A Painful Return Trip To Reality
The Missoulian reports from Montana. “Missoula’s real estate climate, while sheltered from the extremes in other markets, cooled in 2007. ‘We didn’t see the huge price increases and so we’re not seeing the dramatic drops,’ said Mary Marry, president of the Missoula Organization of Realtors. ‘We’re not seeing people who went so far out on a limb as they were competing with investors.’”
“But about 200 fewer homes have changed hands. There were 1,303 homes sold so far in 2007, as compared with 1,505 in 2006. Prices have dropped for some homes and some listings are taking longer to sell. ‘I think we’ve taken a little bit of a speed bump,’ said broker Sherril McCabe.”
“Kim Chambers, the incoming president of the Missoula Building Industry Association, said…houses constructed in the $150,000 to $215,000 price range remain strong. But she has noticed a slowdown in speculatively built homes in the $600,000 range.”
The Bozeman Daily Chronicle from Montana. “After the boom year that was 2007, and in the face of a host of potentially worrisome economic indicators, local businesses are trying to remain hopeful. 2007’s roller-coaster stock market, credit and mortgage woes, and a slowing housing market have caused ripples and echoes here in the Gallatin Valley.”
“‘Shawn Cote, government affairs director of the Southwest Montana Building Industry Association, said the ongoing nationwide housing slowdown combined with a glut of new homes on the market locally will have an impact.”
“‘Given what’s going on nationally, most builders are anticipating a slower building season,’ Cote said. ‘You’ve got the liquidity crunch, and that’s how homes get built - through credit. A lot of builders are repositioning themselves, scaling down the number of lots and homes they’re building just as a protective measure in case there is a continued softening of the market.’”
“‘We’ve got a lot of people on the fence trying to time the market, which is never a good idea,’ Cote said. ‘This is a good time to be buying.’”
The Mail Tribune from Oregon. “For sellers and agents used to riding the crest of the 2002-2005 real estate joy ride, 2007 was a painful return trip to reality.”
“Gross sale volume, including rural sales, declined to 2,289 in 2007, a 16 percent drop from 2,727 transactions in 2006. You have to look back into the 1990s to find a lower number of deals.”
“Figures compiled by SOML show the median sales price of existing Jackson County homes declined to $229,000 in December from $258,000 a year earlier. For all of 2007, the median price was $260,000, down 3.7 percent from the $269,500 median in 2006. New construction saw a 19.2 percent decline to a median of $289,900 for all of 2007. The 2006 new construction median was $358,900.”
“‘The sellers’ market of the past has been replaced by the buyers’ market of today,’ said Colin Mullane of the SOML board. ‘Sellers who are moving within the valley have the advantage of offsetting any loss, perhaps buying into a lower-priced home, or a better quality home at a lower price than previously experienced.’”
The Olympian from Washington. “Sales of single-family homes and condominiums in Thurston County dropped 32 percent in December compared with a year ago, but median prices held steady in the same period, the Northwest MLS reported.”
“Buyers in the county found more choices last month as the number of single-family and condo homes listed for sale was 1,739, up more than 12 percent from 1,546 at the same time a year ago.”
“Many brokers say 2007 was a year the real estate market corrected itself from the record 2006, when more liberal lending practices boosted sales but also resulted in rising mortgage foreclosures.”
“‘I believe the bottom has arrived in the Puget Sound market and from here on prices will stay level or advance slightly in 2008,’ said Dick Beeson, broker in Tacoma.”
The Kitsap Sun from Washington. “Above-normal rainfall and floods contributed to the expected seasonal housing slowdown in western Puget Sound in December, according to officials from the Northwest MLS.”
“Mike Eliason, executive of the Kitsap Association of Realtors, said that it was only a matter of time before the housing market would come back to earth.”
“‘When you have double-digit increases in home prices year after year after year, at some point it will drop off, particularly when local wages are not increasing by the same percentage,’ he said. ‘I think you’re seeing that now.’”
“It shouldn’t surprise anybody that as the number of pending sales and closed sales decreases, sales prices will drop, Eliason said. ‘I think we’re getting back to a more stable real estate marketplace,’ Eliason said. ‘The correction in the market has been good, particularly for first-time homebuyers. There need to be places for our children and grandchildren to live.’”
The News Tribune from Washington. “Pierce County housing prices held steady last month at nearly $270,000 after three consecutive months of year-over-year price dips. The number of closed sales, however, continued to fall, according to the latest figures released Monday from the Northwest MLS.”
“Sales in the typically slow Christmas season slid by 39.3 percent compared to December 2006.”
“Listings were up, though not nearly as much as in King and Snohomish counties. Pierce County had 7,109 houses and condominiums for sale in December, according to the listing service – 34.5 percent more homes than the same month a year before.”
“Patti Dains DeYoung, (an) agent who’s been selling real estate more than 20 years, said today’s market feels much like the mid-1990s: aggressive pricing, frustrated sellers and homes staying on the market.”
