An Even More Different Market
The Baltimore Sun reports from Maryland. “For a man with about $175 million riding on an unconventional condominium project set to open in the spring, Patrick Turner seems remarkably unworried. Never mind that the real estate market is in the dumps. Never mind that no one has ever put condos in a converted grain elevator or really knows how many people want to live in one. And never mind that not one unit at Silo Point has sold.”
“‘Everyone said when I bought [the old grain elevator], we were crazy,’ Turner said. ‘They said we’ll never get it done, we’ll never get it zoned. It’s impossible to do. I think in April of next year, the market will be in a better position. It will start to level off.’”
“Eliminating pre-sales, ‘does seem somewhat risky, given the current real estate market,’ said Daraius Irani, at Towson University. ‘However, they’re not making any more water views.’”
The Daily Times from Maryland. “It would be a last resort, but the proposed 500 Riverside condominium community on the downtown waterfront could turn to a renters market for occupants if home sales remain in a slump, says Tom Wentz of Prudential Carruthers Real Estate.”
“‘The market is not improved dramatically; there is still a ton of new housing on the market and resells are slow,’ Wentz said. ‘We’re not clear on a plan yet.’”
“The slump has created a national buyers market that has forced builders to push down asking prices. Developers of unsold condo units, though, can attempt to cash in on a market of renters who, by default, could land a trendy or upscale apartment-style accommodation, said James Shaw, a principle in Shaw Development LLC.”
“‘In the future, more would try to put a rental program together; developers would want to establish a market for people who want to rent,’ Shaw said Monday.”
The Star Exponrnet from Virginia. “In Culpeper County, 117 homes went into foreclosure so far this year, through Oct. 23, compared to 33 homes last year. That’s a 355 percent increase.”
“Not surprisingly, most of the foreclosures happened, and are still happening, in the newer developments that went up at the height of the housing frenzy of a few years ago.”
“Carlos Garcia, a resident in the Meadows of Culpeper is living that reality. ‘I’ll be next,’ he said.”
“In 2005, Garcia said, he purchased his three-bedroom house on a cul-de-sac for $389,000…and took out two adjustable rate mortgages. The 30-year-old meat cutter started out paying $2,700 a month and said he did not fully understand the implications of an adjustable rate. Two years later, Garcia says he’s facing a 30 percent increase over the next few months to his mortgage payment - to $3,500.”
“‘I already told them I couldn’t afford it. If they want the house, they can keep the house,’ said the husband and father of three.”
“A house that went for $300,000 two years ago is now priced to sell in the $200,000-range, said Norma Mayo, a longtime real-estate agent in Culpeper.”
“‘Everybody complained two years ago there was no affordability here,’ she said, ‘well, OK, we’re right back where you wanted to be. We are weeding all of those lenders that need to be let out, all the Realtors that came in, they’re out. House prices have come down where people can afford. We’re where we need to be.’”
The Times Democrat from Virginia. “Warrenton-based Realtor Joe Allen considers the current housing slump the worst in his 34 years as real estate broker.”
“On when strong home prices may return: ‘It probably takes four to five years to get back to the high prices again. The sellers now have got to realize that 20 percent (increases price sales a couple years ago) was never really there, except for those that cashed out. It’s a very hard thing to swallow if your neighbor got $800,000 two years ago (and) your house is now worth $625,000.’”
“‘It’s like the dot-com days. If you cashed out before the Nasdaq crashed in April of ‘01, then you did wonderfully. After that, you took gas, because all of your wealth prior to that was on paper. It didn’t really exist,’ he said.”
The Virginia Pilot. “Will Kirby’s rented out his Norfolk house since he was transferred to California in 2005. His tenants will move out this month. The place has been listed for nearly three weeks. Kirby has already knocked the rent down $50, to $1,300. He’s braced to go lower.”
“If it stays vacant through winter, ‘we wouldn’t be eating Ramen noodles,’ he said, ‘but it would definitely put a ding in what we do.’”
“Kirby has plenty of company these days. ‘There are an awful lot more rentals on the market,’ said Laura Wenslaff, owner of Home Rental Realty in Virginia Beach, ‘and they’re not renting as fast as they normally would.’”
“Realtors confirm a significant upsurge in house rentals. And the ‘for rent’ signs are popping up in upscale neighborhoods, such as Bay Colony and Witchduck Point in Virginia Beach.”
“‘I’ve been in the business for 23 years, and these are the most rental vacancies that I’ve had,’ said John Hanson, broker in Virginia Beach.”
“And it may not be so bad for the renters themselves, said Old Dominion University’s recently released State of the Region report. ‘Over the past few years,’ the study said, ‘it has become relatively more attractive for households to rent rather than to own in Hampton Roads.’”
“Kirby has no thoughts of selling his Norfolk house: He sees it as a long-term investment.”
The Daily Press. “It continues to be a difficult time to sell a house and a great time to buy one in Hampton Roads and Williamsburg.”
“Sellers suffered through a median price drop of 15 percent to $269,450, and the number of homes sold declined by 39 percent. An oversupply led to a 22 percent sales decline as homes sat on the market 33 percent longer than in September 2006, according to data from the Virginia Association of Realtors.”
“The Williamsburg area real estate market, which includes James City County and upper York County, saw its prices fall all year and was down 15 percent in September. The number of homes sold has been erratic there all year, but the drop was a brutal 39 percent in September.”
The Rock Town Weekly on Virginia. “Area home sales plunged 35.4 percent in September, while home prices softened 4.3 percent that month, according to the Virginia Association of Realtors.”
“Real estate markets around the state are experiencing an ‘adjustment,’ according to Virginia Association of Realtors President Melanie Thompson. ‘The past three years were extraordinary for real estate markets,’ Thompson said. ‘It’s somewhat misleading to compare this year’s more normal markets to the historic highs of the past three years.’”
“And, she said, the housing slump has created opportunities for some — namely, buyers. ‘There’s substantial inventory,’ Thompson said. ‘And sellers are having to face reality in their pricing.’”
From My Fox Washington, DC. “The town of Herndon is worried they might loose 1 of 6 homes to foreclosure! Homeowners in Herndon are in need of help. More than 200 homes are in foreclosure. The community is worried that number could increase to 1000 if something isn’t done soon.”
“The Dulles Regional Chamber of Commerce is teaming up with the TPI Mortgage Group and several banks in Herndon offering free one-on-one counseling and seminars all week for homeowners struggling to make payments.”
“The company is even trying to draw people in off the street, anyone, even those who are close to throwing in the towel.”
The Washington Post. “Everyone talks about finding alternatives to foreclosure. What people don’t talk about is how difficult they can be to pull off.”
“Take, for example, the ’short sale,’ which can happen when a home’s value has fallen below what the seller owes on the mortgage. In theory, everyone wins, at least compared with a foreclosure.”
“However, buyers thinking about acquiring a home this way should understand that it can be a long road to a short sale. Negotiations are far more complicated than with a typical purchase. You may have to attempt several deals before one goes through.”
“There will be weeks, if not months, of delay. The home you get could need lots of work. And you could lose several hundred dollars in upfront fees on each failed attempt.”
“Why volunteer for such a hassle when the local market is glutted with similar homes that you could purchase more easily? It’s about money, of course.”
“‘I wouldn’t bother unless the price is way lower than the market,’ said Bobby Samson, an agent who focuses on the Route 28 corridor around Dulles Airport. He said the price would have to be 10 to 15 percent below market value just to catch buyers’ interest.”
“The local MLS doesn’t compile statistics on how frequently short sales are happening, but real estate agents and lenders say they’re seeing them more often, and plenty of thwarted attempts.”
“‘It’s been pretty prevalent in our market, that’s for sure,’ said Laura Triplett, branch manager for SunTrust Mortgage in Woodbridge. We can expect to see more as long as home prices fall and as more adjustable-rate mortgages reset to higher rates that borrowers can’t afford.”
“Not only will the lender need to be convinced it’s the best deal it can get, but a title insurance company may have to sign off on the deal as well. Title insurers decide case by case, according to Wesley Justice, assistant VP for loss management at United Guaranty Residential Insurance, which sells private mortgage insurance to borrowers with low down payments.”
“They’re more inclined to do it when borrowers can demonstrate a financial hardship, such as a job loss or illness. Even then, they’re skeptical.”
“‘Quite frankly,’ he said, ’sometimes some of the hardships they’re going to be [deceiving] us about.’”
From CNBC. “A little over a year ago, mid-September 2006, there was a little blurb in the Washington Post about the then-president of the National Association of Realtors, Tom Stevens, not being able to sell his Virginia home.”
“It was really the beginning of our coverage of the housing downturn, and so we found it marvelously ironic.”
“The house had been on the market for a year, with an unchanged price of $1.45 million. Being the annoying reporter that I am (see video clip), I cornered him after a hearing on the Hill, just to needle him a bit and see what he’d say.”
“‘I didn’t listen to my agent. That’s what consumers need to do. They need to listen to their agent. If the agent says you need to adjust the price, then you need to adjust that price, we’re in a different market today,’ Mr. Stevens admitted politely.”
“And it’s an even more different market today. Stevens, who is a Senior VP of the nation’s largest residential real estate brokerage, still can’t sell the house.”
“Mr. Stevens pulled the house off the market in early 2007, and now it’s back for $1.285 million. So if you start from the top, that’s approximately 766 days on the market, $165,000 price cut, and still no bites.”
Ah yes, all those DC trolls can kiss my you-know-what now. All that talk about government payrolls, blah blah.
But it’s different here, Ben! The GMU Center for Regional Analysis said so!
They know nothing.
over at the bubblemeter blog, which now sucks, they would say that DC prices wont go down because;.
1. There were so many rich lawyers
2. DC has always been undervalued and will soon be like london or manhattan.
All I can do is laugh. Potomac median household income is around 230k with median home price probably being over a million.
Somethings got to give.
The big reason why DC will not be London or Manhattan is the cap on building height. London and Manhattan have much higher volumes more downtown workers due to the skyscrapers. More workers = more demand for nearby housing. DC has way more sprawl in its working areas than do NY or London. The less-concentrated working areas equates to less demand for living in a specific area, thus less price.
