy filings grew more than twice as fast as those filed in the United States as a whole, according to data released by the federal judiciary.”
“During the first half of 2007, filings in Nevada jumped by 113 percent, to 4,922 from 2,310, when compared with the first half of 2006. During the same time period filings nationwide increased 48.2 percent. California bankruptcy filings grew by 97.5 percent.”
“The Silver State has had fewer Chapter 11 filings than other states in other regions, although there has been a significant increase in those this past year, from September 2006 to September 2007, said Assistant U.S. Trustee August Landis, who works out of the Las Vegas field office.”
“Much of the increase in business bankruptcy filings can be attributed to failed real estate developments and entrepreneurs, he said.”
“Bankruptcy reform is working, Landis said. ‘Reform does help,’ he said, adding that the legislation provides for effective tools, such as the means test, in ferreting out abuse of the system. ‘The bankruptcy is not as simple. You don’t just file a piece of paper and not pay your debts anymore.’”
‘A proposed 20,000-seat arena behind Bally’s and Paris could pave the way for mixed-use projects along Koval Lane and long-anticipated growth of the Harmon Road corridor, local brokers and analysts said. The prospect of an arena behind the Strip is welcome news for owners of the condo-hotel units at Residences at MGM Grand and the Platinum, where owners haven’t been happy with their cash flow, said Steve Bottfeld, executive vice president of Las Vegas-based Marketing Solutions.’
‘Lyon County schools saw some growth in student population, but not nearly at the pace of the past few years. Wade Johnson, school district comptroller, estimated the increase to be just over 1 percent, and pointed to high home prices in the area combined with an economic downturn as reasons for slower growth.’
‘It used to be that homes here were a lot more affordable,’ he said. ‘Now, with high gas prices, the difference in price from Reno or Carson City may not justify the cost of commuting. There doesn’t seem to be the mass influx of people moving into the area that we’ve seen in the past.’
‘Johnson said slower growth will impact the district’s budget, because projections estimated faster growth. ‘It’s not what we had projected budget-wise. We’re below budget,’ he said.’ ‘Virginia City High School was down three students, Virginia City Middle School was down 13 and Hillside Elementary School in Lockwood was down 14 students. Superintendent Rob Slaby also blamed the high cost of housing for the drop.’
‘It is too expensive to live up here on the hill for young families,’ he said, adding that housing prices are also high in other areas of the county.’
The prospect of an arena behind the Strip is welcome news for owners of the condo-hotel units at Residences at MGM Grand and the Platinum, where owners haven’t been happy with their cash flow,
Condo hotels not producing massive profits for their owners? In fact becoming expensive alligators? Who could have predicted that! LOL.
They are putting up tons of them at the Canyon’s ski resort in Utah, at the rate of about one every two months ( I am exaggerating).
Steve Bottfeld is the absolute worst of the Las Vegas RE shills, and in this case he’s “talking his book.” Why? Because he OWNS a place at the MGM Grand condo project. Paid $399,000 for 520 sq. feet (wow, great deal!) and closed on it in July 06. Hmmm, taking a little bath now, eh Steve? Here’s the link (hope it works!):
http://redrock.co.clark.nv.us/assrrealprop/pclDetail.aspx?hdnParcel=16221315182&hdnInstance=pcl7
– Judge Smales
“You’ll get nothing and like it”
Today’s Austin Business Journal:
Report: Home sales dip 10 percent
Austin Business Journal - 3:01 PM CDT Monday, September 24, 2007
Home sales in Austin continue to fall.
A total of 2,501 single-family homes were sold in August, down 10 percent from a year ago, according to the latest Multiple Listing Service report released Monday by the Austin Board of Realtors. The August sales figure is also down 5 percent from July, further proof of a market in decline.
Still, other factors are tempering the sales downturn. The median price for single-family homes rose 6 percent year-over-year to $192,000 as the number of days homes sit on the market fell 3 percent to 58 days.
