Local Market Observations!
What do you see in your local housing market this weekend? Industry layoffs? “Charlotte-based online mortgage broker service LendingTree announced late Friday it will lay off 255 people, or 17 percent of its workers in its mortgage origination business. Most of LendingTree’s cuts will be in Irvine, Calif., and Jacksonville, Fla.”
“The cuts reflect ‘the current realities of the market,’ spokeswoman Rebecca Anderson said.”
Lending difficulties? “Jack Haynes, executive VP with Countrywide Home Loans, said lenders are having a hard time interesting investors in purchasing the mortgages they make. ‘Things are stacking up on everybody’s shelf,’ Mr. Haynes told builders meeting in Grapevine for the Sunbelt Builders Show. ‘At a certain point that will strangle the mortgage industry if it doesn’t get some relief.’”
Or REO discounts? “In 10 of Akron, Ohio’s hard-hit neighborhoods, a report given to the city council this week said 79% of all homes sold from February to August this year were unloaded by lenders for a fraction of their value. In Akron, as elsewhere in the USA, the dumping of foreclosed homes on the market has squeezed both builders and sellers who must compete against additional properties.”
Or foreclosures? “The flood of foreclosed homes has stretched the staffing limits of the Marion County, Indiana’s sheriff’s civil division and drenched the resale market with so many properties that it has nearly dried up profits for investors who deal in homes.”
“Despite facing more foreclosures than any other county in the state, Marion County remains the only one that hasn’t capped the number of properties per month it puts into its sheriff’s sale. That’s done out of fear the county would never catch up.”
“‘If we were to cap these, it would just be chaos,’ said Shirley Challis, commander of the civil division. ‘We do not see daylight now. We are working on three sales all the time’ — the last and current ones, plus the next one.”
Or speculation? “Housing prices in the Edmonton area continue to drop. But that’s not stopping homeowners from putting up ‘for sale’ signs in record numbers.”
“‘I haven’t had a call yet and my place has been listed for three weeks,’ said Jason, who’s selling a new home for $455,000 after building it for just $270,000. ‘The market has loosened up but the boom isn’t going anywhere.’”
“Shashi is selling her home for $475,000 after buying it last year for $329,000. She only had three calls since listing the house two months ago. ‘I’m not in a rush to sell, but I can tell people aren’t in such a rush to buy either,’ she said.”
“‘I haven’t had a call yet and my place has been listed for three weeks,’ said Jason, who’s selling a new home for $455,000 after building it for just $270,000. ‘The market has loosened up but the boom isn’t going anywhere.’”
Jason, think it might have something to do with the $185,000 profit you’re greedily trying to make?
Perhaps Jason is trying for the Golden Fleece?
That’s pretty funny…
WOW! Wish you could have been a fly on the wall when I read that to my hubby…his face is still red-hot-hollering MAD!
Amazing how these greedheads hang some fantasy price on their sh!tbox, then express dismay when nobody comes calling. Hello, your POS shelter’s not worth that!
Amen, brother Bear. That’s why I’m not even bothering with lowball offers for at least another six months. Too many greedhead delusions still haven’t been dispelled - when every one of them has a miasma of abject dispair, that’s when I’ll start looking.
I agree…chances are 1)He is just plain greedy 2) He put too much in renovations into the house and wants to get his money back….If I were trying to sell today…and I REALLY wanted to sell the property…I would examine the house I would like to move into to…add my 20% needed for the down and a couple extra dollars for closing and that would be my selling price..or price myself 15% less than any other home for sale in the community…
a short sale and a foreclosure in my hood 22151
90% gov workers- never saw this in the 90-93 RE bust
flatffplan, Sounds like you are in Falls Church, VA? Near Exxon Mobile HQ or where? My observation from walking around /and Craigslist is that inventory is WAY high. Prices are dropping at a speed that surprises me. Wrote a few months ago about the Castleton. A nice looking Tudor / Gothic 1920s era apartment building on 16th Street about 10 blocks north of the White House. Relatively good / decent neighborhood. Building went condo a couple years ago, still not sold. Studios have been advertised as recently as a few months ago for $159K. That is about a 2002 price. There’s a one bedroom in Woodly Park across from National Zoo for $180K. Granted a small one bedroom but $180K seems like 2002 - 2003 price. There’s a short sale here on Capitol Hill (my hood) for $399K. That stikes me as a $2002 price. Still, the best quality stuff is moving. There seems to be fewer pie in the sky wishing prices. Definately the realtors have gotten the memo.”Let’s talk” - “make an offer”… Talked to an agent last Sunday at an open house. How refreshing he talked all about cost to own vs. rent - all the expense of owning…expected rent…ratios etc..He used to be a mortgate broker. Said often he turned downed deals because the loan was no good for the borrower. He’s been a RE agent for nine years so other than the immeadiate post 911 lull has not seen a bad market. Seemed like a nice fellow. Hope he’s prepared.
