Local Market Observations!
What do you see in your local housing market this weekend? Price cuts? “Up to 25% Off home prices PLUS 3% Toward Closing Costs!*
Or boosterism? “Healthy real estate markets in Kentucky and Midwestern states are being hurt by national news reports of problems in other areas, Lawrence Yun told Lexington Realtors yesterday. ‘It’s the coastal markets that are out of whack and, some might say, have a (home price) bubble,’ said Yun, the chief economist for the National Association of Realtors.”
“There is ‘absolutely zero bubble’ in Central Kentucky, and the area’s housing remains remains ‘very affordable,’ maybe even ‘undervalued,’ he declared, as his audience applauded.”
“The total number of home sales for Scott County is down 14 percent year-to-date from last year, and September’s sales are down 36 percent from a year ago, according to Lexington-Bluegrass Association of Realtors figures. Scott County’s median sales price has fallen 3 percent year-to-date from $157,800 in 2006 to $153,000 year-to-date in 2007.”
“Economist Lawrence Yun said that it is important to keep the current housing market in perspective because 2007 still will be the nation’s fifth-highest year on record for existing-home sales.”
“‘Although sales are off from an unsustainable peak in 2005, there is a historically high level of home sales taking place this year - a lot of people are, in fact, buying homes,’ Yun said.”
“Scott County’s higher inventory should be encouraging to prospective buyers, said Becky Murphy, LBAR president. ‘With unprecedented inventory levels, it is an excellent time to purchase a home as buyers should have no problem finding exactly what they are looking for,’ she said.”
The rolling bubble? “Local housing experts have provided evidence backing their assertion that homes in Carlsbad are becoming more valuable by the month.”
“A few local case studies also provide some insight into the market. According to information provided by Dunagan, for example, a $77,500 house purchased on West Blodgett Street in September 2005 sold for $91,500 in July 2007. The $14,000 jump represented an 18 percent increase, and minimal changes were made.”
“‘When they say minimal, usually it’s paint,’ said broker George Dunagan. ‘They basically did nothing but maintenance to the house, so it’s pretty indicative to the market.’”
Or job cut notices? “Employees were laid off at Wells Fargo’s Billings loan-processing center Thursday. ‘After evaluating our operations in the current housing market, we must reduce staffing to better align capacity and increase the efficiency of our home equity fulfillment operations,’ wrote Lori Sinsley, a Wells Fargo corporate spokeswoman. ‘To that end, we are making adjustments to the number of our home equity team members in Billings.’”
“Tom Frisby, regional Job Service director, hopes the lending industry layoffs don’t become widespread. ‘I hope this is not a portent of something in the financial industry that is going to really impact Billings,’ he said.”
“Canfor Corp. president and CEO Jim Shepard said Friday he won’t hesitate to take more sawmill shutdowns in the face of a continuing poor market and high Canadian dollar.”
“‘If this market ratchets down, we will ratchet down our production, full stop,’ Shepherd told analysts and reporters on a conference call to discuss the company’s $42.1-million third-quarter loss.”
“Prince George Trucking Association president Stan Wheeldon said there was already a reduction in work in the summer which meant more people chasing less work.”
Retail changes? “Wal-Mart is selling 26-inch high-definition TVs for $450 this weekend. Circuit City plans to give away consumer electronics prizes every day for the next 30 days, starting Sunday.”
“Retailers, eyeing the housing slump and the credit crunch that has decimated consumer confidence, are slashing prices early in the hope of snagging a bigger share of the annual Christmas spending spree. That spree is expected to be more subdued than usual, said Ellen Davis, spokeswoman for the National Retail Federation.”
Related markets? “Experts are detecting a slowing in the commercial, industrial and office markets in Chandler, and new numbers bear that out. Real estate developer Michael Pollack takes the real estate cycles in stride.”
“‘I don’t believe we’ll see a crash and burn scenario, but I do believe we’re seeing a correction occurring…in all types of real estate,’ he said.”
“Some projects are overpriced for leasing because investors paid too much for the property, Pollack said. It’s similar to the single-family home investors who overpaid, relying on the greater fool theory.”
“‘They were a fool for buying it for too much money and were hoping for a greater fool to come and save them,’ Pollack said.”
“There is ‘absolutely zero bubble’ in Central Kentucky, and the area’s housing remains remains ‘very affordable,’ maybe even ‘undervalued,’ he declared, as his audience applauded.”
YUN is not his real name. It is an acronym for young-urban-numbnuts.
I bet YUN was proud of himself after pandering to his audience. When he heard the clapping, I’m sure the people were thinking, “yeah, it’s different here.”
Boosterism at its finest. On last night’s GLOBAL TV News here in Vancouver, there was a story that featured a banquet hall FILLED to the brim with RE industry people.
They were all gushing with excitement over the fact that Vancouver area prices are destined to climb ever higher.
As per usual, the Gobal reporter did NOT interview anyone with contrary opinions, nor did he challenge any of the opinions offerd by any of the “experts”.
Shameful.
It really is, and these same reporters will stand around saying, ’tisk tisk, who’s responsible for this mess’ after the blow up.
i bet this clown has a set of cue cards. 50 to be exact. Let’s see, which state are we in today? Oh yes, Arkansas. Alabama…..Alaska…..Arkansas! Here we are.
“the reason Arkansas will not experience the same problems as Kentucky is because……”
Consumer advocates howl at children’s TV shows when the shows are nothing but commercials for the sponsors. I view the puff articles about the RE industry in the same manner.
It amazes me how gullible viewers/readers are regarding the inherent symbionic relationship that exists between the MSM and their advertisers. Anyone who thinks through this relationship should understand why there is rarely anything negative reported about their sponsors.