Pending sales dropped to 2,196, down 24 percent compared with last year as the number of new listings ticked up 16 percent.
Jack McDonald with RE/MAX Austin Associates says one thing he’s noticed is that those moving to Central Texas from other parts of the country — particularly places like California and Florida — are having difficulty selling their homes and therefore are delaying purchases in Austin. However, McDonald says the dominant problem is the mortgage situation, which has taken a lot of potential buyers out of the mix.
“We’re going to have to go back to doing real estate the way we used to,” says McDonald, which means more FHA and government loans.
“We are seeing a slow down,” says Tausha Carlson realtor and co-owner of Marathon Real Estate. “I think it’s been so hot for so long it had to experience a slow down. But I don’t think we’re going to experience the crash that is happening in other markets like Las Vegas and Miami because we didn’t have the tremendous rise that those places did.”
Like McDonald Carlson says she’s seeing a growing number of contingency offers, where buyers moving to the area agree to purchase a home here only if they can sell their existing one elsewhere.
But Carlson says even with the slowdown, she believes “Austin remains a healthy market overall.”
The sales decline is also likely to be mean a significant cutback in the ranks of agents operating in Austin. McDonald says the number of agents has grown tremendously during these boom years, but that’s unlikely to be sustainable. “I think we need to be somewhere around 7,000 agents, and I think right now we’ve got about 11,000,” he says.
I used to tease my sister who lives in Silver Springs that they didn’t have homeless people in Nevada, just trailer trash. My jaw just about hit the floor last time I visited. I couldn’t believe there were $300,000 to $500,000 tract homes in freakin’ Dayton of all places.
Dayton is dropping like a rock. Yesterdays 300K - 500 K is todays 200K -300K, and it’s no where near bottom yet.
Silver Springs, Stagecoach, Fernley, Fallon, Dayton…that whole area is the @$$hole of the earth. Amazing something so unappealing could be within a few hours of Lake Tahoe. I cannot understand why anyone would ever buy a house out there.
That 20,000 seat arena has been propsoed about 20 times. First it was downtown. Then it was at I-15 and Blue Diamond. Then it was back to downtown. Now it’s behind Bally’s.
There is a large arena at the MGM Grand. An even bigger one at Mandalay and the Thomas & Mack seats 19,000. Las Vegas needs a new arean like it needs more desert.
What would the new arena host? LV isn’t going to get an NHL or NBA team, no matter how much the residents think it will happen.
I went to a spring training game in LV this season and sat next to two older ladies who gave me the LV sales pitch and talked about how much the mayor wants a major team there. And he is such a great guy he is going to buy the team and move it to LV if the league doesn’t give LV one. LOL. I always thought the whole “when taxi drivers give you real estate advice” thing was a joke, but it happened to me in Vegas. Hell, even the monorail had recorded messages talking about how many people were moving to the city every month.
Monorail, you say?
What about us lazy slobs?
–You’ll be given cushy jobs!
“ ‘I’m seeing a lot of real estate agents with their houses in foreclosure,’ she said.”
True story from Tucson: In the oh-so-desirable Sam Hughes neighborhood, I biked through one intersection where three out of four of the houses were for sale. And two of those three are owner/agent homes. I can’t help thinking that these two agents might be in a bit of hurt right now.
You need to send a couple of those listings to txchick…
I love the neighborhood, but I can’t stand the summers…and she loves the heat. And she’d love tangling with those agents…lol.
That comment really brings home the reality of the housing bubble. Self-described experts claiming, “real estate never goes down,” and all the trusting people who believed them.
I have no sympathy for the speculators who wanted to make a quick buck by milking the next GF. However, the uneducated working class people who were raised to trust professionals I do feel sorry for.
This quote really goes to show just how much training real estate agents have. A stock broker/agent cannot guarantee performance by law; even for a ten dollar purchase. Yet real estate agents are allowed to guarantee returns on massive real estate purchases.
