October 11, 2007

A Literal Reversal Of Fortune

A report from the Arizona Republic. “Median home prices have dropped in more than half of all metropolitan Phoenix’s ZIP codes, according to a Republic analysis of new- and used-home sales from the data-research firm Information Market. Hardest hit were newer Valley fringe communities from Pinal County to Peoria and even some closer in, where home builders reduced prices.”

“Several of the newer suburbs farther out such as Queen Creek, Surprise and Avondale posted double-digit drops in median home prices.”

“Kathy and Dennis Rowedder are trying to sell their north Phoenix home in the 85050 ZIP code. The couple recently closed on a new house in Peoria and got a $30,000 concession on it because they haven’t yet sold their existing home.”

“So far, the couple have lowered their price $40,000 to $360,000.”

“‘I thought when we listed it at the beginning of August it was priced really well. I buried a statue of St. Joseph in our front yard for luck,’ Kathy Rowedder said. ‘But after we lowered our price, I went out and dug it up, cleaned it off and brought it back in the house.’”

“Overall home prices in 85050 have fallen almost 24 percent this year, the biggest drop of any Valley neighborhood. But several new, less expensive homes recently went up in the area, which pulled down the overall price. The median new-home price in 85050 dropped 60 percent this year to $298,271.”

“‘The bad time to buy a home was two years ago; now sellers are motivated, and there are plenty of houses to choose from,’ said Steve Walsh, president of Scottsdale-based Scout Mortgage. ‘Buyers just need to be careful and not get into loans they don’t understand that could cost them a lot more in a few years.’”

“Based on the record 55,000-plus homes for sale across metropolitan Phoenix, Brett Barry of Realty Executives estimates there is a 12 to 14 month supply of homes on the market.”

“‘That means homeowners have a 1-in-12 chance to sell their home in a month,’ Barry said. ‘Those odds aren’t good in Vegas, and they aren’t good for the housing market.’”

“The drop in home prices is bad news for homeowners who bought at the peak and are now finding their homes are worth less than what they paid. Market watchers say those people should price to sell now if they have to because prices are likely to continue to drop.”

“‘We are going to have to go through this pain to get back to a healthy market,’ said. ‘Sellers tell me their bottom line on a sales price, and I tell them to forget it because we haven’t seen the bottom of the market yet.’”

From KTAR in Arizona. “As homebuilders ratchet up sales incentives in the current depressed market, some housing experts are questioning their methods.”

“Free landscaping and kitchen upgrades used to be the norm. Now, one builder is offering a Lexus. Arizona State University’s Tony Sanders said that distorts the actual sales price.”

“‘It’s almost like giving away toasters to open a savings account,’ said Sanders. ‘We want to see the real rate, we want to see the real prices. And I think most educated consumers will get by that very quickly.’”

“Tim Wilson of Wachovia goes further. He said the sales contract and appraisal should be adjusted to determine the accurate value of the properly. ‘That should be documented in the contract, and the appraisal should be adjusted to determine the accurate value of the property,’ said Wilson.”

“John Foltz, president of Realty Executives, agreed, saying incentives worth tens of thousands could distort market values.”

“‘To my mind, it’s kind of an artificial way to sell a home for less money, but not have the public records show it was sold for less money,’ Foltz said. ‘I understand why it’s done — to sort of support neighborhood values and so on. On the other hand, prices are what they are and transparency’s a good idea. So, it’s not something I’m really in favor of, but I know it does happen.’”

From Builder Online on Nevada. “According to RealtyTrac…foreclosure rates are up 99 percent from September 2006 and Nevada continues to hold the nation’s highest rate of foreclosures.”

“For September, Nevada is reporting one foreclosure for every 185 households and 5,504 foreclosure filings, which is up 187 percent from September 2006. The executive director of the Southern Nevada Home Builders Association, Irene Porter, says certain factors are being ignored in Nevada’s nine-month reign atop the nation’s foreclosure list.”

“‘It’s bad but it is not as huge a number as it appears to be because you have to take into consideration the amount of housing we’ve built in the last few years,’ Porter told BUILDER Online. ‘It is part of the nationwide problem we have as a result of [bad] mortgages and investor buying. A good number of [Nevada's] foreclosures are related to the investor buy.’”

The Daily Herald from Utah. “Wasatch Front Realtors are basking in the bright spot. That’s because the state is a market unto itself.”

