What Follows Is Always The Big Plummet
The New York Times reports on Maryland. “Colorful banners, draped across buildings like giant flags, urge people driving through Baltimore’s rebuilt downtown neighborhoods to move into the new condos and apartments inside. ‘Sophisticated Urban Living W/Garage and Gated Off-Street Parking’ one sign declares in the long campaign to gentrify the central city.”
“Until recently, the ballyhoo was not much needed. But now, the banners are the most visible evidence of the incipient damage to this major American city from the turmoil in the national economy.”
“As home sales dry up, tax revenues fade, foreclosures have surged, hiring is down and a new caution is inhibiting activity.”
“‘I don’t see a recession mentality,’ said Atwood Collins III, executive VP of the M&T Bank Corporation, who complains that the national media are amplifying the bad news. ‘But you would have to be deaf, dumb and blind not to be a little infected by what is being said.’”
The Gazette. “Maryland luxury homebuilders are adjusting to the housing slump by marketing less expensive models that still offer the upscale cachet that affluent buyers seek.”
“In acknowledging the obvious, John Lavery, Mid-Atlantic’s VP for sales and marketing sounded a hopeful note. ‘The market is still in a slump — there is no doubt,’ he said. ‘But we think we’re at the bottom of it.’”
“Luxury homebuilders are uncertain of the future. ‘I think everybody across the industry doesn’t know what to think,’ said Thomas West, VP for Greentree Homes, which has added ‘affordably priced houses’ at its Tuscarora Creek community in Frederick. ‘Everything now is a negotiated deal. People seem very interested in buying a home, but there is no urgency if they already live in this area. They may have a home to sell.’”
The Virginia Pilot. “The message embedded in Old Dominion University’s latest State of the Region report is clear: Don’t expect the slowing Hampton Roads economy to rebound soon.”
“Moreover, the document painted a bleak outlook for parts of the Hampton Roads housing market. The boom in housing prices is over, and prices ‘already are stagnating in response to increasing amounts of inventory,’ it said.”
“The sector of Hampton Roads’ housing market that will encounter particular difficulty, it said, is condominiums.”
“‘Substantial amounts of new inventory are still under construction and have yet to hit the market,’ the report said. ‘Some investors who purchased condominium units with the intent of ‘flipping’ them…now find they cannot make a sale without significant price reductions.’”
“Another source of heartburn in the housing market has been the sharp rise in foreclosures among higher-risk borrowers who used sub-prime mortgages to buy homes. ‘Sub-prime delinquency rates in Hampton Roads almost doubled between December 2005 and December 2006,’ it said.”
The State Journal from West Virginia. “During the past few years, it seemed as though every apple orchard in the Eastern Panhandle entered autumn decorated in one of two ways: with shiny, red fruit dangling from tree limbs or bright surveyor’s tape showing where the next batch of new houses would spring up.”
“But this autumn, the bumper crop of new houses appears to have stopped.”
“A glut of homes available on the market, coupled with a nationwide panic over mortgage-lending practices, has slowed the once hyperactive housing market in Jefferson, Berkeley and Morgan counties to a crawl and left homebuilders scrambling to find buyers.”
“‘We’ve had some builders go out of business here because we overbuilt and the houses were just overpriced,’ said Marc Savitt, president-elect of the National Association of Mortgage Brokers and president of The Mortgage Center, a Martinsburg-based mortgage lender.”
“The Eastern Panhandle is not alone. According to real estate and homebuilder associations from throughout the state, the market is slowing down a bit, especially in counties that have seen housing prices skyrocket in recent years.”
“‘Part of the reason for that is because interest rates went up, and it’s also because we have had an awful lot of building, so the supply is up,’ said Chris Ilardi, secretary of the North Central West Virginia Home Builders Association.”
“‘It’s the concurrence from our members that it is slowing down all over the state,’ Ilardi said. ‘In the Eastern Panhandle, they are really hurting. The average time on the market there is exceeding one year. So when it stopped, it just stopped, like someone turned off the faucet.’”
“‘Some of the larger national lenders came into West Virginia, and they brought in their own mortgage brokers and title agents,’ said Savitt. ‘They offered customers discounts but required them to use the in-house broker and appraisers. And the discounts were simply shifted to other parts of the mortgage so the buyer still ended up paying the same price.”
“‘Now we are seeing a lot of those people coming in, trying to refinance, and what they are finding is that when it was appraised it wasn’t worth as much as what the appraiser told them, he said.”
“As a result, a number of those properties are in foreclosure. In fact, a recent survey by the Mortgage Bankers Association showed more than one out of four of those loans are considered delinquent, and the state has the one of the highest delinquency rates in the country for subprime adjustable rate mortgages.”
“‘The prices have dropped, and that’s the bad news. But it’s also good news because affordability is back,’ Savitt said. ‘Houses are becoming reasonably priced again, and that may enable people who were priced out of a home to now afford one.’”
“Savitt said a couple recently came to his office to talk with him about buying a home. They had come in last year hoping to buy a house that caught their eye. But at that time the prices simply were too high. They couldn’t afford the loan.”
“This year, things are different. The couple told Savitt they had found another home they liked, one that was the same model style and in the same development as the home they fell in love with in 2006. But this time around, they could afford to buy.”
“‘It was the same style house, but it cost $40,000 less,’ he said. ‘Real estate around here has gone crazy, but now it’s going to a more affordable level and becoming more normal.’”
