A Whole Collection Of Must-Sell Sellers
9 News reports from Colorado. “Neumann Homes, the builder of the Village at Harmony Park and three other local developments, has declared its intention to file for Chapter 11 bankruptcy. That is a big problem for Lori Hartman who lives at Harmony Park in Westminster. She recalls the day her problems began. ‘We heard water dripping,’ Hartman said. ‘It was raw sewage in the light fixtures.’”
“Even the VP of the Harmony Park Homeowners Association, Glenn Potter, says he can’t get his phone calls returned. ‘They all want to build a house and get your money and after that, it’s kind of your problem,’ said Potter.”
“There are several homes at Harmony Park that are only partially complete. Jena Sautter pointed at one of the homes across from her own. ‘That house doesn’t have a roof on it,’ she said. ‘Can it last through the winter without falling down completely?’”
The Arizona Republic. “Vacant homes are a big reason why Valley home prices are falling. At least one out of every three homes for sale across metropolitan Phoenix is empty, and owners are motivated to cut prices to sell.”
“About 36 percent of the Valley homes posted on the Arizona Regional MLS are empty. That’s almost 20,000 of the record 55,000 houses for sale now. And a growing number of vacant houses are owned by lenders that foreclosed on the properties and want to cut their losses by selling them quickly and often cheaply.”
“‘There’s a whole collection of must-sell sellers in the Valley’s housing market now,’ said Jim Sexton, president of the Phoenix real-estate firm John Hall & Associates. ‘It’s a great time to buy, but sellers have a lot of competition now.’”
“These empty, bargain homes aren’t clustered in just a few neighborhoods. According to the MLS, vacant homes for sale are scattered throughout most Valley neighborhoods.”
“Home prices dropped in more than half of all Valley ZIP codes during the first eight months of this year, according to The Republic’s recent Valley Home Values report.”
“Existing home sales fell to 3,050 in September, the lowest monthly level for resales in several years. During August of this year, 4,240 existing homes changed hands.”
“‘There are a lot of people who have to sell now, ‘ said Brett Barry of Realty Executives. ‘We tell our clients to drop their prices every 30 days because they have to compete with so many other motivated sellers.’”
“Sales of existing homes in Pinal County dropped to 625 in the third quarter of the year from 970 resales recorded in the second quarter of 2007. The same quarter in 2006 saw 850 sales of existing homes. Pinal experienced its record high in the third quarter of 2005 with 1,550 recorded resales.”
“The median price has steadily eroded from $220,000 in fourth quarter 2005 to $200,000 in second quarter 2007, and $193,000 for the third quarter. The median price was $199,900 a year ago.”
“The median price has steadily eroded from $220,000 in fourth quarter 2005 to $200,000 in second quarter 2007, and $193,000 for the third quarter. The median price was $199,900 a year ago.”
“‘Although affordability has improved, higher gasoline prices, more congested highways and limited employment opportunities continue to adversely impact the housing market in Pinal County,’ said Jay Butler, director of Realty Studies at ASU.”
The Arizona Daily Star. “With the real estate slowdown settling in, local real estate professionals have been diving into volunteer efforts for first-time home-buying programs.”
“‘It’s a great time for buyers, especially first-time home-buyers because homes are a little bit more affordable than they were a year ago,’ said Judy Lowe, president of the Tucson Association of Realtors MLS.”
“Amado-Tellez, of Chicanos Por La Causa, said she’s happy to see more real estate professionals taking an interest in first-time and lower-income home-buyers. That hasn’t always been the case, she said.”
“‘I always can tell when things are slow because they start calling us,’ she said, referring to real estate agents looking for program participants as clients. ‘When things are really, really hot, they can’t be bothered.’”
The Review Journal from Nevada. “The Bureau of Land Management is holding its next public land auction Thursday at the Clark County Government Center. A total of 167.5 acres in parcels will be available for sale under the Southern Nevada Public Land Management Act of 1998.”
“The previous auction in March resulted in four parcels totaling 25 acres being sold for nearly $12.5 million, or roughly $500,000 an acre.”
“Fewer than 100 people attended that auction, which was held at the BLM’s Las Vegas field office. Past auctions have packed up to 2,000 people into venues such as Sam’s Town Live and 500 into the Cashman Center Theater and the Clark County Government Center.”
The Nevada Appeal. “Placer County is still accepting applications for residential building permits allocated by the Tahoe Regional Planning Agency for 2007.”
“In another measure of the state’s slowdown in housing construction, nearly half the county’s share of about 50 residential building permits remain available.”
“In recent years, heavy demand for the annual allocations have led planners to conduct a lottery among hopeful applicants. That’s not the case this year. The remaining 23 allocations are available on a first-come, first-served basis.”
“Each year, the bistate planning agency decides how many new houses should be allocated and distributes them to local governments in the Basin: Placer and El Dorado counties in California, Douglas and Washoe counties in Nevada and the City of South Lake Tahoe. Any remaining unused 2007 allocations will be forfeited and returned to the Tahoe agency.”
‘That house doesn’t have a roof on it,’ she said. ‘Can it last through the winter without falling down completely?’