“The biggest price drops were seen in North Tacoma (down 11.8 percent) and the Lake Tapps-Bonney Lake area (down 10.3 percent) with the largest boosts in the Graham area (up 33.8 percent) and DuPont (up 14.6 percent).”
“The number of sales was off by more than 50 percent in Fife and Tacoma’s North End.”
The Seattle PI from Washington. “Nobody can deny now that Seattle-area home prices have declined. The question is: Have they hit bottom?”
“A typical house in Seattle and King County sold for less in December than a year earlier, a milestone, according to data the NMLS released Monday.”
“The city price was down 9 percent from a high of $501,000 in August, while the county price was off 9.6 percent from a peak of $481,000 in July 2007. Home sales dipped 14 percent in Seattle and 28 percent in King County last month from December 2006. Pending sales, which can be a better indicator of the most recent activity, dropped by 23 percent and 34 percent, respectively.”
“That eases the recent frenzy of bidding wars and waived inspection contingencies for potential buyers. ‘The competition is a lot less,’ Jessica Gartner said outside a Greenwood open house on Sunday. ‘You can take your time looking.’”
“Meanwhile, the number of homes on the market in December had gone up 70 percent in the city and 61 percent countywide from a year earlier.”
“‘We’re willing to wait to find something we like,’ said Dan Mellott, who moved to Seattle from Philadelphia in November.”
“Patrick Anderson, who owns a Seattle house and is interested in downsizing, thinks prices are still too high. ‘I think it needs to soften up a little more,’ he said.”
“The changes leave others unsure what to think. ‘There’s all this talk about prices going down. What if it tanks after we buy, or what if we wait and it goes the opposite direction?’ Mellott said.”
The Seattle Times. “‘One of the biggest things slowing down the local market is the memory of multiple offers and sellers being unrealistic in accepting the fact that the gold rush mentality is gone,’ said Paul Simpson, an associate broker. ‘What we now have is what I like to call a normal market.’”
“The owner of the historic Smith Tower in Pioneer Square is scaling back its proposal to turn all of the building into residential condominiums, papers filed with Seattle city agencies indicate.”
“It now plans to convert just 12 top floors in the skinny part of the tower into condos, with a single unit on each floor.”
“Walton Street Capital, the building’s owner since 2006, created a big buzz last February when it sought — and ultimately got — permission to convert all but the ground level of the 38-story office tower into 150 condos.”
“The floors slated to remain as offices contain about 11,000 square feet of floor space each. The floors scheduled to become residences are smaller, about 2,000 square feet each.”
“The downtown-office market is booming, noted Matthew Gardner, a Seattle real-estate economist, while the condo market may be slowing. ‘This would certainly limit one’s exposure,’ he said.”
The Bellingham Herald from Washington. “The 2007 Whatcom County housing market numbers looked very similar to 2006, although the fourth quarter hit a sour note, according to a report.”
“The Whatcom County median home price was $290,000, an increase of 2 percent over 2006, according to Lylene Johnson of The Muljat Group South office in Fairhaven. The modest increase ends a four-year run of doubledigit increases.”
“Particularly striking was a slowdown in home sales in the fourth quarter: Whatcom County was down 14.8 percent compared to the fourth quarter of 2006; in Bellingham home sales were down 16.8 percent for that same period.”
“There are now pickier buyers out there, said Mark Brown, president of the Whatcom County Association of Realtors. ‘The buyer mindset is they are in no hurry and may be waiting until the spring to see what will happen,’ Brown said.”
“In this climate, it’s crucial to price the home correctly, Brown said. ‘I won’t take a listing now where the seller insists on pricing it 5 percent over market value,’ Brown said. ‘It’s a waste of time if the home is overpriced, because it will sit while buyers wait to see how far the price will be reduced.’”
Goodbye CFC and hello DJIA 12.5K.
WOW!
JUST WOW!
This is going to be heckuva of a recession.
TIMBER!
I didn’t glance at the market for a good 40 minutes. Man was that a shock to see from the roughly zero day to down more than 200…
Woah.
More fuel for the fire. I say: Bring it on. I listened to a financial show this morning. One of the only ones I actually trust. A caller asked if the host thought there would be a recession. The host replied that did he think people should keep getting fat? Recession? Hell ya- bring it!
should see a decent bounce tomorrow. not for any substantial economic reason, just psychology.
Yes… A hope for ANOTHER Fuggin rate cut to help devalue the dollar even more. Of course traders will be all giddy about that. The only time that the stock market has gone up at all for months now has been almost entirely reliant on promised rate cuts and the firing of company CEO’s, none of which is economically beneficial.
I don’t know…….something feels different about this one.
could you please elaborate on your comment “…….something feels different about this one”
I too have become very uneasy, but then again what do I know, I only read everything on mtge banks etc. and then short them.
thx for any thoughts you care to share
B-B-But, the consumers will save us:
WASHINGTON (AP) — Consumer borrowing rebounded in November as credit card debt shot up by the largest amount in six months.