“‘We didn’t participate in the housing boom when the rest of the country was, we never do,’ said Jim Bringhurst, president of the Utah Association of Realtors.”

“Instead, the state created its own mini-boom on the back of a blistering economy and new move-ins from more expensive areas like California, Nevada and Arizona.”

“‘They want to sell on the high side and come here and get a better quality of life,’ Bringhurst said. ‘Our houses are a bargain compared to the markets they’re coming from.’”

“Utah’s market will slow down, but because it’s not dependent on the rest of the nation, a softer landing is more likely.”

“That landing may be premature, though, says Bringhurst, because Utah homeowners are paying attention to national trends instead of local trends, such as low unemployment, low interest rates and a lack of a speculative market.”

The Deseret News from Utah. “The uncertainty surrounding Utah’s topsy-turvy housing market is revealed in the responses to a recent Deseret Morning News/KSL TV survey conducted by Dan Jones and Associates.”

“‘Right now it is definitely ‘change time.’ I personally believe (the market) is going to get back to the days we had back in the ’80s and ’90s a little bit,’ explained Dave Seiler, an area Realtor.”

“He described circumstances in which home prices have been artificially inflated due to out-of-state investors and speculators flocking to Utah, triggering a steep increase in property values for a short time — followed thereafter by a sharp decline.”

“But Kelly Matthews, economist for Wells Fargo, sees Utah’s current home market as more stable than other states that saw rapid appreciation and are currently experiencing a literal reversal of fortune. ‘Our Utah situation has not deteriorated nearly as much as some of the other places,’ Matthews said.”

“Matthews said new home construction fell 20 percent during the period August 2006 to August 2007, while selling prices for homes increased in the double digits for the same period.”

“‘Most of the adjustment thus far has been made in a reduction in construction (of new homes) rather than any cut in pricing,’ Matthews said.”

“Back in the trenches, Seiler says the evidence is clear.”

“‘When you look at how many investors were in our market two years ago — even versus last year — the problem is that some of them had done well,’ resulting in a number of houses being rehabbed and ‘flipped’ for a nice profit, he said.”

“‘Everybody had gone to classes, and all these investment seminars were on every corner with signs saying ‘Investor needs apprentice.’ Everywhere you went around, people were thinking they were going to make big money in real estate. If you look at the investors who bought last, they’re hurting right now,’ he added.”

“He said currently there is a high volume of high-end properties that are not selling, creating a glut of homes in the Utah market.”

“‘So you get all these (late) investors in there who now own properties that are sitting vacant, and they’re having to start doing whatever they can because it’s starting to eat their profits away if they had any,’ Seiler said.”

“Seiler is concerned Utah may find itself in similar situations to other states that are experiencing serious housing price corrections.”

“‘Right now the buyers are sitting on their hands doing nothing,’ he said. ‘Those interested in purchasing homes already have the sense the market is changing. Many prospective buyers have recognized prices are falling and they could get more for their money if they are patient.’”

“‘Everywhere you turn around, you’re seeing ‘price reduced’ signs going up,’ Seiler said — adding that a number of homes are selling for less than the asking price, which also drives down prices overall.”

“Pointing to his own market analysis, Matthews said affordability fell significantly from February 2005 to February 2007, meaning home prices increased more than prospective buyers’ ability to qualify for loans to purchase them. He predicts a 7 percent drop in the average Wasatch Front home price by mid-2008, which he says will increase affordability, thereby strengthening the overall market.”

“‘If people can’t qualify for loans and the homes aren’t selling, at some point (builders and sellers) are going to have to lower their prices,’ Matthews said.”




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72 Comments »

Comment by Ben Jones
2007-10-11 12:49:35

‘Foreclosures are going to keep climbing,’ said Margie O’Campo de Castillo of Arizona Dream Realty. ‘Many people, particularly in new homes on the fringes, are upside down in their home. They owe more than it’s worth and can’t sell.’

‘The mortgage market is getting back to normal. The crazy financing of a few years ago is gone,’ said Jay Luber, First Horizon Home Loans of Phoenix vice president. ‘People with good credit and incomes will still be able to qualify for mortgages.’

‘If you can afford to make the payments on your home, stay put,’ said Nicholas Retsinas, director of the Joint Center for Housing Studies at Harvard University. ‘Prices are sticky now.’

‘Not every square inch of bare land in the Valley has been eaten-up with shopping malls and new homes.’