Some people have ezpressed amazement at the idea of bulldozers knocking down new subdivisions in Texas in the 80’s. These sort of reasons are why.
‘The previous auction in March resulted in four parcels totaling 25 acres being sold for nearly $12.5 million, or roughly $500,000 an acre. Fewer than 100 people attended that auction, which was held at the BLM’s Las Vegas field office.’
This is why there is no telling how far prices might fall in the west. Prices have been artificially propped up by government hoarding, that I can imagine it getting down to the level of rural land prices in Texas not so long ago; a thousand or two per acre. That’s all it is worth, IMO.
Same thing happened in many inland areas of So Cal in the 90’s bust. You’d see these framed skeletons just rotting in the weather.
Empty land may end up being worth more. If there’s a house on it 1) you may have to pay more taxes because assessed value is more and 2) you have to factor in the cost of tearing down the house!
“The previous auction in March resulted in four parcels totaling 25 acres being sold for nearly $12.5 million, or roughly $500,000 an acre.”
I still can’t believe that people would pay half a million dollars for an acre of Los Vegas desert.
You can pay any amount per acre as long as you can go out the back side at a reasonable profit….$4.5 mil a acre is very common around here….
OMG! Call me stupid and slap me silly!
I’m targeting 4-5k an acre! (and that’s high IMO).
Lordy!
Leigh
Butter my buns and call me a biscuit!
I’m targeting less than $3K per acre, and that for land that has water, and green stuff growing all over it.
Slap me silly and call me Susan but I am expecting $100 an acre with a mine full of gold, diamonds, and lots of fruit and vegetable trees and 50 egg laying chickens and a partridge in a pear tree.
Actually, it’s worth less out west because there’s no water (OK, OK I know major portions of Texas don’t have much water either).
That is correct. A lot of that land leases for $2.00 per year. My in-laws have CO land that can only be grazed every 3 - 5 years. It won’t grow anything fast enough for more intensive use and the water rights are long gone. The cities out here dry out the farm land so they can have golf courses and bluegrass lawns.
Those numbers can not be correct. $500,000 an acre for desert property?. Are these parcels on the Strip?
I doubt the BLM has much land near the strip anymore. It was the national builders that bid it up so. They were paying $700k/acre a year before that auction.
Neumann!
“Neumann Homes, the builder of the Village at Harmony Park and three other local developments, has declared its intention to file for Chapter 11 bankruptcy. That is a big problem for Lori Hartman who lives at Harmony Park in Westminster. She recalls the day her problems began. ‘We heard water dripping,’ Hartman said. ‘It was raw sewage in the light fixtures.’”
hello jerry!
man, what is it with the raw sewage in the light fixtures? that same thing happened in that police training buiding those US contractors put up in Iraq.
Short Circuit between plumbing and electrical conduits. Also happens in old city municipal systems - backdraft from empty freshwater pipes sucks raw sewage - cause of water borne illnesses like E. Coli & Cryptosporidium (famous outbreak in Milwaukee, WI)
Sorry, I can’t let this one go uncorrected. It is not caused by a short circuit between plumbing and electrical conduits. In houses there rarely are electrical “conduits”. There’s just wires all over the damn place.
Here is what happens. The drain from the toilet leaks. It gets in the space where the joists are between the ceiling of the first floor and the floor of the second floor. The light fixtures are set through a hole made in the ceiling, so the “water” starts leaking through that hole and into the light fixture.
Honey, what is this turd doing in the light fixture?
Don’t worry about it, that was one of the upgrades.
LOLOLOL!!!!!
Wife — “Honey, what is that dripping noise?”
Husband — “I’ve got good news and I’ve got bad news. The good news is that it is not water dripping out of our ceiling. The bad news is that…”
Wife — “Honey, what is that dripping noise?”
Husband - TSHTF!
No wonder they have to file for bankruptcy! Look at their homepage…graphic designer cost them a fortune (laughing).
http://www.neumannhomes.com/
:>)
Leigh
Honey…….you forgot to flush the light again.
I’ll never buy an Alfred E. Neumann home again.
“Fewer than 100 people attended that auction, which was held at the BLM’s Las Vegas field office. Past auctions have packed up to 2,000 people into venues such as Sam’s Town Live and 500 into the Cashman Center Theater and the Clark County Government Center.”
They just aren’t buying parched desert land, like they used to…
Commodities are up! What is tumble wheat going for these days?
Don’t know what it is today – we mostly just monitor during harvest for when we want to sell. But for an interesting take on the (un)likelihood of it going down, here: http://www.safehaven.com/article-8605.htm
Good read.
“In recent years, heavy demand for the annual allocations have led planners to conduct a lottery among hopeful applicants. That’s not the case this year. The remaining 23 allocations are available on a first-come, first-served basis.”
Man, how many planners, politicians and municipalities thought they were the $hit because starts were up?
does every town have a deputy housing minister ?
soviet sounding names
does every town have a deputy housing minister ??
Fabricate a need, sell it to your superior and “Bingo” you have a brand new “Muni” job…..
In Douglas County there are/where many purchased permits going unused. When the Sustainable Growth Initiative was passed limiting the number of permits to be issued per year, many of the builders ran down and sucked them up in mass.
