Local Market Observations!
What do you see in your local housing market this weekend? Legal actions? “The Massachusetts attorney general’s office has sued Fremont Investment and Loan, once the state’s second-largest subprime lender, accusing it of using predatory lending practices to sell loans to some borrowers who eventually lost their homes or had to file bankruptcy.”
“Fremont customers identified in the lawsuit include a single mother in Dorchester who earned $1,800 a month and financed her first home purchase with a Fremont mortgage that had a $7,000 monthly payment.”
Failed development? “The Portland, a 43-unit upscale condominium project slated for Minneapolis’ Mill District, is the latest casualty of the withering condo market.”
“In a recent letter to residents in the area, Brighton Development Corp. said it was canceling the project. The letter cited the retrenchment in the credit markets, which has triggered ’sudden and dramatic changes’ in residential development.”
Flipper resentment? “It Is a sleepy Loch Ness-side village that has long been a magnet for tourists from south of the border. But now there are fears that spiralling house prices inflated by incomers buying second homes in the area could have sparked anti-English resentment at Fort Augustus.”
“After anti-English graffiti was daubed on the walls of a former loch-keeper’s cottage, the picture-postcard location is now at the centre of a police investigation. The offensive slogans, including ‘English Out,’ were painted in white on the cottage beside the Caledonian Canal.”
“One woman said emotions were running high as it was understood the cottage had been sold to English people rather than locals who were finding it increasingly hard to get a foot on the property ladder.”
“But yesterday British Waterways, which is also selling a further three cottages along the banks of the canal, claimed the property had not yet been sold and remained on the market.”
Housing bubble related news? “Fallout from the implosion of the residential-housing market will dampen what has been a white-hot commercial real-estate market, Valley economist Elliott Pollack told a group of commercial brokers and developers.”
“The commercial-office market is getting hit first. It has begun to experience fallout from the subprime crisis as mortgage brokerages, title companies and financial-services firms downsize or close up shop, said Pollack, who was the keynote speaker at the Society of Industrial and Office Realtors’ Southwest chapter at the Arizona Country Club in Phoenix.”
“‘We need half the mortgage brokers that we have,’ he said. ‘That’s how much excess capacity there is in that business. Half of them are going to go away. Sublease space is going to be a problem.’”
“Watchers of the housing industry might have a new economic indicator to weigh: the number of would-be flippers inquiring about ways to insure vacant homes. State Farm Insurance Cos. has long offered standard homeowner and landlord policies for people renting out vacation homes.”
“But the cooling of the real estate market has generated more inquiries from consumers who bought properties as investments, thinking they could turn around and sell them for a profit, but who now find residences sitting vacant because of the recent credit crisis.”
“‘The vacant endorsement measure is suitable “for people who have to sit on that extra property, but don’t want the hassle of renters,’ State Farm spokesman Jeff McCollum said. ‘I can tell you, anecdotally, that we’re getting more interest in this product lately in all the areas you’d expect — Florida, Phoenix, Denver, heavy vacation areas.’”
“After anti-English graffiti was daubed on the walls of a former loch-keeper’s cottage, the picture-postcard location is now at the centre of a police investigation. The offensive slogans, including ‘English Out,’ were painted in white on the cottage beside the Caledonian Canal.”
Will Californians that moved out of state, receive similar resentment?
They already do, don’t they?
Having moved intrastate, I wouldn’t really know…
Anybody from the vast 49 state occupying area care to chime in, as to what you’ve seen?
I’m a ex-Californicator that has moved to NNV, and yes, we definitely suck!
less than a third of “californians” are natives..
The large majority of those exporting themselves are natives of other these other States.. east-coasters, midwesterners, Nevadans, Arizonans, ex-NYers, ex-Floridians, ex-Carolinans.. the home states of which don’t want them to come back home.
“less than a third of “californians” are natives..
The large majority of those exporting themselves are natives of other these other States.. east-coasters, midwesterners, Nevadans, Arizonans, ex-NYers, ex-Floridians, ex-Carolinans.. the home states of which don’t want them to come back home.”
I completely agree with Joey.
Here in southern NM, Californians (such as myself) have been welcomed and treated very well. Southern NM has been looked down upon and despised by Santa Fe-types (really, really over-rated place) which has been populated by east coast transplants (mostly from NJ and NYC suburbs).
So, all I can think of is that So. NM has been mistreated/looked down upon by the Santa Fe political structure/populace for so long that anyone - even us Californians - are welcomed.
NOTE to Californians :):
I have been working very hard to try to give NM a positive image of real Californians. Please do not exceed the speed limit while traveling through Las Cruces on the 10 - I know its 70-75 on the 10 generally, but the limit reduces to 65 while traveling through Las Cruces. Please remember to use your turn signals. I have been polite to locals and let them know (when inquired of) that Cali people are not being rude when we don’t make eye contact or are focused on whatever it is we’re doing/buying, etc. That’s just how we are in Cali because generally, we are a focused, hard-working, creative population.
The rudies encountered from Cali most likely came here from somewhere else and have anger issues due to having moved across the country for a job, a relationship, etc.
~Misstrial
less than a third of “californians” are natives..
The large majority of those exporting themselves are natives of other these other States.. east-coasters, midwesterners, Nevadans, Arizonans, ex-NYers, ex-Floridians, ex-Carolinans.. the home states of which don’t want them to come back home.
I agree completely with Joey.
Many realtors TM from the CO and Pacific Northwest, among other places like OH, came to CA/OC during the ’80’s and drove up our cost of housing. What goes around comes around.
~Misstrial
Misstrial, i think native californians wouldn’t leave in a million years unless forced to. Why leave? We’ve got it good.. and it’s home to us.
I have seriously searched and no place compares to it, much less improves on the style i’m accustomed to. Of course i’m 100% biased.. spoiled.. which is my whole point.
Natives fight to remain here despite the economic pressure to leave. The plague of locust California suffered has simply changed direction and is migrating back.
joey,
What are you smoking?
Californians coming back to $700k houses, after having sold theirs?
and unlike Fl..you get salaries that can get you more than a loaf of bread…
Just wanted to add that southern NM, specifically Las Cruces, is the Number One area where soldiers subjected to the Bataan Death March came from. In fact, a number of the survivors have returned here to retire. Hwy 70 out to White Sands/Holloman was renamed in their honor.
The amount of respect given to them here is HUGE. When a vet/survivor crosses the intersection (wearing their blue military baseball cap) EVERYONE waits for that vet to cross the road (many times in a motorized wheelchair).
Visiting Californians please take note!
~Misstrial
I moved to Seattle from LA in June. I’ve been treated very nicely, as has my wife and daughter. The primary rule seems to be this: treat those around you with respect, and that sentiment will likely be reciprocated. Act like a turd and you will likely be treated poorly.
Concur. It’s my experience that people appreciate good neighbors regardless of where they moved in from.
Particularly if they bring more punch.
Hi Alad,
I have live in too many states to count : )
An American can choose to live in any state, if they have the means to relocate and sustain themselves.
Pardon my ignorance, are Californian’s resented in other areas?
(I truly do not know).
Best,
Leigh
they are in some states, especially if they “flaunt” being from California. But Americans are so mobile, after a year or two in most western metros you’re considered a local.
Curious…
What is considered “flaunting”?