If DC ever lifts its building height caps, then buying DC residential real estate will be a very good investment. Though it would probably take 10-20 years to come to fruition.
I’m so glad that these trolls are not permitted here. Even if I appreciated their point of view, which I don’t, the sheer illogic would frustrate me. I am tired of hearing that people are “jealous”. People who cashed out at the top are not “jealous” of mortgage slaves and FBs. I also see no evidence that “bitter renters,” aka bubble skeptics are underearning. My observation is that most have well-paying jobs and many have made money on investments as well. I have avoided Bubble Meter, unfortunately since I am not interested in being an emotional punching bag to fbs.
I remember that. There was one particular guy on the Bubblemeter who had an ARM on some place in DC who was the most stubborn housing booster I’ve ever seen. Wasn’t it he who came with the “rich lawyers, diplomats, and G13-grade federal employees” theory as to why DC prices were reasonable? Wonder if he’s living on the streets yet?
As to the “DC is just like NY or London” theory, certain DC-ites have an inferiority complex to NYC in so many ways that it’s pitiful. DC is not, and will never be, anything remotely like NYC or London, and that’s not necessarily a bad thing.
His name is Lance, and he’s still in his place in Dupont, albeit with a renter in his English basement. Bought a rowhouse for $900K in 05, with a 10 year-fixed I/O ARM.
Arghh! The government jobs, they do nothing!
Once Martin O’Money gets done jacking up our taxes through the roof, it will be “different” here… Oh, and BGE wants to raise rates some more, which will also be “different.” Hehehe… They always claim it is “different here” but in what way?
I get a bunch of laughs out of this article, such as the comparison to the Dot.Bomb days, yet the clown is saying it is a “buyer’s market.” Yeah, and I guess that buying Cisco, JDUS, Pets.com, and others when they were 10% down from their peak was also a great idea, right? Guess not!
It’s also amusing to watch all the predictions regarding when prices will start zooming upwards again. None of these jokers have considered the fact that prices will be going nowhere buy down with: higher taxes and unfunded social programs coming online, loss of jobs with the coming recession/depression, no increase in wages even if the economy doesn’t tank, and a lack of toxic loans in the future. By the time 2012 or whatever rolls around, we’ll be lucky if we’ve gotten past the worst of this mess - nobody is going to be in the mood start up the NINJA loans, Option ARMS, etc.
Real estate is going to continue downwards, following the ever declining real earning power of the average American.
If DC is so different then why were people crying to the media in the early 90’s that they lost 100k because they did not sell at the 88-89 peak?
DC is different, its much more susceptible to RE price swings because its relies upon Federal spending for its economy, so if Uncle Sugar is spending like crazy, jobs & RE prices skyrocket. If Uncle Sugar cuts back on spending, puts a hiring freeze & reduction in force in place and cancels gov’t contracts then jobs & RE prices crater. RE has not cratered here yet because Uncle Sugar has not cut back. We are currently only experiencing RE drops from overshooting what Uncle Sugar’s spendthrift behavior in metro DC can support. Once Uncle Sugar starts cutting back, as he always does post conflict and which he must do after doubling the national debt in just 6 years, LOOK OUT. In a few years we will be hearing sheeple crying about how they last 250k instead of 100k when this bigger, better, new and improved gov’t instigated bubble bursts!!
DC_bubble and Va_Investor say hello. LMAO!!
And if you guys are curious about the direction: Price to rent in my little corner of paradise is 277. (Make that asking price; my neighbor put up an identical unit for sale, and we rent, so it was an eye-opener of a calculation.)
Signed,
Mr bitter renter in alexandria.
It’s also houses. In Oakton-Vienna, price is 250-333 x rent.
Clarendon (in Arlington, VA) price to rent is about 275 now and was about 150 just a few years ago.
Those guys were very annoying mental midgets. I would put the facts right under their noses and they would troll away. Enjoy the poorhouse boys and girls…
My daughter watches Dora. The show annoys me on many levels, but the main one is that most every show emphasizes that all you have to do is talk to people to make everything better.
The bad guy (Swiper) goes away if you tell him 3 times to go away. Almost every show with an “evil” person is reformed by the end, usually by Dora talking to them.
Obviously, it’s a kids show - you don’t want kids punching each other or scare the crap out of them. On the other hand, the “all we need to do is talk about it” POV doesn’t work in the real world. People have to first be open to another POV - if they aren’t, talking is a waste of time.
How interesting you bring this up, Vermonter. I was just singing ‘I’m the map, I’m the map, I’m the map…’ yesterday. My sister has a little boy and I sometimes babysat when I lived closer to her, so I got to watch kid t.v. This is a few years ago, but that stupid map song still lingers. Dora bugged the cr*p out of me. The reasons you mentioned, and the insane cheeriness. And the stupid songs.
Dragontales sent me absolutely apesH*t, oh, heavens, even the memory brings a shudder. I’d stand up bellowing frantically. The nephew loved it when that came on, he enjoyed watching ME freak out, forget the t.v. Do they still have that?
One show I liked very much was ‘Oswald’. The blue octopus guy. He would sing these nice little simple songs in a simple little voice, and he had a pet hot dog and a fussy gay Penguin friend named Henry with a spoon collection. I, too, have a spoon collection, so I approved of this.
Okay, time to sing the map song loudly.
On the other hand I had to quit letting my 5 year old watch Star Wars because her favorite parts were the “burned up in hot Lava” and “Lukes arm getting cut off”. She also kept decking her brother.
Promising! My kind of gal.
“She also kept decking her brother.”
If you only knew the POWER of the dark side!!!!
Where’s DarthRealtor??
Ben, has somone wrested the controls of the HBB away from you? This does not sound like you!
Yes, I agree! LOL.
Ben, I’m not sure if gloating will maximize sales of your (hopefully) forthcoming book. But it may maximize how good we all feel!
LOL Tx–he’s sssssssssasy!
I miss Phil Hartman
TX,
I am a little techy about the DC trolls. Long-time readers may remember it was a VA area RE message board that decided to mount a concerted effort to flame this blog out of existence, after the LA Times profile in 2005. That was the beginning of the serious troll wars we all went through.
What board was this? I know David’s blog at bubblemeter gets a lot of flaming, particularly from a clueless dolt named Lance and the infamous VA_Investor
sounds like Ben is as “techy” about DC trolls as I am about FL (Hillsborough County)family law courts.
I remember. I can’t think of a single poster I despised more than that VA Investor person.
‘I can’t think of a single poster I despised more than that VA Investor person.’
You are forgettin Gekko, obviously.
Here is a “blast from the past”:
Enjoy!
Comment by va_investor
2006-09-24 11:13:09
I don’t know anyone who is worried about price declines. Yes, it sucks to some extent, but no one I know is in jeopardy of being out on the street. This huge debacle befalling FB’s is way overblown. The relatives and friends I talk to don’t even mention housing prices. Maybe it is demographic(?).
Comment by Beer and Cigar Guy
2006-09-24 11:40:01
Your insight is astounding. You must be correct. Within weeks this temporary glitch will revert back to the new paradigm of constantly skyrocketing real estate values which will never end. In light of your unique and intimate knowledge of the market you should immediately invest in more real estate. Lots of it. ALL of it. At any price and in any location, because it will only go up in value. Sshhhh! Don’t tell anyone else about your special secret. You are a genius.
Comment by va_investor
2006-09-24 11:48:09
Thanks jackass. Just because you find housing “so expensive” doesn’t mean most people do. Perhaps you are running with the wrong crowd. Some people in my circle own multiple homes.
Comment by crispy&cole
2006-09-24 12:03:09
Is that a$$ clown Casey in your circle of friends.
Comment by Mort
2006-09-24 12:04:16
Yeah stupid, always hang with rich people, they have such great personalities. (snickers)
Comment by va_investor
2006-09-24 12:10:18
Wealthy people don’t really care about “house prices”. It is a minor part of their economic picture. I know all bubbleheads are just dreaming of people crying about house prices, but the fact is that most homeowners don’t give it much thought.
Comment by eastcoaster
2006-09-24 12:17:00
Not dreaming of people crying. Just wondering what the general public really thinks. Why do you always have to add things like, “wealthy people” and “people in my circle” etc.? You must have very low self-esteem to go with alleged very high net worth.
Comment by Beer and Cigar Guy
2006-09-24 14:07:42
“Thanks jackass.” What’s wrong, cupcake- Did I touch a nerve? You are just another ‘ten-dollar millionaire’ who needs to masturbate your ego to reassure yourself what a genius you are. If you were really that sure of yourself or that wealthy you wouldn’t be posting here, you ass-pilot. As for me, I do have a little money, but that doesn’t mean that I have to be stupid with it.
“Just because you find housing “so expensive” doesn’t mean most people do.” If you can, pull your head out of your anus and don’t quote me for things that I didn’t write. The next house that I buy (I’ve owned and sold several) won’t be in the upswing or peak of an obvious bubble. It sounds like you’re a little sensitive on that topic too, hmmmm genius?!? In response to your misquote, I’ve got a news flash for you Einstein- most people DO find housing too expensive and thats why inventories are soaring as sales decrease across the country. You really ought to get out more often if this is news to you. Why don’t YOU try running with a different crowd- or is that what you are trying to do by posting here? Is this the extent of your socialization? Your stunted world-view tends to indicate that this might be the case. Go buy a few more houses, Brainiac. Soon you will own the world.
Reply here
Comment by crispy&cole
2006-09-24 12:01:53
Thanks for the wonderful comments. BAHAAHAHHAHA!
Reply to this comment
Comment by uptown
2006-09-24 13:12:02
I’m sure there are plenty of people who don’t worry about price declines - they’re called bad investors, or poor.
Reply to this comment
Comment by jannifl
2006-09-24 14:14:18
“The relatives and friends I talk to don’t even mention housing prices.”
What pray tell, do they talk about?
