Inventory Has Become The Elephant In The Room
The Palm Beach Post reports from Florida. “Palm Beach County’s foreclosure rate skyrocketed in 2007, figures from the county clerk’s office show. In Palm Beach County, the clerk’s office recorded 13,962 foreclosure filings in 2007, compared with 4,831 in 2006. That’s nearly three times the foreclosure rate of 2006, according to the county clerk’s figures.”
“The rising tide of foreclosures will, of course, add more homes to that inventory as the market continues to decline. Indeed, inventory has become the ‘elephant in the room.’”
“‘Nobody talks about it,’ said analyst Jack McCabe. But ‘there’s 55,000 homes for sale in Palm Beach County alone.’”
The Sun Sentinel from Florida. “Palm Beach County’s median price for homes sold in November was $345,700, down 7 percent from $370,400 a year ago, the Florida Association of Realtors said. Sales declined 13 percent, to 459 from 525 last November.”
“The county’s existing condominium market also was hit hard, with the median price of $177,400 falling 19 percent from $219,800 a year ago. Condo sales dropped 17 percent, to 347 from 420. Many condo owners were short-term investors who bought at peak prices during the past several years. With an oversupply of units for sale, owners now have to slash prices if they have any hope of selling.”
“Marvin Hochberg, a retired accountant, lived in his three-bedroom house west of Boynton Beach for five years. He recently got married and moved into his wife’s home in Boca Raton.”
“Hochberg listed his house in August for $339,000 but has since dropped the price to $289,000. Still, no offers.”
“‘I’m disappointed in the way things have turned out,’ Hochberg said. ‘The way the market is, even people who might be interested are saying, ‘What’s the rush?’ Eventually, things have to bottom out.’”
“South Florida is expected to be slammed by the foreclosure debacle in 2008. Analysts say the market conditions that created the slump will not suddenly go away in the new year. ‘The best thing to say about ‘08, is that ‘09 is right behind it,’ said David Levin, a housing consultant in Delray Beach.”
From CBS 4 in Florida. “Throughout 2007, there have been reports of how South Floridians have been overwhelmed wth high property taxes and insurance rates, all happening in the midst one of the worst housing markets to hit South Florida and the U.S.”
“Families like the Bozas want to start a new life in South Carolina if they can sell their Cutler Bay home. ‘It’s been pretty difficult. I’ve had only one person call,’ explained Adele Boza.”
“The Weisses have had their Pinecrest home on the market for months. They said they’ve had several open houses but very few people have come by.”
“Some call this struggling housing market a slump, others feel it’s a crisis. Veteran realtor Hazel Goldman, who’s been selling real estate in South Florida for 30 years, said the market is simply a challenge that does have an end in sight.”
“She offers some advice in trying to sell property under the current strained conditions. ‘There is a buyer for almost everything we have out there… if the seller is realistic and in tune with the competition and what they have to do to get the property sold.’”
“Realtors say sellers should be realistic, make a home ready to move into for a buyer, and continue to drop prices.”
From Tampa Bay 10 in Florida. “Brad and Stephannie Sharp love their two bedroom home, but they’re trying to sell it, so they can relocate to Minnesota. ‘It’s been brutal that’s the best word I can use, is brutal, not a lot of hits, just a couple,’ according to Brad.”
“Their house has been on the market since March, so they recently put an ad on Craig’s List and other internet sites. The couple is also willing to give up items like their couch and television in order to sell their home.”
“Realtor Ed Gunning says the housing market isn’t as bad as it seems. Gunning adds, ‘It’s a buyers market and if the sellers are realistic on the prices of their homes, they can sell their home.’”
“He goes on to say, homes are about 20-percent lower than they once were. Gunning advises a person not to sell if they don’t have to. But it is a great time to buy a home.”
“Sharp’s home is appraised at 170-thousand-dollars. By dropping his price to $164,900, he hopes to finally sell it. ‘Time will tell, I hope so, we both hope so. It’s disheartening,’ says the hopeful homeowner.”
The News Press from Florida. “Some 27,769 building permits, valued at nearly $2.3 billion, were issued in 2007, a steep drop from the 43,357 permits, valued at $3.8 billion in 2006.”
“‘It’s great to compare, but it had to come down drastically,’ said Bob Knight, president of the Lee Building Industry Association. ‘It couldn’t sustain itself.’”
“He added buyers are starting to look for homes again. ‘Somebody’s got to sell all this,’ Knight said. ‘Is it ever going to be like 2005? Probably not. That was unsustainable. It will probably come back to the normal pace of 2000. We have to burn off some excess inventory.’”
“December was the worst month — not only in 2007 but in 26 years — for new single-family home permits in unincorporated Lee, Bonita and Fort Myers Beach. Thirty-five permits were issued last month, compared to 292 in December 2006, said Joan LaGuardia, spokeswoman for the Lee County Department of Community Development.”
“The previous low for the county was 45 single-family home permits issued in November of 1981. Cape Coral had another record low month with only nine new single-family home permits issued in December, breaking November’s record of 12.”
“‘For as long as we’ve been keeping records, nine is probably the record low,’ said Cape Coral spokeswoman Connie Barron.”
“‘There’s still so much land available for the development of homes,’ she said. ‘That’s why we’re optimistic we’re going to come out of this in a reasonable amount of time.’”
“Knight said the real estate cycle is a pendulum that swung far to the boom, then far to the bust, and is now working its way toward the middle. ‘It’s stabilization,’ he said. ‘It’s a good time to buy or build a house, but everybody wants to wait until it hits bottom. You’ll never know when it hits bottom.’”