SEC standards should apply to realtors as well. I don’t like bureacracy, but there is a need for it sometimes.
I’m not so sure that making future predictions ,promises ,or quarantees by real estate agents about future markets or profit is excused .I expect some court cases coming down the pipeline regarding this issue . Also ,some builders are getting sued for making promises verbally or otherwise .Who knows how these cases are going to turn out .
Part of every transaction I do includes a “changing market” disclosure to the buyer…In essence a statement that says markets go up and go down and there is no real way of predicting what will happen….
Your a smart man scdave .
“‘I’m seeing a lot of real estate agents with their houses in foreclosure,’ she said.”
just when I thought there was no justice….
I hope all the readers will consider supporting Ron Paul for President. I’ve noticed generally the readers of this blog seem of like mind on financial issues. The MSM is ignoring him by design as he represents a shake up of the establishment & corporate bought interests. To learn about his positions and how you can contribute check out his website:
http://www.ronpaul2008.com
garrett, I agree with you. I know some say they would like to vote for him, but they’re not sure he can win. I say, if everyone who felt like that voted for the guy, he’d win.
You can never get hurt by voting your conscience. It’s a matter of personal integrity, not popularity.
Ron Paul is the GOP version of Dennis Kucinich…a crazy person masqurading as a serious presidential candidate.
Well, like the wise sayings person once stated, “J J GA’s opinion of Ron Paul is like a butthole; he’s got one and it stinks.”
I think that’s how it goes, anyway.
Wow. How mature. Did you learn than today before or after nap time?
JJ, I think if you check his voting history you will find that is not the case at all. He is one of the only people in Washington to practice what he preaches.
If I had to make a list of crazy people running for president, neither Ron Paul nor Dennis Kucinich would make the list.
Dennis Kucinich would be first on my list of crazy people running for president. He is a Nut Job with a capital NUT JOB.
Ron Paul is slowly becoming my candidate of choice, I love the way he gave it to BB in some of those congressional hearings.
I agree. if you will actually listen to Ron Paul and not the press plus check out his voting record the man walks it like he talks it. Not saying he is perfect and maybe even switched a position or two but he almost always lets the Constitution be his guide. War hawks are trying real hard to mischaracterize him as a “nut” or coward and he is neither of those.
Sorry J J,
I have to quote SeinFeld for this.
“The fact that you are against this, makes me think I am on to something.”
I love a good editorial comic.
http://news.yahoo.com/edcartoons/tomtoles;_ylt=AsXGpGcjIR9hPxCPGo66D_MDwLAF
That’s funny…
that’s pretty funny
What’s that hissing sound?
Even her most loyal clients opted to use friends and relatives who had gotten their licenses or obtained a license themselves.”
I hadn’t realized how many of my friends’ sons, daughters, neighbors, etc. had become realtors until after I sold my house two years ago. All of a sudden all these people wanted to help me buy a new residence.
It does kind of put you on the spot.
One of my cousins was/may still be a real estate agent. Personally, I wouldn’t buy a birdhouse from him.
Why not? Because I don’t trust him, that’s why.
And after all the friends and family are played out then what….??
I had the same problem for a long time with people I would visit who were likely headed for foreclosure. When they hear listing as one of the options I could do, I always got the “my brother/sister/cousin/friend/coworker/etc. is an agent” and rarely got anything from it. Then as often as not they’d still not list and lose the property. Maddening.
I’ve seen that before and it’s the stupidest thing I have ever witnessed. I’ve also watched people get shorted 50K-100K cash + my commission using that argument and trying to do it themselves. Instead of doing the homework they chose to pick up information through inane conversations. Sheeple are stupid that’s why this country is in the position it’s in and why I stopped dealing with the average Tweedle Dee’s and Tweedle Dum’s of the real estate business long ago.
‘Supply and demand is back to normal. We’ve absorbed that excess supply (of housing stock).’”
