The Euphoria Is Out Of This Market
A report from the Tennessean. “Homes sales fell 25 percent in September — their sharpest drop since 1991, but prices edged up slightly, a sign that sellers are continuing to hold out for higher prices despite a dramatically slower market. Richard Courtney, the Greater Nashville Association of Realtors’s president, said in a statement that sales may have been deflated by buyers’ looking for better deals.”
“‘It may be that potential homebuyers are waiting for the market to get better so they can save money, and that’s simply not the case,’ he said.”
“But appraiser David Lafferty said that it’s sellers who are holding firm, refusing to budge from their prices amid the slower market.”
“‘It depends on your inclination to sell: Do you really need to sell your house, or do you want to put it out there at a high price and it not?,’ he said.”
The Outer Banks Sentinel from North Carolina. “Dare County has felt the crunch of a sluggish real estate market for the past 12 months evidenced by land transfer fees down more than 34 percent.”
“Adding to the financial squeeze is a 78 percent increase in the number of foreclosures in the county. Between Aug. 31, 2005 and Aug. 31, 2006, there were 217 foreclosures. From Aug. 31, 2006 to Aug. 31, 2007, the number jumped to 387.”
“The increase is startling when compared to the percentage increase across the state which is 7 percent.”
The Morning Call from Pennsylvania. “The average price of an existing home in the Lehigh Valley fell last month for the third time this year, while the number of homes sold fell for the 16th consecutive month.”
“At the same time, the number of homes coming on the market rose 11 percent in September, according to statistics from the Lehigh Valley Association of Realtors.”
“September’s results show a strong continuation of the slowing trends that began last year. The outsize increases in prices and the fast pace of sales that became common during the boom years of 2004 and 2005 are now a thing of the past.”
“‘It is not like a perishable good. If you don’t sell your home, it will not go bad,’ said Bethlehem economist Kamran Afshar. ‘If you are not selling, [the price change] is a paper change.’”
“Experts have also said the slowing market has provided a needed correction to the excesses of the boom years, in which buyers had little power to negotiate. The large number of homes listed for sale this year has provided prospective buyers with lots of choices, and the ability to reject many of the properties they see.”
“According to LVAR, which does not distinguish between new listings and relistings, the number of homes listed for sale in the first nine months of the year, 13,915 homes, has surpassed the amount of new listings in all of 2005.”
“The lull in sales and the slower rate of price increases comes after blockbuster years in which low interest rates and an influx of people from New York and New Jersey brought new buyers into the market and sent prices soaring. Last year was the fourth consecutive year that prices for existing homes in the Valley climbed by double digits.”
“Some real estate agents say the influx of buyers from the east has begun to slow. That’s because homes in New York and New Jersey are sitting on the market longer, and high gas prices and the lengthy commute are deterring some prospective buyers.”
“Now a tightening of borrowing standards has served only to further reduce the relatively small pool of buyers in the market. As foreclosures have increased, buyers with shaky credit histories are no longer qualifying for mortgages.”
“Sellers can no longer be reluctant to accept offers or reduce prices,’ wrote Jeffrey Burnatowski, a real estate agent in Allentown. He added, now is ‘not the time to hold out for the ‘best’ price possible.’”
The Express Times on Pennsylvania. “Home sales in the Lehigh Valley continued to decline in September while prices slipped, according to a report released Tuesday by a real estate group.”
“The September results seal a summer that, compared with the prior boom years for the once-hot housing market, failed to sizzle. According to the Lehigh Valley Association of Realtors, 554 home sales were recorded last month. That’s 18 percent fewer than September 2006.”
“Add up July, August and September and the summer months posted a 15 percent decline in sales from the same period in 2006, according to LVAR figures.”
“‘This is a significant correction,’ said Kamran Afshar, a Bethlehem-based economist.”
“Afshar noted that sellers are not rushing into the market like years past. For the past three months, LVAR’s new listings rose 5 percent from last year to 4,559.” “‘It’s still a high number but not anything resembling euphoria,’ Afshar said. ‘It seems the euphoria is out of this market.’”
“Prices also declined a bit, a contrast from prior months where prices rose slightly even as total sales declined.”
“‘For the majority of people, it has no effect,’ Afshar said. ‘For those who are looking to buy, this market has become a lot more interesting because things are a lot more flexible now.’”
“Other data revealed in LVAR’s monthly report indicate that homes are taking longer to sell and pending sales, an indicator of future activity, are down. The agency listed 392 pending sales for September, down 30 percent from 560 in the same month last year.”
commercial- wow, rents falling fast in 98% employed fairfax county
–
Non-res RE is coincident to lagging indicator of the economy. Fairfax Co. economy must be sagging and might join the nation into recession.