I should add that I sold my house in Fairfax VA in 2005. Was looking to downsize. The prices neighbors were getting really prompted me to sell. Also wanted to have a shorter (ideally) walking commute to job in DC. When I looked at condos in 2005 practically nothing for under $300K even studios. The $159K studios are nearly 50% drop. Now lots of studios in $200K - $225K range. Makes for a 30% to 25% drop. And I think this just begining. Rent to own cost still out of wack.
05 wow, you hit it on the head- off 12% from peak- I’m in Burke
San Diego inventory continues to rise now at a record level of 23715 properties according to zip realty. This time last year inventory had been declining since late August from a high of 23505 down to 22800 as of 09/29/2006.
Clearly we are in a very different market pattern this year. This could be due to tightened credit standards and reduced sales or perhaps sellers are not taking a chance on the “spring recovery”.
These @sshats are a little slow. It’s taken them a while to figure out that plan b renting out their gator ain’t going work either. A 1200 sq ft 1950’s stucco box does not rent for $2500 here in my hood. 1600 to 1750 tops is going rent. $2500 x 0 = $0. $1700 x 12 = 22,000.
Original wishing rent for this place well over a year ago was $2495
http://sandiego.craigslist.org/apa/430783479.html
Austin housing market slowing
Sales in August were down 10 percent from previous year, but prices still rising. Check it out: http://www.statesman.com/business/content/business/stories/realestate/09/25/0925homesales.html
FYI: A few months ago - noted experts were saying Austin is immune to the housing bubble fall out. I guess they were wrong.
Thanks for the link… I keep wondering when the dung is going to hit the fan here in Austin.
They mention that the median price is rising… but as discussed here before, it’s most often because entry-level houses are not selling. The high-end part of the market (not as severely affected, yet) then pulls up the median. So likely comparable homes are already dropping in price.
Some acquaintances in Steiner Ranch have dropped their price $20K because it’s wasn’t selling after months on the market, several houses on the same street for sale. But the asking price is still at least $80K more than they paid in ‘02.
Steiner Ranch and areas way out there are toast…..stuff like that dropped 50% from 1985-90…there is a lot more of it now in Austin too. I bought a lot in Long Canyon in 1991 for $26K…was $85K in 1985… Long Canyon is much better located too.
“Shashi is selling her home for $475,000 ….
oh no, she ain’t..she might be “trying to sell it for $475,000″, but,,,well you know the rest.
Why not ask a million?, she has owned it for a whole year…
Any one saw 20/20 yesterday?
real estate special. I got to watch completele.
highlights
a) 2 FBs getting married, bought new home. unable to sell their prev homes. posponed their wedding
b) 2 FBs getting divorced, forced to stay together because they are unable to sell their home
c) another FB , SOCAL I think. selling home after one year. 470 was listing price, no bites after three months. purchase price 420+50K in improvements. next tried auction. highest bidder was 400K. now decided to rent.
d) last one was on doggi houses spl.
overall good show
They will spend the next 10 years wishing they took the $400K
No, they will walk in 2009….
a) 2 FBs getting married, bought new home. unable to sell their prev homes. posponed their wedding
b) 2 FBs getting divorced, forced to stay together because they are unable to sell their home
Maybe the 2 FB’s getting married could sell one of their houses to one of 2 FB’s getting divorced.
HaHaHaHa! Very Funny!
Wife and I have been house hunting this summer, 400-470 range, outside Boston
Of homes we’ve looked at but other bought, there is a real change.
July - Houses closing 10k under asking
August-Houses 10-15 under asking
Sept - Houses closing at 20-25k below asking.
Here in southern NM (88007) a lot, and I mean a lot of homes are for sale, mostly custom. Why they are all selling is somewhat of a mystery, since in my zip code these homeowners are mostly cash-outs from the “old” Scottsdale, AZ.
I estimate that there are at least 100+ homes for sale in 88007, due to primarily 2 factors:
1. Flooding in 2006 and flooding in 2007. Homeowners, who are generally elderly, probably cannot take the flooding and the threat of damage to the interiors of their homes anymore.