I don’t envision that happening any time soon. We’d have to have a prosperous economy loaded with good jobs for everyone AND we’d have to increase immigration. Not gonna happen.
“Elliott Pollack, president of Scottsdale-based Elliott D. Pollack & Co., said the economy should avoid a recession, but the slow pace of growth may make it feel like a recession.”
Well, like they say…if it walks like a duck….
Still can’t get over the fact at $300 or more a night Vegas hotels continue to be sold out and try to walk around a casino on the weekend you can’t the places are jammed.
I ask a few locals and employees aren’t you concerned about the RE downturn their answer, what goes up must come down and what goes down will come up, we will wait it out and they went back to work or putt more money in a slot machine.
What happens here stays here i guess?
Compared to “investing” in houses, the odds in gambling on games of chance in Loan Vegas, seem generous…
Do you really think they are renting the rooms for $300 a night? Any word on if Priceline.com and other special rates are digging into the margins?
What happens here stays here i guess?
Except that the Visa bill follows you all the way home.
“I wish I’d listened”
Pharaoh Thutmose III
1450 B.C.
‘When a consumer has no confidence in a market, he doesn’t buy,’ Brown said. ‘He sits on his hands because no one wants to appear stupid in making a purchase decision.’”
A home-buyer is a very SPECIFIC kind of ‘consumer’ making the most EXPENSIVE purchasing decision in his/her life. When it comes down to laying REAL money on the table (unlike those that bought in the last few years using ‘funny’ mortgages) and particularly at times like this when home prices are dropping, the home-buyer refrains because they do not want to see their REAL down-payment equity wiped-out after only 3/4 months once their new home quickly becomes WORTH LESS than what they paid for it.
Besides, not wanting to pay 650K for something that’s REALLY worth only 300K is NOT ’stupid’ …IT’S being SMART!.
“But despite the exodus of some agents, hundreds of newcomers have streamed into the industry in recent months.”
I found a brief article discussing the mystery of new RE agents entering the market… http://tinyurl.com/2kkqsg
In the end, 450 dead animals lay on top of one another in a billowy white pile,
“billowy white pile” - poetic
Poor sheep..they must have seen the fall season lineup at NBC
Unfortunately for the newcomers, they will not be saved by any cushioning effects of the pile of RE agents who already jumped off the cliff. BTW LMAO. That was an excellent post.
“(Analyst) R.L. Brown said a lack of consumer confidence is the biggest obstacle to a recovery in the housing market. ‘When a consumer has no confidence in a market, he doesn’t buy,’ Brown said. ‘He sits on his hands because no one wants to appear stupid in making a purchase decision.’”
Again with the consumer confidence schtick! This is driving me nuts! How about taking a look at the massive inventory and the mortgage meltdown? How about unaffordibility? How about strawberry pickers buying 650K houses? Those look like bigger “obstacles”!
No, I don’t think people are worrying about “appearing stupid”.
Because if that’s the case, the real stupidity already happened.
Actually, it might be more accurate to say that some people may be starting to wise up.
For 7 years he’s been saying the market is still underpriced. You don’t expect him to suddenly say… Naaaaaaaawt!!! Do you?
This:
“Brown said the Valley has a 15-month supply of new, resale and foreclosed houses that are available for buyers, even if there were no new construction. Housing is ‘dramatically’ overpriced for such a large inventory, he said.”
is a HUGE leap.
I’m as much of a “bubbler” as the next guy, and I do believe that Phoenix metro housing prices will fall. That said, I’m continually amazed by the amount of construction and growth in the valley - now especially around the 101 in Scottsdale north of Camelback.
I get the feeling that even as AZ feels the pain of the housing slowdown, it will still benefit somewhat from the business exodus from CA, the northeast, and the midwest. I just read about a video game company that would “usually” have built in Silicon valley building in Chandler instead - something like 100 software engineer jobs.