Now, most spec homes have been on the market 12-18 months. Nothing, and I mean nothing, is moving up here. I asked someone I know who works for a local builder why in the heck did his boss just start another spec (he has 6 high-digit specs sitting) He tells me the boss said that the only way to pay himself and keep his workers busy is to keep building, but that if the market doesn’t turn in the next couple months it’s BK time. His boss better go find himself a lawyer now and quit wasting time.
That means that builder is down to using construction draws to pay direct employees. A big no-no. Almost sure sign of immanent BK. And this after a historic bubble run, when if these guys has been prudent they could pay cash and never have to use loans ever again….
ex-nnvmtgbrkr;…Is it getting worse up there ??
botox
WASHINGTON - The Federal Reserve pumped $41 billion into the U.S. financial system Thursday, the largest cash infusion since September 2001, to help companies get through a credit crunch.
Isn’t the “Free Market” just great? Hey, if I run a little short of money for expenses this month will the FED lend me a couple of hundred million to help me out?
The fed has a government supported monopoly on money in the U.S. The monetary system in the U.S. is a lot of things, the least of which is a “free-market.”
What exactly does pumping money into the financial system mean? I’ve never understood the concept, I always imagine dollars flying out of an air nozzle.
I’m not 100% sure, but I think it’s this: the Fed loans out money at ridiculous low rates with non-existent collateral. (Banks borrow from each other all the time). The “loans” are nomially expected to be paid back but it’s mostly okay if it never comes back again. Thus the Fed can create money on a whim.
But then it must be inflationary with all this new money flying around willy-nilly, right? I need to take a remedial Economics class…. I understand Joshua trees much better.
The “fed funds rate” is just a target. Banks lend money to each other for short-term stuff all the time. Generally, banks don’t go straight to the fed to get the fed funds rate. If they go to the fed, they have to go to the “discount window”, which is a mis-nomer since it is now .5% above the fed funds rate.
So, if more banks want to borrow over night than want to lend, the actual rates will creep up. So, the fed says it plans to inject some money and asks banks to submit bids on what collateral they’d like to borrow against.
Let’s say the actualy interbank rate is at 4.70 with a target rate of 4.75… The fed may call some loans.
Or, in the case of today, yesterday they cut the target rate to 4.5%. So, they guestimate how much money they’ll have to loan out to get enough extra money in the system to drop the rate the banks charge each other down to the new target rate.
So, the Fed injects money by granting loans to banks. The money they are loaning, did not exist yesterday.
The banks then use the money to make loans to each other.
The $41 billion was needed to get the actual overnight rate banks charge to each other, to drop to their new target.
OT:
http://www.marketwatch.com/news/story/first-americans-target-suit-over/story.aspx?guid=%7BACE3E88E-FD76-4277-95F4-3F349FFC3735%7D
First American sued over alleged appraisal scheme
Worked with Washington Mutual to inflate home appraisals, suit charges
While I think phony appraisers should be prosecuted, home buyers were complicit, too, and should share some of the blame.
RE: While I think phony appraisers should be prosecuted, home buyers were complicit, too, and should share some of the blame.
Correctomundo, R.
The homebuyers knew the fix was in.
They more than willingly went along with their lenders to utilize the appraisals shops which were known to make every deal fly.
I have no empathy for any of these people.
One interesting thing about the current bubble is, for the most part, it was driven by people with NOTHING to lose!
If you had any significant savings, you probably wouldn’t try flipping houses! You’d know that you may have trouble just walking away from it if things went bad. (Even “no recourse” loans usually apply to primary mortgage on residence.)
Only people with absolutely no savings would feel comfortable getting a house they couldn’t afford with “no money down”. And with banks willing to work with appraisers to make up crazy valuations, it was risk free to HELOC money, too.
Two things make this worse:
1. We can’t go after these borrowers. They have no money. And our Bankruptcy laws make it impossible to do anything to them. I certainly don’t want to see debtor’s prisons, but any bank that has FDIC insured accounts should be prohibited from making home mortgages for more than 80% of the cost of the home at closing.
2. You and I will, ultimately, end up paying for this. I wish someone would at least hold the BORROWERS liable for taxes on forgiven debt and whatever they stated their incomes to be. It’s much harder to get out of a tax obligation. Let these folks pay off the government for the rest of their lives.
Bhwawawawa…….so much for the rate cut.
http://www.marketwatch.com/news/story/us-stocks-slide-earnings-financial/story.aspx?guid=%7B09331B7F%2DFA3E%2D4284%2D8E7F%2D4378B240A74C%7D
Yeah…And look at the last hour….That was ugly…
“Let’s be realistic, we have no idea how big of a problem this whole subprime mess really is,” Mendelsohn said. “Is it 200, 300, 400 billion dollars? This is the third round in the subprime fight, and we don’t know how many rounds there really are.”
wow, are they actually seeing the writing on the wall?
$1 TRILLION
I watch CNBC and there are flapping heads calling for more transparacy. If they got it, and found out that the problem was $1 trillion, then they’d want to go back to the days where there was no transparancy!