2. The downturn in the real estate industry and income loss to the financial sectors. Realtors and mortgage brokers simply cannot afford their own lifestyles while collecting no commissions.
Many homes in the higher ground areas (other 88____ zip areas) still face flooding hazards since washes and gullies are not channeled properly, probably due to substandard engineering. Thus, even if one is not in the flood zone of the Rio Grande, you can still get whacked by flood waters as they come down from the Organ Mountains or from the arroyos adjacent to Picacho Mountain (”extinct” volcano).
For these reasons, among others (NM is listed as 9th from the bottom on the 10 Worst Places to Live in America List), we are not buying here.
Prices are coming down though. On the big end, I have seen 2 $100k drops and $40k drops on 2 other properties. Lower end are seeing $5k and $10k drops and holding. However, there are those who are living past tense and want $400k for a small house with a view.
~Misstrial
In 2007, NM is the second most dangerous state to live. NV is first, AZ is third. All states at website listed.
http://www.morganquitno.com/dang07.htm
State your name…
“I’m Chevy Chase, and you’re not.”
Chevy Chase
http://tinyurl.com/3b7yoj
I have a new winner for the most unbelievable project I’ve seen in New York City. I have said that 59 John Street was the worst idea in my neighborhood. 145 Hudson Street is the worst idea in Soho. But we have a new, and baffling winner.
We were walking around The Meatpacking District the other night. That is an area that is almost impossible for me to believe how trendy it is now. The first economic downturn will crush that area. While walking we saw something that borders the Meatpacking District and the West Side Highway. I have a hard time explaining this. It is built to hover over some kind of overpass. The first 3 or 4 floors are merely giant concrete footings that allow it to straddle this overpass. Built from about the 4th floor up look to be a heck of a lot of condos. They are now up to about 20 floors. The development is being built by Pavarini McGovern. Have any of you fellow New Yorkers seen this development at about 14th Street?
The amount of destruction in a housing market will be dependent upon the amount of madness it experienced in this housing mania. This development in the Meatpacking District shows that Manhattan’s madness knows no bounds.
I tried to send pictures of 59 John Street to the HBB about a year ago. I don’t know if they ever went through. Most of the bad idea developments are hard to get a sense of from photographs. This monstrosity in the MPD requires photographs. I will take my camera up there and get some pictures. It is really amazing.
There is the Sheraton across the Masspike in Newton, MA. When you are in a room, I do not recall that it feels strange, or loud, and it is almost like a landmark, or a sign of, one is home, or almost there.
You know, if that hotel was all that great (there’s a supermarket built over the Masspike at Newtonville, too), then why did nobody lease air rights over Masspike for decades?
Last time I was in Newton, the Sheraton (I thought it was a Marriott? Whatever.) was looking pretty dingy.
I used to take the bus from Newton Corner all the time. Lots of clueless guests who were told by the desk that there was a bus to downtown but didn’t know the bus number, schedule, fare …
At the Bayerischer Hof they actually sell train tickets to you.
I’m certain that hotel is a cheaper alternative to a downtown Boston, but … ugh. It’s not even at a train station. Drive in horrendous traffic or take a taxi at highway robbery rates or ride a crowded 15-year old commuter bus … world class my —.
This monstrosity in the MPD requires photographs. I will take my camera up there and get some pictures. It is really amazing.
It sounds really bad, but some photos would be good. I’m curious about the clearance above the overpass and how much noise or vibration the FBs would feel. Plus it’d give me something non-touristy to look forward to when I visit my sister …
Have seen this one NYC boy -nice description!…I watch where I live the most (brooklyn) - and we have a similar monster that rose a breath away from the elevated Q over the manhattan bridge — the “J” condos - but just read on curbed.com this week that they are starting to rent these suckers out (lot of dark lights in the J at night) - developers must have been smoking the big J when they timed this one
Also just heard a commercial on the radio to day for “luxury rentals” in a new building in Tribeca - I’ve NEVER heard radio ads for apts in NYC before - (what happened to this tight rental market -haw). Hang in there — it’s’ souring more every day
the manhattan “new luxury rentals” were built as condos for sale, now oversupplied and converted to rentals. nytimes did a big spread hyping them a month or so ago. i laughed. uneasily.
NYCboy kindly forgot to explain that in the mid to late nineties the “area” was ground zero for the “He She” prostitution trade and serious sex clubs like The Vault. These clubs were hard core no joke Sodom and Gomorra stuff. I used to live on Bank St and when traveling home south by cab, had to transverse the area. The fellas used to flash the cabs, and late at night with a belly full of booze, and disappointment, that was a real stomach churner.
