Swamped With Sellers Who Are Desperate To Sell
A report from the Arizona Daily Sun. “Laura Fenbert and her husband Richard bought a townhouse in Lower Greenlaw two years ago for $140,000 to help their daughter, an NAU sophomore at the time, escape dorm life. The couple also bought the home as an investment, hoping to save thousands in dorm fees as well as make a small profit. The couple came close to making that tidy profit last year, receiving unsolicited offers hovering around $260,000.”
“This year, prospective homebuyers regularly tour the three-bedroom, two-bath townhouse but no one has made any offers in four months. The family has poured thousands of dollars into the home this year…to help attract buyers, Fenbert said.”
“They have also cut their asking price from $249,000 to $244,000, but prospective buyers have slowed to a trickle as they try to compete with eight similar three-bed, two bath townhomes also for sale nearby.”
“Most likely, those homebuyers touring the Fenbert home made offers on the condo-conversions in Flagstaff. The former apartment complexes flooded the market this year with hundreds of condos, tempting buyers with incentives. Totaling approximately 900 units, the projects are offering attractive incentives that the Fenbert family cannot hope to match.”
“‘The condo-conversions have cannibalized the townhome resale market,’ said Realtor Stephen Brighton.”
“As their daughter prepares to graduate in December, Fenbert says there is still some room to attract buyers. She says she could offer a serious buyer some incentives if it helped close the sale.”
“The ups and downs in the sale of her home has also been a teachable moment, said Fenbert. ‘My daughter has been given a wonderful learning experience about the housing market,’ Fenbert said.”
Newszap reports from Arizona. “Like the outside temperature, Surprise’s once red-hot housing market has started to cool.”
“‘In 2004 we saw an incredible amount of activity in the housing market. This phenomenon lasted for another 1 1/2 years to the end of 2005,’ explained Associate Broker Rowdy Dawson. ‘Unfortunately, we won’t see this again in our lifetime.’”
“Mr. Dawson said during this explosive time, out-of-state buyers saw an opportunity to buy inexpensive homes in the Northwest Valley while making a profit.”
“‘The housing industry at that time became a ball of fire that most thought would continue to burn,’ Mr. Dawson added. ‘As soon as a sign went up, the listing agent had 2-3 offers minimum. But now, the problem is the housing market is parallel to affordability of a client. Now the clients are not able to buy these homes because of the prices.’”
“According to the real estate broker, an 1,800-1,900-square-foot house in Surprise in early 2004 was closing at approximately $162,000. By the end of 2005, the same size home cost an average of $280,000.”
“‘That’s a 43 percent increase in less than two years,’ Mr. Dawson said. ‘Did your salary increase 43 percent in that time — I know mine didn’t. That’s what is making the market so stagnant.’”
“There are approximately 2,200 single-family home listings now available in Surprise, up by approximately 200 over the previous month. Additionally, city data indicates at least 1,000 Surprise homes involved in foreclosure or pre-foreclosure actions.”
The Arizona Republic. “Florida-based TOUSA Inc., the parent company of Arizona builder Engle Homes has hired a Wall Street firm for advice and stopped offering earnings guidance in response to worsening market conditions.”
“Its Western operations accounted for the largest share of losses. For its second quarter ended June 30, TOUSA lost $132 million on a 10 percent drop in revenues to $577 million. Net home sales fell 15 percent year over year.”
“Its operations in Arizona, Colorado and Nevada accounted for $47 million in red ink from continuing operations.”
“Morningstar analyst Eric Landry indicated the lack of guidance signals management’s inability to deliver on prior predictions of positive cash flow for the second half of 2007.”
“‘The fact that it’s no longer confident of its cash-generation abilities indicates that a crucial element of its deleveraging strategy is probably now gone,’ Landry wrote recently. ‘It’s likely TOUSA will now have to turn more heavily toward asset sales in an effort to stave off a restructuring, a strategy we think has little chance of success.’”
Reuters reports on Nevada. “Dana Fillmore was like many of the thousands arriving to the casino capital every month when she moved from Minnesota in 2004. With no money down, she landed a house with a pool for a $2,100 monthly mortgage.”
“But her marriage collapsed soon after, and her husband, who works in real estate development, had trouble with support payments as his industry slumped, she said, so she is now trying to sell her house.”
“Fillmore bought the place in Henderson next to Las Vegas for $329,000 in July 2005, around the peak of the boom. Since listing the house at $317,000 a few months ago, she has dropped the price to $289,000 and is still hoping for her luck to change as she cannot afford to pay the mortgage on an annual salary of $42,000.”
“‘It’s always been a dream of a lot of people in the northern states to move to a southern state,’ she said wistfully. ‘I wish now that I never moved.’”
“‘Say they paid half a million. They might be able to sell in the low $400,000s, maybe,’ said Rita DeSimone, a broker working with Fillmore. DeSimone said her income is down by half from last year. ‘Come May, the phone just stopped ringing,’ she said.”
“Joy Gillen has had her home on the market for nearly a year and a half. She initially listed the home at $597,000 then $539,900 and since refused to budge, even though she paid only $291,000 for it five years ago.”
“‘I never thought it would ever take so long to sell my house here — the market was so hot,’ she said. ‘I could sell for a cheaper price, but I would shoot myself (financially).’”
