No Longer An Investment But A Money Vacuum
A report from the Arizona Republic. “A family of four would fit easily into the 2,800 square-foot house near Chandler’s Sanborn Elementary School, but the owner and Phoenix real estate investor Jessie Ogle hasn’t received any acceptable offers on the $425,000 house. Despite its appeal, leasing the two-story house hasn’t worked. Ogle had two tenants and tried seeking a third, but it sat empty for months. No one wanted to pay $2,000 a month in rent.”
“The expense of maintaining the house, yard and pool is too much. In Ogle’s mind, the 10-year-old home is no longer an investment but a money vacuum. A young arsonist’s visit in May burned a bigger hole in his pocket, costing him hundreds of dollars.”
“‘For me, it’s been enough of a nightmare,’ said Ogle, who put the house back on the market in June. Now, almost four months later ‘I’m looking for somebody who has something I’d rather have.’”
“That’s right. Ogle says he is willing to swap, even if it means getting a house that’s worth less than his and needs fixing up, as long as it’s in a good rental location.”
“Donna Parnham and her husband are having trouble selling their house, which spans 3,390 square feet, about 2 miles southeast of Gilbert.”
“All that space has overwhelmed the Parnhams, who are looking for a smaller house in the same vicinity. They had hoped to sell theirs for $529,000 when they first listed it in May, but there were no takers.”
“They’ve installed new stainless steel appliances, have a tile floo, sculptured carpeting, a courtyard and Tuscan lighting in the foyer. The couple also dropped the price to $458,000. Still nothing.”
“‘The market is so slow. Even as Realtors, we can’t even get our house sold,’ Parnham said. ‘We decided we would try to be a buyer for a smaller home who wants to jump up to a newer home.’”
“The Parnhams turned to craigslist.com to make their match. A look at the site’s house swap listings shows Phoenix has plenty of pitches.”
“Real estate broker Jason Roggensee at Gilbert’s Property Sales and Management is leery of swaps. The situation is complicated when an owner or both owners have mortgages, a common situation. ‘Unless you pay it off, there’s really no way around it,’ he said. ‘I don’t see any real legal way to make it happen.’”
“Home building permits across metropolitan Phoenix fell to a 14 1/2-year-low to 1,309 in September, according to RL Brown’s latest Phoenix Housing Market Letter. New home construction figures for the Valley haven’t been this low since February 1993.”
“Valley builders also are dropping prices in many subdivions, which is helping new-home sales. Price decreases are replacing hefty incentives on many new home models.”
The East Valley Tribune from Arizona. “Some 2,991 new homes were sold in September, a 34.18 percent drop from the same month last year, according to Brown. Year-to-date, 28,666 sales have been recorded, compared with 37,128 last year.”
“Area builders are also finding success in selling their homes by dropping prices. D.R. Horton was one of the first to seriously reprice their products, he said.”
“‘This last month, we saw pretty much even the laggards get on the wagon,’ he said. ‘I think that’s encouraging. It’s obvious that the pricing surge of 2005 was not sustainable.’”
“The larger the incentives and price reductions, however, the more builders can weaken the existing home market because regular home owners aren’t able to compete, he said. And that can end up hurting builders in the long run because a potential new home buyer can’t make the deal if he can’t sell his current home, said John Fioramonti, at Meyers Builder Advisors in Scottsdale.”
The Wall Street Journal on Arizona. “Some forecasters now warn that home prices are unlikely to start rising in most of the country before 2009 or 2010. A year ago, many home builders and lenders still thought that the housing boom would end with a gentle landing. Now those hopes are dead.”
“‘Everybody’s kind of at a stalemate now, waiting to see what happens next,’” says Donna Butera, who has a business in Phoenix ’staging’ homes for sale.”
“Ms. Butera and her husband are trying to sell six homes in Phoenix and Scottsdale. They bought the properties as investments over the past few years, but now find that the rents they collect don’t cover mortgage payments that are resetting to higher levels after initial low-cost periods of a year or two.”
The Review Journal from Nevada. “Home sales continued to plummet in September to their lowest levels in years, and median prices for both new and existing homes edged downward from a year ago, Las Vegas housing analysts reported Tuesday.”
“‘Our September numbers are in and they’re not pretty,’ Home Builders Research President Dennis Smith said.”
“He counted 1,399 new home sales, the lowest monthly total since January 2000. The year-to-date total of 15,475 is down 44.3 percent from a year ago. Larry Murphy of SalesTraq showed 1,328 new home closings during the month, a 52 percent decline from the same month a year ago.”