The Federal Reserve reported Tuesday that consumer borrowing rose at an annual rate of 7.4 percent in November, far higher than the 1 percent rise in October.
The category that includes credit card debt surged at an annual rate of 11.3 percent, a six-month high, reflecting the fact that shoppers are continuing to rely heavily on their credit cards to finance purchases since home equity lines of credit have become harder to get.
This whole unraveling is going to accelerate even more once this source dries up. The retail and financial sectors will continue to get hammered . . . oh the humanity.
Excellent point. For several years people could HELOC their lifestyle. With that gone, you see the credit cards get whipped out again. Once people are maxed out on cc’s, game over. UNLESS Uncle/King Georgina gives everyone that $500 rebate/coupon. Then it is plasma TVs for everyone again, if not that 2nd ord 3rd home.
This is truly hilarious. $500 per person is not going to make a bit of difference for a FB. It barely feeds the alligator for a week.
Is this going to be $500 for every member of a household, for each adult, or just per household?
And is this going to be a real “freebie”, or just an advance on the tax refunds? (which means that you might have to give it back April 15)
We as a nation have become so good at prolonging the inevitable, (i.e. borrowing beyond what we have the ability to repay, admitting to cheating or using steroids) that the $500 tax credit in discussions now is “in the bag” IMO. It will collectively “buy” us another month or so . . . big whoop.
At this point, I don’t much except that this was one idea floating around in the queen’s head. I can’t recall where I even read it because I just dismissed it as more loony economic mumbo-jumbo.
“just an advance on the tax refunds”
LOL, I don’t know how many heated “discussions” I had with friends over that one.
Advance. again. Just an Advance.
I mean, where else are they going to find this kind of loot?
So does one extrapolate that only so-called christians are propping up the economy due to their xmas shopping?
LOL
You guys that keep talking subprime are NOT getting it. The banking system has suffered a $5 TRILLION loss.
Mortgage debt is selling at less than 50 cents on the dollar in the secondary market. Nobody want to own the debt. U.S. banks have recorded $10.1 TRILLION of mortgages on their books. If that $10 Trillion of mortgages is only worth 50 cents on the dollar, then the banking system has suffered a $5 trillion loss!!!!!!
Never in U.S. history have losses ever been so high. The S&L crisis of 1990 was a $150 billion problem. It took 2 years to clean up, took 20% off the S&P 500, and put the economy into recession. This problem is currently 30 times that size and is growing to include credit card debt and auto loans, not to mention the British financial system.
NOW DO YOU GET WHY THE BANKS ARE SELLING LIKE IT WAS DEPRESSION?????
Between the Fed and the ECB, nearly $1 Trillion of liquidity injections have taken place. They have done NOTHING! Never in U.S. history has liquidity injections been so high. If they don’t take hold, we will be in a liquidity trap. If they do take hold eventually, we will be looking at hyper inflation. Choose your death pill. BOTH will kill the market.
To bring up an old expression - can’t push on a string.
I totally agree. I don’t think we will see hyper-inflation, though. The reason? The banks are going to suffer huge losses. Who “makes” money under our basic economic theory? Banks. If you look at the dollar, it is above the recent lows by a pretty good amount and if you look at the 10-year treasury (TDX), deflation is a real possibility. People with money are squirrelling it away. I know I am.
“For sellers and agents used to riding the crest of the 2002-2005 real estate joy ride, 2007 was a painful return trip to reality.”
Welcome back to the future…
WOw, wow, wow! Is right! CFC is toast. What about FED and DSL? Are they still worth shorting?
I hope people still need tools in 2008.
Countrywide Tells Judge It ‘Recreated’ Letters - [2008-01-08]
I guess this is the new economic model we all have been hearing about. Just lie!
Yeah, that was REALLY, REALLY bad. The judge out to throw the book at CFC for that evil manipulation because it calls into question the integrity of anything that Countrywide brings to court. I’m generally pro-business, but this, to me, is the sign of a rotten corporation in need of dire punishment.
Lender Tells Judge It Recreated Letters
Oops.
The judge out… = The judge ought…
Cats living with dogs!
San Diego home prices down 5%… IN A MONTH!
http://www.voiceofsandiego.org/articles/2008/01/08/toscano/846decprices010808.txt
SD down 5% in a month, 15% is not out of the question Feb to May?
Little San Diego tried so hard to be Los Angeles, and seemed to have come through…
Traffic jams & debt jams
LA Traffic and OC Finances
That graph looks like DC metro’s.
Many thought the start of a new year would bring better news and that a end to the crisis was near with a late 08′ come back, that looks like a complete mistake.
Energy,housing, jobs, the war and of course the losses in the mortage markets will sustain itself for some time. Even a slight upturn in sales late in the year isn’t enough, the ship has pretty much hit bottom, the question that all must now answer is the water to deep to pull the vessel up.