Jas
I just rented a house in Stafford last week. They wanted $1850 a month 3 months ago. I got them down to 1300 on a 12 month lease. They were trying to sell at 375K.
just saw the mris numbers for the DC area for September- they are butt ugly!
Some interesting stuff here.
http://seekingalpha.com/article/47951-the-roof-is-caving-in-on-the-housing-market
“‘It is not like a perishable good. If you don’t sell your home, it will not go bad,’ said Bethlehem economist Kamran Afshar. ‘If you are not selling, [the price change] is a paper change.’”
So are you begrudgingly conceding that the price change on the way up was merely phantom profit?
I think we’re finally getting somewhere with these AssHats.
I own my own home outright, and let me tell you. It IS a perishable good. If it wasn’t you would never see an old run down shack that used to be a home out in the middle of nowhere. If I go off to another country without winterizing my home even at the top of Texas where I live I’ll come back to busted pipes and a horrible mess. Roofs wear out, pipes bust, sewers back up, weeds move in, appliances wear out, termites eat, birds nest. Homes are the ultimate perishable good in my opinion because they are built out of perishable goods. Even a new house needs some degree of maintenance or they become a shack.
Drug dealers move in, pimps use it as vice dens, drunks pee on the carpet, scrap metal strippers pull out any copper etc.,
homeless make a mess ….. City moves to condemn the nuisance.. Sends you bill for demolition…
You continue to pay mortgage/taxes/lose alternate investment income
Any Questions? Call me in Detroit.
I think many recent home buyers didn’t have the slightest intention of staying in their house for more than a few years. Therefore, why bother with maintenance? That’s the next occupants problem.
The ame priniciple has applied to house construction since the 70’s, it seems. Why bother with skilled labor or insulation? It’s the buyer that pays the heating and repair bills, as long as the house lasts past the 1-year warrantee. My clock radio has a better guarantee than that..
Exactly! And with how poorly many of the thrown-together Bubble Shacks are built, it is debatable if they will outlast the “explode-a-loan” that was used to “buy” them. What a joke!
Well said. I own a house in foreign country (luckily bought 12 years ago before the bubble years) and let me tell you that it is a pain in the neck to keep it from ‘perishing’. The only reason I am keeping it is for diversification of my investments. Otherwise, it is better to own vacant land than a building which is decidedly perishable.
Even vacant land has its costs. Friend of mine bought a lot in Florida (Flagler Estates, near St. Aug) a few years back. Much to his delight, prices took off. Much to his dismay, so did his property taxes.
I think he said he was paying $700/year or something high like that. Ouch! I recommended to him that he also get insurance, just in case some dirt-biker wipes out on his new culvert and sues him –so there’s even more cost for empty land that he thought would be nearly free to keep.
Did I mention the garbage hauling fees? Yeah, his lot is one of the many that are unattended and thus collect old fridges and the like.
“Otherwise, it is better to own vacant land than a building which is decidedly perishable.”
Yeah rrrrright…. Try making that worthless dirt cashflow while getting bent over by the local tax collectors year after year.
RE: Otherwise, it is better to own vacant land than a building which is decidedly perishable.
I always liked viewing selling you average real estate broker’s building expense numbers to arrive at a net income figure relative to cash flow from a multi-unit they’d be marketing.
Pure unadulerated fiction.
When I’d ask where’s the amount alloted for the “reserves for replacements” aka…depreciation monies set aside for replacement of roof, boiler, carpets, flooring, appliances, etc…” They’d look at me and say, “WTF are you talking about?”
To these chucks expenses were simply taxes, insurance, sewer, and water.
Good post.
What comes from the earth goes back to it.
kThomas\……Thats exactly what we say in the construction biz.
On the other hand, if you were counting on the new price being the minimum selling price forever or you would have no retirement savings at all, the house already has “gone bad” since it no longer serves its intended purpose.
–
“It is not like a perishable good.”
Says who? All the money I have spent over the years on home repairs and maintenance (I am not handy at all and, hence, hire help) must have been for not.
Where they find these idiots for quotes? I bet that this idiot has not read Adam Smith, who is emphatic about housing-dwelling being a pure consumption item and one that depreciates. Even Greenspan conceded that he had not read Adam Smith for 50 years until he has asked to give presentation on Adam Smith. Maestro discovered that Adam Smith was as fresh today as when he wrote. I agree.