Q: “What is considered ‘flaunting’?”
A: NOT looking like a candidate for Extreme Makeover.
~Misstrial
Our neighbors next door moved here about 5 years ago from California. They put half down on the $305,000 sales price, and thought they’d died and went to heaven buying a 2500 sf center hall colonial, with a 1300sf finished basement, all on beautifully landscaped 6 acres, 1 mile from the center of town. Problem was they had a 395k 1200sf CA house on a postage stamp size lot to compare it too. They roughly overpaid by 50-60k at that time. They thought they were getting a great bargain, but didn’t realize they were buying from people who also overpaid and came from an expensive area. Guess what, put half down and the banks don’t do appraisals, so they really never knew they overpaid. But they have 7 kids, and relatives in the area, so they’ve meshed well.
Chances are with 7 kids they will be in that house for years to come…like our grandparents it will work out for them in the end..they can have appreciation.. and this will not be the first housing bubble they will go through…
We moved from Cali to Colorado. We are definitely not liked here. They even make stickers that say “Colorado Native” or “Colorado Transplant”, I think we’re being segregated!
But they blame us for their high cost of housing and bad traffic (HA! Bad traffic… they don’t even know what traffic is!!)
Although, I did see a bumper sticker yesterday that I thought was amusing. It was in the shape of California and Colorado smushed together and said “Colofornia”.
But we try not to tell people we are from Cali and the first thing we did when we got here was change our license plates.
I have read this before, CO & Idaho in particular.
I will not do busine$$ with any State that mistreats Californians.
BTW, plenty of people (like Realtors TM) moved from CO & the Pacific Northwest to OC during the ’80’s and drove up OUR cost of housing.
~Misstrial
Here in NC, you can change your lincense plate from NY to NC or from NJ to NC, but you can’t change the way you talk!
How true is that…my husband has already been asked in GA…Where you from boy? I hear a twange in your voice?(he is from NJ)! LOL…
I learned to talk in CA, and grew up in MA, but have been living and working in FL for the last two years.
Last week, a passenger asked if I was from TN. Ha!
As a Colorado native, I have to give my two bits worth. IMO, most Coloradoans don’t hate or even dislike Californians. Most of my best friends are from Calif, have one from Palo Alto visiting as we speak. I like Califs because they tend to be more liberal than my redneck Colo buddies (and relatives), though there are plenty of liberal Coloradoans, too. I like Califs because they are open and usually like the outdoors and seem to be less uptight. The main resentment here is when they zip around on rural roads and are too urban and yuppie and money oriented. They’ve also been perceived as being behind some of the development here, but I don’t even think that’s true, most that I know of is from back East (Telluride was developed by New Yorkers). They have been responsible for helping drive prices up, primarily by being willing to pay anything for whatever. The locals resent this, it’s hard to see family ranches sold because you can no longer afford the property taxes. I have seen a few bumper stickers, “Don’t Californicate Colorado,” but most of the real resentment here is for the Texans and really urban back Easters who fit the obnoxious insensitve stereotypes. Colorado is actually a pretty generous state to outsiders, in my experience.
Thank you for your post, Lost in Utah. (My husband took our son to St George/Bryce Cyn/Zion/Monument Valley and just had a great time - as visitors only :))
My feeling about the entire “hate California”/”Californians are driving up our home prices”, - has to do with the RealtorTM industry. They are to blame and I will give you an example of “why”:
A few years ago, the city of Irvine began a campaign to discourage parents from moving to Irvine to enroll their disabled child(ren) in Irvine’s renowned public education programs for disabled children. (This was all in the Irvine World News and so its no secret.) The Irvine Board of Educ in conjunction with the City Council at that time instructed the local realty companies to “get the word out” to actively discourage potential transplants from moving to Irvine and enrolling these children because the costs of the program were beginning to be more than the Board was willing to bear. The realty companies were to stop advertising Irvine’s public school program for disabled, emphasize the costs of Irvine housing to dissuade parents. Eventually, the program was moved out to a vacant section on El Toro Air Base that was located next to a juvenile detention program which really upset the parents of the disabled kids - which was the intent if you ask me.
So, my point is if the realty companies were involved and instructed to dissuade transplants then the same could possibly be for *attracting* through advertising to encourage them to various areas to drive up home/ranch prices simply for the sake of making more commission money.
Its all about money.
~Misstrial
Those bumper stickers were around in Texas in the early 80’s. “Native Texan” was on everyone’s (pickup) bumper. I eventually saw a “Temporary Texan” sticker on cars…a good laugh. I think those stickers come out whenever a state gets “hot” for others to move to or at least popularized by the media. I am waiting for the “Native Mississippian” sticker.
This is not really that surprising. Scots detest English big time. I once heard a joke by Englishman defining a well balanced Scot as someone with a chip on both shoulders.
At least Scots are reverting to Graffiti. In North Wales, extermists used to burn down houses that were bought by English owners who had them as holiday homes.
There used to be a Commercial on getting people to install coal fires “Come home to a real fire… buy British Coal” which got paradied as “Come home to a real fire…buy a house in Wales”.
LOL! I was just going to post the same observations -’ come home to a real fire’…has had a different meaning since the 70’s.
And, everyone hates the English - even the Cornish hate the English
The English are the ‘Californicators’ of the British Isles.
…as child watches mobs on TV burning California flags and effigies of Californians…
Child: “Why do they hate us Californians, Daddy?”
Dad: “They are jealous because we’re rich.”
Child: “Why are we rich, Daddy?”
Dad: “We’re rich because our houses go up, up, up in value.”
Child: “Why do our houses go up in value, Daddy?”
Dad: “Because we’re special, Son.”
Oregon’s stated policy 20, 30 years ago was to discourage Californian emigration. It was official policy, and fine with us. We’re in Illinois and hate competing with Cal RE money. A friend from SoCal has been eying a lodge/resort n the wilds of Oregon, thinks the price is great. I told him he’s crazy to buy anything now. There is no way to know what the value of the asset actually is. He finally decided, uh, that’s true, not offering after all.
“As rich as an Argentine” early 1900’s saying
“As rich as a Californian” early 2000’s saying
Just spent a week in Bend, OR being treated to site tours of various critical infrastructure facilities in and around Bend. Lots of housing for sale; the typical 3bd/2ba w/1800-sqft going for $375k. The RE guide found at the grocery store’s free newspaper racks paints a different view of what’s for sale — lots of upper end housing north of $600k, and then there is the $1.8m+ stuff. I don’t know where the money to support this high-end stuff is being made, but it’s difficult to imagine it being earned here in Bend, OR. My wife would likely be comfortable in Bend with the various outdoor sports and shopping, but we couldn’t afford a home there right now. One of the local professionals told me that they still have to travel to Portland for major medical treatment because the medical insurance co-payments are much higher in Bend; probably too many uninsured living in the area. The elevation of Bend is just over 3,500-ft., so it was little surprise that near freezing evening temperatures are already here; I drove through several snow flurries on my way home, heading north on the 97. Still hooked on CA coastal weather!
Back when I lived in north Idaho in the early 80’s, a popular bumper sticker read: Don’t Californicate Idaho!
“Fremont customers identified in the lawsuit include a single mother in Dorchester who earned $1,800 a month and financed her first home purchase with a Fremont mortgage that had a $7,000 monthly payment.”