“Thousands of signs in front of single- and two-story homes illustrate a glut of available properties, many of which are now vacant. Along one stretch of six homes on Edgeworth Place in south Las Vegas, four show ‘for sale’ signs.”
“After more than half a year on the market, one house is in the process of being sold after the owner dropped the price from $324,000 to $250,000, broker Doug Helen said: ‘They literally wanted to get rid of it.’”
From KLAS TV. “The prices of new and existing homes have been steadily dropping in Las Vegas since mid-2006 and likely will continue to plummet…according to several professional traders and national economists monitoring the valley’s real estate market.”
“Last month, the world’s leading Century 21 realtor filed for bankruptcy in Las Vegas.”
“Kelly Kuntz bought a real estate business last year as the housing market was starting to crash. He calls the situation dreadful. He says although he has plenty of work, he won’t make any money this year. ”
“‘What happens is this doesn’t become a slow market, I am swamped.’ He is swamped with sellers, many of whom are desperate to sell.”
“‘They believe that through some miracle somebody is going to come to their home and the chances are very very remote,’ Kuntz said.”
The Pahrump Valley Times from Nevada. “Pahrump has been affected by the high rate of foreclosures and a slowdown in the real estate industry affecting the rest of the country, statistics show. Some of the figures weren’t as alarming in Nye County, however.”
“Andrew Alberti Jr., a local real estate broker helping people avoid foreclosure, said almost all of the property owners he’s working with defaulted on loans taken out from 2003 to 2006. They got a good initial interest rate after signing the loan for a couple years before the adjustable interest rate began to rise.”
“But he said in one case an individual bought vacant land in January and defaulted by March.”
“‘If your income dropped by 60 percent, how long would you be able to stay in the line of business you were in?’ asked Norma Jean Opatik a realty agent…who represents the Greater Las Vegas Association of Realtors in Pahrump. ‘The media drove this market to make it boom the way it did. Now I think it’s the media once again doing it. If we could get those prognosticators to stop this doomsday thing the market would rebound much quicker than it’s doing.’”
“Lenders are now questioning appraisers of property, Opatik said. ‘Our appraisers know our market. Even the appraisers who come out from Las Vegas, they know our market, and yet they’re questioned all the time, and that’s totally beyond the scope of what a lender should be doing,’ she said.”
“‘Now people can no longer afford the home because of the adjustment their loan took. Now again, that’s the mortgage industry. When this boom happened they would lend to many people that probably shouldn’t have been lent to. They call it creative financing,’ she said.”
“Opatik thinks investors will step in to scoop up the bargains. A home that may have been on the market for $300,000 to $350,000 might be selling for $250,000 to $280,000 now, she said.”
The Salt Lake Tribune from Utah. “At first, it looked as though Utah’s homebuilders would be able to avoid the sharp downturn in new-home construction that followed the nation’s subprime-lending debacle.”
“But by July, it became painfully apparent that even Utah’s hot economy couldn’t prevent residential construction along the Wasatch Front from plummeting to 10-year lows. Builders have been forced to make substantial layoffs and offer thousands of dollars in incentives.”
“‘This is going to be a tough year for builders,’ said Jim Wood, director of the University of Utah’s Bureau of Economic and Business Research.”
“By summer demand for new homes had dropped sharply, with homebuilding activity in August the worst in years.”
“Lenders nationally and in Utah have imposed tighter lending standards in recent months that have made it more difficult for people to qualify for a home loan. And several years’ worth of home-price increases from Ogden to Provo, in many cases vastly outpacing wage gains, have put homeownership out of the reach of many Utah families.”
“Richmond American Homes has run ads touting free options and upgrades of as much as $35,000, and up to $3,500 in down-payment assistance. Not to mention the drawing for a really nice television.”
“In September, Richmond American took out permits for the construction of only six homes locally, down from 90 in September 2006.”
“Many builders, such as Utah’s Hamlet Homes, say the slowdown came on rather suddenly, in July. ‘Suddenly we hit this brick wall,’ said David Irwin, VP of sales and marketing. ‘Sales were down, traffic was down. The initial thought was that it was a temporary blip. But it continued, through August and September.’”
‘Increasing numbers of Utahns trekked into U.S. Bankruptcy Court for Utah seeking relief from their debts during the first nine months of 2007. U.S. Bankruptcy Court Clerk David Sime reported that the number of Utahns who declared themselves insolvent through Sept. 30 increased 23 percent compared to the number of petitioners who filed during the same period a year ago.’
‘Bill Crim, director of strategic initiatives and public policy at the United Way of Salt Lake, said he still is worried. ‘We have a strong economy now by most measures, so to see bankruptcies increasing is cause for concern.’
I don’t know about bankruptcies, but I just asked the FedEx guy who was picking up from me if they have been busy lately and he said it has been very slow. I said the economy is bad huh? He said that is an understatement. Just one FedEx guy but I would think they would have their hands on the pulse of the economy being on the front lines of delivery.
Ryder just reported dismal results just one shipping/moving company but
FedEx will get plenty of court order deliveries soon enough.
Stock market is at all time high. Is this a new paradigm? I have been hearing some so-called experts calling this stock market an indication of a new paradigm. The market is now world wide and not just based on U.S. economy. As long as the world economy is doing well, the stock market will continue to do well regardless of U.S. economy going into recession.
This is all deja vu again. Just wait until U.S. is in recession and see if the stock market is still high.
Amy, many of us here have talked about the PPT and TPTB and how the market is rigged.