What they really want is for there to be transparacy, and for the probelm to be fairly small. And people in heck want ice water….. The probelm is huge, so they should be happy without transparacy!
Try 4.5t trillion dollars. That’s a 25% haicut on a notional value of the housing stock of 22 trillion often bandied about by ‘economists’.
And this AFTER the FED infused $41 Billion dollars into the system. Can they print money that fast? When do they EVER take that money back out of the system? Do we have enough trees to support all that printing?
Looks like the market took a huge Bernanke today… Time for the Clueless Buffoon to implement another emergency rate cut and inject more money into the system.
I am not so sure that gig can work anymore after watching the last two days. I think the saavy investors have figured out that BB and Co. and ‘Merika for the most part have painted the country into a corner.
Print more dollars and lower the rates to what, 0%. You can forget about the dollar being worth more than just wallpaper at that point. I know not everyone here is a goldbug, but running the printing presses and dropping rates again will push gold over $900. The only thing worthwhile about the money now is that it is just a medium of exchange. Cash is just paper and BB is letting everyone know that, esp. if he lowers again.
The irony of the entire economy, however, is that it takes cash, technically speaking, to buy a lot of what we need. Sure, you can use credit or debit. However, I have yet to see the ARCO man give me 300 gallons of gas for my 1 oz. gold coin that reads $1 on it.
Amen OCDan! Gold is just as useless as paper money. It doesn’t matter what the “currency” is, it only matters if the majority can agree on its relative worth. I think we have all agreed in one way or the other that binary digits stored on secure servers and storage somewhere are now the de facto currency.
Let’s rescind the legal tender laws and see how many folks sign up to trade paper when given a choice.
“‘It’s a great time for buyers, especially first-time home-buyers because homes are a little bit more affordable than they were a year ago,’ said Judy Lowe, president of the Tucson Association of Realtors MLS.”
Yeah, but they were better times when no-doc, fully ARM’ed NINJA’s were camping outside. I’m so tired of the “first-time home-buyer” bs.
I love the realtors circling their prey like the predators they really are. They believe that the 1st time buyer is the weakest, most vulnerable segment of the market, and the realtors will do whatever they can to separate them from the herd, so they (the realtors) can come in and make a killing (the sale).
If you buy now at this “great time”, it will be a long time before you’ll ever be able to buy again.
A bit more afordable, Judy? I think I’ll wait til they’re a big honking bunch more afordable….that OK with you, Judy?
Judy, Judy, Judus… Get an honest grip on your life. Would you personally advise your son or daughter to buy into this market? Would you personally advise anyone’s son or daughter to buy into this market?
It’s one thing to act the shill for her ‘profession’. It’s another to actively lie for it. She is on the border.
Good luck Judy. As a “first time buyer,” maybe I’ll just wait until homes are a lot more affordable. Feeding realtors and flippers driving around in their beamers doesn’t fall within my definition of “worthy charitable causes.”
A realtor friend of mine, actually a neighbor, said to me last night “It’s a great time to be a buyer right now”. I told him I agreed, but only because being labeled a “buyer” means you haven’t bought yet. He laughed. He can afford to laugh since he sells mostly commercial real estate now and owns rental properties.
I don’t hear anyone saying “It’s a great time for recent buyers”.
Excellent point!
“In another measure of the state’s slowdown in housing construction, nearly half the county’s share of about 50 residential building permits remain available.”
“In recent years, heavy demand for the annual allocations have led planners to conduct a lottery among hopeful applicants. That’s not the case this year. The remaining 23 allocations are available on a first-come, first-served basis.”
I lived in Lake Tahoe some 20+ years ago and enterprising slacker friends of mine, would camp in line for a week or 2 during the winter, for somebody that wanted a coveted building permit.
I think one friend got $500 for 10 days of going nowhere, fast.
Hi. I may be moving back to Phoenix (Tempe/Chandler area) at the end of this year. I’ll rent at first, and can really rent for as long as I want.
It looks like home prices have dropped maybe 10% from the peak, but they’re still far above 2003 levels. I know that guessing the bottom is impossible, but I’m asking for your best guess here. My own feeling is it could be 2-3 years from now, hopefully with prices down another 10% or 20% from where they are at today. That would correspond to 5%-6% annualized appreciation starting in 2003.
Thanks,
Bill
‘guessing the bottom is impossible’
I agree, because the wild card is the AZ economy. The state is so dependent on RE and tourism, that anything could happen.
I think high oil prices might force some of the snowbirds to become permanent AZ residents. After all, they can sit at the mall in the summer when it’s hot, but cannot choose NOT to buy $100/bbl heating oil to keep their old northeast house from freezing this winter. AZ is really a low energy use state as long as you don’t mind sweating a little. So maybe some percentage of ‘birds will settle permanently in Sun City or at a trailer park in East Mesa, giving just a little bit of a jolt to the RE situation.
None the less Bill, prices are going down, down, down whether or not the tourists show up this winter. I’d wait until asking prices match the 2004 or 2005 tax assessment values - about 30 to 40% under current prices.