‘The next auction is a residential piece immediately west of Desert Ridge. It’s about 400 acres it is north of the 101, it goes over towards Cave Creek on the west. Prime residential area,’ Winkleman said. ‘Obviously, that market is not as vibrant as it has been, so we’ll see, but it’s terrific property in a terrific location.’

‘The last significant piece in Ahwatukee is refered to as the South Mountain 620, its where Chandler Boulevard currently dead ends. The city of Phoenix would like to acquire the north half of that to preserve, the southern half would be a very attractive residential development,’ Winkleman said.’

‘It’s been attemped to be auctioned off several years ago several times. It was not successful, Winkleman said. ‘I think we’ll be successful this time.’

Comment by steadykat
2007-10-11 13:37:23

The word I get from friends Salt Lake is that “the housing market is dead”. I was there a couple of months ago and it appeared that every third house had a “for sale” sign parked in the front yard.

Washington County (St George) isn’t doing any better. Regular citizens that I talk to see the drop but always counter with some upbeat realestatespeak. “I hear that we are at the bottom”, “I think that the turnaround has begun”, or my favorite “the Government won’t let housing tank”.

However, my conversations with real estate types are much more fun and informative.

Examples: “I gotta sell a house!” or “I got no income coming in” or the best “my wife said she won’t sleep with me until I make a sell!”.

Two local constructions guys that I know are down to two days a week on the job. My neighbor needed some ‘minor” work done on his home. He called three different companies. All three returned his calls (unheard of just months ago) within the day and it only took one more day to get someone (the low bidder) to come out and do the job.

One other thing. My local St George Bank (Sunfirst) shut down it’s home mortgage division about three weeks ago.

Comment by aladinsane
2007-10-11 17:58:23

We were utterly blown away by the overbuilding in the St. George area…

The real estate giveaway guide, was the size of a phonebook, nearly.

And water has always been an issue, historically there. (hat tip to the Hurricane, Ut. museum, nice place and informative)

 
 
 
Comment by Richard
2007-10-11 12:50:51

test- does this even work? my comments have NEVER appeared

Comment by Richard
2007-10-11 13:01:27

oops, guess I’m retarted!

Comment by bots
2007-10-11 14:06:44

From the Urban Dictionary..

2. retarted
A retarded person’s way of spelling the word “retarded.”

Just pokin’ fun, Rich

 
Comment by ridingthewave
2007-10-11 14:08:32

are you using naughty words richard? your comment wont post if you use them.

 
 
 
Comment by flatffplan
2007-10-11 12:57:04

they went up ,where ?
Median home prices have dropped in more than half of all metropolitan Phoenix’s ZIP codes,
if you ain’t drillin you’re going down,yo

 
Comment by Professor Bear
2007-10-11 13:05:03

“‘I thought when we listed it at the beginning of August it was priced really well. I buried a statue of St. Joseph in our front yard for luck,’ Kathy Rowedder said. ‘But after we lowered our price, I went out and dug it up, cleaned it off and brought it back in the house.’”

Wow — even the tried-and-true techniques of selling are failing. I had no idea the situation had become this dire!

Comment by mrktMaven FL
2007-10-11 13:07:18

LMAO. That’s too funny.

 
Comment by Ben Jones
2007-10-11 13:11:36

That is funny PB. Now we are going to have to come with a new term to describe this saintly extraction!

Comment by az_owner
2007-10-11 14:20:37

“Giving Joe Dirt a bath”?

 
Comment by emcee
2007-10-11 15:39:50

Undesecration?

 
 
Comment by Rally Mitigation Team Member Bob
2007-10-11 13:41:57

With apologies to the ladies here, the only way to describe this FB is “dumb beyotch.”

 
Comment by Catherine
2007-10-11 14:57:57

Wow. I wonder what she’d do with baby Jesus if it was Christmas time?

 
Comment by luvs_footie
2007-10-11 15:08:39

“‘I thought when we listed it at the beginning of August it was priced really well. I buried a statue of St. Joseph in our front yard for luck,’ Kathy Rowedder said. ‘But after we lowered our price, I went out and dug it up, cleaned it off and brought it back in the house.’”

Another res-erection :smile:

 
Comment by Not Mssing It
2007-10-11 15:16:32

Kathy Rowedder said. ‘But after we lowered our price, I went out and dug it up, cleaned it off and brought it back in the house.’”

Kathy either check the expiration date or you have a used one.

