December 30, 2007

Local Market Observations!

What do you see in your local housing market this weekend? Price reductions? “The number of homes for sale on the Jackson market reached a two- year high on Nov. 30, when houses reached an 8.5 month supply at the current rate of sales. That data comes from the Central West Tennessee Association of Realtors MLS. Investors from California and other states have helped prop up Jackson’s mid-priced housing market, said Ben Roberts of Crye-Leike Blue Skies Real Estate.”

“‘I have some (San Jose,) California investors who are buying houses from $110,000 to $130,000,’ he said. ‘They have done their homework and like the property appreciation.’”

“The number of Madison County homes entered into foreclosure doubled this year from 2006, said Linda Waldon, Madison County Register of Deeds. ‘We have never seen this rate of foreclosures since I have been in here since 1990,’ she said. ‘This is pretty bad for this county.’”

“Effects of the nation’s housing decline can be seen in the Memphis real estate market. ‘I inspected a house (in Memphis) that sold for $127,000 last week,’ said Jim Callicutt of Accurate Home Inspection in Memphis. ‘The same plan sold one subdivision over for $165,000 earlier this summer.’”

“Like most other parts of the country, Rhode Island’s housing market has been in decline. When it will rebound is anyone’s guess. ‘I wish I had a crystal ball,’ said Roger Warren, executive director of the Rhode Island Builder’s Association.”

“In Rhode Island, the inventory of unsold single-family houses listed with real estate agents in September rose to 6,883, a 10-month supply, up from a 9.2-month supply in September of last year, according to the Rhode Island Association of Realtors. For the first nine months of this year, the median price was $276,000, down 3.2 percent from the first nine months of last year and the first decline in the January-through-September period in a dozen years.”

Or property tax problems? “Valley homeowners upset about the fast rise in their property-tax assessments may feel some relief this year as the latest valuation notices hit their mailboxes. The Maricopa County Assessor’s Office says the new round of valuations to be mailed around Feb. 1 will reflect the slump in the housing market.”

“Paul Petersen, an assessor’s spokesman, said appeals have increased 25 to 30 percent during the housing boom. The combined median prices of new and existing homes increased 55 percent in the Valley from 2004 through 2006, according to Arizona State University.”

“But the market turned locally and nationally, and home prices fell in more than half of the Valley’s ZIP codes in the first eight months of this year, according to The Republic’s latest Valley Home Values study.”

Markets related to housing? “The commercial real estate market follows the residential market by 12 to 18 months, according to conventional wisdom. Those 12 to 18 months ended in early 2007. And like the residential market, Southwest Florida’s commercial real estate market has begun to slide.”

“Both the total number of deals and the total dollar volume in the three-county region were down 30 percent over the 12 months ended Nov. 30 compared with the same period a year earlier, according to county property appraiser data.”

“‘This summer was dreadful,’ said John Swart, VP of commercial sales for Schroeder-Manatee Ranch.”

“‘The market really fell off late this summer,’ said Mark Vitner, senior economist with Wachovia Bank. ‘A lot of buyers couldn’t raise capital, and that situation hasn’t gotten any better. We’re not going to see a lot of volume. Prices will continue to come down, and construction will slow.’”

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Comment by NYCityBoy
2007-12-29 09:39:03

The Bits Buckets has some comments on the golden New York City market. I have been saying for a long time that there is a lot of inventory coming online for this magical (ahem) place. I have also stated that every condo that goes up in Jersey City, Hoboken, Brooklyn, Queens, etc. must be considered part of the overall New York City inventory. And that inventory is skyrocketing.

Come down to the financial district and look at the William Beaver House. That is 45 floors of condos that will be coming online just as Wall Street suffers the aftershocks of its debt overdose. There are developments everywhere. The thing that will hurt New York City, just like every other market, will be the psychology change. Once people realize New York City isn’t as special as advertised then the downturn will really take hold. Does anybody really believe that California can meltdown and not take everything in its wake down with it? I sure don’t. The California housing market is probably 1/5th of our overall housing market. It is tanking and the shock waves will be massive.

Comment by Faster Pussycat, Sell Sell
2007-12-29 11:13:36

Amen brother!

I have been saying this forever. It’s always “the Europeans are coming”, or “Manhattan is special”.

We’ll see.

Comment by Professor Bear
2007-12-29 17:11:11

Maybe the Europeans will play the bagholder role in the current U.S. real estate bust that the Japanese so kindly played in the previous one.

Comment by lmg
2007-12-29 20:28:19

Maybe a new motto for 2008:

“Everytime a condo goes up in New York, a tree dies in Brooklyn “.

Comment by vozworth
2007-12-29 09:40:33

nothing selling. For sale signs have weathered look.

gettin calls and mailers from ghost of bubbles past….

never been a better time to walk away and throw the keys on the roof.

Comment by cashedin05
2007-12-30 11:24:25

I am seeing a lot of sign posts minus the actual sign here in Phoenix. They all reside on the unkempt lawns of vacant houses.

Comment by aladinsane
2007-12-29 09:42:58

We drove from the Central Valley to Tuscon, and it’s funny…

You get an idea for what sort of wrecks places are, by reading about them on here, but when you encounter Phoenix and it’s 65,000 houses for sale, in person, in drive-by fashion, it really hits home.

Drive-by economix

Comment by bill in Maryland
2007-12-29 11:26:41

Shocking isn’t it? I miss my lunch time drives in Central Phoenix to the eateries (Pei Wei, Rubio’s, Pita Jungle) and to the gold coin dealer (of course). Over 18 months there I would see the same for sale signs. Some places had front yards that were “let go.” Over a 3 mile distance you’d go from places with bars in the window at the south end to places where the front and back yards were huge. Some of it depressing, but there are signs that there are enough residents who try to keep the neighborhood clean and neat. I’m talking about the Arcadia / Biltmore areas.