Jas
PS: For all you inflationists out there how much do you think I paid for roof repair (four shingles has blown during last year’s heavy winds)? I hired a neighbor who said that he would charge $15 an hour for labor. He did the job in one hour and he charged $5 for the material! During the 2008-10 depression I pan to get a new roof at 1/4th of the current cost. Patience.
‘If you are not selling, [the price change] is a paper change.’
That’s BS too. I’m selling soon (maybe), but even so there are benefits to the “paper” change. My house just appraised at $10k less than the last tax cycle. My taxes are going DOWN this year - yee haw!! Also, we’re running out of room in our current house, so we want to buy a bigger one (or add on to this one). In either case declining prices and an end of the lending mania is good. We can actually get contractors to talk to us now. They used to just blow us off with ridiculously high prices.
still a few morons around paying 15% off prices and thinking they are getting a good deal. wait until next year when they realize they are losing a nice chunk of change if they have to sell.
Richard Courtney, the Greater Nashville Association of Realtors’s president, said in a statement that sales may have been deflated by buyers’ looking for better deals.”
“‘It may be that potential homebuyers are waiting for the market to get better so they can save money, and that’s simply not the case,’ he said.”
Ok so Mr Courtney is playing stupid again……and this time, he appears to be winning
I don’t get these dorks! The sooner the sellers start lowering prices, the sooner sales will start picking up and the sooner they will start collecting commissions again. How hard is that to figure out?
Probably because a lot of those “dorks” bought “investment properties” which are proving to be not very good investments and they don’t want to go deeper underwater. Also a lot are the “big men in town” who gave out similar investment advice to their family, friends, and neighbors and they don’t want to be seen pushing down prices that just last year they were touting.
“‘It may be that potential homebuyers are waiting for the market to get better so they can save money, and that’s simply not the case,’ he said.”
Naw — potential homebuyers are waiting for a tsunami of REO auctions and foreclosure auctions to swamp prices back down to affordable levels.
I for one am waiting until I can afford to buy. At a bit over $100K my salary is not nearly sufficient to service a loan on property purchased in the San Diego market.
We are in the same boat. With 8K homes in SD allegedly at some stage of the foreclosure process, and growing signs the local economy is headed into a housing-sector-led recession, perhaps you will not have to wait forever.
Professor and GH,
Yeah, mee too. I was in SD (PB) 1999 until i bailed in 2003. Hadn’t even found the blogs yet, just did the math, listened to it, and it said ’sell’. Now im seeing homes in Coronado going for $3M. Who the heck is buying this stuff?? I know there is always the someone with more money, but wow, even with sales off 25% M-O-M the prices are crazy.
I have faith that we will see a drop, a big one. Im hoping for 50% off peak…but isnt it just true, the market can stay irrational longer than you can stay solvent.
J
The market can stay irrational longer than you can stay young enough to buy a home.
I too did the math in 2003 and things already looked WAY over the top. What my calculations ignored was the amount of EZ qualalie financing floating around and the fact most were being qualalied based on the teaser rate and not the real amortized payment, allowing the market to distort reality and accelerate upwards. I am still certain once this shakes out we will see 2000 - 2001 prices again, but it will take a long time for sure, perhaps on the order of a decade.
Getting ready to move to SD for job - I hear rents are really down, but on Craigslist they don’t seem to be even reasonable. I’m one person, so I don’t need a McMansion. What’s the real story on SD rents?
are they crazy: I’d go ask your question to the boards on piggington.com. That’s the designated arena for SD real estate discussion and they should point you in the right direction as far as what to expect for neighborhoods and rents.
Pass - thanks for the tip.
Jasper:
Look at the whole comment.
A report from the Tennessean. “Homes sales fell 25 percent in September — their sharpest drop since 1991, but prices edged up slightly, a sign that sellers are continuing to hold out for higher prices despite a dramatically slower market. Richard Courtney, the Greater Nashville Association of Realtors’s president, said in a statement that sales may have been deflated by buyers’ looking for better deals”
Sales fell 25% because prices refuse to fall to a reasonable level.
Also, the 25% fall was yoy, compared to 2006. 2006 prices were down from 2005.
Also, how are they figuring prices? If only higher end homes are selling the median and average price will be higher…but higher than what? YOY, I would assume.
They use median prices. What happens is that the sales of lower end homes dries up, leaving only the more expensive homes moving. It does not mean the actual price of a given home is going up, just the general market trend is favoring the higher priced properties.
THANK YOU!!!
Every month in my metro area the report is “median prices are climbing!” but active listings are at an all time high and the number of sales keep falling.
I tell the people around me the same thing as GH, and all I get are blank stares.