 
 
Comment by ed in texas
2007-10-11 13:05:57

“If you look at the investors who bought last, they’re hurting right now”…
Jeez, first Amway, then Beanie Babies, now real estate.

Whooda thunk?

Comment by SF Mikey
2007-10-11 14:03:29

“‘The bad time to buy a home was two years ago; now sellers are motivated, and there are plenty of houses to choose from,’ said Steve Walsh, president of Scottsdale-based Scout Mortgage. ‘Buyers just need to be careful and not get into loans they don’t understand that could cost them a lot more in a few years.’”

Any bets that Mr Walsh was spouting the following lines two years ago to potential buyers:
– Better get in now before it’s too late because real estate never goes down.

– It’s different here - everyone wants to live here (it’s a dry 120 degree heat). They aren’t making any more land ………..errrrr desert.

– “Fifteen percent is pretty much in the bag for in 2006,” he says. “It’s impossible for prices to go down this year.” ala Gary Watts fearless predictions.

I wonder if this clown has ever heard of the falling knife analogy!!

Comment by Judicious1
2007-10-11 15:14:43

‘Buyers just need to be careful and not get into loans they don’t understand that could cost them a lot more in a few years.’ —> of course, that’s precisely the type of financing we were recommending two years ago on all those houses we sold that people shouldn’t have been buying.

 
 
 
Comment by Dennis
2007-10-11 13:13:49

“Free landscaping and kitchen upgrades used to be the norm. Now, one builder is offering a Lexus. Arizona State University’s Tony Sanders said that distorts the actual sales price.”

How STUPID are buyers anyway! Just think about paying property tax on the Lexus over the life of the loan as the car value is added to the sales price.

Comment by qt
2007-10-11 13:40:29

let see. Lexus or $50,000 price reduction?

I’ll take the 50K. Remember, not only property tax but mortgage interest as well. But hey, you get an interest tax-deduction. Yeehaw!!!

Comment by Blue Falcon the FBs
2007-10-11 15:04:01

The Lexus is a lease… you have to give it back after 2 years.

 
 
Comment by Rally Mitigation Team Member Bob
2007-10-11 13:44:17

Screw the property tax… How about the costs of amortizing the foregone price reduction (i.e., the Lexus) over 30 years?

Comment by Anthony
2007-10-11 14:30:17

Besides, a Lexus is nothing more than an overpriced Toyota. Enough said.

 
 
 
Comment by kpom
2007-10-11 13:14:00

“‘That means homeowners have a 1-in-12 chance to sell their home in a month,’ Barry said. ‘Those odds aren’t good in Vegas, and they aren’t good for the housing market.’”

No - you can have a 100% chance of selling your house in a month - price it appropriately. Alternatively (like most sellers), you can price it so you have a 0% chance of selling it in a month.

This isn’t Vegas…

Comment by Professor Bear
2007-10-11 13:30:18

The odds a seller can afford to price their home to sell in a month and also cover the cost of paying off their loan plus a down payment on a new faux chateau might be down to 1-in-1000 or so.

 
Comment by Statsman
2007-10-11 14:09:58

“‘That means homeowners have a 1-in-12 chance to sell their home in a month,’ Barry said. ‘Those odds aren’t good in Vegas, and they aren’t good for the housing market.’”

Great, another flunkie made it past my statistics class with absolutely no clue how to interpret probability.

Comment by turnoutthelights
2007-10-11 14:41:05

I honestly expected a follow-up with his statement that ‘…and in 1 year that means our housing stock will be zero. So buy now before they’re all gone.’

 
 
 
Comment by Blue Falcon the FBs
2007-10-11 13:17:07

Its nice to see Utah is finally getting off the “its different here” train.

Comment by mrjauk
2007-10-11 13:39:11

“‘We didn’t participate in the housing boom when the rest of the country was, we never do,’ said Jim Bringhurst, president of the Utah Association of Realtors.”

“Instead, the state created its own mini-boom on the back of a blistering economy and new move-ins from more expensive areas like California, Nevada and Arizona.”

“Utah’s market will slow down, but because it’s not dependent on the rest of the nation, a softer landing is more likely.”

Hmmm…something about those two statements above, made by the same person, just doesn’t compute but I can’t seem to figure out what it is. Oh, yeah. That’s right. They are declarative statements that directly contradict one another!!!

Comment by Professor Bear
2007-10-11 13:54:25

‘They are declarative statements that directly contradict one another!!!’

