Local Market Observations!
What do you see in your local housing market this weekend? Failed developments? “The developer of a luxury housing complex in Asbury Park has bailed out of the project and sold the unfinished building and surrounding property to a new investment firm. The sale comes just three weeks after Hoboken-based Metro Homes LLC stopped work on another upscale oceanfront complex in the city”
“Councilman James Keady said Kushner most likely backed out of the deal because poor sales of the units are cutting into the company’s profits.”
“‘I think what’s happening now is that reality is catching up with the hype — the hype being from the developers’ side of things that you can get rich quick in Asbury Park, and from the real estate side that this bubble is going to last forever,’ Keady said.”
Lending trends? “When talking mortgages, 40 is the new 25. Less than two years ago, the longest amortization period for mortgages was 25 years. And that’s what most first-time buyers in British Columbia were opting for, as skyrocketing real estate prices translated into hefty monthly payments, even when spread over 25 years.”
“Feisal Panjwani, a senior mortgage consultant in Cloverdale, estimates that 95 per cent of his first-time clients are going long-term with 40. There are also zero-down mortgages and an interest-only mortgage that help them get into the market, he said.”
“According to statistics released by the Bank of Canada, British Columbians carry 19 per cent of the country’s mortgage debt, yet represent only 13 per cent of the population and 13 per cent of the country’s disposable income, said Doug Porter, deputy chief economist with BMO Capital Markets.”
“‘When people talk about the potential risk of outsized household debt it’s probably most acute in B.C.,’ Porter said.”
“And if problems arise in the housing market as they have in the United States, the large mortgages could be a problem, he said.”
“Fears have been expressed over possible closures and job loses in sections of Northampton’s estate agency industry. They come on the back of one of the country’s largest estate agents, Your Move, shutting offices and axing 315 full-time jobs nationally.”
“The cuts are the first large-scale redundancies in the sector, which employs 50,000 people, since the property slowdown began late last year.”
“But Simon Bond, joint managing director of O’Riordan Bond, said he was confident that current market conditions would see established estate agencies, such as his, standing out from the crowd and increasing market share.”
“‘It is now a genuine market. House prices will remain steady, but the number of transactions will fall slightly. This is because banks are less likely to lend money to people who cannot afford it, and because there are less people who are buying houses to make a quick profit, rather than buying them as a home,’ he said.”
Lower prices? “The owner of one of Williamsburg’s biggest brokerage firms said that the Corcoran Group’s 2007 market report was ‘wrong’ in estimating that the average price of a condo in the neighborhood had increased 8 percent since 2006.”
“David Maundrell told The Observer that ‘there was no way’ that the average price of a condo in the Williamsburg market had risen from $817,000 in 2006 to $880,000 in 2007, as the Corcoran report concludes.”
“‘Their data is wrong. We’ve seen the market come down 10 to 12 percent across the board since it peaked in the beggining of 2006,’ he said.”
“‘Prices were astronomically high, even inflated so they had to come down,’ Mr. Maundrell explained of the causes for the slump. ‘Plus there has been a lot more development and competition.’”
More foreclosures? “Westchester County closed 2007 with foreclosure activity up 40.1 percent over the previous year, the county clerk’s office said yesterday. There were 2,166 new foreclosure actions started in the county, up from 1,546 in 2006. The 2006 level itself was up 42.8 percent over 2005.”
“The number of foreclosure judgments by courts in 2007 also was up sharply. There were 707 judgments, up 60.7 percent from 2006. The figure was more than double the 300 foreclosure judgments in 2005.”
“Industry observers said the increase in subprime mortgage problems has contributed to higher foreclosures in the Lower Hudson Valley.”
Insider moves? “The worsening state of the housing sector hit home for one Lennar executive last week when he sold shares purchased in August at a $300,000 loss.”
“Vice president and head of investor relations Marshall Ames sold 30,000 class A shares for $540,174. On Aug. 16, when stock of the Miami-based home builder hit a low of $27.76, Ames had purchased 30,000 shares for $845,100, or $28.17. The stock has continued to fall and when Ames sold the 30,000 shares they were worth $304,926 less than the purchase.”
Touring the Tampa Bay area this past week, i have noted quite a few roadside signs seeking new owners of “investment properties”.
Many claim the “value” is $150-200k, but you can get a real bargain at $85k-115k.
I even saw one fixer-upper at $50,000. It was in a run-down ghetto area, so i didn’t pursue the advertisement.
I figure we now have plenty of time to shop for better homes at better prices.
These things are very encouraging, as 2 years ago, you could not find ANYTHING in the Bay Area under $100k, and mostly the cheapest crap was priced at $150-200k.
There are lots of signs, many “by owner” sales and rentals.
The market has clearly turned since last year and looks to be getting better as we head into this new year.
With the stock market crashing, maybe more of these investment geniuses will figure they need to unload their real estate to flush up their cash positions. I am hopeful 2008 will be a time to restore sane pricing to a working-class area.
Is it possible that Florida will become similarly priced to Buffalo or Detroit, in just a few years time?
I do not think that is in the realm of possibilities. Both Detroit & Buffalo have serious long-term economic fundamental issues which Florid does not have (other than the real estate bubble, which in 7-10 years time will work itself out). Plus the weather is world of difference: sun/beach always beats out snow/ice storms.
Don’t leave out Florida hurricanes, though…
Never underestimate Florida’s ability to screw things up.
Somebody let me know what the prospects are for my co-worker. I don’t know a lot of details because the subject is taboo. We don’t discuss real estate around her. But I found out a few weeks ago that her flipper husband got stuck with some West Palm Beach condos. We thought it was 1 or 2. It turns out that it is 6. They live in Queens.
I know Florida is a disaster. Is there any part of WPB in which they would be okay?
If he bought them pre-construction after 2004, they’re almost definitely very screwed, as WPB probably has the 2nd most underwater/illogically placed/overbuilt condos, with Miami #1. They might be less screwed if he bought only older condos in established buildings.
WPB has too much inventory in the county. I would argue that it is the most overbuilt area in the USA.
Sales are under 500/month with inventory above 55,000. Unless your coworkers can dump the property *today*, they have no hope. Sorry to hear about them… Its probably best for them to just walk.
I used to live in Jupiter and I’m floored by the number of listings… In an area where 500 listings would be high they have over 2,500.