What I see in SW Tenn probably goes for the rest of the state. Prices are “already so low” in most areas (compared to the Coastal South and elsewhere) that the regional RE flaks are crowing that prices can’t come down from a bubble that wasn’t. Foreclosures? We’re a perennial leader in foreclosures, what’s a few more? A few big employers downsizing or leaving, in a market with few major employers to start? Pshaw! A huge, honking, widening gap between wages and home prices isn’t a bubble. Nothing to see here, so git off the fence & buy a house already!
It’s still eerie to me, knowing that what’s reported on this blog as “current”, plays out here in my parallel universe 12-24 months later.
precisely. Good case in point is my parents. They make maybe 80k combined, which for their part of TN is considered very good. They own their home and everything. Out here in CA, it pays your rent and you might buy a car every 5-6 years. The fact of the matter is that all these people that assume that since their home is worth 500k in FL, then homes in TN that are 220k must surely be underpriced. It helps to understand regional economics.
Right on. Recent conversation with a female who had moved from SD to the Central Valley - crowing about what they sold for in early 2006 and then bought for in early 2007, with a difference of 200K. A month later (1)she’s bitching because the job’s here pay so much less than in SD, and ‘I simply won’t work for those ridiculous wages,’ and (2) the new construction neighborhood is selling her floor plan at deep discounts now - approaching 100K less than her price. A very pissed large unfriendly woman. Good thing her husband drinks.
Interesting. My anecdotal evidence seems to indicate that Memphis and western Tennessee is suffering from more of the fallout than middle Tennessee. I would suspect that is from the greater percentage of subprime loans in that area. I could be wrong.
Nashville has had good economic growth of late, having landed several corporate HQ’s in the area, partially because of lower cost of living and partly geographic location. Home construction has been keeping up, but the market is as subject to subprime loans as any. As a resident, I’m hoping the mortgage market mess has cooled down the housing market enough to prevent meltdown here.
There has been a recent push for urban condo living. A huge tower, called Signature Tower, is planned to be one of the tallest residential buildings in the US. Others are or have been built. This market may be long overdue… or it may be a bubble. Living in these condos is really a lifestyle choice, so when the cost of the mortgage eats into that lifestyle, and you can’t eat out or go to the symphony or to Starbucks or a Titans game much anymore (though they’re standing right outside the window) the city will lose its luster. Commutes into the UBC are not as long as in other cities, so a drop in housing prices, along with stiffer lending practices, may pull the rug out from under $500K+ luxury condos.
I bought at the end of 2005 at what was the peak of other markets in a 1960 neighborhood of 1-acre lots and hills. About half the neighbors are homesteaders. During 2006 there were many homes for sale around me, some took over a year to sell. But today, none are on the market. The few within a mile that are hard sells are victims of the fact that buyers no longer jump at whatever is available like a few years ago, now that so much new construction, at lesser prices, has been built a few miles out the highway.
Memphis particularly “suffers” from lower home prices simply because the city has such notoriety for crime. That in many ways is it’s own best defense since my Aunt lives there and I can’t say that I really felt that things were that different from any other larger city.
Darth,
Yep. Amazing isnt it. Just goes to show you, Mr Courtney is right, deals just “arent going to happen” are they :=) Eventually, must sell inventory sells and everyone else can go home (so to speak). People never HAVE to buy a home, regardless of what you mom, wife, sister or the person in the mirror might say; however, there are definitely times when people HAVE to sell.
Mr Courtney, our beloved real estate professional somehow missed the basics……wow, you just cant invent that kind of stupid. Sort of like the guy yesterday with the monster truck and harley trying to scare away buyers because prices were too low. And then?? Plan B?? Mr Courtney and that guy should go have a beer together and argue over the tip.
J
Jasper;
Is everyone here enjoying this whole train wreck as much a you and I??
It’s amazing what people will come up with to rationalize their flawed thinking.
There are few Realtors that, by this time believe what they spew, but if they say it enough, it might come true.
Speaking as a resident of greater Nashville, I can say that the housing boom did not hit us to the extent of other cities. That said, it doesn’t not mean that we will not be affected. You do see a significant slow down in sales - many homes have been sitting there for the summer and now into the fall. I haven’t really seen prices drop much, but I think they have to strictly from the additional restrictions in obtaining a mortgage. However, since there was not a great run up in prices (my house appreciated perhaps 30% in the last seven years, or about 4% a year), the greater Nashville area will likely not feel the backlash like many other places in the country.
I will readily admit that this is probably one of the best places to live right now. Out economy is growing despite the problems, and the fallout will not be as great (he says, crossing his fingers.)