AKA standard REIC propaganda

Comment by Lost in Utah
2007-10-11 19:32:41

utah ain’t differnt, but Utahans are…

(Comments wont nest below this level)
 
 
 
 
Comment by Professor Bear
2007-10-11 13:27:52

“He described circumstances in which home prices have been artificially inflated due to out-of-state investors and speculators flocking to Utah, triggering a steep increase in property values for a short time — followed thereafter by a sharp decline.”

That sure sounds a lot like other bubble stories — especially reminiscent of most of the inhabited areas of CA, Las Vegas, Coastal Florida, etc etc etc

“But Kelly Matthews, economist for Wells Fargo, sees Utah’s current home market as more stable than other states that saw rapid appreciation and are currently experiencing a literal reversal of fortune. ‘Our Utah situation has not deteriorated nearly as much as some of the other places,’ Matthews said.”

But then again, Utah’s situation is clearly different. Like other areas that were hit by the bubble tsunami later in the game (Seattle and Portland come to mind), it will take longer for the water to recede from the beach and reveal all the naked swimmers in Utah than in bubble bellwethers such as San Diego.

Comment by Groundhogday
2007-10-11 13:51:52

This guy forgot to say “yet”.

 
Comment by Brandon
2007-10-11 14:27:35

They have the same excuses in Idaho. It’s different because of yada yada yada…..It is not different as the bubble is linked together—the money and equity locusts just found it’s way to the intermountain west later than Arizona, Nevada, and Oregon. Around Boise, the height of bubble fever was late 2005 to early 2006. Accordingly, sub-prime and ARM reset issues are just beginning to show and some of the “investor” homes that have set empty since the height of the frenzy have begun going into foreclosure (three in our neighborhood).

Comment by Groundhogday
2007-10-11 19:05:39

Moscow, ID has been selling 2-3 homes a month since mid summer. There were a few hundred on the market last month but many have given up, apparently planning to relist “when things pick up.”

States like ID and MT have almost no building or zoning restrictions so they really binged on new construction during the bubble. Now they are going to be amoung the hardest hit on the way down.

Big MT news by the way, the Gallatin Valley (Bozeman area) Realty Times finally admitted that prices are falling! Only a year late to the party, but perhaps we can get some crackers out for you.

 
 
Comment by Professor Bear
2007-10-11 14:34:48

I believe it truly is different in Utah this time. If you review the price history in UT vrs. CA from the early 1990s bubble deflation (roughly over the period from 1989-1996), you learn that UT held up while CA imploded. This time, thanks to a far larger wave of CA equity locusts bidding up UT prices greatly in excess of levels that local incomes can support coupled with crazy lending, UT prices will tank along side of prices in the rest of the desert SW.

Comment by Lost in Utah
2007-10-11 19:34:20

wish it would hurry up…

 
 
 
Comment by Duncan
2007-10-11 13:29:10

A useful definition of insanity:

‘It’s been attemped to be auctioned off several years ago several times. It was not successful, Winkleman said. ‘I think we’ll be successful this time.’

Comment by cereal
2007-10-11 18:03:21

insanity:

doing the same thing over again and expecting different results.
insanity

 
 
Comment by Professor Bear
2007-10-11 13:53:03

“‘Everybody had gone to classes, and all these investment seminars were on every corner with signs saying ‘Investor needs apprentice.’ ”

Funny thing is that those (handwritten) signs were also on every corner in San Diego two years ago. More recently, they have been supplanted by handwritten or, at best, hand-painted signs offering life lines to owners facing foreclosure.

 
Comment by Renter
2007-10-11 13:58:40

All this info is great and prices are falling, but here in SE Florida folks who bought houses for 200k in 1999 are still asking 500k+ in a market where the median income is 47k. Banks are holding back on the REOs and RE Agents are still lying about the market and telling people the most amazing crap to get them to buy. Few folks are buying, but they are buying. It amazes the number of people who believe whatever some realtor tells them about the biggest purchase they’ll ever make. They will research all sorts of things before buying like cars, vitamins, you name it, but houses? Nope.

State govt came to rely on the excesses in RE taxes and sales taxes from the booming housing market and now we are going to see increases in sales and other taxes to make up the shortfall. House prices will not fall in step with the increase in inflation. We are screwed.