The Sun News from South Carolina. “Real estate sales are still falling from last year’s levels, but the number of condominiums on the market has dropped, a decline officials say comes because buyers are likely pulling units off the market.”
“Homes are selling at the same pace they did in 2004, but down 19 percent from last year, according to the MLS.”
“Condo sales have dropped 38 percent from last year, and are selling at the same pace they did in 2003.”
“‘Well, it’s not getting worse. I don’t look for numbers to start turning around for probably another year,’ said Tom Maeser, president of the Fortune Academy of Real Estate. ‘People need to hang tight. Sellers need to get realistic in pricing, and buyers have to realize they can’t wait forever for good deals. There are definitely good deals out there.’”
“It will take at least 15 months to sell the current supply of homes on the market at today’s sales pace and 23 months for condos, Maeser said.”
“Falling condo inventory is a good sign for the correcting market. There are 8,975 units on the market compared to 10,493 last year.”
“Rachel Broadhurst, president of Century 21 Broadhurst, said this is likely due to condo sellers deciding to wait to sell or choosing to rent out properties. ‘We encourage people to do that sometimes,’ she said.”
“But single-family home inventory is up 20 percent to 6,344 homes from 5,291 last year.”
“Broker Mirela Monte said what happens on the oceanfront affects the rest of the area, and home prices inland are dropping as well but not as drastically as the oceanfront. When oceanfront prices skyrocketed in 2005, so did inland home prices.”
“Monte wants real estate agents to talk realistically about the market to their clients. After a sales frenzy and skyrocketing prices in 2005, Monte calls what happened in 2006 ‘the paralysis period,’ where listings grew but there were few or no sales.”
“What follows she says is always ‘the big plummet,’ where sales happen at unbelievably low prices, well below established comparable sales. The plummet has happened on the oceanfront and is starting inland, but won’t be as drastic there, Monte said.”
“‘Our third quarter statistics are dismal at best: only 9 percent of available condos have sold in the past quarter, only 18 percent of the homes and 5 percent of the lots available have sold in our area during the past three months,’ she said.”
“July, August and September are normally hot sales months on the Strand, she said. ‘These disheartening figures may signal a more severe trend yet,’ Monte said.”
“Economist Mark Vitner of Wachovia said price declines are painful but necessary. ‘A lot of people were priced out of the market and prices need to correct,’ Vitner said.”
“The growing number of foreclosures will also lower prices because banks will be more willing to discount homes than investors who’ve lost money, Vitner said.”
“Real estate slowdowns are as predictable as the rising sun. We know they will return, but unlike the sun, we just don’t know when. We are in the midst of one. A National Association of Realtors index, which tracks pending sales of homes, fell to its lowest level ever.”
“That report is only the latest that has shown a soft real estate market. The news is similar locally, with double-digit drops in area condo and single-family sales. Sellers are lowering prices. The coast saw the biggest gains during the boom and is experiencing the largest drops.”
“Some believe reporting such facts is the media’s way of harping on the negative. I didn’t notice that kind of complaining when the media was penning positive headlines, even though everyone in the know understood such rapid market expansion could not be sustained.”
“Many of those who unwisely jumped into the market without first preparing themselves are hurting. ‘It was just plain easy to get anybody approved,’ said Eunice Harris of New Genesis Mortgage in Conway. ‘For the last three years, just about anybody who wanted a house could get a house.’ Harris turned down several people who weren’t ready for the responsibility.”
“‘You want to see people get into homes; you do not want people to get into a home they can’t afford,’ Harris said.”
“The hundreds of mortgage companies Harris was able to place a mortgage with in recent years are dwindling by the day. She closed a loan with one company on a Friday only to get an e-mail on Monday saying they were shutting their doors.”
“‘It’s a mess, isn’t it?’ Harris said of the market, which can mean only one thing: ‘This is a good time to buy,’ she said.”
MISSION DECOMPLISHED
“Until recently, the ballyhoo was not much needed. But now, the banners are the most visible evidence of the incipient damage to this major American city from the turmoil in the national economy.”
“In acknowledging the obvious, John Lavery, Mid-Atlantic’s VP for sales and marketing sounded a hopeful note. ‘The market is still in a slump — there is no doubt,’ he said. ‘But we think we’re at the bottom of it.’”
Another bottom caller! He’s hoping and wishing and thinking and praying…
“‘It’s a mess, isn’t it?’ Harris said of the market, which can mean only one thing: ‘This is a good time to buy,’ she said.”
Arrrrrrgggggghhhhh.
I hate this stuff. Doesn’t this turkey realize that was LAST MONTH’S NAR line.
What the ‘good time to buy’ crowd always neglects to consider is that anyone who might have listened to them already bought during one of the other recent ‘good times to buy’. By nature the real time to buy will be when nobody is in position to actually do so.
Since RE agents only make money when RE is selling from their point of view its always a good time to buy. Since if nobody buys they don’t make any money.
Whether or not it’s a good time to buy for the people who are actually buying the RE agents don’t care, since it’s not their money, they just want the commission.
It just goes to show how far we are from a bottom. There is still no capitulation out there.
I’m thinking none of these shills could find their bottom with both hands…
“Another bottom caller” — You beat me to it. Dawn you!