And yes, I hate to say it, but “thousands of people move here every month”. My MIL just met a guy from Indiana on the plane from Chicago - he’s moving his 30 person business to Goodyear.
So I don’t know - even though Phoenix was bubble ground zero, if the economies of the “feeder regions” fall faster than AZ we may benefit from their pain. Tell me if I’m wrong - but spending time in north Scottsdale this weekend I had a very hard time seeing any signs of economic slowdown. Fellow AZ’ers - what do you think?
Things are tight and getting tighter in N AZ. I noticed people in Phoenix seem to be spending fools. How long can that hold up? Foreclosures are still relatively low in AZ, compared to CA or NV.
“Spending fools”
You’re right Ben - one type of retail I expected to see quickly scale back were sellers of “power sports” items, such as jet skis, ATVs, etc. Instead, I’m seeing several NEW stores open up in Mesa/Chandler selling this junk. Husband of my wife’s friend just bought a $10k dune buggy - financed of course, and plans to add thousands in aftermarket parts to it - probably on the payment plan too. He’s also working three part time jobs and shuffling credit cards, and they are expecting a baby.
Like I said, the Phoenix metro just seems to keep rolling on - I grew up in Michigan so I really know what recessions look like - every third restraunt or store abandoned and empty, banks closing down, roads left full of potholes, etc.
Husband of my wife’s friend just bought a $10k dune buggy
Spending Fool or thinking ahead?
roads left full of potholes, etc…..
Three couples out of the dozens of homes we scoped here in Wisconsin were moving to AZ. Just an anecdotal
observation.
It’s easy..as long as you are renting
I think we’re rapidly overbuilding commercial. I live over in northern Glendale, and every bit of land that was empty a year ago, now has office condos and/or stirp malls going up, then sitting empty. About 20 offices went up at 67th ave and Bell. Complete at least 6 months ago. Signs on two saying a dentist and an urgent care will be “coming soon”, but so far, all of the offices are empty. Along Thunderbird, I can count at least 4 strip malls that have opened and are 80% or more empty.
What we have is a favorable tax environment! We’ll soon have lots and lots of empty buildings as all the current commercial development completes… We’ll also have lots and lots of cheap houses coming back onto the market after foreclosure. And, we’ll have LOTS and LOTS of laid off construction workers, laid off mortgage brokers, laid off title agents, and underemployed realtors.
The only question is, in my mind, will the low tax environment bring in new companies quickly enough to replace the construction jobs that will be lost. With 1 in 3 dollars in PHX metro now associated with real estate, I highly doubt it. That is a lot of money to replace in a very short time!
RE: Tell me if I’m wrong - but spending time in north Scottsdale this weekend I had a very hard time seeing any signs of economic slowdown. Fellow AZ’ers - what do you think?
Maybe the Hilliary and Nancy pony show will cede your state back to Mexico as a concession if they can convince the Mexican government to stop the flow of illegals into Californicator.
WTF…This country’s given away all the jobs.
Why not let’em have the infrastructure too.
Still got your HS spanish book?
Si, Senor…
Regarding signs of economic slowdown in AZ, I’m with az_owner. I thought I was seeing it this summer when everything was dead on the 4th of July weekends. I told my wife: “See, nobody has any money to spend.” She told me: “Everyone is just out of town for the summer.” I think she was right. Now that school is in (the universities bring lots of seasonal residents) and the snowbirds are coming back, the malls are absolutely packed. Wall to wall SUVs in the parking lots. Yet I personally know many people that are bleeding from bad real estate deals over the last few years. I just can’t figure it out. Maybe I’m the only one saving my money.
–Chet
you’re not the only one, Chet. I’m saving too!
I have to agree Az Owner. Although no houses are selling in Surprise at this time, there is an explosion of commercial building going on. I also see cars from Ca, and the midwest on a daily basis. The last three houses that were put up for rent in our neighborhood rented and had families moved in within 5 days.