Perhaps you should avoid talking real estate around these coworkers. I have a coworker who owns in Melbourne FL and on Thursday he angrily asked me “why didn’t you tell me last year real estate cycles.” (He overheard a conversation with another coworker.) This will get ugly.
Got popcorn?
Neil
Neil,
I can’t believe you feel the least bit sorry for them. These are the folks that made real estate grossly overpriced here. Sitting up north somewhere, looking a brochures and dreaming of real estate riches untold.
SIX. Say again, S i x…. l u x u r y condos.
This is PURE GREED.
I, for one, hope they lose every dime the put up, if any, and that they used their home as collateral.
These people deserve to get thrown out in the cold for wanting to ROB people like me with “appreciation” gains as their retirement fund, based on hard work by others.
Let them rot. No bailout. No help. Let them EAT IT!!!!
Whew…………i feel much better now!!!!
Don’t be so harsh, Diogenes. They were just smart New Yorkers looking out for you helpless Floridians.
“Whew…..i feel much better now!!!!”
Bill Bixby –> Lou Ferrigno –> Bill Bixby ?
Gotta side with those who have no sympathy. If your co-worker had bought one condo with the hope of moving into it after selling their present home, sure, I’d fell sorry for them. But six? He/she should have gone to Vegas, at least they’d have been treated like whales while they lost their money.
Like Diogenes, I can’t buy back in until prices return to pre-bubble levels and even then the property taxes and insurance will be higher. If this gambler haven’t sold even one of the six, the clue meter is maxing out and they are toast. If they want to understand reality, advise your co-worker to reduce the price of one of the condos by 5% every two weeks until it sells. That will tell them approximately how screwed he/she is regarding the other five.
“he angrily asked me “why didn’t you tell me last year real estate cycles.”
Of course you just smiled at him and asked, “Got popcorn,” didn’t you?
“According to statistics released by the Bank of Canada, British Columbians carry 19 per cent of the country’s mortgage debt, yet represent only 13 per cent of the population and 13 per cent of the country’s disposable income, said Doug Porter, deputy chief economist with BMO Capital Markets.”
Columbian Debt Lords
‘Feisal Panjwani, a senior mortgage consultant in Cloverdale, estimates that 95 per cent of his first-time clients are going long-term with 40. There are also zero-down mortgages and an interest-only mortgage that help them get into the market, he said.’
Anyone who wishes to see how and why bubbles form need only look at the psychology playing out in Canada. Every warning sign being ignored and going head-long over the cliff.
Ben,
What amazes me is that the Canadian banks don’t see the similar pattern. I would expect your average Joe six-pack to be clueless about the causes of the bubble and bust in the US. The Canadian banks making these stupid loans, however, have no excuse. Open any Canadian business section and the 1st page is littered with articles about the US credit crisis and sub-prime crisis; and yet the banks here happily go head-first into making the same mistakes.
Incredible!
It’s different there.
Yeah, its worse.
Because it’s Socialist there.
I just came back from a trip to Vancouver, British Columbia and can tell you that the masses are totally deluded up to the Gills on real estate in spades. Literally everyone thinks they are financial geniuses and keep buying and adding to their real estate “investments” and speculation is rampant eveywhere.
The reality is that Vancouver is in total traffic gridlock and the quality of life (imho) is miserable (just as it is in most cities).
The fact that the Banks and TPTB have willingly aided, promoted and abetted this mania is criminal and the ultimate unwind when it comes will be devastating to all at every level of society.
In my wildest dreams (nightmares) i could never, ever envision that such a mania could devolve and suck in so many at all levels of society and that is part of the reason why i have been moving funds offshore and buying gold and silver for long term purposes.
The Canadian Banking system surely ultimately must end up getting a total asshanding once the lights go out and as well TPTB surely must end up getting their just deserts as well.
Truly UGLY and if that is ”As Good As It Gets”, then check me out of the game.
I think Canadian banks / financial institutions are going to be hit by a double wham:
1) The -current - default of US mortgage based securities in which they have invested heavily on.
2) The -future- default of their own mortgage based securities.
Could they end in worst shape than their American counterparts?
To whom are they able to sell their MBS? I’d have thought that as of August, such sales were dead in the water everywhere.
Who are the major builders / banks /Insurers? I think PUT’s would play out nicely in Canada.
“the masses are totally deluded up to the Gills on real estate in spades”
Well put. I’ve had many conversations with people I respect and consider “smart” over the past few years and almost all believe the hype. We’re “running out of land”, the “Olympics are coming”, the “rich Asians are buying up everything”, the “Albertans are coming with oil money”, “real estate never goes down”, “replacement costs are rising”, the “BC economy is booming”, “everyone wants to live here”, Vancouver is the “best city in the world”, we have “great weather”, blah blah blah.
One thing I find odd here is that many young people don’t seem to resent the bubble. They finish university with 50k plus in debt and then they lever themselves into a (potentially leaky) tiny condo with a 250k plus mortgage and help from mom and dad. Realistically many will never be able to buy an average house in the suburbs (currently around 500k) unless the price drops, but that’s fine with them because they will “make money every year on their condo”. Seems strange to me.
Another odd thing is the reaction of many Vancouver property owners to the declines in the US and Alberta. It doesn’t enter into their thoughts that price drops could occur here; instead they start thinking about buying investment property in those places to take advantage of the “bargains”. This illustrates how potent the Kool-aid is here.
It’s a mass delusion of epic proportions.
50% increases in Alberta RE prices in 2007 are completely justified since that is the amount by which oil went up and northern Alberta is the new Saudi Arabia. Not to mention the precious Canadian dollar, which should go to parity with the euro within six months.
LOL. I assume you’re kidding — Alberta prices are already correcting. And Alberta is nothing like Saudi Arabia: there’s a vast difference between *estimated* oil reserves and *recoverable* oil reserves in Alberta.
I was just on the phone with my Octomom and she told me her sister’s place in Calgary is going up for sale next week, as she’s in an elder-care place now.
The house is utterly unremarkable, and “worth” $400k.
If memory serves, it was worth around $100k just 5 years ago…
Aladin, I can vouch for the surreal nature of price run-ups in Canada. My mom bought a cabin in Ontario back in the 60’s for, if I remember correctly, a pack of chewing gum and an old tire. Now similar ones are selling for 400+. It’s absolutely mindboggling. Realistically you can live in these places from about May till October; otherwise, it’s just too damned cold. And of course, when the weather is bearable, mosquitos the size of humming birds try to carry you off into the woods. I’ve been urging her to dump it, but she’s attached to it for sentimental reasons.