Pinball Wizards, notwithstanding
“‘I don’t see a recession mentality,’ said Atwood Collins III, executive VP of the M&T Bank Corporation, who complains that the national media are amplifying the bad news. ‘But you would have to be deaf, dumb and blind not to be a little infected by what is being said.’”
“the national media are amplifying the bad news”
Everthing I read about my market (Orlando) is not as bad as what I see.
Mr. Collins, you are indeed deaf, dumb, blind, and severly mentally impaired (my appogies to any and all with these real afflictions). What a dumbass!! I know what you all are thinking, so I’m not even going to bother writing it.
I think we all get tired of repeating ourselves. It is fun to slam these guys.
“Condo sales have dropped 38 percent from last year, and are selling at the same pace they did in 2003.”
I seem to recall 2003 was a bumper year for real estate. Is this BS or true?
Not for condos, not in the DC area anyway. There is not as much inherent demand for condos as for SFH, so there was not much existing supply in 2003. It was only when appreciation took off that the condo frenzy began — “buy something, anything, now or be priced out forever.” 2004 was the pre-sale stage and early building.
I agree with Oxide — I saw this here in Florida but I think it applies almost everywhere that condos are built in large number. Condos seemed to slightly lag the boom on the way up and aggressively lead on the way down, probably because their planning, approval and construction times are long. Since condos were the choice of most quick-flippers here, the fast money zoomed in and put down a deposit during pre-construction sales, then immediately marketed their contract. Effectively, they bought an assignable contract even though many did in fact close first and sell second — often 30 minutes later. The other attraction of condos to flippers was the virtual absence of a need to oversee maintenance or even participate in construction decisions; this allowed out-of-staters to buy them out the wazoo, with little concern about the deterioration of their property while they waited for the greater fool to some along.
In Florida 2003 was the transition year. 2002 was a little abnormally up, but in 2003 things were beginning to rev up and of course we know what 04 thru now was like.
“As a result, a number of those properties are in foreclosure. In fact, a recent survey by the Mortgage Bankers Association showed more than one out of four of those loans are considered delinquent, and the state has the one of the highest delinquency rates in the country for subprime adjustable rate mortgages.”
Also, these people have been screwed twice. As poorer people, they have less skills. Thus, they must be more mobile to move to jobs. One out of four is foreclosed. The remaining three are stuck with being tied down to a house in which they will be ‘priced in forever’ - can’t get what they paid for it for a long, long time.
And additionally, they’ll probably have to struggle for a long time to keep making payments on the house. Their income will slowly inflate up. But the joy of the ARM, instead of the fixed rate is that the ARM payments could keep growing with it!
If there is some kind of assistance program, the lenders, speculators and other who caused this situation should get nothing for stupidity, malfeasance, or some combination of both. But people who saw the market skyrocketing and were duped into buying - those are the ones I wouldn’t mind seeing programs for, to keep them in their house, or to help them recover some downpayment money from the house and limit damage to their credit.
“But people who saw the market skyrocketing and were duped into buying ”
But “duped” exactly how? They wanted in on the market, they went to a broker and got a loan. They then signed the docs.
As Mayor Bloomberg pointed out, if you declined their request for a loan, you were in line for lawsuits for discrimination.
They were adults and they wanted to buy into the housing market…
and they did.
So, how were they duped. The mortgage docs spelled out the terms of the loan; they were responsible for reading and understanding what they were signing.
you think you could call the mainstream media and tell them to report that? Not!
Spike;
There’s where you screwed up, you used the word “responsible”
You’re discriminating between the credit worthy and non credit worthy. That’s financial profiling!!
They don’t need any assistance - all they need is a nice sturdy business envelope and a stamp.
Is that the real bailout we could all get behind? Government funded pre-paid small padded mailers to the banks for jingle mail? Regular paper envelopes are bound to tear easily…
Seriously now - if you love something you’re supposed to set it free, right?
Well, if you care about subrpime people - why the h@#% would you want to help shackle them to a depreciating asset?
That is not what I would call “showing them some love”.
Not the Jonathon Livingston Seagull defense?
it has been my observation that poorer people don’t move, one of the reasons some stay poor is they won’t move to locations with better opportunities.
they may claim good reasons, they may claim lousy reasons, but i don’t think the mortgage is a reason
really interesting … I think you’re right …
It may be more of a self-selection thing; those who move on “make better luck” (this has been studied, actually), while the stick in the muds stay poor.
IMO -
Baltimore has two major problems before it’s market picks up: 1) crime, and 2) taxes. The prices there aren’t bad compared to the rest of the region, but the tax rate is almost twice that of the surrounding areas.
The DC area, on the other hand, has a long way to go down price wise. There have been noticable declines and there is a good deal more inventory below the 400K mark, but prices are still a good 100K more than they should be. A 1960s 3/1 in PG county should not be $380 or even $350. A DC rowhouse in Mt. Pleasant or Columbia heights shouldn’t be 750K renovated or 500K unrenovated… they have a more than 100K to drop.
I used to work in North East (N.E.) Washington, D.C. (probably more dangerous that Iraq at this point!) and we used to stand in the lobby of our building and listen to the gunfire in the neighborhood around 6pm EVERY NIGHT.
Anyway, the rowhouses in the “Eckington Place” neighborhood even abandonded and crack filled were selling for $700,000 back in 2005!