“Existing home sales were down 50 percent to 1,466 in September and existing median home prices declined 8.9 percent to $263,075.”
“Murphy said his minister on Sunday invited real estate agents, mortgage brokers, residential construction workers and anyone else affected by the housing downturn to a night of free hamburgers at the church.”
“‘That’s the perception of the public, and perception is reality,’ Murphy said.”
“Home builders are offering substantial incentives ranging from bonus commissions for Realtors to $50,000 to $100,000 in free upgrades and custom options, he said.”
“A number of builders have slashed prices. Lennar Homes dropped prices by 25 percent in about 30 new home subdivisions and Pulte was advertising a 15 percent cut in prices over the weekend.”
“Tom McCormick, president of Las Vegas-based Astoria Homes, said he sold 30 new homes during the weekend of Oct. 12-14 after discounting prices by 10 percent to 27 percent in eight neighborhoods.” “The effects of these price reductions will be reflected in the coming months, Murphy said.”
“‘We have not yet reached the bottom of this market in either new homes or existing homes,’ he said. ‘The short-term outlook for this market is not good. It will take another 12 to 18 months before we will see any significant improvement, in my opinion.’”
“He noted that the resale inventory is at an all-time high of 27,000 homes and nearly half of them are sitting vacant. Looking at the dismal 1,065 closings on the MLS, Murphy calculates an inventory of nearly two years.”
“Foreclosures are four times higher this year compared with 2006. As the banks take back these properties, they will be added to the already swelling inventory.”
“Rick Waltjen is one of those buyers who’s waiting for the housing market to bottom out. He’s been watching it closely for two years, specifically inventory levels that have risen almost weekly for the past six months.”
“‘There is absolutely no sign of the market bottoming out yet,’ Waltjen said. ‘Everyday there are more price reductions. The inventory continues to climb.’”
“‘I think that a key piece that people conveniently ignore when telling us that we are at the bottom or close to it is that we have never been in a market where 40 percent of the homes are vacant,’ said broker Bob Reeve. ‘Just drive around. Why would any buyer buy a boarded-up mess with a dead yard?’”
“The experts talk about burning off the oversupply of resale inventory, but a huge portion of that vacant inventory is going to be permanent, Reeve said.”
“The so-called ’short sale’ of a home can be a viable alternative to foreclosure and will become more prevalent as millions of adjustable-rate mortgages reset over the next 18 months, real estate industry observers say.”
“Arthur Marvin, broker in Las Vegas and class instructor on foreclosures, said there are 3,350 homes listed as short sales in Las Vegas, more than double the number from four months ago, and 1,450 of them are vacant. That’s a good indicator that many of the short sales are investor-owned, Marvin said.”
“‘That’s a lot of homes that are short sales and every one of them is overencumbered,’ he said. ‘It’s grown exponentially since last year and it’s going to keep on going. Just a reminder; there is an epidemic going on in Las Vegas and they’re called foreclosures. Foreclosures are causing another epidemic called short sales.’”
“‘What they want upfront is a hardship letter from the seller, a contract between the buyer and seller and an estimated settlement statement,’ said Realtor Robin Camacho. ‘They may counteroffer and you continue to negotiate. They’re a lot more negotiable than they were six weeks ago.’”
“She has five short-sale listings, including one in the Sunrise Mountain area of east Las Vegas that’s in escrow for $182,000. It was purchased for $200,000 two years ago and refinanced for about $232,000. She’s waiting for a response from the lender.”
“Camacho said she’s also waiting to hear if an offer will be accepted for a short sale on a 6,600-square-foot ‘fixer upper’ home that will probably sell for 60 percent less than a similar home across the street.”
The Deseret News from Utah. “The number of homes with lingering ‘For Sale’ signs in Salt Lake City’s Avenues neighborhood mirrors the situation in many areas along the Wasatch Front and nationwide, and while homes are still finding buyers, some sellers are having to adjust their expectations on price.”
“‘There are more homes available. Therefore, buyers are able to be a little more choosy,’ Gary Johnson with ReMax Associates.”
“Johnson said some homes may be sitting longer because they are not being priced competitively, as sellers attempt to get higher prices based on those obtained during the boom period rather than what is realistic in the current market.”
“Kevin Blalock put his 3,100-square-foot, recently renovated home in the Avenues on the market about two weeks ago and) is optimistic. After looking at comparable properties in his neighborhood, he said he believes his asking price of $721,000 is reasonable for the current market.”
“‘I think Utah’s economy — and Salt Lake especially — is incredibly strong,’ Blalock said. ‘Our house is priced right for area and the newness of it.’”