Many jobs and the well being of the coutry is at stake, all in the know see the problem but nobody knows or really wants to say this is a very very big mess and a lot of folks are going to get even more upside down, Pres Bush said “i’m keeping my eye on it,” you have to wonder maybe the president needed glasses all along that is why we are in this mess?
Thanks Ben can you post more on the Oregon market and Wash. State
It helps show that these housing bubbles are coupled to the California bubble. This coupling dispels the all housing is local myth. Also since it looks like we are entering a recession I think Oregon will see a double whammy as both lumber and high tech slow. This growing recession may actually cause prices to collapse faster then most people believe.
I don’t think you need any ‘proof’ that Californians and Oregon’s home prices are tied together. I live in CA and for years now all I’ve heard from Californians is how cheap it is there, and how that they’re selling out and moving there as they believe Oregon to be the “next California” as they’ve also bestowed on the state of North Carolina and parts of TX. Californians seem to be aware of only a handful of other places in which to relocate to. Simple mathematics tells you that if CA falls, OR is going to fall harder. Secondly, I imagine a majority of those who left are now realizing that OR, NC, and TX are nowhere close to being another California and retain their own unique characteristics that are entirely different from CA’s. I imagine quite a few of those ex-California patriots will be soon hightailing it back to CA to lick their wounds.
Try the Denver market, where back in 2000 the locals told Californians to go back we don’t need you to keep our prices high here we can sell amoung the locals guess what, a lot of Californians did just that and they moved back or to AZ and NV.
The Denver market has been dead for 8 years now all they saw were foreclosures and dropping values, now the chamber of commerece advertises in all 3 states to come back give us a look again of course nobody is ever going back, one they hated the fickle climate, two why would you sell your home below market to move to boom or bust town mostly bust.
I sincerely hope that people stop moving here. For one, it will defer the day of reckoning when the Denver acquifers are sucked dry.
No offense, but…didn’t you move there?
I have seen the opposite in northern NM. Ex - CA’ers, say wow, I did not know that I could have it better outside of CA’s rat race. This is so cal people talking. i don’t know anyone who will ever go back.
That’s why im leaving Florida for Pennsylvania instead of Georgia, Carolinas, Tennessee as prices in those states are too inflated(not as bad as Florida, but still) it’s all those who left Florida for those states that inflated house prices there. I am relocating where few others are relocating so I am getting not so inflated prices. I will wait in NW PA for prices to become sane elsewhere.
tn is cheap as sht
pro biz low tax =happy happy
TN isn’t cheap enough at $70/foot. My friend says houses are rarely worth over $50/foot and TN isn’t one of those “rare” exceptions. Heck you used to be able to get a house for $50/foot right in palm beach county back in 1995, I predict the bottom at $70/foot here and like $40/foot in most of TN. I can get a house for $33/foot average in NW PA, the disparity is too great considering other locations aren’t much better
Where in the heck are you looking? My whole family lives in TN. You can still get a pretty nice place for under 150k. I’ve seen some -even historic homes- in TN for under 100k. Here’s the thing: there’s only about 4.5 million people in the whole state. The major cities: Nashville, Memphis, Knoxville, and Chattanooga are spread apart far enough to make them non-commutable from one city to the next. Drive 15 minutes or less outside of any of those cities and it turns into rural farmland and sometimes simply nothing but undeveloped land.
I recall seriously buying a 32 acre farm 20 miles outside Nashville last year. The place had a large farm house, barn, pond, a wooded area, creek, and fields. All for 160k.
The expensive parts of TN are the places that seem to somehow get touted as “the place” to live for out of staters. Places like Franklin in TN, or Farragut in Knoxville where the wealthy of the city lives. Sure- homes there are anywhere from 250-400k. But elsewhere homes are a fraction of that.
My Wife is from PA, and there’s no way in hell that PA is cheaper than TN. That and it gets cold there, so you’d better count on paying for heat. I would do some serious research first before you decide on PA because I lived in one, and have visited the other. Needless to say, TN has my vote hands-down.
California was indeed Golden in the 1960’s & into the early 70’s…
My parents bought their 1st home in el lay in 1960 for $14k.
A home in Dayton or Detroit probably cost around the same, at the time.
Things Change…
Agree. My parents bought their second home in 1960, for 1 times income == $22,500…
In Malibu.
I think you missed the point, many Californians moved solely for price to states then they missed a way of life so they didn’t always return back to Cal true they moved to New Mexico , Az ,Nev were they felt more comfortable.
Col and many other places including the Northwest didn’t make anybody feel good so many left. Yes the good life can be had in a lot of areas but when the locals turn their back on you most just say the heck with it i will go back to Cal maybe or be more careful where i choose to live next time.
I don’t know of many people who left Colorado because they didn’t “feel good”. I know of a few who left because they couldn’t hold down a steady job, especially in tech and telecom.
Raises hand…. I’m one of those that loved CO, but left to find a job. 2002 the tech industry just stopped in CoSpgs.