Comment by NYCityBoy
2007-12-29 09:43:23

A lot of talk on Fux News Channel this morning. The cluelessness is amazing. John Rutledge has all of the intelligence of a cocker spaniel on heroin. Gary B. Smith earlier said housing stocks will be the best investments of 2008. “Buy a basket of them”, he said. The consensus on one of the shows is that the second half of 2008 will resume the hot market. Denial and stupidity are still rampant. Peter Schiff was the lone voice crying in the wilderness. I don’t know why he subjects himself to the bulls–t but I suppose all of us on this blog have done that the past couple years.

Comment by vmaxer
2007-12-29 10:09:07

I’ve heard a lot of this cheer leading the last few weeks, on the financial shows. I’m thinking these clowns will be pushing the kool aid hard, early in 2008. These guys probably have investment properties they want to unload onto some schmoes.

Comment by speedingpullet
2007-12-29 10:21:49

Don’t forget the ‘post superbowl surge’ that was predicted for early 2007 - I’ll bet good money that they’ll keep rah-rah-ing about a september 2008 ‘turnaround’.
Until it doesn’t happen.

Comment by crispy&cole
2007-12-29 10:24:22

They know that when the .com bubble burst ratings dropped significantly and they are afraid that will happen again.

Comment by denquiry
2007-12-29 10:35:11

The schmoes on Fux news channel get paid handsomely to schill what Fux wants them to. They tell the truth it’s goodbye paycheckio.

Comment by combotechie
2007-12-29 10:46:37

Be grateful for the denial and stupidity of those on Fux News. These are the ones that will entice the knifecatchers to lay down their money.
Imagine what would happen if everyone suddenly “got it” and real estate prices suddenly dropped to the bottom they are destined to reach. The market would lock up and chaos would ensue.
It’s best for everyone else that the MSM keeps the hope alive and encourages the FBs to keep making their payments and the knifecatchers their buying commitments.

Comment by Lionel
2007-12-29 11:26:55

I think at the core of this denial is that the “analysts” earn in the hundreds of thousands of dollars and everyone in their circle of friends is similarly wealthy; they can’t comprehend that most people do not have access to that kind of cash. Schwarzenegger has a similar problem. He can’t imagine having trouble buying a 500K house. It’s a huge blindspot with these people.

Comment by lavi d
2007-12-29 13:35:13

It’s a huge blindspot with these people.

Plus 5 insightful!

Comment by bill in Maryland
2007-12-29 11:28:11

On Bulls and Bears this morning, Gary B.’s worst pick was posted: Hovnanian. He picked it at mid-year and it dropped 60% in value since then. He admitted it was knife-catching.

Comment by flatffplan
2007-12-29 09:43:32

22151 N VA S of DC central Soviet
no gov workers fired yet ,but prices bordering on 2004 definitely early 2005

Comment by nova
2007-12-29 11:13:30

You are such a broken record. Fess up. Some agency not hire you?

Comment by flatffplan
2007-12-29 11:22:25

they have no use for a capitalist

Comment by polly
2007-12-29 11:42:23

Actually the government has plenty of uses for a capitalist. The clients of my old buddies on Wall Street would curse the day that I became a fed if they know what I was doing.

It feels great.

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Comment by polly
2007-12-29 11:46:43

Sigh. know = knew.

Comment by arlingtonva
2007-12-29 12:40:12

You make your living using GPS systems. Satellite projects are one of the most costly wastes of taxpayer money I can think of.

How do you measure 3 years into a satellite project whether it is performing well? You can’t.

You’re a phony capitalist. You make money off the use of Federal projects.

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Comment by Anon In DC
2007-12-29 13:42:53

Flatfflplan is not a broken record. There are many hard working dedicated gov. workers Feds, state, and local. But still the government has a monopoly on what they do. Hence a bit of cynicism necessary.

Comment by exeter
2007-12-29 14:24:08

No….. Lets get this straight. Flat is a one trick pony.

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Comment by cashedin05
2007-12-30 11:30:17

That’s the pot calling the kettle black.

Comment by exeter
2007-12-30 11:33:45

And the peanut gallery natters.

Comment by aladinsane
2007-12-29 09:48:11

“Like most other parts of the country, Rhode Island’s housing market has been in decline. When it will rebound is anyone’s guess. ‘I wish I had a crystal ball,’ said Roger Warren, executive director of the Rhode Island Builder’s Association.”

I use a cheap Chinese crystal ball that I bought from Wal-Mart…

It only tells me things a week or 2, in advance.

Comment by aladinsane
2007-12-29 09:51:16

“Like most other parts of the country, Rhode Island’s housing market has been in decline. When it will rebound is anyone’s guess. ‘I wish I had a crystal ball,’ said Roger Warren, executive director of the Rhode Island Builder’s Association.”

Talking magic…

The best yodel-rock one-hit wonder of all time?

Comment by WatchingTheSagaUnfold
2007-12-29 11:02:23


Comment by slb
2007-12-29 12:08:55

So that’s what the Geico cavemen did before the commercial gig came along.

Comment by Paul in Jax
2007-12-29 09:56:10

“‘I have some (San Jose,) California investors who are buying houses from $110,000 to $130,000,’ he said. ‘They have done their homework and like the property appreciation.’”

Strange, but I’ve never been able to cash in historical price appreciation myself, be it stocks, houses, or whatever.