“According to a report this month from the Salt Lake Board of Realtors, the number of homes sold in the third quarter of 2007 in Salt Lake and Utah counties was down almost 34 percent compared to the same period last year.”
“Along the Wasatch Front, housing prices have remained fairly steady over the past several months, although the selling prices of homes in the Avenues dropped nearly 14 percent.”
“Blalock acknowledged that he put his home on the market at ‘the dead wrong time of the year,’ and although he said he is not pressed to sell, he hopes to find a buyer by early December. If not, he would be willing to take it off the market and then try again to sell it sometime next spring, or maybe not sell at all.”
“‘We’ve priced (our house) at what we believe is fair market value for what you get,’ he said, and whether he is right or not is up to the market to decide.”
–
More like a money pit. This has been my main contention — constant bleeding from all those Vacant Units, on and off the market. An easy 10% a year carrying total costs.
Jas
Exactly. The shock will come when many Americans realize that what they thought was their biggest asset is actually their biggest liability.
And it’s 10 years old. He has plenty of room to cut the price but won’t consider that an option.
All numbers point to Capitulation Day Nov 15, 2007…This is three months from the credit crunch of Aug 15…people can no longer live off their credit cards, and the non-selling winter months begin. ARM resets continue, builders discount remaining inventory, and Bank REO’s must be off their books by year end. The perfect storm.
Who would want houses that big? It must cost a fortune to cool in the summer.
Who Hoovered up all the money?
More like Dysoned, becaused the financial vacuum isn’t showing any signs of weakening.
But “Hoovered” has a natural memory link to Herbert Hoover and the subsequent economic readjustment.
Speaking of rentals: “Treasure Valley vacancy rate rises for rental houses. Absentee owners opt to rent Valley homes they can’t sell because of the real estate slump.” “He attributes some of the increase in vacancies to more rental homes coming onto the market because their absentee owners have been unable to sell them.”
“A lot of investors purchased properties and now can’t sell them, so we’re seeing a lot more being turned over to property managers, which is causing a rise in the availability of properties…”
http://www.idahostatesman.com/newsupdates/story/192838.html
The same cycle is playing out in every market. No national bubble…:) Its like an earthquake that just rolls from one area to the other with the exact same outcome.
That’s what amazes me about this. Its not just national, its global buy the NAR will try and pretend every market is different.
Not this time.
BofA to close wholesale division. This is additional layoffs. Not exactly a positive sign on real estate.
http://forum.brokeroutpost.com/loans/forum/2/177781.htm
The tan man reports tomorrow. Street expects a loss of 1.08Billion. Any bets how much worse it is?
Got popcorn?
Neil
“so we’re seeing a lot more being turned over to property managers”
“Property Managers” - the new job for out-of-work realtors and mortgage brokers.
got my hair cut from an ex-real estate prop manager last week. nice guy, did a good job. whenI asked him what field , residential or commercial, he stated he did commercial, mostly real estate company leased buildings …. he also said many of em just vanished from the premises when the slowdown happened. just walked away from their leases.
. . . and yet you get the shils posting (usually industry cheerleaders)lecturing us to honor our personal debts. yeah …. right ! KMA
honor & responsibily is so 1950’s. Why should I personally adhere to a system that the corporations created, own, but yet disavow themselves? You think ____________ (insert co.name) wouldnt avoid their debts in a new york minute and/or declare BK if in their own self interest?!?!
Like maybe ,, hmmm i dunno … New Century ??
AND stiff you for an honestly earned paycheck ?!?
but surrrrrre - lemme just volunteer to be the only honest player in a rigged card game.
I think not.
I thought this was a pretty good description of things.
The government-backed bailout plan for Citigroup and Wall Street underscores the increasingly parasitic and socially destructive operations of American and world capitalism. The role of the SIVs exemplifies the degree to which immense wealth is generated for a layer of mutli-millionaires and billionaires on the basis of financial manipulations almost entirely divorced from the process of production and socially useful investment. (ie unlike capitalism of old)
The industrial and productive base and social infrastructure of America continue to deteriorate, living standards for the broad mass of the people continue to decline, while both government and corporate policy are focused on the further enrichment of a small and fabulously wealthy financial elite. At the same time, deregulated markets intensify the inherent anarchy of the capitalist market, creating a situation in which the Wall Street bankers and corporate CEOs, economists and government policy makers have no real idea of the actual value of financial instruments, often highly complex and exotic, contrived to divert ever greater shares of the national wealth into the coffers of the super rich.