Note that Global is a media conglomerate which also owns the two major Vancouver newspapers, as well as many community papers, all of which are heavily dependent on RE advertising.
Local joke: What’s the difference between the Real Estate Weekly and the Vancouver Sun (major paper)?
The Real Estate Weekly is free!
It is large doses of bullshit from the LOCAL MSM that keep water flowing down the river of Denial. In EVERY instance of local reporting, the journalist is quoting the RE spinmiesters. FB’s, clowns who think they’re sitting on a million dollar lottery ticket and other assorted a$$Hats desperately cling to every printed word of these clueless wordsmiths. After talking with a journalist at the Albany Times Union, it is glaringly obvious to me that his opinion of the REIC is high and “they wouldnt’ blow smoke up his a$$.
“Tom Frisby, regional Job Service director, hopes the lending industry layoffs don’t become widespread. ‘I hope this is not a portent of something in the financial industry that is going to really impact Billings,’ he said.”
pssst…
Frisbys don’t come back when you throw them, only boomerangs do that.
How about another “We’re Special” article from San Jose.
http://www.mercurynews.com/business/ci_7360448
“reflecting trends that are making the region an economic star.”
Yes, unbiased, facts-only reporting at its finest.
I was down in the area of the economic star on Friday and it still remains shocking to see how many office parks are empty or partly filled - going back to the dotcom era/heyday.
Santa Clara County (San Jose) still has fewer private sector jobs than it had seven years ago.
How’s that for an “economic star”?
$450 HDTVs at walmart? That means I should be able to get a good one for $700 this Christmas. Bring it on!
Psychology update…
My estimation is that, for the general populace here, we are at about 40% “It will get better next year”, 40% “I don’t think this will get better next year”, and 20% “what bubble?”
If you interested in psychology of the masses, visit The Learning Annex to see what the masses are interesting in learning these days. As of right now, this Learning Annex site has the Trumpster’s mug plastered right on the home page (can’t that guy afford a decent haircut?) and then something about land auctions. Click on that, and up pops a list of “wealth experts”, featuring Alan Greenspan. Maybe he’s finally found his right nitch in life, a huckster.
“…visit The Learning Annex to see what the masses are interesting in learning these days.”
What a shyster site — chumming for suckers!
I was out with my son this morning, and we saw a realtor putting out some balloons at both ends of the street. Imagine having to rely on some balloons for your livelihood.
Just a guess here, but I bet one could make more money selling balloons these days than selling real estate.
Balloon creatures–a skilled profession!
Seasonal, though.
I may have to start doing a Wall Street and Washington post every Friday after the markets close:
‘Moody’s Investors Service said on Friday that recent downgrades of U.S. subprime mortgage-backed securities have led to default notices on at least seven collateralized debt obligations linked to those securities. Moody’s has taken rating actions on five of the seven CDOs receiving ‘Event of Default’ notices. Those five have a total par value of about $5.4 billion.’
‘Standard & Poor’s went on a rate-slashing spree on homebuilders Friday, just two days after Moody’s Investors Service announced it placed all ratings on homebuilders D.R. Horton and Ryland Group under review for a downgrade.’
Just goes to show you cannot make triple A out of triple B.
As soon as the underlying triple B goes bust or interest proceeds are diverted to the upper tranches in the underlying all the derivatives tied to the underlying go tits up. There is a reason these AAA rated securites (CDO’s) are getting massive downgrades— they were not AAA in first place.
I gotta think that there is a RICO offense in there somewhere between the appraisers, the banks, Wall Street, the Realtors, and the rating agencies. The settlement on this one would make the tobacco industry settlement look like a ticket for jay walking.
Looks like the landsharks are already circling:
NEW YORK, Nov 2 (Reuters) - Bond rating company Moody’s Corp (MCO.N: Quote, Profile, Research) said some legal or tax issues may have a material impact on a quarter’s results, even if none of these issues are expected to have a materially negative impact on the company’s overall condition.
The language appeared in a quarterly regulatory filing on Friday, but did not appear in last quarter’s filing, and implies Moody’s is feeling pressure from a series of regulatory probes against its rating practices.
Moody’s, parent of Moody’s Investors Service, is being probed on matters, including its rating policies for mortgage bonds and for practices, including offering unsolicited ratings.
The Connecticut attorney general said last week he had subpoenaed the three largest rating agencies as part of an investigation into anti-competitive practices. (Reporting by Dan Wilchins
Report: Downgrades trip overcollateralization-linked event-of-default triggers in CDOs
PRESS RELEASE
New York, November 02, 2007 — Recent downgrades of subprime residential mortgage backed securities (RMBS) have triggered overcollateralization-linked events of default in several cash and hybrid collateralized debt obligations (CDOs), giving senior investors the right to potentially liquidate the underlying asset pool, says Moody’s Investors Service in a new report. (Click here to view full report: Impact of Subprime Downgrades on OC-Linked Events of Default in CDOs)
Many transactions with event of default triggers (EODs) based on overcollateralization (OC) ratios include rating-based haircuts when calculating the aggregate outstanding par amount of the underlying assets. Recent downgrades of subprime RMBS have magnified the impact of rating-based par haircuts on OC-linked EOD triggers, causing several CDOs to breach this provision.
Moody’s is closely monitoring the senior OC values of CDOs where the subprime RMBS downgrades may affect the calculation of the aggregate outstanding par amount, and is taking action as appropriate.
Upon receipt of the notice of default, Moody’s is identifying the noteholders’ options as detailed in the transaction documents and assessing the likely rating impact.
As part of its monitoring process, Moody’s may contact the trustee, underwriter, collateral manager, and to the extent possible, the senior investors representing the controlling class, of the relevant CDO.