One thing many of us have forgotten is that the 14K everyone spouts is garbage. If anyone on MSNBC was wise enough to figure out the quotes on 1 share for each of the businesses on the DJIA, one would quickly find that the total price of 1 share of each company for the entire DJIA would only cost about $1700. However, a convoluted formula is used to get the much more impressive number. Bottom line is what the real cost is. Just more of the same garbage.
As for the global economy, I believe there is some truth to that comment. However, i think a lot of propping of this market is due to a lot of 401K plan investing. Not sure of that, but just a hunch of mine.
The DJIA isn’t really convoluted at all. It’s the price of 30 stocks, adjusted to account for variations in price that don’t reflect market changes, like when the stocks comprising the dow are changed, or stocks splits, things like that.
The purpose of the index is to be able to chart the performance of those 30 stocks (which are presumably indicators of the market as a whole) over time. If you didn’t adjust out changes like the ones mentioned above, the index would be less valuable as there would be indications of volatility that are not legitimate.
I am one who believes the market is very much rigged for a number of reasons, but this isn’t one of them. The DJIA may or may not be useful for any given purposes, but it’s not really “rigged” in any nefarious sense.
It’s priced in U.S. dollars. That alone is depreciating its raw value in late 2007.
–
“Stock market is at all time high. Is this a new paradigm?”
Amy,
It is the same old paradigm, as the older one in 2001, with 6.5-year time shift. During Apr-May’01 the Scam Market was going up all the while the economy had already entered the recession just like it is now. The denial of the recession was very strong back then as it the case today. When the reality did hit there was a huge decline from May’01 to Oct ‘02. What lies ahead would be lot worse. New lows in 2009 that will easily eclipse the lows in Oct’02.
Hope this helps.
Jas
With BB in charge, many may be expecting another bubble, this time in the stock market. Just look at the Fed minutes, BB & his gang members are expecting tough times ahead. But the stock market participants are saying, “Yeah, you are just itching to blow a huge bubble for us!”
There is some truth to it though. Major DOW stocks get upto half of their revenues from abroad. With a falling Dollar, those revenues get amplified and everyone is happy. If US $ goes down by a factor of 10, their revenues go up 5 fold and stock market rejoices. Nothing like debased currency as the opiate for the wall street dumbos!
Utahns have a higher tolerance for debt at young ages. Millions of reasons - we start with CC’s really young, our parents are down the block and we can call them when we’re in a bind, our LDS ward privately bails us out when we can’t pay the bills. We don’t understand the concept of personal responsibility. Utah is always one of the nation’s highest bankruptcy states.
Having housing prices jump 30 - 300 % across the state only puts more sh** onto our credit card statements, as mortgages eat up more and more of take-home pay. Rather than adjust a lifestyle, we’ll adjust our credit limit. Viva la RC Willey furniture financing!
SLC Resistance,
Boy, you just taught me something! I would have thought that the LDS’ emphasis on personal responsibility and paying one’s debts would have made Utah the state with one of the lowest bankruptcy rates. I guess things aren’t always as they seem, and I have given Utahns the benefit of a positive stereotype. Thanks for the lesson.
For a outsider’s peek into their world, I recommend “The Mormon Murders”…
http://www.amazon.com/Mormon-Murders-Steven-Naifeh/dp/0451401522
Quality used information from just 1 Cent (plus shipping)
“If we could get those prognosticators to stop this doomsday thing”
Apparently, Mr. Ben Jones, this is all your fault. But the good news is you can put “prognosticator” on the jobs line on your passport.
You bad prognosticators, stop being mean to the REIC.
Why is she harping on us now, over 2 years ago the prognosticators told her this would happen. She treated us with the scorn as was heaped upon Cassandra when telling Paris of the doom to Troy.
“It is different here.”
It is just beginning.
the she continues…
“Lenders are now questioning appraisers of property, Opatik said. ‘Our appraisers know our market. Even the appraisers who come out from Las Vegas, they know our market, and yet they’re questioned all the time, and that’s totally beyond the scope of what a lender should be doing,’ she said.”
Okay, now I’m fired up!! This Betty better pucker-up and hide, ’cause she just got put on the top of the Joshua tree list. NICE!! How dare the lenders, the ones lending the money, the ones whose money this is, how dare they scrutinize the very asset their money will be secured against. “It’s none of their business”, so says the stupid b1tch! Oh really Hagitha? home prices are plummeting everywhere and you think the lender has no right to take a closer look. And another thing, I’ve been in the biz for 14 yrs, and as far back as I can remember reviewing appraisals has always been within the lenders “scope”.
You better start running…….
Beautifully worded and well put together rant! Loved it.
Those quotes say a lot about how the REIC got us into this mess.
Absolutely. She knows what she’s up to. You only get pissed about review appraisals when you’re trying to pull a fast one. Anyone who has any experience in the biz know that it has nothing to do with “knowing the market”, and everything to do with comps, comps, comps. Someone posted nicely about this a few days ago, about how lenders don’t care about granite countertops or fancy floors. It’s like for like on the print-out sheet baby. That’s the way it is and has always been.
So if your appraiser is trying to sweep a couple 2 to 4 week old comps under the rug in favor of some 3 to 6 month old comps, it really sucks when you get “reviewed” by the lender. Actually, it really, really sucks for the appraiser since he’s the one putting his license on the line by doing it. The realtor or LO just loses the deal.
