The Hype Is Now On Hold
A report from the Oregonian. “In the hot real estate summer of 2005, the futuristic John Ross tower generated a buzz never seen before in Portland. Within a week, 222 potential buyers plunked down $5,000 or more to reserve their condos in the 31-story tower on the Willamette River. The talk around town was that developers couldn’t build new big-city condos fast enough to keep up with downsizing baby boomers and newcomers. But two years later, the condo boom is over.”
“Today, the John Ross has seen so many canceled purchases that developers actually have fewer buyers — 192 — than they did two years ago.”
“The city has a condo glut, and thousands more are rising out of the ground. In the past six years, developers built 4,042 downtown condos, more than twice the figure from the previous 30 years. Today, developers have nearly 2,114 condos under construction.”
“Two towers already switched from condos to apartments. Other projects were shelved, and construction has stalled on smaller projects from Beaverton to Northeast Portland.”
“Developers of The Civic had deals to sell all but eight condos. But cancellations pushed that figure to 37, a higher rate than normal.”
“Nelda Newton, a senior VP at Wells Fargo…acknowledges that current condo sales can barely keep pace with cancellations. ‘That’s not great,’ said Newton, who led Wells Fargo’s lending for several downtown projects. ‘There’s no great way to slice that, put a positive spin on that.’”
“By early this decade, the city was gripped with full-blown condo fever. Construction cranes could be seen swinging over new towers from the Pearl to the South Waterfront. The condo craze meant developers nearly sold out buildings during construction. They staged lotteries to handle the sales rush.”
“Condos in the early 1990s went for about $120 a square foot. Today, prices sometimes are far above $500. But the hype is now on hold.”
“‘Definitely the brakes just kind of went on,’ said architect John Holmes, lead designer of the 937 tower in the Pearl. ‘The buyers aren’t there.’”
“Recently, developer Bob Ball shocked the industry when he converted the $50 million Wyatt building under construction in the Pearl to rentals. Before the switch, Ball said he’d cut prices and still sold only 53 units, just 21 percent of the total and barely half his goal.”
“‘The problem wasn’t with the Wyatt,’ Ball said. ‘It was the overall change in the market. We just have too much supply on the market.’”
“Bob Scanlan, whose real estate company invested in the John Ross, says sales are so slow in that tower that he expects his returns to be cut in half. The 303-unit building is almost two-thirds sold…far below initial expectations.”
“Even sales that developers thought were in the bag have fallen through in growing numbers. The Civic, the West Burnside Street building marketed to young first-time buyers, got hit by canceled pre-sales. Gerding Edlen Development Co. still has Civic condos to sell. But it is competing with about 20 of its own customers who are reselling just months after they moved in. So many units were for resale that real estate brokers for a time resorted to attaching lockboxes holding house keys to the building’s bike rack.”
“Scott Byer bought an eighth-floor condo for $250,000 and tried to flip it for $310,000. Like other resellers, Byer dropped his price, to $269,900 last week. But he got few lookers, and no offers.”
“Still, real estate insiders remain confident about the long-term future. They say Portland is immune from the downturn that’s infected other big cities. ‘It’s steady as she goes here,’ Scanlan said. ‘There’s no reason to panic.’”
“Dirck Lowe hasn’t found condo sales to be so vibrant. Lowe bought into the John Ross at the peak of the frenzy. In summer 2005, he went online to reserve one of the 20-minute slots with a salesperson. Lowe (and) his wife owned a 3,000-square-foot house in Milwaukie.”
“‘We thought this would be a fun, upscale New Yorkish condo,’ Dirck Lowe said of the 21st-floor unit. He later put down about $20,000 to reserve the 790-square-foot condo.”
“In 2006, Lowe took a new software job and moved to Long Island, N.Y. He closed on the $371,000 condo this summer when construction finished, then put it up for sale at $399,000. He joined a crowded market. Developers already have 1,000 new units for sale just in 16 downtown high-rises, according to Todd Prendergast, one of the city’s top condo sellers.”
“After just two showings and not a single offer, Lowe is considering renting the unit. ‘It’s quiet,’ said his real estate agent, Jonathan Heins. ‘Anybody that says it’s booming, it’s not.’”
The Idaho Business Review. “If there’s one place where a declining housing market might be good news, it’s Valley County. Real estate prices in small towns like Donnelly and Cascade shot up when Tamarack Resort was built and the cities made the abrupt transition from speck-on-a-map status to resort community.”
“Home prices have dropped by about $20,000 to $30,000 in recent months, said Carol Amburgy, the broker and owner of Idaho Mountain Properties.”
“That’s still not enough to serve all the people who need affordable homes in the area, Amburgy said. An average family making $50,000 can afford roughly $174,000 for a home, she said. There are currently 13 listings in Donnelly, Cascade and McCall between $150,000 and $175,000.”
“‘Most of those are old fixer-uppers not on a foundation or they’re old trailers,’ she said.”
“But the price drop frustrates developers like Karl Bonar, who is developing a 65-acre, 128-lot project in Cascade called River Woods. Homes in River Woods will range from $150,000 to $500,000, Bonar said, but the low end of the range is required by the city of Cascade. That means 15 percent of the homes they build must be priced from $150,000 to $170,000.”
“Bonar said he knows of eight affordable units that are sitting on the market. ‘Nobody wants them,’ he said. ‘The builders are sitting there paying for them…. Qualified families aren’t taking them.’”
“Falling home prices have put some market-rate homes in the same price range as the affordable homes developers have to build to meet city code, Bonar said.”