Quick observation re. W. Colorado - I have pets and am watching the rentals - am currently renting an awesome strawbale near Durango - 1800 sq. ft. for $1200, but am thinking of finding something closer to family, so am calling a few promising places when I see them - the last two couldn’t care less if I had pets, one woman will waive the deposit and all I have to pay is first month, she’ll even wait for 2 months if I want. But here’s the good one - a house near Telluride, called the owner, he’s never even been in it, lives in Vegas, couldn’t even answer basic Q’s, is dying to rent it, 2800 sq. ft. for $1200 - he was sounding desperate when I hung up, can’t sell it, asking 400k, about 150k too high for the area (rural Ridgway).
I have PETS for Pete’s sake, 4 dogs and 2 cats, and these people are peeing all over themselves to get me in there.
Can you spell recession?
BTW, have been lurking some, not on the net much, but this blog’s a Godsend for me. Carry on, Ben. Another check coming your way.
But if he can only get $1,200 in rent for this place it would tell me that it is about $250,000 overpriced.
120 x $1,200 = $144,000
I am a big fan of the 120 Rule.
I was going to offer him 1000 tops if I rent it. I bet he’ll take it in a heartbeat. BTW, Durango is slowing down, the whole Four Corners area is, and guess what - so’s Telluride. They said it couldn’t happen there.
In Montana, at Big Ski, realtors are saying, “sales will pick up when the skiers come”. Meaning very little has sold durring the summer.
I’ll go ski at Big Sky this winter. Probably get a 10 day express pass.
When you drive down to Big Sky just try to avoid going by any house owned by a Yellowstone Club executive. The house might explode. You wouldn’t want your car damaged by flying debris.
Any word on sales in Bozeman? Someone stated that they were down huge in August. Any confirmation? Amazingly, Billings still seems to be ticking along. ‘07 sales a little higher than ‘06 sales, through August. Must be different here.
There was a chart in the business suplement in Monday’s Chronicle. I don’t what make of it, as it showed sales down slightly in the three counties, Gallitan, Park, Madison. The problem is I don’t trust the Chronicle for local news, I have seen them cover up to many things. Another question is how many of these “sales” are real. I had to investigate many developers and builders were they are flipping properties amoung the corporations, or LLC’s they control. Two different builder might flip property to each other or flip to a realter. I have seen all sorts scams like that. I can tell what I have seen with my own eyes. There are a lot homes on the market, there home that have been for sale for months, I have seen very few actualy sold.
There a lot of devolpers around Bozeman getting desperate, as one put it, “Nothings moving”. I been talked couple of realtor, “things are slow”. There is a disconect what you see around Bozeman and what you read in the Chronicle. In Montana, in the old days the Anaconda Company ran most the newspapers in the state. I thing the media in state has a new master, their largest advertises, realtors and developers.
Should they consider opening the uranium mine again to help the slumping economy of theirs?
“Housing prices in the Edmonton area continue to drop.” Alberta is the only province in Canada that has a dynamic economy. Calgary, the major city in Alberta, is the fastest growing city in Canada. One the reasons for the Candian dollars being at par with the U.S. Dollar is due largly from exports of oil from fields near Edmonton. If Alberta’s economy is hurt by a deflating housing market, the rest Canada’s is in deep trouble.
No kidding. Even in the Atlantic provinces (perpetual economic basket case) prices have surged over the past few years. Have incomes there risen significantly too? Of course not.
It just isn’t the price of all this real estate stuff. Even a paid for house is an alligator as it takes so much time and cost to maintain and operate it. The Canadian real estate market is an accident waiting to happen and the Canadian banking system is loaded to the gills with “AAA” mortgage paper and “it can’t happen here” mentality. Just wait and keep looking for a parallel universe of peace and tranquility.
Did somebody say “incomes going up”?
http://www.edmontonsun.com/News/Alberta/2007/09/30/4537898-sun.html
Falling Paycheques
New report agrees we’re behind where we were years ago
Wages are lagging behind inflation in these boom times, new research shows.
The average hourly wage in Alberta was lower last year than five years earlier, according to statistics released yesterday by the Alberta Federation of Labour and the Parkland Institute.
“Middle-class Albertans are not benefiting from the boom - or if they are benefiting, it’s only because they’re working longer hours,” said Parkland research director Diana Gibson. “The steep economic growth is not being reflected in wages.”