Unless you’re an educated vulture eyeing distressed sales, don’t try to time the bottom. Instead, look for 2 quarters of price increases after a reversion to mean. Yeah, that’s a long wait. If you can’t rent that long, then at least wait until you get close to the reversion to mean territory.
Or;..Just track the inventory levels a wait for a “clear” turn…Maybe a 30% reversal…
In other words, don’t time the bottom. Wait until values start to go up. That’s a safer bet to be as close to the bottom as one could guess.
Here,
keep track, and try not to laugh tooooo loud:
http://www.azcentral.com/business/datacenter/foreclosures.html
Thanks a million for all the comments. 30%-40% decline from here sounds good!
I am watching, and will continue to watch, the inventory levels. Also will periodically look at the cost of renting vs buying. I think people really underestimate all of the expenses associated with owning a house.
There seems to be a good supply of rentals, both apartments and houses, at attractive prices. That works for me.
Bill
o/t Maria Bartoromo looks sick today.
She says ‘down 340 is nothing to get excited about’.
No ‘big O’ for Bartoromo today!
What a doll that one is.
10 years ago.
Liz Claman is much better.
She was so happy yesterday she could barely contain herself. Nearly all these reporters act like the Fed is Santa Claus when the present is a rate cut. Yesterday they were just as excited as children on Christmas morning.
That’s funny.
It’s all about brainwashing the American public into thinking that rate cuts are good. You never hear them say, oh no, the price of goods will be going up. Why? Because they are the ones robbing you!
Maria Bartoromo has so much collagen in her lips it impedes her speech.
her undereye bags can hold a gallon of water
Housing Bubble Boom, in reverse.
“‘There are a lot of people who have to sell now, ‘ said Brett Barry of Realty Executives. ‘We tell our clients to drop their prices every 30 days because they have to compete with so many other motivated sellers.’”
I always turn cnbc off the last hour and watch bloomberg, can’t stand the drama and yelling. I can’t believe my posts are going thru (a first), must be slow.
I cannot stand Maria Bartoromo, Larry Kudlow, or Jim Cramer. A bunch of Bulls(hit).
Larry is just a financialtor, as he always says “It’s a great time to buy financials”. Let’s see what he has to say in a few minutes…
“‘It’s a great time for buyers, especially first-time home-buyers because homes are a little bit more affordable than they were a year ago,’ said Judy Lowe, president of the Tucson Association of Realtors MLS.”
a little bit more affordable ?? please, i have an idea, how about you tell the truth. wait for prices to fall further so it will be alot more affordable. but then i guess that would be expecting to much from a realtywhore.
“Amado-Tellez, of Chicanos Por La Causa, said she’s happy to see more real estate professionals taking an interest in first-time and lower-income home-buyers. That hasn’t always been the case, she said.”
“‘I always can tell when things are slow because they start calling us,’ she said, referring to real estate agents looking for program participants as clients. ‘When things are really, really hot, they can’t be bothered.’”
so they are scraping the bottom of the barrel now. i hate realtors!!!
One would have thought they found every last warm body already with the sub-sub-sub-prime loans of last year. Now they’re digging up the dead and going through their burial clothes looking for loose change.
“‘It’s a great time for buyers, especially first-time home-buyers because homes are a little bit more affordable than they were a year ago,’ said Judy Lowe, president of the Tucson Association of Realtors MLS.”
JUDY YOU ARE FULL OF $#@!!
IT IS NOT A GOOD TIME TO BUY UNLESS THE BUYER GETS A FAIR PRICE. PRICES ARE STILL BASED ON FRENZY BUBBLE PRICES.
TUSCON TAKE 50% TO BE JUST FAIR.
Comment by ex-nnvmtgbrkr
2007-11-01 12:59:33
Unless you’re an educated vulture eyeing distressed sales, don’t try to time the bottom. Instead, look for 2 quarters of price increases after a reversion to mean. Yeah, that’s a long wait. If you
A reversion to mean would be at least a steep price drop of over 50% for bubble markets
Yep. Actually in lot of places even 60-70%.
In reality - in most cases that 50-70% will be realized in large part by inflation catching up - e.g. a place that got 50% out of whack will see perhaps just a 10% decline in nominal prices, with the other 40% being made up for by inflation. And in most cases this will take a long time - like 10-15 years.
We are in no hurry to buy, but I’m not waiting 10 years!
I confess, we can afford to purchase, but we’re not big on burning money.
Many seem to be much more optimistic than I.
Here are my thoughts. Get out of dodge into relatively safe area before mass hysteria hits. (upward commodities, unemloyment, angry people).
I see this happening rather fast–but I can’t quite put my finger on why.
Your (board) input is most welcomed and warmly received.
Curtsey,
Leigh
You don’t have to wait 10 years, Leigh. When you’re reasonably certain housing prices have bottomed, then buy at the bottom. It shouldn’t matter to you if it takes several years after that for prices to rise in real terms, as long as you’re purchasing the house as a place to live in on a long-term basis (i.e., until or after the mortgage is paid in full) and not as an “investment.”