Bernanke, asked following his speech to the New York Economic Club, about the real value of CDOs, “asset-based securities” and other investment novelties, replied, “I’d like to know what those damn things are worth.”
http://www.deepjournal.com/p/7/a/en/1042.html
In fact, what we have is worse than unregulated markets, we have markets where the regulators are corrupt, and the regulations actively favor unstable arrangements.
This is exactly like the capitalism of “old”, if you mean “1880-1920″ (minus Edison, Marconi, and Tesla and Ford, i.e. industrial production.)
Then, and now, there was plenty of ideologically deregulated markets and political power tilted to making the ultrarich even more ultra. They captured the political class.
And guess what happened?
Only this time our factories don’t make much any more, and this time, we are running out of oil (in an economic sense) whereas back then we just started the huge oil boom. (The USA was the worlds #1 oil producer by far for many, many years. WW2 was won thanks to Texan oil.)
Karl Marx couldn’ta said it better..
And they wonder why Marxism ever developed such a following.
i wouldn’t have believed it a year ago, but now i think hillary actually has a chance, just because of the current economic climate..
Marxists make the mistake though of assuming capitalism is monolithic when there are many different kinds of capitalism. The Sovereign wealth fund, which is a fund run by the government that invests globally is a new kind of capitalism that is currently emerging in China and the middle east. The U.S before the federal reserve was also a different form of capitalism. One where money creation was much more limited and the booms and busts happened but recoveries were quick and the economy did not get caught up in ridiculous bubbles.
If you go as far as you can to the left or the right, you end up with the same thing. A totalitarean government with a large very poor population.
the garbage you posted from something called Deep Journal also appears, word for word, in this link..
http://www.wsws.org/articles/2007/oct2007/bank-o18.shtml
WSWS.org is “World Socialist Web Site”.
the young, inexperienced kiddies have no idea what you’re saying or doing, which is why they are easy to manipulate.. but keep this crap outta my way..
Red and Jingo
(As the volcano erupts)
Red: “THE VOLCANO IS ERUPTING! RUN AWAY!”
Jingo: “Shaddup you commie!”
“Ms. Butera and her husband are trying to sell six homes in Phoenix and Scottsdale. They bought the properties as investments over the past few years, but now find that the rents they collect don’t cover mortgage payments that are resetting to higher levels after initial low-cost periods of a year or two.”
_________________________________________________
Multiply this situation by the thousands.
Negative investment with a reset coming due, good luck suckers!
If I were in the same predicament, I doubt that I would plaster my misery all over the local newspaper. What’s wrong with these people? “Investments” using NegAm loans that do not even cash flow with the teaser rate…Not to mention SIX of them!
I agree with you…Good luck suckers and thanks for the entertainment.
What the heck is this house swapping scheme? I don’t buy that these people with McMansions suddenly just want to move to a smaller place. I am assuming they would also like to swap their giant mortgage for a smaller one - otherwise it’s pretty dumb. Of course for some reason they don’t just say that up front - do they think they’ll be able to trick someone into buying their pig in a poke?
Sigh… the stupid .. it burns..
According to the article, it’s a complicated matter unless both parties own their property outright. But one of the house-swapping online services is also working with a title company who also handles the exchange and works with the lenders.
Another thing mentioned is that you can’t see the real behind-the-walls condition of the house through pictures so I think it’s best that a visit (and a thorough inspection) be planned.
BayQT~
“According to the article, it’s a complicated matter unless both parties own their property outright.”
Well, that pretty much screws the pooch for 99.99% of all RE specuvestors.
Yep….I agree. Very few of the swappers will have had their mortgage burning parties.
BayQT~
lol
My folks really only spent big on four parties for themselves:
1. Their wedding
2. & 3. 50th birthday
4. Paid off the mortgage party. (It cost them 10 payments to throw that party! Ain’t inflation grand?)
“Bernanke, asked following his speech to the New York Economic Club, about the real value of CDOs, “asset-based securities” and other investment novelties, replied, “I’d like to know what those damn things are worth.”
…but if I keep on devaluing the currency they’ll be worth, like, something.
Encouraging an actual SALE or two of those “damn things”, so they can actually get marked-to-market vs. “Super-SIV” merry-go-round schemes and pier loans would be a really good start.
$90 a barrel oil. So does the FED really need to cut rates?
The surge in prices has also attracted lots of speculative investment money, further driving prices higher. And the tight supply and demand situation magnifies the effect that geopolitical tensions have on prices, as there is less spare supply available globally to cover a disruption from someplace like Iran, Nigeria or Venezuela.
The falling U.S. dollar has also played a role, as oil worldwide is priced in dollars.