Comment by SF Mikey
2007-10-11 14:08:29

If you think SE Florida is bad as far as unrealistic pricing goes then you should look around the San Francisco Bay Area for what a $1M buys in a good neighborhood with good public schools - 900 sq ft - 2BR fixer upper if you are lucky. It’s insane to buy at these levels.

 
 
Comment by JimmyB
2007-10-11 14:04:09

I didn’t even know Utah was still a state. I thought they got kicked out of the Union for polygamy.

Comment by Dan
2007-10-11 14:17:08

The issue was resolved when Utanians agreed to give-up 3 wives each.

 
Comment by Professor Bear
2007-10-11 14:30:46

You have your facts backwards. They were admitted to the Union for banning polygamy.

Comment by spike66
2007-10-11 15:22:48

And the War on Polygamy has been as successful as the War on Drugs.

 
Comment by Houstonstan
2007-10-11 15:29:07

I think they should re-instate polygamy. This would revigorate Utah’s market. Imagine the nagging the husband would have from each wife “but suzanne researched it…”

 
 
Comment by Lost in Utah
2007-10-11 19:36:23

you’re right, the first wife kicked them out of the union…

 
 
Comment by ridingthewave
2007-10-11 14:05:13

“‘It’s almost like giving away toasters to open a savings account,’ said Sanders

someone asked me the other day if i remembered that. i was told that banks would do this to get you to save your money at their bank. when they were able to go to wall street for money they dident really seem to compete for savings accounts anymore. sad but true, no incentive to save. took away the interest rate and the toasters too!!!!!!!!!

Comment by SGA
2007-10-12 06:39:40

Bank deregulation took away the toaster. :(

 
 
Comment by Peggy
2007-10-11 14:08:30

Now that the go-go real estate market in Vegas is officially bye-bye, I’m wondering what formerly “hidden” problems will once again surface. Specifically, I’m thinking of the Kitec plumbing installed in Vegas during the building boom.

I’ve noticed that two homes near where I live have “for sale” signs that advertise new plumbing with a hang-tag below the sign. These are re-sale houses. New plumbing is a selling point because so many homes in built from the late 90s to 2004 in Vegas have plumbing that is failing. The connections in the pipes become corroded and the water slows to a trickle.

A friend of ours just had his home replumbed…cost him $18K! There was a time when no one here asked about the problem when purchasing a home. Now they are advertising the solution (as well as the problem).

Link:

http://www.builderonline.com/industry-news.asp?sectionID=28&articleID=497866

Comment by spike66
2007-10-11 15:27:25

From the link…

“The original complaint, filed in February 2006, names Ipex and three local plumbing supply distributors. More recent lawsuits filed this past January name builders John Laing Homes, KB Home, and Woodside Homes. Up to 15 builders could be sued.
Randall Jones of Harrison Kemp Jones, the Las Vegas law firm that is handling the class-action lawsuit, says some 35,000 to 50,000 homes covering more than 260 subdivisions in the-Las Vegas area may have had the allegedly faulty Kitec fittings installed.”

 
 
Comment by Statsman
2007-10-11 14:12:59

“Utah’s market will slow down, but because it’s not dependent on the rest of the nation …”

Yeah, Utah is not like the rest of the nation. The rest of us have laws that limit people to one wife. ;-)

Perhaps they need more homes out there for the extended family.

Comment by Professor Bear
2007-10-11 14:29:15

Utah creates it’s own demand; that’s the natural consequence of so many families with eight kids that want to live there.

Comment by Lost in Utah
2007-10-11 19:38:19

as I’ve mentioned on this blog before, it’s hard to find houses in Utah with fewer than 5 or 6 bedrooms - tons of kids

 
 
 
Comment by jinwnc
2007-10-11 14:25:12

A Little Reversal of Fortune:

http://www.cnbc.com/id/21249064

Got popcorn and chardonay, cheers!

 
Comment by Professor Bear
2007-10-11 14:25:50

“Instead, the state created its own mini-boom on the back of a blistering economy and new move-ins from more expensive areas like California, Nevada and Arizona.”

“Utah’s market will slow down, but because it’s not dependent on the rest of the nation, a softer landing is more likely.”

In other words, hordes of equity locusts funded with liberated CA, NV and AZ bubble profits created a mini-boom in Utah, while a massive bust in the same states will have no effect on Utah? I will have to ponder that logic carefully.

Comment by jinwnc
2007-10-11 14:29:34

Nonsense is just that. You can waste alot of time trying to make sense out of it.
Time better spent pondering the complexities of the universe.