When you mean ” Get out of Dodge”, hopefully you don’t mean move to the boonies. While the thought is tempting, you need to remember that in a downward cycle, metro areas will be better areas for jobs, etc etc. This doesn’t mean you have to stick to the classic big cities like NYC, LA, SF etc. Smaller metros will actually probably fare better since then didn’t get themselves as deeply intertwined with over the top prices, hence their local economies might actually be safer.
But I don’t think running literally to the hills is especially wise. Rural areas will be hit worse than other places. That is unless you’re just loaded and can afford to simply not work.
Hi RMTM Bob and jetson_boy!
Thank you for the input(s).
A thousand pardons, as my communique is clouded, let me please clarify.
–long term basis (homeowner, not vestor)
–resources (water, wheat, and trees…oh, I love trees!)
–small community…with like minded individuals
–energy efficient
er…not loaded, per se, loathe…er…dislike consumerism.
And!!!
Saved for a rainy day!
For all the good of it!
Number one fear (uh oh) is the ones whom are angry.
P.S. Do not like most folks or fear much of anything
Leigh
Leigh,
I think I can read between the lines what you are afraid of. I do wonder about some areas if recession turns to depression. I remember the LA riots and something could reoccur.
A bearish person buys gold but the ultimate bearish person would invest in guns/ammo and self-sufficiency.
History gets interesting when self-sufficient people invested in guns & ammo meet an even larger number of the same.
In reality - in most cases that 50-70% will be realized in large part by inflation catching up - e.g. a place that got 50% out of whack will see perhaps just a 10% decline in nominal prices, with the other 40% being made up for by inflation. And in most cases this will take a long time - like 10-15 years.
I disagree i think 50% plus real price drops are going to mhappen in relatively short order. Pricing is so out of whack vs incomes that affordability will force prices down hard.
Inflation does not follow lock step between assets and expenses (liabilities).
When gas is $7/gal and milk is $11. You can’t go to the office the next day and tell your boss to double your pay. Boss is gonna say sorry man, nobody is buying our stuff anymore, I gotta let you go.
Assests only go up if you can get more money (wage inflation). I don’t see that happening.
More likely to see managers and owners telling you some other guy more qualified and desperate than you is willing to work for less than you get. So take the cut or pack your stuff.
“‘There’s a whole collection of must-sell sellers in the Valley’s housing market now,’ said Jim Sexton, president of the Phoenix real-estate firm John Hall & Associates. ‘It’s a great time to buy, but sellers have a lot of competition now.’”
Pleeeaassseeee….for the umpteenth time, someone tell me just WHO ARE THESE BUYERS? Who’s left in the idiot gene pool?
Haven’t all the buyers already bought and now THEY”RE the sellers?
They’re all on the supply side!
Criminy…If I see “it’s a great time to buy” one more time….
No, he’s right, it is a “great time to buy”. But only for the right price.
There are several houses in my city that I’d “snap up” in a heartbeat, if the price was right. Unfortunately they’re not so I wait.
BTW, the realtor I used in 2001 was with this John Hall firm - a nice lady and this was before the Phoenix Phrenzy when houses were still just houses.
A colleague of mine just bought. Got very excited about a cute house that she thought just came on the market, and “jumped” at the chance before someone else “snapped it up”. I just know those words came from the realtor.
Gee, exactly ONE house has sold in Pullman over the past month, there are a hundred on the market, this house was priced way above comps (2 bedroom in a family town), it was on the market for a couple of weeks (meaning everyone who was watching the market had a chance to see it and passed), and adding insult to injury my colleague’s agent LITERALLY works for the seller who is a broker at her agency.
Bottom line: a lot of folks out there have their head in the sand, and Realtors are quite good at taking advantage of them.
http://www.nypost.com/seven/10312007/business/sec_eyes_goldman_sachs_good_fo.htm
This is absolutely no surprise. Wait until the full story comes out with all the financials investments banks realtors appraisors
Law suits for years
‘If someone had known the scope of the subprime mortgage mess ahead of time he could have profited handsomely.’
How about anyone on this board for 2+ years’ wtf
LMFAO
Read Mr. Christopher Woods of CLSA “Greed and Fear newsletter” from 2005 (if still available). His scenario for his institutional investors describes the current mess. At the time he advised all his institutional clients to get out of US CDOs and US CLOs. Now the market is points higher and the enormous profits made this year on the short side will be greater still. I follow his advice on things to avoid, I do not follow his timing or his recommended purchases. Risk avoidance is over half the battle.
MBA, right.
I know that TXchic and others including myself did pretty well shorting alot of the subprime bombs. I still do short a couple of call spreads every month and am collecting premium month after month.
“They also assume that much of what The Working Group accomplishes is done through Goldman, where Treasury Secretary Hank Paulson had been chairman before heading Treasury.”
So they’re wondering if there is some sort of “insider” leak? LMAO! That much has been obvious to me, if it was a snake it would have bit them. I’ve always said, Paulson doesn’t work for the US, he works for Goldman, still. Care to place any bets whether the SEC will find any wrongdoing or dare to name the “insider”?
A Scenario.
Housing developments standing empty.
McHouse neighborhoods, with large portions of homes ‘For Sale’ signs, or in the process of being foreclosed on.