Oil producing nations have less incentive to ramp up output if the buying power they receive per barrel is declining, and foreign consumers have less incentive to reduce demand if oil is, relatively, getting cheaper for them.
$90 a barrel oil. So does the FED really need to cut rates?
No, but the Pig men and politicans need it to deflate not only housing debt, but also the enormous National Debt + twin peaks of unfunded Medicare & S.S. liabilities. Whatever the puppetmasters “need” automatically becomes “our” need too.
The falling U.S. dollar has also played a role, as oil worldwide is priced in dollars.
No it’s not. There is not a price tag on a barrel of oil saying “US$80″, like on a copy of Time magazine or whatever. The price of oil is determined on the open markets (just like gold or any other commodity) and fluctuates continuously, just like currencies fluctuate against each other. At any given time oil has a price in US$, yen, Euros, pounds, Polish zlotys, etc, but no price is any more significant than the other. Oil is just quoted in US$ because that’s more convenient.
There is nothing special about the US$, other than the amount of US$ debt held by foreigners, and Americans had better get this through their heads.
“‘The market is so slow. Even as Realtors, we can’t even get our house sold,’ Parnham said.
I’m so busy laughing my @$$ off that I can’t write anything more!
I wrote about this once before: a husband and wife realtor team moved out of a house in our neighborhood and within a few weeks, a notice of trustee’s sale was posted on the door of their house.
A few blocks away, a house for sale by “owner/agent” has been on the market since spring.
And in my little neighborhood, a Realtor/flipper couple just failed in their attempt to sell their house. It was a rental before, now it’s a rental again. I wish them luck on collecting enough rent to cover the mortgage.
BTW, this is one of three failed sale attempts within easy walking distance from the Arizona Slim Ranch. One of the others was right behind me — on the market for five months, even got a bit of staging inside and some landscaping outside. That didn’t help. It’s a rental again, and the landscaping has been overrun by weeds.
As for the third sale-flop, the owners didn’t get their wishing price, so they withdrew the house from the market. They’re still living in it. Word on the street is that they’re going to stay put for the time being.
House swapping is that anything like wife swapping?
They’d probably have better luck with that…
The problem is they can’t clear their loan. I made a very large downpayment and have a 15 year loan at 4.75%. There is no way I’d swap with one of those folks. I’ll wait for the foreclosure auction, and even then it may be overpriced.
my advice for whatever transaction you are thinking about … hire an inspector first.
LOL
Ok, that’s just brutal. Brutal and sweet. LOL
creating a situation in which the Wall Street bankers and corporate CEOs, economists and government policy makers have no real idea of the actual value of financial instruments, often highly complex and exotic, contrived to divert ever greater shares of the national wealth into the coffers of the super rich.
I think this describes SIV’s perfectly. J6P wants a safe investment so he puts his money in the bank. The bank then creates of balance sheet entities that gamble the money on high risk investments. The elite bankers collect a fee meaning even if the SIV looses money they make money. If the SIV goes bankrupt they count on our government to step in and save them. If the SIV makes money they get a higher bonus.
ie they are stealing from anyone who puts money in a savings account.
If CA houses go down 50%, but the dollar goes down 75% who wins? Which is why I refuse to predict how this will all play out. I’m sure it’s going to suck, but I’m not sure who’s going to get screwed worse, the savers (the populist jerks call them hoarders) usually get shafted when a democracy takes action. Just look at what FDR did.
What did FDR do?
“Blalock acknowledged that he put his home on the market at ‘the dead wrong time of the year,’ and although he said he is not pressed to sell, he hopes to find a buyer by early December. If not, he would be willing to take it off the market and then try again to sell it sometime next spring, or maybe not sell at all.”
“‘We’ve priced (our house) at what we believe is fair market value for what you get,’ he said, and whether he is right or not is up to the market to decide.”
Gibberish translation: “I’m not GIVING it away! We go to the mattresses!!”
BayQT~
If I was a Realtor this clueless twit would be the last one I’d take a listing from.
if i were an agent hunting for listings in this market, there’d be two types of clients i’d consider working with.. those who are desperate and those who are desperate… oh.. also those who are desperate.
I wouldn’t waste any time on anyone else who claims to be a “seller”.
Negative reinforcement in Pavlovegas…
“‘I think that a key piece that people conveniently ignore when telling us that we are at the bottom or close to it is that we have never been in a market where 40 percent of the homes are vacant,’ said broker Bob Reeve. ‘Just drive around. Why would any buyer buy a boarded-up mess with a dead yard?’”