Friend used to live in CO, then moved to SEA and got a great paying job, got married to person from CO, moved back, got same job Minus 2/3 of income, divorce, moved back to CA. Jobs in CO aren’t good paying according to him.
As a person looking to leave CA myself, I do have to agree that the Seattle, Portland, Raleigh and Austin are at the top of my list. Not because they will ever be the next CA (or I wouldn’t bother going as I want to run as fast as I can from here) but because of a quality of life issue. These areas are cheaper, more educated, somewhat hip and aren’t nearly as cold as other parts of the country.
One has to be reaslistic. No matter how much I hate this place, I would be miserable in a highly conservative area, one with horrendous weather, rural, etc. I think that is why Californians will always flock to these places - less culture shock.
Well put. Aside from Austin, those are my top pick areas as well. I like those areas because they are not CA and I dread the idea of them becoming little californias.
Bring your own job, though. Wages in Oregon are lower. There are fewer large corporations and more small businesses.
Migration has started … we rent in Seattle’s belltown (just north of pike place market). The amount of CA migrants in unbelievable. They all seem to rent for 3-6 months and then buy in overpriced neighborhoods.
“I dread the idea of them becoming little californias.”
I think it’s funny when people say such things, but don’t realize what their influx in aggregate does to a place. Yes, if you were the only Californian who did so maybe.
You want California, it’s all here.
I find that strange. Presumably these are retirees? How do they handle both Seattle and Portland’s weather?
The older you get, the more heat you need!
“Presumably these are retirees?”
Yeah, arthritic joints aren’t happy here, but we get a lot of the younger crowd as well. Thing I’d like to know is, in spite of pop growth, how many are actually BUYING homes. I’d speculate that the majority have low-mid pay jobs and live with a roommate in a rental.
Tends to be a very transient city as well. People come-people go…
“Bring your own job, though. Wages in Oregon are lower. There are fewer large corporations and more small businesses.”
Nike, Intel, Adidas, Columbia Sportswear and many more in Portland area alone. Please clarify “small”.
No offense, but in certain industries (mine at least) I’ve actually found that these companies don’t generally want to hire locals for many of the top jobs. One of the many reasons the locals hate transplants from a major metro.
Retirees Live up there but are snowbirds and come south during winter along with ducks and other migratory animals, screwing up the voting demographics locally.
Instead of identifying different species of birds, you just look at license plates from Montana, Idaho, Washington, Oregon, Missouri, Illinois, Indiana, Oklahoma, some from Texas and Florida a few spotted owls from NYC..
Mostly BIG gas guzzling species.
Site keeps eating my msgs, and gosh, they aren’t even political or biblical or ornery
It must be dinner time, Ben, it keeps eating posts.
I wonder how many people who live in California are actually born here? Most of the people I work with (including myself) came here for the work from out of state.
Think I read somewhere (a long time ago) that only 1/3 of California’s population is native.
I grew up in what many could call one of those red-blooded conservative states: TN and moved to first Boston then the SF Bay Area. To be frank, the whole conservative versus liberal ideology is less to do with actual location and a more basic fundamental question of rural versus metro areas. The small city near where I lived was Knoxville, a small city of maybe 90,000. Anyhow, it had night clubs, a few gay bars, art galleries, and coffee shops. There was also the University of TN. As a kid, we all thought it was “way cool” because all the hip, cool, forward-thinking people lived there. We all lived in the sticks, which was as you might imagine full of people who believed in carrying firearms and drinking large quantities of beer while mowing the lawn.
As a person who’s been on both sides of ” the fence”, I have to say that there are benefits to both lifestyles. Part of what being forward thinking is all about is learning to accept the way in which people live. Most people really don’t care anyway. Most just go about their business. I’ve found that many in SF who claim to be liberal yet want nothing to do with any of those conservatives to be non-tolerant people themselves who will never mix with those they deem to be unsavory. That’s ashame because I’ve had many friends who believed in politics and lifestyles that I didn’t necessarily agree with, but enjoyed their company nonetheless.
So whether you decide on Kansas City, Austin, Atlanta, NYC, or Little Rock, you’ll probably find the same various mixtures of people.
I totally agree with you on that.
Cold?!? Yesterday it was warmer in Indiana than it was in Los Angeles.
Oh my no, we’re different here. There won’t be any recession, according to our local economists. Lumber is already slow, so is construction, leading me to believe we’re in it now. Remember how economists always say that by the time they declare recession, it’s already happened and may be done? I think that’s the case here.
“It shouldn’t surprise anybody that as the number of pending sales and closed sales decreases, sales prices will drop, Eliason said. ‘I think we’re getting back to a more stable real estate marketplace,’ Eliason said. ‘The correction in the market has been good, particularly for first-time homebuyers. There need to be places for our children and grandchildren to live .’”