Just for fun, I called a realtor who had listed one of these babies on “O Street, N.E.” one block from North Capitol to see what the price was. She happily told me that it was $625,000 because it was in Capitol Hill. Haha!
This is when I knew the real estate market had gone completly insane. These same war zone dwellings were selling for $10,000-$30,000 back in 1998.
I guess when she has open houses, the buyers get bullet resistant jackets as part of the sale!
I hear ya! Looked at a house in ‘99 or 2000 that was on 5th Street, NE - just above H Street. Needed a gut job. The ask was 70K. Renovated, that thing would have gone for well over 600 at the peak.
I vividly remember driving past the house, late at night, just to see what the neighborhood was like in darkness. It was unbelievable - I was flagged down by drug dealers every 30 yards. That sealed the deal for me - I didn’t and don’t need to live with that garbage.
Funny thing is, you fast forward seven years, and the ‘hood has really not changed all that much. I would not walk around there at night, and even if you did, you will not find a pharmacy, dry cleaner or grocery store anywhere near your 600K house. A bottle of wine with a screw cap? Sure, just slide the five dollar bill through the slot in the bullet-proof glass!
Bwahahaha. The bagholders up there are in such deep do-do…
Ah yes… I’ve told several people to never park north of H street unless they are within literal spitting distance of Galludet. But really the drug dealers aren’t that bad… be friendly and nod a hello and things should be fine. They don’t want anyone robbed in their area or cars broken into since it brings a greater police presence. And if you say hello, they know you have marked their appearance. It’s the crack-head customers you have to watch out for!
Yes, working in that area always reminded me of the movie “Taxi Driver” with the quote: “Someday a real rain will come and wash all this scum off the streets.”
In the 6 years I worked there I saw (or had co-workers involved in) sexual assault, car jacking, car theft, murder, drug dealing, gang warfare, and prostitution.
I put that experience in context with the price of housing in that area and it made me want to sell everything a put money in the mattress!
I also remember when Baltimore City sold what were affectionally known as “slums” to anyone who would take them for $1 as long as they agreed to renovate them. Federal Hill is as nice as it is only because of this project.
I am hoping that people will realize that housing is not a speculative investment like “dot com” stocks and think of it like it is: places to live.
Yeah - Capitol Hill had a really violent streak in the 80’s and 90’s — and areas north of Capitol City — Ivy City, Hanover Place, public housing near North Capitol and NY Ave — seemed like they would always be lousy/scary. Amazing that there is now a bar scene on the 12th-13th & H Street areas.
Yeah, but that is essentially one or two blocks with a couple of interesting music clubs surrounded by blight on all sides. To be fair, the gentrification of Capitol Hill moved north pretty close to H Street during this decade, but the northern edge of that gentrification is still quite dubious, and H Street looks post-apocalyptic for most of its length.
Ha…
You need to drive around Baltimore more. H street is almost utopia in comparison.
Agreed. The blight in DC, I don’t care where you are, just doesn’t compare to the bad sections of Baltimore. The picture in the NY Times article is an good representation of what the BETTER neighborhoods look like. If you only have a couple boarded up houses on your street, you’re in an upscale section! I’ve been down streets in B’more where 3 whole blocks will have EVERY SINGLE HOUSE boarded up.
RE: Anyway, the rowhouses in the “Eckington Place” neighborhood even abandonded and crack filled were selling for $700,000 back in 2005!
LMAO!
That’s why these MBS chucks refuse to mark their holdings to market.
When a legit appraiser is called in to call a spade a spade, as in a simple neighborhood analysis of the above, the shit will hit the proverbial fan-meaning the entire underwriting and risk analyst departments and whoever was responsible for them will be lined up against the wall and shot.
So many must be scramblin’ around tryin’ to figure out how to get out with as much possible. Kinda like the rats in the Fuhrer Bunker when the Russkie hordes were comin’ over the wall.
Gentrification in D.C. was going on considerably before the housing bubble started, and I’m sure it will survive the bubble, but it will slow appreciably. And a lot of the crap condos that the builders were cobbling together to take advantage of gentrification? That stuff is dead in the water.
“war zone dwellings were selling for $10,000-$30,000 back in 1998″
Matches going price for a house in Baghdad! Coincidence?
“even though everyone in the know understood such rapid market expansion could not be sustained.”
- When you are in your 20’s and 30’s it is hard to be ‘in the know’ because the media tells you what is ‘in the know.’
These folks watched all these flipper shows explaining how easy it is to make FAST money that they deserved. No one explained the concept of waiting and saving money first.
I saw my first episode of “My house is worth what?” earlier this week when I was home sick. I couldn’t believe what they were telling these people. New kitchen and some other stuff and the condo appreciated from $500K to $715K since 2004 in Boston? I had to hit the information button to confirm that it was a 2007 episode (though I guess it could have been filmed in 2006).
And these shows may also have been the ones that started the fantasy that a realtor is your friend. Even the woman who was disappointed with her valuation was told that she had substantial appreciation.
Sickening.
Mission Accomplished
“Colorful banners, draped across buildings like giant flags, urge people driving through Baltimore’s rebuilt downtown neighborhoods to move into the new condos and apartments inside. ‘Sophisticated Urban Living W/Garage and Gated Off-Street Parking’ one sign declares in the long campaign to gentrify the central city.”