Comment by SubKommander Dred
2007-12-29 10:41:15

And exactly what form of currency are these ‘investors’ using? Monopoly money?

SubKommander Dred

Comment by vmaxer
2007-12-29 10:02:36

Long Island: Not much action the last couple weeks. I see a lot of houses that have been on the market all year, still sitting. Most of the price reductions were in the fall, October and November. Some asking prices have come down 20% over the last year, others haven’t budged. Still a lot of absurd asking prices. Their simply not worth the prices sellers expect. I gotten used to a nice fat interest payment each month, on the cash I have in the bank. It’s going to make it harder to put that cash into a house and not get any interest, like dead money.

I expect the next couple months should be interesting. The “spring” selling season should start by middle to end of January. The smart sellers will price aggressively to capture any available buyers. The dumb sellers will think that they can price higher because it’s the “spring” selling season. The dumb ones will lose the buyers to better priced houses. They will help the smart sellers get buyers by making the better priced house look like a bargain in comparison. Because it can take up to 12 months for a foreclosure to go through, in New York. I expect that 2008 and 2009 will see a significant up tick in New York foreclosures, as more finally get through the process.

Patience is still needed. I don’t think I will look at anything seriously until 2009.

Comment by polly
2007-12-29 11:39:04

I logged on to my personnel system this morning to up my federal and state withholding for next year so I don’t have to deal with making quarterly payments on the “downpayment” interest. Even after taxes it will generously cover two months rent and some extra on top of that.

Not a bad thing at all.

Comment by Faster Pussycat, Sell Sell
2007-12-29 13:23:37

vmaxer said: I gotten used to a nice fat interest payment each month, on the cash I have in the bank. It’s going to make it harder to put that cash into a house and not get any interest, like dead money.

Technically, this is not correct. Even if you paid in cash, the foregone interest (or “opportunity cost” as the economists call it) is really the rent you’re paying for the place.

There is no mechanism to “not pay rent”. You always have to pay. The only interesting question is “how much?”

Agreed though on the emotional thing. Once you get used to that interest subsidizing your current rent, it’s really hard under present circumstances (= absurd) to pay top dollar for a place.

Comment by exeter
2007-12-29 14:29:12

I’m with Vmax. I’m collecting 1 grand every month in interest, and of course that’s growing by the month. My reluctance to part with that stream of cash is growing. Ain’t no house gunna pay me 1G per month.

Comment by Faster Pussycat, Sell Sell
2007-12-29 14:51:55

You have to pay taxes on that.

You are still paying rent. All that 1,000 does is subsidize the rent (which is great!)

This is most emphatically NOT an argument about that 1,000. This is an argument about analyzing the numbers, and seeing what makes sense.

Surely we can all agree on that?

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Comment by exeter
2007-12-29 14:58:02

Agreed. I do have to pay taxes on it. My rent is negligble at 150 per month.

Comment by zeropointzero
2007-12-29 10:02:36

Saw a real estate ad in the Washington Post this a.m. for some new condos in the Cameron Station (alexandria) development that said, in effect, “we want to hear your lowball offers” (I don’t recall exact wording - but definitely used word “lowball”). I think this develoment has done reasonably well (it’s been selling a mix of townhouses and condos for years on the site of a former army base in Alexandria) - so I was suprised to see the use of the word “lowball”.

Also saw an ad for this development a few blocks from my house - going to go check it out for amusement/educational purposes:

Comment by polly
2007-12-29 11:45:43

It looks terrible. Tiny little floor plans. You can’t design an apartment around a “great room” concept unless the room is actually large. Doesn’t work. Not the worst I’ve seen, but that isn’t saying much.

Comment by zeropointzero
2007-12-29 15:52:21

Building looks almost complete. Sales office guy said it was “43% sold” - but the master floorplan layout sheet had “sold” stickers on a lower proportion than that. Didn’t do check out the units - didn’t want to waste the sales guy’s time (and wasn’t up for the full spiel). Same developer as the nearby Liberty Row condos — which definitely went for a lot more a couple years ago (but a nicer project, too).

Comment by arlingtonva
2007-12-29 12:44:55

This graph shows Northern Virginia inventory has flat lined, and unlike last year it hasn’t gone down during the winter months:

Comment by OC_Stomp
2007-12-29 10:04:50

I’ll report back later. My wife & I are checking out a home in a little bit. In OC, lot is over 20k sq feet (big by OC standards), house is large, and we’re hoping to get it for about $250/sq foot.

I am not delusional about catching the bottom, but I will say the wife and I have been looking at homes for over 3 years (thankfully we never bought) and never came across one we liked nearly as much.

The most gut wrenching part is that I know it’s likely our 20% down will evaporate as prices come down. Countering that is the fact that this house meets so much of our criteria. Good neighborhood, close to good schools, great yard, nice view, and very close to the in-laws (built in baby sitters). We see no reason why we’d ever need to move from this home (I know unforeseen things can happen).

Flame on.

Comment by vmaxer
2007-12-29 10:16:32

They’ll be plenty of other opportunities in the next few years. No need to rush. Contrary to what the brokers want people to think, houses are commodities and new listing are constantly coming on the market. The brokers want people to think any house their interested in is a once in a lifetime opportunity that they can’t let go.

Comment by phillygal
2007-12-29 10:28:55

I agree.

If you really intend to buy this house, offer a price in the vicinity of $200/sf. You never know…the seller may be more “motivated” than you think!