——————–
I’ve got a thousand dollars for anyone who can show me a verifyable quote from this guy from 2004-2006 saying that rising housing prices were bad because there would not be places for “our children and grandchildren to live”. Highly doubtful that this fool had any consideration for such things when the getting was good.
I have gotten so sick of talking to people about the housing market and they would say to me, with GLEE, “Yes, the housing market will continue to go up.” How stupid can these people be when they are paying large amounts of money for a house that was over priced. My husband and I have waited to purchase a home because of this sick market. We are searching for a place for “our children to play!” The deep south’s market is not as high as the rest of the U.S., but it is not reasonable!!!
AZ_Lender, need my address for that $1000? train1@gmail.com
Mike Eliason wrote an editorial on 6-5-2006 for the Kitsap Peninsula Business Journal about city planning: http://kpbj.com/opinioneditorial/articles/2006-06-05-EDT-05.html
Close enough? He doesn’t say it with your brevity, but an argument can be made that a few of his points hint toward the need for affordable housing for future generations. Here’s the final sentence:
“We must encourage a variety of housing choices and provide opportunities for businesses to start up or expand. Then, as families grow and business thrives, we will be able to support and improve our quality of life.”
Brian,
I read your article, and while I don’t think it holds the exact sentiment I was looking for, it does seem to hint that more land should be zoned for housing so that “choices” are available. Does he say “today’s high prices are bad for our children”? Not exactly, but for your appreciated effort, I’ll donate $100 to the real charity of your choice. Just let me know which one.
Here’s the thing: If RE shills really wanted to turn this thing around at last from a PR perspective, then why not ” join the other side”? What I mean by this is for the entire time the market has been down so far, the news is seemingly heavily tilted towards homeowners and how AWFUL things are in the housing market. Of course they make some lame half-hearted attempt to state that ” Now is a great time to buy” for good measure, but the overall attitude remains that a Seller’s markets is good, and a Buyer’s market is bad.
In my mind, there is indeed a huge segment of the populace who feel that a buyer’s market is fantastic- I being one of them. So why not cater to the buyer’s interests rather than lamenting the success of then past and the degrading values of homes? It just seems to entirely stupid to make attempts to prop up a sick market made ill by high prices when equal or greater efforts to promote lower prices would surely help RE professionals regain their professional health. Anyone else get my drift?
Drift gotten!
Feels a little Drifty in here ~!
Very simple, real estates have to come down on their commisions but they won’t, ever tell that to one of these brillant souls they come unglued , they think they are entitled to 6% no matter what the state of the economy?
Haha, obviously, the realtors are also the owners!
Realtors represent the Sellers.
As a last resort, why don`t they just try telling the truth?
Because in order to get their last few sales, they had to swear on their mothers’ graves that real estate only ever goes up. They convinced themselves of this lie so that they could say it with a straight face. Most of them are much too emotionally invested in this fiction now to “join the other side.”
hey. I am at the salon having my hair done. What happenedx to the market???????????
I must quote Samir Nahiminotgoingtoworkhereanymore.
“This is a f&^(!”
I see the att comments and that i was stopped out of cien for a 50c per share loss. Oh well.
We’re at make or break now on the s&p. Either it bottoms around here or a little lower for a triple bottom with the march and aug lows or the bear is here.
Now back to my wax anc pedicure. Lol.
I think people aren’t buying the CFC denial. AT&T certainly spooked the action, but that was bigger than just one CEO spooking. Too much down, too fast. Late in the day too, which I’ve noted as unusual.
Glad you got out of CIEN. I’m still looking at it. It’s up after-market, as most everything is I would imagine. It could be a good pick for a stronger than average rebound tomorrow.
Or, as you succinctly put it, the bear could be here.
Speaking with some of my amatuer investor college buddies, they’re all down big (~20%) over the last three months. Many of them are fed up and ready to sell. Take their lumps. That’s very dangerous for the market.
Maybe someone got wind that their projected 4th qtr. profit is going to be a loss??
Tomorrow will be interesting. 1375 - 1368 S&P is the line in the sand give or take a few pts. Triple bottom break = bear market probably. Successful test and bounce means rally in the other direction.
The Plunge Protectors will boot it above the support levels for a week here and a week there but I am looking at S&P in the 1K range by the summer.
i think someone pushed the panic button!
You should have kept those puts
Guess so. Oh well, sometimes youre the winshield znd sometimes youre the bug. I made out fine on them.
“I made out fine on them.”
I’m sure you did. I’ve been lazy lately and just stayed in my puts, and so far I’ve made and lost the same money a few times. If I’d been in and out on your schedule, probably would have done better over last week or so.
I get a little jumpy in these sorts of markets, and I figure sometimes it’s better to put away the gun than to risk being trigger happy.
ATT said “its not contained”.
Baaaad hair day.
You have hair? What kind of hair? What are you doing to it? You know, I somehow always have imagined you only in a combat helmet. A pretty combat helmet, but still. And with darling shoes, of course.
long and reddish brown. Im finally well enough to go out in public.