“Hagitha”…I can’t stop laughing…
Hey Catherine, how about these Flagstaff numbers?
‘Compared to third-quarter sales last year, the number of condos nearly quadrupled, jumping from 21 units sold in 2006 to 80 units this year.’
‘Brighton said the surge in sales is primarily due to three large condo conversion projects coming online recently. Totaling approximately 900 units, the projects are offering attractive incentives that the Fenbert family cannot hope to match.’
‘Sales of townhomes in Flagstaff and the surrounding areas during the summer are down 36 percent when compared to last year, according to NAAR’s multiple listing service. For single-family residences, sales slipped by 16 percent when compared to last year’s third quarter figures, but prices trended down only slightly by 3 percent.’
‘Third-quarter sales of manufactured, mobile and modular homes in Flagstaff were down 38 percent, but the median price down just 3 percent.’
Well, Ben…gotta say, it’s kinda like reading my kid’s 5th grade math homework…just doesn’t make sense.
21 units sold in 2006 compared to 80 condos this year? How does that jive with “Sales of townhomes in Flagstaff and the surrounding areas during the summer are down 36 percent when compared to last year, according to NAAR’s multiple listing service”?
Everyone sing along…”You say condo, I say townhouse, can’t we all just get along?”
Here in Bucky O’Neill territory, it’s pretty pitiful, although I lost my MLS access…they got wise to me and cut me off…LOL. But it’s easy to see how horrible it is, condo, townhouse, manufactured (even those aren’t selling), luxury horse ranch, etc…nothing is selling. The number of rental homes has skyrocketed. Lots of incentives for….renters. Free rent for 2 months, waive deposits, etc. Probably about the same here as up there. And everything in between…Sedona? Now there’s a vortex if I ever saw one!
From what I can tell, these condos have only hit the market in any number this year. The same effect can be seen in Florida.
But they’ve sold 80 and have 900 coming on the market?
I’m floored by the math.
900 condos come on the market and only 80 are sold.
So we have 820 plus still entering the market. One can safely assume the 80 sold were pre-bought during construction. One can also assume that only one or two more months of elevated “pre-construction” sales are left.
Thus, at best, That is 660 condos at 21 units per month. Or, in rough terms, three years of inventory.
Those will only sell when they are priced as “rent substitutes” on a 15 year fixed rate mortgage.
Got popcorn?
Neil
grrr…the five letter curse word! CONDO.
They are cursing our nation! Dang *CONDO*s. Curse the builders of these abominations!
Rant off.
And they continue to build them! Look at the supply of these (insert expletive) useless spaces. My gawd, they’re everywhere.
Please, if there is any justice, builders, hear my plea, STOP IT.
OK…rant off.
Funny, I totally read it the other way. I thought she meant that the appraisers were on top of the new lower prices, and that the lenders (read brokers) were trying to get them to appraise for a higher amount so the loans would go thru as had happened for the past 3-4 years.
A lender will never question an appraisal that is thought to be low.
Yeah, same here. I thought the whole point of having an appraiser was to get an unbiased, independent opinion so that both the lender and the borrower can agree on the value. If you don’t agree with the appraisal, you should be free to get a second opinion or simply reject the deal, but it seems like an awfully fine line between “questioning” the number and asking the appraiser to hit a number.
Unbiased?!! Surely you jest! If appraisers gave unbiased appraisals they’d starve. Show me an honest appraiser and I’ll show you a man out of work!
Hilarious stuff!
Ok, I get it, they’re all scum. What, then, is my course of action as a buyer? Can I trust no one, not even someone to whom I’ve paid an “appraisal fee,” to give me a reasonably fair valuation of a property before signing the next 30 years away?
RE: Unbiased?!! Surely you jest! If appraisers gave unbiased appraisals they’d starve. Show me an honest appraiser and I’ll show you a man out of work!
You can Roger that, Good Buddy!
Can I trust no one, not even someone to whom I’ve paid an “appraisal fee,” to give me a reasonably fair valuation of a property before signing the next 30 years away?
You don’t need no stinking appraiser. If the total monthly cost of buying with 20% down, 25 year fixed term exceeds the cost of renting the same place, the price is too high.
The true value of any property is its future income stream, not what some idiot paid for a similar property 2 weeks ago.
That’s all there is to it.
Correct, yogurt.
What you can rent a property for is a truer indication than a comparative. Usually 100 times rent equals value.
There are variable.
Also, 2.5 to 3 times median income should be the price of the median house.
This is coming from someone in Pahrump NV as well. I was waiting for her to say it’s different here - everyone wants to live in Pahrump! Real estate only goes up they aren’t making any more land errr desert.
I imagine that only a few of the folks on this board have any idea of what Pahrump is like but it isn’t pretty. Pahrump is a collection of single / double wide trailers with few nice homes scattered here and there across a big valley.
Pahrump is where the brothels are located.
Soon to feature local RE talent…
Chicken Ranch, Sherri’s Ranch. Both fine places.
These are the closest brothels to LV.
RE agents can suck you dry just like before. This time it would be more literal.
Parump. Brrr… just the name gives me the shudders.
I suppose its out of their scope to say ‘No’ to lending on overpriced desert sh*tboxes too?
Where will you be then, dearie?
“Lenders are now questioning appraisers of property
Boo-hoo…The brokers can’t put the valuation “fix” in anymore because the lenders are now queered on their rackeetering appraiser co-horts because of their dishonest reporting.