I will readily admit that this is probably one of the best places to live right now.”
I totally agree. Im a TN native and went to Nashville a lot as a kid. It was kind of a dump back then. I visited last year and wow- what a change. It was clean, friendly, and pleasant. Sort of one of those best kept secrets. That and yes- prices are still reasonable.
I feel for the Southeast…
soon the absurdity of nascar will become self-evident
What circus will replace it?
Absurd? American! A sport where a machine does most of the work.
It sure isn’t going to be replaced by bicycle racing.
Lol, you sure hit the nail on the head there!
It sure isn’t going to be replaced by bicycle racing.
Maybe. By the next decade couldn’t we see performance enhancing drugs push bicyclist to 200mph?
But will there be neat crashes and fires, too?
As opposed to what……soccer??
I don’t care how popular it is worldwide……God himself could not have made a game more boring than soccer.
I’ve been to quite a number of London area football matches and what sets our crowd apart from theirs, is…
We are staid, and only get excited when a good play happens, or prompting from an electronic device
They are singing and carrying on all game long
Sometimes the action on the field, rivals that in the stands…
You have obviously never been to a cricket match.
Correct…..so why is it so boring??
I guess because it’s kind of the idea of baseball (very roughly) but without as many bases, so no climactic lead-ups to “bases loaded” situations as in baseball.
After hitting the ball, the batsmen just run between the two wickets. And hit again. And run. Over and over. And the matches can go on and on and on and on. In some cases, like “test matches” it goes for days. Literally.
Of course, it’s more complicated than all that, but we’ll all be sleeping face-down on keyboards if I dare explain more.
not to mention the wnba and arena football
isnt one of those a half time show for the other ?? or visa versa. I can never remember which….
haha.
Careful, that’s treason that is.
Go! Middlesborough!!
Or baseball, when the highlight of the game is when 3 players are simultaneously in motion. Most of the time they just stand around, how exciting!
Soccer is a great sport to watch. In many ways, more exciting than American football. I love both, but what irritates me about the latter is all the commercials. It’s slowed the game down, and the players are not very athletic. Some of those lineman are so fat, there’s no sport in the world that they could play…excpet sumo wrestling.
I think that its hard for people who have never played the game to appreciate it, much like most of the world cabn’t appreciate baseball.
nas-trash. Myself and those I work with laugh at the lunacy that nascar is considered a sport. If nascar is a sport then I’m a belly dancer.
Don’t laugh. Nascar is actually about to eclipse Basketball in popularity. One thing is certain: Nascar is one of the most successful marketing machines out there, and it makes A LOT of money.
Theres no question it’s a money maker. The idea that it is a sport with athletic competition and ethics is way beyond a stretch.
Well in that case, I guess we better debunk Indiecar, the Lemans, Rodes, Horse racing, and other forms of sport that do not require full physical involvement.
Actually, I do have some experience with dirt track racing, and to say that race car driving is not physically challenging is an understatement. I’ve never been as sore as I was after spending several hours behind the wheel of a car with essentially no suspension, interior padding, power steering, or automatic transmission. The constant inertia alone is enough to wear anyone out.
Yes. NASCAR is an Olympic sport with deep roots in Greek culture.
Ok?
Well, if they’d just rub oil on their naked bronzed bodies while piloting their 21st Century chariots… see Carrie Ann below.
LMAO!! Some funny chit happening here!!!
“If nascar is a sport then I’m a belly dancer.”
There’s an image for you.
ugh!! :):):)
Let’s see… a sport that involves driving really fast to get nowhere in particular, mindlessly consuming gasoline or whatever it is they use, and everywhere there can be advertising, there is.
How is Nascar *NOT* the perfect American spectator sport?
The drivers need to be stuffing their faces with fast food while racing.
Don’t forget the obligatory cell phone, jammed in the crook of the neck, so’s you don’t miss those important calls on the road to nowhere.
If they were racing Hummers with cell phones in one hand and fast food in the other, it would be the perfect American sport, but it is pretty close now…
“The hilltop trophy house in Stillwater, built in 2003, was once valued at $1.4 million. But $729,000 will start the bidding on it at a mass foreclosure auction this month.
The house is among 325 bank-repossessed homes from across the Twin Cities headed to the auction block Oct. 20-21 at the Minneapolis Convention Center in one of the largest foreclosure auctions in many years, observers say.
…This year, more than 8,000 homes in the seven-county metro area have gone into foreclosure and been sold in sheriff’s sales - a required step before the house goes back to the lender and becomes real-estate owned, or “REO,” in industry parlance.”