Nice hair
Are any of the hair dressers wearing purple wrist bands?
‘One of the biggest things slowing down the local market is the memory of multiple offers and sellers being unrealistic in accepting the fact that the gold rush mentality is gone,’ said Paul Simpson, an associate broker. ‘What we now have is what I like to call a normal market.’”
———————
A bonus thousand for a quote from this guy in 2004-2006 where he says “This is what I like to call an abnormal market”.
Good snag on the Countrywide drop from earlier postings …. of course I actually turn on the TV ( first time during the daylight hrs in a long time ) and there is not ONE FUGGIN WORD about Countrywide, after enduring MSNBC blather for 30 minutes, Closing Bell, and other channels going on about New Hampshire primaries and Obama and blah blah yadda yadda.
A concerted effort to distract/redirect/obscure such a large event by the media? Awfully suspicious - but yet Brittanys every move is broadcast seconds after it happens.
The average person is SO effed and doesnt even know it yet, thanks to our morally & financially corrupt leaders.
(note to Ben; what am I doing about it? Opting out at every level. In fact, I have been for decades but its virtually impossible to stay off-grid when you have children because the system demands details about em, such as SS#, and more. Just try to resist & you get a knock on yer door from the nanny state dept of childrens affairs nosing into yer business, complete with a deputy to force entry if you object. Its for the CHILDDRENNNNN of course)!
I applaud your efforts nonetheless. good luck, I mean it.
Homeschool
Best way — though not guaranteed — to keep the govt out of your family’s business.
Amazing how the bottom fell out of the market late in trading, after having (ex-Mr. Freeze) say: “let the chips fall where they may”, in terms of housing prices…
The PPT cruiser made no 3:46 pm e.s.t. courtesy call, today.
i was listening to the KB conference call today. i heard the CEO say that there were 4 million homes for sale in the US. is this an astronaumical number? and i wonder how many are vacant?
I seem to recall Census Bureau reports stating that the homeownership vacancy rate, which is usually around 1.4%, is up to 2.7-2.8%. And that’s an all-time high.
Which translates to a whole lotta see-through houses out there.
Those who live in glass houses shouldn’t throw stones.
this is from the transcript:
Let’s start with current market conditions. As we enter 2008, we see no indication that markets are stabilizing. On the resell front, there were roughly 4.25 million existing homes for sale at the end of November. That represents more than a 10-month supply. With this continued overhang of excess inventory, prices for existing homes, which had held up fairly well for the first half of 2007, have begun to decline. Over the last five months, average sales prices have dropped almost 8% from a peak of $276,500 in June of ’07 to $256,800 in November.
As for new homes, inventories have come down somewhat since the beginning of 2007, driven largely by homebuilders reducing production. However, new home sales in November were off 34% from a year ago, representing a seasonally adjusted annual rate of just 647,000 units. At this sales pace, the inventory of new homes now stands at more than a nine-month supply.
http://seekingalpha.com/article/59455-kb-home-f4q07-qtr-end-11-30-07-earnings-call-transcript?source=yahoo
if the resale homes = a 10 month supply and the new homes = a 9 month supply, does that = a 19 month supply of total homes that are for sale in the US? if so, i really dont see how all these so called economists can say that housing is going to stabilize any time soon and that prices wont fall too much further. these kind of people need a good swift kick in the butt!
No, you can’t add the 2. If there are 400K sales a month of exisitng and 4 million on the market then 10 month supply. 50K new home sales and 450K for sale = 9 month supply.
thanks for the clarification, but i still think those NAR economists need a swift kick!!
An interesting here is - let’s say - if the current inventory levels nationwide are at 10 months but we’re seeing a 25-30% drop in total sales on a year-to-year basis, then these 10 months will soon be 12, then 15 and so on.
And when your average is 3 months … whew …
‘We didn’t see the huge price increases and so we’re not seeing the dramatic drops,’ said Mary Marry,
She also said it was a good time to buy, BTW.
Gee, that’s the story I get here in Portland, too. But prices DID double from 2000 to 2006.
Mary Marry Quite Contrary
The Olympian from Washington. “Sales of single-family homes and condominiums in Thurston County dropped 32 percent in December compared with a year ago, but median prices held steady in the same period, the Northwest MLS reported.”
I get this actual newspaper, you know, so I got to see this article up close and personal-like. And when I did, I took the pages into my arms, and pressed it to my heart lovingly, and murmured tenderly into its, well, it didn’t have ears since it’s only paper, but I didn’t care. Then I fondled it, while joyously rhapsodizing about how maybe local builders will have to cannibalize each other by May and won’t that be a great article, followed by more kissing of the newspaper and gushy endearments.
It was good for both of us.
Olympia…you just crack me up.
I’m just not into fondling newspapers. They get my hands and clothes dirty.
If you don’t like it, you aren’t doing it right.
(sigh)…….life is so not fair.