The New York Times on South Carolina. “Ettore and Larisa Costanzo are showing off their new house, which they love madly. The house, on which the couple made a down payment of $88,820, is empty. Their belongings are in storage. They live, unhappily, in a hotel.”
“‘It’s very upsetting, not to be allowed in our own house,’ said Ms. Costanzo. ‘Please take our money and let us move in.’”
“Their builder is Levitt & Sons, a unit of the Levitt Corporation, which ran out of cash in October and declared bankruptcy in November. All work on this planned 460-home development for retirees, grandly named Seasons at Prince Creek West, has ceased.”
“The Levitt employees were laid off, the subcontractors put down their tools, and the Costanzos found themselves in limbo.”
“The collapse of Levitt, the first big home builder to fail in the current slump, illustrates how the turmoil in real estate is spreading far beyond subprime. Levitt had a fabled brand, decades of experience and enthusiastic customers with good credit, but none of that was enough to save it.”
“Paul S. Singerman, Levitt’s bankruptcy lawyer, said that as the real estate market in Florida went into ‘an absolutely unprecedented and catastrophic downturn,’ the builder’s customers across the Southeast became victims. ‘There is a bad story, an unfortunate story, about every customer that placed a deposit,’ Mr. Singerman said.”
“Seasons is less than a quarter finished. About 90 buyers have paid a total of $3.48 million in deposits for houses in varying stages of completion, ranging from all but done, like the Costanzos’, to unadorned dirt.”
“Another 90 houses are occupied, but many of these residents are, if anything, even more unhappy than the depositors. Levitt sold them on a community where everything would be taken care of. Those assurances mean little now.”
“‘I can’t believe we’re dealing with Levitt & Sons,’ said Nancy Harth, who moved in last March. ‘It feels like a start-up company.’”
“Selling a lifestyle was something Levitt perfected long ago. Thanks to the builder, Time magazine noted approvingly in a 1950 cover story, buying a house was suddenly easier than buying a car. The original cost was $6,990, about $70,000 in today’s dollars.”
“The product changed in a half-century, of course. The houses at Seasons are not the tiny boxes of the original Levittown but expansive dwellings with whirlpool tubs and marble vanity tops. With upgrades, prices reached $450,000.”
“But they were still sold as Levitt houses. Home movies of early Levittown residents dancing on their lawns played in the sales center and on the Web site. A pamphlet giving a detailed history of Levitt’s glory years was passed out to prospective buyers.”
“Nancy Darr, who had once watched her condominium developer go bankrupt, asked her Levitt salesman whether the company could fail. ‘This is Levitt & Sons, America’s oldest home builder. We built Levittown,’ Ms. Darr remembers him replying. ‘It’s a solid company. It’s listed on the stock exchange. This could never happen.’”
“Gary Drejza, a former Seasons salesman, confirmed that such assertions were routine. ‘We felt they were the truth,’ Mr. Drejza said. ‘We believed.’”
“He must have, because he bought a house himself. ‘Want to see it?’ he asked, pointing from the window of his Mercedes-Benz at Lot 49, still a pile of dirt.”
The News & Observer from North Carolina. “Record numbers of homeowners in the Triangle were threatened with losing their homes through foreclosures in 2007. Foreclosure proceedings were filed against 7,390 homeowners in Wake, Durham, Orange and Johnston counties.”
“Because the state largely was left out of market speculation that left many areas glutted with overpriced homes, foreclosures in North Carolina are proceeding slower than the national pace.”
“The increase in foreclosures is already swelling the inventory of unsold homes in the Triangle and could depress prices that have continued to rise throughout the national housing slump, said Bernard Helm, a residential sales consultant.”
“The inventory of unsold existing homes in November was up 24.5 percent to 13,107, according to the Triangle MLS. In 2007, total closings were down 5.4 percent in the first 11 months.”
“Most of the increased foreclosure filings are in urban areas where home sales and populations are concentrated, or in resort areas where there was more speculation. Filings increased 20 percent in Wake County to 4,461 and 11 percent to 7,943 in Mecklenburg County. In New Hanover, where many oceanfront homes are sold, filings rose 27 percent to 714.”
“‘Home prices in the Triangle have not dropped, but increased foreclosures will increase the inventory of homes on the market for sale and that will tend to put steadying or downward pressure on prices,’ Helm said. For sellers, ‘it’s going to be more difficult to get what you want — there’s more competition.’”
The Citizen Times from North Carolina. “If everything scheduled to be built downtown actually gets under way, there might be times this year when the number of construction workers downtown exceeds the ranks of lawyers or bankers.”
“Work on The Ellington, a 23-story luxury hotel and condominium building planned on Biltmore Avenue, and on Zona Lofts, a condo building planned for Coxe Avenue, should get going this year.”
“People looking to sell a home, developers, Realtors and everyone else in the real estate industry will be looking anxiously for an end to the housing slump affecting the nation and Western North Carolina.”
“Several larger apartment complexes and some condominium complexes have been approved or proposed for sites ringing the city limits of Asheville.”
“‘People have asked me, ‘Do you think we’re going to have denser development in the city, or are we going to have sprawl out in the county?’ and I answer, ‘Yes,’ said Jim Coman, Buncombe County zoning administrator.”
“Home sales in the Asheville area started dropping in fall 2006, but last year it became clear that the declines nationwide would have a deep and lasting impact locally. The number of existing homes sold in Buncombe County through the MLS was down 19.2 percent for the first 11 months of 2007 versus the same period of 2006.”
“‘A lot of people in places like Florida want to sell there before they buy here. As soon as those markets turn, we should see increased pent-up demand for Asheville,’ said Terry Horner, co-owner, Preferred Properties of Asheville.”