“Some homes priced up to $250,000 have dropped to $200,000 to $210,000, said Michael David, executive director of Valley Adams Regional Housing Authority.”
“But that doesn’t take care of most middle-income people, he said. ‘You have to make $70,000 to afford a $210,000 home.’”
“Moreover, middle-income families are hurting more than ever because the lending environment has tightened, he said. Thanks to stricter mortgage requirements and the overall housing market, many people are hesitating to buy real estate at any price.”
‘Barring a last-minute surge of children registering for school, there are no major changes anticipated this year in Crook County (OR) school enrollment figures. ‘No big surprises, but with the housing slowdown, we’re wondering what the demographics will look like,’ Swisher said. ‘We’ll probably go over that slightly when it’s all said and done…’
‘With an election approaching that could dramatically reduce the scope of what they’re allowed to build, some Measure 37 claimants are trying to beat the clock by building roads, drilling wells and dropping in septic tanks.’
‘Encouraged by land-use lawyers who acknowledge it’s a murky area of the law, the property owners are spending heavily in attempting to show that their subdivisions are well under way — enough so to be ‘vested,’ or exempt from limits contained in Measure 49 on the Nov. 6 ballot.’
Meanwhile, nearby, the hype is still on:
‘Surging multi-family home construction has pushed 2007 Lower Mainland housing starts above last year’s pace for the first time, Canada Mortgage and Housing Corp. reported Tuesday. The federal housing agency said construction on 14,880 Greater Vancouver homes began during the first nine months of 2007.’
‘Adamache noted the Greater Vancouver resale housing market just experienced its third-strongest third quarter ever, which bodes well for future new home construction. ‘We’re still looking at very strong fundamentals propping up demand, so we don’t see any end in sight yet,’ she said.’
‘Vancouver Island Real Estate Board president Jennifer Lynch says consumer confidence remains high in the marketplace. ‘With an increase in inventory across most of the VIREB area, it is helping to satiate the buyer’s demands and creating balanced market conditions,’ she said. ‘Real estate values are continuing to appreciate, homeowner equity is building, and we’re seeing sales volumes consistently rising from the same time last year.’
‘Lynch said she’s pleased with the upbeat comments released in the B.C. Real Estate Association’s fall housing forecast, distributed in late September. ‘Considering the pace of growth and the fact that we have been breaking records over last year on a month by month basis, I’m not surprised to see the prediction that B.C. home sales will surpass 100,000 units for only the second time in history.’
Check out the photo of the condo construction in the Vancouver Sun article.
“Check out the photo of the condo construction in the Vancouver Sun article.”
WOW- this will be like condos in Miami soon. Holy Cow.
Yeah, no end to the boom here yet. Looks like the upcoming 2010 winter Olympics are going to keep it humming or at least propped up ’til then. Almost bought a place in Coquitlam in 1995-6, turns out that was the last time places were affordable.
I am NOT paying $450,000 for a place out in Maple Ridge, I will wait some more.
How did they come up with the name “Crook” County? Is there a neighboring Honest County to balance things?
Actually, I have some good friends (from WA state) with this name. It’s a set of four siblings, and you’re gonna love this: One of them was a church pastor.
The now-retired Pastor Crook is one of my professional mentors and a really sweet guy.
Thanks for the story Slim, very funny.
Slim…I’m rooting for you and your neighbor friend.
Best,
Leigh
“Pastor Crook”
Reminds me of my favorite lawyer’s name…Gary Creep of Escondido, CA.
Richard Nixon used to vacation there as a young boy. The name stuck.
You know, as someone who was a victim of the “leaky condo” fiasco in Victoria, B.C. in the late 90’s, I wish the buyers all the best of luck with their current purchases. I had to pony up $30k on 7 year old construction in special assessments to fix water damage, and ended up losing $60k overall. Even though there have been no changes in the construction industry, I’m sure that won’t happen again. That was sarcasm.
“‘We thought this would be a fun, upscale New Yorkish condo,’ Dirck Lowe said of the 21st-floor unit.”
These will be the famous last words of many who bought faux lofts, converted rental units, new build highrises and other fun condo projects in downtown centers across the country. This includes LA, and while Portland is a bit more “New Yorkish” than some of the places we could talk about, it isn’t Manhattan. Hell, even Manhattan won’t be Manhattan with all the unsold condo crap hanging around.
And the article didn’t mention if his Milwaukee house is sold. How long can he hang on trying to rent in Portland? Talk about spread out.
hows the Madison wi high rise and Lubbock tx tower going
forgot Asheville nc
Actually Ben
Milwaukie is a small community south of Portland metro. Still wouldn’t want to have 2 mortages to pay…
OK, thanks. I didn’t know that.
Funny Ben,
I did not know much about it either, and I live in Oregon. However, I was checking out a web site called “find your spot ” last week, and it seemed to think I was the place was a perfect fit for me. Seems like a pretty nice down, for the burbs.
Milwaukie ( not Milwaukee ) is in Oregon.
Snowman: Guess we both hit that nail at the same time.
Actually, that particular building is in a decidedly UN-NewYorkish area of Portland. It’s in the South Waterfront district, which is a brand new residential area with no amenities. You have to cross some fairly unappealing areas to get to downtown Portland proper. It is no where near the popular NW 23rd and Pearl District neighborhoods.
Of course, they were charging prices in SoWa as if they already had all the amenities of a mature neighborhood, so it’s a pretty good guarantee that there won’t be phenomenal appreciation even in the long-term - that anticipated appreciation was already priced in.
Portland has a pretty good track record in making these kind of neighborhoods work, but this neighborhood is shaky. The buildings are huge (300 units each; the typical Portland condo building is 150-200 units), so they are adding A LOT of supply very quickly.