We went out to eat last Friday night in Surprise and found every parking lot jammed with cars. The weather has cooled a bit and everyone is in very good spirits. Once home prices become affordable(new home prices are much better already) this place will probably begin to grow steadily again.
Based on traffic at Arrowhead Mall, no slowdown in foot traffic. Everyone seems to be carrying multiple bags.
You should see the Chandler mall on a Saturday. I guess as long as people can service 2% of their CC debt per month everything is golden in their little worlds.
I’ve noticed a large increase of CA plates lately too - must be IE refugees getting away from $600k houses, to buy the same thing for $300k in AZ. CA is not a snowbird supply state, so these are permanent relocations (and the people are not 60+ retirees either).
I like to add that snow birds from FLA just might find their way out here too.
“Potential new residents will have a harder time selling their homes in California or the Midwest, [Elliott Pollack] said. The result is the housing market will remain weak for several years, he said. ‘This will take a while to resolve,’ he said of the housing slump. ‘The next few years could be ugly.’”
Man - I wish it was ‘different’ here in California. It’s not fair that it’s ‘different’ in Arizona and they get to skate through this not-recession-but-feels-like-a-recession.
I need to relate a funny story. A friend of mine was visiting a couple months ago. He owns a condo in Miami and bought two preconstruction condos (”Blue” and some other one) years ago. He’s looking to sell both of them - would be happy breaking even. I think he purchased them in 2004 (IIRC), and I do hope he gets out at least even. He said fortunately Miami is different - lots of wealthy people from Latin America and Europe buying. I respectfully disagreed and that was it.
The next day I was up in the bay area. Sitting on the plane on the way back to OC I heard the guys in the seat behind me talking real estate. One said to the other something to the effect of “it’s different here - everybody wants to buy in the bay area” (plus all the wealth tech employees).
Not more than five minutes later I started talking to the stranger in the seat next to me. He lives in Aliso Viejo, and proceeds to tell me that “Orange County is different - everybody wants to move here”. As with my buddy from Miami, I respectfully disagreed and stated my case. Then we started talking about his cool 40 foot yacht…probably a HELOC purchase
I $hit you all not - this happened within a 24 hour period. I only wish I would have met some people from Duluth, Atlanta and Boston so I could have gotten additional “different here” data points.
Very good.
Just last nite a friend was telling me why “it’s different” in Philadelphia - “It’s different here because so many New Yorkers who can’t afford Manhattan are moving here.” I didn’t respectfully disagree, I just listened. I did comment that NYers must hate where I live because nothing is selling. (I’m in burbs)
That kind of puts the lie to the domino effect of overpriced housing. If NYers are moving to PHL because Manhattan’s too expensive, then where are the Philadelphians who’ve been displaced by NYers going? They’re not coming to my ‘hood, and if they were, they’ve stopped. Because RE in my area is dead in the water.
You must be wrong, Phillygal, the Inquirer said this Sunday that it’s different here (I assume you saw that article), at least as far as prices go. I didn’t bother to scrutinize the article’s claims, but it looked like a lot of 2005/6 data, and the old median price comparisons. In any event, I’m seeing the same thing you’re seeing with the lack of sales; the excess inventory is the precursor to falling prices.
RE: I $hit you all not - this happened within a 24 hour period
Denial can manifest itself in strange ways.
These people are talkin’ BS because their brain cannot yet grasp the depth and scope of the housing/capital credit crisis.
the new and improved YUGO economy
“Elliott Pollack, president of Scottsdale-based Elliott D. Pollack & Co., said the economy should avoid a recession, but the slow pace of growth may make it feel like a recession. ‘The economy is no longer running on eight cylinders but on three or four cylinders,’ he said. ‘So the economy will still be driving forward, but…it will be a sub-prime year.’”
….. may make it feel like a recession.
If it walks like a duck and quacks like a duck………
The ancient Egyptians have nothing, compared to our Pyramids…
“‘I’m seeing a lot of real estate agents with their houses in foreclosure,’ she said.”