I remember the heyday of the “Baltimore as DC commuter suburb” idea - mid to late 90’s - Inner Harbor and new Camden Yards baseball stadium seemed to put a fresh face on the city. And, the neighborhood appeal of Fells Point or Federal Hill is kind of cool — these seem like romantic, fun and kind of cheaply funky but safe neighborhoods to some young types. But violence and the city’s problems aren’t going anywhere in the long run - and I’ve seen a lot fewer stories about moving to Charm City but working in DC in recent years.
Wasn’t there a mayor who painted the streets pink?
fed workers will commute for hours to avoid actual work
RE: fed workers will commute for hours to avoid actual work
Well said…
they don’t really “work” at work, so it’s all the same …
mmm… zombies need brains
what amazes me is how these people get into debt. one fed employee we had to deal with at work answered the phone with “The check’s in the mail!”
hey, my dad was a fed worker and he worked his ass off. he didn’t get paid a ton for it, either, though we were comfortable. I know generalizations can hold some truth, but I also know there are some fed workers on this blog who have stated in the past that they’ve traded better salaries for a more secure retirement. I think there are a number of very hard working fed workers that may carry the rest…
The Baltimore interactive homicide map: fun for all ages. For all you “The Wire” fans, you can play “Where’s Omar” instead of “Where’s Waldo”.
http://essentials.baltimoresun.com/micro_sun/homicides/
Wow, mind boggling that someone would create this — a wee bit macabre and oddly fascinating for the same reason — interesting find. I guess another tool for neighborhood due diligence.
That map blows me away, especially the key at the bottom. But I do love Omar.
That accelerated in this decade, when it became “I can’t afford a rowhouse on Capitol Hill, so I’ll buy one in Baltimore’s Federal Hill”. Of course, that turned Federal Hill into an overly expensive DC enclave, but there you go.
That said, I know several guys who moved to Baltimore from DC because they grew up in northern Rust Belt cities and felt more at home with Baltimore’s blue collar atmosphere than with the Gucci/Pottery Barn vibe in DC.
Great news! We added 120 new jobs last month. I suppose the hundreds of realtors, workers at mortgage brokers, few hundred thousand illegals who worked in contstruction, building contractors, etc, who lost their jobs must come under another government department. Even more great news! Inflation is contained. I suppose that letter I got yesterday from the water company saying they were raising my water rates by 21% - yes, 21% - and that call I got from my stock charting company telling me they weere raising my subscription from $30 to $44 doesn’t come under inflation. Everything is terrific under Bush. I think we should elect him as a great war time President for a 4th term (sarcasm off). I will repeat what I’ve posted several times. Under no circumstances trust or believe ANYTHING that comes out of this administration.
Musta woke up on the wrong side of the bed, but as for today, I’d hang ‘em all in a hot second if I could - the realtors, the mortgage brokers, the lying economists, the crooked credit card companies, the scumbag politicians, the stupid greedy Americans who allow themselves to be led by the nose, the… WAIT!!!! That leaves pretty much just those on this blog, doesn’t it???? OK by me.
One of my old co-workers commented at one point that he believed we were all overfed, complacent and appathetic. He did not think there would be change until the dissatisfaction index was high enough and broadly felt. I tent to agree with this.
Me too! Hey–you bring the rope, and I’ll bring the bullets. Where do we start?
rope only, bullets too fast
If you think anything’s going to change after 2008, you’re in for a shock.
RE: If you think anything’s going to change after 2008, you’re in for a shock.
What?
You mean the Hillary and Nancy dog and pony show aren’t going to fix everything?
OH, those poor soccer moms and all their precious darlings.
Your typing mirrors my thinking - exactly.
I’m voting for Obama. Sure, he’s another Wilson, and Wilson wasn’t terribly effective. But when you can’t do anything constructive, making a gesture is the only option left. (Thanks to the French for teaching me this.)
Yup, but we’re in for a big change before that…if the media will report any of it - recession
What??? According to this guy, the media is shoving “recession” down our collective throats! (Just like they were the housing bubble, although the only place I seemed to be able to find any information was right here, until a few months ago…)
Whiner:
“‘I don’t see a recession mentality,’ said Atwood Collins III, executive VP of the M&T Bank Corporation, who complains that the national media are amplifying the bad news. ‘But you would have to be deaf, dumb and blind not to be a little infected by what is being said.’”
After a sales frenzy and skyrocketing prices in 2005, Monte calls what happened in 2006 ‘the paralysis period,’ where listings grew but there were few or no sales.”
“What follows she says is always ‘the big plummet,’ where sales happen at unbelievably low prices, well below established comparable sales.
In my area we’re in the “paralysis” stage. The “big plummet” may not happen til 2009.
Yes we are now just getting into the “Oh, No, something is wrong stage”
Which then becomes the “Dig in your fingernails and hold on for life stage”
Only after that does not work, do you hit the “Big Plummet stage”
Ah, the classic deer in the headlights look. Except that light is a slow train crash waiting to happen!
There didn’t seem to be a “big plummet” back in the 90s RE decline if I recall correctly.
However, I don’t recall ANY 100% LTV, no doc, loans back then either. Throw in the legislation that eliminates the taxable income hit to forgiveness of debt and exactly what friction exists to keep far, far more many people from mailing in the keys this time?
The more and faster people totally walk, the faster the decline will have to be, in my opinion.