Comment by Catherine
2006-09-24 14:35:48
“Some people in my circle own multiple homes.”
Sounds like a circle of hell. Complete with monogrammed button downs, pomegranate martinis, and a copy of “A Million Little Pieces” in a Prada backpack.
“a single poster I despised more than that VA Investor person.”
The Lingus
y’all can get mean
arroyo,
You took it there. Sheer insanity. I think that I had subconsciously blocked him from my mind.
I can’t believe no one has metioned Hedge Fund ANALyst.
va_investor nows posts on the craigslist housing forum under the name ‘formerwinner.’ and yes, the posts are just as stupid today as they were on here back in the day.
There was always LVLandlord, with the “we’re running out of land argument.” In Nevada, are you kidding me ?!
va_investor/formerwinner and Lance also post at the novabubblefallout blog. When I started posting price declines in March the latter would come up with all kinds of excuses about the “outliers” I was putting up. Va_Investor (who only posted once, thankfully) said they were either dramatic lowballs put out by the agent to attract multiple bids, or else foreclosure pricing that didn’t affect the rest of the market. Now as the fallout continues and closes in they’ve drawn a line in the sand around their street, block, and quadrant being “different”. Soon it’ll be down to their very house. Which is fine with the rest of the commenters, because it’s unlikely they’ll have trouble finding something else that suits them.
Such BS about gov’t payrolls, most are on the GS scale and top out at 150K per year. Most make less. Contractors sometimes make more than civil servants at the same level, but not much more. How that is supposed to support 500-700K houses in the DC suburbs is a mystery to me. Oh wait, it doesn’t.
At least in NYC and SoCal you can pretend it’s all based on high paying industries like entertainment or finance. You can get very wealthy doing these things, unlike being an employee of the government.
If I were going to make the case for 500-700K houses, it sure wouldn’t be on the backs of the gov pay scale. I don’t care if you’re a G90, it doesn’t make sense.
The only sensible way to have argued it: The govt cheese flow around here is obscene. Believe it or not, the census list Prince William and Fairfax county as numbers 3 and 5 of the top median income. (Howard MD has number 2, has both dc + balt income). Those dc numbers are ahead of ANYTHING in CA, and shows that Iraq has been quite profitable for this region.
But still, little things like price-to-rent don’t make any sense. (See my post above.) So you just know that it isn’t “different here” after all.
OK, end of rant, I’ll stop before you think I’ve taken over flat’s keyboard.
Indeed, we may be wealthy, but not wealthy enough to support the stupidity that has been going on here for years: “starter” townhomes in the $400’s, McMansions at $600K and up - unreal! And the cost of living overall is very high in this area, and climbing as we tax our way to prosperity. No way can this are support such stupid-high housing prices once the funny-money fountain is turned off.
Significant other and I rent a TH just outside of old town. Combined, we gross a bit over 200K and have a difficult time trying to save and make ends meet. Yes, I know that some may think that is a lot of money, but it does not go very far in DC. While I have not checked in a while, and do not intend to, ranches/ramblers were being listed for 600K! In any event, 2-3 townhomes near me have been on the market for about 6 months or so and the HOA sent out letters a few months back about all the for sale signs and the time limits on keeping for sale signs up. In late 2005 we were looking at a townhome to rent and some military type decided to buy it instead, I just kind of laughed. It seems to me that they are the only ones that continue to buy and sell- I guess there is nothing like screwing over a fellow soldier.
Combined, we gross a bit over 200K and have a difficult time trying to save and make ends meet. Yes, I know that some may think that is a lot of money, but it does not go very far in DC.
WTF? I did DC on 20K per year in 2000. As I recall, groceries were super cheap there. (Baltimore is a major port, especially for Florida produce, IIRC.)
You must be one of those people who think they’re “rich” at six figures and hence spend beyond your means. My wife and I make $50K combined (who knows, maybe we will clear $60K next year if all goes well) and we save between 10 and 20% gross per month! And we eat out, go on trips, indulge her crazy yarn purchasing habits, etc. Heck, we went to Munich for a week earlier this year (also spent a few days in Prague–but the point is, München ist gar keine billige Stadt).
Btw, HOAs in NOVA? Nazis. Every last one of them.
You can’t rent anywhere near Old Town and live on 20-50k per year, I assure you.
But you’re right in that housing is the only thing in metro DC that I would consider to be unreasonably expensive. Gasoline is about in the middle of nationwide prices, though the awful commutes can suck up the gas pretty fast. Downtown parking is expensive but not nearly at NYC levels.
Grad students can barely sruvive on $20k a year in DC, and if anyone know how to skimp and live on Top Ramen, it’s grad students.
Ostrich is right: $200k really isn’t jack here.
You can’t rent a dump here for less than $900 month. And that is an apartment big enough for 3/4 of one person. Usually comes with singing pipes and drafts. No DC is not for the faint of heart. Many ugly houses that are found in ghettos in other cities have price tags one would find only in landed gentry neighborhoods in other major cities.
I have found that service are much more expensive here. Cleaners, repair services, alterations and such are way out of scope, but again the rents are too high plus these people must make lots money to buy the $500k 2 bedroom, 1 bath dumps found all over the place.
Don’t get me wrong - I think that the prices in the DC/MD/VA area are overpriced, but the salaries, esp of dual income folks, is pretty high. A lot of the fed gov’t employees and contractors make well over 100K. I think that the avg gov’t worker is a GS-13 which is $79K-103K in the DC region. The private sector people in DC and NOVA area often make even more money. The $200K household income example below is very typical around DC IMO. That’s why a $500K house is so affordable to so many people around here (2.5x income). From what I’ve personally seen, many of these same people bought the $7-800K houses based on their $200K+ salaries and the equity from selling a home (that had basically doubled in price) in the 03-05 timeframe. Still around a $500K mortgage. The big problems that I see are now are all those people who leveraged/HELO’d their previous equity or first home (’06 & 07 buyers, ARMs, etc) beyond their underlying salaries and were dependent on rising home values.
And it’s laughable to me that someone w/ a $200K household income claims that they can’t find affordable housing around the DC area. There’s huge inventory in the $4-600K range. I understand if you decline to buy b/c you think that it’s overpriced, but don’t try to tell people that you can’t find anything to buy.
The problem is that the “huge inventory inthe 4-600k range” mostly consists of a) dumps, b) nice SFH far from work, or c) townhomes in crowded neighborhoods.
In contrast, if my wife and moved to Atlanta (just to pick another area, but not atypical), we would make the same or more. Yet, houses would be 40% of the DC prices. From talking to others, that seems to be pretty typical (same or better salaries with much cheaper houses).
I think the big contrast is comparing the current situation to earlier in the decade. Same high salaries (inflation adjusted), but the 800k house today went for 340k in 2000, and $400k in 2002. In the mean time, we actually had an increase (inside the beltway, outside, and in the exurbs) in the ratio of housing units:population. That is, there is less of a ’shortage’ compared to 2000, yet the price of homes is completely out of proportion to incomes compared to the beginning of the decade. They are also out of proportion compared to rents. You can rent a million-dollar house in Oakton-Vienna for $3000 a month (longandfoster.com). Why buy when you can rent for a helluva lot less?
Right now, our goal is to get out of here, but if we can’t, we’re going to stick to plan B (ride out the storm and buy a place when things are more affordable).
We’ve been priced out of this market since 2001. My husband’s income went up 10% a year, and housing 1 hr. south of DC was climbing close to 25% a year. We had almost resigned ourselves to buying a “starter” town-home for $400k (without the bells and whistles) an hour outside of DC when the market began to slow down.
Area household incomes are $75,000 — but the average ticket price for a house is over $400k (and that’s for a 2500 square foot, nothin-special home on a rinky-dink lot). Compare this to my parents’ home (nothin-special home on a 3acre lot, 3,000 square feet), which NEW in early 2000 was worth roughly $250,000. At the peak, it would have sold for nearly $550,000!
100%+ appreciation in 4-5 years is insane — and no, there really isn’t anything available other than real POS houses here under $300k — remember we’re an hour freakin’ south of DC, and the average double-income household is making $75,000.
When I can get that $650,000 home down the street for under $400k, we might talk (did I mention that the builder is BEGGING me to make an offer — any offer — to get this house sold by the end of November?) I don’t expect to get it, but I *do* expect to get a nice home currently listed at $359k for around $270. It’s a REO, but move-in ready.
Wait till the Gov’t pay doesn’t pay enough to cover what inflation is eating up.
they aren’t making anymore waterviews? FOOL!
Indeed, global warming will be making many more water views, I’m afraid.
Not only global warming but also plain old beach erosion. Here in SoFla the erosion is bad lately. Some folks who had waterviews out back will soon have waterviews in front also. Mother Nature wins eventually.
Ya beat me to it! Jeez, waterviews. I suppose a greater fool out there would fall for that one!
He’s right. No one will dare build a waterfront condo high rise for years.
someone bookmark this turkey’s development.
Should be fun to watch this guy implode next year……………………….
I thought it was funny and that the guy has a great sense of humor. I read that as a tongue in cheek comment… patterned after “they aren’t making any more land.”
“We can’t make any more of the land, but we can build huge high-rises on the beach.” - Robert Shiller
This can’t be! Everyone in Norfolk-Virginia Beach-Newport News metro area said that it’s different here because (drum roll) there is so much military spending!
I’ve been bearish on the comment box on Virginia Pilot since 05 or 06. They’ve even allowed me to post the URL to this blog once. It’s kind of relaxing to be vindicated, but I’d still rather have a realistic housing market. I still remember when another woman accused me of bringing down the market with my negative talk on there.
‘I still remember when another woman accused me of bringing down the market with my negative talk on there.’
Well then you can imagine the grief I get.
Seriously? Do you get an inbox full of hate mail from distressed sellers, owners and realtors? You could always publish the emails for entertainment, like some of the spoof sites do (landoverbaptist.com or what have you).
Ben actually goes and talks to people in the real world about this stuff. (Interviews in the media, etc.) I have no idea about how much email, etc he gets but I can totally see how he’d get the “blame the messenger” comments and evil stares.