What a stupid idiot. If they knew the first payment was going to be greater than the mortgage, then I say let it swim. Fremont is equally stupid for writing such a loan. Is there a DUH bubble in this country?
I’ll tell you about what’s happening in South Dakotastan. We have a bunch of people and barbarians from the coastal states and Red states moving here and setting up big divisions in what used to be farmland. 5 years ago the west side of town was nothing but a huge empty field. Now, there’s maybe 600 - 2000 houses at the minimum there (in a town that was 130K at the time). Overall I’d say we’ve added on 4000 - 9000 houses in the last 5 years and they’re still planning on more! We have a condominium complex in the center of town sticking out like a sore thumb and only a third of the units have sold in the three years it’s been up. The builders here want to add on maybe 5000 - 10000 housing units in the next five years. Yeah good luck on that.
Anyone thinking of moving here to the rural plains states, think again. This part of the country has all kinds of housing developments that will never be sold on normal terms. North Dakota, South Dakotastan, Nebraska, and all of the rural western states and great plains are not very good places to live right now as they barely get by even in good times, and if this housing bubble blows up like I think it will, this will be a very miserable part of the USA to live in. It is ‘cheap’ to live here, but only because the rest of the country is paying these people’s bills. Consider too that this part of the country has more than its fair share of hardcore Communists and Nazis. I’ve been out here for longer than I want to remember, and the myths that bugging out here is the best idea in any SHTF scenario, are myths. This part of the country is far from self-sufficient, and these rural states and the mountain states nearby are far from being libertarian in their politics. Keep that in mind if you are planning on moving here from Bubble Central.
Thanks for the info…
I’ll mark the ‘Stans off my list of potential places to live.
Also, the PNW really really sucks. It rains all the time, very pale people will walk up and punch you in the stomach for no reason, Bigfoot is a total jerk and cheats at cards…it’s all bad.
Spread the word, people.
Washing’Stan?
Whatever happened to the chick that had Bigfoot’s baby? (for the record, I always felt she had it coming to her.)
I don’t know. After the baby shower I kinda lost track. I got them a keg full of milk and a goat wearing a pretty bow, as my presents.
Whatever happened to the chick that had Bigfoot’s baby? (for the record, I always felt she had it coming to her)
My bad on the double post.
Very pale people is right. We had some folks move into our area from the San Jaun Islands, and they looked like they’d been living in a cave for the last 10 years.
Olymipagal
I graduated from Timberline HS and lived in Oly for about 15 years. e-mail me at Kathy.barrett “at” cox.net. I would like to get some local news.
sounds like my kinda place, I’m on my way…
actually, the cowboy myth aka the myth of the west being independent and self-sufficient is exactly that, a myth. Out here, we call them “welfare ranchers” - the govt. subsidises with cheap grazing, etc. W/o the gubmint, much of the arid US would be impossible to make a living in. (Disclosure: cattle ranching family)
And the MYTH of the old west being a really violent place?
Read “Gunfighters, Highwaymen and Vigilantes: Violence on the Frontier” by Roger McGrath, to get an idea of how untrue it all was.
A UCLA professor, he had access to a dozen year run of Bodie, Ca. newspapers, for his research. Bodie, was supposedly the wickedest town in California
Buffalo Bill, Dime novels, movies and television would have you believe otherwise…
It was violent in a way that matters to the powers Back East: armed robbery on bullion shipments!
And another kind of robbery–loose money.
The Northeast parasites (or were they? they provided the capital … philosophical debate: fight!) did find the West rather wild.
I forget exactly the number, but…
Bodie had a crime rate 1/10th of that of Boston or New York City at the time, according to the professor.
“And the MYTH of the old west being a really violent place?
Read “Gunfighters, Highwaymen and Vigilantes: Violence on the Frontier” by Roger McGrath, to get an idea of how untrue it all was.”
Try telling that to the Indians…
aeyra,
Excellent write up. The destructive nature of equity bandits is felt everywhere. Words can’t express the contempt VT/NH/Upstate NY natives have towards the dumb-asses from metro areas. I can go on about it but it would be senseless. I can tell you that based on previous speculative housing cycles, these morons end up leaving after a period of time, usually with empty pockets and the knowledge that the natives despise them.
“….the knowledge that the natives despise them.”
Personally from what I have experienced, the equity bandits could care less. Their entire existence is centered on themselves and on cutting a profit. The esoteric excuse for their selfish behavior is that they are doing it “for the kids, grandkids”.
Until laws are changed that makes their business conduct unprofitable they will go on reducing housing affordability. Best thing would be to eliminate capital gains exemptions altogether for 2nd homes. Another would be to reduce their SS benefits to 0 based upon owning multiple SFH/condo properties, especially vacant properties. I know this may come across as rather harsh, but these people have brought our country to the brink of financial destruction.
~Misstrial
Harsh? Not harsh enough. Those are good ideas for sure.
Capital gains elimination would not be the way to go IMO….Eliminating interest deduction even if rented on 2nd homes would be a better approach….
Yes, yes! Mortgage interest deduction is #1 way banks enslave us today.
Get rid of it and you can get rid of HUD, because housing will be affordable again.
Repeat after me: it’s not an investment, it’s a roof over your head.
(And if it is an investment, why are you receiving a tax subsidy for it? I mean, huh?)
Agree!
~Misstrial
For all those people who think Atlanta won’t be affected by the housing/credit bubble. Here’s a graph of the percentage of subprime loans issued in 2005 and foreclosure hot spots in the metro Atlanta area. Home prices areas with lower foreclosure rates “start” around $400K and these are smaller, aren’t in great condition, are in questionable neighborhoods, or are so far out the commute is 1.5 - 2.5hrs on average.
http://alt.coxnewsweb.com/ajc/business/foreclosures.jpg
And late mortgage rates skyrocket and foreclosure rate is predicted to only get worse:
http://www.ajc.com/search/content/business/stories/2007/10/03/delinquents_1004.html
http://www.ajc.com/search/content/business/stories/2007/10/04/delinquents1004.html?COXnetJSessionIDbuild56a_prod=rdPQHHfChPRRSWQqvH2DGhJ5×2vhjNS09plDDm7C5LgvMlpTSJw0!350902392&UrAuth=aNaNUOcNZUbTTUWUXUVUZTZU\UWUbUaUZU\U]UcTYWYWZV&urcm=y
The problem is growing so lenders are starting to accept short sales on homes in Atlanta:
http://www.ajc.com/search/content/homefinder/stories/2007/10/05/johnadams_1007.html
This is only the beginning of falling prices in Atlanta…
As much as I would say that prices will fall…I tend to disagree that the market in Atlanta will be hit hard like Fl or CA…it will experience some pricing adjustment but I think that has been happening already for several years as resales have to compete with new homes. Right now it makes more sense to look for a new property than a resale in Atlanta and its surrounding suburbs. That was one of incentives for my husband and I. The same “new home” with lot and square footage was 150K less than a resale. Why buy resale?
‘I tend to disagree that the market in Atlanta will be hit hard like Fl or CA…’
- I totally disagree with you. If the median income can not service a fully amortized mortgage (400k?) then they are doomed.
You can try to apply the California version of ‘Mexi-Math’ but it will only delay the forclosure’s.