Comment by WatchingTheSagaUnfold
2007-12-29 11:24:37

This is how the market works. As folks go sour on houses being more than a shelter and depreciating asset, houses will be available more per a buyer than a few years ago. As someone wrote here the other day, there are million dollar houses and every other price range. The buyer has to be able to afford the mortgage in the end. The REIC has one directive and that is to sell. Remember when having a modest place to live got belittled and yet overpriced at the same time? Avoid feeling pressured to buy. The REIC needs people to feel like they will be ridiculed if they do not have a house.

Comment by scdave
2007-12-29 10:19:29

OC….I don’t see anything wrong with your approach….Your 20% down will only evaporate if you needed to sell and it sounds like you are committed for the long haul…Make the best deal you can and go for it….

Comment by crispy&cole
2007-12-29 10:22:36

“Flame on”

LOL. You have been here way to long!!

Comment by Ben Jones
2007-12-29 10:25:20

‘Flame on.’

It’s always funny to see posters think that people here get worked up about knife catching. I listed to a couple of guys last night go on and on about how the market was down and they were going to be ’sharks.’ There isn’t anything to say, except ‘medic!’

Comment by rms
2007-12-29 10:28:02

What is the average rent/sqft in the neighborhood?

Comment by OC_Stomp
2007-12-29 10:32:59

The only data point I have is one - a house that was previously listed at about the same price ended up being leased for a year. Not too far away, smaller yard, but updated (the one we’re looking at isn’t), $5k/month.

Comment by SubKommander Dred
2007-12-29 10:50:20

OC, if this is a house you really ‘must’ have, would you consider leasing it from the current own for a while? If they are desperate for money, and you make them an offer for what maybe a little more than the usual rent in the area, perhaps they would go for it, if for no other reason that to generate some cash flow. That way, you get the house you want and they get some income to cover the mortgage. In the next few months, when it becomes obvious to anyone with at least functioning neuron that the housing market has tanked, you would be in a position to buy the place outright, either as a short sale from the current owner or perhaps even directly from the bank.
Just my few cents worth. Be interested to know if anyone else thinks that’s a good idea…

SubKommander Dred

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Comment by OC_Stomp
2007-12-30 12:53:16

Not a bad idea SubKommader Dred. Unfortunately they aren’t desperate for money (ie cash strapped). They built it in the mid 70’s, and while it is very clean it needs to be updated (so they haven’t plowed $$ into that). Owner is in her early 70’s and wants to take the $$ and travel the world with her new husband.

They want to be out of it for good now. I know that because one of the other offers apparently had a seller note that was to be carried back, and the word was they want to be done with it when the transaction is over. Wouldn’t you know while we were there yesterday checking it out (again) there was another family viewing it.

Comment by zeropointzero
2007-12-29 10:29:34

Interesting - you’re buying a house you can afford (I assume), that you plan to live in for a good while, with sensible downpayment/financing, and you’re going into it with your eyes wide open - you’re doing everything “right” - but you still may be doing it at a bad time.

It’s an interesting parallel to the percentage of flippers/speculators who recklessly gambled on a new condo because their friend, in-law, whoever told them it was a sure thing - and - because they bought in 2002-3, and sold in 2004-5 - it was! In other words - they were foolish (at least by the standards here), but their timing was right.

Good luck. Hope it works out for you.

Comment by exeter
2007-12-29 14:32:35

250 per square? You’re out of your mind.

Comment by SiO2
2007-12-29 21:05:14

You’ll get a lot of flack about 250/ft from Midwesterners. That’s not too bad for a nice neighborhood in California. If you like it and intend to be carried out foot first, just think about how you’ll feel if you lose 15-20% of the value.
I am in a similar position, own in San Jose, want to go to a better neighborhood. I realize that if I buy I’ll lose some value. But, I’m going to lose something by staying here too. It would make more sense financially to sell my current house and rent an apartment, but I like my house so I’m willing to spend money to live here. I think a lot of posters here don’t put a lot of value on owning, so owning if it costs more than renting doesn’t make sense. Which means that it basically never makes sense to own in coastal CA. So it becomes a non-financial decision, just like buying non-McDonalds meals, or taking a vacation, or buying a car nicer than a Chevy Aveo, or any other discretionary spend. (I do like reading this blog, even if I sometimes disagree with the comments, as it’s good to get view from across the spectrum.)
anyhow, if you are picky for houses, can swing the mortgage, and can deal with a potential loss, then go for it. It might be worth it for you.

Comment by CA renter
2007-12-30 04:29:04

Truly no offense, OC Stomp, but weren’t you posting about a house about a year or two ago that was your “dream house”?

IIRC, you posted the listing & it was nice, but you thought you wouldn’t be able to find another house that was as “perfect” as that one.

Obviously, you didn’t buy it, but here you are finding an even “better” house — and I imagine it’s cheaper than the one you posted before — still knowing that it’s overpriced.

Best to do what you feel is right for you, but my suggestion is to wait…definitely NOT to buy before winter of 2009. I have a feeling by then that you’ll be turned off to buying due to the economic situations about to unfold.

Comment by OC_Stomp
2007-12-30 10:41:37

Touche CA Renter - you have a very good memory. No offense is taken whatsoever. You are making the same argument I was making to myself (and my wife) when we first started contemplating this one. Every year it seems we find one or two houses we really like. There were two we liked last year so I don’t remember which one I posted. One we made a lowball offer on and another we weren’t willing to go after at all. In 2005 there was one we liked. I know that in 2008 & 2009 there will be more we like.