No, directly from a few of the local FBs and specuvestors. What can one say to them, ’sorry?’
We all know that Ben has a St Joseph voodoo doll.
“Will Kirby’s rented out his Norfolk house since he was transferred to California in 2005. His tenants will move out this month. The place has been listed for nearly three weeks. Kirby has already knocked the rent down $50, to $1,300. He’s braced to go lower.”
I actually know this dude. I went to his wedding. He’s a nice guy - chopper pilot in the Navy. Anyway, when he and his wife bought the house in San Diego a few years ago, I clearly remember his father-in-law saying “oh I don’t think there will be a big drop in real estate prices.” At the time, I was just learning about the housing bubble and thinking that something just didn’t seem right - that prices sure seemed awfully high.
Oh, how times have changed.
I hope for his sake he didn’t heloc that SD house, or else he may be toast. Two alligators in declining markets.
“Kirby has no thoughts of selling his Norfolk house: He sees it as a long-term investment.”
I like to LOL when I hear talk of long term investing in RE. Mr. Kirby will break even (in todays money, NOT on an inflation adjusted basis) in about 15 years, plus or minus 5.
“Long term investing” really belongs in the context of those enterprises that are growing their sales and profits over and above inflation on a yearly basis. For the most part, aging rental buildings do not grow their revenue and profits over and above inflation. Also, every building that is built is built with an expected lifespan; as it approaches this lifespan it will cost you dearly in maintenance. SOMEBODY gets stuck with huge repair bills. (I am thinking of that type of construction where the corroding metal water pipes are set incapsulated in a concrete foundation slab. Good luck chasing down multiple water leaks in that POS.)
I am now sitting on a 3-bagger after 5 years of stock ownership. I am also sitting on a 17-bagger after about 7 years of stock ownership. I have bought and sold other multiple baggers in my time. No tenants, no insurance, no maintenance, no water pipes, no contractors, no yard work, no landscaping, no salespeople tripping and suing, no property taxes, no HOA, no mello-yellow roos, no interest, no monthly payments. When I sell it costs me all of $9.95 (plus maybe some small fractional point shaving by my broker) plus 15% Federal, with or without the AMT.
If anybody wants to do long term investing then try to find small but growing companies with strong balance sheets (lots of assets and very little debt) and a product and/or service that solves an economic need or problem.
But buy your damn house to live in it. Period. Paragraph.
Got 10% down?
do you have any stock recommendations?
There is a new apartment building down the street from me in Norfolk, VA. It was built at the same time the company built a condo building next door. Pretty large buildings. A co-worker of mine lives there, I just learned this yesterday. He said that he is moving out of the new building when his lease is up because they are raising the rents again. He already pays quite a bit more than market value, almost $160 more than me and I have a view of the water and what not. He said that the building was made very poorly, and that there are all sorts of problems. The people that bought it are having a hard time covering the costs or some such, and there is still a number of units empty. So they are trying to up the rents to cover the costs, but of course, people aren’t going to hang around for that when there are so many other places for rent.
Just out of curiosity, how much does it take for renters to move from where they are to a nearby place with lower rents. Do people do a financial analysis, and what kind of payback interval do they use? (It costs money to move, even if you rent a truck and enlist your friends’ strong backs.)
Let’s say you like where you live, the neighbors are nice, and the landlord is accomodating but he’s raising the rent. How much lower would the rent somewhere else need to be in order for you to move? $50 a month? $100? $200?
I hope some renters here will share their thoughts.
It round numbers: Moving costs a lump sum of 1-2K. At $200 /month less in rent, it’s a no brainer and gets paid off in less than a year.
I’m seeing move-in bonuses appearing nearby (free 1-2 months rent), which makes the move pay off almost immediately.
Bill, glad you asked because my family is in the process of moving. We have lived in a nice 3/2 for almost 2 years in South OC. When we moved in our rent was very nice, about what a 300K loan would go for. Okay, I know you guys will get on me. BUT. I am 4 miles from work, go home for lunch, we have a pool, spa, a nice nature area, and the gym. Of course we didn’t rent the garage (yes, a 1-car garage would cost another $100). Well, slowly but surely all the neighbors started moving. We started to hear and talk to others. Rents are going up.
Long story short, our rent went up another $100 last year, so still okay. However, we started looking and found a nice 2/2 with loft condo for $60 less than what we pay now. The kicker, we get a 2-car gargage and all the amenities we have at the apartment we are leaving, except the gym. Added to that we will be right on the RSM lake.
So, did we pencil it out. You betcha. I’ve been schooled here for 2 years. Not going to go in without doing the math homework. Figured if we stay we we are, we are gonna get hit for at least another $100/month increase. Was told by one of the secretaries in the office we are at the low end of the rental pipeline for the 3/2s. In fact, we are $325/month below, so I know we are gonna get hit. Well, we do have to pay a 1-month penalty to get out, but factoring in the lesser rent, the gargage cost where we are vs. no-cost where we are going and a few other items, it is a wash except for the $625 for the furniture movers. We are moving all the boxes and such. Movers are taking all the big stuff.
However, I look at it this way, if we stay a second year, like we stayed at the place we are leaving, we will be ahead. Also, being a county worker, I have a 5% raise in the bag (Mr. Watts) this June, so the less rent will help.
Keep in mind, my wife stays home, so it is 1-income here. Also, we are trying to downsize our lives and teach the kids the value of family and friends, not stuff or a big house.
On the other hand, I am slowly trying to warn everyone who will listen and my wife, subtley, that less is going to be more in the coming years with oil, gas, food, and everything costing more.
Bottom line…for us this is the right move.
So sorry for the long post. I should add that where we are moving from WAS a nice place. In the two years, I have seen the creep move in. By that I mean the deterioration of the neighborhood. I mean come on, do we really need to remind dog owners to pick up after their dogs? Is a fine necessary? Well, apparently even a find does not deter. I have also begun to see more and more extended families living together. Nothing like 10 to a 3/2, but a sister of brother or SIL or BIL living with a couple. Guess when the rents are $2K+/month, you need 3 salaries to make it work.
Sheesh, I really fear for this country. Our children are in for a world of hurt if it takes 3 salaries to make ends meet.
I can’t fathom why anyone who isn’t stinking rich (or who bought when it was cheap) would ever live in SoCal.
Our children are in for a world of hurt if it takes 3 salaries to make ends meet.
And so I raise my glass to bigamy!
Colorado, you are spot on, which is why I have applied for jobs out of state. Once one comes through, we are def. gone. This state is out of economic whack!
I would say it costs about 500-1000 to move- truck rental, movers and tip. Then there is the whole stress of moving thing- probably worth another 500-1000 to me. That said, I would not move voluntarily unless I was going to save about 2000/year better. Although, when I was 10 years younger, I moved to save 100/month. That said, however, if my LL tried to raise my rent, I would laugh and then demand that he lower my rent 300/month. If he did not, I would move out of spite even if it meant that I lost a few bucks.
Interesting comment about the stress of moving. Sure, I hate moving as much as the next guy. However, I have always used the time to get all the files and “stuff” in order. I know this is a tragedy, but after the wildfires, this move is a great time for us because I have got the files all in order for the quick getaway or if should the untimely occur to me, the wife can find everything. I also use the move to clean out all the old toys, clothes, books, music, etc. I find it cathartic and a chance to really look at what is important. I go through everything with a fine-tooth comb. It is interesting to look back on 14 years of marriage, 2 children growing up, yearbooks from high school and college, etc.
My wife, on the other hand, while she goes through a lot of stuff before the move, will usually clean out on the back end, in other words when we get to the new spot. As she unpacks, that is when she makes the killing.
We also have less stress this time because we have an overlap of 9 days. So, the movers take all the big stuff on day 1. We’ll take so boxes. Day 2 well make about 4 trips, remember that we are only moving about 4 miles, so it isn’t too big of a deal.
It would be quite a bit for me… pinball machines, A/V equipment, furniture, and lots of computers and other heavy stuff. I’m saving quite a bit of money now, and that makes me feel great.
I looked at a condo near my apartment. They wanted like $380,000 for the condo. Had to rent parking space from the city with the condo, no real view. Nicer fixtures and countertops and floors… My apartment? $1150/month, high ceilings, feels like more room, and I can see the water (and the roof of the condo building). But I’m a looser renter in their eyes I guess.
Pinball machines. AV equipment. What are you running over there? A grade school? An after-school reck-center? Just kidding. trying to keep it light.
Bill, Moved 6/07. In nominal terms it was pretty cheap, probably about 1K with prof mover. The drag is not monetary it’s agravation. Doctors, phone, email, etc etc
We rented a Brand New 3/2/1 for $875 . 1400 SF including Garage. 2 Years ago. Landlord is a Great Guy . Contract was to go up at 5% per Year. He raised the Rent to Just $900 after the first year and hasn’t raised it since.
Now at the end of the Block there’s a brand new 3/2/2 with 370 more sf plus 2 car garage for $750.
Normally in the Real World, this would be a no brainer. I could Move myself at no cost and save $1800 per Year and have a Newer, Bigger House in the Same neighborhood.
But Here’s the thing. Do You go from a Great landlord, who never bothers You, except to say thanks for being such a great renter and who You think is financially stable so as not to lose the house out from under You, to take a chance on a landlord that could be an a**Hole , and may lose the house in 6 months.
When numbers don’t add up it makes Me nervous. How does someone rent a $185,000 house for $750 in Florida? Or a $350,000 house for a Grand a Month?
I’d change houses in a second if I thought these People were wealthy and going to subsidize my rent by $10k or $15k a Year for at least a couple of years. But I think they’ll all be Repo within a year.
My last in-town move here in SD cost me about $800 including the movers. I chose to move to a better rental, closer to work, that cost about the same, but included things that I had been paying for separately. I would start thinking about finding another place if I were offered a rent increase of $125+/mo. I would be looking for something around $175+/mo. cheaper
We recently moved to a place with the same rent because it was bigger (400 sq. ft.) and had a back yard. It’s a pain to move, but it was a quality of life thing.