“Pearl District.” “SoWa.”
What a bunch of Chamber of Commerce rubbish. Neither of those names existed when I grew up in Portland and lived there until 15 years ago.
What is now the “Pearl District” was Portland’s version of Skid Row. And “SoWa” is such a pathetic attempt at “New Yorkishness”, that I don’t know whether to laugh or cry.
I’m with you ChrisO. I moved away from Portland in the mid-80s and the “Pearl District” was homeless central. It’s near the Broadway Bridge, right?
That’s correct. It’s basically the area between West Burnside and the Broadway Bridge, up to about the I-405 freeway. They have spruced it up a lot, to be fair, but I certainly wouldn’t pay the silly asking prices for a condo there.
Yes, heading west on the Broadway bridge you make a right on what used to be the Lovejoy Aqueduct and into condo hell. If they populate all of those condos, traffic will be a nightmare.
“Livable” my a$$. I really don’t get the appeal.
Not to mention the rest of Portland subsidizes the taxes on those luxury condos.
The neighborhood which is now Pearl District was undoubtedly very different 15 years ago, so it’s not inappropriate that it bears a new name.
I live pretty close to Lovejoy near Broadway. Traffic is not a problem for people that live there. I actually find traffic to be MUCH worse out in Hillsboro, where I work, than in Pearl District. As far as liveability goes, I give this neighborhood top marks.
It’s not for everyone, I agree. But then again neither are the ‘burbs.
Annata,
I think my disdain for that area comes from how open it used to feel. I wasn’t opposed to condo buildings such as the Gregory and the ones right near 24 Hr. Fitness. A few here and there wasn’t really a bad thing. As of late, however, it seems like they just keep building more and building bigger creating this huge wall of concrete and glass.
It also feels like most of the buildings are only half full. That’s what I meant by my traffic comment. I realize that many people don’t have cars down there, but I also think there are more vacancies and non-owner situations than we are led to believe. And yet, they just keep building.
With 10th/Hoyt coming online soon and the Metropolitan Presort building being demolished and condo developed soon, it’s all too much. If all those buildings become fully occupied, I can’t imagine how congested it’ll get. As far as I can tell, they want to go all the way to Front Ave.
It’s disappointing, really, that they took a dilapidated area and had great intentions for revitalizing it, but they are going way overboard in my opinion. And how “green” is it really to keep stacking people up down there?
Also referred to as the SoWhat district.
I kept asking where the Pearl district was when I first showed up here. When a friend finally told me it is where REI is, I laughed out loud. I believe in this case the “pearl” has already been cast to the swine.
“Moreover, middle-income families are hurting more than ever because the lending environment has tightened, he said. Thanks to stricter mortgage requirements and the overall housing market, many people are hesitating to buy real estate at any price.”
Sounds as though tighter lending standards are helping middle income families by discouraging them from trying to catch falling knives.
I am sure many are already starting to understand this concept and many more will in the future.
Oh the horrors of renting and being considered low class by the faux upper middle class wannabees. It used to be normal for a family to rent while saving for a house. It was normal to wait 5 to 10 years to expect a house as a young couple. Now everyone expects to buy a house on day one, and a McMansion at that.
We happily sold our home anticipating all this and are renting now. I wonder what class we are in. We are financially comfortable and that should at least make us smart class.
I vote smart!
Renting is the new black.
“It used to be normal for a family to rent while saving for a house. It was normal to wait 5 to 10 years to expect a house as a young couple.”
Try that move now and watch the Fed inflate your savings out from under you.
You would fit in, though, here in Fairbanks, Alaska. Almost 2/3 of households are rentals. (Much turn over in populations, especially with military, oil workers, etc. so very dominated by rentals). What makes recent bubble pricing especially odd (yep, it has hit Anchorage, Juneau and Fairbanks- cheap and sleazy loans slithered across all boundaries…) is that duplexes are still available at non-bubble prices, because people EXPECT those to cash flow.
BTW it appears that Anchorage (which has had a ’seized-up’ housing market and high inventories for awhile) finally went over the edge- 1.1 percent YOY price drop for the median house (Sept.)
“We thought this would be a fun, upscale New Yorkish condo”
How many ex-nyc folk have fanned out across America with this exact, ridiculous, unattainable “lifestyle” mission?
You either live in NYC, or you don’t.
It is clear that he wasn’t really planning on living there, he wanted to flip and make a bundle.
“Dirck Lowe hasn’t found condo sales to be so vibrant. Lowe bought into the John Ross at the peak of the frenzy. In summer 2005, he went online to reserve one of the 20-minute slots with a salesperson. Lowe (and) his wife owned a 3,000-square-foot house in Milwaukie.”
“‘We thought this would be a fun, upscale New Yorkish condo,’ Dirck Lowe said of the 21st-floor unit. He later put down about $20,000 to reserve the 790-square-foot condo.”
“In 2006, Lowe took a new software job and moved to Long Island, N.Y. He closed on the $371,000 condo this summer when construction finished, then put it up for sale at $399,000. He joined a crowded market. Developers already have 1,000 new units for sale just in 16 downtown high-rises, according to Todd Prendergast, one of the city’s top condo sellers.”
“After just two showings and not a single offer, Lowe is considering renting the unit. ”
So now the greedy bast*rd is get roasted. Nobody will buy his condo and there will be hardly anyone to rent it.
Uh-oh. Look at the vocabulary in this passage:
1. Vibrant
2. Fun
3. Upscale
Now, there are three words for my RE hype bingo card.