Full article at http://www.twincities.com
“Probably because a lot of those “dorks” bought “investment properties” which are proving to be not very good investments and they don’t want to go deeper underwater. ..”
Ramen eaters are head deep into investment roach hotels.
I’m long ramen short whole foods.
and I’m long some Whole Foods ramen for lunch.
Henry Paulson talking about Housing and foreclosures.
He says, “falling prices are bad”
So having affordability is bad?
To keep prices high and affordability low they pushed this toxic mortgage crap onto these people. Now they want to help them out to prolong the problem, bailout wallstreet, keep affordability out of the hands of the those who live within their means and use tax dollars and “innovative” programs to help those in “need”.
Weren’t “innovative” programs the ones that had all the toxic mortgages to begin with?
If I said what I’d really like to say about cueball Hank, I’d sound like that Denninger guy.
At least he lets everyone know what he’s thinking
Denniger, that is.
For what he’s aying to make sense, you have to know where he’s coming from. All his buddies are bankers, big investors and wall streeters, so that’s where his interests lie. If prices go down, foreclosures go up and the aforementioned crooks start losing capital.
One of the biggest light come on moments in my life was when I read The Rise and Fall of the 3rd Reich. It was several years ago, but even so the paralells to today made me litterally ill for over a week. There were two light come on moments:
1. The MSM knew a decade in advance what was going on in Nazi Germany, but not only didn’t report it, they suppressed the deluge of information coming out so that then J6P had no clue what was going on.
2. Once Germany was overthrown, on of the victors spoke with one of the high ranking vanquished (I paraphrase): Germans are usually so efficient, why is your national organization so screwed up with multiple duplications. It doesn’t make sense. The answer: That’s because you’re looking at things from the wrong perspective. The reason things are organized the way they are was to keep Hitler in power, and keep all his underlings cutting each others throats and not his. It certainly wasn’t organized to maximize war output.
Since then that point of view has served me well. Whenever I hear or read someone saying something contradictory or nonsensical, I put myself in their shoes and try to figure out what their ulterior motive is. Then all the pieces fall into place.
A frustrated prosecutor at the Nurnberg trials once asked ex-Marshall Goering (paraphrased): “…what, are we supposed to believe you were all just “yes” men!”
Goering’s dry response: “Of course, all the “no” men are dead.”
Ooo raaaa! Yea you right!
Roidy
In Dachau, there is (or was 30 yrs ago) a wall that is papered with blow-ups of the New York Times reporting daily deaths in Dachau from 1937 - 1939. I think the exhibit was “The world did not protest”.
Still eaglerly awaiting the Triangle (Raleigh, Durham, Chapel Hill) figures for NC. The eternal optimists bragging about the growth in RTP are getting on my nerves. While some places have decent value, other places like North Raleigh went up many fold in a short time (e.g. 300K - 1.1M in less than a decade). The figures should be on News & Observer in a few days.
I write about local economies and real estate markets around the country. The hottest economies are state capitals, preferably with big public universities and federal employment too. Austin, the Triangle, Nashville. And it states with big problems, the state capitals are less affected than elsewhere — Columbus, Indianapolis.
Other people’s money.
And the ultimate OPM Wash DC.
Still, the group maintains an optimistic message. It’s senior economist, Lawrence Yun, noted in a statement that markets including Austin, Texas, Salt Lake City and Raleigh N.C. are showing price growth and 2007’s home sales will be the fifth-highest on record.
“The speculative excesses have been removed from the market and home sales are returning to fundamentally healthy levels, while prices remain near record highs, reflecting favorable mortgage rates and positive job gains,” Yun said.
Where does Mr. Yun get his economic data? It is not from this planet. Does he not realize that the average consumer is not making the wages and salaries to qualify. He live in the RE bubble.
http://news.yahoo.com/s/ap/20071010/ap_on_bi_ge/housing_forecast_realtors;_ylt=AmRdwgnEcV2yhdkjaieV76us0NUE
Realtors make another downward revision.
According the the NAR, mortgage applications are rising? Does anyone know if the phrase, “mortgage applications,” have any validity as to the numbers actually “approved”. Or does “application” actually mean “approved”. If not, that’s a very misleading phrase. Gee! A misleading statement from the NAR! Tell me it isn’t so!
Anyone can apply for ANYTHING but it’s who gets accepted which matters but the NAR, who gave out these numbers, would obviously like to give the impression that people are buying again where as we already know MOST of those applications are attempts to re-fi and thus escape the higher interest resets. However, it would be interesting to know the number applicants who get accepted. Maybe the NAR will tell us (lol).