The report, “Impact of Subprime Downgrades on OC-Linked Events of Default in CDOs” is available on the company’s website, http://www.moodys.com.
Just goes to show you cannot make triple A out of triple B.
Actually, it was never even triple B to start with. Most of the stuff was dreck even in the original MBS, before the so-called ‘credit enhancements’ were used to get it even to BBB.
Now hold on one gosh darn minute there. I saw it done back in High School. Little Mary Joe Williams took tow wads of kleenex out of her sweater and viola! She went from a triple B to a triple A in the blink of an eye. Oh! Y’all didn’t mean that kind of BBB? Darn, sorry for the mistook there. But it was a nice trip down mammary lane.
Good analogy to mortgage back securities: “Tit for tat”.
Yep, the massive foreclosures are bad enough, but even when the loan is a good one, the bondholders are getting the shaft. For instance, I refinanced my mortgage in 2005. It is about 60% LTV, 15 year fixed, our debt payments (incl. the mortgage) are only about 15% of income, so the bondholders should be ecstatic with me… NOT. They loaned me the money at 5% with an actuarial expectation that I would refi or move in 8 years (the average for mortgages pre bust). There is no way that I am going to pay this one off early at that interest rate. So the bondholders are stuck with my lousy 5% when they could be getting more than 5% investing in CDs. Ouch. The prime loans with fixed interest are going to be the death of a thousand cuts- even if the payments keep coming the bonds will be discounted due to rising inflation.
They loaned me the money at 5% with an actuarial expectation that I would refi or move in 8 years (the average for mortgages pre bust). So they made a bad bet on you. Tough luck for them. That’s why I buy only short term CDs & Tbills.
Sounds very familiar. 1978 comes to mind.
I may have to start doing a Wall Street and Washington post every Friday after the markets close
It’s a good idea. It is a well-known PR strategy to put out your worst news on Friday evening, because Saturday morning news has the smallest readership of the week.
To Ben Jones:
Ben this is a very informative, educational, intelligent forum where like minded individuals who need to understand and share their perceptions and realities of our economic situation can come together. You have been able to find people who give their honest opinions. Please keep these forums going even after the dust settles in the housing market. I thank you for all your efforts. A sharing blog at the close of the market and commenting on the Wall Street as well as the Washington post will go over really well. I will look forward to participating in it.
Far Western N.C….35 older townhomes on golf course, 20 for sale.
Speculators from Fl. selling, no doubt.
Billboards available all over, used to be realtors’ ads.
Saw my first “owner says make offer!” sign and lots of reduced signs.
Just recent changes in the last few weeks here.
This is 2 hours west of Boone, or so, it is different here…….lol
Saw my first “owner says make offer!” sign and lots of reduced signs.
If you like that, you’ll love the headline on this:
http://chicago.craigslist.org/nwc/rfs/463256190.html
“$456900 The Only offer that would seem ridiculous would be the one not made.” (Barrington, IL - an upscale/expensive town due in part to its good schools)
I used to play at a golf course about a mile away from where I live in Haslett, MI
There were McMansions surrounding the golf course.
The owner sold the golf course to a condo developer.
Bad time for condos so the golf course is just a bunch of weeds now. Its kind of interesting how the grass on the greens grow like 3 feet tall when its not mowed.
Hmmm…we’re only in the first inning here.
http://www.washingtonpost.com/wp-dyn/content/article/2007/11/02/AR2007110201201.html
Therein lies one of those newly-formed employment opportunities: foreclosure counselor.
Love the Toll Brothers “luxury condo” ad running right next to it.
Pope & Talbot files for creditor protection
Jobs and operations at main B.C. subsidiary in doubt while industry braces for poor year-end numbers
“VANCOUVER — After months of being battered by a strengthening Canadian dollar and low lumber prices, Pope &Talbot Inc. has applied for protection from its creditors in Canada, casting the future of employees and operations into doubt and reflecting grim times for the domestic forest sector.
Pope & Talbot, based in Portland, Ore., has its principal operating subsidiary in British Columbia and cited the surging loonie as a key factor in its decision to file for protection under the Companies’ Creditors Arrangements Act (CCAA).
“Persistent record low demand for lumber, high-priced pulp chips and sawdust, the appreciation of the Canadian dollar and the high cost of debt service have combined for an untenable business environment,” the company said yesterday in a statement.
Pope & Talbot said it would use protection under CCAA to pursue restructuring that includes asset sales. The company, which is 150 years old, has been struggling for months with heavy debt and was delisted in August from the New York Stock Exchange.”
Lumber producers “are just getting killed” in current conditions, he said, and to date, producers have been loathe to make the big, permanent production cuts that could help push prices up.
“Pope & Talbot has already taken several steps to unload assets. Last month, the company put some of its properties in the Kootenay region up for sale, marketing the sites through the “unique properties arm” of real estate firm Colliers Macaulay Nicolls Inc.”
How ironic, big forest companies up here in Canada that cant sell their wood due to the housing bust in the US are now reverting from logging the land to selling it as real estate.
http://tinyurl.com/3dnq53
In my part of SoCal, Redondo Beach, it’s like someone pulled the plug on the market. There are homes near me that sit on Redfin for months, but I don’t see sellers slashing prices to entice buyers. It’s become common knowledge that housing is entering a major correction period and the psychology has shifted dramatically. The sellers in this area are kidding themselves if they think a rebound will occur in Spring ‘08. As I drive around and see all the same “for sale” signs, it’s somewhat like watching fruit slowly rot on the vine.
The only sizeable reductions I’ve seen in Redondo are in the higher end. People still think they can sell a 1974 tall & skinny for $800K. For those outside of the area, this is a 1900 sq. ft house built on a 2500 sq. ft. lot. The entire bottom of the house is like living in a basement.