Race to the bottom…
“She offers some advice in trying to sell property under the current strained conditions. ‘There is a buyer for almost everything we have out there… if the seller is realistic and in tune with the competition and what they have to do to get the property sold.’”
Did you see Andy Rooney a week or so ago? Making fun of “self help” books on a variety of subjects all over his desk, he picked up one entitled “1001 Tips on Buying or Selling a Home.”
“I’ll save you the $15.95 on this one,” he said. “If you’re having trouble selling your house, lower the price.”
He then tossed the book away and went on to the next one. This, on 60 Minutes. It’s about time, if you ask me.
Wish I could have seen that! Lordly, I hear so many people complaining about how hard it is to sell a house now. Why? It isn’t hard at all. Just drop the price until you find a buyer. Done.
“It isn’t hard at all. Just drop the price until you find a buyer. Done.”
yea..b..b …but, i’m not giving it away!!@!
Andy Rooney is amazing. In a couple weeks he’ll be 89.
Which is coincidentally also the length of his eyebrow hairs in inches.
ROFLMAO. I Had the exact same thought as I read that comment and then a split second later I saw this comment.
I had dinner at the table next to him a few months ago at a local rest. He looks every bit of 89 in person.
He gave the commencement speech at my college graduation - he was great. Somewhat curmudgeonly, but still great.
“Some call this struggling housing market a slump, others feel it’s a crisis.”
No dictionary in the world defines “crisis” as “FB can’t profitably unload a POS”. Jeeze…
‘People have asked me, ‘Do you think we’re going to have denser development in the city, or are we going to have sprawl out in the county?’ and I answer, ‘Yes,’ said Jim Coman, Buncombe County zoning administrator.’
IMO, it is a sign of a financial mania when a public official will openly make such undesireable predictions.
–
“Public officials” love manias (or bubbles) and lot of development becuase that is how they get bigger revenue. They never think of the other side of these.
Jas
“Brad and Stephannie Sharp love their two bedroom home (in Tampa), but they’re trying to sell it, so they can relocate to Minnesota. ”
I’ll bet you haven’t heard a line like that very much since the hurricanes calmed down, older cities fell into accelerated decline, and air conditioning became widespread in the 1960s.
I was going to say. That almost as bad as relocating from Tampa to upstate New York. At least there are jobs in Minnesota. But I have no sympathy for this couple because, according to the Pinellas County Property Appraiser website, they paid $149,000 for their St. Pete house in September 2005.
If they hold out until spring, they may be lucky to get 100k for it.
they paid $149,000 for their St. Pete house in September 2005.
They paid $75,000 more than the house is worth. Most of these homes are 1950’s built homes in this area.
In 1953, we moved to St.Petersburg, and my mother bought a 2 bedroom, 1 bath house with a 1 car garage on a 50X150 lot for $8000. It was new, and the address was 3921 54th Ave North.
Using the handy BLS inflation calculator, the 2007 value of that property is…$62,974.38. Which makes sense because given the housing upgrades that have taken place since then, that house is the equivalent of an apartment.
But, it “appraises” at 170k !!! And they’re offering it a huuuuuge 3% discount (164,900). What do you want them to do - give it away?
At least there are jobs in Minnesota.
yes, and this couple will need several to help them pay the $149,000 that is worth $75,000. Hard to make payments when jobs only pay $8 an hour in Tampa!
Man, their neighborhood sucks to boot.
Wow I wonder how they will handle the harsh winters. I probably won’t even survive! Yes I can get a house in MN for under $50k, but NW PA is as cheap and much milder winters.
Where are you looking in NW PA?
I grew up in that area and went to undergrad there.
Oil city, Franklin and maybe Seneca or Cranbarry if prices drop there. I visited this place in mid Oct and it wasn’t cold, was actually hot for a couple days(around 85) coldest got down to like 43 degrees. This morning it got down to 35 degrees in south Florida and I was hardly cold, although my mom and sister were.
I might get a few cold winter days in NW Pennsylvania but it looks mild. I checked the forecast and there will be a high of 53 and low of 41 this weekend up north. Seems like everyone makes a big deal out of it. I would understand if they were in Alaska, Minnesota or Canada(excluding the coasts and south Ontario)
“‘Nobody talks about it,’ said analyst Jack McCabe. But ‘there’s 55,000 homes for sale in Palm Beach County alone.’”
The Sun Sentinel from Florida. “Palm Beach County’s median price for homes sold in November was $345,700, down 7 percent from $370,400 a year ago, the Florida Association of Realtors said. Sales declined 13 percent, to 459 from 525 last November.”
Can someone with an abacus handy do the math on this one? This looks like about a 10 year inventory? This ought to end well, eh?
lol
Ok, it was about five years of inventory last month… I like how the Realtors ™ only point out the YOY sales decline. I bet who hangs out on Clamatis blvd has really changed in the last year…
To think, there is probably a bunch of ‘hidden inventory’ that will appear if there is any perception the market improves. Palm Beach’s inventory is unbelievable. There is no better 2009 there (for sellers). No improved 2010. Not unless the bull dozers come out and reduce the inventory.
Got popcorn?
Neil
there is probably a bunch of ‘hidden inventory’
Your right on the money when you include rental houses, foreclosures, pending foreclosures and for sale by owner.
Don’t forget people who decide to take their house off the market for awhile until the spring season.
Sure, it’s two red beads, plus two green beads and a yellow bead.
“Seasons is less than a quarter finished. About 90 buyers have paid a total of $3.48 million in deposits for houses in varying stages of completion, ranging from all but done, like the Costanzos’, to unadorned dirt.”