Pick me Bob, pick me. ooh ooh for drug investment opportunities!
this vacuum could be deflationary:
http://en.wikipedia.org/wiki/Velocity_of_money
they can increase the supply but they can’t increase the velocity
“A family of four would fit easily into the 2,800 square-foot house near Chandler’s Sanborn Elementary School, but the owner and Phoenix real estate investor Jessie Ogle hasn’t received any acceptable offers on the $425,000 house. Despite its appeal, leasing the two-story house hasn’t worked. Ogle had two tenants and tried seeking a third, but it sat empty for months. No one wanted to pay $2,000 a month in rent.”
Jesse’s not an investor, he’s a clown. A shortsighted buffoon who ran with the herd. Real investors don’t purchase properties which don’t cash flow and provide a positive return on the investment. Jesse’s a poser, and will soon find out the intricacies of BK. So long Jesse, we won’t miss you.
No one wanted to pay $2,000 a month in rent.
The invisible hand is having fun slapping Jesse.
What idiots. When all of this surplus inventory shows up… rents will plummet. We’ll have domestic deflation coupled with energy/metals/import inflation. Joy joy!
By domestic deflation, sadly I also include wage deflation.
Either by taxes or salary cuts.
Got popcorn?
Neil
It’s official, fresh out of my inbox:
“Subject: Important Notice regarding Bank of America Wholesale
It is with sadness that I must report that Bank of America Wholesale will be closing at the end of this year. We will be closing anything in the pipeline and will be accepting new applications until November. Please know that we are still actively processing your loans. I am very sad about this and I want you to know that I appreciate your loyalty and your business.”
Can’t figure how the mortgage brokerage industry will be around in six months. Any paper originated “third party” is considered toxic goo right now. Further real estate depreciation and increased foreclosures should put the nail in the coffin. If all that’s left is gse and govt. money, you can apply at the kiosk at any one of 3000 branches.
Please feel free to contact me
Thanks!
This was the worst kept secret around.
OT:
Boulderbo, can you please share your opinion about Southwest Longmont + Boulder/Gunbarrel area ?
You must be having insider view.
We are considering buying ranch home @ end of 2008, spring of 2009.
Tale of two worlds. Boulder at one end of the spectrum and Longmont/Weld county on the other. Gunbarrel is right in between. Don’t know whether Boulder’s $1000/sf silliness will push/maintain values in the area or whether it will get sucked into the black hole that’s occurring in Longmont. It’s bad and getting worse out there. On the other end check of http://www.parkgablesboulder.com- thirteen “urban bungalows” on a single family lot going for $1.5 MILLION per. Unfortunately, I think that the 1,000,000 evacuees in socal will create 13 refugee buyers for these things.
FWIW, ranch homes are hard to even find in Boulder. If you stick to your timeline, you can get a very good deal in Longmont or Loveland, if not sooner. They call it “Planet Boulder” for many reasons, property is one. Any other reasons???
Thanks Boulderbo/DenverLowballer,
Yes we definitely can not afford to buy in Boulder (even with
discounted prices)
Our best case scenario is Gunbarrel. Most likely scenario looks like SW Longmont (which falls in Boulder County)
Will consult you guys on this blog if I find anything interesting.
Despite its appeal, leasing the two-story house hasn’t worked. Ogle had two tenants and tried seeking a third, but it sat empty for months. No one wanted to pay $2,000 a month in rent.”
$2,000 a month for Phoenix? Wow, what a bargain! Can’t understand why rich renters aren’t snapping it up.
“Donna Parnham and her husband are having trouble selling their house, which spans 3,390 square feet, about 2 miles southeast of Gilbert.”
3400sq ft? naw that can’t cost too much to cool in a blast-furnace climate.
“All that space has overwhelmed the Parnhams, who are looking for a smaller house”
That caught my eye too…they buy some oversized house and only afterwards think about living in it.
I posted this a few days ago, but for anyone who missed it, the Dept. of Energy sponsors the Solar Decathlon, with 20 universities competing by designing solar-powered, energy efficient homes, some using new and innovative materials, others materials available right off the shelf. Check out the hydroponic gardens, solar fences, and indoor waterfalls to control humidity.
Here’s the website.http://www.solardecathlon.org/
“Tom McCormick, president of Las Vegas-based Astoria Homes, said he sold 30 new homes during the weekend of Oct. 12-14 after discounting prices by 10 percent to 27 percent in eight neighborhoods.” “The effects of these price reductions will be reflected in the coming months, Murphy said.”
I would assume the majority of those 30 new homes were sold at the 27% discount. As long as one was sold at a 10% discount, you have a range. Maybe he should have given us the median percentage instead.