The AFL-Parkland research shows that, after factoring in inflation, the average hourly wage in Alberta was $19.30 in 2006 - compared with $19.37 in 2001. Meanwhile, real wages in construction have dropped from $25.28 in 2001 to $23.35 in 2006.
Preliminary data for the first part of 2007 shows stagnant and declining wages.
Companies, on the other hand, are benefiting from the boom - with a rise in profits from $12 billion in 1998 to $54 billion in 2006.
Gibson says Alberta continues to draw migrants from across Canada and around the world, because the average wage remains relatively higher. But workers and society must also cope with rising prices, the cost of housing - and the fallout of the boom.
“We have a record number of employed individuals that use food banks,” Gibson said. “We have a record number of employed individuals who are homeless and using shelters.”
The AFL and Parkland hosted a conference, “Treading Water: Workers, Wages and the Boom,” Friday and yesterday at MacEwan College.
The research was one of the conference’s highlights.
Keynote speaker Sam Gindin, a former administrator of the Canadian Auto Workers union and now chair of social justice studies at York University, said Albertans are beginning to get restless with the status quo.
He pointed to recent labour unrest, with workers demanding changes to labour codes and the right to strike, and to the debate on the rate of royalties the province receives from the oil and gas industry.
Gindin said the broad range of topics covered at the conference leaves him optimistic.
“The people here haven’t just been talking about what is good for labour and how do we increase our wages,” he said. “They see that this is part of a larger movement,” he added, with questions raised about topics from poverty to social programs, user fees in health care and temporary immigrant workers.
I continue to watch the listings in my hometown in Minnesota. The past couple of weeks have presented interesting developments. 1) The inventory had a big jump. It should be declining after Labor Day, I thought. 2) I am seeing much bigger price cuts than the $2,000 - $4,000 price cuts that seemed to prevail.
One of the houses I’ve been watching was listed at $249,900 and states “owned by an interior designer”. It’s not a bad house and it has a really nice yard but I think local incomes would dictate a price of about $160,000 or so. Week after week the price has just sat there without moving. It had been lowered $10,000 on July 5th. Yesterday I logged on and saw $234,900. This is one of many $10,000 - $15,000 reductions I am now seeing. And these are not California prices so those are pretty good cuts.
It will be interesting to watch how it plays out. I still think reality dictates a 30 - 40 percent cut and the market seems to be agreeing. Cuts in the 5 or 6 percent range are a nice start.
Misstrial - you have some different observations of NM than what I see up here in the Duke City. Albuquerque of course has more for sale. But if priced reasonable, seeing stuff move. I find the quality of life here much better than in the Bay area (since both of us are from CA). I am in one of the best areas of ABQ. But RE for anyone now not good. Have some friends wanting to sell because moved to a bigger home (they are wealthy and will be fine) and renting old house.
Hello need to leave ca:
The fundamentals are different here in the south as compared to ABQ. Lower salaries for one. Most jobs here top out at $8.00/hr.
Properties are moving, of course, just not moving well in my zip.
As far as quality of life, that is debatable depending on one’s interests, hobbies, background, etc. I am a native Californian and so my views will differ from yours on the quality of life perspective. I am still a legal resident of CA and maintain a residence there, so that may have something to do with my perspective.
But to each her own.
All the best to you.
~Misstrial
“Most jobs here top out at $8.00/hr.”
Too low to raise children, but that doesn’t seem to bother anyone these days.
Lost In Utah - good to see you back. 4 Corners has some great scenery, but desolate to live in.
OFF TOPIC …….
For those of you planning to meet with NEIL at the CHEESECAKE factory tomorrow….you might want to leave a little early and go take a peek at Julian Beever’s drawing at the REDONDO BEACH PIER. He is there today drawing a three dimensional chalk drawing, which is suppose to be finished this afternoon.
http://web.go2db.com/media/chalkartist.mov
http://www.youtube.com/watch?v=SOV1srK0hhg
Cheesecake Factory = good key lime martinis.
More Yard Sale signs than ever before. Went to one where the unhappy yard sale’er woman walked towards me and began to hammer into the ground a FSBO sign. Why was she not happy to see me?
And still I have yet to see a real estate transaction notice in the local paper for under 100 grand.
Lots of RTO.
Sorry to repeat a post from the bits bucket, but this is a local market issue: What is D.R. Horton trying to hide from the San Diego press? An abysmal anticipated number of auction sales, abysmal realized sale prices, or both?