The house we made an offer on last year (Dec) was asking approx. 15% more than they paid for it in late 2003. This was after numerous large price reductions. A divorce was in the works & they wanted it sold. We offered them a 10% premium over the 2003 price, but somebody else came in with an offer over the asking amount (yes - in December 2006). The house we really liked last year was listed for $446/sq foot and ended up selling for $408/sq foot. The house was done very nicely, and the layout was wonderful, however they were asking for such a premium over 2000 prices I wouldn’t even try to offer.

This house is very different than both of those. Different layout, much larger house and yard, and in a better neighborhood (one we had never really contemplated previously). If our offer is accepted it will be 66% of the original ask (yes – I know the original ask was incredibly overpriced). The price per sq/foot we’d be looking at, if you compare it to the neighbors on the same or adjacent streets, compares to anywhere from early 90’s in some instances to approx. 2003 in others. Of course price per sq. foot doesn’t take into account a whole lot of factors, but it’s the easiest data point to share.

I won’t bore you with all the details or reasons why we have, yet again, fallen in love with this one, but I will say both my wife & I really like it for a number of reasons. Clearly we’re not approaching this as a strictly a financial transaction. I’ve managed to keep my wife at bay for a while already, and we’re starting to see that fruits of that approach. In short, we’re ready to buy now if we find the right house at the right price for us.

Ah – the joys of knife-catching in a declining market.

Comment by aNYCdj
2007-12-29 10:11:42

Check out the floor plans, so much wasted space, long hallways, a separate shower stall and tub, plus the walk-in closet in in the bathroom…. hmm mold mildew

Comment by Chip
2007-12-29 10:58:47

I wouldn’t buy a house in which I couldn’t install a powerful exhaust fan near the shower that vents the air to the outside or at least into the attic. Agree about odd floor plans relative to closets — in one house we looked at several years ago, the closets for the second master upstairs are at the front of the house, complete with windows, so you have to pass through the bathroom to get to them.

I’m also amazed at the number of builders (in the South, at least) who seem to design their own ugly houses instead of buying plans from one of many sites that offer beautiful elevations and excellent floor plans for $2-3K.

Comment by CA renter
2007-12-30 04:35:17


Most builders in California build the closets in the bathrooms. Amazing to me that more people don’t seem to mind.

Also, they like the “open” bathrooms with no doors between the bedroom and bathroom — as if you want to see your spouse taking care of all their grooming needs while you lie in bed.

Kinda disgusting if you ask me. :(

Comment by Jas Jain
2007-12-29 10:23:00

“‘I have some (San Jose,) California investors who are buying houses from $110,000 to $130,000,’ he said. ‘They have done their homework and like the property appreciation.’”

Guess where they (from Silly.con Valley) were buying three years ago?


Comment by aladinsane
2007-12-29 10:42:11

Before I bought any house in the future tense…

I’d want to make sure my new neighbors were in good financial stead, as an unoccupied house or 2 or 5, or 11 around you, is a magnet for thieves and guest-stayers.

It’s pretty easy to be financially nosy, nowadays.

Comment by bill in Maryland
2007-12-29 11:39:31

I agree. However I think five years from now is long enough for the last of the FBs to lose their places. After that point, $400,000 2007 houses should be priced at $200,000. Even at half price, today’s FBs will not be able to have the credit or the means for a down payment to get back in. It will be easy to find responsible neighborhoods in 2012. No unkempt yards.

Comment by Chip
2007-12-29 10:51:22

Spent most of the week in Bradenton, FL. I go there often and on this trip what struck me was the very large and increasing number of hand-made signs stuck in the ground, in front of houses and at intersections, offering houses for sale and/or rent. The number of professional agency signs doesn’t seem to have increased much, but the small do-it-yourself ones are everywhere. I’m seeing a noticeable increase of these in Orlando, too, though not yet as widespread.

I think that in retrospect, some entrepreneurs will kick themselves for not creating a national Website for non-MLS houses for sale and rent. something more sophisticated than Craigslist and easier to search, for non-Craigslist mavens. BuyOwner and others should cooperate on such a venture, IMO.

Comment by Mozo Maz
2007-12-29 11:06:16

Charlotte made news that it’s one of the few cities with price growth - but things are slow. Even people at work have remarked to me about how many houses are for sale around the edge of town. (The local newspaper has run several stories about a foreclosure crisis in newly built neighborhoods.)

Also, I’m a buyer now.

After watching a home that I liked, get slowly cut from $195K to $179K, I offered $175K — and the owners took it without batting an eye. The deed records showed they had bought it 4 years ago at 100% financing, and had moved into a new McMansion this spring, also at 100% financing. I’m sure the had come to view this empty home as an albatross.

I estimate they had a freight train of at least $450K in mortgages, plus who knows how much credit card and automobile debt behind the scenes. I’m satisfied with the purchase, and think $175K is fair. It’s 3x my salary which is in line with historical pricing precedents, and it’s a well maintained 3 BR 2 on a half acre in a stable neighborhood.

Comment by Jas Jain
2007-12-29 11:15:58

PPSF For Charlotte Metro (Radar Logic):

8-year Low = 80.27

8-Year High: = $101.62

Gain since 1/4/00: +19.4%!

Current from the recent high = -3.7%

All metros are declining for the past several months. Don’t get fooled by YoY growth in some areas.


Comment by Jas Jain
2007-12-29 11:29:51

Forgot to mention that adjusted for inflation, or in real terms, PPSF in Charlotte has been falling for 8 years. This movie is coming to a metro near you.

God forbid that we have deflation in the US economy. Wicked people wouldn’t like it a bit. Those who have been good would love it.


Comment by em3
2007-12-29 11:19:53

While Jersey City is getting towered up for even more apartments, New York City alone is reputed to have 30 million s.f. of residential space coming on line in the next 9 months.