Sounds like any old failed construction project, anywhere in Mexico…
Two items stand out…
They’re willing to give up their couch and TV to make the sale, oh, and take 5K off the price…
and the best one… “You’ll never know when it hits bottom.”
I bet I sure will, and I’m only a renter.
I know! Like adding an old couch or TV will help clinch the sale. Who the hell wants someone else’s couch? (And I’m sure they’ve already checked between the cushions for loose change!)
My FIL always swore that he would sell his house completely furnished or that we could worry about it after he died. My SIL and I didn’t think anyone would buy it and all of his old, wornout furniture. Including a microwave from the mid 1980’s. Someone did-his granddaughter almost two years ago. We did sell the Queen Anne living room set, which she hated. All that has had to be replaced was the kitchen stove which was over 40 years old. All in all, she came out pretty well and is actually paying aboyt what she would be paying in rent.
Well I can’t afford my parent’s house and if they gave it to me, my bro and sis, I am putting it for sale. The brother and sister can buy my third of “ownership” or split the money three ways. I wish they sold it in early 2006. Ive said this in other forums and almost everyone took my parent’s side. Oh well they are either stuck in that house or get little more than what they paid in 1995.
And yet, the local Realtywhores, FAR, and FB’s vociferously attack anyone verbalizing the market is either overvalued or declining. For some comic relief, I suggest you meander over to http://www.palmbeachpost.com/blogs/content/shared-blogs/palmbeach/realestate/
to get a feeling for the mentality of the community. I have personally heard from friends, coworkers,and such that they “refuse to just give their houses away”, and will take no less than 2005 prices. Remember, these are the same people that couldn’t figure out how to vote in 2000, and that steal all the sweet-n-low.
“refuse to just give their houses away”, and will take no less than 2005 prices.
Tell them lots of luck and then watch them fail!
It’s like taking candy from a baby…whaaaaaaaaa
Yet you still see bubble prices all over especially in miami-dade.
http://miami.craigslist.org/rfs/515556291.html
http://miami.craigslist.org/rfs/512377003.html
When are banks/institutions going to dumb the foreclosure inventory?
When that happens we will see the dramatic declines. They waiting for the new year to start writing-off these losses to avoid dramatic changes
to book value?
“The rising tide of foreclosures will, of course, add more homes to that inventory as the market continues to decline. Indeed, inventory has become the ‘elephant in the room.’”
Glad to hear the inventory elephant has come out from under the living room rug into clear view of MSM commentators.
When they call it the “white elephant in the room”, we’ll know they are serious.
A pink elephant in the room, now that will be something.
“Nancy Darr, who had once watched her condominium developer go bankrupt, asked her Levitt salesman whether the company could fail. ‘This is Levitt & Sons, America’s oldest home builder. We built Levittown,’ Ms. Darr remembers him replying. ‘It’s a solid company. It’s listed on the stock exchange. This could never happen.’”
You’ll love it @ Levitt…
Wasn’t Enron listed on a stock exchange, somewhere? And isn’t she aware of the fact that very few companies listed on the original New York Stock Exchange still exist in their current form? Durrr!
It’s quite amazing the way people think that if something is larger than a certain size that is immunized from bankruptcy. I heard this about Pulte Homes the other day. Local builders can go bankrupt all day long - totally normal, but a national builder - can’t possibly happen.
“Knight said the real estate cycle is a pendulum that swung far to the boom, then far to the bust, and is now working its way toward the middle. ‘It’s stabilization,’ he said.
Uh-huh. Bobby, that pendulum has a looong way to go yet. I don’t think it’s even reached the middle on its way toward the bust side of things. But keep telling yourself that.
Yes, his wishful thinking struck me too as I read this. He may be right that the pendulum is working its way toward the middle…but still from the boom side!
He may be right that the pendulum is working its way toward the middle…but still from the boom side!
Exactly. We still have mortgage companies in denial.
1. They offer products they can never make a profit on.
2. They are still very overstaffed.
The time to buy is when its hard to get a mortgage. Guess what, its still easy by any historical measure.
Got popcorn?
Neil
“Paul S. Singerman, Levitt’s bankruptcy lawyer, said that as the real estate market in Florida went into ‘an absolutely unprecedented and catastrophic downturn,’ the builder’s customers across the Southeast became victims. ‘There is a bad story, an unfortunate story, about every customer that placed a deposit,’ Mr. Singerman said.”
Another story to make one’s blood boil! I did a search in Congressional Record (available in Lexis/Nexis) and I couldn’t find any discussion about helping people who made downpayments with builders who went BK.
Yet, Congress quickly passed legislation to give “specuvestors” tax breaks that could easily be worth $50K - $100K.
Nobody cares about the True Victims of the housing bubble. Certainly people who lost deposits because builders went out-of-business are one class of True Victim. (The other “victim”, of course, is the few percent of Americans who pay taxes, have savings accounts, and have a positive net worth)
‘Another story to make one’s blood boil! I did a search in Congressional Record (available in Lexis/Nexis) and I couldn’t find any discussion about helping people who made downpayments with builders who went BK. Yet, Congress quickly passed legislation to give “specuvestors” tax breaks that could easily be worth $50K - $100K.’
Second homes and investment homes weren’t covered in that bill, as I recall. BTW, the US probably spent as much as that tax break in Iraq in the time it took you to type that. Perspective, please.
You are joking, right? $120 billion a year in Iraq and Afghanistan. Call it $100 billion for Iraq. $274 million a day. $11 million an hour. $180K in the minute it took to type the post.
What is that? The tax on 5-10 short-sales if the lose $50K-75K per short.
Forgiving the tax on the short-sales and foreclosures will cost as much as 7 YEARS of the wars.