PS - Sorry for jumping on you a few weeks back for the WGA strike comment; it just really pressed a button.
Lionel…
I like Canada, but it’s got weather issues, especially so for a wimpy Californian.
Last time I was in Calgary this time of year, the walk from the parking lot to the mall door seemed like the Iditarod, to me. brrrrrr…
sorry about deliberately provoking you, in talking about the strike, that was my bad.
What about the scabby stuff going on now?
I’ve been on methadone for a couple months now, to deal with withdrawals from not getting my fix of The Daily Show and Colbert Report.
(golf clap for the boys, for coming back next week)
“What about the scabby stuff going on now?”
That’s a loaded question, and, having (happily) moved to Seattle, I am (happily) removed from the situation. On the positive side, I can’t say I’ve ever been a huge fan of Tom Cruise, but he’s done the WGA right by agreeing to our terms. (And he’s being especially savvy, as this move should rehabilitate his image with other artists anyway.) Overall, it’s extraordinarily difficult not to be cynical about the ultimate outcome. While there is a group of writers who are financially well off, generally we get hosed, and that’s what I expect. My guess is that we won’t see much movement on negotiations until the DGA weighs in some time in the next few months.
What amazes me is that the Canadian banks don’t see the similar pattern
Sure they do. All high ratio (>80%) mortgages made by banks in Canada must be insured. Major insurer is CMHC which is a branch of the federal government (NOT a GSE like Fannie/Freddie, it is EXPLICITLY backed up by the Feds like FHA).
There is only one other insurer, a private sector US company called Genworth which has only a fraction of the market, and why they are still doing business in Canada is beyond me.
The banks have nothing to lose.
Similary, since the mortgages are insured, there is no issue with offloading them on the secondary market.
Gee, and so many posters believe the bubble was all our stupid gubmints fault.
Canada will see a world of hurt.
Where I live it’s still easy to get a 0 down mortgage. An insider tells me realtards are rolling heavy with 0 down investment properties.
I don’t think we’ll see SoCal/Fl bad but there will be blood.
Why won’t it be as bad or worse than SoCal/Fl? I can’t think of a reason. You can rent for half the cost of owning, many people are buying real estate at over 12X their gross incomes, we have massive overbuilding of condos, and now we have 40 year/0 down mortgages.
Actually, some company called LaBuick has a 50 year mortgage.
Add to this, predicted economic problems in BC. Our forestry is dead. Other industries in trouble.
Vancouver will be ruined.
“you can rent for half the cost of owning…”
I rent in a nice part of Vancouver for about a third of the cost of owning. My rent has hardly risen at all in 3 years.
The article on people taking on 40 year mortgages confirms my suspicions that people can’t afford the prices here.
I thought this market was insane in 2004. Here we are in 2008 and the bs is still being shoveled. Personally, if someone offered me the average house at a 50% discount on the condition that I would have to live in it and pay the mortgage (rather than immediately selling it to realize the gain), I would turn down the offer.
Speaking of renting, lets here it for renters who are patiently waiting for prices to be realistic.. and yesterday it rained a little bit, many hrs after small rain stopped, the ceiling started leaking. Glad I won’t’ be paying for repairs to rental.
As all Canadians know, since America has a large military and no National Health Care it is not a valid model for Canada.
“David Maundrell told The Observer that ‘there was no way’ that the average price of a condo in the Williamsburg market had risen from $817,000 in 2006 to $880,000 in 2007, as the Corcoran report concludes.”
A trip to Williamsburg to look at condos in the early fall of ‘05 was one of the moments that turned me into NYCityBoy. We looked at the new condos they were putting up. We still had the thought that we might buy something. The condos were in neighborhoods that still had a lot of bad stuff in them. One of the developments we had gone to look at was priced in the $700,000 range. To get from the condos to the subway you had to walk through a housing project. I couldn’t imagine my little wife walking through there on a dark and snowy night. That housing project will be there forever, no matter how much gentrification they do. We just thought it was crazy. Who would pay $700,000 for that?
It was after that revelation that I started searching the Internet for answers. I found this blog and the rest was history. Williamsburg condo-mania created NYCityBoy.
NYCityBoy,
Just a note to say that I really enjoy your posts - it reminds me of home. Although I live in California now (for the last 8 years or so), I grew up in the Bronx, and I guess I never really left it….
I remember as a kid (10 or 12 years old) walking by apartment buildings that were literally on fire on my way to grammar school (St. Philip Neri on the Grand Concourse and about 203rd street). They burnt down half the neighborhood it seemed (a bit of hyperbole, but 20 blocks south of there, and that’s probably spot on). That was 30 years ago. Now there are condos around there (not sure how much). 30 years before I was walking those blocks, the Grand Concourse was solidly middle- to upper-middle class, known as the “Champs Elysee” of NYC.
Real estate cycles are long, but they can be extreme. I always laugh when I hear people saying they’re buying “for the long term”. Wake up - when you’re buying in a bubble, “long-term” is your enemy. Mean reversion can be a killer.
Thank you. I’m glad that you enjoy my ranting. Here’s what I enjoy.
“Westchester County closed 2007 with foreclosure activity up 40.1 percent over the previous year, the county clerk’s office said yesterday. There were 2,166 new foreclosure actions started in the county, up from 1,546 in 2006. The 2006 level itself was up 42.8 percent over 2005.”
The “Westchester is different” crowd is having a hard time keeping their singing in tune. A woman that sits near me at work (different company) nearly paid $800,000 for a home in Westchester 6 months ago. I told her she was nuts. I heard all of the bulls–t that accompanies delusions and denial. I wish she had bought. She needs to be taught some really tough lessons.
The New York City crowd is still buying into the argument that we will stand alone while everybody falls but you can see their knees shaking. The attitude in our meetings is much different than it was. I heard chuckles the other day when I predicted that ‘08 would make people nostalgic for ‘07. I then stated, “I don’t think any of you people yet understand what we are facing.” The chuckling stopped. The stock market blew up on Wednesday and Friday. The confidence is quickly being replaced by fear. The stock market has been the leg holding this rotten stool up. That leg is being sawed from under them. Expect the attitude in NYC to take a brutal hit this year. That is my report from inside Fortress Manhattan.
Last week I drove through Williamsburg with my Mom. The purpose of the trip was to take a look at “luxury waterfront condos”, mid-800K to 1.5m. The waterfront neighborhood is a dump! Ugly and unsafe-looking.