Otherwise, it would probably take ~$300 a month difference to motivate me to move again.
Bill, I think part of it isn’t just the dollar amount but percentage. If your rent is $500/mo then a $100 increase is 20%. But at $1000, the increase is only 10%, and so on. I would think that it would also depend on how much you’re making and if you really want to cut back $100 on other areas, so that you could pay a higher cost for the same place.
$100 a month.
It costs me $35 to rent a truck and I move the stuff myself with a couple friends. It’s a good opportunity to get rid of junk I don’t need and reorganize. In fact, since both my grandmother and my mom had/have packrat tendencies, I think my frequent moves have been a kind of therapy to keep me from going down the same path.
We moved two months ago to save $600 a month. I’m feeling better about it now after reading all of these comments. The new situation is fine, but we’ll be more than ready to buy again in a few years. Little things the builder of the house didn’t provide (like a water filter on a well) can drive you crazy.
I think quality of life is a huge consideration after money. Sometimes it’s a matter of where you feel the most comfortable and can function best. We’re now further from many things we enjoy (although closer to my husband’s office). We’re the most rural we’ve ever been. It’s sometimes hard to get used to big lifestyle changes to save money. But I do feel confident it was the right decision. And from this blog I’ve learned patience pays off.
To answer the question, though, after being honest with yourself about every cost involved, I think I would move if it would mean saving 3-5% of my gross income per year. And we’ve also learned that having too much *stuff* is a nightmare and a detriment to living the good life. I talked to two military wives/mothers the other day who’ve been stuck in one place for a few years, and they said they like moving because things get tidied up.
The $600 included utility savings, to be more clear. The rent was $300 cheaper (both are 4-bedroom colonials). The water plus utilities are $300 cheaper a month.
“For a man with about $175 million riding on an unconventional condominium project set to open in the spring, Patrick Turner seems remarkably unworried. Never mind that the real estate market is in the dumps. Never mind that no one has ever put condos in a converted grain elevator or really knows how many people want to live in one. And never mind that not one unit at Silo Point has sold.”
This is without a doubt, the dumbest real estate venture i’ve ever heard of…
Years ago, when I was a young pup traveling around the country, I met a fellow who joked about putting a silo in his backyard. For out-of-state guests to stay in. (The state in question was Wisconsin, and be forewarned, those Badgers have wicked senses of humor.)
With the rising costs of food, and food being exportable, perhaps keeping it as a grain silo would be a better move.
There is a mud hole here in downtown Norfolk which is supposed to be home to the premiere condo tower… that can’t find financing. It got pulled from out from under the project.
Yeah, I’ve posted on this project many times. One link had a bunch of photos. There was a reason they put the silos where they did.
Hahahahaha!!! A grain elevator???
What’s next, missile silos??
Funny you should mention that…
http://news.bbc.co.uk/2/hi/americas/7012020.stm
$1.5 million. Sigh. Guess I’ll have to be content with the 1000 gallon concrete septic tank buried in my backyard.
“While it may seem an improbable castle, the Zwonitzers are not alone. As many as a dozen of the nation’s former missile silos have been turned into homes, says Ed Peden, who lives in an Atlas E silo outside Dover, Kansas, and helps sell the sites.”
http://edition.cnn.com/2003/US/Central/08/02/silo.sweet.silo/
I guess you’d have to be hopeful that Russia had added your backyard to their “inactive” targeting list.
dumb ? he has lots of competition for dumb-lubbock,madison,asheville
has Scranton announced a high rise condo yet ?
Are you sure this is the dumbest idea? Perhaps you missed the one a year or so ago about floating barges - I mean “luxury condo homes” - that would be basically rooms on ships that would sail up and down the Mississippi River, all part of a new “lifestyle?” Unless that was an April Fools joke, I think it wins for dumbest idea thus far, although this one is close, IMHO.
Pardon the cross-post, but I think the Bits Bucket just devoured the following…
The first-ever Tucson HBB gathering will take place at 6 p.m. this evening at the Yoshimatsu Japanese restaurant. (Sushi-phobics take note: Yoshimatsu serves many non-sushi dishes.)
We will have a special guest, Tango In Uniform, who you know and love from this site, and also from his Billings, Montana Housing Bubble site. If you haven’t watched his Billings Bubble videos, you’re in for a treat.
Location of our gathering:
Yoshimatsu
2660 N. Campbell Ave.
Tucson, AZ 85719
(520) 320-1574
Look for us at the table with the “It’s Different Here” sign.
LOL! From now on all HBB huddle-ups are gonna sport this “It’s Different Here” sign.
South Central Ky has a a county that was voted the best rural county in America buy some magazine. Doesn’t seem to have put a dent on all the growing empty Mcmansion inventory, though.
How many magazines are there colluding with the REIC over this crap?
Glad you asked, TCM!
To tonight’s Tucson HBB gathering, I’ll bring a recently published business magazine. To me, the copy looks like it came straight from the Arizona REIC. The cheerleading, even in the fall of ‘07, is something to behold.
“Eliminating pre-sales, ‘does seem somewhat risky, given the current real estate market,’ said Daraius Irani, at Towson University. ‘However, they’re not making any more water views.’”
Viewing water pales in comparison, with having water rights…
Price:Rent where I am in Colorado is……..FOUR HUNDRED AND SIXTY SIX
(the house where my wife and I live is for sale)
Boulder?
Silverton (SW Colorado, north of Durango)
The house isn’t going anywhere, nothing in Town is selling, but the whole Town is for sale.
Been there once. Can’t imagine living there. How high is it? 9-10,000 feet.
Do you have a lease? They would have to pay you to move if they break it, otherwise the new owner cannot do anything except collect the same rent till it expires…..and the new owner gets your deposit at the closing…..I have had 2 “free” moves in my lifetime.
“Mr. Stevens pulled the house off the market in early 2007, and now it’s back for $1.285 million. So if you start from the top, that’s approximately 766 days on the market, $165,000 price cut, and still no bites.”
From the NAR………Real Estate is your “best investment”.
15% a year “appreciation” is………..”in the bag”.
BWAH hahah ahhaha hahhaha
and why is he selling when there was never a better time to buy according to his friends? Is Stevens a real contrarian?
“‘I didn’t listen to my agent. That’s what consumers need to do. They need to listen to their agent. If the agent says you need to adjust the price, then you need to adjust that price,
So the president of the NAR didn’t listen to his own agent…
huh?
The president of the NAR has no clue about the market, and neither do his co-works.
Phillygay, may the past NAR presidents trick or treat at your home next year!
Go Eagles. HAHA!
So sorry. Meant to say Phillygal. Error E3 on the Mets fan originally from Nothern NJ.
OCDan, you from Joisey? Can I guess…Wayne?
Phillygay’s OK. It kind of fits with the upcoming holiday season, when everything’s gay and bright. And I did stop by Woody’s a couple times when I was young and they let straights in.
Not Wayne. Yuck! try Richwood, er, I mean, Ridgewood.
College roomie was from Ridgewood. Went home with her one weekend but we mainly hung out at the nightclubs where her Cuban boyfriend went.
It was kind of a culture clash.
Not only that, he’s no longer USING a realtor. As I understand it, Redfin (the site where his home is listed) is a fixed price, low cost online real estate site….bwahahaha!!
Just returned from Annapolis, MD where I saw several condo projects that are now apartments. They’re trying to build up the west side of town. It seemed like there were many more ads for houses than there were a year ago. No talk of a crash. Most of the everyday folks seem oblivious to the bubble and have accepted they are price out.
I think it will take a few years of stability to convince people to get back into real estate in any significant way. Nobody wants to catch a falling knife, and those who might be interested in trying are usually not good credit risks anyway, so I think it will be quite some time yet…
“It would be a last resort, but the proposed 500 Riverside condominium community on the downtown waterfront could turn to a renters market for occupants if home sales remain in a slump, says Tom Wentz of Prudential Carruthers Real Estate.”
translation:
“We are turning it into apartments, our last possible out.”
next: section 8 housing
“On when strong home prices may return: ‘It probably takes four to five years to get back to the high prices again. The sellers now have got to realize that 20 percent (increases price sales a couple years ago) was never really there, except for those that cashed out. It’s a very hard thing to swallow if your neighbor got $800,000 two years ago (and) your house is now worth $625,000.’”
__________________
It’s going to take at least 8 years to return to an up trend (and those prices will still be just above the bottom), and the 20% increase over the past couple of years is actually a 120% increase over the past 10 years. I love it when the people who maximized the ascent try to minimize the descent.
This elevator doesn’t stop until it gets to the basement.
It’ll probably take at least another generation or two–when nobody’s around to remember 2000-2009–for this to happen again. You need extremely low interest rates, lenders willing to lend to *anyone*, investors willing to invest in mortgages made to unquialified people, and builders willing to slap up houses.
There’ll be some other sort of boom/mania before housing ever starts up again. It wouldn’t suprise me if housing drops 50% on average nationwide, and sits there for 25 years, maybe creeping up a bit to track wages.
Overpriced condos are an even dumber idea in Baltimore than they are in DC. Incomes are lower there. When I lived there only a very affluent person would have a 200-300K house. Where was this sudden influx of people who will pay 400K for a condo in Charles Village supposed to come from? Oh yeah, DC, hahaha. I guess all of those people priced out of DC will take on a wildly inconvenient commute just so they can pay the same prices as in DC — sure that makes sense.
And still, in PHX they are pushing forward with many new condo towers for downtown. Simple insanity! Why would I buy a 1200 sqft apartment for $400K when I can rent an apartment a few blocks away for $800 a month? 500 to 1 rent to purchase ratio? come on!
Oh, it will be on the new light rail line. A train that goes from nowhere to nowhere with nothing in between.
Sounds like the same “Light Rail Will Save Us” rhetoric that’s been blowing through Tucson.
You’re getting one too? Norfolk, VA has just started on a $240 million 7 mile light rail line.