Cry me a river.
“If we could get those prognosticators to stop this doomsday thing”
“The sun was in my eyes”
“You sneezed when I swung”
“I’m hitting into the wind”
“If we could get those prognosticators to stop this doomsday thing”
Sure thing. Give us a sunny scenario with affordable housing.
“Joy Gillen has had her home on the market for nearly a year and a half. She initially listed the home at $597,000 then $539,900 and since refused to budge, even though she paid only $291,000 for it five years ago.”
10 to 1 she HELOC’d it and has no equity in the house.
Well, how’s she supposed to PAY for it?? Heheh
“‘I could sell for a cheaper price, but I would shoot myself (financially).’
That’s pretty much proof of HELOC.
That’s the only thing that came to mind with a comment like that, considering if she sold right now, she’d bring in about $200K after realtors fees and closing costs.
What color is the Massaratti? Or was it a Humer? For $240k of missing money, I want to see some real bling!
Got popcorn?
Neil
Well, you can’t expect her to GIVE it away, right?
(/sarcasm)
BayQT~
Are you referring to the house price or the daughter stripping?
Looks like it’s free and clear…just a greedy (insert favorite expletive here)
http://redrock.co.clark.nv.us/assrrealprop/pclDetail.aspx?hdnParcel=19007813038&hdnInstance=pcl7
‘My daughter has been given a wonderful learning experience about the housing market,’ Fenbert said.”
That Mommy & Daddy are greedy idiots ?
I have always believed that one of life’s best learning opportunities is the chance for children to learn from their parents’ mistakes.
How many lapdances required to close the gap between market price and the mortgage balance? Lesson learned indeed! BWAHAHAHAHAHA
Got strippers?
DP
Now now… you’re assuming something here. Is the daughter cute? Now who is on the mortgage? How is the loan structured? Will they rent the place? (Oh god, after college students… )
Got popcorn?
Neil
Bear;
Kids obviously don’t learn from their parents mistakes as most of them get married.
And old Fenbert is going to get a wonderful lesson in losing money.
My kid rode his bike into a tree and got a wonderful lesson on dental surgery.
You beat me to it. She didn’t learn a thing about her housing market. She did learn that either:
1. Her parents are greedy idiots who try to get-rich-quick
2. Her parents aren’t mature to make a speculative purchase, and be prepared to accept the fact that they might lose money
I think Mommy & Daddy are going to get a better learning experience.
two years ago?
I thought AZ was back to 05 ,and even 04 pricing
Nevada is ahead of Arizona by a bit, I believe.
LV is ahead, but NNV is being a little stubborn. Don’t get me wrong, price reductions abound, but it’s only been over the last several months that panic and fear have become perceptible.
Some of the best stats I used to find were from NNV, but the papers and their websites don’t report on it much these days.
Your right. The media has zipped up about the whole mess. There seemed to be a time about 12 months ago when our local rags looked like they were going to start calling it like it is, but now hardly anything. Word of mouth is huge here, though, as we still have that “small community” feel. That being the case, all the local chatter is filled with horror stories. It won’t be long before our “rah-rah” bent media will be forced to deal with it.
“Word of mouth is huge here, though, as we still have that “small community” feel. That being the case, all the local chatter is filled with horror stories.”
Oh yeah, ditto this statement. I hear horror stories daily. Friends dad working for large developer just had to turn in the company truck, no funds for it and he’s scared because they’ve started layoffs. He bought a spec home at the peak and is afraid he’s going to get the Royal Joshua Treatment.
Another friend’s ex just had the American Title office she manages shut down and she’s been transferred to another branch. Afraid her job will be next.
I could go on….
Amazingly the best place for what’s really going on is a blog run by a local agen.
The last Real Estate stories that got big coverage in the Gazette Journal was a proposed new condo development in the South Meadows area, and approval for condos/townhomes in the Sparks Marina area. WTF are these people thinking??? The mentality is pretty much that Vegas is doomed but we’re somehow different w/our market.
“The mentality is pretty much that Vegas is doomed but we’re somehow different w/our market.”
Funny how a few good years and we get a little big for our britches. We’ll soon find out how dependent we really are on the “big markets”.
“Royal Joshua Treatment”
That’s comedy gold, baby. Gold.
– Judge Smales
“You’ll get nothing and like it”
Nevada, then Arizona, now Utah falling apart. Well, at least Colorado and California are fine. Oh, wait.
Don’t worry!
Detroit and Ohio will support the economy…
I mean Florida, Texas, Massachusetts, and DC…
ummm… ugh…
It looks like only New York and Washington state have even a pretext of holding on. Or did I miss a story on the great Seattle RE massacre?
Ugly times ahead.
Got popcorn?
Neil
THe PNW over the cliff news yesterday, Utah today. Sounds like the last of the Mohicans to me.
Can we throw in Hawaii and Alaska?
“Laura Fenbert and her husband Richard bought a townhouse in Lower Greenlaw two years ago for $140,000 to help their daughter, an NAU sophomore at the time, escape dorm life. The couple also bought the home as an investment, hoping to save thousands in dorm fees as well as make a small profit.”
“The family has poured thousands of dollars into the home this year…to help attract buyers, Fenbert said.”