Where are you getting 400K as the house you have to buy in the Atlanta area? There are tons of new homes that are selling for 250K-300K that are only a 25 min commute into the Atlanta area…and townhomes that are at less than 200K. Foreclosures even before the boom has been an issue with GA..so it wasn’t the housing market that made it an issue..
All of the areas that “start” at $400K and above are highlighted in the graphic as low foreclosure areas (i.e Buckhead, Sandy Springs, Ansley Park, Druid Hills). Homes that are $250-$300K that are near the city center are areas that are being “revitalized”. I’m not against neighborhood revitalization. However, these are the areas that have been rampant with fraud, flipping, subprime loans, and crime. The values of these homes are suspect and will drop since the foreclosures in these areas are high. I wouldn’t buy in these areas at the higher-end prices since the foreclosures will hurt those home values, and you probably wouldn’t get your equity back for quite a while.
Speaking from experience, half-an-hour outside the city is during non-rush hour/off-peak times. It is only possible to drive half-an-hour or less to work if you live near where the jobs are which are near the areas mentioned above. People move to suburbs to get more affordable housing at the cost of traffic congestions, long commute times and their health.
http://southernenvironment.org/cases/atlanta/facts.htm
It is well-known and documented that Atlanta traffic is horrendous. Atlanta has made it to second place in traffic congestion across the U.S., second only to L.A.:
http://www.usatoday.com/news/nation/2007-09-18-congestion_N.htm
Fixing the issue, won’t be easy. The state and local government has been working on this for over a decade. Recently, they even came up with a $25 Billion dollar solution to build underground tunnels around Atlanta as a “solution” to the problem. Needless to say the traffic congestion problem is getting nowhere fast in Atlanta, and with projected growth, it will only get worse.
http://atlanta.creativeloafing.com/gyrobase/Content?oid=oid%3A155335&comments=yes
http://www.ajc.com/opinion/content/opinion/stories/2007/09/23/equaled_0924.html
Foreclosures have tripled in Atlanta since 2000. It has always been an issue in Georgia since it only takes 37 days to forclose upon a homeowner. More homes on the market and foreclosures will affect the prices people can sell a home for since it brings down the values in the whole neighborhood.
All of the areas that “start” at $400K and above are highlighted as low foreclosure areas (i.e Buckhead, Sandy Springs, Ansley Park, Druid Hills). Homes that are $250-$300K that are near the city center are areas that are being “revitalized”. I’m not against neighborhood revitalization. However, these are the areas that have been rampant with fraud, flipping, subprime loans, and crime. The values of these homes are suspect and will drop since the foreclosures in these areas are high. I wouldn’t buy in these areas at the higher-end prices since the foreclosures will hurt those home values, and you probably wouldn’t get your equity back for quite a while.
Speaking from experience, half-an-hour outside the city is during non-rush hour/off-peak times. It is only possible to drive half-an-hour or less to work if you live near where the jobs are which are near the areas mentioned above. I do have to a caveat when I’m referencing jobs — I’m talking about well-paying, “professional” jobs. People move to suburbs to get more affordable housing at the cost of traffic congestions, long commute times and their health.
http://southernenvironment.org/cases/atlanta/facts.htm
It is well-known and documented that Atlanta traffic is horrendous. Atlanta has made it to second place in traffic congestion across the U.S., second only to L.A.:
http://www.usatoday.com/news/nation/2007-09-18-congestion_N.htm
Fixing the issue, won’t be easy. The state and local government has been working on this for over a decade. Recently, they even came up with a $25 Billion dollar solution to build underground tunnels around Atlanta as a “solution” to the problem. Needless to say the traffic congestion problem is getting nowhere fast in Atlanta, and with projected growth, it will only get worse.
http://atlanta.creativeloafing.com/gyrobase/Content?oid=oid%3A155335&comments=yes
http://www.ajc.com/opinion/content/opinion/stories/2007/09/23/equaled_0924.html
Foreclosures have tripled in Atlanta since 2000. It has always been an issue in Georgia since it only takes 37 days to forclose upon a homeowner. More homes on the market and foreclosures will affect the prices people can sell a home for since it brings down the values in the whole neighborhood.
Annette - exactly which Atlanta suburb did you purchase in?
“Watchers of the housing industry might have a new economic indicator to weigh: the number of would-be flippers inquiring about ways to insure vacant homes. State Farm Insurance Cos. has long offered standard homeowner and landlord policies for people renting out vacation homes.”
How does one insure against squatter occupancy or gang incursion?
Moreover, why are flippers sniffing around these vacant homes? Are they speculating that some kind of massive taxpayer bailout will make this a historically excellent time to catch falling knives?
Seems as if those darn cutlery jugglers are bent on making this a long slow descent. Bailout talk clouds the picture too, let’s see how this fall’s buyers feel in 2Q 08.
Would a paring knife, be the cutlery of choice?
“‘The vacant endorsement measure is suitable “for people who have to sit on that extra property, but don’t want the hassle of renters,’ State Farm spokesman Jeff McCollum said. ‘I can tell you, anecdotally, that we’re getting more interest in this product lately in all the areas you’d expect — Florida, Phoenix, Denver, heavy vacation areas.’”
I think that State Farm is a great place to look for a job as the rate of home fires in vacant homes will increase…Let’s see the house is insured for how much more than what the true market value is? Strange that the places that are looking for additional insurance are some of the worst housing bubble states?
Chuckles–my gramps use to call ‘em friction fires. Setting the mortgage note afire!
In Ohio after 6 months of a house being vacant most ins companies cancel your policy.
“Fallout from the implosion of the residential-housing market will dampen what has been a white-hot commercial real-estate market, Valley economist Elliott Pollack told a group of commercial brokers and developers.”
Who could have possibly foreseen that a housing bust might impact commercial RE??
Who could have possibly foreseen that a housing bust might impact commercial RE??
Who can foresee an explosion in the rat and vermin population primarily in areas affected by massive property vacancies and their resultant deterioration would result in the resurgence and spread of pandemic diseases thought to be extinct in modernized, civilized countries.
Green swimming pools = West Nile virus breeding ponds
Possibly connected to green swimming pools?
More Metro news
West Nile cases in county at 15 in ‘07
By Cheryl Clark
UNION-TRIBUNE STAFF WRITER
October 4, 2007
For several years, San Diego County defied the odds against West Nile virus. As neighboring counties diagnosed dozens of people who became infected, the San Diego region had just a handful of cases.
But no more.
San Diego County health officials have diagnosed 15 West Nile patients this year, including seven cases they announced yesterday. In comparison, only seven county residents were infected between 2003 and 2006.
http://www.signonsandiego.com/news/metro/20071004-9999-1m4nile.html
Are you suggesting the armies of rats that will spread the Black Plague across the land will succumb to some mild west nile infection carried by a few mosquitos?
I wouldn’t predict that
There are lots of abandoned pools turning or already turned green here in the Sacramento MSA. Wouldn’t it be funny if our greed turned into our own demise via West Nile Virus because we just had to have that energy hog water wasting swimming pool?
For a really good pandemic you’re gonna need bird flu. It appears that is no problem. All those green and yellow peas your 6th-grade teacher said created new traits? Nah. The big ace up nature’s sleeve is mutation and the bird flu will not disappoint.