Darrell — I’d like to see some math on that conclusion. The amount of foregone tax on each short or foreclosure is the difference between the selling price and the amount owed, times the marginal tax rate. It looks like you are claiming that approximately $1 Trilllion in income tax would be forgiven that way. If the average marginal rate were 33%, which I doubt, that would reflect $3 Trillion in losses. But the average losses cannot logically exceed 1/3 of the mortgage value, so then aren’t you talking $9 Trillion in mortgages that will receive this forgiveness?
Don’t forget, if you’re adding 100K to your income that year (in forgiven debt), your marginal rate is 33%!
The unspoken issue is that most of the time, these people can’t pay the tax anyway.
I felt somewhat bad for the couple who actually sold their original house before buying the new one, and renting until it is completed (if ever) The only mistake they made was buying in late 2006, and making a good downpayment.
That was what I was (trying to) get at! There are few FB stories here where the victims are deserving of sympathy. These folks who sold their home and put a traditional down payment on a home where the builder went BK are a rare instance of a true victim. But nobody cares about them.
‘“Bob Knight said the real estate cycle is a pendulum that swung far to the boom, then far to the bust, and is now working its way toward the middle…..?’
- Of course Bob has it wrong again. This is only the beginning of the slide and the ‘middle’ is only an idea at this point.
“Sharp’s home is appraised at 170-thousand-dollars. By dropping his price to $164,900, he hopes to finally sell it. ‘Time will tell, I hope so, we both hope so. It’s disheartening,’ says the hopeful homeowner.”
Not exactly. What’s disheartening is how some ppl think appraisals have anything to do with a home’s value. Even while current they are just a figure of how much some a***ole was willing to lend you at a high interest rate with the intent to then turn around sell the note to someone else for a profit. The value of the home was never the real issue, it was always how much rope can I allow you to hang yourself. It may be true that appraisers are supposed to be independent, but it is a referral business. What is a 10 letter word for an honest appraiser? U-N-E-M-P-L-O-Y-E-D.
“He goes on to say, homes are about 20-percent lower than they once were. Gunning advises a person not to sell if they don’t have to. But it is a great time to buy a home.”
Gunning is the perfect example of the realtor who has been brainwashed by the NAR hype that it is a great time to buy. If it is soo good, why is he not buying?
That is what I keep asking people who tell me it’s a good time to buy.
A good time to buy is when you won’t lose your a** off within a year of depreciation. I won’t buy a new car that loses 20% of it’s value in a year; I’m certainly not going to do that with a house either.
Gunning is with this upscale brokerage firm whose main office is near my house. I get solicitation offers all the time from other brokers/agents touting fast they can sell my house (which I rent), and listing all of the properties that these “top sellers” have hawked to FBs in the last 12 months. The glamour shots on the fancy mailers are hilarious. And I keep wondering: why are they soliciting potential sellers to list their houses for sale when they already have 5-6 years worth of houses yet to sell?
That’s interesting. In east central Florida, brokerages are not soliciting listings and from what I hear they turn many down if the price is not low enough to be credible. There are almost no lookers, so the brokers do not want to be stuck with unrecoverable advertising costs. I wonder if that might be responsible for the dramatic increase in the number of hand-made FSBO signs that are planted at intersections and in front of houses.
“Indeed, inventory has become the ‘elephant in the room.’”
“‘Nobody talks about it,’ said analyst Jack McCabe.”
Hell, that’s all we do is chat about it around here.
I love when they quote the numbers of homes for sale on the MLS and CONVENIENTLY omit the bank-owned and FSBO numbers. Shady, shady, shady.
What I don’t get is the “5 years of inventory”, or “23 months of inventory” crap. This implies that houses sell at a steady rate, like bread or something.
Rather than having inventory expressed in terms of months or years (based on the current sales pace), I would prefer to see a chart showing the actual number of homes for sale in a given area and how that number has varied with time. Is there a website that provides this type of info?
“‘A lot of people in places like Florida want to sell there before they buy here. As soon as those markets turn, we should see increased pent-up demand for Asheville,’ said Terry Horner, co-owner, Preferred Properties of Asheville.”
The next person who uses the idiotic term “pent up demand” to help explain how the market will rebound goes into a choke hold.
You just have a pent up demand to choke somebody.
It’s very sexy, doncha see? Buyers are moping around abstaining, and with all that pent up demand, once they make a move, it will be the big O.
A tax meltdown, and him at the molten core
Property values fall, yet tax bills rise? Blame the appraiser
By JEREMY WALLACE
jeremy.wallace@heraldtribune.com
Even strolling down Main Street in Sarasota on his lunch break, Jim Todora cannot escape the heat of the real estate meltdown.
Todora, Sarasota County’s property appraiser for the last 11 years, is introduced to a stranger who, under the midday sun, skips all pleasantries and begins haranguing Todora about how his office messed up another property assessment.
More at:
http://www.heraldtribune.com/article/20080103/NEWS/801030745
It used to be the cableguy and IRS agent who lied about their professions at parties…
why do i feel like we are going to keep hearing about “Pent Up Demand” over the next few months? Pent up demand for a home worth 200 or 250 priced at a reduced price of 350k…give me a break.
It is rather bizarre….the same group that will blather on about how they saved a dollar at Costco for some 12 month supply of lasagna is so blithe about paying 350K for a house.
“‘It’s very upsetting, not to be allowed in our own house,’ said Ms. Costanzo. ‘Please take our money and let us move in.’”
the story in the nYtimes is a sad one. Here are people who worked hard all their lives and put down a 50k plus deposit and can’t move in or have units that haven’t even been built yet. If there is ever a bailout of any kind for victims of this mess, I’d say these people deserve it. In the original article the last paragraph-
“We end with nothing,” said Mr. Whalen, 62. “I might as well have taken my deposit, put it in $1 bills, and let them blow off the front porch.”
there are some real victims here.