Btw, Mr. Magoo has now uttered his latest, and as usual “covering my sagging wrinkled ass,” comment. This time concerning a recession (which we are already in btw). He is quoted as saying, “The chance of a recession are less than 50/50.” Correct me if I’m wrong but isn’t that a “Maybe yes - Maybe no,” comment? Same old b.s from a typical Washington hack.
Application means application.
Some people are filling out multiple applications in the hopes that one of the many will screw up and give them the money.
Richard Courtney, the Greater Nashville Association of Realtors’s president, said in a statement that sales may have been deflated by buyers’ looking for better deals.”
“‘It may be that potential homebuyers are waiting for the market to get better so they can save money, and that’s simply not the case,’ he said.”
—————————————————————————–
HUH!? Is it me or what kind of logic is this? Sales may be down because buyers are looking for better deals but potential homebuyers aren’t waiting for the market to come down so they can save money? Did I miss anything?
First of all, thanks for including information about Nashville. I’ve been watching the Nashville MLS site for about 7-8 months. At the start of my records, the amount of homes for sale was around 16,750 grand total. The amount today is around 26,550. That’s a rather large jump in supply which is unusual because the Nashville area still has a fairly large spread of homes in all price brackets.Interesting because since Nashville is off the radar of the bubblespere, you’ll NEVER hear a bad word written by the press there despite the obvious. You can still get a decent place for around 150k or less there. That said, I do recall just 3-4 years ago there were also lots of homes for 50k or less as well.
Nashville in my opinion almost got carried away with their prices. The median income is roughly 40k. The median home price is pushing 170k, which while sounding cheap to some of us in say- CA and NY- is getting dangerously close to being bubble prices for the area.
That said,I do think the city just barely missed the bubble and has yet to be ” the in” place to go for baby-boomer retirees from up North or the West Coast as NC has. It is a pretty nice, progressively developing city. The fact that it didn’t get caught up in the bubble quagmire will probably be a saving grace for it’s economic development.
“Nashville in my opinion almost got carried away with their prices. The median income is roughly 40k. The median home price is pushing 170k…”
——–
Believe me you have a long way to go before you are “carried away.” In Hawaii, our median income is 50k and median home price is 665k.
Ditto, from the Northeast.
Hence the reason why so many from the the east and west are moving into the southeast.
Hey Matt… Hawaiian KoolAde is very high strength. It induces idiot talk immediately on contact. I know this to be true as my brother is a McMillionare there. “Real estate always goes up in HI”. Just ask him, he’ll tell you.
Well I wish I shared your pessimism but except for the outer islands prices aren’t really dropping. Honolulu (majority of the market) keeps humming along like nothing is wrong. I have been predicting a fall here for several years but it hasn’t come, and actually at this point don’t really care as I will probably move somewhere else.
Matt I don’t know how long you’ve been there but I recall that HI is subject to high levels of market volatility due to japanese speculation. If you look at historical data, HI got wiped out due back in the 1990’s.
Hmmm? What happens in paradise when only millionaires can afford to live there? Do they do each others laundry? Landscape each others homes?
Sorry, the idea just came to mind when I read MattR’s post - an island society populatd only by those who can afford mansions.
Eating up the last of your consumables while living on an island. Ok, who moved Easter Island north?
Hmmm? What happens in paradise when only millionaires can afford to live there?
Like everywhere else, the serfs live in slums.
HI has advantages - no heat/air required, can grow food and ocean full of fish. It’s certainly a place where one can rent and live comfortably if you don’t need high end everything. Of course I speak of outer islands - wouldn’t consider Honolulu - night as well be in LA.
Pullman, WA has a median household income of about $35k, median home price in the low $200k range (roughly 7x household income).
Friends in Liepers Fork, TN are counting on the bust not coming their way as they just put their 4000 sq ft log home up for sale at $1M.
Today’s Wall Street Journal: ” The strip-mall vacancy rate edged up to 7.4% in the third quarter, a 5½-year high.”
The dumb have their nuts trapped in the gradually-tightening vice…
August 2007 was really the turning point as Ben Jones noted yesterday.
Aren’t we all glad we stayed together on this blog supporting each other as we watched insanity of bubbleheads before 2006?
The article points out that strip mall vacancies lead large shopping mall vacancies by up to two years. Strip malls have relatively shorter leases, and hence are more immediately responsive to a downturn.
$400 monthly HOA on fully detached house in Front Royal, Va.
http://www.nytimes.com/2007/10/10/greathomesanddestinations/10gh-what.html
House looks nice — but $400 a month for community pool, tennis courts and a playground? I’m sure it’s nice to have someone plow the streets on the handful of really snowy days per year.