One gallon of bleach is about $1.50.
The green algea will disappear along
with the mosquitos.
Speaking of green pools…anyone here anything from Casey lately?
SubKommander Dred
I heard he is “laying low” in Australia. I just checked and the USGS reports no earthquakes of magnitude 4+ in Australia during the last 7 days.
A dark house at night, nobody ever seems to be there, the weeds are growing and the garbage cans stay put that is the new standard of the American neighborhood, flipperville or bank owned USA, this is what the American dream has become.
On Long Island we’re seeing price reductions on already high asking prices, I estimate 10 - 15% reductions. Still a lot of wishing prices, out there though. I’m seeing a lot of houses sitting for months, even after price reductions. I’m also seeing a lot of empty houses with cosmetic work done, probably flipper houses. Foreclosures are ticking up, even high end, over $1 million properties. A foreclosure in NY can take over a year to go though, I expect this will draw out foreclosures in NY for a long period of time. The length of time to foreclose should make lenders even tighter with credit in NY.
The proposals being thrown around by the politicians and government employees, such as the FDIC, should make credit standards even tighter.
These ideas create a lot more risk in making a loan, when the terms of the loan can be changed in the future, or the lenders access to the collateral may be impaired.
Still a lot of wishing prices, out there though.
Wishing will turn to desperation when there’s not enough money to buy food and gas.
I think the FDIC proposal reflects the fact that the underlying security now has little or no value and thus changing the rule of the game right now would save everyone money (not bail out a GF.)
Just a thought.
“‘We need half the mortgage brokers that we have,’ he said. ‘That’s how much excess capacity there is in that business. Half of them are going to go away. Sublease space is going to be a problem.’”
Kinda reminds me of the problem of the Useless Third of Golgafrincham
San Diego hillside slide… Home sale prices in La Jolla could be very interesting going forward, given the impossibility of insuring multi-million dollar homes against land slides.
More of Mount Soledad may be prone to collapse
Geologists, residents monitoring seaward side
By Mark Sauer and Chet Barfield
STAFF WRITERS
Another section of Mount Soledad – this one with ocean views – may be poised for a landslide, threatening more homes with the kind of devastation that struck the eastern slope this week, geologists reported yesterday.
http://www.signonsandiego.com/uniontrib/20071006/index.html
Mother Nature laughs last at our perceived Ne Plus Ultra…
Does insurance cover if you slide into the ocean? They’ll probably say, “sorry we don’t cover boats on a homeowners policy.”
No coverage for that, those folks are SOL. Well, probably not SOL because no doubt the taxpayers of San Diego are going to get pick up the tab for their stupidity. But anyhoo, when they built those homes in 1961 seven of them slid down the hill before they were even finished. That should have been their sign, right? It was a dumb @ss place to build, just like Mission Valley, where the @sshats built in a freakin’ RIVERBED, a riverbed of all places then whined that their businesses were flooded every winter. Taxpayers picked up the tab on for the valley with a million plus flood control project.
But… Did they build the first ever highway down the wet axis of a flood control zone?
Dallas! Number One! Loud and Proud!
I would like to know as to local conditions what has happen to that guy in South Carolina who was on TV flipping all those homes and running around like he was baking bread and selling it to the grocery chains. I wonder now is he the only one that can sell a house and turn a profit he made it look so easy, somehow i think he better go into the bread making business at least it is steady honest work?
Well if he’s stuck with a bunch of houses, he’s got lots of kitchens to bake his bread in.
Key West, prices are kind of sticking but stuff is piling up, a lot of stuff dropped 10-30% and has just kind of stayed there. Cheapest condo on Island is around 235k for like 500 or so sq feet
Beginning to wonder how low key west will get in the next couple years, probably not as low, as I had hoped.
Now south of Miami in Homestead , prices are dropping like a stone, on the mls there are now 2 condos for 100k, that are identical to the one my GF sold less then a year ago for 152k , 33% drop in less then a year, there are also many more in 105-115 range, seems like every third listing mentions foreclosure in it
Condos in Florida have never been a good investment..period..
anybody have any info on recent sales of condo in palm aire in pompano beach, fl?
well according to zillow there where some people in key west who bought units for the low 100s and resold them within 5 years for 300s
there were also units that sold for 250k pre-construction in 2000 and are still selling for over 1.2 million now, so I would say if you time it right they could be good investments
I look mostly at condos because there are only two of us, and most houses are at least 400k which is too much for us to buy with cash.
Zillow is one of the worst sites for true value..I perfer to use sites that give you a range on the value of a property….Key West does hold its value better than most when it comes to property due to the lack of land and only so much availability..but for the rest of Fl…condos are a dime a dozen..and selling at major discounts
http://www.youtube.com/watch?v=tkuW8bCjC6c
yeah, its too bad I don’t like Miami that much
you are looking at them losing value as bad, whereas I am looking to get a place to live, and pay less a month then rent
I am hoping to buy some place outright, lower my living expenses and hopefully its value will out pace inflation by a little
Condos in Florida have never been a good investment..period..
I know someone that might disagree with you.
My landlady lives in the keys and the ins. is crazy. A bungalow that can be built (although not to todays code 500sq ft or so little insulation ect.) for 25,000 could command that in ins. My understanding is that we insure improvements not sandspits so what in the world is going on?
Bank owned homes are scaring the buyers even more, when a house sells on a short sale it hurts every home in the area. People that want to buy that 500k house when the bank just short sold the same house for 395K, makes them stop in their tracts and walk away, that is why this whole mess will get even more messy?
Once confidence is lost in a bubble, any bubble…
Game Over
Downtown/Gold Coast of Chicago… 2BR condos are starting to be offered for what 1BRs were at a year ago. A couple of 1BRs in my neighborhood even come close to cashflowing, maybe within 20%.
The whole downtown area seems way overbuilt. Lots of high-rise condos. A twinge of desperation in the air.
Any examples in particular? A lot of new towers are going up along State near Walton - are they on schedule? Sorry, don’t make it down that way much anymore and have fallen out of touch.
Sacramento: The early bird gets the worm…..well, actually he gets the falling anvil….
It appears JTS Communities (think Toll Bros wannabe) just sold their last 12 houses to an “investor” for around $5,000,000 ($150/sf). This was probably their best option, before going to an auction format.
The buyer, after paying taxes, ins, bonds, HOA, management & vacancy, he will net about $150,000 a year! A 3% return, assuming an all cash purchase. If he needs to make any debt service payments, it could be ugly. If he borrowed 70% at 6% interest, he will give his $150,000/year “cash flow” to the bank and add another $100,000/year on top of it. All for the privilege of owning an asset that is dropping in value each month.
This guy did not catch a falling knife, he caught a falling anvil. He may get crushed on this one. He has listed the properties for rent on CraigsList at 20% over market rents. See the add here for $2800/mon:
http://sacramento.craigslist.org/apa/439138122.html
and then look at this same house (different owner) asking $2150/mon:
http://sacramento.craigslist.org/apa/437521974.html
The second home has been available for rent for 9 months with no takers.
Negative cash flow will eat this guy up in 2 or 3 years, since there will be no appreciation until 2012 at the earliest. In fact, prices are still dropping. This investor probably thought he was getting the last houses in the neighborhood, so $145/sf was the new “bottom”. Here is the problem with that theory: there are about 20 bank owned houses and 10 more in default or trustee sale status just in the same development. He paid $420,000 for the model discussed above, which he is trying to rent. Countrywide just listed the same house for $407,500 around the corner.