I got a bit lost on the way out, and wanted to stop and look at my computer printout - my Mom started screaming “don’t stop, don’t stop”. She was that scared. Frankly, I couldn’t blame her - the area did NOT look safe.
Funny. One thing to ask yourself…… If someone GAVE you one of these for free with the stipulation that you had to live there for say 10 years and couldn’t sell it or mortgage it ……. would you take the deal?
What I actually said after the trip was - even you paid me, I wouldn’t live there.
No, I wouldn’t.
Sometimes I wonder (fruitlessly, of course) what prices would look like if there were no mortgages at all, or if people had to put at least 50% unborrowed money down.
Didn’t people used to build their own houses? When I first came to MT in the 70s there were still families who more or less built their own, often not very well. Or they had tradesmen buddies who helped.
When I moved to north Idaho in the 70s, I bought a portable sawmill and built my own house with help from friends.
You’re kidding, right? I ride my bike over there a lot and while I don’t know what it’s like at night, it’s nowhere near scary during the day. You guys from the suburbs by any chance?
More bailout attempts…
Ny State Assembly Speaker Silver proposes mortgage bailout.
New York taxpayers should come up with $180 million…
http://tinyurl.com/2tshh6
Thank goodness, NY post calls Silver reckless:
http://tinyurl.com/2v69ro
Good article. This Silver guy seems like the prototypical brain-dead pandering dip$hit that so many voters just love to elect. New Yorkers have gotten the politicians they deserve. This state in general, and this city in particular, is loaded with numbskulls, losers and mindless do-gooders. We’ll see how this works out for them. At least I have the freedom to flee this place if need be.
Even though it was a financial disaster for me, one of the happiest days of my life was when I quit my job and walked out of 55 Water St. for the last time (1982). Free to leave - and I did.
Sheldon Silver single handedly stoped Mayor Mike from building the horrible Jets Stadium in the middle of Manhattan. So, he isn’t all that bad.
As to pols in general:
“This state in general, and this city in particular, is loaded with numbskulls, losers and mindless do-gooders.”
As opposed to those great politcians elsewhere? Florida? Texas? California?
Nah they are the same all over, whatever color, red or blue. They are all one. One or two are good. Or try to be, then they are run over, roadkill.
What were you before NYCityBoy?
“The developer of a luxury housing complex in Asbury Park has bailed out of the project and sold the unfinished building and surrounding property to a new investment firm.
Wesley Grove is in the first of three phases that are expected to put nearly 750 townhouses, condominiums and duplexes — ranging from $400,000 to $800,000 — along Wesley Lake and Cookman Avenue on the south end of the waterfront.”
I live about 30 miles away from Asbury Park and go fishing there quite often. That city is filled with hookers, drug addicts/dealers and immigrant laborers (not to put them in the same category as the first two, but just observing the situation) to a large extent. Who in their right mind want to pay $400K to $800K for a condo there, even if it is next to the beach?
I once drove through Asbury Park on the way to Spring Lake and I tell you, this looked like a scary & ugly place. For reference, I also ended up in Chicago South Side all by my lonesome (which was rather interesting) and also been to Harlem plenty of times, incl. by subway.
Hello, all. I started reading this blog two years ago after noticing how fast the prices of houses for sale in my neighborhood (in Austin, TX - hello, txchick) had climbed, while my rent had gone up all of 20 bucks in five years. It awakened a latent interest in economics that led to reading Charles Mackay and John Kenneth Galbraith. So, first of all, thanks to Ben and all the posters for their insights.
I can’t help but notice that many of the predictions made here by various folks long ago have now made it to the MSM and are suddenly acknowledged as happening/true/obvious. Now that the bubble has been acknowledged and some well-deserved gloating has taken place, I keep reading just because I’m curious to see your take on the coming economic situation. I’ve gone from reading this blog occasionally to reading it every damn day now. I know posters like Jas and others are anticipating a catastrophic economic event in the wake of this. I find it fascinating to tap into the collective minds at work here. So - carry on!
And just as a side note, I am a broke musician with a crappy day job who probably has the lowest net worth of anyone who posts here. Just sayin’. I wouldn’t have been in the market for a house anyway. Just appreciate the blog on an intellectual level.
Fear not - you’re not alone in the low net worth (for now), I can assure you…..
and net worth is indicative of nothing. I regularly seek to lower mine by giving it away.
I’d rather be a broke musician any day than a cubicle drone.
Woo hoo. I’m an office drone. I’ve hit the big time. Take that, TXChick.
We all make our own hell.
Alas, I know few musicians who make their living solely from music, and most are cubicle drones or something else menial as well. But at least they are doing something more interesting in their off hours than their co-workers, who are no doubt chiefly engaged in the American pastime (I’m speaking, of course, of shopping for “stuff you don’t need with money you don’t have”)!
We are planning to go see one of those starving musicians in a few hours here. There isn’t any hell in the CityBoy household. Meet us in the Village, Chick, and we will buy you a drink. Maybe two.
Being a musician, and having people pay you $ to play music are 2 different things. I sing in all sorts of groups, but get zero cents but MUCH enjoyment !
Well, after reading “Your Money or Your Life” my reaction, rather than “Gotta get my financial act together for early retirement!” was “What if I get hit by a bus before I retire?”. So, while I am not a high roller by any stretch of the imagination I have absolutely no debt and spend little, and my low-paying job allows me some flexibility in doing what I want while providing the health insurance.
(I also have traveled to about a dozen countries, accumulated a ton of records, and have 8 guitars and a jukebox crammed into my one bedroom apartment…)
We all have our priorities, I suppose.
“What if I get hit by a bus before I retire?”
Somebody on this blog said - and I’ve taken it to heart as very good advice - “every day, take a little bit of retirement”.
Life is a challenge on how to balance enjoying the present while preparing for the future. You can do both and still be a happy person. If I can do it anybody can do it.
What if I get hit by a bus before prices come down enough for me to BUY A FRICKIN HOUSE!
Bub - I feel your pain.
The Husband is an ex-DJ, so we have about 2,000 vinyl records and 3,000 CDs.
We tend to rent places with lots of wall space….
Same here. my husband is a guitar head, always pinning for the next best guitar so we always have empty guitar boxes in the garage, waiting for his next score on e-bay. But he’s got a sharp eye for a good deal, so I encourage his obsession. All this fun on less than 100k!