“It is clear that he wasn’t really planning on living there, he wanted to flip and make a bundle.”
That’s the dirty little secret nobody’s talking about. Portland painted itself as different than SD, LA, FL, and NV by not allowing speculators to buy. I remember them blatantly saying this when the John Ross first was selling. BS!!!!
Gee, I wonder why 20 people are selling their condos at The Civic (the other condo tower highlighted in the story) after only having “lived” in them for a few months.
Got bitter? (I do)
Portland is the Wannabe Capital of America. Goes back as far as I can remember there (the ’70s). Portlander elites are desperate to have you believe that they are every bit as sophisticated as folks in New York or San Francisco. Which, of course, makes them look exactly like the rubes they are.
Muggy, thank you, I agree. I’ve grown so weary of the crowd down there. Of course, I lived down there before the boutiques and parking meters so I’m a little more bitter than most.
One of my fondest memories was being awakened on a Saturday back in 1999 when the rails for the new (at the time) streetcar were being dragged through the streets. Seems like so long ago.
And let’s be clear, when we say NYC, we mean Manhattan.
Below 110… LOL
Amazing how many real estate insiders (read realtorwhores probably) say their area is “immune” from property price declines. Only a short while ago, everyone where I live (southern california/thousand oaks area) were saying, “We’re immune because of CountryWide and Amgen”. Both based in this area and the biggest employers. Well guess what? Prices are dropping. As for CountryWide? Not too healthy and Amgen has been laying off employees AND they are slowly moving out of California. I don’t blame Amgen for that. The tax laden State of California (in debt up to the eyeballs) thinks any business which is making money needs to get milked as much as possible. Property pices are not dropping fast yet but some are already down on average from $700,000 to $625,000.
Hmmmm. Looks like “immunity” from price declines wear off after a few months….off like flu shots.
There’s a pretty substantial move in the biotech industry right now to start offshoring research and production to China.
Wave goodbye to the high pay biotech jobs.
Forget high paying biotech jobs. Even Wal-Mart isn’t hiring at the rate it used to before. I was told this by a regional manager, she has been with Wal-mart for >10 years and says ‘tough times’ are definitely ahead.
California prices were crazy so they will have a double whammy of price declines coupled with high wage job loss. Should be interesting at the bottom in California, last time in the mid 90’s it was completely dead in real estate.
mid 90’s ?
Early 90’s…1991-92…We started comming out around 1995
“Still, real estate insiders remain confident about the long-term future. They say Portland is immune from the downturn that’s infected other big cities. ‘It’s steady as she goes here,’ Scanlan said. ‘There’s no reason to panic.’”
hmmmmm, I know I have heard that line somewhere…..
‘It’s steady as she goes here,’ Scanlan said. ‘There’s no reason to panic.’”
I got it! The movie Titanic!!!!!!!
Dude needs to realize the “but it’s different here” line is soooo 2005.
No, it isn’t. We HBB-ers are going to co-opt it for our local gatherings. Like the one I’ve been trying to put together here in Tucson.
Anyone care to join me? We’ll meet at the “It’s Different Here sign in some cool eatery/drinkery.
Slim….I have been trying to get to Tucson for the last couple of years…Maybe this spring…
Sorta the other side of ‘real estate is local’. Every little burg and every big city will solve its own problems now: no big spender specuvestors with wads of cash and a stupid ‘investment plan’ to bail them out. No, what you got - too many condos, prices out of sight, no buyers and a screwed tax base - is your own to deal with good or bad. All real estate is local, and most of it sucks.
“By early this decade, the city was gripped with full-blown condo fever. Construction cranes could be seen swinging over new towers from the Pearl to the South Waterfront. The condo craze meant developers nearly sold out buildings during construction. They staged lotteries to handle the sales rush.”
This is the exact phenomena seen in Austin, TX. Right now, we have over 3000 condos in construction and another 3500 in permitting. It has been pointed out that downtown condos in other cities have been somewhat of a flop. Sure, a few sold as primary residences but a lot more went to speculators looking for a quick flip.
However, everyone quoted in the newspaper has said “Austin is different - we are in a unique real estate market.”
I grew up in Portland and am familiar with Austin. They remind me a LOT of each other in more ways than one, both good and bad. Except that Portland has nothing like Sixth Street in Austin. But of course, Austin doesn’t have skiing or beaches an hour away, either.
Once the specuvestors are out of the market, who the %$@#! is going to buy these condos?!? I live in Los Angeles now but lived in Austin from 88-95. There is *nothing* but empty land surrounding Austin, and tons of developments being built. The houses near downtown that used to be in what was a crap area are getting mcmansioned and offered at Los Angeles prices. Just nuts. If a nice house is $150k, why would someone spend 200-500 on a condo?!?
I partied HARD on Sixth Street as an intern in college. I worked in San Angelo for a summer and would travel to the big cities on the weekends. Definitely a fun place. Still have the liberated shot glasses to prove it.
Austin doesn’t have skiing or beaches an hour away ??
Oregon coast is as good as it gets IMO…
Funny you should say that… When I was in Austin a few years ago, I thought it couldn’t be more different from Portland!
Roger, do you know whatever happened to the big building that was abandoned near I-35?
If I remember correctly, it was an Intel project, perhaps circa 1999-2000ish.
Did it ever go commercial or was it converted to condo/res?
Steel frame from Intel building was recently torn down after sitting there for years. It will be replaced by a Federal Courthouse.
This could describe almost any mid-size city in America. Hello, condos are a niche dwelling for a reason. When apartment rent and SFH principle+interest are roughly the same, there is little inherent demand for condos. Add in HOA, and an SFH ought to be cheaper. The only barrier was that quaint down payment.