In WLA, everything is getting pulled off and put up for rent. Most of it is not moving. Some idiot is trying to rent a new house in PALMS for $9K a month on WSR after trying months to sell it for over $2M.
In the SFV in LA…I swear…it’s just shifted and prices are in a freefall. Wow. I guess the lenders want to off their inventory by the end of the year. I try to look at nothing but REOs and they are slicing prices every 2 weeks. Now you can gwt a sh!tbox for under 400k. I haven’t seen that for 5 years. I’m looking at a few tomorrow. Someone stop me from buying! I am sooo tempted.
Yes, the areas are questionable…but to get shelter with a 3 in front of it within 5 miles of my son’s private school…..Falling knives…everywhere I look! Some are easily 25% off from the peak. How much further will it fall?
My lease is up next Sept…..I probably should wait till mid-summer and fix it for a month….I’m jonsin for my oun crackerbox… As Jim Carrey says in the Mask…Somebody stop me!
Also, in Studio City, Where I rent…There are several 3 bdrm houses for around 750K. Just 2 months ago, the LAND VALUE was 850k. The flippers have been flipping this area like crazy for the past several years…Does this mean they have run out of credit? Gawd, I hope so. They’ve taken all the quaint 30’s houses and turned them into freakin Mc Cruise ships. So, yes, prices have slid some….puleeese continue….
Take a look at Ben’s next post regarding ARM resets. What does this suggest about the state of housing over the next 3 or 4 years? I just love hearing the “experts” say “well, we just have a few months to go in order to pass the peak on the subprime resets…blah, blah, blah”. It takes months, even years, for the reset of mortgages to work their way through the market. These aren’t stocks, they are houses, and the change in an individual’s mortgage payment takes quite some time to be absorbed by the housing market and the overall economy.
The way this is unfolding, I am even more reluctant to enter the market now, even at a lower price, than I was in ‘05 (please don’t tell my wife I said that). The writing is on the wall; housing is in for a major correction that will transpire over the next several years and could push the economy into a recession. If we enter a recession what will that mean for housing? It will deteriorate even faster. I think I’ll sit this out for at least a few more years.
Judicious1,
I’m betting when they revise all the numbers with actual data instead of guesses (usually a year or two after the fact – sometimes even longer) they’ll be telling us we are already in recession as of now. The only Business types I deal with who say they are “busy” are attorneys – attorneys are only this busy when things have gone bad and the parties are trying to establish who broke what contractual obligation and how much they should pay for doing so. (why I laugh at all the “kill the lawyers” jokes – lawyers are a just the arbitrators of what we, as people, do to each other – hence if people where “inherently honest” we wouldn’t need them and there wouldn’t be so many of them…
Look hard at the numbers, and take some time to start understanding how the Gov comes up with the “real time” numbers – much of it is “guestamating” based on the past. We already know there is no past for this kind of crash, so their models are so broken I wouldn’t bet on any of those numbers even being close.
AZ-IT - I agree completely about already being in a recession. When reading company press releases, I have started skipping the $-based stats and focusing on the actual volumes. For instance, railroads and trucking cos. had higher gross $-based sales in Aug. and Sept. than a year ago, but their actual volumes in tons or packages handled are either down or up less than 1% from a year ago. Likewise, manufacturing went up only 0.1% between August 2007 and Sept 2007. Once Oct. and Nov. figures start to get released, all the numbers will be down. Get ready to hunker down.
Judicious–
Lawyers aren’t neutral in this, as they get paid every time things get ugly. Think of them as enablers–like mortgage brokers.
(However, unlike mtg brokers they have much more education and may actually provide a useful service–heck, I think so, I hired one last month–whereas mtg brokers are basically just parasites.)
My daughter is shopping right now in Topanga. Am trying to hold her back…
Remind her that she cannot even get FIRE INSURANCE in Topanga and if she owned there last week, she would have been living in Pali High for a few days.
I assume your daughter is a hippy/free spirit/artist, since that area of LA makes Berkeley look conservative in comparison.
Good point, thanks. The fires have definitely made me rethink my own long-term plan to cash out in the NE and move full-time to Santa Barbara. Yes, my daughter definitely tends toward the counter-cultural. Topanga is the place she has chosen. She’s a very successful TV writer, from a family of writers. Not sure how the upcoming writers’ strike will impact her real estate plans (me, I’m just writing novels these days, so no worries).
I lived in Topanga for many years…
They have some great areas there and it definitely doesn’t feel like LA at all. BUT, it can be a nightmare getting in and out if there is an accident on the 405. And it can be hard getting financing without a big downpayment.
I personally don’t think the strike will last long. Having worked on the business end of a major network, the ad revenue bleed will far outweigh anything the writers are asking. I give it two weeks tops.
I think the strike is going to be much worse than anyone thinks. My ex works at an entertainment law firm and she was saying the partners were getting prepared in case the industry leaves california.
Also if anyone looks around in LA there are so many offices for lease, I don’t see how we are not in a recession. Whenever I mention that Bombay went bankrupt a month ago, I definitely get a feeling of chills from other people since that was a pretty big well known furniture store.
I actually hope the strike DOES last months. It would likely be the precursor to meaningful reductions in the “good” parts of LA. Plus, I might actually be able to find a table at the Coffee Bean now.
Judicious1,
I’m betting when they revise all the numbers with actual data instead of guesses (usually a year or two after the fact – sometimes even longer) they’ll be telling us we are already in recession as of now. The only Business types I deal with who say they are “busy” are attorneys – attorneys are only this busy when things have gone bad and the parties are trying to establish who broke what contractual obligation and how much they should pay for doing so. (why I laugh at all the “kill the lawyers” jokes – lawyers are a just the arbitrators of what we, as people, do to each other – hence if people where “inherently honest” we wouldn’t need them and there wouldn’t be so many of them…
Look hard at the numbers, and take some time to start understanding how the Gov comes up with the “real time” numbers – much of it is “guestamating” based on the past. We already know there is no past for this kind of crash, so their models are so broken I wouldn’t bet on any of those numbers even being close.