I have said it before and will say it again now — it is in all likelihood wiser to just cut the sale price to market value, taking into consideration any anticipated cost of renovation, than to throw away money on bringing a home’s condition up to perfection before selling.
“They have also cut their asking price from $249,000 to $244,000, but prospective buyers have slowed to a trickle as they try to compete with eight similar three-bed, two bath townhomes also for sale nearby.”
$244,000 - $140,000 = $104,000, a 74% profit over two year’s time. Good thing they weren’t hoping to make a large profit by owning a condo over a two-year time horizon!
Bear;
Well said. Surely they can sell it and make a profit although they did buy it two years ago, at the peak. OOOOPs!
Stop it!! She pays $260K, two years ago, and a 50% profit is still not enuff.
“The ups and downs in the sale of her home has also been a teachable moment, said Fenbert. ‘My daughter has been given a wonderful learning experience about the housing market,’ Fenbert said.”
And your daughter will learn even more as you ride the property into a ‘loss’ before you sell. There is nothing wrong with being greedy, but not having an exit plan is stupid.
Wall $treet to the $huttle
go for throttle up
“Laura Fenbert and her husband Richard bought a townhouse in Lower Greenlaw two years ago for $140,000….”
“They have also cut their asking price from $249,000 to $244,000…”
Wow, so they’re still expecting their “small profit” over two years to be $104,000.
I really feel for these poor, poor greedy people.
I sent tis to the reporter:
This woman is going to EAT that condo……..ill bet she Helocd the $$$$ to pay for her daughters college
can you follow up on this…..that’s why she wont sell it for $199K and move on with her life.
I’ll bet she also HELOC-ed to pay for the renovations that were supposed to make it sell.
boob job
Boob job is fine! The more the merrier.
Better if she HEL’d for the college degree.
GREED - that was what struck me about their situation, and like having a 5K reduction is gonna save their a$$… i didn’t know if i should laugh or be mad.
good to hear some news out of AZ.
here are two cases i ran into this past week - note to FB : the lenders are waking up, and if you don’t get out of the way you’ll be fodder…
case# 1 : REO, heloc’d at $166K in 2006, lender has it listed for $135K - similar SFH on the block sold for $170K last few months.
case# 2 : REO, SP of $700K in 10/2006, 1st @ $560K, 2nd @ $106K, lender has it listed for $435K (about current mkt value)- boy this is gonna leave a mark!
I guess w/ 66K lisiting in the PHX area, some lenders have started to smell the peeling paint. used to be they would’nt budge at all.
reminds me of that scene from ‘Armagaddon’, where the crazy guy wanted to sit on the meteor and have the best seat to the distruction of the world.. well fellows i think we have the best seats to the housing bust– buckle up and grab some popcorn..
got cash?
Zee, did I just read the amount 66,000 in relation to Phoenix listings? Jeez-o-man!
When the time comes to buy a house in Phoenix (not now), be sure and do a good inspection with all of the utilities on. I have seen a couple REOs here lately with the water meter and who knows how much plumbing missing. The houses were all under five years old.
I bought a two year-old REO in Phoenix five years ago, and it was only “stripped” of minor stuff like some ceiling fans and a garage door opener. In some cases, it may be worse now courtesy of the same criminals who steal wiring, etc from commercial buildings to pay their drug dealer.
But there should be plenty of foreclosed houses left largely intact for the rest of us.
very good advice. I went to see a brand new huge Thermador oven and refrigerator for sale cheap by ‘private party’…when I got there, it was in a million dollar home on the market, and these clowns were trying to sell the appliances via the classifieds. Also said they’d throw in the ceiling fans for free. Hilarious.
What did you pay for them?
are you kidding me? I would had to pay for a CRANE to get those beasts outta there! There’s just something about buying appliances from a house being torn apart by desperate sellers. LOL.
“But by July, it became painfully apparent that even Utah’s hot economy couldn’t prevent residential construction along the Wasatch Front from plummeting to 10-year lows. Builders have been forced to make substantial layoffs and offer thousands of dollars in incentives.”
And July was before the onset of the credit crunch (gulp!).
“Joy Gillen has had her home on the market for nearly a year and a half. She initially listed the home at $597,000 then $539,900 and since refused to budge, even though she paid only $291,000 for it five years ago.”
“‘I never thought it would ever take so long to sell my house here — the market was so hot,’ she said. ‘I could sell for a cheaper price, but I would shoot myself (financially).’”
If she keeps this up, she will really be upset with herself in 2010
there it is…the best line…..
“I never thought”.
Pretty much sums it up.
Since 5 yrs ago puts us at ‘02, and my guess has been a fall in prices to at least ‘03 levels in NV, she better hurry up and wise up before her finacial stupidity really hoses her. This house will be in the low 300’s or lower soon.
‘Unfortunately, we won’t see this again in our lifetime.’”
Bastard stole my line.
don’t worry there will be another bubble in 7 - 10 years…
somethings gotta keep Ben occupied after the housing bust.
He’s got that covered — it’s called “Money & Metals”.
Of course it’s now on temporary hiatus, but when gold blasts past $1000 next year he’ll probably start posting there again.
“‘I never thought it would ever take so long to sell my house here — the market was so hot,’ she said. ‘I could sell for a cheaper price, but I would shoot myself (financially).’”
Why shoot yourself when you can cut your wrists and slowly bleed to death?
“Opatik thinks investors will step in to scoop up the bargains. A home that may have been on the market for $300,000 to $350,000 might be selling for $250,000 to $280,000 now, she said.”