The homeowners who are still there feel creepy, as they look around the neighborhood. They are all alone. They ask themselves, as they sit at the dinner table eating a quiet dinner. “Why are we staying here?”.
They want to leave.
The abandoned neighborhoods are quiet, like ghost towns. Just a few stray cats & dogs who were left behind, scrounging for something to eat.
NOW, with that scenario in mind, fast forward to one Mr. Alan Pondscum, former chairman of the Fed. He has now dragged his carcass out in public, because he knows what’s coming.
He even wrote a book to save his sorry ass because all eyes are focused on this man. Who by the way looks like a Big Mouth Bass.
Greenslime: “I think bubbles are great. They are actually good for our economy. They bring out the best in us”.
I am not joking. I read this on the DU recently.
Now pan back to the plywood frame, the 4 walls standing there. Exposed to the elements, rotting in the rain.
Curstey Cliss,
I believe you found the finger I myself could not find.
A Leigh original:
Irrational exuberance turns into mass hysteria?
Uh oh,
Don’t know?
Leigh
THE FED PUMPED $41 Billion into the system today. In the past 3 mos, they have pumped over $100 Billion into the system. Hyper Inflation. The FED thinks they can print their way out of this mess and inflate government tax coffers through inflation.
http://biz.yahoo.com/ap/071101/fed_markets.html
In perhaps 100 times hyperinflation has raged across the world, the past 100 years…
Gold has never failed once, in terms of keeping a constant value of your wealth.
Not a bad track record, eh?
1980 to 1999 wasn’t too fun ($800 to $250 isn’t quite constant, the dollar depreciated that whole time), but, unlike Enron, it never did go to zero.
They were rollovers of existing repurchase agreements. Nothing new, nothing to get excited about - just evergreen loans.
Oh yeah?
Do the math on an alternative investment with even as low a real rate of return as 3% and add the effects of inflation and the initial high gold puchase prices made 20 years ago and you will see that you were left with darn near nothing IN REAL TERMS over the 19 years gold was in the crapper.
do the math!!!!!
Except when you go to sale the gold. Then what happens? The Gov’t taxes y ou on the gains so you still end up worse but not as bad off as if you would not have bought the gold in the first place. As for the gov’t? They are better off and so is the IRS. They just got more of your money.
Heard from the grapevine that an individual took his pay in the form of gold coins. He was taxed (FICA, State, Fed) and the Corp was also taxed on worth of gold. Appealed to Fed court and ruiling overturned. Only have to pay tax on ‘FACE’ value of coin. Am sure IRS will appeal to a higher court. In Las Vegas. Does anyone know anything?
http://www.nowpublic.com/crime/media-blackout-161-federal-tax-charges-0-convictions
There are a lot of pieces of legislation on the books that lets the Pres. have his way with your assets here and abroad. Nothing is really safe from them unless it is in your own self-styled “matress”.
Only the loans make the news. The repayments don’t. I wonder how much has been paid back by the borrowers.
Total Fed credit since Aug has stayed between $40 and $45B - there have been no increases - just rollovers. Discount window borrowing total is $254MM. Obviously C, BAC et al payed back the $2B they borrowed at the discount window.
I am amazed that no one hear has picked up on the disclosure this week in Bloomberg, by the 12 FHLB’s loans totalling 163 BILLION DOLLARS made by this government apparatus to 800 mortgage lenders, including 51 BILLION to CFC and 31 BILLION DOLLARS to WM in the months of Aug and Sept 07.
The 12 FHLB’s went into the bond market for 143 BILION DOLLARS of that money and lent it to CFC, WM, et al at 4.9% when Libor was 5.6% minimum and where this kind of dollar volume WOULD HAVE BEEN IMPOSSIBLE TO PLACE and in the process subsidizing the loan interest by using their implied gov’t guarantee.
UNF*^KING BELIEVABLE!!!!!!!!!!!!!!!!!!!!!!!!
That is why no one showed up at the discount window to borrow money despite a credit crunch - they got all thay needed from the Feds through a back door, which did not have to be reported till after the quarter’s end, thus avoiding criticsm of the move and to protect the dollar to some degree.
What you people still don’t get on this blog is how Bernanke will do anything, and I do mean anything, to AVOID DEFLATIONARY PRESSURES IN THE ECONOMY!!!!!!!!
Just remember that academics are slavishly devoted to theory and are woefully short on the kind of real “economic street smarts” to understand the far reaching implications and impact their ambitious plans entail.
Could you give some very basic information on this cash infusion. How is the money introduced into the system? What happens then? How / when does it get paid back?
My background is in engineering not economics - thanks for the help.
What happens/happened is that the Federal Reserve allows banks to meet short term cash needs by providing the Federal Reserve bank with a security (US Treasury Bond etc.). The credit insolvency issue in August is such an enormous problem the Federal Reserve allowed member banks to place ANY MORTGAGE BACKED SECURITY with the Federal Reserve as collateral. These are “Repo” agreements, generally lasting 3 days to 1 month. Since then the Federal Reserve has “rolled over” the loans without requiring any reduction in loan amount.
Since the majority of the moneys loaned in August were MBS collateralized, this has the potential to monetize losses at full face value. Obviously there is no mortgage backed security that is worth what it was on August 1.