Here in Brooklyn, condos in recently completed high-rises are visibly not selling (even at night if the lights are on in random units the illumination is all of the same cast and color as if originating from the same kitchen fixture, with no furniture visible through tall windows and nothing on the walls). And construction on mid- to lower-rise buildings is being put together at snails paces, either boarded-up half finished, with no activity at all during the day–or almost completely finished out with almost no activity behind cover of plywood. Almost completed sites have been left in the same conditions for more than half a year in Adelphi and Crown Heights. The neighborhoods are also littered with weed and neighborhood-garbage bag littered, abandoned sites where construction never made it higher than completed basement-level foundations.

Comment by Paul in Jax
2007-12-29 11:29:49

30mm sq ft=~30,000 units=between 1/2 and 1% of NYC population, depending on occupancy levels, somewhat greater than normal 9-month population increase. Still, doesn’t seem too outlandish compared to the building that took place in FL.

Comment by Lost in Utah
2007-12-29 11:33:46

ASPEN, Colo. (AP) — A Snowmass Village home with a list price of $37.5 million is under contract for sale, but it’s not yet known what the actual selling price is.

The 14,300-square-foot house belongs to Leon C. Hirsch, founder of U.S. Surgical Corporation. It has 11 bedrooms and 12 bathrooms and sits on 200 acres with panoramic mountain views.

Real estate broker Maureen Stapleton, who listed the home, says she can’t disclose the selling price or the name of the buyer.

If the house goes for the asking price, it would top the $36.5 million that Saudi Prince Bandar bin Sultan got for a similar-size house in nearby Aspen this month.

Information from: Aspen Daily News,

Comment by polly
2007-12-29 11:34:33

I think the car ads are starting to sound positively desperate. I don’t think I’ve ever heard it like this before. Sign and go leasing? Just come in an sign a piece of paper - no payment at time of lease, no payment for a month or two after that, who actually believes that the company isn’t going to take it out of their hide later on? O% on every single Honda model? It must be bad out there for the car dealers.

Comment by Mozo Maz
2007-12-29 12:00:29

Three of the surest indicators of a recession are declining new car sales, declining new home sales, and tax revenue shortfalls. News of all of these are now rampant in the MSM, but they can never seem to find an economist willing to predict over 50% “odds of recession” /rolling eyes/

Comment by Frank Giovinazzi
2007-12-29 12:54:19

Volkswagen has a nice sign and drive lease deal right now, get a Jetta for $249 a month. [Plus $200 a month for new car, full coverage insurance.]

For anyone looking to buy a pickup, check out GM, Chevy or GMC — a recent report said they have 153 days of inventory [very high], and they are going to have to deal to clear them off the lot.

Traditionally, anyone looking to lock in a good deal should do it before Jan. 2. Rebates usually stink in Jan and Feb as OEMs and dealers get ready for the spring/summer selling season.

However, they are terrified right now. Forecasts suggest a return to 15 million and change in sales, from 17 mil. IMO, this means certain death for Chrysler or Ford, and my money is for Chrysler to disappear, with Jeep being sold to the Chinese.

The point of this comment is for people who are thinking about buying a new car in the next 3 months. Right now there are good deals to be had, as the current incentives end Jan. 2. I think, though, after a couple weeks of bravado, industry discipline will crack and you’ll see heavy discounting return. For those who follow the industry, you’ll know the domestics have shown a little bit more discipline the last 15 months or so, but I don’t think it’s going to last. It’s an open secret that someone is not going to be in business before this downturn is over. Good luck getting that Chrysler lifetime powertrain warranty honored.

Comment by Brian in Chicago
2007-12-29 16:49:22

Ford has spent the last two years restructuring their operations around the idea of selling fewer cars. It’s almost as if they saw this coming. Honestly I would be surprised if they aren’t the strongest US auto manufacturer 5 years from now.

Comment by MD_renter
2007-12-29 11:59:07

Back home in the Atlanta exurbs for Christmas. Lots of luxury houses way too high-priced for the area (400-500k). Nice looking but sitting empty in new subdivisions with only a couple of houses sold. Some were sitting there last Christmas as well. Went in a couple that look like construction stopped abruptly a while ago.

Comment by Chip
2007-12-29 21:47:42

MD - that’s what I observed, exactly. Just waiting and watching. I’m almost a vulture, but am not quite hungry enough to qualify yet.

Comment by eric
2007-12-29 12:12:07

Las Vegas is still screwed.

Comment by chrisinbirmingham
2007-12-30 09:44:31

detroit is too.

Comment by Blacque Jacques Shellacque
2007-12-29 13:18:12

Valley homeowners upset about the fast rise in their property-tax assessments may feel some relief this year as the latest valuation notices hit their mailboxes. The Maricopa County Assessor’s Office says the new round of valuations to be mailed around Feb. 1 will reflect the slump in the housing market.


Yeah, they’ll reflect the slump, but not as much as one might think, for obvious reasons - lower values mean less tax collected. Just like the “investors” and/or FB’s, the assessor’s office will certainly be in a state of denial about property values, claiming that they’re worth more than they really are.

Comment by edgewaterjohn
2007-12-29 14:39:07

Shoddy condo conversions: Chicago.

Two blocks away from me a conversion of a sixties-era “four plus one” went belly up earlier this year. It’s a $13.2 million dollar foreclosure. It is on the northeast corner of Winthrop and Balmoral.

Details are coming out now about the developer - who defied so many “stop work” orders from the city that the fines alone tally to $25,000.