More Business news
Builder’s condominium auction under wraps
By Emmet Pierce
UNION-TRIBUNE STAFF WRITER
September 29, 2007
Home builder D.R. Horton has clamped down on public attendance and media coverage of a planned auction today of condominium units at two San Diego developments amid a growing national interest in its marketing strategy.
http://www.signonsandiego.com/news/business/20070929-9999-1b29auction.html
The washington post realestate section had some very interesting graphs showing inventory vs. sales. Showed the greater Washington DC area was pretty much at 9 or 10 months inventory with decreasing prices.
PG County was the worst, with inventory going straight up past 6000 with only around 600 homes sold.
“‘I haven’t had a call yet and my place has been listed for three weeks,’ said Jason, who’s selling a new home for $455,000 after building it for just $270,000. ‘The market has loosened up but the boom isn’t going anywhere.’”
Sorry Jason, but it’s probably worth less than the $270k you put in it.
“Shashi is selling her home for $475,000 after buying it last year for $329,000. She only had three calls since listing the house two months ago. ‘I’m not in a rush to sell, but I can tell people aren’t in such a rush to buy either,’ she said.”
Ditto Shashi. Better start below $329k.
Pensacola Beach, Florida
I have an update to the “luxury” condo monstrosity called Portofino. The latest wishing price per the MLS on a two bedroom, 1,300 square foot unit (previously $800K to $1M at the height of the bubble) is $499K! Also there are two units listed in foreclosure on the local clerk of the court’s website. I imagine units will be selling for around $250K in a couple of years.
Thought of the Day
Why is it that if rich white people live in high density high rises the buildings are called “condos” but when poor minorities live in high density high rises the buildings are called “projects” ?
A rose by…
Hahahahahah!
Both populations love bling and are probably broke as hell. They also have attitudes the size of New York City.
(Except for some of the older retired people … at least in the projects. Don’t know if there are any mensches living in condoze, actually.)
We have so many houses on the market here in North Idaho that there must be a shortage of signs. They have started using small signs made from 2×4’s and even hanging 2 signs on one yardarm…either a shortage or an agreement to use the smaller signs to make the hundreds of properties for sale less noticeable. There is a development near me that was built to appeal to Californians. It is gated, which for this area is a joke. Of the 40 or so lots, 7 have houses on them and 4 are specs, one of which was completed 3/06 and still sits, they are asking 600k-1MM for these places! Best of all is the developer was smart and allowed local realtors to pre-buy almost every lot. Now there are some desperate barista-turned-realwhore types hoping for a greater fool. Lots were asking ~299k, some have been lowered but others sit at unrealistic prices. The agents say things like “2008 will bring a new wave of transplants” to snap up these places.
We just had a write-up in USA today about how great ID was doing…HA! They claim low unemployment, but there are few high paying jobs here, plus we have a lot of equity locusts that moved here 2 years ago and are just now looking for work. They are being blindsided buy the fact that they can’t afford to live the lifestyle they are used to on the wages here.
There are 4 foreclosures on my street alone and I know someone who moved to Boise and is renting because 1) he can’t sell his house here 2) there are tons of vacant/for sale houses on southern ID.
Northern Idaho, eastern WA, MT, Wyoming…those places are going to get their collective @sses handed to them. Why? No good jobs! It is quite astonishing how high prices soared in those areas.
Tis quite funny to hear that some equity locusts have burned through most of their bubble gains, and are forced to look for employment in their city of refuge. They’ll quickly find out why houses were so “cheap” in their respective areas. Home prices should represent what local wages afford, and nothing else.
can’t believe such folks never gave a thought to this beforehand.
Sagesse,
You brought to mind an incident in April of this year. We did some landscape renovations and I was seeking bids.
Side note on the construction trade here: 2 years ago contractors were so busy here that my neighbor could not even get a bid to build a deck; when I began looking for bids (April) on this project, I started calling on a Friday afternoon, by Saturday afternoon I had 5 bids. Project took 8 days to complete counting sat and sun. Not a small project either, scrape 28 yds of gravel/dirt, pour 2 stamped concrete slabs, irrigate for new lawn and drip system, underground wiring, install ~2600 sq. ft. grasspave and hydro-seed.