“Some forecasters now warn that home prices are unlikely to start rising in most of the country before 2009 or 2010.”
Yes, prices are “unlikely to start rising” as they continue falling at an accelerated pace until 2009 or 2010. In other news, average global temperatures are unlikely to drop as they continue to rise…and when we return we’ll cover why the dollar is unlikely to become stronger as it continues to become weaker. Stay tuned, we’ll be right back.
Katie Couric, move over. You, Judicious, are ready for prime time.
Got a date with an old piece of wood…
adios
“‘Everybody’s kind of at a stalemate now, waiting to see what happens next,’” says Donna Butera, who has a business in Phoenix ’staging’ homes for sale.”
“Ms. Butera and her husband are trying to sell six homes in Phoenix and Scottsdale. They bought the properties as investments over the past few years, but now find that the rents they collect don’t cover mortgage payments that are resetting to higher levels after initial low-cost periods of a year or two.”
Flipper fool. This dope needs to be bailed out? NOT!
On this topic, we saw a beautifully staged home last week. Owner is a realtor, and they have everything including a set table with wine bottle on the table, various “scents”, accent lighting, etc… But it is still 10% overpriced relative to the current inventory of overpriced homes that are NOT selling, probably 30% over fundamentals. Lots of lookers (in a prime neighborhood), but no sale.
Does anyone really buy a house because it is nicely staged?
Nope. House behind me has been staged for sale twice. First time this was done was in September-October ‘05. Place sold in March ‘06 for considerably less than the ‘05 price.
Definitely. It is an emotional purchase for most families.
I do think staging a house can make it an earlier - and easier - sell than houses filled with old, ratty furniture, lots of clutter, and a yard full of weeds. The most effective staging shouldn’t really cost anything other than labor and time, though…and perhaps a monthly storage fee. Most of it is simply about clearing your detritus out so people can see the actual house.
People who completely re-do their kitchens and bathrooms to re-fit them with granite, marble, stainless steel, etc. are crazy, however. Because the number one house-seller is ALWAYS going to be a good price. In a buyer’s market, in a seller’s market…price your house at or slightly below fundamentals for the area, and you’ll be able to sell it. “Invest” lots of money in stuff you saw on HGTV and jack up the asking price to cover your “investment” and you’re sure to fail.
When people talk up their house and its renovations as an “investment” I like to ask them how much they expect a renovated kitchen to sell for…80% or its cost? 85%? “Yeah, about that.” “So you expect to LOSE at least 15% on your ‘investment’?” That usually shuts ‘em up.
I do think staging a house can make it an earlier - and easier - sell than houses filled with old, ratty furniture, lots of clutter, and a yard full of weeds. The most effective staging shouldn’t really cost anything other than labor and time, though…and perhaps a monthly storage fee. Most of it is simply about clearing your detritus out so people can see the actual house.
People who completely re-do their kitchens and bathrooms to re-fit them with granite, marble, stainless steel, etc. are crazy, however. Because the number one house-seller is ALWAYS going to be a good price. In a buyer’s market, in a seller’s market…price your house at or slightly below fundamentals for the area, and you’ll be able to sell it. “Invest” lots of money in stuff you saw on HGTV and jack up the asking price to cover your “investment” and you’re sure to fail.
When people talk up their house and its renovations as an “investment” I like to ask them how much they expect a renovated kitchen to sell for…80% of its cost? 85%? “Yeah, about that.” “So you expect to LOSE at least 15% on your ‘investment’?” That usually shuts ‘em up.
Microsoft is up big after earnings and even though I hold a bunch,
I FEEL NOTHING!
“Murphy said his minister on Sunday invited real estate agents, mortgage brokers, residential construction workers and anyone else affected by the housing downturn to a night of free hamburgers at the church.”
I volunteer once a month at the local food pantry. In past years, there were 100 people that would show up for assistance. Now we run out of food after 250 people come in for any help. It is going to get worse.
I’d think it would cost more than the cost of the gas to travel to a hamburger give-a-way. You just know these realtors & ilk do NOT bicycle anywhere, so the travel costs outweight the food benefits.
Of course misery loves company, which is what the good reverend is counting on as a draw. And realtors ARE a gregarious, social bunch.
Hmmm, may be a marketing stroke of genius for the reverend … !
I’ve noticed a lot more RE agents and their ilk at free food give aways called, “happy hour.” If lucky, they can even get someone to buy them a cheap well drink.
Home builders are offering substantial incentives ranging from bonus commissions for Realtors to $50,000 to $100,000 in free upgrades and custom options, he said.”