Why would a SFH *not* be cheaper? The land is cheaper, as well as the construction (wood frame vs. concrete & steel).
People buy downtown condos rather than rent apartments for the same reason that people buy houses rather than rent them. But no one buys a downtown condo because it was cheaper than a SFH in the ‘burbs. That’s not really a decision driven by price.
A phenominally arrogant builder/developer here in Pullman, WA thought it would be a great idea to build $300k luxury condos on the edge of campus in the midst of cheap student apartments, dive bars and fraternities. So far only 2 of 12 have sold and those two were both listed “for rent” before the building was even complete. Looks like we have one bankrupt development and two failed flips coming right up!
Expensive property in Pullman really cracks me up. Whenever I visit (relatives on Military Hill), I can either take a fairly easy walk to the University, downtown, or to the edge of the infinite expanses of wheat and lentil fields. Talk about a place that isn’t running out of land. Do farmhouses a few minutes drive out of town still sell for low prices? That would make $300k condos even more ridiculous.
Actually, falling down farm house with a few acres are listing for hundreds of thousands…
Listing, but not really selling as far as I can tell…
So, ‘is the euphoria out of the market’ or is this a ‘backlash from excess, during the boom?’
This is only ‘euphoria out of the market’.
The backlash hasn’t begun yet because the buyers are on an extended holiday. (When the time is ripe, this blog will signal the green light for them to return.)
When buyers do return, watch out, there will be copious blood on the streets. Blood of the sellers. It will be fun!
“…developers built 4,042 downtown condos, more than twice the figure from the previous 30 years.”
“Still, real estate insiders remain confident about the long-term future. They say Portland is immune from the downturn that’s infected other big cities.”
whiskey tango foxtrot!?!?!?!?!?!?
“In the past five years, if you called a mortgage broker when you were about to buy or refinance a house you may have been told, “We can check with lots of lenders so you’ll get the best price.” Because you are a careful shopper, this sounds good - one-stop comparative shopping. The broker most likely didn’t add, “I’ll take a bribe to steer you to the loan that is more expensive for you and more profitable for the lender.”
The costs are staggering: Fannie Mae estimates that 50 percent of those who were sold ruinous subprime mortgages would have qualified for prime-rate loans. The next time you read that subprime mortgages permitted people to purchase homes they couldn’t afford, stop to consider whether those individuals could have afforded the house if they had gotten the mortgage that they qualified for, instead of one inflated by a yield spread premium. How many families are losing their homes because the difference between paying 6.5 percent and 9.5 percent for the same loan? Or 8 percent and 15.5 percent?
…High on the list is my personal favorite proposed changes: the mortgage broker has to tell if he took a bribe, how much the bribe was for, and how much it cost the borrower. That’s a good start.”
http://tinyurl.com/2d8cgu
The author of the above article was then bombarded with hate email from angry mortgage brokers defending their practice of profiting at the borrower’s expense:
http://www.creditslips.org/creditslips/2007/10/hate-mail.html
I guess those angry brokers have nothing else to do nowadays. Let ‘em vent. It won’t help them sell their crap paper on the secondary market.
“the mortgage broker has to tell if he took a bribe, how much the bribe was for, and how much it cost the borrower.”
When I became a homedebtor in 2005 in Portland Oregon my brokerwhore disclosed the yield spread premium but only after close of escrow. Their good faith estimate stated that there could be a yield spread premium, and that I would find out after close of escrow. As I recall the pig got an extra .625 I think, on a $212K loan - around $4,500 or so. But I got a great rate 5.75% fixed rate 30 year pmts @ 1,237 per month. It was a great time to take on debt, as long as you are able to handle it.
Got diversified assets?
Steeper Decline in Home Sales Predicted
The eighth straight downwardly revised forecast from the National Association of Realtors calls for U.S. existing home sales to be 10.8 percent below last year as housing market woes persist. Sales of new homes, meanwhile, are expected to finish 2007 at the lowest level in a decade.
http://biz.yahoo.com/ap/071010/housing_forecast_realtors.html
“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.
this remark screams of desperation, i think he is trying to turn the tide in the msm. lol good try!
Yun is a troll. MSM should ignore him.
“They say Portland is immune from the downturn that’s infected other big cities. Job growth remains strong, and people continue to move to the area, providing demand for urban living”
What they don’t mention is how many people “continuing to move to the area” are equity locusts from California. My guess is upwards of 50%.
“More recently, developer Bob Ball shocked the industry when he converted the $50 million Wyatt building under construction in the Pearl to rentals.”
This was a BIG deal. This is was a heavily marketed building by a popular developer in a prime location, not one of those pseudo-luxo towers in a questionable neighborhood All of Ball’s previous projects have been unqualified commercial successes.
And unlike other condo towers that switched to rentals during construction, this building was almost finished when the decision was made. There was nothing strategic or anticipatory about this decision; he simply didn’t have enough sales.
There was nothing strategic or anticipatory about this decision; he simply didn’t have enough sales ??
But obviously has the horse power to take a far lower rate of return as an apartment rental than a saleable unit…
No, he has reportedlly sold his interest in the project. Actually, the original Oregonian article a few weeks ago made it sound like this was the decsion of his financial backers, not his own. I would not be surprised if it turned out that they essentially “repossessed” the project from him.
“Moreover, middle-income families are hurting more than ever because the lending environment has tightened, he said. Thanks to stricter mortgage requirements and the overall housing market, many people are hesitating to buy real estate at any price.”
..unlike giving people any amount they asked for whether or not they had any chance of paying it back. Just like the “housing advocates” that help get people into “affordable housing”.