One of the guys I asked to bid called for directions and, based on his questions, I could tell he was new in the area, sure enough he told me he had moved from San Diego 4 months prior. When he arrived his Tahoe still had Ca plates. We talked for some time and admittedly I was somewhat critical of his plan. He was working for a custom home builder in SD but things got slow. His FIL told him that this area was booming and I guess that was all the research he did! He moved his family of four and was renting a house. Like most of the recent Ca transplants I think he was broke, hence the Ca plates four months later. He made 2 comments that made me realize how careless and foolish he was to move here. 1) He told me he was struggling to find jobs to do and had applied at several construction companies but that “wages were ridiculous here” I was so floored by that statement that I asked him “you didn’t research that?” 2) His reply summed it all up “no, but I was thinking about flipping some houses”. At that I could not hold my tongue and gave him a crash course what was going on in this area: Mines and Logging are all gone, small resort economy, and a very few small companies that don’t depend on the local economy (like mine, but heck I only have 4 employees), and anywhere between 42-48% of this county’s employment is construction and R/E related. The guy could not understand what I was trying to tell him about his chances of survival, he just asked me “so you don’t think flipping some houses is a good idea?” I just shook my head no and said so long..he never gave me bid!
A friend of mine who is a dentist tells me that they no longer extend credit to new patients. He also tells me about Californian transplants that moved here hoping that with a cheaper house and some left over money they would not have to work. I guess these idiots are finding out that is not the case now and a $7.50 hr job making sandwiches isn’t paying the bills.
This bubble has done more than damage the economy; it has ruined the concept of an honest day’s work for and honest day’s pay.
My thought is this, if you cant make it in California, what ever your job is, you sure as heck won make it here where wages are 1/3 of Ca.
By 2010-12, this attitude will be beat of of everyone…
2004 Piedmont (East Bay Alt-A Bay Area enclave) buyers told me recently that they would have saved $150,000 by buying today instead of back then, since a neighbor cannot sell a similar house nearby for even the lower price. This is for a house that is in the million dollar range.
“Nobody is buying.”
Also, a relative of theirs in the Alt-A Bay Area is receiving calls from a realtor three times a week asking when will they “make an offer” on another place.
Somehow, my acquaintances believe a market turnaround is in the near future.
First post eatin again
We have so many houses on the market here in North Idaho that there must be a shortage of signs. They have started using small signs made from 2×4’s and even hanging 2 signs on one yardarm…either a shortage or an agreement to use the smaller signs to make the hundreds of properties for sale less noticeable. There is a development near me that was built to appeal to Californians. It is gated, which for this area is a joke. Of the 40 or so lots, 7 have houses on them and 4 are specs, one of which was completed 3/06 and still sits, they are asking 600k-1MM for these places! Best of all is the developer was smart and allowed local realtors to pre-buy almost every lot. Now there are some desperate barista-turned-realwhore types hoping for a greater fool. Lots were asking ~299k, some have been lowered but others sit at unrealistic prices. The agents say things like “2008 will bring a new wave of transplants” to snap up these places.
We just had a write-up in USA today about how great ID was doing…HA! They claim low unemployment, but there are few high paying jobs here, plus we have a lot of equity locusts that moved here 2 years ago and are just now looking for work. They are being blindsided buy the fact that they can’t afford to live the lifestyle they are used to on the wages here.
There are 4 foreclosures on my street alone and I know someone who moved to Boise and is renting because 1) he can’t sell his house here 2) there are tons of vacant/for sale houses on southern ID.
Thanks for the update, SawItComing. I like to know about that area.
Here’s -$151K in evaporated equity in coastal San Diego in a little over 2 1/2 years of homeowership. This lucky buyer paid $1.1 Million in Jan. ‘05 and the listing now starts at $949K. (Link doesn’t show the correct price.) This rather unassuming 1970’s house looks a little odd to me with all the granite bling and stainless steel.
http://tinyurl.com/32gpwj
Can things get any worse in New Zealand? Houses are 10x income and now rents are going up too:
http://www.nzherald.co.nz/section/8/story.cfm?c_id=8&objectid=10466744
Doug Casey is abandoning this overpriced South Pacific backwater and moving to Argentina, an actual developed country with affordable real estate:
http://www.financialsense.com/editorials/casey/2007/0926.html
if you click the Edmonton Sun link, don’t forget to check out the Monday Sunshine Girl page: Kali wants to be a real estate developer. LOL.
http://www.edmontonsun.com/SUNshineGirl/Monday/home.html
Most of those girls are skankalicious. Yikes.
I still prefer women from Calgary.
urghhh….jeezus, she’s kinda busted looking - looks like she might have been a man at one point. love the escort model pose. classy.