“my husband is a guitar head, always pinning for the next best guitar”
What do you guys think of Carvin Guitars? I have an itch to check out the market for them this year, in order to reward my daughter for keeping up her practice habit. I am guessing that the absence of the home equity financing prop may open up the prospect of some good deals in the San Diego musical instrument market this year…
http://www.carvin.com/
Here’s the skinny from my man. He says you’d be better off going for a Fender American Strat or Telecaster if you’re looking for electic, since they hold their value, and Taylor or Martin is good for acoustic. He feels $300-400 is minimum you should target for an entry level guitar. Don’t pay retail, the list is about 30% higher than what you need to pay. Check out http://www.musiciansfriend.com or http://www.music123.com
“What if I get hit by a bus before I retire?”
What if you don’t?
Low net worth is not a bad as negative net worth.
Ghost - that’s what I was thinking. There are a whole lotta people out there who have negative net worth. Many of them don’t know it yet because they don’t want to know.
So you are telling me that all those ‘thousandaires’ out there with all those credit cards and a McMansion with debt up to their eyeballs aren’t rich? What is this net worth thing. You add up all the toys you own and SUBTRACT the debt load. I am not so good at subtraction thing so I just kind of left it out. I have stuff therefore I am RICH!! I can always refi to a lower rate or get no interest for 6 months. But my credit score is high so I will be OK. etc etc etc.
I personally can’t wait for the insanity to get flushed out of the system so we can get back to what made America great. Transparency in our markets, hard work and a handshake meant something real!!
“I am a broke musician with a crappy day job who probably has the lowest net worth of anyone who posts here.”
Don’t count yourself out. You could be a future Federal Reserve chairman.
http://www.noblesoul.com/orc/bio/greenspan-time.html
Nero (Greenie) fiddled, while money roamed…
Actually he tooted on his clarinet, but same difference I suppose…
Or you could be Tony Snow
I made my living as a musician for 30 years, though I gradually phased out and worked only weekends while doing the 9 to 5 thing. Eventually the weird hours got to me and I had to quit playing. But my net worth has suffered for sure, from all the diversion of my energies. I don’t know if it was worth it or not.
Many adults who studied a musical instrument as a child then quit express regrets.
And many an adult who kept practicing to eventually pursue professional training in music is prone to wondering later on in life about how high was the opportunity cost of this indulgence.
Comparison of local market median list prices Jan 07 vrs Jan 08. The divergence of movement across zip codes is quite striking. I have no explanation off the top of my head.
Community ZipCode Median List Price Change Percentage
Rancho Bernardo E 92128 $669,500 $582,500 -$87,000 -13.0%
Rancho Penasquitos 92129 $665,000 $625,000 -$40,000 -6.0%
Poway 92064 $875,000 $672,000 -$203,000 -23.2%
Carmel Valley 92130 $1,180,000 $1,349,000 $169,000 14.3%
Rancho Bernardo W 92127 $1,353,950 $1,195,000 -$158,950 -11.7%
Rancho Santa Fe 92067 $3,550,000 $3,899,500 $349,500 9.8%
Update on my friend looking to buy in 92075:
As I suspected, the owner who said her house was in escrow at her wishing price just called my friend to say the potential buyer wanted her to carry the 2nd. Couldn’t find a bank to loan on an overpriced home, imagine that! However, she’s not willing to lower her price, said she’d rather fix it up and rent it, then play ball. We’ll see. The house is 40 years old, needs a ton of work, but because there’s a potential ocean view if you build a 2nd story, the owner won’t budge because she sees the sale as her ticket to retirement. Typical FBO. I’ve been advising my friend that time is in her favor…
Solona Beach is a real mixed bag of price increases and decreases right now. It has some nice upscale areas, but also some old run down ones…
Honest to god, my friend’s realtor keeps saying “it’s different here.” Proximity to the beach and the Del Mar Race track, yaddah, yaddah, yaddah, and folks buying are rich with money to burn. We’ll see.
Upon reflection, I’m in the Jas Jain camp.
The unwinding will be brutal. Along the way houses will get really cheap but living in them without services will take a daredevil.
- What do you mean by “without services”?
- Wouldn’t whatever you mean by this be at best a temporary service disruption?
Hey folks, long time reader, first time poster.
This blog has helped myself and a number of coworkers stay away from LA’s stupidly-insane real estate market. Thanks Ben!
To contribute, I’ll add what I’ve been seeing around downtown LA, where I live and work. I don’t see too much about our area on HBB usually, so maybe this will be of use to someone.
There’s been a number of conversions from old office building and skyscrapers into lofts and condos happening here. I’d say at least 10,000 units added to what was previously an uninhabitable area. The building has just gone bananas and for many years it seemed every nook and cranny in the downtown area was being announced as condo conversions.
When I first started working downtown in 2002 one of the first loft buildings opened up at 6th/Spring and were selling for the low $200,000s, which to me seems reasonable. The same units last summer were pushing $600,000 without parking. This is not a good part of town, either.
Fast forward to today, and we’ve got a number of cracks showing. Santee Lofts is giving away a free MINI Cooper with each loft sold. Market Lofts is offering $25,000 for “whatever you want” if you buy one of theirs and has dropped the opening price to $417,000 (wonder why?). 1100 Wilshire still has half vacancy after almost a year and a half and has taken to putting up an absolutely enormous billboard facing 7th St. of some hot guy jumping into their pool with “HOMES FOR SALE!” under him. Chapman Flats (starting at $300k) is sending me glossy offers in the mail for free closing costs, two years HOA, and $10,000 off their units, and they haven’t even started move-ins. Vero at 1234 Wilshire opened with great fanfare a year ago, yet is still dead as a doornail. Tons of their units up on ziprealty, and they started out pretty reasonably priced as well ($300s), however I rent a similar-sized unit down the street for $1150, so it’s a little out of whack.
That initial building I saw in 2002 (Bartlett Building) now has about six foreclosures available. Dozens of lofts are on ziprealty with massive price drops. One in particular, 312 5th Street #613, has seen its price drop from $449,900 to $279,900 and it’s still sitting on the market.
So there’s my little contribution to Ben’s blog. Downtown LA is showing major signs of distress and prices are dropping like a rock. Thank goodness we have tons of new inventory coming online this year!