In the long run, those on the margin that are denied now, will end up better off in the long run. I’ve read a few articles of late, where those renting were just fine while renting, then became buyers, now they are screwed. The right time to buy is when the buyer has excess liquidity, NOT when the credit markets have it.
“‘Definitely the brakes just kind of went on,’ said architect John Holmes, lead designer of the 937 tower in the Pearl. ‘The buyers aren’t there.’”
You just can’t make this stuff up. A guy named John Holmes designing a huge condo tower. He should get together with developer Bob Ball who is named later in the story. The headline could read “John Holmes erects towering structure with Ball’s backing”.
OMG…I was sipping water…big mistake–be back shortly, need new shirt.
Thanks!
Leigh : )
Forget the shirt…..we don’t mind.
Funny…
Bet he really blew a wad on it.
I’m surprised that you didn’t work “karl Bonar”, the other developer mentioned in that compilation, into your post.
i can see it now. Mozilo is jumping on this bandwagon to try to help his image. lol! good luck!
Countrywide Joins New National HOPE NOW Alliance
http://biz.yahoo.com/prnews/071010/law121.html?.v=49
HOPE NOW - can’t get much more Orwellian than that. Although “Hope” is hardly a confidence inspiring word to be using as part of a confidence game.
I’m guessing here, but I figure these folks are about to be screwed again. Instead of just leaving the keys and walking away, CFC will “help” some small percentage to stay in their homes. Is this really in the FBs best interest? As prices spiral downwards, they are spending everything they have left on a depreciating asset…what’s the point? They’re better off walking and renting.
Of course, if these workouts are loans that CFC was not able to offload, then it’s all money still coming in to Tan Man and Crew.
And if they are mortgages that CFC sold, they can keep these FBs paying long enough so that CFC isn’t forced to buy them back when they default.
Truly, HOPE NOW is Orwellian.
Speaking of “It’s different here.” Here is an Atlanta realtwhore’s latest pitch….
Hello friends!
(You might want to print this one out- we’ve got a lot to cover!)
We hope this email finds all of you doing wonderfully! Finally….cooler weather and football season is here- mine and —n’s favorite time of year!
This email will hopefully answer a lot of the questions you may have about what’s really going on in the Atlanta real estate market!
The most important point I hope you take from this email is that real estate is VERY local. The news/media’s attempt to make blanket statements about the state of the real estate market is like them trying to forecast the weather as being 90 degrees for the whole country. Every area is different. What California, Florida and Arizona (to name a few) are experiencing in negative appreciation is not being felt here in Atlanta. Business 2.0 along with Moody’s Economy.com has named Atlanta as one of 10 cities that are bucking the national housing trend. They are forecasting that Atlanta will be returning to normal appreciation levels by the beginning of 2008. Here’s what we’re seeing:
The Atlanta real estate market entered a “correction” phase in the 4th quarter of 2006. Interest rates rose slightly during this time which affected the borrowing power of some buyers. The most severely impacted market were new homes priced below $200,000.
There IS good news! Houses are still selling at increased prices compared to previous years, indicating a sound overall market- however, increased days on market, lower sales price to list price ratio and a higher percentage of transactions requiring a price reduction indicate that pricing at the current market is the key- meaning Aaron and I are only going back 6 months when researching a home’s value- to selling in the least amount of time at the best price. We monitor the market on a weekly basis now-sometimes even daily-so we can keep ourselves and our sellers/buyers up to date on our fluctuating conditions. In addition to using the newest comparable sales to determine a truer value of our listings we’re also advising our sellers who have vacant homes to hire a Staging Company. This is a growing trend, especially in-town. A vacant home just about HAS to be staged like a model home to sell quickly now. Our average days on market for a staged listings is only 16 days as compared to unstaged listings taking up to 52 days to sell.
The biggest concern is the high number of homes on the market. This poses the greatest problem in the new construction market who’s inventory is up 53%. New construction prices have increased greater than resale’s, making the latter more attractive this year and causing the new homes to sit. Until both new construction and resale home inventories return to more normal rates sellers putting their homes on the market will have to be very realistic with what they list at. If Seller’s overprice their homes it will typically take 3 X longer to sell. This results in higher carrying costs, the inconvenience of keeping their home in “show” condition every day and delays in finding their new home. The days of overpricing and waiting for a buyer to make an offer are gone for now.
More good news! Although it’s taking longer to sell a home the difference are quite small. The price points that have experienced the least changes are homes under $200,000 and above $500,000.
Here’s some great news! The average sales price of an Atlanta home has risen 4.3% over this time last year. Many of the California, Florida and Arizona markets are experiencing negative appreciation. Not us- we’re still holding strong!
In most price points sales are down an average of 9.5% compared to 2006. The hardest hit price point has been new homes below $200,000. However, there is a huge price point still seeing an increase in # of sales- that would be the $500,000+ market where sales are up 7.7%.
The price range of $300,000-499,000 has experienced the highest # of sales in all in town markets except for Buckhead, as well as Alpharetta, Roswell and Mableton. If I were a builder or investor I’d keep an eye on this price point since this is where the most activity is happening.
There are fewer buyers now due to the tightened restrictions on credit scores and down payments. Home ownership is once again becoming a privilege. But with an entire buyer market wiped out where are those “buyers” going? Well, that brings me to more good news!
The renter pool is growing and causing a supply and demand market shift. For the past few years rents have stayed very steady, with many landlords losing money each month. This was because so many renters were able to buy…and did so. There are going to be more renters renewing leases and more coming into the market. If you’re currently renting look for your monthly rent payment to start rising upon your lease expiration. Bad news for renters- great news for investors. BUY A RENTAL HOME NOW! Build your portfolio while prices are low and demand is high. We can help you with that. Contact us if you’re interested in more information.