“‘You want to see people get into homes; you do not want people to get into a home they can’t afford,’ Harris said.”
Yeah? Tell it to some of your sleazy associates.
“A glut of homes available on the market, coupled with a nationwide panic over mortgage-lending practices”
Nationwide panic has not hit San Diego and Los Angeles. If it had prices would come down and people would go to jail. The MSM is not telling the whole story. Lately its like a nationwide rescue of the brokers and the scammers.
TOPIC ?
how many banks have to fail to get msm’s attention
what was the early 90’s number ?
None will fail. They just bail eachother out like CFC. All you need is a pricey suit and a fake tan.
Everything’s contained…
http://www.fdic.gov/bank/individual/failed/miamivalley.html
The New York Times, again! Those guys are shameless chearleaders for NYC-area real estate but are always happy to trash someone else’s market.
I’ll say it again - one of the lessons of this bubble is that if you want to learn about your own market, you have to read the out-of-town papers.
NY Times will report on Baltimore, Boston Globe will report on San Diego, Chicago Tribune will report on Miami, etc. None of these institutions will dare shed light under their own noses.
they need local real estate add revenue - cheeseballs - you only get accurate info on blogs and some talk radio.
Yeah, but watch what they report, it still won’t be accurate, even if it’s about a different area.
That’s because the talk to “respected experts” and all of them work for the RE industry
and they read the gubmint reports…and believe them! BWAHAHAHAHA
But the Times most recent real estate article about stuff outside New York was about a new trend for including an observatory dome in custom built homes. Needs a separate poured foundation for the telescope (so people walking doesn’t knock it off of what you are observing), a rotating dome, all sorts of stuff.
Ooo, hells yeah! I wanna be rich!
–
“‘Our third quarter statistics are dismal at best: only 9 percent of available condos have sold in the past quarter, only 18 percent of the homes and 5 percent of the lots available have sold in our area during the past three months,’ she said.”
Simple math leads to 32 months supply of condos, 16 months of SFH, and 5 years supply of lots. I wonder how many of the units are empty and how long can the owners of empty units carry them.
Jas
That’s why they became realtors and mortgage brokers.
Their math skills obviously stink.
“‘Some of the larger national lenders came into West Virginia, and they brought in their own mortgage brokers and title agents,’ said Savitt. ‘They offered customers discounts but required them to use the in-house broker and appraisers.
Yeah, get the crooked appraiser to appraise the house at $100K above what it’s worth, then put in a “discount” of $25K, or better yet, a $25K “upgrade” which is really only worth $10K. Nice try.
The eastern panhandle of West Virginia is a textook “leapfrog” region. Empty land at the edges of the metro sprawl is so expensive that builders built attached product. So, higher end builders leapfrogged over it entirely to the far boondocks where land was cheap, podunk govs were desperate for tax money, and you could still build McMiniPalaces on 1+ acre.
Eastern WV is ~1.5 hr drive (no traffic) to the NoVa office sprawl near Dulles airport. It’s going to get hit bad for a while.
RE: ‘They offered customers discounts but required them to use the in-house broker and appraisers.
Can’t believe the Feds aren’t applyin’ RICO statues to prosecute these POS companies. Instead it’s a scramble for bail-out’s.
–
“‘It’s a mess, isn’t it?’ Harris said of the market”
Yes, M’am.
” which can mean only one thing: ‘This is a good time to buy,’ she said.”
No, M’am.
I would be interesting to plot ‘This is a good time to buy’ comments over time. Market wouldn’t bottom until no more of this appears in the print.
Jas
“‘I don’t see a recession mentality,’ said Atwood Collins III, executive VP of the M&T Bank Corporation, who complains that the national media are amplifying the bad news. ‘But you would have to be deaf, dumb and blind not to be a little infected by what is being said.’”
Ode to Nelson Bunker Hunt…
Ever since I was a young boy
I’ve watched the price of Silver fall
The Hunt Brothers & the Saudis
Tried to buy it all
But I ain’t seen nothing like this
In any recessionary pall
That well fed, not so dumb Texan kid
Sure got screwed by the market’s fall
He stood to make a fortune
Denied because of the money machine
Knowing all the metals
Always playing clean
He played by intuition
Demanding delivery, that’s all
That not so poor, big old rich kid
Sure got screwed by the market’s fall
He’s a metals wizard
There’s got to be a twist
A Silver Wizard
He sure got slapped on the wrist…
http://www.youtube.com/watch?v=lf60_kExwXk
att: Cramer
cat and deere are slower than sht
per salesdude
The gov’t wants to “temporarily” raise the caps for Freddie and Fannie and “temporarily” allow them to take on more debt.
When has the gov’t done anything that was “temporary”?
Weren’t Federal Income taxes a “temporary” thing to help pay for WWI?
Farm subsidies were put in place during the Dust Bowl.
Wars used to be temporary too…oh wait, we’re just “in a time of war.”
IIRC, Income Tax was ‘temporary’ too.
Funny because I remember 6-7 years ago, a friend of mine had a Girlfriend who went to college in Baltimore. According to her, there were entire chunks of the city that were either abandoned or so run down that the city would just about give you a home there free of charge as long as you agreed to fix it up.
‘Sophisticated Urban Living W/Garage and Gated Off-Street Parking’ one sign declares in the long campaign to gentrify the central city.”