Hate to tell you, but investors WERE the problem in the first place. If prices go down, and you are hoping for investors to come and save you, you are only prolonging the agony to come.
You can’t get positive cash flow at those “bargain prices” so as an investor you can call me at $150K and we’ll run those numbers again.
There is hope eternal for the “greater fool”.
Everyone wants to believe that they are not the greatest fool; that there is someone out there that is yet more foolish than they.
I’m constantly amazed at the number of people who just unconsciously assume that buying a property to “flip” is still a viable endeavor.
I blame television, and the whole late-night, be-a-millionaire, buy-property-with-no-down advertising blitzes.
Well, that and fair doses of greed and ignorance.
A home that may have been on the market for $300,000 to $350,000 might be selling for $250,000 to $280,000 now
… and $100,000 to $150,000 in another year or so.
Where are they going to find new investors when the old ones have lost their a$$e$?
“Lenders are now questioning appraisers of property, Opatik said. ‘Our appraisers know our market. Even the appraisers who come out from Las Vegas, they know our market, and yet they’re questioned all the time, and that’s totally beyond the scope of what a lender should be doing,’ she said.”
Yeah, trying to verify the accuracy of the collateral you’re loaning hundreds of thousands of dollars on is just beyond the pale! Damn those lenders and their…..renewed interest in good business practices!
Pahrump has been affected by the high rate of foreclosures and a slowdown in the real estate industry affecting the rest of the country, statistics show.
In other words, Pahrump goes kerplunk.
Can I get a Harumph over here ?
I’ve been to Pahrump. It looks like the SaHarumph.
What else is there besides tumbleweed? And where do these people work? LV is over 1 hour away.
BayQT~
“But by July, it became painfully apparent that even Utah’s hot economy couldn’t prevent residential construction along the Wasatch Front from plummeting to 10-year lows. Builders have been forced to make substantial layoffs and offer thousands of dollars in incentives.”
Let’s please remember what made Utah a..er…”hot economy”….
residential construction.
‘That’s a 43 percent increase in less than two years,’ Mr. Dawson said. ‘Did your salary increase 43 percent in that time — I know mine didn’t. That’s what is making the market so stagnant.’”
BINGO !! We have a winner ! The obvious finally get stated ! This should be sent to every dumbass Realtor quoted by dumbass reporters that the market will recover and go higher if we’d all just shut up about it.
That’s a 43 percent increase in less than two years,’ Mr. Dawson said. ‘Did your salary increase 43 percent in that time — I know mine didn’t.”
The maddening thing is that this was ignored while prices were going up. There was so much money being made that everyone turned a blind eye to fundamentals. Now that prices are going down, the utter disconnect between appreciation and income is finally getting some air cover. Too late for a lot of FB’s, though.
A winner maybe, but a mathematician no. 162k to 280k does not equal 43% increase. In actuality, we are looking at a 73% increase. But he is right, incomes did not increase by 73% either.
Good catch and I would not have rethunk it if you had not posted!
It is an infinite return! 0 down plus depreciation.
“$597,000 then $539,900 and since refused to budge, even though she paid only $291,000 for it five years ago.”
I can literally feel my blood pressure rising as I read that quote. I need to lay off this blog, or I’m gonna have a stroke before 40!!!
Hey, I’m closing in on 50, and this blog just makes me laugh myself silly. Learn to laugh, Moving. It’s good for your health.
no salt for your popcorn!
We concentrate a lot on losers, on here…
I like schadenfreude as much as the next gloomer’, but
Who are some of your Heroes?
This is my Man, for never giving up.
He’s led this Olympic 5,000 meter race for 3 miles and gets passed by everybody…
Watch what happens, as he finds another gear, somehow.
http://www.youtube.com/watch?v=3Irnx6Upmkg
Share yours
Most likely, those homebuyers touring the Fenbert home made offers on the condo-conversions in Flagstaff.
Sort of OT, but as someone who is renting an apartment which was converted into a condo, doesn’t the whole idea of a condo conversion indicate there is some kind of problem with the market?
I mean, the owners of the apartment building could choose to sell the building as a whole or each individual unit. Given the additional hassles of extra marketing and all those closings, the whole has to be worth significantly less than the sum of it parts.
Maybe this has been discussed before, but I was curious if anyone else had come to the same conclusion.
I mean, the owners of the apartment building could choose to sell the building as a whole or each individual unit.
Huh? From what I understand, the owners do sell the building “as a whole” when it’s converted, to a company that specializes in conversion, which then upgrades the building and sells the individual units. Being a landlord is a whole other game than selling condos, I don’t think too many landlords have attempted it themselves. And I’ve never heard of a situation where part of a building was condos and part was apartments, if that’s what you’re suggesting. I believe ownership issues of the common areas would prevent that.
I wasn’t suggesting that part of the building be one and part be another, not sure what I said to suggest that.
It may be true that the original owners sell the building as a whole, but then the buyer (who at that point *is* the owner) is selling it in pieces. It does not really change what I am asking. Somehow the value is more as individual units than for the building as a whole despite what has to be a great deal of work to break it up. To me that indicates something is wrong with the market.
Of course something is wrong with the market. It now costs much more to buy a condo than to rent the same unit. It’s supposed to be the other way around - that’s how landlords make money.