-Drew
Drew,
Please keep us informed of the downtown LA condos. Why am I interested? One of my cousins it itching to buy one. Thankfully I’ve persuaded him to wait… but his wait times are in four month blocks… (smart kid, very young)
This is the ‘great squish down’ that has been anticipated for a long time. As better and better units squeeze under that $417k limit, it forces the prices of ‘lesser units’ further down the food chain. When there is a large number of new yet unsold condos… it just happens faster than with other types of housing.
As you find buildings *with parking* dropping in asking price (or even selling out), please post in these ‘local market observations’ threads. I would appreciate it.
Got popcorn?
Neil
Neil - IMHO they’ll be giving away downtown condos upon opening up a bank account with the lender. The amount of residential (condo and rental) currently available is mind bending. And they’re still building. You might suggest that your cousin keep an eye on downtown LA at themls.com.
Will they be giving away a Toaster as well with the units?
Now that I would be interested in…current toaster is toast.
Wow, and all the time I was growing up in LA I never heard of anyone wanting to live downtown. It must be those lively urban streets, now?
Thanks for the info, and welcome…
My dad was quite a wheel on the Pacific Stock Exchange in the 1960’s, when it was a rival to the NYSE.
There were quite a few days i’d get to go play in his office on Spring Street, and hang out in the computer room and watch the tapes spin & punch cards fly, in that temperature controlled room.
The PSE died, and Spring Street has been no place for anybody to be, for 35 years. It’s where you pick up a Greyhound bus, dig.
I’ll have to do a drive-by, next time i’m deep in the heart of the city of angles…
Aladinsane,
I mostly concur with the sentiments about spring street but on 300 block or so there is a large office bldg which houses some very scary Cal State Agencies. And just up the street on corner of first you run into some equally scary, actually gruesome federal and state court bldgs. CA Superior ct or federal district courts i don’t know which but there is a whole clusterfuck of fed and state agencies around that area.
Bet back in the 60’s La Dwtn was better and cleaner before the invasion of illegals turned the inner ring neighborhoods surrounding dwtn, and large parts within it, into third -world tenement cesspools.
I Used to travel into dwtn LA as part of my job from 2004-2007. I was there at the height of the dwtn bldg boom when all those residential h-rises and offices were springing up along grand and flower aves near staples. Vero was dead even before it started going up in 2005(bad area). 6th & spring is close to some federal & state office blds but still a bad area. 1100 wilshirw sits almost over the 110 fwy and is a really ugly noisy place to reside in. It was a former office blvd( i think )rather hastily converted into living units , and may be the worst sited residential hi-rise in dwtn , or may be Vero is, or little tokyo lofts.
La dwtn is loaded with turkeys, i mean badly sited condos/lofts/apts. You step out from one of these onto the streets and if U don’t run into the homeless U get to walk on dirty gummy urinated sidewalks, meet illegals fresh from the border, tijuana roach wagons, ect. The worst places are the far northeast corner near alameda and 1st, the garment district, the entire warehouse district east of Alameda , areas close to the 10 fwy along the south margin, and the pico-union district west of the 110 along wilshire . South grand ave/ flower st district near staples need a lot of cleaning up and trees planted along the barren pavements but may be salvagable.
The best sited living units are the library lofts on sixth an hope directly across from the LA central library. Within walking distance to every notable site in dwtn though U might have to rub elbows at night with some indigenous homeless.
“So there’s my little contribution to Ben’s blog. Downtown LA is showing major signs of distress and prices are dropping like a rock. Thank goodness we have tons of new inventory coming online this year!”
This year 2008 might be the time when dwtn la condos/lofts might be had for bargain prices. With the economy and RE values tanking all over LA, recession in the air and with the huge dwtn inventory put up and still coming to market there will be bargain units available for around $200,000 if U have the stomach for dealing with some dwtn squalor and the homeless.
The best bargains located in the worst squalor distrcts such as garment district, warehouse district, areas of alameda st around little tokyo & pico- union will have the best bargains in condos/ lofts in 2008 but U better not have kids and have a taste for urban jungle living.
Not sure I would consider those bargains at any price.
If these “bargains” are the due to foreclosures, then the local HOA may have difficulty making its budget. Either maintenance will suffer, or alternatively, there will be substantial increases in HOA dues.
Then too, nature abhors a vacuum. Especially in downtown areas, these condos may morph first into tenements,and then into slums.
I think people were sold a bill of goods, imagining that simply building high-end condos without funding the necessary ancillaries of a true ‘urban’ life-style, would reenergize downtown LA.
Well, the prices in my area are coming down, but what difference does 100k make? still can’t afford a house, now they are ONLY 400k. My savings from my condo sale in 05 are being eaten alive by my rent, 1500. My sister says just move. Where? not going to the ghetto, I just wonder how much longer these people can hold out for these prices. Same houses listed day after day, reo’s listed at 400,000. I don’t see the banks trying to get rid of their inventory. Someone on this blog said maybe January the banks would start unloading, I know its early, just not seeing it.
Something’s wrong with the numbers. If your sale proceeds are in CDs that yield 4.5% - 5.3% (currently easy to get), and you are using the interest (after estimated taxes) to offset your rent, and if you’re renting in a condo, it sounds like your budget for buying a place is more like $200K or less, because your mortgage plus condo fees and taxes on a new place will eat you alive. I’m just guessing at your proceeds, of course, but $1,500 rent after subtracting interest on savings does not afford you much of a purchase price when you add in all monthly costs of ownership.
(and you’re not even having fun at $1,500.)
I’m going to use this one as a barometer of sorts for my neighborhood, as it went up THIS SUMMER right nearby and the hammering and loud tejano jams of the workers carried far enough to wake me up on Saturday mornings. Tore down a small house that actually fit in with the neighborhood to build this monstrosity…
http://tinyurl.com/yo8p72
This artists rendering doesn’t do justice to the fugliness…the “guesthouse/apartment/office above detached 2 car garage” isn’t shown and is DIRECTLY IN FRONT of the condo, completely filling the front of the lot. The garages face each other so closely that there is no way an SUV could possibly fit to even pull in there…stucco over particle board construction (but with granite, natch)…it’s like a summary of everything I’ve read about on this blog…$665K.
In Austin there are so many new condo projects started recently that it’s hard to tell if there’s any slowdown. Down the street from the house above is a new no doubt “luxury” condo/apartment complex being built right next door to existing cheap apartments. They just broke ground recently. I wonder how many of these places will actually be seen all the way through to completion?
Speaking of sticking out, these fugly townhouses are still for sale in Missoula at $283k though I saw it was dropped 10k. They’re in an older nabe of mostly craftsman stuff - but oh they’re GREEN and so moderne. Bleah..