- This is another thing that kind of bothered me about the housing bubble, which was the encroachment of mostly white hipsters into lower income neighborhoods. I live near Oakland, CA which has a large hispanic and black population. For a few years they were building lofts in some not so great parts of town. The one thing I can tell you is that the locals who lived there did not like this at all. You would be an idiot to move into one of these areas and not think that every single person walking down the street would absolutely hate your guts. Yes- it sounds sad, especially since the Bay Area is ’supposed’ to be all-that in regards to race, but I saw the reality. Put simply, you can’t expect to shove your working class people out of the way and expect them to like you for it.
There was talk a few years ago of building lofts in Hunter’s Point, which is one of the worst areas in SF. That project never got off the ground because for one, the boom ended and secondly because the residents there protested it.
I have seen this kind of gentrification invasion in several cities I’m familiar with: SF, Oakland, Memphis TN, and Philly. The worst part of it all is that the universal opinion seems to be that gentrification is a GOOD thing. I don’t agree.
“Put simply, you can’t expect to shove your working class people out of the way and expect them to like you for it.”
The working class almost always gets boned, either by wealthy or lower class parasites. Working class supports both those parasitic classes.
Yup. Gentrifiers seem to love being called Gentrifiers, too! I agree with what you said. Over a year ago in the section of Philadelphia I live in, these twin townhomes were built. Wishing price? $535,000. While they were being built they guy hired to guard the contstruction was gunned down. Police were calling it a hit because it was this man’s Mom who was part of a Community group that worked to get these things built. “Bring in the yuppies and our housing prices will skyrocket!- We’ll be rich!” was this womans mantra. BIG TIME kool-aid drinker.
Well, its been almost 18 months since her son was murdered and these twin townhomes still sit empty. They are gone through at least six different realtors and the price hasn’t changed. Oh, maybe they went down to $495K. One of them has a window that was broken months ago. Hasn’t been fixed yet. Next to it are six foundations. These six foundations have not been touched in almost two years. Now what surrounds these townhomes? Oh houses that you can get easily for $125K or less. Not a bad neighborhood. Lots of families, safe, almost suburban style living…
Go to any realtor site and type in my zip code 19153. You’ll see. Sad. Greed has left one woman with a dead son, neighbors with a vacant-for-soon-to-be-two-years condos sitting. What a shame.
Gentrification was controversial in Boston, too, but in the beginning, the gentrifiers put a lot of sweat equity and their own money into properties to make them nice places for them to live.
Also, the gentrifiers were either artists looking for rent they could afford and architecture they could stand, or, as in South Boston, gays creating a community for themselves as they were marginalized elsewhere. The gays and the working class Hispanics brushing shoulders did get awkward for a while, but crime went down.
The real speculation started after the rents shot up.
I knew the boom created strange bedfellows in PHiladelphia, but didn’t know they were trying to gentrify Southwest. I thought that was a neighborhood stronghold.
Too bad that lady’s son was murdered. Philly’s turning into a kill zone.
From the Virginian Pilot piece:
“Nearly 9,100 jobs will be lost by 2013, and Hampton Roads’ gross regional product will fall by $900 million because of the eventual closing of Fort Monroe in Hampton and consolidation of certain operations at Fort Eustis in Newport News, ODU economists predicted. However, the base closing and consolidation won’t have a major effect on the region’s economy in 2008, they said.”
Idiots. The base closing & consolidation won’t affect the economy in 2008 because Fort Monroe is not going to close for another couple of years! I believe that the deadline for the closing is in 2011. The changes at Fort Eustis will not be more than a few hundred jobs - it is a relatively small base [employment-wise] to begin with.
However, we will have a major effect on our economy in 2008 when the Navy moves an aircraft carrier from here to Jacksonville. That’s ~5,000 jobs, plus any additional jobs in terms of supports ships that may also get relocated, though I am not sure that any will be. These jobs are not accounted for in this article, as this area is still in denial about the carrier relocation.
maybe talking 10,00 or more
when gop blows the WH the dod budget will get hacked big time
not judging it just imo
With the Carrier gone this will make room in the area for all those millionaires who are moving here to buy all those “luxury condos” that local governments are subsidizing. [/sarcasm]
What about a concerted effort to debunk every single slob story the MSM puts out. They won’t do the research to see these folks are serial refiers and made huges profits that they took and now will walk away scot free. Everytime we hear a government official talking about bailing out the poor victims, they should be deluged with fact filled emails.
“Everytime we hear a government official talking about bailing out the poor victims, they should be deluged with fact filled emails.”
Government officials NEVER see the truth or much in the way of communication from the people they serve. Their staffers screen or tune it out. Much of what makes it into law is tinkered with by their nasty little condescending jerkoff staffers, who are either insane, on meds or completely brainless.
I know all about being a staffer - most are very young and willing to work for bupkus for a front row seat to political power. Christian right and Move-on have been very effective in these types of campaigns by making the huge amount of correspondence on an issue the story. It would be easy to just let go and figure it has nothing to do with me, but it does. Someone is going to have to make up for all that lost tax revenue and you can bet it won’t be the wealthy.