Inventory in northern VA is going up right now, when normally it’s going down this time of year:
http://www.recharts.com/nova/nova.html
2005 was an unusual year that had the same effect - when inventory *really* started to take off. 2006 was more “normal” in terms of rising in the spring, falling in the fall (though inventories were still about 4x normal). 2007 is back to rising unusually again. I’m sure this is due to tightened credit.
I know, am just throwing in observations from this tiny speck in the huge expanse of US real estate, called Park City, UT. But the other night, there was an event in a local church, and when I saw the announcement, I just had to go. Because it was called: “Who do we want in Park City? Economics and diversity”.
It was eerie, because I could sum it up with: This is how it looks when the middle class is disappearing. The panel consisted of developers and old timers, and I picked up a great whiff of fear from exactly those middle class folks whose very policies make them a disappearing species.
They said basically two things: not everyone can live here, and screw the workers on which this place depends. And: the second homeowners pay the commercial tax rate and this is who we want, while middle class people ‘have the choice’ to go elsewhere.
The folks on the panel were not willing to hear much from the audience, thye did not want diverse, and did not want to hear from
‘diverse’.
What it told me personally was that my kind of diversity (white middle class professional creative) is not wanted here, but I got that impression increasingly during the 18 months here, as the REIC runs the show. I am anyway headed towards ‘international diversification’, and the whole thing just made it crystal clear why that I got to that point. Will probably be skiing somewhere else too.
Last month’s Business 2.0 had an article on American ex-pat tech workers.
Even as many as three years ago I was hearing professors (the high performing ones) talking about taking jobs in Scandinavia, possibly to leave the US for good.
The brain drain is here.
My mother and father in law, both professors, took jobs in Sweden. Less pay but better jobs, benefits, etc. My husband (prof) and I (scientist) just moved to Canada for better pay, better jobs, better benefits. I wish I could say the housing was cheaper here!
Your report had a real impact on me, Sargesse. Thanks for the input.
Greetings. I lived in Rochester, NY before this.
Sagesse,
read the link posted by new zealand renter above, Doug Casey is abandoning NZ and heading for Argentina.
As for Park City, they sound delusional. 2008 promises to be a fright. And these folks want to chase out middle-class taxpayers?
Well good luck to them and good bye. The West is dotted with old ghost towns that went bust…happened once, will happen again.
Atlanta–One of our neighbors is moving out right now due to foreclosure. The wife has MS, and the husband who is in his 60s was having a hard time finding decent employment. They lived here for at least 15 years. Since they bought so long ago, if a mortgage vulture had not gotten a hold of them, they would have probably been okay despite everything. It’s very sad to see something like this happen.
Now they are having to move to a very run down apartment complex. There is a mortgage broker somewhere out there that deserves to rot in hell because of this.
And please let TxChick, know we now have another cat—they couldn’t keep it, so we volunteered to take it.
Any observations on the Grass Valley/Nevada City Ca area?
Any observations on the Grass Valley/Nevada City area??
Friends in B’ham and Seattle reduced prices again this week, still no sales. The ones in Seattle (630K in May, now 499K) are now asking me for advice, after not listening for over a year. In May, they could have sold that place in a week for 560K. Now, they’d have to go below what they paid (including all the money they’ve thrown in since May to remodel and restage) for a *quick* sale- which is what they say they’ve wanted since May- so, at this point, there’s no more advice to give, they blew it.
Ditto for the B’ham house (360K in May, now 315K). If they put it at 265K now, they’d sell it, but that won’t happen. They’re out of the country for two years, and only paid 150K for it, no HELOCS, etc. so *could* sell now and still make a profit, just not BIG enough a profit to suit them! So I guess they’ll start bleeding money at some point.
These are all people who, if they hadn’t been so dang greedy, could have sold quickly back in May and come out ahead. It’s very interesting to me that they act as though they are “victims” of the housing market when in fact, they are victims of their own out- of - control greed.
Since they’re friends, my sentiments were originally aligned with them, hoping they’d get their miracle (though realizing it was a chance in a million). Now I’ve changed over to the prospective buyers camp and say to myself “Well, at least there’s some strangers out there who didn’t get completely screwed by falling for my friends original too-high prices of the spring and summer”.
“The old axiom says that Florida picks up 1,000 residents each day, but evidence is mounting that this long-lived assumption is no longer valid.”
Oh, I don’t know about that. When I was in St. Pete’s recently, I’d say roughly 1,000 passed-out vagants were being picked up off the sidewalks every night.