Green does not have to look fugly. What is with bldrs or ? designed these things. Just like cars, they could make a Jag into a green car..but they won’t.
Local (N San Jose) condo dev with ~160 units in 8 buildings has had 15 listings on the market since late August; 2 sales, 10 withdrawn, 3 still on the market. Listings at $405-410K for 1B, down from $450K at peak, 2B w/ nice loft is hanging tough at $568K.
Hey NYCityboy (and any others interested in this market) wanted to comment on your Observer story quote about Williamsburg — here is the full link:
http://www.observer.com/2008/williamsburg-2007
Check out the threatening comment on this story too - Can’t reiterate enought that manhattan brokers keep very tight-lipped about any bad news -and spin hard the other way. But it’s clearly starting to be an interesting blowback scene from smaller outfits wanting to preserve their reputations (and convince buyers to lower prices so they can move inventory) to the bigger firms that have a more vested interest in keeping the illusion going.
You’ll probably get a better sense of the market from watching back-and-forth moments like this than from anything you’d read in the press. Along these lines, the NYC media reported (without any analysis) data from an economist at the realty firm Brown Harris Stevens, saying how great the Manhattan market was doing without posting any specifics on methodology or potential conflicts of interest (their chief ‘economist’ Gregory Heym works for a realty company and has served on the Real Estate Board of NY - data spinners extraordinare)
This softening market is going to get spun into gold until some good editor allows some good reporter the time and resources to compile actual sales data from city records and compare it to these RE “market reports.” Readers should start demanding the press do this instead of simply polishing up and passing on the RE industrys press releases as fact.
OK, so I just took my own advice and compared the brown harris stevens 4th Q data — with Zillow (which is not perfect, but does take into acct actual tax records)
according to brown harris, median prices for manhattan apts rose this way -also put in Brown harris’s numbers at time prior quarter reports were issued - because they differ from totals listed in the latest report):
(but earlier BH report said)
2006 4thQ - 725,000 760,000
2007 Q1 755,000 770,000
2007 Q2 795,000 840,000
2007 Q3 815,000 815,000
2007 Q4 828,000
But data taken from Zillow indicates median prices are actually higher but dropping (tho it doesn’t break down by quarters -and may be higher because it’ll include a few whole townhouses amid the city’s vast majority of apt sales, which brown harris only measures in its overall tally):
Median sales price - Past 12 monts: 876,000
Median sales price - Past 6 months: 875,000
Media sales price- past 3 months — 837,000
Median sales price, past 2 minths — 785,000
So, it looks like Brown Harris is revising median apt. sales figures in earlier reports, and gosh, it looks like median prices are going up. But Zillow’s measure of median sales shows prices dropping..makes me go hmmm….
Sorry about tabbing - BH earlier reports said median house prices were:
4Q06: 760k
1stQ07 - 770k
2ndQ07 - 840k
3rdQ07- 815k
Some evidence of the slowdown at Big Sky. It dosen’t come from our local media, the Bozeman Daily Cover-up, but from a far more creditable source. The December 22 issue of Montana Law Week. An Arbitration between Ed & Sally Stilwill and Chad Rothacher, DBA as Rocky Mountan Rustics (RMR). It was it a dispute over the amount owed on a unfinished home.
Both parties agree on one thing, ” Both Stiliwills and RRM testified to a downturn in the economy and construction in the Big Sky area in 2007.”
This was a legal procedure, both parties sworn to tell the truth, subject to cross-examination. Not the usual media BS of finding two real estate spin-artists as sources for a story to cover up unpleasant truths.
#%*#@ credible, I am having a bad spelling day.
Gotta love those “cheap” DFW houses:
http://dallas.craigslist.org/lgs/529470457.html
‘She’ should NEVER have closed until the place was fixed. Bldrs always cut a deal when they screw up and they don’t have their escrow closed.
I’m in the Orlando area; just had lunch with a couple who are good buddies of ours. Her brother has a house in a neighborhood that is in Orange County and that the City of Orlando wants to annex. Virtually every homeowner apparently voted “no.” Darned good thing, because Mike Thomas’s scathing op-ed in last weekend’s Sentinel (link below) made me believe that the city is toast. The mayor is committing to over a billion in debt to build a new arts center and sports complex and the county government wisely said “no deal” to participating in the financing. Now hundreds or potentially thousands of condos under construction or newly built in downtown O-Town are unsold and may rot on the vine for a long time. So how’s this new debt going to be serviced? Sure glad I sold and moved out of the city.
http://www.orlandosentinel.com/news/columnists/orl-miket0108jan01,0,186560,full.column
Or at this TinyURL link (above full one is for posterity)
http://tinyurl.com/yra8zt
“Arts Center” is a euphemism for urban renewal in a blighted section of town in order to give bums an interesting and pleasant place to congregate.
That’s exactly what happened when they built the new library in downtown Orlando something like 20 years ago. The bums hang around like flies.
Dirty Deeds.
http://www.businessweek.com/magazine/content/08_02/b4066046083770.htm
We are rapidly headed toward homesteading/free property like hasn’t be seen in this country since Oklahoma.
Very interesting…
Funny how the best advocates for homeowners have been in a couple of rust-belt towns, Cleveland & Buffalo.
Last month when the judge in Cleveland asked Deutsche Bank for proof that they held title to homes they had foreclosed on, and they didn’t have any…
Was seminal, perhaps?
Dirty Deeds
The mortgage crisis has blighted the landscape with boarded-up houses. Now a few cities are holding giant lenders accountable for what foreclosure leaves behind
by Michael Orey
January 14, 2008
On Dec. 17 in a windowless Buffalo courtroom, Cindy T. Cooper, a prosecutor for the city, buzzes among a dozen men in suits, cutting deals. “You’ve got to unboard [the house], go in, and clean it out,” she tells one. “If all the repairs are done quickly, I wouldn’t ask for any fines.” To another, she says, “the gutters weren’t done right,” and asks to see receipts for the work. It’s “Bank Day” in Judge Henry J. Nowak’s housing courtroom, more typically a venue where landlords and tenants duke it out over evictions and back rent. Instead, Cooper is asking lawyers for CitiFinancial (C), JPMorgan Chase (JPM), and Countrywide Financial (CFC) to fix problems like peeling paint, broken masonry, and overgrown or trash-filled yards at houses the city says the banks are responsible for maintaining.