(sorry if this is a double post - I think I tried to post to fart down where it won’t nest…
RE: LA… you all need to check this out (hat tip mrincomestream)
http://www.latimes.com/business/la-fi-homes3nov03,0,7824038.story?track=mostviewed-storylevel
This is a sea change, this guy carries a lot of weight. As mrincomestream said yesterday… the fat lady is singing… Now if sellers (and current buyers) will just remove their earplugs…
Great link! Thanks!
Agents should “go with the flow” by using the downturn to prod buyers, he said. “We are salespeople. We have to be positive.”
That remark prompted Sands to interject: “But if you go too far, you lose credibility. People need to know what’s happening.”
If you have no credibility, then you’re basically done, imo.
Ever see than problem in a large company? Very destructive. Watching it unfold over the last few years where some of my friends work.
Have strength! Those sh!tboxes will be under $200K before too long.
Come Monday, if the writers strike is on then let’s see how that plays into the Westside/Southbay/MidWilshire real estate drama.
We’re talking about 250,000 people affected. It’s the friggen lifeblood of Santa Monica.
The problem with people who list with Redfin is since they are saving a lot of the realtor fee, they figure they can list higher and pocket the money themselves. A lot of FSBO’s price higher than a realtor would tell them to. Remember their house is “special”.
That has been our almost universal experience. FSBO’s in Pullman, WA are almost universally priced higher than equivalent MLS listings. When they don’t sell, the sellers blame agents for freezing them out, sign up with an MLS agent, drop the price and pay the commission… when all they had to do was drop the asking price as a FSBO and save the 6% commission.
Dealing with FSBO is like talking to someone about their first born.Though, I have bought by owner before as saved a sh!tload of $$$. Had an attorney write up the paperwork.
I sold my house FSBO. Decent house, good location, no stupid sh*t I did to it. Certainly nothing special. I had no real problem other than showing it. I priced it reasonably based on the MLS prices and was willing to come down some and have items fixed based on an inspection.
RE in that area at a bit of a standstill since there are pending layoffs.
Have Joseph McCarthy and Lawrence Yun ever been seen together at the same time?
Both have amazing powers of bamboozlement…
“There is ‘absolutely zero bubble’ in Central Kentucky, and the area’s housing remains remains ‘very affordable,’ maybe even ‘undervalued,’ he declared, as his audience applauded.”
Right, undervalued would be 100 x monthly rent or lower. Median price is $153K. You say prices are undervalued you’re telling me I can’t rent a decent home in Lexington area for $1500/mo. or lower.
Actually, I checked local listings. Looks like large, well-appointed houses (2500 sq ft) rent for $1600-$1800. 3/2s appear to be in the $1200-$1300 range. Not bubbled out by any means, but certainly not undervalued, except relative to San Diego, Calgary, etc.
http://buyit.kentucky.com/findit/real_estate/apartments_home_rentals/index.htm
SOUTHSIDE — Developers of Toscana I and II, two luxury condominium towers at the St. Johns Town Center, are starting over with plans to transform at least one into a four-and-a-half- to five-star hotel.
Jaxbizjournal: http://tinyurl.com/26vu5v
In Duval County, there were 2,288 properties in some form of foreclosure in the third quarter, a 38 percent increase from the third quarter 2006, and up 12 percent from the previous quarter. Foreclosures were also up in the other counties that make up the Jacksonville metropolitan statistical area: Baker (up from one foreclosure to 21), Clay (up 68 percent), Nassau (up 47 percent) and St. Johns (up 163 percent).
Note: There was a lot of speculation in St. Johns county.
JaxBizJournal: http://tinyurl.com/3y3az6
In response to a local poll:
“You have to be kidding,” wrote one reader. “No rational person is touching real estate for the next 12 months.”
Several readers offered accounts of how the market had been all but abandoned by buyers, such as this one: “Our home has been on the market since February 2007. We’ve reduced the price twice ($50,000). No showings for the past two months!”
…
“I’m looking for a good deal,” wrote one optimist. “I think now is when I will get the best for my money.”
JaxBizJournal: http://tinyurl.com/2frk27
I saw on news special last night about a developer in Manatee County, FL “going ahead” with plans to build 4,400 more homes in a community where 550 are already for sale. Vaporware anyone?
If you interested in psychology of the masses, visit The Learning Annex to see what the masses are interesting in learning these days. As of right now, this Learning Annex site has the Trumpster’s mug plastered right on the home page (can’t that guy afford a decent haircut?) and then something about land auctions. Click on that, and up pops a list of “wealth experts”, featuring Alan Greenspan. Maybe he’s finally found his right nitch in life–a huckster. (Sorry if this is a duplicate, this comments page is giving me fits.)
ATLANTA-Weekend Drought Update
This is from the local WSB TV web site. Paulding County is a suburban community that had been experiencing a huge boom in residential construction (i.e. paving over the cow pastures).
“The Paulding County commissioners proposed Monday that businesses, like car washes, and landscapers would no longer be exempt from the outdoor watering ban starting Thursday.
“If we can’t get out there and plant new installs a lot of builders will have trouble getting their CO’s to finish up construction projects so it’s going to have a domino affect on everybody,” said landscaper Brett Canady.
The Paulding County commission chair said drastic steps to save water must be taken.
“We’re at the end of the water line. We get our water last after everybody else gets it from the Cobb-Marietta Water Authority,” said Paulding County Commission Chair Jerry Shearin.