It seems that as the city was inspecting the plumbing and electric in three sample units they found little things missing - like conduit for instance. Now the wall so all 90 units must be torn down. The building is also reported to have major structural issues in the support columns of its first floor garage. In all likelihood the developer is dead in the water at this point.

I’ve seen firsthand the shoddy work at a similarly converted building four blocks north of this one - plumbing and electric are always shortchanged even though the granite seems to make it into the unit okay.

Between shoddy condo conversions in the city and crappy new construction everywhere - any property developed in the last decade should really be highly suspect at this point. They were charging top dollar for arguably some of the worst dwellings ever built in our nation.

Comment by Duane Lapinski
2007-12-29 14:52:01

Were these condos built by a bunch of ex-roofers?

Comment by bill in Maryland
2007-12-29 15:08:58

I checked in with Zillow on the house I sold in 1996 in Ridgecrest. I bought it in 1990 for $96,600, added a $2400 landcape, and sold for $80,000. The price of that house did not vary between 1996 and 2003 much. It was zillowed as high as $89,000 in 2003, 7 years after I sold it for a loss. Along came a BRAC announcement that 2400 new military jobs would come into the area. “Zillow” value zoomed to $247,000 as late as a year ago. Today’s zillow price is $178,000. It’s a 3 bedroom 1.75 bath model at 1480 square feet in Ridgecrest. Its zillow value fell $5,000 in the last 30 days. It’s been a 26.5% drop from the peak. I checked the comps around it. The ones that have been selling have been doing so for lower and lower prices (November 2006 had hire sold prices than June of 2007). Coincidentally, the price on that house has appreciated at an annual rate of 3.5% over the last 17 years and is under $120 per square foot. I think the price on it is right, but figure it will get below $140,000 in the next 12 months if there is no reassurance when the BRAC actions will occur as stated.

Comment by Professor Bear
2007-12-29 17:24:49

How about a “bargain-basement” price of $319,000 for a Rancho Bernardo “manufactured home” (aka trailer)?

14955 AVENIDA VENUSTO #26, SD - Rancho Bernardo, CA 92128**
Bedrooms: 4
Full Baths: 2
Partial Baths: 0
Square Feet: 1,248
Lot Size: N/A
Year Built: 1990
Listing Date: 09/05/07
On Market: 115 days
Type: SFR
Status: ACTIVE

Already reduced $20,000! Spacious! 4br family home with garden tub. Super affordable, good condition. Smart floorplan. Large 2-car garage. Manufactured home is set back from the street. Has the look and feel of much more expensive homes located nearby. One of the largest lots in the complex. Poway schools.

ZipRealty Price Track:

Price Reduced: 10/01/07 — $349,000 to $329,000
Price Reduced: 10/29/07 — $329,000 to $319,000
On Market: 115 days

Clients who viewed this home also viewed:

SD - Rancho Bernardo, CA 92128
Beds/Baths: 3/2 Sq.Ft: 1,512

SD - Rancho Bernardo, CA 92128
Beds/Baths: 3/2 Sq.Ft: 1,296

SD - Rancho Bernardo, CA 92128
Beds/Baths: 3/2 Sq.Ft: 1,296

Comment by Professor Bear
2007-12-29 17:26:04

Already reduced $20,000 $40,000$!

Comment by CarrieAnn
2007-12-29 17:42:44

Well it is Christmas vacation week and lots of existing homes pulled their listings off the market this week so all that is a left is a deluge of new construction in both the new to market page and reduced page.

I’ll bet since the inception of that web site there has never been a majority of listings on the “price reduced” section that was new construction .

Comment by Groundhogday
2007-12-29 18:21:52

From the Bozeman, MT Realty Times:

“Inventory of homes is still large and it is a buyers market dependent on the sector of the market you are looking. Price points are softer in upper segments, but we continue to see interest in these properties. As volatility in the stock market is currently the major issue, we hope to see a re-surgence in the real estate arena. The latest interest rate cuts may boost the economy and hopefully home sales as well… We continue to feel bullish about the market as the high end market has continued strength and has not seen dramatic price drops…

When entering the finer home arena, it is becoming a seller’s market due to an increase in out of state buyers flocking to the area… The largest problem in the market currently is the lack of inventory due to the increase in demand for prime property.”

Huh? What a load of double-talk nonsense. Bozeman Real Estate must be crashing HARD.

Comment by Lionel
2007-12-30 10:15:21

Was in Gig Harbor, WA (cute town next to Tacoma) for Christmas with the MIL. I would estimate that at least a third of the properties on the main drag leading to her house were for sale. It’s staggering, especially considering that it’s the dead of winter and I’m guessing a number of sellers took their houses and lots of the market to wait for the fabled spring bounce. It’s amazing to me that my MIL can drive this route every day and not understand the impending collapse. (Although much of her mindset has to do with the fact that she’s frugal and has paid off her house in full. She can’t imagine buyers doing it any other way.)