To summarize- we’re definitely in a buyer’s marker, however homes are still selling. Some areas/price ranges are selling less than last year. Some are selling more. Expect to see your current home appreciate this year anywhere from 1-4%. Now’s not the time to test the market. If you’re putting your home up for sale it must be priced competitively, show like a model home and have an aggressive marketing strategy. Be prepared to reassess your market position every 2 weeks for the next 6-12 months. Expect to pay some or all of the Buyer’s closing costs.
If you’re a buyer this is the perfect time to buy! Rates are still very low, there’s a good bit of inventory and motivated sellers. Expect to negotiate for some or all of your closing costs to be paid. Have your financing in place before making an offer. And have fun shopping! Now’s not the time to wait. Rates will continue to rise and many sellers who haven’t sold by mid November will pull their homes off the market OR not be as negotiable if they’re expected to move through the holidays. NOW is the time to buy!
Atlanta’s economy is doing better than expected due to our high rate of job growth. Young professionals flock here from surrounding states….we have Hartsfield Jackson International Airport (the busiest in the world….and several Fortune 500 companies call us home. This is a great place to call home!
Want detailed information about your home or neighborhood? We have it! Just let us know and we’ll get it to you!
Where do we start? This is one of the most target-rich RE messages to hit this board in a long time. I’ve got my virtual .38. Here I go…
Blam! BLAM!
Ah, that was satisfying… Anyone want to try with a .357? Or with something in the way of a rifle?
Skip the preliminaries. Go for the nuke.
I pretty sure Leigh can help!
I’ll help! Just one well placed bullet though…bullets are going up! (Chuckles)
Wouldn’t it be easier to just go out and get a real job?
How about an email addy so we can flame her???
and the brainwashing just goes on and on and on, next thing you know they will be targeting school children. i wonder how many people are falling for that crap?
This realtor has gotta be starving if he/she’s got the time to right a novel on Atlanta real estate.
Exactly EX….
Could! I! Possibly! Use! A! Few! More! of! these!!!!!!!!!!!!!!!
Just when you think the bubble is popping in Idaho: “More than 100 people watched developer SunCor explain to the Eagle City Council its conceptual plan for Avimor’s about 12,211 houses on 23,000 acres in the Foothills — just over 1 house on every 2 acres, in three counties.”
http://www.idahostatesman.com/newsupdates/story/180089.html
SunCor ??
Is that the same SunCor thats been developing in Arizona ??
Yup- you should look at the reader comments. Locals are very opposed to this project- telling SunCor to go back to AZ and Cali.
There are currently 13 listings in Donnelly, Cascade and McCall between $150,000 and $175,000. ‘Most of those are old fixer-uppers not on a foundation or they’re old trailers,’ she said.
$175K for an old trailer in podunk Idaho?
Brings up a very interesting point. Location. Many of these boom period properties were built in areas that only a fool would want to live in. Two examples:
In the early 80’s I bought a house on 2 acres in Fallbrook, Ca. That’s in North San Diego County. It cost $125,000. Nice house. a few hundred lime tress. A dozen avacado trees, etc. I was born and raised and worked in the big city (London) and I’ve lived in other big cities all my life. Paris, Barcelona, Turin, New York and Los Angeles. However, I decided I was getting older and figured it would be nice to have a place in the country so I moved to Fallbrook, ca. which is about a 2 hours drive from Los Angeles. Nice town. Small (then) which was once almost totally owned by the guy who directed, “It’s A Wonderful Life.” Frank Capra. He bought hundreds of acres there in the 1930’s. Probably for $5 an acre! Anyway, I moved to Fallbrook. Took my 3 dogs with me (I was single at the time) and took up residence. It was one of the most boring experiences of my life. Watching the avacados, lemons and oranges grow doesn’t exactly fill the air with electricity or exercise the brain. I lasted 9 months before I decided I was going to die of boredom if I had to live there. That isn’t to say it isn’t a nice little town….but living in an area with miles of tacky sh*t boxs with nothing going on ain’t for me. Of course, the town of Temecula is not far away from Fallbrook where they have been building hundreds, if not thousands, of properties. There is NOTHING there but tacky sh*t boxes. Many are now in foreclosure and many more on the edge of foreclosure. Btw, there is NO work for the majority in some of these newly built up areas. They’ve built these massive areas of track houses - but there are no good paying jobs.
In Fallbrook, there were lots of illegals swarming up from the border which is about 1 hour away. Maybe those FB’s who bought those crappy tract houses can take the jobs the illegals were doing? Picking oranges, lemons and avacados. Pay is about $6 an hour. No benefits.
Example #2. A very close friend has just retired from a government job. As a side note, the government retirement pension she is getting at age 55 is incredible, bordering on ridiculous. It’s no wonder the USA government is bankrupt if they (we) have to support all these retired Federal employees with retirement pensions which are more than the average non-government worker makes . She was born and raised in Texas so she wanted to retire to Texas. She bought a big chunk of land out in the boonies with the intention of building a manufactured home. Now, 3 months later, she’s pulling her hair out with boredom and trying to figure out how she can get out of buying the manufactured home she’s contracted to buy. She’s living in a 30′ trailer at the moment but she says even if she swaps that for better living quarters, she STILL doesn’t want to live in a place where you can watch the grass grow.