I am puzzled by why these megabanks are stuck with the underlying (REO), as I thought the main advantage of loan securitization was to get ill-fated loans off your books before they blow up. How did C, CFC and JPM get stucco with so many vacant houses?
These people are awesome. Is there any possible way Cooper could be lured back to California? Her services are sorely needed here.
“Cooper, as an intern, suggested a tactic that the judge adopted. When banks ignored summonses for code violations, Nowak began entering default judgments against them and imposing the maximum fine, which can reach $10,000 to $15,000. For a big bank, that’s not much. The real pain comes because the fines give the city a lien that impedes the banks’ ability to buy or sell other properties in the area. In addition, when lenders come to his court to get residents evicted from a particular property, Nowak refuses to grant the request until the bank addresses violations outstanding on other properties. Judge Pianka employs similar tactics in Cleveland. On Dec. 10, for example, he assessed a $50,000 fine against an absentee defendant, Mortgage Lenders Network USA, for 21 code violations at a home.”
Cooper for U.S. national mortgage czar…
‘That slide into decrepitude is exactly what Cooper is trying to head off in Buffalo. In February, she joined the city’s law department, where one of her duties is prosecuting banks. She and Nowak each say their main objective is not collecting fines but bringing banks to the table to try to find constructive solutions for dealing with abandoned property. That doesn’t mean borrowers are off the hook. Cooper typically charges both borrowers and lenders, and Nowak may fine homeowners or sentence them to community service. “Can both be responsible?” asks Cooper. “Absolutely.”‘
In the SoCal mountains this weekend waiting for the storm. Snow is falling now, forecast for possibly 2 ft above 7000 ft. by tomorrow night
And now for the HBB report.
Big Bear Lake Houses Listed as per trulia: 413
Avg. Listing Price: $583,921 (wk ending Dec 26) Up 2.9% from last month.
Median Sales price: $360,128 (qtr ending Nov. 07) Down 0.3% from prior qtr.
So much for aladin’s water shortage scare. (I am still scared of the man-made shortage to satisfy the court ESA ruling on water shipments to the southland, though.)
Never underestimate the stupidity of Vancouverites who think this city is immune to the US real estate collapse - that slow motion train wreck south of here… Wouldn’t the sane real estate investor say “haven’t we seen this B.S. before”?
While laying down in my rented home’s backyard yesterday half dead with the stomach flu I overhear the neighbor next door talking loudly on the phone ” we won’t make a dime off the sale ” and then moments later ” don’t pick the oranges from this side of the tree or the house won’t sell”. Well sure enough this am I see a for sale sign out front of the house.
This is Phoenix AZ in the city of Ahwatukee, yes things are getting bad all over. I was able to watch some daytime TV CNBC on Friday and heard even perabulls like Joe batapaglia ( spelling? ) say their is no growth left in the US economy. Secular change in the wind? My whole investing experience started in the early 1980’s , whats a bear market in a Secular Bull market, its a blip. Are we now headed for a Secular bear market ? Could the demographics favor one ? 10 years ago I would bounce back from a stomach flu in a day now I feel like a truck ran me over… getting old at 47 and so goes the Baby Boomers just in time for the giant recession.
You’ll know things are really bad in the U.S., when the phone and cable and cell companies decide we should go back to the old shared ‘party’ lines.
On the plus side, you won’t have to strain to hear your neighbor’s conversations. All you’ll have to do is pick up the phone!
Where are you in Ahwatukee? We’re near each other.
Financiers, Fix Foreclosed Homes
Lenders and other financial institutions that end up owning mortgages should pay for repairs to dilapidated or hazardous foreclosed properties. Pro or con?
http://www.businessweek.com/debateroom/archives/2008/01/financiers_fix.html
Can someone please remind me of the rate of first payment defaults on subprime loans made in 2005-2007?
Con: Hold Damagers Responsible
by Marco Cercone, Rupp, Baase, Pfalzgraf, Cunningham & Coppola, LLC
Imagine lending your friend money to buy a car. As part of your agreement, you reserve the right to take back the vehicle if he fails to make a payment. One day, after making payments to you for years, you learn your friend cannot continue, and you initiate proceedings to seize the car. Although the title hasn’t transferred to you yet, you learn the automobile in question is on its last legs and requires thousands of dollars to repair. It doesn’t seem fair for you to have to pay the repair bill since you don’t own the car yet, does it?
The comments following the Pro/Con leaders are most fascinating. The first one ends with a very questionable suggestion; if it were correct, why wouldn’t the banks already be following it?
“If a lender brings a dilapidated house back to its former glory, it can sell it in the marketplace for a profit later on and make the rest of its loan and repairs back with a profitable end to an unpleasant story. Lenders should look at this as an opportunity to expand into real estate and prepare for the next upswing when the homes being sold and abandoned now are being snapped up by prime borrowers, not as a crying game of who did what to what house.”
van Gogh,
IMO, Vancouver is a wonderful place to live. It is a very beautiful city with a lot of amenities.
I just got back from Las Vegas. Now, THERE’S a dump. Why prices got so out of hand down there is beyond me…
We are down in Costa Rica on vacation at the time and I am reporting that Costa Rica is also most certainly experiencing a real estate bubble, particularly on the beach. Take the town of Tamarindo. Once an idyllic surfer´s village, even as recently as 2001 when I met my Costa Rican husband, greed has so thoroughly changed the face of this place (can you say CONDOS?), that they now struggle with the horrific issue of major fecal contamination of the beach and ocean due to lack of infrastructure to support the rapacious greed, I mean, development. Yes, these condo-building greedmeisters from North America (usually Americans or Canadians) come here, take a dump on the environment and the beauty of this country, never having the intention to even live where they sow their destruction, take their profits and flee. The mess they have left behind is not only aesthetic, but is costing a lot to those who had nothing to do with it. Tourism is down 50% in this, the high season. That is very bad. Why? Because word got out about the crap issue and that is no small part due to the condo-mania that has hit here. This year spells disaster. Costa Rica is joined at the hip to the U.S. economy, and there is a 50% rate of foreigners who buy here returning home, so I shudder to think the number of properties that wll be for sale in the coming years. Oh yeah, and we have MAJOR water issues. I told my husband we are buying in a place with lots of water and enough land to grow our own food. In fact, we are going to be realtors but focusing on selling farms. Food prices here have skyrocketed too. Self-reliance inasmuch as its possible is not a bad idea, even if you are still going to be on the grid.