Comment by lnk
2007-12-30 11:18:35

before i start, my apologies — the shift key on my keyboard doesn’t work well unless i press down really hard, and with the cold weather making the arthritis in my fingers worse i’m not even going to try to get it to work…

some observations from albuquerque, new mexico–

i’m seeing lots more houses in my neighborhood for rent or for lease. the older, smaller houses have always been 50/50 rentals/sales, with many owners keeping them for rentals when they move up and out, but now even bigger, newer houses have ‘for rent/lease’ signs up, often without even going through ‘for sale’ first. and the ‘for rent’ signs are staying up months and months…

there definitely is/was a bubble. the house across the street from me - built around 1980, about 3500sf, ‘remodelled’ — started out for sale in early 2006 for 750k and finally sold in mid-2007 for a little under 400k, which is still a ludicrous price for that house in this neighborhood in this city. based on other sales in the neighborhood it should be worth about 250-275k.

i’m also starting to see big new trucks, suvs and even boats sitting out in driveways with ‘for sale’ signs on them — not a lot yet, but definitely way more than usual.

there seemed to be a spate of commercial building in the first half of this year, either new strip malls or more frequently teardown and/or renovation and expansion of existing strip malls. now, more than half that space is still sitting empty month after month with big ‘for lease’ signs hanging all over. the stores that have appeared are mostly nail salons/spas — often, several per block in a neighborhood — dollar stores, fitness workouts, insurance, one music store — instruments and lessons, not cd and records — thiftstores, one psychic reader and one big new yuppie farmer’s market (a few blocks from where a smaller, low-end farmer’s market went out of business a few years ago0.

i had an interesting argument with a friend just yesterday, which highlighted how people think that gets us into the mess we’re in.

she makes about 1/4 what i do, and was whining about how much gas cost and how i could afford it but she can’t. (and how ’somebody *has* to fix the price of gas!!!’)

i pointed out to her that she chose to buy a humongous new ford expedition — after her few-year-old for explorer stopped working because it needed a new transmission, which she couldn’t afford, and it’s still sitting dead in her driveway because she won’t ‘give it away’ (meaning she wants the full price it would be worth if it were working) — and how she has a job that involves lots of driving around, while i bought a used 1998 honda civic which i fill once a month, since i bought a house 5 miles from work with shopping along my route. i asked her what her gas mileage was and she didn’t know — no idea whatsoever. she bought the beast ‘because she liked it. she doesn’t waste money on other things (oh, yeah?) and she deserves to have it, because she deserves to drive something she likes’. and she’s not going to even consider its effect on her budget, but whine about gas and keep pouring money down her gas tank.

she also is all for ‘the poor people’ (aka, illegal immigrants, since she was one herself, fro mexico, and did the 1986 amnesty) but against welfare (aka — according to her, not me — the lazy american welfare queens who get free food stamps and free health care and free everything-else).
i tried pointing out to her that it was the illegal immigrants suppressing wages in her typre of job — nursing home aide — and that without so many illegals employers would have to offer better wages and some benefits to get workers to do the necessary but crap jobs, but she couldn’t understand the supply-and-demand argument, it was just selfish-me being against all those poor people.

Comment by In Colorado
2007-12-30 11:43:20

Not surpising. Having a big a$$ truck is a status symbol for her demographic. Every south of the border immigrant that I know who “made it” has a big honking truck. If you watch your local spanish language channel you will notice that big trucks are what is plugged by local car dealers, both used and new.

Comment by waiting_for_the_fall
2007-12-30 12:03:41

A Ford Expedition gets 10 miles per gallon. I know, because my sister bought one a few years ago. I asked her why she would buy it when it only gets 10 mpg, and she didn’t believe me. Later, she called me and said I was right, it does only get 10 mpg.

I tried to convince her to get rid of it and buy a more fuel efficient car, but she refused. She likes it and it’s ‘already paid off’ because when she refinanced her house, she rolled the debt into her house payment.

When I explained that it’s not really paid off, that she’s going to be paying for it for 30 years, she just got a blank look on her face, like she didn’t believe me.

Some people just refuse to face facts, no matter how clearly you try to explain.

Comment by lnk
2007-12-30 20:02:24

‘She likes it’ — word-for-word what i got told.

what interested me most, was how my friend was simultaneously so mad about how much gas was costing her, and how totally oblivious she was to having any responsibility for making decisions that led to that cost, or that could lead to reducing that cost.

she’s paying on a big car loan on the expedition (zero down, of course), still paying on the not-working explorer, and paying on her husband’s truck too.

there’s been many mentions of negative savings rates and j6p needing to cut back spending eventually, but with attitudes like hers, i’m not sure that a large fraction of people are capable of even understanding their spending, much less controlling and changing it.

i could list lots of other examples of her weird spending decisions — on a minimum wage nursing home aide salary, she has a house (with mortgage, of course), cellphones, cable to keep her young son entertained (but no internet, even though i’ve given her my hand-down computers), trips, etc

just a perfect example of living paycheck-to-paycheck :-(

Comment by manhattanite
2007-12-30 13:21:42

“the shift key on my keyboard doesn’t work well”

you’ll never go back! :-)

Comment by lnk
2007-12-30 19:47:52

well, i’m certainly not going to spend good money replacing a keyboard where only the shift key doesn’t work!

Comment by In Colorado
2007-12-30 11:46:33

but she couldn’t understand the supply-and-demand argument, it was just selfish-me being against all those poor people

I have encountered this attitude with south of the border immigrants. Not surprising. People are tribal by nature, and while they might fight with each other back home, they pull together when away from home.

Comment by lnk
2007-12-30 19:50:11

yes, it’s obviously very tribal –she’s mexican, so mexican illegals are all to be pitied and welcomed and catered to — but she’s rabidly anti-cuban, anti-black, and anti- all sorts of other people.

Comment by alta
2007-12-30 11:49:00

“The areas (of the nation) that have gone through unrealistic growth, Florida, California, are down drastically,” he said, “but we have gone up about 3 percent in price consistently, so we have not seen that down phase.”

That’s actually below inflation rate.

Comment by Martin Cohen
2007-12-30 17:15:45

Question on Chrysler: I have a 2006 PT Cruiser with 3 years left, payoff ~ $9300, bought from and financed through Carmax at ~ 7%. I can afford to pay it off. Should I pay it off?

What would happen if Chrysler went under? How about Carmax?


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