So there it is. Another problem which many do not take into consideration. That nice, clean little stucco house they rushed to buy in Buttf*ck, ca. or Florida or many other places, because they wanted to get onboard the American Dream, might turn out to be the most boring place on earth. I suppose they can always start drink more than usual - which I was starting to do in Fallbrook - to drown the boredom.
“…It was one of the most boring experiences of my life. Watching the avacados, lemons and oranges grow doesn’t exactly fill the air with electricity or exercise the brain.”
Hey Mike,
Gee, what a bummer…you really should have done some kind of personal experiment on self-reflection before you bought…All I can say is that you certainly aren’t the type that seems to thrive on solitude…I’ve written some of my most subtle poetry watching things like avacados, lemons and oranges grow…in fact, it was a haunting lemon tree that gave me the insight that the color yellow is derived from the color grey. Well, come to think of it..I’m influenced by Looney Tunes, so what the heck do I know anyway.
Mike,
Thanks for the post. I live/work Manhattan, which I do like. But I dream of a tiny house on an acre or two in Maine, Vt. or NH. It’s what I do on vacation for a few weeks…but maybe it’s worth considering whether it work work full time. Many thanks.
Yup- people are investing (gambling) in the area with the hopes that it will become the next Aspen or Jackson, WY. The area is quite beautiful, but accessibility is an issue as the road from Boise is a windy two lane death trap.
But that doesn’t take care of most middle-income people, he said. ‘You have to make $70,000 to afford a $210,000 home.’”
What a bright idea…. mentioning affordability and incomes. Something new after saddling a bunch of debt dopes in houses they could never make the payments on
i hear they have a great airport in atlanta though
No beach in Austin? I beg to differ!
http://www.hippiehollow.com/
Good one Chic…
* Pedestrian / Bicycle Annual
$25.00 plus $2.00 surcharge
(With ID and permit when entering the park )
Wow, what a deal…don’t think I’ll ever make it to Tay-hos… but if I do…I’ll be drinking a good single malt Scotch…eating some of Neil’s “All Natural Hot Buttered Derivative Popcorn” somewhere in this place…Well, could be I’m “revealing” too much about myself… once again. Hey, I guess if your bashful…you could hide behind a 20# trout!
The nudist colony I’ve been to - believe me, they don’t look like that………
Thanks, my eyeballs are bleeding. Why are most nudists people I’d prefer NOT to see naked?
“because, some look in the mirror…and see…what they… want to see.”
Just thought I’d post a progress report on my tracking in Utah.
Provo 84604, had reached a record high listings for 4+3 SFR of 116 on 9/7/07 and has since backed off to 102, but that count is still 148% increase over same date last year. For those people who say the Provo area is different, it also looks like wishing prices are most definitely headed south. The median wishing price has reached a low 22.2% below the record of 739K, set 3/6/07. By my math that’s an average decline of 3% per month on the wishing price. The fact that inventory has increased 47% over the same period kind of puts the whole thing into perspective. Significant price reductions are still failing to move inventory.
Cedar City as a whole has seen median wishing price for 4+3 drop back 18% from the record of 439K to 360K. Inventory is up 39% YOY but has backed off 8.6 % from the high point set 8/16/07. In all it looks like a healthy downtrend is gaining momentum.
360K for an ordinary house in Cedar City? Its a podunky town (population 20,000) out in the middle of nowhere. There are no high paying jobs (according to Wikipedia the median HH income is 32K). Jeepers, it makes Fort Collins look like a bargain (twice the median HH income and lower house prices).
I was thinking the same thing. That shows how out of wack everything is. A $360k house AFTER 18% depreciation is still 10x income! Cedar City must be locust magnet. Jeepers, creepers…
I agree wholeheartedly. The highest priced home in the cedar city area is currently asking $2,697,000. There must be some powerful loco weed in those parts, or just california equity pioneers returning to the old country. That Cali money has dried up, and the helockers amongh them will soon find out that in Iron county a good paying job is about 20K/annum.
Hopefully, Utah can get back to its rightful place in leading the nation in bankruptcies as it was a few years ago. I highly doubt the good folks of the predominant religion learned their lessons of the past. Fortunately, it looks like the recorded documents are online so that the nieghbors can see how these folks really “afford” all the kids, suburbans and large houses.
Ron Paul on msnbc right now
Thats cut and paste porno Tx
Update from Lake Oswego: there are many, many homes for sale in the First Addition. This is an old neighborhood which has been seeing a LOT of infill this past year. It seems that every little scrap of a lot got a new, very large McHome built on it, probably close to $800K.
Amazingly, a lot of these are now frozen in various stages of building. I see ‘For Sale’ signs everywhere. Many older homes are obviously empty. The yard are unkempt, you can clearly see they’ve been empty for a while. There is a lock box on the front door. Sometimes 4 or 5 houses, in a row are for sale.
Interestingly, the NEW projects are just standing there. There are 4 plywood walls standing there, but the building seems to have stopped. The rains are going to start soon, and these houses will be damaged quickly.
Condo Project.
Another condo project seems to have frozen in its tracks. This one is in Lake Grove. Builder: Legend Homes. We think they are trying to get more financing so they can continue with the building. The problem is: by the time they’re done, the real estate market will have collapsed completely. (after they tore down a beautiful forest + old homestead which we all loved to go walking in).
Bad timing, Fools.
“Real estate prices in small towns like Donnelly and Cascade shot up when Tamarack Resort was built and the cities made the abrupt transition from speck-on-a-map status to resort community.”
With a little help from high energy prices and the destruction of the American credit bubble, here’s the game plan for small towns in the Pacific Northwest:
Transition from speck-on-a-map status to resort community to speck-on-a-map status .