Yes, and their crime is stupidity. They end with nothing because they were stupid.
Pretty harsh words. These were not 100% financing losers, they actually put up substantial down payments. Like I’m guessing you will when you decide it’s time to buy.
yeah really, very harsh words. every once in a while it might not be a bad idea to try walking in someone elses shoes, even though they might not be as savvy or intelligent. these people, all of them, seemed like hardworking folks. Call me a bleeding heart but this is unfair. I hope they get their money back.
U Haul index for a different city pair, picking up a 26 foot truck on January 16.
Ormond Beach, FL to Greensboro, NC $1415
Greensboro to Ormond Beach $252
The 5.6:1 ratio is a little better than past checks, where it has been as high as 8.5:1.
Who the heck is still buying in Florida anyway?
They have lots of nice new condo developments in Miami along Brickell Street, etc. 2 Bedrooms with a great water-view have fallen from the 700ks to 500s. In the 200ks I may pick one up for a winter place (I hope to get a lake house in the North for retirement but hate cold winters). It appears more than 50% are in some stage of foreclosure and 1000s of new units are still online with the majority of buyers backing out. At least some things are headed in the right direction in Florida.
I just did this for Charleston, SC/Fort Myers, picking up a 26 footer on January 18th.
Fort Myers, FL to Charleson, SC: $1469
Charleston, SC to Fort Myers: $94
Yes, that’s 94 bucks…I did it twice just to make sure I wasn’t imagining things.
Floridian, all I can say is, “Yikes!”
Tim, we will be heading to Sarasota in late January and I think this year we will do some active looking for a winter getaway. It would have to be a mighty good deal, however, as I think next January (2009) will see another 15% knocked off current prices. In Sarasota, they’re already down 30% from the peak.
Keep me posted. It will be great to see renters who saved retire to luxurious retreats while homeowners enter their retirement years with several 100k of principal still due on their notes. Ooops. Sometimes greed and ignorance bites you in the ass. I normally dont like to see others fail, but they were so smug and so greedy, I can deal with it.
It’s cheaper than hiring somebody to drive ‘em there and paying the $300 in gas - if they can get someone to drive their inventory to where it’s needed it’s a net gain of around $800 or so.
We’ve just moved from Ormond Bch [Daytona area], to Asheville, NC…I checked all the rental truck companies….
The thing that you’re missing is the price of diesel….@ 6-10 mpg & >$3.00 gal …your talking $.30 to .50 cents per mile, just for petrol….[it's 500 miles one-way]
I found a small moving company down in Ormond, with two pick-up trucks, and trailers, and he moved it all in one day….for $3000….Yes!! 2 big trailers full…WHEWWWW!
Fairfax, VA to Greensboro, NC: $736
Greensboro, NC to Fairfax, VA: $181
I will also be looking in FL to buy a beach condo soon. I live in NJ, owned my house mortgage-free since the early 90’s and will be looking to buy a vacation place at an auction, bank sale or something like that. There are buyers like me out there who never participated in this crazy bubble and is in a position to buy at fire sales. Incidently I am short real estate stocks at the moment so I am not 100% positive on home prices going forward but I think I will do OK if I am disciplined in buying (which I am).
Bill…We just did the move from Ormond to Asheville, and I checked it all out, every which way….The numbers you state are correct, but the time, and expense of fuel also become a determining factor…Yah!!! The lower fee up in NC is a big difference and we considered renting the truck up in NC, a driving it down to Ormond to get our stuff…But by the time, you factor in $250/diesel each way, and over-nights, and 2 full days of driving, and getting people to load & unload…WHEEWW!!
I got tired just thinking about..>>>”"”THINKING ABOUT IT”"
I invite anyone to go to city-data’s Raleigh/Durham/CH page and post the News&Observer link on this site. VickiR over there will give you a mouthful on how numbers don’t mean anything and her buyers love the great deals they’re getting. Of course, you’ll be banned almost immediately for spreading bad vibes and immediately be labeled a doom and gloomer, sourpuss, or scrooge. One guy was even stereotyped as a bachelor loner without kids. Naturally, if you have a wife and kids, you think nothing but positive things about RE.
Rant off.
http://www.city-data.com/forum/raleigh-durham-chapel-hill-cary/
One guy was even stereotyped as a bachelor loner without kids.
I’m a bachelor loner without kids and I’m absolutely ecstatic about not owning real estate. It’s a wonderful time to be alive.
Oh, wait, I’m supposed to be a doom-n-gloomer, sorry.
Which forum?
forumthread?Finally found it!!!
http://www.city-data.com/forum/raleigh-durham-chapel-hill-cary/172541-home-price-drop-increase-especially-near-5.html
Look for a posting by TuborgP mentioning kids.
‘Vicki, I wonder how many of the doom and gloom crowd have spouses and kids? I hope they realize the world they are predicting is the world their kids will grow up in. Homes are for families and house for speculators may be the defining line. Apartments are nice but most folks I have ever known with a family and friends wanted a yard for play and get togethers. Keep talking to your kids and keep being positive with them about today and their tomorrow.
I kept telling mine how the world and their future would be there for the taking and to remember that today was always the beginning of a great week.
Unfortunately they both believed me and are living what they think is a great productive life. One even went off the cliff and sold and bought in the Triangle within the last couple of months.’
Finally found it!!!
I think I’ll register an account with the nickname “doom-n-gloomer”
Or maybe “doom-n-boomer”.