Stroking that check every month would drive me nuts. Surely there’s plenty of other places to live out in that area where you don’t have to feed the HOA gator — and could instead join a comparatively inexpensive golf club out there with that dough?
Testify! HOAs can be a real rip. Sometimes you get people on the board who have plenty of money and impose their wishes on the rest of the homeowners, some of whom may not have as much disposable income. And there you have a definition of a government. And I’ve seen a HOA piss money down the drain, like giving a deposit to a contractor who then promptly disappeared. And then they soaked the association all over again for the same fees. Microcosm for the 9 billion that went poof in Iraq.
Yep - and, little or no incentive for the pool/tennis operation to keep down costs or make money on drinks/sandwiches - since they are already largely subsidized. And I’ll bet the landscaping is not bid out to lowest decent contractor.
I understand garbage and trash collection and fixing some potholes every few years. But if I wasn’t a swimmer/tennis player - I’m just subsidizing the people who are. If you work M-F, and the pool is open from memorial to labor day, you have a maximum of 35 or so days a year you could use the pool IF you went every weekend day and holiday.
I understand the need for a condo fee that pays for some utilities, keeps the elevators running, the roof sound and the sprinklers charged. But an HOA that is mostly used for lifestyle and maintence of common areas — [makes shuddering sound].
I hate swimming in the water. There is no telling what the fish have been doing in there.
Roidy
P.S. Besides, it’s wet.
Agreed. I’m renting in a 100 unit townhouse complex small pool and tennis court. HOA = 400 month x 12 = 4800 x 100 = 480,000 per year. There’s some money falling through the cracks somewhere.
it is not a perishable good
Tell that to the termites.
“it is not a perishable good”
Well, then take a good look at the houses in Pittsburgh and Cleveland. Outside of theft and squatters older houses will fall apart if not taken care of. Technically everything is a perishable good, nothing lasts forever.
Some people must have the resourses to hold out, when i talked to a neighboor and informed him two house had lowered their price in a dramatic fashion he said screw them i’d rather go broke then give a buyer a deal who the heck do they think they are trying to steal a home here, i didn’t say much the guy was hot?
He may get his wish
Reminds a little of the story years back of the guy who refused to join the local fire protection district. Wehn his house caught fire the fire crews set up water curtains to protect the member houses on either side. The guy ran around with cash trying to buy their services - but they refused and let the structure burn to the ground. Agreed that some times stupid things happen to stupid people.
While they kept the member neighbors houses from burning down, they now have the joy of a burnt out hulk next door (hope he had insurance).
Funny how in tax restricted Colorado we have taxpayer funded fire departments. Heck, they have them in Wyoming, the lowest tax per capita state in the country.
The repo man makes a prediction in Atlanta. Anyone want a Porshe?
‘ “The housing market is just taking a toll. It’s an instant snowball effect,” Grosvenor said strolling through the three-acre gravel lot at Speedy Recovery, a Lithonia business he started 14 years ago. He points to a plumber’s black 2007 Corvette. Behind it is a Bobcat. A few yards away under a tree is a white Dodge Ram 3500 pickup voluntarily turned in by the owner of a construction company.
As busy as he is, Grosvenor believes this is just the start of a huge wave of repossessions: cars and home-building equipment amassed during an euphoric period when credit and mortgages flowed freely. “I don’t think it’s really hit yet.” ‘
‘ “The homeowners struggling the most right now are those caught up in the risky subprime loans, McCook said, people who took on more house and more loan than they could afford. They’re looking for a way out, but they’re stuck.” ‘
This is due to the housing, subprime loans, and easy credit:
‘ “They can’t get refinanced,” he said. “You’re sitting in a house paying interest-only or an ARM [adjustable-rate mortgage] and it’s time to renew. The cars are the only thing they’re going to have left. They’ll lose the house first and keep the cars.” ‘
‘ “It’s nothing for me to pull up in the driveway of a half-million-dollar home now,” said Grosvenor. “Maybe it’s the financing and these ARMs … that’s killing people.” ‘
‘ “They’re surviving right now spending savings, living on credit,” Grosvenor said. “But it’s only going to get worse.” ‘
http://www.freerepublic.com/focus/f-news/1891998/posts
confession time…a few months ago the wife and i got in to a heated argument…it wound up like (her)-”Well how do other people afford homes then?”…..guess who walks on water now
You wonder how much of this was caused by manipulative women and weak-willed husbands! If every guy were like the hubby in the “Suzanne Researched It” commercial, that would explain the bubble.