This is a delightful 05′ Cavern, eh?
lower the price, you greedy $%^&*!!!
there was a comment yesterday about people seeing more dented cars. I drive (and proudly say) an older, paid off car. It had a few dings when I bought it. I have been rear-ended twice now. I pocketed the insurance proceeds. DIdn’t ‘need’ the money. But it made more sense to use the money to offset car repair and now pay for my upcoming trip back to visit a friend in California. Yes, I am going to go back and see how CA (inland empire in particular) is doing. I do miss my friends there. Don’t miss the housing (and general living) craziness.
Went for a walk today and saw a car parked in front of a house that I know two years ago sold for over $500K. Parts of the front end were held together with black electrical tape. I guess they pocketed the insurance money too, perhaps didn’t have insurance. A local cop said that they have seen a rash of rear license plate theft of late. The rear plate has the yearly tag and you can’t renew for your yearly tag if you don’t have insurance and all tickets paid up.
Plenty of troubling signs on U.S. horizon
Sep 24, 2007 04:30 AM
David Crane
The consensus among economic forecasters seems to be that we are headed for a soft landing from the current turmoil in financial markets – a bit of a slowdown but nothing too serious.
This is the tone, for example, in the latest global forecast from the Economist Intelligence Unit.
But don’t bet on it.
One troubling sign – the risk of a recession in the United States. In an appearance before the Joint Economic Committee of the U.S. Congress a few days ago, Yale economist and housing expert Robert Shiller warned that “the collapse of home prices might turn out to be the most severe since the Great Depression.” Shiller was the economist who predicted the bursting of the dot-com bubble earlier this decade.
Such a decline would have a spillover effect across the economy through what economists call the wealth effect. It has been estimated that $4 trillion (U.S.) in household wealth would be lost if U.S. house prices fell 20 per cent.
http://www.thestar.com/columnists/article/259658
“Carreira warned the Fed is merely prolonging or expanding the crisis by ‘pushing the day of reckoning further into the future,’ or ‘by encouraging more unwise lending and borrowing.’”
Oh, I SO heartily agree with this.
At what part of the Richter scale will this soft landing be measured?
hurricain hits miami, or Earthquake hits?
“But don’t bet on it.”
Nah “They’d” never let that happen! Baaaaaaahhhhh Baaaaaaahhhh
earlier comment/post:
“(Analyst) R.L. Brown said a lack of consumer confidence is the biggest obstacle to a recovery in the housing market. ‘When a consumer has no confidence in a market, he doesn’t buy,’ Brown said. ‘He sits on his hands because no one wants to appear stupid in making a purchase decision.’”
Ok, so that guy is supposed to be an analyst yet comes out with a jackass insulting statement like that ?!? People are prudent, or fiscally responsible, no thet ” sit on their hands” …. what the bloody HELL ?! What an Azzhole thing to say . . until you realize later when he also says:
” “‘Those of us in the industry … ” AHAAAAAA ! there it is, a self-serving bitter biased comment against anyone who wont spend money in ” his ” industry, but dammnit-to-hell-jim ” sits on their hands “.
Yeah sure, I get his general meaning but he doesnt have to say it in such an insulting manner. He IS an ” analyst ” after all, isnt he? He DID go to college, got a degree n such, right? Which usually means better skills in critical thinking & balanced, thoughtful expression. But instead he is no better than yer average shreiking hooker when he ridicules & baits people who dont do what HE thinks they should do …. oh yeah, thats right, he has a VESTED FINANCIAL INTEREST in seeing people spend. Like keeping his cushy desk job.
What a tool! Bout as sharp as an upside down knife, too.
500,000 plus off the job
Spending will fall off a cliff
Hard hit Midwestern real estate about to take another punch in the gut.
I’m going to Michigan next month. Will be interesting to see the effects of this strike in ground zero for the auto industry.