Or just “Bitter Bachelor Loner”
Realtwhore Judas Goat.
A commission check awaits, for each slaughtered lamb family. (Or nasty bachelor man, for that matter)
What jerks. Don’t they care if their kids are getting priced out of the area?
The hypocrisy is rich in the air.
Nope. Eating their young is part of the plan for these clowns. I am sure they’ll be all in favor of sky-high taxes on their own kids once they retire and just “have to have” some huge SUV, big McMansion, or go on cruises or something. Me, me, me - that’s all it is with these people.
I like how they tell the kids that the future is “theirs for the taking.” How about telling them to WORK for their future, not TAKE it, as in take it from somebody else?!
“Families like the Bozas want to start a new life in South Carolina if they can sell their Cutler Bay home.”
This is a very painful lesson I learned in ‘01-’03. Most people nowadays might want to consider the possibility that they will not be able to stay in the a home for a long time. For me, the ability to move for employment is of primary concern.
Between gas prices and the housing bust, could we be witnessing the end of the suburbs as we know them?
Could future generations decline to live far from work or own property because of the grief their parents went through in the Great Housing Crash?
Nope. In fact when this all blows over we are going to see a new era of financial gamblers “doubling down” to try to recoup their losses by over-buying in cities, causing a follow-on crash.
More than a dead-cat bounce, it will be a dead-cat thud. And this time the cat will stay dead.
Good questions. My studies in urban geography and all the related reading have convinced me that this bubble/bust cycle, when taken in conjunction with globalization and wider socioeconomic trends, will have a profound effect on our landscape (most everyone here reached this conclusion also). This could be the first big reordering of our living conditions since suburbanization - although the demise of the suburbs is far from certain and likely quite improbable overall.
All the same, this bubble is so fascinating to me because it occurred at what I will argue was precisely the wrong time for people to spend so much for housing - as you have also seemed to conclude. They made decisions that absolutely depend on stability at a time when things are only getting less so.
If there “was” ever a time for people to leverage 10x to buy it would have been in 1955 - not 2005. Thirty years after the breakdown of Bretton Woods is a terrible time to consign one’s self to decades worth of indebtedness.
The suburbs might just transform, with McMansions converted to rentals since the working poor can’t commute from the cities anymore, affluent information workers telecommuting unless they live near transit, and people riding around on bikes. Newer suburbs farther away, however, may have a more difficult time managing the transformation.
People will not return to cities until cities are something other than filthy, crime-ridden, poverty stricken pits of misery and corruption. Not all parts of all cities are like this, but in American many are with plenty of places downright nightmarish. The 3rd world has nothing on parts of Baltimore city, for example, where burned out buildings line the streets and offer refuge for drug dealers who wander around at night with automatic weapons. Oh, and if you “snitch” to the police, you and your family will be killed via firebombing. People won’t move back to the cities until this type of crud no longer happens, and even then I have serious doubts since cities have a host of environmental issues of their own, and like it or not, most people do not like living like ants in an anthill.
As for telecommunication, while it sounds nice, the truth is that if you can do your job from 20 miles away, why can’t we have some wage-slave in a 3rd world nation do your job from a few thousand miles away and for a fraction of the cost? Sure, the results may be a lot worse and it’s possible the new worker won’t even speak our language, but who cares so long as management gets their year-end bonuses. After that, the company can flame out, they collect their golden parachutes, and the workers get canned.
You’re right. But we should realize that if the middle class hadn’t fled the cities, they wouldn’t be like they are. That is, it is largely the indirect fault of the people in the suburbs that cities are often crime-ridden slums.
An analogy: if you live somewhere, never take out the trash or flush the toilet, and then move somewhere new. Are you going to move back to your old home, even if it is closer to work? No, it smells like poo and trash, who would live there?
But it wouldn’t smell like poo and trash if you hadn’t made such a mess.
True, up to a point:
- I don’t see any way to fix the problems with cities currently. Yes, if the middle class hadn’t left, the problems would not be there, but moving the middle class back in would just result in more targets for robbery, murders, firebombings, etc. Short of sending an armored division into the slum-hearts of some of these cities, I don’t see any way to subdue them or turn them around, and nobody is going to move back to such an environment.
- The anthill effect: many people do not like living in glorified anthills, surrounded by noise, pollution, and seething masses of people. I know that I, for one, would sooner live in Nowhereville, USA, than in a city. That’s my choice, but I am sure I am not alone in that matter. Until cities are not lifeless and dismal collections of crumbling stone, rusting steel, and concrete on all sides, I don’t see people moving back.
- Cities have a host of environmental issues, namely getting stuff in and out of them. Just becuase the amount of square feet of land owned per person decreases does not mean that they are more environmentally sound.
Short of sending an armored division into the slum-hearts of some of these cities…
You really don’t have a good opinion of cities, do you?
I’ve lived in Los Angeles, San Diego, Tucson and now Las Vegas.
In all of these places, the really scary parts are actually in the suburbs - think Compton, Chula Vista, South Tucson (not sure yet what the LV equivalent is)
For the most part, the city centers are fairly decent with tons of stuff to do, things to see, etc.
I understand your “Nowheresville” sentiment - for years I swore I wanted to live on 30 acres. But then, after 10 years or so of living on acre+ lots in the desert, I realized it was god-awful boring and a 20 minute car-ride for even the simplest things.
I’ve never seen an eastern or midwestern city, so maybe that would cause me to change my opinion somewhat.
Living in a well ordered city is ideal. Many expats have moved to Singapore because the quality of life is so high and crime almost nonexistent. Singapore is a cross between Disney World and Star Trek. As for hanging drug dealers and caning vandals, I’m all for it. We would move there if we could afford it, but we are priced out forever.