It doesn’t make economic sense to rent out apartments, when you can chop them up into condos and sell them to idiots who will pay an absurd price for them, and you can just pocket the cash.
Let’s say you have a 50-apartment building. As apartments, you have one professional guy looking at the revenue stream it could generate. As condos, you have 50 individuals betting on the appreciation. Plus having a condo board really adds that certain something people pay a lot of money for.
Condo conversions are popular when people will pay un-godly prices for holes in the wall in hopes of passing it on to a bigger fool for a large profit. There’s nothing wrong with a market like that, is there?
“As their daughter prepares to graduate in December, Fenbert says there is still some room to attract buyers. She says she could offer a serious buyer some incentives if it helped close the sale.”
Daughter? Incentives? Tell me more.
I log in, I start laughing hysterically at the opening compilation that Ben has put together and my wife asks me why?
I tell her, Hey, there is a quote from a realtor named Kelly Kuntz, I can’t wait to read the comments! It’s going to be great!
WTF? Nobody even swings at that slow pitch? You guys/gals gettin tired or what?
There’s something about the juxtaposition of the names Kuntz and Auger-Inn that make me burst out laughing.
Sorry, more interest in, the Tynmouth Real Estate Securities, Laura Fenbert than in a guy who spells his name with a ‘K’ instead of a ‘Q’.
Dang, augur, I love ya like a bro’, you have me shaking with fits of laughter right now. Maybe we’re a little wary of the PC police from this AM. But, OK, now I just gotta bite, since you mention it. What would happen if Rowdy Dawson married Kelly Kuntz and took her name? Rowdy Kuntz. (godawful effort, somebody stop me!)
Oh, wait, my bad. Kelly’s a guy.
What happens in Vegas, stays in Vegas (thank God).
Oh dang…now there’s water spewed (out my nose, btw)everywhere on my desk. You guys cut it OUT!
Just a thought on the Phoenix market. I rent a home in Aviano at Desert Ridge. It is a Toll Brothers community. I came across some marketing material from Toll Brothers dated 11/04. They were selling new builds for about $120 to $130 per sq. foot. Now, people are listing for $220 to $300. Of course, nothing is selling. To get back to 2004 prices, we still need about a 40-50% decline, at least in my neck of the woods.
Been watching this site for at least a year. want to buy in vegas please help me to wait longer!!!!!!!! Wife cant wait killing me just wants a place of her own but wont listen. help?
You can live even better w/o the wife!
Wife cant wait killing me just wants a place of her own but wont listen. help?
Which do you think will last longer?
Your marriage or a trashed credit history.
Listen to your gut and not Suzanne.
Speaking of condo in Lower Greenlaw………..growing up we referred to it as Lower Cracklaw
Lower Greenlaw by locals has been referred to as Lower Cracklaw for years. And not very close to NAU……….windy nasty place Lower Greenlaw is
Reuters reports on Nevada. “Dana Fillmore was like many of the thousands arriving to the casino capital every month when she moved from Minnesota in 2004. With no money down, she landed a house with a pool for a $2,100 monthly mortgage.”
“But her marriage collapsed soon after, and her husband, who works in real estate development, had trouble with support payments as his industry slumped, she said, so she is now trying to sell her house.”
“Fillmore bought the place in Henderson next to Las Vegas for $329,000 in July 2005, around the peak of the boom. Since listing the house at $317,000 a few months ago, she has dropped the price to $289,000 and is still hoping for her luck to change as she cannot afford to pay the mortgage on an annual salary of $42,000.”
“‘It’s always been a dream of a lot of people in the northern states to move to a southern state,’ she said wistfully. ‘I wish now that I never moved.’”
“‘Say they paid half a million. They might be able to sell in the low $400,000s, maybe,’ said Rita DeSimone, a broker working with Fillmore. DeSimone said her income is down by half from last year. ‘Come May, the phone just stopped ringing,’ she said.”
Me thinks someone will take a swim and it’s not in the pool. No, you made a mistake moving from Minnesota to…Nevada. As for your marriage falling apart…well you can marry a FB or two (or three or four…) and have them move in and help with the payment.
$42,000 * 5 working adults = $210,000
Yep. That can afford the house now. YOu can even get a Hummer to drive to work and buy McDonalds food to eat (upgrade from Maruchan Ramen) and you can shop at Walmart…Walmart is evil so be careful
Got Lube?
‘The media drove this market to make it boom the way it did. Now I think it’s the media once again doing it. If we could get those prognosticators to stop this doomsday thing the market would rebound much quicker than it’s doing.’”
This is an excellent example of the typical realtor blaming the press and everyone else for their problems. To blame the prognosticators and ask them to stop their “doomsday thing” will not help this market one bit. However, if realtors such as Norma Jean Opatik understood market fundamentals and the consumer threshholds in terms of affordability she would not be complaining. However, I doubt she was complaining when she was making lots of money during the boom! Perhaps she will learn a valuable lesson of what happens when markets are artificially created and excess is the aftermath followed by the lack of affordability by the consumer.
“Opatik thinks investors will step in to scoop up the bargains.
Opatik thinks wrong. prices need to drop 50-60% off of the highs during the 2003-2006 period. I would not touch a property, let alone a single family home until it dropped. If it was listed at $350,000, it would need to drop to about $150,000 before I became interested in the property. In the meantime Opatik, keep up the good work of blaming everyone but the realtors. You too will soon be out of business!