Also, if anyone in Norfolk, VA wants to have a HBB get together, I’d be interested.
The planning of cities in this country is downright crimminal. Most towns had plannned for high speed rapid transist for the new century what we got was like you said in phx light rail going nowhere, trains running up the center of freeways ugly and graffitti, buses carrying hardly anybody, toll roads that were suppose to pay for better roads, was in Chicago all the place is one big pot hole broken street town, city offical told me the state is crooked and state told me the city is crooked, welcome to Disneyland’s view of America back in the late 50’s a modern well run efficent big cities and suburbs slated for the year 2000, i’m still waiting guess what a buss just passed beautiful smell and one quarter full?
Tell me about Shadow. For all the rhetoric in LA, that’s about what you get in the city of demons, er, I, mean angels. And the cost! Don’t ven talk about the cost for a subway in LA. I don’t recall the exact numbers, but it was mindboggling. Something like a million for every mile or so of track. And this was years ago when the subway was first built. Then you can add in all the disruption caused by building these boondoogles. You can only imagine what it does in LA. Lastly, add in all the frakazoids that gravitate to something like a subway in LA and you might want to rethink even building it. Of course, certain cith higherups and construction contractors made out like bandits.
It was $4 Billion for four miles.
Thanks. I knew one of you would remember. A bil for a mile. What a joke! Why bother?
And part of that was $1B in stolen moneys.
US DOT actually pulled their funding.
shadow
I’ll take a stab at replying to yer comments about public trans;
I myself try to be careful & logical about things. So do a lot of other people. Business commuters especially. So with this in mind, the responsible commuters get fed-up with being shoehorned in a conveyance that allows access to any nutcase, thug, predator, or any other type of public nuisance. Not to mention the minor annoyances like foul body odors, bad manners, or the bus/train getting cancelled w. no prior notice. All of these things make for a miserable experience.
In strong business centers like New York, the mere presence of larger decent people give a better sense of security, but for the rest of the country public trans just means the troublemaking poor are entitled to ride with decent citizens. Well, after a few rides the ideals of community vanish to the harsh reality of the predators/troublemakers being able to bother others because THEY CAN GET AWAY WITH IT !! Thats THE main problem with public trans;
average law-abiding citizen’s exposure to the troublemakers. AND you cant just walk away because yer stuck inside a bus/train for awhile. Meaning yer a captive subject.
Now I dont know about you, but most people don’t like getting caged into the same pen with jerks, with no escape. Mothers w.kids, elderly, even the ordinary looking joe average citizen are all at the mercy of the pissed-off poor who are angry and blame the world for their situation, & WILL take it out on anyone nearby. Thats why even when gas goes to $10/gal many will find some way to continue to drive to work, in peace, comfort, and most of all, security. The car will be saved for use to get groceries & work commute. All other non-essential trips will vanish. Count me among that group also.
It’s always amusing to me reading over the years the politicians pleas for ” more mass transit .. we need it” while the exalted leaders are somehow exempt from taking the bus. Go ahead, ask one of em sometime to practice what they preach? Why dont THEY take the bus?? How bout just ONE DAY of taking the bus ??
Of course you’ll get a blathering reply about time constraints, schedule conflicts, meetings, harumph harumph .. etc.
Hmm, so whats good for the goose is not good for the gander …?
And of course the added stigma of only the poor take public transport. In fact, the FIRST thing a poor “new arrival ” here in CA does is buy a large shiny truck w/shiny rims to show they’ve made it!
Also, gotta have the ” Michocoan ” decal on the window. (Here in body, not in spirit). Whats even MORE ironic is the latin workers going off to their jobs daily in expensive rides yet their wives/girlfriends are left behind to daily lug the 3 kids miles down the street using only a stroller for groceries !! NOO, they wont buy two inexpensive vehicles ,,, nahh the MAN of the family has to have his expensive ride first, then come home with his buddies with cases of beer afterwork to relax. But, bbbbut, they are POORRRRRR -feel sorrrrrry for ‘em ??!!!!
BS to that! I have lived thru it all while watching my formerly decent apt complex go downhill very fast, while caught in the dam housing run-up bubble.
yeah, I meandered around a little. Dont like it? Go watch Britney on TV. I’m sure she is on at least 3 channels somewhere.
rant off - for now
Amen Aquis. When I went to USC I couldn’t believe that some of these people lived in squallar (SP?) while they had rides that surely cost upwards of 50K and remember this is the late 80s when I attended. WHat kind of thinkin is that? Back then they could have bought a decent home somewhere, anywhere with a 40K downpayment and got very nice used car for 10K or 2 for 5K each. BUUUUUUUUUUUUUUUUUT NOOOOOOOOOOOOOOO! They would rather live in a 1 bed/1bath roach-infested, cr@p-on the front lawn PoS across Hoover from USC because they had to have the 35K sound system in their CHEEEEVY! Sorry if I am not PC. I am just calling it like I saw it.
Here in B’more, land of the endless ghetto, there are places where one can RENT spinner rims for one’s g-ride. Nice! What an amazing waste of money by wastes of people!
Watch it, Aquis and OCDan, you just described most of the people on the next street over.
When I lived in Hawaii there was talk of building a light rail along the route of the H1 from Kopolai (sp?) to Honolulu. When polled, voters were overwhelming in favor of the project…. When asked why, the near unanimous answer was so everyone else will take the train, leaving less traffic on the freeway for me.
Would you take the train? 80%, probably not.
Would you take the train if it cost more, took longer and was less convenient??? 95%+, probably not.
That is the light rail here in PHX. People in nicer neighborhoods do NOT want the line run into their neighborhood. Therefore, the lines run from downtown, through the slums… then just end in the middle of no where in a very scary neighborhood.
My wife actually works near downtown. So, is she supposed to drive halfway to work, then park her car in a scary neighborhood, then wait for a train, pay to get on the train. The train makes stops every mile or so, so actually travels slower than cars. Then from where it drops he off there will be about a 3-4 mile trip to her work. Cab???
There is NO WAY she’ll be taking the train!!!
I live 2 miles from work, but our lease is up at the end of the year. Talk is that we’re moving about 4 miles east to be closer to the I17 corridor. Still, I won’t be taking the train!
Smokes. Car, train, and the cab to get to work. What a ginormous waste of even trying to make that work! What a logistical nightmare! On top of that, in scary areas of town! Why do cities even bother?
If they are still pushing forward with these condo towers at this stage of the game, then it would be very interesting to find out who is financing this crap.
The last report I saw was about two Isreali companies pushing forward with a project.
“can’t miss”
http://tinyurl.com/yokzyp
Oct 23, 2007
“Two Israeli firms, BSR and Africa Israel plan to build three condominium towers on the northwest corner called One Phoenix.
SW Development Group plans to build a pair of condominium towers near the southeast corner. The development doesn’t have a name yet. ”
Why the projects can’t miss?
They are on the light rail lines (that run through the slums on their way from no where to no where)…
They are near historic neighborhoods (slums?).
Close to jobs.
They won’t be completed for years, giving the market time to recover (yeah, but at a MUCH lower platau. AKA, the PITS OF HELL.)
Sorry, but if people actaully wanted to live in downtown PHX, then the apartments in the area would be renting for MUCH, MUCH more than they are.
Darrell:
I own (outright) my home near 12th St., N. of McDowell. I’d consider a condo at McDowell and Central- IF the price was right. That will be years, IF the condos are built. Doubtful.
The road ahead of me is far shorter than that already traveled; it won’t be many more years until i can’t drive, the location is perfect to get the most of the meager public transportation here in Phoenix.
Maryland has a stunningly bad mass transit system - nothing goes anywhere, and everything connects to nothing, when it is running at all, which it isn’t.
LOL! that is hilarious
though i have to disagree, i’ve taken the metro to the bus that goes to bwi and back, and it wasnt sooo bad
Well, okay, some of them DO go somewhere - the airport. That’s about the only part of the whole system that seems to make sense, which isn’t surprising since it sort of has to (airport makes money, you know.)
Talk about a rock and a hard place. You paid x amount of dollars for your dream home, the investors came in and tried to flip and the builders didn’t care your neighborhood is becoming the lost world, little red flags showing sold dotted the site plan board, the first clue was the red flag, it should have signal beware stay away?
“There will be weeks, if not months, of delay. The home you get could need lots of work. And you could lose several hundred dollars in upfront fees on each failed attempt. Why volunteer for such a hassle when the local market is glutted with similar homes that you could purchase more easily? It’s about money, of course.”
Sounds like an empty nester dumping their paid-up house can get a better price than a recent buyer.
“‘It’s like the dot-com days. If you cashed out before the Nasdaq crashed in April of ‘01, then you did wonderfully. After that, you took gas, because all of your wealth prior to that was on paper. It didn’t really exist,’ he said.”
It didn’t really exist,
It didn’t really exist,
It didn’t really exist,
Maybe if we just keeping repeating it, they’ll finally get it . . .
But in the 90’s at least people were investing money that they actually *had*.
The problem isn’t that this wealth didn’t exist, the problem is that the entire boom didn’t exist because it was based on borrowed money. A boom of borrowed money isn’t a boom at all. Anyone can max-out a credit card and party like a rockstar. The trick is actually being able to afford it. We as a nation just borrowed an entire boom which we couldn’t afford. ie: There was no boom, just a party on credit.
There are only two ways forward economically. Party on: continue the insanity. Stop: crash and burn. The first one actually does have some viable ways out — they just involve cheating and stealing from all holders of dollars — and benefiting debtors/house owners.
Got gold? You better.
“It would be a last resort, but the proposed 500 Riverside condominium community on the downtown waterfront could turn to a renters market for occupants if home sales remain in a slump…”
Tee hee. I can’t turn on KIX106 without blaring commercials for the El Dumpo Condo Conversion complex in my “upscale” neighborhood. Ironically, the place looked much nicer when it was apartments.