Living on a postage stamp in central Tokyo in the 90s f’in ROCKED.
This could be the first big reordering of our living conditions since suburbanization
The thing(s) that got me thinking about this stuff are:
1-I lost a really good job in ‘01 and didn’t get another good one until ‘04 when I finally broke the mindset that dictated that I had to live in a certain place in “my” house.
2-I love riding bicycles and I like riding my bike to work
If buying a house is less desirable for a large group of people because they’re not sure where they’re going to be working in 5 years and gas prices put an end to the Suburban Dream, then maybe more people will live near work and use alternative transportation and put off buying houses until they retire.
“Families like the Bozas want to start a new life…”
Florida would be 1,000x more livable if all of the “start a new life” types disappeared.
It’s way easier “start a new life” when you can afford shelter. My wife moved from FL to CO in the 90’s. She did start a “new” life, one of poverty, though. Shelter cost almost 2x where she came from and wages were depressed by all the people moving into the area.
Frankly I don’t care who you are or where you came from, but lower house prices are a good thing. I say that as a current owner. And someone who has kids. I want my kids to be able to afford to live near me. I want house prices to go down and stay down.
Its too bad I won’t be able to stay in Palm Beach County and with the crime and other problems, good riddence. My parents can relocate with me. NW PA is a good, safe, cheap place and in 2012, there will be many other places like that with cheap houses.
ot-sorry
saw a commercial yesterday encouraging people to save
http://www.feedthepig.org/
what a smart idea maybe i will try it
If inventory is the elephant in the room, housing prices are the megasaurus. The ONLY way inventory will clear is with lower prices since the other options are: 1) massive wage increases - never will happen, and 2) a return to insane lending standards, which won’t happen for a good while.
“‘There’s still so much land available for the development of homes,’ she said. ‘That’s why we’re optimistic we’re going to come out of this in a reasonable amount of time.’”
Hunh? Lots have to be developed? In Cape Coral, where there’s no productive economic activity to speak of? Sheesh.
Don’t knock Cape Coral, prices are comming down nicely there. Not yet time to buy, prices now are about $120/foot and lots of REO’s. Any guesses how cheap that place will become? I say $60/foot
“But they were still sold as Levitt houses. Home movies of early Levittown residents dancing on their lawns played in the sales center and on the Web site. A pamphlet giving a detailed history of Levitt’s glory years was passed out to prospective buyers.”
The homes that Levitt built for returning vets in the 40’s are still all there and going strong. My BIL lived in one all through the eighties and thought it was a great house. I expect that they will still be standing long after the crap Levitt put up in the last ten years has fallen apart.
“Florida would be 1,000x more livable if all of the “start a new life” types disappeared.”
Agreed. They’re also the first to complain about prices of insurance and taxes that were actually higher when they got here. I’ve got an idea…if it wasn’t affordable to “start a new life” to begin with…DON’T COMPLAIN ABOUT IT LATER!
I’m not native by any means but I certainly didn’t move to FL to start a new life. I moved to Florida because there were jobs and a moderately reasonable cost of living as compared to Detroit that has no jobs and a crazy cost of living.
Thats why more people are leaving FL than comming. Too bad they ruined NC and TN as well. Not many relocating to NW PA so it’s good and cheap, ill deal with the occasional winter day.
The couple is also willing to give up items like their couch and television in order to sell their home.
Wow - a crud covered sofa? No friggin way…I’m so on board to buy the house now! There should be at least $.52 and a half-eaten ding-dong in the cushions to help offset the cost of the home…
Maybe you can drive a really hard bargain and convince them to also leave you their stained mattress if you buy the house. What a deal!
Foreclosures, late payments and falling prices. This industry is a complete disaster. Realtors on the other hand live in a world of make believe because they continue to lead people down the yellow brick road for the almighty commission. Remember, no commission no food.
Hazel Goldman (A veteran realtor selling for 30 years in south Florida - as if selling real estate is rocket science) says that the maket is simply a challange that does have an end in sight. This statement from a so called veteran realtor. Are real estate agents this stupid or do they believe their own lies. Ms. Goldman, it is without a doubt that you have no real education in finance or economics. You probably think that the definition of prime rate is the rate that a butcher charges for a pound of prime rib.
Ed Gunning another realtor in south Florida says that the market is not as bad as it seems. Does this man really have any intelligence or is he just stupid. Just stupid would be my belief.
Real estate agents need to sell homes to make a living. But do they have to keep adding to the stress of the industry. Sure by this house today. The value tomorrow won’t be lower than the price you pay today. Who do these people think they are fooling? The same people that they fooled before. What was it that they were saying two and three years ago, you should buy today because the values will continue to rise.
Did any real estate agent ever say this market will end and devistation will occur? Not one. Now they say it’s not as bad as it seems or the media is making it worse than it really is or as Ms. (Stupid) Goldman states, “the market is simply a challange that has an end in sight”. The only thing simple is her lack of intelligence.
How do I know all of this? I work in the industry as a Finance professional and I see and hear the terrible things that are happening.
Open your eyes. This in not a good time to purchase. Tomorrow will not be a good time to buy. Wait at least one year if you can. If not go in and make the lowest offer within reason that you can.
Recently Bush offered a package (life line for distressed home owners), not increasing the interset rate etc. Could some one explain what it is, how this works, how it could affect the real estate. Thanks in advance to all…
Affects onwer-occupied subprime borrowers (FICO below 660) who are current with their mortgage who bought 2005-2007. Let’s them avoid the taser rate until 2009. Since subprime borrowers are starting at 7.0%+ already it’s not that horrendous a bail-out measure.