The fact that economist and the government gage a productive economy by how much debt that people have been pushed to the max on is scary . I remember years ago when the government would publish stats on a balanced budget for a family . Loans were made (in the good old days )based on a balanced debt ratio for borrowers . Something happened in the last 10 to 15 years ,and I think it has something to do with the new age global economy .
[“Concerns are that the rate cuts will cause inflation and that it interferes with long-term market adjustment that should be allowed to run its course to correct the aftermath of ‘easy money policies’ of lowered borrowing standards that existed from 2003 through 2005, he said.”]
Hey, a little bit of honesty there! That’s pretty refreshing to see someone quoted saying that.
Part of the new mantra is that the rich still have lots of money to spend. Yesterday while in Carmel I asked a shop owner how business was, his reply, business is slow and Aug. sales were off 18%.
Hmm..50 bp rate cut…another 25 bps expected in Oct…I bet the rich are buying equities more so than more consumer goods..
Can’t stand this cheerleading for another .25 cut for Oct. I knew they would start chanting for more …more …after they got that .50 cut . Wow…this is hard to watch .
You mistake the rich and the elite’s. The rich are people who work for a living. The elite manipulate government to obtain wealth. I just read mazerati or one of those italian companies sold out of a new sports car priced at 2 million dollars each. In Dubai they are making islands for the elite. Those people are still doing well stealing the wealth and natural resources of the countries they run.
You mistake the rich and the elite’s. The rich are people who work for a living. The elite manipulate government to obtain wealth. I just read mazerati or one of those italian companies sold out of a new sports car priced at 2 million dollars each. In Dubai they are making islands for the elite. Those people are still doing well stealing the wealth and natural resources of the countries they run.
Again with the consumer confidence schtick! This is driving me nuts! How about taking a look at the massive inventory and the mortgage meltdown? How about unaffordibility? How about strawberry pickers buying 650K houses? Those look like bigger “obstacles”!
No, I don’t think people are worrying about “appearing stupid”.
Because if that’s the case, the real stupidity already happened.
Actually, it might be more accurate to say that some people may be starting to wise up.
And what about the stupid cow in Beaumont CA that bought a more expensive house as the guaranteed road to riches so she didn’t have to work. The house was going to work and produce $100K for them just because they lived in it for 2 yrs, and now she bemoans having a baby. People sheeple are so greedy and stupid.
Fortress unit moves to cut subprime links
By Anuj Gangahar in New York
Published: September 24 2007 20:00 | Last updated: September 24 2007 20:00
A subprime mortgage unit of Fortress Investment Group, the $43bn hedge fund and private equity group, is to stop buying loans originated by brokers as it scales back its operations in response to the US mortgage crisis.
The move by Nationstar Mortgage, a wholly owned unit of Fortress, raises questions over what role hedge funds and other relatively new entrants to the mortgage business will play in the market as a result of the subprime crisis.
http://www.ft.com/cms/s/0/1f2136ee-6ac5-11dc-9410-0000779fd2ac.html
Steve Bottfeld is the absolute worst of the Las Vegas RE shills, and in this case he’s “talking his book.” Why? Because he OWNS a place at the MGM Grand condo project. Paid $399,000 for 520 sq. feet (hey, great deal!) and closed on it in July 06. Hmmm, taking a little bath now, eh Steve? Here’s the link (hope it works!):
http://redrock.co.clark.nv.us/assrrealprop/pclDetail.aspx?hdnParcel=16221315182&hdnInstance=pcl7
What were those people (”owners”) thinking?
“‘I’m seeing a lot of real estate agents with their houses in foreclosure,’ she said.”
BWAHAHAHAHAHAHAHAH… and the game is barely entering the second inning.
How long before Schumer, Frank, Dodd and even Shrub propose federal legislation to name homeless realtwhores a “protected class”? And I fully expect a Hate Crime inclusion as well. You know the hordes of homedebtors will want blood when it’s all said and done.