Even if they haven’t refi’d, a lot of times they’re doing OK. Compare these two stories:
1. Couple buys a house with no money down and pays very low teaser rate for first two years. When rates start to rise, they can’t afford payments, fall behing, and “lose everything.” BOO HOO
2. Couple rents an apartment. Landloard has a heart and says, “I see you’re just starting out. I’ll give you a 30% discount for the first two years.” Couple pays rent for the first two years, but then decides to move elsewhere where rents are lower. Generous landlord gives them a $5000 loan to help them move, and then decides to make it a gift.
These two stories are EXACTLY THE SAME. Now I know the mortgage company in #1 didn’ t really “have a heart” and was just trying to make a buck. But, you know what: Intentions don’t really matter! Only our actions do. And the actions are exactly the same.
Actually, case #1 is even better! There’s no income tax on that forgiven loan!
Nobody would feel sorry for the people in case #2. But, for some reason, people in case #1 who put no money down and paid down no principal are seen as “losing everything”. Nonsense! They simply rented a house from a bank for a couple of years, at a good rate, and then had to move.
Here’s a typical sob story:
http://pressherald.mainetoday.com/story.php?id=135959&ac=PHnws
Wow!
“Green, 54, had wanted to buy a home for years, but she hadn’t gotten far. Managing money, she said, has never been her thing.
At the time they were house hunting, Green had no down payment, no recorded credit score and a part-time job earning $11 per hour at Southern Maine Medical Center.
Her husband, who is diabetic, worked as a mechanic at a salvage yard, earning $9 per hour without benefits. ”
I’m stunned speachless…
I know! They’re making $40K/year, and got to live in a nice house with a yard for a couple of years. That’s great! They should look back and say “Gee, that was a nice opportunity”, and find a nice place to rent that they can afford.
Larry Kudlow says things are looking up!
Most folks would agree that while far from being completely solved, the credit crunch is easing. And of course, the stock markets have rebounded dramatically with the Dow hovering near its all-time 14,000 high. Stock markets all around the world have recovered. And the outlook for economic growth, though still uncertain, is nonetheless much brighter than it was back on August 7th when the Fed first turned its back on the emerging credit crisis.
Cocaine Larry Kudlow is a one man Crime Syndicate assisting in the enslavement of J6P on behalf of Wall streee.
I’m now beginning to wish that I had been irresponsible enough to actually buy a home I couldn’t afford. According to the Merc’s real estate section found in Business (www.mercurynews.com):
House OKs exemptions on forgiven mortgage
and
Schwarzenegger’s office unveils measures to help home buyers
I’m getting pissed. Is this all designed to keep home prices inflated?
yep
might try these
cagw.org,ntu.org and go all the way lp.org
everyone else is offering bail
“Is this all designed to keep home prices inflated?”
Why of course it is, you silly goose. Which house generates more tax revenue, the $500,000 starter home or $200,000 one? Your government is actually in on that home appreciation gravy train too. Ever hear of shared apppreciation homeloan programs?
Is this all designed to keep home prices inflated?
YES.
Off topic but funny personal experience today….
Back in late 03, early 04 I was considering buying (actually thinking I would get priced out) back home in VT/NH. I was working with a RE agent and my last words to him in Feb04 was “Kevin, I’m not gonna pay these prices… so long my friend”….. Haven’t heard a word from him since then until today I get an email saying:
“Mr. XXXXXX, How are things going? I was wondering if you are still on a quest for land or other property in this area. Let me know what you are interested in at this time and I can forward a list of properties for your review.”
Apparently things are slow back home….. real slow. :):):)
We’re priced out. (for now muhahahhah…)
The realtor who sold our house (and sold it to us) had a dead winter and is anticipating the same for this season. She’s training right now to prepare taxes to file in the gap.
Vermonter, I’ve since changed my mind about moving back home. I absolutley have ZERO desire to commune with city-ots and sneaker wearing, eurotrash driving fools from metro areas.
One thing worthy of note though: making appraisers responsible for their ‘actions’.
Baltimore and DC are going to get reamed. Baltimore is for all practical purposes a Rust Belt city. If they are giving houses away for $1 to people, then anything being sold in that city could sell for $1 as well. The ‘tony’ neighborhoods are no different, I could believe 95+% declines in Baltimore. As for DC, DC doesn’t do anything for anyone. It spends trillions of dollars on NOTHING. 95% declines will happen here too irregardless of how ‘powerful’ the US government is. I think personally the US government is a paper tiger and it won’t be bothering us 10 - 20 years down the road. Besides, aren’t the ‘libertarians’ on this site wanting less and less government? Consider too that there’s not much for industry in this entire area of the USA outside of government pork. I’d leave the DC and Baltimore areas and 25 miles out from there if I was there now.
hope you’re right, I’d kick in 10-20% of my house gains to see the country spared the fate of the Roman Empire………..
As a libertarian, I’d *like* to believe everything you’re saying. Unfortunately, I have a feeling that Uncle Sam the Pusher Man is a pretty resilient creature.
For what it’s worth, “flipping” is a term used in horse racing…
“Landrum says Herrell mastered “flipping,” a common practice among jocks to purge hard to quickly lose weight for a race. “He pulled 5 to 10 pounds in the hot box, and he flipped, or heaved, 15 times a day,” she remembered.”
http://www.wave3.com/Global/story.asp?S=4121499
“‘Substantial amounts of new inventory are still under construction and have yet to hit the market,’ the report said. ‘Some investors who purchased condominium units with the intent of ‘flipping’ them…now find they cannot make a sale without significant price reductions.’”