From the Yahoo finance article linked above:
“Since August, the Fed has been pumping cash into the financial system to help ease strains from the credit crunch.”
That is patently false. Total Fed Credit since August has fluctuated between $40B and $45B. There has been no cash infusion. The “discount window” is 254 Million loaned out which is within a few millions of where it was in July.
Not a problem unless prices come down, or inflation rears it’s ugly head, (already here in some places) they will just convert to the Amero, backed by the full faith and confidence of the mexican and canadian government along with what is left of the US government. Wonder what genius thought this was a good idea. Price drops have to happen or else that 24K a year strawberry picker will need 240K ameros to afford the “Dream”. This whole mess is just getting started and already seeds of panic are sprouting in the RE “Industry”. Gonna be a show, that is for sure.
This is hilarious.
http://tinyurl.com/3baue5
The Wall Street Journal this morning takes Bear Stearns CEO James Cayne to task for, among other things:
Playing golf and bridge during the summer even as two Bear Stearns hedge funds were losing money.
Cayne reportedly spent 10 of 21 workdays out of the office in July.
Disappearing during August conference calls with investors.
Eh, so what. Almost all CEOs play golf and bridge. BUT, after successfully employing a trump coup in contract bridge do they kick back and twist up a big fatty? :
“After a day of bridge at a Doubletree hotel in Memphis, in 2004, Mr. Cayne invited a fellow player and a woman to smoke pot with him, according to someone who was there, and led the two to a lobby men’s room where he intended to light up. The other player declined, says the person who was there, but the woman followed Mr. Cayne inside and shared a joint, to the amusement of a passerby,” the Journal reported.
“Asked more generally whether he smoked pot during bridge tournaments or on other occasions, Mr. Cayne said he would respond only “to a specific allegation,” not to general questions.
So that’s what they mean by Cayne’s “blunt style.”
Well, we have to hand it to Kate Kelly over at the Wall Street Journal. In this morning’s story about Bear Stearns CEO James Cayne, she managed to crank out 16 straight paragraphs before outing the dude as a bridge-playing, pot-smoking freak! Sixteen paragraphs! The sheer discipline it must have taken to do that is beyond our comprehension.
On the other hand, it is the Wall Street Journal and they are, after all, professionals. But so are we. Minyanville has compiled the following list of handy Bear Stearns pot-laced quips for your usage. Use them on your friends at Bear. Or just cut and past them into IM if it’s easier.
Bear Stearns Announces Stock Spliff!
Cayne to Leave Bear Stearns After End of Quarter… Bag
Bear Stearns’ Cayne Says Credit Markets Returning to NORML
Dude, Where’s My CEO?
Thai Skunk Downgraded at Bear Stearns; Master Kush KC33 Raised to Strong Buy
Bear Stearns Quarterly Yield Now 28 Bong Hits
Analysts Dazed and Confused by Bear Stearns Quarter
Bear Stearns’ Cayne Pitches One Hitter, Says Will Now “Only Smoke On Weekends”
Report: Bear’s Cayne Feels Like Everybody in Board Room Looking at Him Bear Stearns Announces Half Baked Plan to Exit Subprime Mortgage Business
Chicken Little took a lot of safety breaks…
Ahhhhhhh…that explains it…smoking rope.
Jeesh, and golfing.
How great is it to be an elistist, and denial on all the fronts?
Ya just can’t make this stuff up!
Leigh
P.S. Guess what Stan O’Neal was doing while Merrill Lynch was tanking?
Ya just can’t make this stuff up!
Best,
Leigh
http://jeffmatthewsisnotmakingthisup.blogspot.com/
Realtor to the stars murdered.
http://www.cnn.com/2007/SHOWBIZ/11/01/stein.obit/index.html
She must have ticked someone off I guess. I wonder if it had anything to do with real estate.
Poor woman. Probably just a breaking and entering incident, but I hope they arrest and covict those involved. Sad and pathetic.
What if you got involved with some cash back real estate crooks and she decided to change her tune ?
no forced entry which makes it more interesting.
“‘It’s a great time for buyers, especially first-time home-buyers because homes are a little bit more affordable than they were a year ago,’ said Judy Lowe, president of the Tucson Association of Realtors MLS.”
How it can be “It’s a great time for buyers, especially first-time home-buyers ” if only “little bit more affordable”? maybe it is “It’s a LITTLE BIT great time for buyers, especially first-time home-buyers”
suckers who buy now
Scary Halloween edition: Maricopa County Arizona (Phoenix Metro)
Notice of Trustee’s Sales
Aug 05 795
Sep 05 669
Oct 05 728
Nov 05 704
Dec 05 749
Jan 06 726
Feb 06 687
Mar 06 790
Apr 06 638
May 06 764
Jun 06 797
Jul 06 851
Aug 06 1019
Sep 06 1114
Oct 06 1238
Nov 06 1493
Dec 06 1407
Jan 07 1624
Feb 07 1577
Mar 07 1720
Apr 07 1709
May 07 2007
Jun 07 2325
Jul 07 2501
Aug 07 3248
Sep 07 2834
Oct 07 3458