The second massacre at Lincoln Crossing is about to begin. (See http://sacrealstats.blogspot.com/2006/10/massacre-at-lincoln-crossing.html for the first one). Some people think JTS has created more FB’s on a prorated basis than any other builder in Sacramento. Now they may have just created a new category of Super FB!
Go to streets like Devonshire: 34 houses on the 3 block street and 11 of them have dead lawns. There are houses listed at $115/sf that no one wants to buy (or can’t buy anymore, since you need 20% down).
This declining price correction has about 2 more years to run. Think about it: Foreclosures are rising, auctions are increasing, prices are dropping, rents are dropping, credit is tightening, builders are going BK, cities’ revenues are disappearing, and sales inventory is breaking all time records.
This market will not change until 24 months past the time these trends are reversed. Until then, there is no point in buying anything. Renting is still 60% the cost of owing. Saving $1,600/mon is $20,000 in real cash to your savings account each year.
Cash is the Jack of Hearts today and Cash will be the King of Diamonds tomorrow.
These arrongant pricks will be worm food before they get 20% over market rents in Sacramento, unless they want to go the “group housing” route. LOL
I’m glad you mentioned HOA costs. HOAs are another ticking timebomb that will keep all this recent construction from ever appreciating.
You can’t control your HOA costs; they have the power to make your life miserable; they can slap you with a fine because your American Flag is too big, and foreclose on your property if you don’t pay. They can prevent your kids from having toys in the front yard, or you from putting a solar electric panel on your house.
HOA “fees” can go up and up. And then there are special assessments. I sued an HOA in Florida once. (Long story I won’t go in to.) And all the home owners had to pay an assessment to cover the legal fees. All because their HOA president was a jerk who said things that get him sued. (We didn’t live or own there; we just had to deal with them.)
Imagine living under the tyranny of a private government, with no oversight. Imagine some old bitty on the “Architecture Review Board” telling you what color you can paint your house!
So, ANY investment in an HOA-governed communty is fraught with danger and should be avoided. When prices were “only going up” nobody cared. Now with thin margins for would-be landlords, it’s a very critical issue. If you want to rent houses for a living, better to find houses in older, non-gated, non-HOA communities where you can have more flexibility and fewer montly charges.
Actually, I think part of the recently-passed energy bill made it illegal for HOA’s to restrict solar panels.
Right! And, boy am I pissed about that. I spent a lot of time looking for non-HOA/CC&R property in Florida specifically because I wanted solar electric PV.
I knew that having a home with a zero electric bill would be worth a great deal in the near future.
Fully-informed buyers willingly entered into a covenant with the county and developers to restrict what they can have on their roofs. This is a contract. The government has no right to invalidate it, no matter how stupid it may be.
I want the extra value my non-CC&R property has because I can put up solar panels! And I’m annoyed that the Government voided out this legal contract.
(In Florida, Jeb bush made it illegal to restrict against outdoor American flag displays, other than reasonable height restrictions. Again, if some dubf–k wants to live in a neighborhood where there are no flags, that’s his problem and he should live with that decision. I was disappointed with Jeb Bush for doing this.)
http://freecondobook.com/
Jingle,
Truer words were never spoken. I rent in an Elk Grove neighborhood that is a flipperville, bank-owned home auctions and all. I feel really sorry for the owner-occupiers and I have warned them that if they don’t take action, their neighborhood will become overrun with group homes (which, by the way, don’t have to provide notice to neighbors before setting up shop. Oh, joy.) My question to everyone else is, other than moving out, what can owner-occupiers in a “flipperville” do to keep their neighborhoods from declining while this whole bubble thing plays itself out? Can a neighborhood in decline ever be turned around? Has anyone else ever seen that happen? I was in grad school during the last real estate bubble, so I wasn’t really paying attention.
Form a Neighborhood Association.
~Misstrial
If you want to control a piece of property, “buy it!” I really don’t like the concept of taking other people’s property through legislation. We probably disagree on this.
Fact is, Elk Grove and many other neighborhoods will probably fill up with vacant homes and squatters, group homes, and section 8 renters. Better invest in bars for your windows!
I’m not gloating over this, but throughout history, every boom is followed by a bust. People never learn and individuals get screwed.
Does anyone have their finger on local observations for the triangle area of NC? I can’t take my realtor friend that everyone’s moving here for the RTP tech, life sciences, and other R&D jobs, driving house prices to over 1M. While I believe there’s value in under 200K homes given the solid economic figures, I can’t believe some homes are fetching 1M and the location is only marginally better.
Comment by ex-nnvmtgbrkr
2007-10-06 09:47:30
Very pale people is right. We had some folks move into our area from the San Jaun Islands, and they looked like they’d been living in a cave for the last 10 years.
What’s wrong with living in a cave? Secondly, if they were white people, that’s what white people look like when they haven’t been scorched by the blazing sun or else gotten into those insane burrito looking tan machines. I’m a bit cranky about your ‘living in a cave’, as it smacks of mockery, Mr Man. All my ancestors came from the North Sea environs, and I only have about 3 melanin cells in my entire person. Nevertheless, this spindly and translucent person will fight you! Trounce you for your mockery! And for cave dwellers everywhere!
Talking caves…
If Mother Nature hits us with 140 degree heat, just for laughs
Caves are always the same temp, around 50-55 degrees, never varies.
If you want to survive.
And I do want to survive.
Plus, all my friends are already in there.
189 new CNY listings this week (some are relistings) to an existing inventory of almost 3300. (per CNYhomesdotcom)
There was a surprising amount of new homes from my town that just hit the market this week. It doesn’t appear that they’re priced any lower than the wishing prices of last year. I suppose they feel they’re home is “way more special” than the other 10 in their price points that have been sitting unsold all year. (Sigh!)
One particular home with 6 acres was priced at $1.3m. (This is south of Syracuse, NY) It’s an older home. There are no inside photos (usually not a good sign) and the property has a very low tax bill for that asking price. It’s also in an odd area of high end homes tucked in the woods behind a collection of tear down properties on the main road into Syracuse. I think they’re probably experiencing some sort of pretty pill side effects.
The hissing began!
My local market observation from my very average San Francisco neighborhood (overhead today and tomorrow will be the Blue Angels here for Fleet Week!) is that the housing bubble began losing air two years ago in the Alt-A Bay Area.
If I recall, it all began this first week of October in 2005 with my first “Price Reduced” sign in decade or so.
So, as I did one year ago this week, a little bit here to commorate the anniversary:
This time, I envision a high school marching band, fire trucks, maybe a few moped/scooters whirling around with senior citizens, balloons, parents and their little kids with candy and the Blue Angels screaming overhead. As the jets’ thunder peals away the music and singing begins as everyone joins in…
“Happy Birthday To You
Happy Birthday To You
Happy Birthday Dear Deflating Housing Bubble
Happy Birthday…. Toooo…. Yooooou!”
[cheering, whistles, whoops, hoots & hollars, clapping, giggling and general glee...]
“Happy Birthday Deflating Housing Bubble!!”