All water departments are having to cut consumption by ten percent from winter use levels — that order came from Governor Sonny Perdue. Paulding County is also calling for an immediate moratorium on zoning requests for commercial and residential construction. They are one of the first counties to propose that during this water crisis.
“I don’t know how we can allow more business and people to come to the county if we don’t have the water for the people that are here now,” said Shearin.”
Also, a Wal-Mart observation: The closest local Wal-Mart used to be a “third world” Wal-Mart. Being a female “Kid”, I actually found it rather scary, and would not shop there without my boyfriend. And I always made him drive his old work van because I was afraid my car might not be there when we came out of the store. Now it has changed over to white upper middle class shoppers, with Mercedes and Lexus vehicles predominate in the parking lot. I think this is a good reflection of the silent economic pain being felt around the country. The poorest people can no longer afford to shop there, and the upper middle class now needs to shop there.
It’s not looking good.
In our area we always saw the expensive vehicles in the Sam’s lot and the beater cars at 7 eleven. Evidently the poor didn’t mind paying $3-4 for a loaf of bread.
Ghostwriter: that’s because the poor didn’t have money for gas to get to Sam’s club, and they are dumpster diving for the rest of the meal.
This is the big real estate story in Maine this weekend:
http://tinyurl.com/3bcqg5
My husband and I toured this place, which used to be a nature preserve, about two years ago, when it launched. I was horrified that the state, county, or some environmental group had failed to buy and preserve it. But they did not. The developers envisioned this as an extremely upscale summer colony of $1M+ houses and they seemed to be doing a quality job on the infrastructure with a big substantive dock, buried power lines, and much common acreage conserved. Looks like they have failed to sell most of the lots and are now throwing in the towel. BTW John Travolta does have a house in Maine, but on Isleboro, not here. Stephen King lives in Portland. Andrew Wyeth did paint in Cushing, but he has been gone for 30 years. It’s sort of like peddling a condo in Ventura with the promise that you will “Live near Oprah!” (in Montecito).
A local ad with an ending that gave me a little chuckle thanks to this blog:
Are you looking for a career??
Not a job, a career??
CHANGE YOUR LIFE
Real Estate Sales Agent
Feel good about yourself personally and financially
Call…………Suzanne!!!
Real Estate One
Hmmm, maybe you should send Suzanne the LA Times link to the Fred Sands “get out of real estate” story plysat posted above.
Check out Lennar’s auction of 17 homes on 1/2 acre lots. These homes were selling for $600,000 a year ago and the staring bids are as low as $300,000.
http://www.realtybid.com/lennar/laureates.cfm
From the LATimes:
“Mogul’s advice to Realtors: Don’t keep your day job”
“The Southern California market will get worse before it gets better, he warns a gathering. One survival strategy: Slash prices, now.”
The Mogul is Fred Sands, a famous local Realtor.
NY Realtor Association is always pumping false information also. They use the same phrases such as its different here. It’s a buyers market. Their rants are all about buying. Independently Realtors will acknowledge that there is a massive slow down and the inventories of homes for sale are building up. One thing I have noticed the sellers are being told to lower the prices but the high end homes which btw here in Syracuse area is about 500K are not selling at all. A 500K house will usually have about 17K to 20K in taxes. A house listed for 750K will usually have 30K in real estate taxes. Homes in the price range of 80K to 160K are slowly selling.
http://www.cnyhomes.com/.
And for 30K/year (the property tax amount), in almost any area, you can rent an apartment. It may not be spacious, but if you can live w/o a lot of crap, think how much better your quality of life would be if you can manage living in a 2500/month apartment for several years and put the amount you would have paid on a 750K mortgage in the bank (or gold!)
SU Guy
I just closed last Wednesday on my south of Syracuse area home. Sold for full price in 4 days. I had a full priced back up offer to boot if the first couple backed away. It went that way because I was about $15k underpriced and the house was in really good shape.
To the credit of the two realtors I consulted, that low price was what they told me to go with when I told them I wanted a no BS, “get out of Dodge” price on the home.
The problem now is where to find a good rental in the town I want. Right now I’m enjoying a lovely b&b while the owners are in Florida trying to sell their home. I’ll have to be out by spring at the latest when they return for summer b&b business.
I had planned to sign a 15 mos contract for a rental the day I closed. But the landlord really wanted to sell the home. Two hours after we closed he signed a contract to sell his home. It had been on the market about 4-5 mos.
BTW Ben, check being mailed out to you this week. Thanks to you and all other people on this blog. I have to wait for my hub’s desktop to come home at night to get on but I’ll be here for the duration. I LOVE THIS BLOG.
http://money.cnn.com/2007/08/16/real_estate/home_prices_fall_again/index.htm
Here’s an interesting chart. I’m about 25 miles south of Youngstown, so you can see prices here are 2nd from the lowest in the list. In our area, incomes are still right in line with house prices. I think median income for here is about $29,900. We have foreclosures like everywhere else, but the prices on homes sold really don’t fluctuate much. This is about where they were before the bubble, except for normal 2% appreciation. Our sales started slowing down about the end of ‘04.
Good news from eastern WA,
A colleague of mine had her offer on a grossly overpriced house accepted last week (made the offer against my advice). Now this week, she is complaining about the national credit collapse because she is having a hard time getting a loan. First time homebuyer, boyfriend of not yet crystallized commitment to share the mortgage, essentially no down payment, attempting to buy a small, $250k, 2/2 home. She might just luck out of a mistake thanks to tightening credit.
This is the first person I’ve known personally who has had a hard time getting a loan. Great news for market correction enthusiasts here in the Pacific Northwest.