 
 
Comment by AnonyRuss
2007-10-11 14:47:25

From the first KTAR/Phoenix piece on builder incentives:

“ASU’s Lee McPheters doesn’t expect the offers to last much past year’s end.”

“‘I think they’ll fade away as the economy recovers and as we move into 2008,’ McPheters said, adding there’s widespread expectation the housing market will bottom out early next year.”

Another proud day for the ASU faculty. Way to go, McPheters.

Comment by D. Montgomery
2007-10-12 09:04:02

Shouldn’t that second zero be a one? Although it still might be optimistic to think the housing market can bottom as early as 2018.

 
 
Comment by jag
2007-10-11 14:49:49

“The drop in home prices is bad news for homeowners who bought at the peak and are now finding their homes are worth less than what they paid. Market watchers say those people should price to sell now if they have to because prices are likely to continue to drop.”

I guess this advice works for those who have cash to bring to the table in a short sale. And how many people would that be again?

Comment by SMF
2007-10-11 15:25:54

Yes, sell now and create a new wave of knife-catchers.

 
 
Comment by aeyra
2007-10-11 14:50:36

“Utah’s market will slow down, but because it’s not dependent on the rest of the nation, a softer landing is more likely.”

I beg to differ. Most of the western USA grew thanks to California, and I suspect it’s partially because of the illegal immigrant problem and partly because of CA’s internal problems. I don’t think there’s been too much of an eastern influence on the Western USA; my personal belief is that there are TWO housing bubbles in the USA. One is the bubble on the East Coast, the other on the West Coast and in AK/HI. YOu could draw a line from the border of ND and MN and draw it all the way down to the TX/LA shore and that’s the border between the two bubbles.

Comment by Lost in Utah
2007-10-11 19:39:49

so how do you tell the difference between the two bubbles? ain’t a bubble a bubble?

 
 
Comment by SMF
2007-10-11 14:53:21

‘Buyers just need to be careful and not get into loans they don’t understand that could cost them a lot more in a few years.’

OK, then. When did you start saying this? 2007? 2006? 2005? 2004? 2003?

Aren’t we a little late to FINALLY say this?

Sorry, this does not absolve you from your RE ’sins’.

 
Comment by aNYCdj
2007-10-11 15:20:06

What is it with these stupid Idiot Americans….you are moving 1500 miles away and you own 2 houses? Cant you like um ..rent for 6 months or a year?
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Kathy and Dennis Rowedder are trying to sell their north Phoenix home in the 85050 ZIP code. The couple recently closed on a new house in Peoria and got a $30,000 concession on it because they haven’t yet sold their existing home.”

“So far, the couple have lowered their price $40,000 to 360,000.”

Comment by jb
2007-10-11 16:10:02

Umm, I think they are moving to Peoria AZ (not Illinois).

 
 
Comment by Not_In_Montana
2007-10-11 15:31:02

Definitely different in Montana. A realtor on a local radio show said so Sunday morning. Meanwhile there is a 34-lot subdivision across from me with NO action. They spent all year from last Nov. improving it, streets & utilities and finally put up the 4 sale sign, no takers.

I just checked out a smaller subdv I couldn’t see from the road well. 16 lots, 5 houses finished, 5 for sale signs, heavy equipment parked, nothing happening.

But one other subdv that was supposed to go to 500 units has about 30 houses going in at different stages of completion. They have to finish those right? They can’t leave them unfinished? It looks like 6 places occupied.

Soka with me because our roads can’t handle all that anyway.

 
Comment by Darrell_in _PHX
2007-10-11 16:11:56

At 67th Ave and Bell, a big chunk of office suites went in about 6 months ago. Must be room for 100 offices or so. In the 6 months since construction finished, I’ve seen signs for one doctor and one dentist now signing up patients for when they move in. The rest of the office space sits empty.

I could repeat a very similar story for about 3-4 more office condo project or retail strip malls around me. The new ones sit mostly empty and the older ones are having more and more vacancies.

Yet, they are still building retail and commercial space like crazy all around me.

 
Comment by aeyra
2007-10-12 13:25:52

“so how do you tell the difference between the two bubbles? ain’t a bubble a bubble? ”

The western states had their bubbles fueled by the California RE bubble. The eastern half of the USA is mostly spillover from the Northeastern bubble and the FL bubble.

 
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