I don’t know about other parts of the country, but where I am, it’s an AVALANCE of “rent to own” pitches from the FBers or their agents. Sure. I’d love to rent at top cover-the-note dollar, + a little premium in exchange for the opportunity to buy in two or 3 years at 2006 prices. And sure, I’ll be glad to take care of it myself if the pipes burst or the roof leaks, because after all, YOU, dear FBer, don’t deserve all the headaches of a “real” landlord. Oh, and I totally understand that you don’t want to accept pets or to allow me to paint the walls fuschia, although you want me to consider the property “mine” in every other respect…that would otherwise cost you.
Sigh. Maybe I’ll find that better/cheaper rental in my neighborhood next year. I like this idea that is catching on with municipalities to fine the living crap out of FBers or - in case of foreclosure - the bank/bagholder, for each day that a house is left unsecured or in disrepair. If they really can’t afford to keep it up, then whoever gets stuck with the hot potato will be forced to sell or rent out, or lose the place to a city lien sale at pennies on the dollar. Normally I hate gub’ment grabs, but 100% occupancy is the best defense against neighborhood blight or the otherwise inevitable bulldozer.
Memphis, your comment needs to be plastered on every R2O sign on the planet. Especially this part:
I’d love to rent at top cover-the-note dollar, + a little premium in exchange for the opportunity to buy in two or 3 years at 2006 prices. And sure, I’ll be glad to take care of it myself if the pipes burst or the roof leaks, because after all, YOU, dear FBer, don’t deserve all the headaches of a “real” landlord. Oh, and I totally understand that you don’t want to accept pets or to allow me to paint the walls fuschia, although you want me to consider the property “mine” in every other respect…that would otherwise cost you.
“‘I already told them I couldn’t afford it. If they want the house, they can keep the house,’ said the husband and father of three.”
Oh my. Multiply this statement by…hmmm…just how many FB’s are there in the U.S.?
Since it was SO painless for these folks to get a mortgage in the first place, it will be equally painless to dump the house.
Also ,because of the news lately ,I wonder how many FB’s are screaming proverty when it isn’t true . Right in front of my eyes I see my ex-neighbor trying to make it look like they are poor when they have alot of assets and income .
2 million is the estimate of the number of people that won’t be able to make their house payments when their ARMs adjust… assuming no recession.
To that, you have to add the number of people that technically can afford their payments, but will choose not to when they see how far under water they are.
Then double that when we DO have the recession that is now inevitable.
No question that IF all 2 million go broke on housing and the markets continue to behave as they have, we will have a depression. Think about it…2,000,000 homes times a conservative $200,000 price tag + 400 billion dollars. Now take that and multiple by what 10 for those deriviatives because arent’t they levered at 10×1? Anyway, you are well into trillions now. Suree, BB can run the presses all day and night 24/7, won’t matter by then. Gold will be at 2K, silver at $250 and the dollar will be used for Tp or wallpaper.
Got soup lines?
2 million is the estimate of the number of people that won’t be able to make their house payments when their ARMs adjust… assuming no recession.
I also have a feel that even if these people got magically switched into 30-year fixed mortgages at 6%, they wouldn’t be able to afford their payments. So if the Government tries to force mortgage companies to renegotiate ARMS, theyse mortgages will still default.
We’ve done the math on some of the FB stories on these blogs. Judging what people say is “too much”, many FBs paying only teaser interest wouldn’t even be able to pay a 0% mortgage (i.e., divide the house price by 30 * 12).
So, not only are there 2 million people out there who can’t afford to pay for what they agreed to, the majority of them can’t even be helped if there were some massive “bailout” of sorts.
All due respect to Mr Jones and his site but in the end i think the computer and BILL GATES will turn out to be the demise of the capitialist world, it has just been to easy, hit a key and see what riches await you, don’t leave your home make a bundle, and a make a webb site and be worth more then Toyota?
Remember Planet of the Apes the ending, the Statue of Liberty bobbing in the water, replace that with a HP or Apple?
I met a nice Icelandic couple 2 years ago at Burning Man, and I asked them to describe my country to me, from their eyes…
He had never been here, and his sole impression of us was from tv and movies, and he told me that this was the “country of easy”.
We hardly had to lift a finger or get out of our cars ever, he thought.
She had lived in Az. 15 years earlier as an au pair, for a year.
She was questioned on this visit by U.S. Customs for about 45 minutes, upon entry to our country, they played good cop-bad cop on her, trying to trip her up.
She told me how she was torn between crying from fear and laughing out loud, at the ridiculousness of it all.
I went to Italy summer 2006. Out of Rome to Amsterdam, so no real sucurity to speak of… all in the EU.
In Amsterdam it was 1-1 interview time:
[in a very accusing tone] So, tell me about these items you are carrying for someone else. Uhhhh… I have no such items.
Tell me about the explosives that you have in your carry on!
Whaa????….. ummm…. I have no explosives in my carry on.
At the time, it was very unnerving… which is exactly what they were going for. Looking back, it is kind of funny.
But did you have to give 10 fingerprints and a mug shot to any customs officials, upon entry?
Standard booking procedure sadly, for foreign nationals entering our country…
That is soooooo insane!
Standard booking procedure sadly, for foreign nationals entering our country…
Crazy, how we treat illegals better than legal visitors.
What was the customs/immigration guy even thinking? Icelandic terrorists?
Maybe we should just dissolve the union and start over from scratch.
Maybe we should just dissolve the union and start over from scratch.
I am with you on that. Where do we sign up? Oh, I forgot, that will probably get us on Bushies’ unpatriotic list, meaning we can have everything seized w/o due process. Gotta love this country!
I know a prankster who cut out of aluminum foil the outline of a handgun and snuck it into the carry-on luggage of a friend going to the airport.
The security folks at the airport were somewhat less than amused.
Some people are gluttons for punishment.
I’m sorry Shadow, but I can’t blame the internet for people who use it as an excuse to fail. People who think they can make it rich using the internet are as stupid as people who bought houses they couldn’t afford with toxic loans.
I have watched both my husband and son try to find work online, and then learn that you don’t find a job unless you get off your a$$ and apply in person.
‘However, they’re not making any more water views.’”
but they’re making lots of underwater views
Haw! Good one!
Just out of curiosity, does anyone know what’s up with ‘The Spectrum’ in Norfolk? Every time I drive by the site, the office is closed, yet their banner ads are still on the Pilot site, as recently as this week.
Not sure. They may have paid for the flight of ads well in advance. It could be a situation where the money was spent before on marketing, but now there is no money to staff the showroom.
On the urbanplanet.org forums, they track all of the projects and may have some good insight. The people on there are mostly very pro tax-and-build-a-nice-skyline group, and really dislike my negative views toward the real estate market.
There are a bunch of projects in the pipeline that are huge question marks now. I don’t think the demand is here, and I have this odd feeling (it could be my imagination) that more people are leaving Hampton Roads now that the cost of living is very high.
Thanks. I will check out unbanplanet.org.
I am one of those primed to bail out of this area, but not just for the high cost of living. This is simply an awful place to live. I am just waiting for my GF to finish grad school and we are out of here.
I have noticed in my particular apartment complex that they seem to be having a little difficulty getting tenants - and I am in a decent, yet relatively inexpensive place. And they continue to build around me. I can’t wait for this place to catch up to the rest of the country with the price declines.
They haven’t touched the Spectrum site in six months and only one condo foundation has been worked on and that has not been touched in at least 9 months. I go by it when boating and the place is always deserted when I see it.
There is also a large number of new $600,000 and up houses that have been built along Ocean View Ave that are for sale or rent with not much being sold. A few new houses are being built but they seem to be going very slow in construction with only one or two trucks on site at a time compared to the half dozen of last year.
There are simply not enough people in the Norfolk area who can afford or want to move into a new $600,000 and up house or condo.
There are simply not enough people in the Norfolk area who can afford or want to move into a new $600,000 and up house or condo.
Or anywhere else for that matter. Of course bringing this up puts us in the category of “negative” people. I suppose that pointing out that people can’t fly just by flapping their arms must also be “negative”.
I think in April of next year, the market will be in a better position. It will start to level off.’”
I think he is dead wrong in his assumptions!
“‘I didn’t listen to my agent. That’s what consumers need to do. They need to listen to their agent.
He did listen to his realestate agent and his economic advisors that prices would not drop. I think this sends a clear message to the public not to listen to the NAR for advice!
Thanks for a post about the “Silent Bubble” here in the Maryland, NoVa, DC area. All the shlubs around here think that: everyone is rich because of DC, everyone lives in a 2 income household making at least $150K a year or more, everyone should “get into a home” because “housing only goes up!”, and that “BRAC will bring infinite high-paying jobs to the area so all those people will buy all our houses!”
They are all nuts - as nuts as the guy building condos in a grain elevator (a waste of a perfectly good grain elevator, IMHO), and housing prices are sliding, but nobody wants to admit it. It is “different here” until the bitter end, and there are still countless True Believers who think their pressboard McCrudshack that sold for $600K or more is actually worth that much. I look forward to them all being eaten alive by their mortgages. Perhaps then, amid the wreckage, sanity will prevail.
“Pressboard McCrudshack.”
ROTFLMAO! I heard them called many things, but not that one. At least not that, until now. Very funny. Pressboard. How about particleboard. Remember that cr@P?
Culpepper…… The handyman who works on my house bought a house there in early 2006. The guys is a deadbeat who can’t get a credit card or a car loan. He commented on the irony of that — that “they” gave him a loan (subprime perchance?) to buy a house but he normally has zero access to credit.
It was a foreclosure, but then I heard that he got a year in jail for DUI. Foreclosure number 2??
“however they’re not making any more water views”
Uh… yes they are. They’re making new “water views” all the time. Been to Miami?
A fool and his money are soon parted. A nation of fools and their money are soon parted as well…
“However, buyers thinking about acquiring a home this way should understand that it can be a long road to a short sale. Negotiations are far more complicated than with a typical purchase. You may have to attempt several deals before one goes through.”
Or buyers can wait until the short sale process is cleaned up.
It amazes me, the quantity of qualified buyers keeps going down (partially due to the market being overbought) and yet there is no mechanism in place to clear the market?!?