The inner east-bay (the good east bay) is also feeling the earliest pinches. Three or four homes in rockridge / north berkeley that are listed at their 2004 prices. Not too many real losers and hardly any short sales. Inventory doesn’t seem that high. Alameda is also showing 2004 prices in some cases, and what appears to be a completely stalled sfr sales market. Other parts of oakland are clearly heading for much bigger problems, lots of issues in the fruitvale area and in the lower flatlands below mills. Very serious increases in crime in the east bay are an interesting, perhaps unrelated, addition to this problem.
Rental market looks really strong though. Prices are definitely fully back at dotcom levels. $2000+ for 2br non-SFRs, low inventory, things disappear from craigslist quickly. However, just on the other side of the hills, there appear to be all kinds of gorgeous homes in lafayette/orinda/moraga going for utterly reasonable rents. Until we see 2002 prices, we aren’t really seeing major corrections.
“Rental market looks really strong though.”
It will remain so as long as bubble sitters keep renting to avoid catching a falling knife, and the labor market holds up.
Yep.
Other HBB’ers were making fun of me a couple of years ago when I predicted **higher** rents as the bubble deflates. Well, that definitely seems to be the trend so far. I also stated that we should see rents decline AFTER the bubble deflation is well under way. I expect this in another 2 years in the SD area. We’ll see, though…
Our lease is coming up for renewal. Usual crap from property managers wanting to increase rent to $2100 from $1980. That doesn’t include garage which we lease extra. I already think we pay too much for what we get albeit it is a very nice 2 story townhouse with all the yuppie fittings.
I was looking around Houston’s 6%’ers webite (HAR.com) for residential leases / inner loop to see what $2200 gets. It came back maxed out # displays of 10 per page. There is a boat load of 3 bedroom new houses up there. They are also for sale.
I guess no cashflow makes the builders reluctant landlords. I would be weary of leasing from these are they don’t really want to be in the game and I don’t know if they could even survive to send a check to.
I remember a few years ago looking at leases and there we not that many. So much for Houston being special.
Are you freakin’ kiddin’ me? $2100 to live in a Houston townhouse, and NO garage to boot. Say it isn’t so. Come on, all I hear is how Texas is so cheap yakkity smackity. I pay $1750 for a 1400 sq ft SFR with garage and a gardener in San Diego. This is pretty much the going rate too.
I agree and there are cheaper places but I am selective on where I will live: certain inner loop locations and only quality places (Quality of life and safety). My sq foot is ~1800ft. This is the most expensive complex I’ve lived in but it is still not worth it.
I see what you mean, wow, it still seems pretty pricey. My daughter lives in San Antonio and has tried to convince us to move there. The places in San Antonio that I would consider living in have asking prices comparable to California.
I could even find a condo at the beach for that, maybe even less.
“‘The vacant endorsement measure is suitable “for people who have to sit on that extra property, but don’t want the hassle of renters,’ State Farm spokesman Jeff McCollum said.
When I become Supreme Ruler, my first edict will be to double the property tax on all unoccupied, “invester”-owned homes and condos[exempting, of course, primary residences or properties undergoing legitimate renovation]. That would send a clear message: houses were meant to be lived in, not to be bought and sold as commodities.
Eh, I have a better idea. Charge the vacant property owner for all police calls, trash or stray pickup, and of course the final eviction call. At the overtime rate, min. two officers, in increments of 30 minutes, and of course gas, mileage, equipment, blah blah. (Hey, works for Verizon.)
Then hound them, garnish their wages, suspend their license, even toss ‘em in jail (charge daily motel rate + taxes) until they pay.
That would certainly put a little deterrence in the flippers’ shriveled hearts!
“Fremont customers identified in the lawsuit include a single mother in Dorchester who earned $1,800 a month and financed her first home purchase with a Fremont mortgage that had a $7,000 monthly payment.”
OK, I realize that all single mothers are off-limits as far as suggesting - God forbid - that the poor choices they made MAY have have contributed to their current situation. But, this dirtbagette “victim” - forgive my heresy - just plain downright had it coming.
Anyone with an income of 1800 and outgo of 7000 who signed up for it willingly (eg, it’s not medical bills or a lawsuit from the RIAA) has it coming. What was it that Dickens said about that?
“Single mother” is what we call a red herring.
Hard to believe that NC would command $1 million houses like they were tract houses. In fact, outside of the megacities I find it hard to believe that any measureable market for $1 million houses exist. Personally, I’d really consider leaving the megabubble areas if I were you. In fact, I have a feeling that this housing meltdown is going to #%@@#^% over this country like nothing else before. The building here in South Dakotastan scares me, no joke. We have had a lot of good businesses move out in the last few years and from what I’m seeing here locally, if this is playing out nationwide, we are in a Doomsday scenario. Do I think it will be the end of humanity? No, far from it. But I do feel that much of the USA will not pick itself back up from this mess. These are the areas I would leave for sure:
Most of the western USA, including all of the states from North Dakota down to most of Texas. This also includes most of California outside of the northern coastline area and parts of the Bay Area. The western thirds of WA and OR are also safe.
Get out of Southern FL. Florida will crash like a frieght train and God knows how the locals will react.
Get out of the New Orleans area and 50 miles out from it. That part of the country still is in a shambles and a housing/economic meltdown won’t help.
Leave Alaska and Hawaii. These states are for all practical purposes islands and I suspect that shipping and air travel will be cut off in a crunch.
Get out of the Rust Belt cities and Detroit. They barely get by even in good times and they will not survive the housing meltdown.
Get out of the Baltimore/DC/NOVA area and 50 miles out from it. Call me a nutjob but if housing melts down nationwide like I think it will this area is going to get ugly, and not just because of housing.
The best areas to be in are rural Western WA, the ruraler areas of the Great Lakes states, and rural New England. Even western MA would be a good place to go. I don’t see these areas as being bad places to live in a housing/economic meltdown. Yes I come across as a loonie but does anyone here think that we can survive a 50% decline in house prices nationwide? 60%? 80%?
Ha ha, Western Mass has been lousy forever, so who would notice the difference? Unfortunately, you are unaware of the serious transportation infrastructure problems in Western Mass. Only a few towns are really good for agriculture (so you can eat) but even there groceries are really high (not a big meat/dairy producing area). Industry is in a pickle there because it’s hard to ship goods out due to closed bridges and craptastic RR lines. Oh, and lousy public transit, yet dangerous by bike. Nice combo.
Also, Central Florida is also toast, and has been for two years. (And they know it.) South Florida is the land of Lulz. I don’t think anything is really going to change (I mean, besides FBs taking it in the shorts). Orlando seems more pathetic, but not really, because it’s (ugh) Orlando.
It would be nice to see some more S&L type scandals like Coast Bank. I have a cast iron skillet and corn kernels, just waiting for the show.
Down here in S. Chandler AZ the same damn houses are for sale, it’s going on 3 years for some of them. The only sales I see in the AZ Repugnant in the 85249 area code are for new builds.
Do not give up hope Casa$Loco! A big wave of resets is coming in the spring of ‘08.
~Misstrial
I beginning to sense a seasonal lull, here in Charlotte. There are more FSBO signs than there were in the summer. I am noticing a few homes still on the MLS from this spring, cutting prices a bit. But generally I think people are waiting things out and assuming the problems of other regions won’t arrive here.