Did she explain that since she’s ENTITLED to that house, she’s ENTITLED to a loan as well?
A friend of mine is a realtor and she told me that the bank associated with her company has turned down many loans that several years ago would have gone thru. Anyone with any credit problems, even small ones, were not even considered to go to underwriting. Times are changing. Hang onto your seats folks. It’s going to be a bumpy ride.
Pensacola, Florida
Noticed a number of “big price reductions” in the MLS of $100,000 to $150,000 (12% to 15%) advertised on the initial wishing prices on a number of properties which have been listed for say 8 to 12 months. If a reduction of a expenditure is the same as an increase in revenue from a cash flow perspective I feel like I might have to add $150,000 on my income tax filing this year. If I wait another year might make another $150,000 by being patient.
Destin, Florida
Houses, condos, and more houses on the market. Nothing is selling. The local REIC is really starting to sweat. Foreclosures are starting in affluent neighborhoods. Just a matter of time before the wheels completely fall off in 2008. Since Destin is primarily (like 80%) a second home market which has exploded over the last five years based on REIC profits when the financial and economic conditions begin to decline in other areas of the US this place will implode. Destin doesn’t have the old money base that other popular areas of Florida and I expect it to fold up like a circus tent in the coming recession.
Moscow, Russia
Prices have stabilized in rubles but are increasing in USD due to the devaluation of the dollar over the past few months. Mortgage financing which was just getting started in Russia has come to a standstill for the most part. On the other hand oil prices approaching $100 per barrel will probably support the market over the next six months as the ill gotten gains trickle down. Local agents are predicting prices to resume their increase in rubles of approximately 1%-2% per month after stabilizing or slightly declining over the past six months or so. Average prices for an average (read crappy) apartment in Moscow is about $4,000 per square meter.
I’ve noticed many more “for sale” signs up in the Raleigh, NC area. Based on the postings on Craigslist, it looks like rents on single family homes are starting to come down. I’ve seen several houses that took down “for sale” signs and put up “for rent” signs and still look vacant.
Apparently many of us here are misinformed. There was a “Buyer’s Guide” insert in our newspaper yesterday with a wealth of information on how to buy a home in today’s market.
“Sabrina Porter, vice president of sales and marketing for Trend Homes, said, like many builders, they’ve had to respond to a slowing market by dropping prices, which she said have hit “rock bottom.”
“Now, more than any other time in the past 10 years, I think it’s the perfect time to buy,” Porter said. “The deals are just amazing, and the price competition is exceedingly hot. So, of course, as builders we’re all fighting to offer the best products for the best prices. In terms of getting a start in owning a home, there hasn’t been a better time.”
Just thought you’d like to know that it’s safe to swim in those shark invested waters.
Prices have hit rock bottom in terms of the builder’s ability to lower them further to meet the market. It’s not my fault they overpaid for the land and materials. Therefore, just like UCR in their negotiations with the local builder for faculty housing, I’ll be waiting to buy from the bank after the builder goes BK. The bank will meet the market.
“What do you see in your local housing market this weekend?”
I see another big auction in Chicago next weekend: http://www.hollandhomeauctions.com/Auction_Homes/
These aren’t foreclosures - just failed to sell on the market. Some of these are still on the MLS. At least a few of these are nice homes in nice places; others are pretty far out. There are “minimum bids” and the owner has final approval of price, though. I won’t be attending, but I sure hope these help bring down the comps.
Went into Bank of Evil, errr I mean America yesterday, and right at the entrance to the line was a GIGANTIC dry erase board which read “Is your ARM reset worrying you? Talk with one of our loan officers about refinancing to a low fixed rate.” Time to capitalize on the old ARM trap, and fleece the FB’s for a second round of commissions (the pigmens’ plan is working nicely).
Is your ARM reset
worryingbreaking you?I saw a “Lease to own” on a new house in Globe AZ. Globe AZ is a old city in the mountains of AZ dominated by Phelps Dodge copper minning slag dumps. Crazy steep hills and some of the oldest and most beat up homes I have seen yet in AZ. More than a few new homes up there mixed in with 100 year old stuff some in good shape some not so good. Could be a pretty place but whats with all the boarded up old brick buildings?
“…but whats with all the boarded up old brick buildings?”
Having been through Globe, AZ 2x, my guess is that these buildings are no longer Up-To-Code for human habitability.
Another concern would be the safety of the tap water. Mining areas can have problems unless their water is piped in from a safe area.
~Misstrial
Ill download my current obfuscation:
local realtor and hubby painter, who at peak bubble had 8 houses, now down to one, on a 3 year ARM are getting the big divorce. Shocking? nope.
Bus customer at work who has a beautiful Provost conversion bus, cant pay for enginge overhaul……been waitin over 3 months for the last 14k of the money prior to releasing the truck, he says money is stuck in Oh Canada….. tells me hes gonna refinance his new digs in the country to pay the bill…
folks, the rout is on, people are confused, broke,and heading for cover. With a backdrop of mismanaged financials at the highest levels of government, a clear and intentional confusion regarding statisitcal analysis of the American economy, employment downsizing across the board, lower prices on goods, higher prices on service, dollar down, gold up…
this is not going well at the momment.
Southern Oregon
WTF is up with engine prices these days? It used to be that you could order a rebuilt RTS II Detroit Diesel engine for under $5K. This was in 2000. $14K in 2007? Granted, there were some factors that would have kept the price of a used-rebuilt RTS II engine down in the late 1990’s (the RTS was the Toyota Corolla of public transit), but the bottom line is that this is REAL inflation. Rebuilt NOVA RTS engine costs about $10K, IIRC, today. Can’t replace the American-made parts with Chinese crap this time.