Oh well… I’ll just keep renting.
Now to do a new article on my blog.
Got popcorn?
Neil
Actually, I bought the house I’m living in now when it was a REO. We started out looking for a ‘fixer-upper’ for a couple of reasons, including the fact that I like remodeling (doing the work myself) and I enjoy the satisfaction of putting together a place which my wife and I like.
Since I was going to re-do whatever we bought, it made sense to buy cheap to begin with, i.e., REO. The process was an eye-opener. Before we finished we’d made offers on 5 places. The nicest had a water leakage problem… a backyard swimming pool was higher than the house and the patio ran down hill from the pool to the house - and then into the family room and kitchen. My bid factored in completely eliminating this problem.
Along the way I dealt with Fannie, with banks, with the VA and finally with HUD. They are all pains in the ass. I bid on one bank owned property, placing a bid two hours before bid closing time, only to find that the listing realtor bought the property for $72 more than I bid. Can you spell fraud?
I was accepted on a Fannie foreclosure, with contingency. Nice property, on a lake. After acceptance I did inspection, found water pipes broken during winter, and paid to have them fixed. Two weeks before closing Fannie told me we had a problem. Seems that when the property went to auction there were two pieces of property. The bank (Chase) dutifully bid on the one with the house on it and then sold it to Fannie. Unfortunately, the other lot had the garage and a gazebo on it, and it was snapped up by a specuvestor. He allowed as he’d sell the property to Fannie for about a 10 bagger. LMAO. Finally let it go. Did get my inspection fee and plumbing repair back, though.
HUD was a piece of cake. I simply took the asking price of the property (available on one web page), the bid record (another page) and the complete list of homes sold (3rd page). Calculated average sales price relative to asking price, subtracted 10% from the average sales price of the property I wanted, and bid it. Bingo!. They work on a computerized basis, so that four weeks later we were moving in.
Any foreclosure or any short sale takes work! Know what you’re doing if you go that route. Also, know what to look for in the way of expensive problems. I bid on a VA property which had water damage and the beginning of mold. I was under the house and into every nook and crevice, and my bid included costs (provided by contractor) for slab jacking to raise a concrete slab and part of the foundation. Some one else, who didn’t know the problems bought that one.
We successfully bought a foreclosure as well. Yes it does take work. But in our case it was definitely worth it.
There is a way to clear the markets - LOWER PRICES that are based on REAL INCOMES.
But if they did that, a few trillion dollars in “mark to meth” Level 3 “assets” on the balance sheets of all the banks would vanish, leaving behind nothing but shredded paper. Not sure if that would really be a bad thing considering where the brilliant “leadership” of these banks has gotten us…
My duaghter is playing flag football. Us parents sit around and chat during practice. 9 kids on the team. Last week talk turned to jobs.
Dad of one kid is a crane operator. Still doing okay because he does mostly commercial, but the backlog of jobs is shrinking so he’s concerned about work 2-3 months out.
Two dads are house painters. One can’t find any work. One is commuting from Surprise (extreme NW PHX) to Fountain Hills (extreme NE PHX) about 1.5 hours each way. He has a contract with a company that does property management, but it ends in a couple months. The company has already said it has been solicited by other painters willing to under cut his price substantially. He’s not sure he can come down enough to keep the contract AND buy gas to make that commute.
2 of the moms are in RE, one an agent and one works for a title company. Neither real happy with their current income stream.
3 in the medical field, and me the computer programmer.
5/9ths related to real estate, 3 in medical, and 1 in tech…..
And there we have PHXs middle-class suburban economy in a nutshell.
I just read a magazine article that said that $1 out of every $3 in Phoenix comes from real estate activity. Will bring the mag to tonight’s Tucson HBB gathering.
$1 out of $3 is what was printed in AZ Republic also.
Healthcare is the largest sector in AZ’s economy, IF you break construction, property management, real estate transactions, etc into separate “segements”. Construction is a close second.
If you lump real estate of all kinds into a single sector, then it dwarfs all other segments of AZ’s economy.
“5/9ths related to real estate, 3 in medical, and 1 in tech…..
I used to think, in all seriousness, that the entire economy of Florida that wasn’t related to the tourist/vacation services industry was based on people selling houses to each other.
Now I see that over 1/2 (5/9ths) of the economy of PHX was the same way.
I wonder why very few people though this was silly/dangerous a couple of years ago.
This is why they had to go down the sub prime path. Otherwise, there was no one to sell to.
I shudder just to think about how many retail and fast food hourly employees bought 300-400K houses (to flip). When the flipping was good they probably made way more in the flips than with their $12/hr jobs.
Orlando really blows my mind, with its base of low paid hourly jobs at Disney, Universal Studios, etc.
I do a lot of work for The Walt Disney Company (as a consultant). Plenty of “professionals” there have believed they can get rich quick flipping property. A few years ago, flipping was all they talked about at lunch. Now, except for a few who got in and out fast, most are in deep Pooh.
Man, I thought that our local economy was weak. Here us a break down of my son’s soccer team:
1 MD (surgeon)
1 independent short haul trucker
2 airline pilots
1 cargo pilot
1 environmental engineer (self employed, cleans up oil drilling sites)
2 comercial construction project managers
1 lawyer
1 church pastor
1 air force officer
1 defense engineer (retired)
1 retiree
2 tech/software engineers
2 others, not sure
What is interesting about this breakdown is that only about 5 or 6 of the parents mentioned above work locally (Loveland/Ft. Collins area). Everyone else either works in Denver (60 to 90 minute commute) or works out of state.
Two dads are house painters. One can’t find any work. One is commuting from Surprise (extreme NW PHX) to Fountain Hills (extreme NE PHX) about 1.5 hours each way.
I was wondering why these guys don’t get into “repainting” houses, but then I remembered that most houses out there are stucco, and won’t be re-painted for decades (if ever).
So stocks are down over 200 points. Do they mysteriously rise today in the last hour like they have been the last few days?
Oh Trading Curbs… You can’t sell! You can only buy.
didn’t they quit curbs?
Actually here it is.
The NYSE also implements a curb on program trading whenever the NYSE Composite Index moves 190 points or more from its previous close, and remains in place for the rest of the trading day or until the gain or loss decreases to 90 or fewer points. This curb permits program sales to be executed only on upticks and program buys on downticks.
Comment by Aqius
2007-11-07 09:59:50
shadow
I’ll take a stab at replying to yer comments about public trans;
I myself try to be careful & logical about things. So do a lot of other people. Business commuters especially. So with this in mind, the responsible commuters get fed-up with being shoehorned in a conveyance that allows access to any nutcase, thug, predator, or any other type of public nuisance. Not to mention the minor annoyances like foul body odors, bad manners, or the bus/train getting cancelled w. no prior notice. All of these things make for a miserable experience.
______________________________________________________________
Then I guess you should keep driving your nice, safe, air-freshened SUV 1.5 hours back and forth to your suburban paradise. As a sustainable plan for the future, this sounds very careful and logical . . .
I don’t think that’s what he meant. We might end up driving 1000 lb, fiberglass, 100 mpg diesel hybrids, rather than ride a dirty, smelly bus.
Transit doesn’t suck so much in Munich. That’s because they have conductors who can issue a fine on the spot if you’re being a dickhead.
It’s not transit that’s the problem–we’re the problem.
Back in the day they had three burly men working each trolley–driver, brakeman, and conductor. You’d better believe that if you crossed them your ass was on the pavement in a jiffy!
There is a question which is increasingly on my mind: what happens if Citi, Countrywide, Bear Stearns, Deutsche Bank, JP Morgan, Goldman Sachs, and the other major mortgage players really have overcommitted their resources and overplayed their hands? What if their Level 3 assets are actually junk and the Level 2 are worth fifty cents on the dollar? The biggest banks and lenders in the nation are bankrupt. Their losses exceed their total equity. They can’t fund more mortgage loans under those circusmtances, and they would face margin calls for everything. That means there would be very little left to try to survive a Chapter 11 Bankruptcy - why even bother when assets are pennies on the dollars of debt owed?
This would crush the domestic mortgage market because nobody would have any money to lend, and nobody would be interested in lending in a falling market.
So what does happen then? Who is the White Knight who will ride in, take over the mortgages, continue the foreclosures and clean up the mess? The theory is the federal government might adopt some format for this. I tend to think if the lenders file for bankruptcy, however, the property may belong to the bankruptcy Trustee to be disposed of. Will the Trustees begin adminstering millions of mortgages and conducting foreclosures? Probably not. They would want to offload the stuff to someone, but this collapse theory precludes any private lender having any money. The default entity would be the federal government and some sort of RTC-style receiver, but it would be hit by lien-stripping actions, fraud defenses, and all of the other stuff being thrown at the lenders right now, so it would take decades to work through everything. There’s not enough federal funding for that right now, and unless the resources of the lenders, i.e. data banks, computerized records and file management systems, etc. are all appropriated by the government, the problem is of a size and scope that I can’t imagine it being tackled by the feds.
So who will?
House prices have come down where people can afford. We’re where we need to be.’”
We ain’t even CLOSE to where ‘we need to be’ along the bubble coasts.
On when strong home prices may return: ‘It probably takes four to five years to get back to the high prices again. The sellers now have got to realize that 20 percent (increases price sales a couple years ago) was never really there, except for those that cashed out. It’s a very hard thing to swallow if your neighbor got $800,000 two years ago (and) your house is now worth $625,000.’”
“‘It’s like the dot-com days. If you cashed out before the Nasdaq crashed in April of ‘01, then you did wonderfully. After that, you took gas, because all of your wealth prior to that was on paper. It didn’t really exist,’ he said.”
Truth: it’s what’s for dinner.
I think Wall Street curbed their enthusiasm…
The only things in my portfolio that went up today were BRK.A and GLD. I’m surpised that my asian index funds took a beating, too.
thanks crew. i had to pick myself up off the floor after reading the comments on VA Investor and Lance on the Bubble Meter Blog. Lots of silliness over there. If I want discussion I come here If I want fantasy I go there.