Same here smack in the middle of Oregon.
Probably true here in No. Ctr. Fla. too, although the real estate agent I know was having a REALLY bad day yesterday. He was showing some houses in the morning; guess it didn’t go too well.
He does commercial, too, but that market isn’t really that “hot”.
Front page headlines of Seattle paper today : Seattle Median Home Price Drops, first time since 2001″ that’s a paraphrase. The Seattle bubble started in late 90’s (’96?’97?) and by 2001 *should * have begun deflating, but we all know what happened to prevent that natural deflation from occurring at that time: super lax lending.
The stress of trying to sell homes at 10 X what they’re really worth is beginning to show up here in B’ham. I’m looking after a friends’ home that was put on the market in May (they no longer live here). The place is a total POS (crappy walls, crappy floors, shoddy early 1900’s boom-town construction that’s been “just barely” maintained. Sold for 34K in ‘89, now on market for 315K (down from 360K). The realtor’s a newbie, it’s her first house. Since it’s not selling, she’s beginning to grab at straws as to what the problem could possibly be (???!!!). Left me a message today, kind of condescending and snotty, which seemed to imply that perhaps the problem was that I wasn’t looking after it well enough, complained that the linoleum floors (laid circa 1965 and a totally knicked up/stained mess) needed to be “washed” better! Apparently, she can’t tell the difference between a cheap floor that’s been damaged by decades of wear and one that’s “dirty”. Called her back and told her there’s nothing to be done about the floor, it’s been scrubbed and that’s the end of it and oh, BTW, you, or some other realtor, left the key in the door the last time it was shown and I’m not sure whether I’ll be putting it back or keeping it to prevent such a thing from happening again. It was all I could do to be “nice” and diplomatic with this conceited, idiot, a$$hat. Now that she’s f%cked up big time with the key, she’s no longer trying to blame the lack of a sale on yours trully.
I suspect we are about to enter the next phase of the bursting asset bubble- a period of insanity and fear as people try to figure out “what’s happening”.
40 yr old linoleum?
HA HA!
Seattle,
That’s my opinion as well. 2001 would have marked the peak of the true RE cycle in So Cal. It’s only lax lending that moved prices up beyond that point, IMHO. I fully expect pre-2001 prices, +/- inflation/deflation before the dust settles.
My wife and I are looking to buy in Anchorage, Alaska (we live and work in Valdez) in about 2.5 years after we retire. Drove around a lot of nice neighborhoods. Nothing seems to be selling. Local realtor I talked to thinks the market is flat, but still appreciating. Picked up a couple of dozen fliers on houses for sale. More than half had price reductions of 10k posted in the last month. According to the local paper (Anchorage Daily News), median house prices in August dropped YOY for the first time in at least ten years to 318k. Problem with Anchorage is that way too many are California split levels. My wife likes traditional two-story plan with all bedrooms on the 2nd floor.
SD piano stores are currently flush with inventory of reasonably-priced new and used pianos. I look at this as a housing crash indicator, as pianos (costing $3K-$50K) are an item that would have typically been financed out of home equity appreciation a couple of years ago. No home equity appreciation, no credit, no savings = no piano purchase.
“Housing slowdown shows up in Austin” Austin Amercian-Statesman requires login http://www.statesman.com/
1st paragraph is the soon to have two mortgages and the second is the flip down $45K to 930K and the “Bring me an offer banner”
Article itself is fairly well balanced.
This week, the Sunday SD Union Tribune Homes section is chock full of ads with language such as “New low pricing” and “Prices Drastically Reduced!” There appear to be an increasing number of ads promoting sale prices in the $200Ks.
And I pity the poor greater fools who bought in Murietta over the past couple of years. The Van Daele Homes ad says, “The Prices You’ve Been Waiting For — PRICES REDUCED UP TO 35%.”
Details are given below:
WILDOMAR MURRIETA VALLEY
REDUCED $121,000!
From the low $300,000s
WILDOMAR MURRIETA VALLEY
REDUCED $109,000!
From the mid $300,000s
WILDOMAR MURRIETA VALLEY
REDUCED $100,000!
From the low $400,000s
MURRIETA
REDUCED $133,000!
From upper $200,000s to the low $300,000s
FRENCH VALLEY
REDUCED $126,000!
From upper $200,000s to the low $300,000s
FRENCH VALLEY
REDUCED $150,000!
From upper $200,000s to the low $300,000s
Asking prices for houses in North Fontana have fallen $90,000 (approx. 20%) in the past twelve months. For example, An 1800 sq.ft. home that supposedly sold for $500K last years is now on the market for $410K. $415K is now a more common asking price. How much further will prices fall in the Inland Empire?
Try those $500K homes going for $150K or so.
Yesterday, I went to a local push-cart hot-dog stand in San Jose. (I know, I know - “If you knew what went into hot dogs, you’d never eat another one.” Can’t help it…I’m an American with a capital A.) Anyway, typically the stand is knee-deep in customers and the only other customer commented on that. “It’s the economy,” I said. “But I got 20 calls today about my apartments,” the other customer said. It turns out he has about 20 apartments, and “my phone has been ringing off the hook.” A local radio station ran a story about renters who are being tossed out of their rental because the rental’s owner is behind on their mortgage payments. So not only home owners are being affected by the rate re-adjustments, but renters as well!
Amazing. Thank you for that info.
~Misstrial
Attended a house auction today in primo W. STL County. 3849 sq ft custom home w/pool on 4 acres. About 20 people showed up and only 3 bid. The high bid stopped at $625k + 5% before the auctioneer took a break to confer with the owner. Not sure how it turned out as he asked everyone but the high bidder to leave.
Saw an interesting ad in a California Central Coast real estate book–it was advertised as _not_ a short sale. When the assumption is that of course the sale is a foreclosure or short sale, and the buyer needs to be notified only if this isn’t the case, things are intresting.
Prices in the less swank areas seem to have dropped from the $700K plus range to mid-500’s, sometimes dropping below $500K.
Had a funny experience while checking out the models in the new construction condos in Oakland, CA. The super pushy realtor. First the realtor didn’t do a great job of qualifying me. They gave us the grand tour. And then closed with a hard sell. Offering up financing deals and other incentives. When I countered with I am looking at purchasing next year….the cliche of..the prices will go up next year and its a great time to buy appeared. We moved on to a new building on the next block with better amenities and cheaper prices. Guess the realtor was trying to keep us in the building, since the nearby condo stock was far superior to this development. Its a great time to buy in Oakland. New developments complete construction day-by-day…and we all know what that means. Developers will need to come to terms with the fact it is a buyers market..and their crap is overpriced.
Saw a few homes in Montgomery County, MD (Potomac area) this weekend. Some sellers are getting it and some are not….
We saw two homes that were last sold at the top of the bubble:
- One sold for just over $900k in 2005, and was now priced in the $700s. It has been on the market for awhile and the seller is more than willing to negociate. The price may not be right, but at least it is headed in the right direction
-One sold for $800k in 2005. It is now on the market for $850k!!! This is not a flip- no improvements were done to the house in the last 2 years. Oh, and get this- it has been on the market for just a few days and it actually says in the description “all contracts will be reviewed at 3pm on Monday”!!! Did I miss something….is it 2005 again?