This is scary. Oh, and in this whole time? Driver’s wages are up by, like, a half dollar per hour in that period, but down with increases in insurance premiums (unless you live in a state/province with strong unions, then your wages went up big time last year).
I was talking to some mechanics several months ago about gold. They bought in the $200’s. Given the inflation in the bus parts market, that doesn’t seem so surprising to me now.
Detroit pricing is in a terrible way at the momment, CAT and CUMMINS are fairly easy to dial in.
Mechanics are in heavy demand, if you know Detroit, Cat, and Cummins elecctrical and mechanical diagnostics and repair… get ready to make some money.
I decided against becoming a diesel mechanic because I thought I was too impatient for an apprenticeship, but at this point I would have been done by now! So you see what impatience gets you.
Oh well, at least driving the bus is teaching me social skills.
(I am actually a transit planner … a very frustrated transit planner … and, ironically, driving the bus is a higher skill profession than transit planning, but you wouldn’t know that from the pay scales … tho’ I admit, you do kind of need to know math)
Who are we kidding here.
A bus driver makes more money than a professor, as long as they are union city employees. So yeah, they are very skilled professionals.
vozworth,
I always enjoy your posts. Thanks.
I love a good Pollack Joke, every now and then…
“‘They were a fool for buying it for too much money and were hoping for a greater fool to come and save them,’ Pollack said.”
Well Ben went and quoted my local paper!
http://www.currentargus.com/ci_7356202
Looks like all I need to do is buy any ole place, paint it and make a killing. But wait, what about those ads in the Sunday print edition that have those little price reduced banners? Did those people forget to paint?
From the article, “A healthy oil and gas industry is one of the reasons Carlsbad appears to be closing the gap, experts have said. ” Oil and Gas? can we say Boom and Bust?
lilly
The ex-girlfriend works for a title & escrow company here in CA. Business is off 70%. That’s right…..70%!!!! Open orders used to be around 100 per day (and that’s a conservative figure). At the end of last quarter open orders dropped to about 30 per day and stayed.
Latest bit of gossip was that the regional VPs for said title company have taken over. Local county managers are no longer making decisions. They are just told which branches to close and who to layoff.
The Jackson Indian Casino about 40 miles east of the central valley in Calif. has been offering free cash to players. This is confirmed by coworkers who go there. I was given the most free play I’ve ever been offered…about $120.
Went there Thursday night. It’s usually packed.
It was D E A D. Empty tables, empty machines. about 1/4th the usual Thurs night crowd. I suspect the pursestrings are tightening–and it’s not just because Christmas is around the corner (wasn’t this dead last year at this time if I recall).
DOC
Ooops! Correction…not free cash , but free machine play (I always “cash out” of the machine then hit the blackjack tables.
DOC
I took another SD County fire tour today. Last week I reported that fire damage was a bit patchy in the Westwood community of Rancho Bernardo. Turns out there are other areas not far from where we live which look like a nuclear explosion was detonated somewhere nearby.
The Madera Golf Club area of Poway is one such example — mile after mile of vegetation is burned to the ground, and multimillion dollar estate homes are reduced to rubble. Unfortunately I did not have my camera along, or I would have taken photos to document that RealtWhores have already put up For Sale signs against the backdrop of utter devastation.
After surveying fire damage around the Madera Golf Club in Poway, I am unconvinced that “shelter in place” construction saved new San Diego County tract home developments from burning. Rather, it was a lucky combination of wind direction and geography, coupled with the heroic efforts of firefighters, which prevented the flames from ever reaching the new home communities of 4S Ranch, Santaluz, Del Sur, etc.
Hate to shop in malls, but needed an item from the cosmetic counter (when Maybelline just won’t do…) Fashion Valley in San Diego was packed. Didn’t notice any particular pre-Thanksgiving sale going on. Perhaps its day of the dead zombie shoppers.
“‘Although sales are off from an unsustainable peak in 2005, there is a historically high level of home sales taking place this year - a lot of people are, in fact, buying homes,’ Yun said.”
Just before the 2001 stock crash, a lot of people, in fact, were buying stocks.
Subprime loan only started its extinction this Sept. , Yun is deceiving
himself and his NAR gang.
“Healthy real estate markets in Kentucky and Midwestern states are being hurt by national news reports of problems in other areas, Lawrence Yun told Lexington Realtors yesterday. ‘It’s the coastal markets that are out of whack and, some might say, have a (home price) bubble,’ said Yun, the chief economist for the National Association of Realtors.”
Does Mr. Yun think that families with established roots on the coasts will decide to pack up and leave for Kentucky and the Midwest just because there is not bubble in those areas? When you buy a house, you are making a major decision on your life. you are lowering the anchor and buying the state, county, town, neighborhood, neighbors.
It’s like the car commercials I love to hate. They advertise $45,000 cars you must buy because they have a $300 new gadget (on which they add $800 to the car). You can get a portable GPS for example. When I was shopping for a Toyota Matrix in 2003 I skipped those with GPS. That would have been $1000 extra.
They think we are all stupid. real estate pimps and madison avenue pimps.
You can get a portable GPS for example. When I was shopping for a Toyota Matrix in 2003 I skipped those with GPS. That would have been $1000 extra.
Think smash and grab (most factory car alarms don’t include motion sensors/vibration detectors)… You may think it isn’t a big deal to remember to hide or take with you a $600-800 gadget every time you get out of your car, but do you know how may people leave these things only to have them stolen? Much better to have built-in… it’s a luxury, but one I wouldn’t buy a car without now that I’ve had it.
‘It’s the coastal markets that are out of whack and, some might say, have a (home price) bubble,’ said Yun, the chief economist for the National Association of Realtors.”
No Yun, you have it wrong again and just can’t seem to get it correct. Your credibility Yun is None!