“A number of builders have slashed prices. Lennar Homes dropped prices by 25 percent in about 30 new home subdivisions and Pulte was advertising a 15 percent cut in prices over the weekend.”
25% discount…I do not think so Beg and just maybe I will bid at 50% off. Maybee.
“The experts talk about burning off the oversupply of resale inventory, but a huge portion of that vacant inventory is going to be permanent, Reeve said.”
IFF, Then what does that imply for prices?
Mark my words: The big story in 2008-9 will be the tearing down of homes in bubble markets throughout the country. Lienholders will decide that it is better to bulldoze thousands of properties in an attempt to prop up prices for remaining inventory than to drop prices to the point necessary to clear all the inventory.
Oh come now. That only works if a lienholder controls the entire market and can exert monopoly control over supply. With the way mortgages are sliced and diced, a lienholder might not control more than a single house.
Only way out for lienholders is to sell at market price, however low it may get. Just like the builders.
“Home building permits across metropolitan Phoenix fell to a 14 1/2-year-low to 1,309 in September, according to RL Brown’s latest Phoenix Housing Market Letter. New home construction figures for the Valley haven’t been this low since February 1993.”
Wow - this is big. Back in the mid 90’s getting a building permit was a piece of cake. It took just minutes. So, a lot of people took out permits on (sort of) a whim. Then they would decide not to construct. The cost and trouble was minimal. Also, Phoenix was a small(er) town then.
These days getting a permit is a bit more work and a lot more cost. A person does not get a permit unless they really intend to construct and they have money backing them up.
I remember we were using numbers from 2001-2002.
Now we’re back to ‘93.
Does anyone remeber what year Woodstock was?
It was in 1969. A neighbor (who is now a very successful attorney) attended. Said it was a groovy experience.
When Woodstock happened, I was part of a crew shampooing rugs at the college dorms. A couple of guys on the crew went to Woodstock, and never returned. Never heard from them again.
“Also included was a rambling manifesto, stating that the reason for the act of arson was that “Aztlán belongs to indigenous people, the Chicanas and Chicanos of Aztlán. We are sovereign and not subject to a foreign culture.”
Indigenous people? You mean those natives who had the Spanish language and culture imposed upon them?
No, not those natives. Aztlan of course refers to that mythical land from San Diego to Des Moines and Houston to Portland that some guys on horseback rode through, declaring it under the rule of Spain. Neat trick, that. Wonder if anyone asked the folks that lived there? If they were serious, they should taken control the old fashioned way, like the whites - disease, starvation and the gun.
Aztlan is the legendary ancestral home of the Aztecs — sort of like Asgard to the Norse, or Troy to the Romans, or wherever the *bleep* the Japanese say the Yamato race originated from.
The Mexican supremacists can’t figure out exactly where Aztlan was — it’s variously described as an island or a region, and has been placed in various locations throughout the western United States — so they just skip all that oppressive bourgeois Anglocentric geography, anthropology, and history and simply claim the whole darn continent. Much easier that way.
One of my best memories from law school was sending Mariana A. absolutely berserk with a few pithy appraisals of Aztec civilization. Of course, she now has a much better job than I do, so she probably has the last laugh.
Is anyone hearing news about the Albuquerque market? The press is being pretty quiet on the subject, and I am still seeing houses sell in the NE side of town, but due to state privacy laws, cannot find out what the sale price actually was.
check out zillow–home sale prices (and current property taxes)are about the only thing it’s good for.
Yeah, I check out Zillow regularly, but I am not sure how accurate it is due to the lack of data.
Thanks for the reply.
“The expense of maintaining the house, yard and pool is too much. In Ogle’s mind, the 10-year-old home is no longer an investment but a money vacuum.”
I prefer the term ‘money tornado.’
http://www.businessstandard.com/common/storypage.php?autono=302279&leftnm=2&subLeft=0&chkFlg=
Free church burgers for Fb’s in Vegas. My brother bought two homes, so makes his burger a DOUBLE WELL DONE with a side order of crow.
Got burgers?
Charles in LV
Free burgers for FB’s, I bought two homes , make mine a double well done with a side order of crow.
Got burgers
Charles in lV
“Blalock acknowledged that he put his home on the market at ‘the dead wrong time of the year,’ and although he said he is not pressed to sell, he hopes to find a buyer by early December. If not, he would be willing to take it off the market and then try again to sell it sometime next spring, or maybe not sell at all.”
PLEASE! Nobody be stupid enough to buy from these Bozos!
Utah’s MLS listings inventory just hit an all time high going past 21,000. This market is keeling over now. Be patient, unless you like catching a falling knife. The treat is in waiting.