What do you mean, sir? You wish you were a newspaper getting delivered hereabouts? Or you wish you were a local Olympian builder, lurking in the undergrowth, tying on your head-band and preparing to pounce hungrily with your knives and forks upon some unsuspecting other builder? It’s kind of the same thing, when I consider the matter. Except for the red rubber band, and the plastic envelope.
meanwhile over in Pierce county:
“Sales in the typically slow Christmas season slid by 39.3 percent compared to December 2006.”
Read that sentence again, carefully. Are they not trying to downplay the drop?
They are. Inserting the words “typically slow” allows them to make people think this was seasonal, in spite of the numbers being YOY.
This insight needs to make it into the Seattle papers who are happily regurgitating NAR happy phrases
“But she has noticed a slowdown in speculatively built homes in the $600,000 range.”
Holy Nuts!!!!! WTF!!!! Who would pay $600K in Montana! Does the economy even support that kind of Income. However I can understand nice homes for $150-200K… im sure regional income is OK for that!!!
$200k in cold, cold Montana or $50k in milder Pennsylvania(even in Pittsburgh) hmmm…..
“I would have liked to see Montana”.
I think it would be a great place to retire. Plenty of space, good weather (I like it cold), low cost of living.
But is it “‘Hip and Edgy” ?
Last year we were looking at South Carolina, but the more some of you guys talk about it, Pittsburgh is looking pretty good. Heck, 50K. It would be so nice to be house-cost free, except for prop tax and upkeep.
I can dream can’t I. I guess at this rate, in another 3-5 years the South OC will become affordable again.
You could live in Pittsburgh(or a suburb) for a few years till house prices become sane again in CA. Many people relocate while riding out the bubble, I bet we will see tons of relocation back to former bubble areas soon.
I do like SC; it is pretty state with beaches, which could lure possible retirees there. Housing is very cheap there, and the weather is humid subtropical. During my last week’s visit to California, I run into couple of guys who were considering to relocate into Pittsburgh. They main complain was the housing coast, and amount of Latinos in their communities. Any case, I see possibility of large amount of people to move from there to the rust belt cities of PA, while envisioning low cost housing and better quality life. There is little naivety in their vision, but last things Pittsburg needs to be defiled with an influx of California migrants.
I call BS - it’s all slow. Since 600k is out of reach for practically everyone here, this makes it sound like the slowdown is not a big deal. Fancy houses
ate my comment - I was saying, fancy houses are still
Over the Christmas holidays, my mom and I had lunch with one of my high school teachers. One of her sons is in construction in Montana. Seems that the high-end market is still holding up quite well. He’s currently working on a $5 million house. Apparently, the owner is worth many times that amount.
However, when you work on such houses, you tend to have these high-maintenance clients who demand EVERYTHING. For example, the five-mill house includes a niche for a sculpture. It’s driving the son crazy. And it’s not the only feature that has tried his patience.
But the money’s good, so it’s all good, right?
Yes I’ve heard stories like that. Also have a shirttail relative who just got out of prison and went right to work as a hod carrier for an outfit at Big Sky, really high-end stuff.
Talked to a friend in Libby MT recently. He said he knew of a guy in the area who is building a 40,000 sq. ft. fort… er house.
Heck, that is almost the size of a football field or an acre. What could he possibly need with that much space? This recession is going to wring out the serious conspicuous consuption that is going on in this country.
I can only guess that for me and my sportscard hobby that means no more 250K for that 1952 topps Mantle graded in gem mint condition. I would welcome that though. The thought of paying that much for cardboard is atrocious. You want to talk bubbles, look at graded sportscards. The non-graded can still be had for decent prices, although you have some that are still costly. However, the graded stuff goes for anywhere from 4 or 5 to 25 times non-graded prices. What a racket.
Back in the late 80’s-early 90’s, I used to sell medium-high end electronics in West LA with a lot of celebs and the entertainment people as customers.
Lemme tell ya - you don’t want to upset a CEO of a major entertainment conglomerate by dropping a 70″ big screen and chipping his custom made Italian marble staircase in his new Malibu mansion.
That would be a no-no.
What’s the sculpture? What substance? Marble? Soapstone? The artist’s nail-clippings trapped in Elemer’s glue? What’s the name? It better not be some stupid candy-@ss horse saddle with a fig glued to it.
Man, you omitted the most important details, and also how this work will be lit.
Disclose!
Bad news. Joe SixPackOfCoors still thinks there’s no bubble in the northern Rockies because prices are cheaper than California and nobody they know has been foreclosed yet. Over the holidays I visited a couple who should know better, who barely escaped from their previous overinflated “investment”, who are currently renting cheaply but contracted on an almost 300k new house, going into debt probably more than 4x their combined income! They said flat out they knew they were lucky to find a buyer for the last house, and that it will be a really tough stretch to afford the new one, but they want it anyway. “Besides, the media is blowing this whole thing all out of proportion.”
I told them I thought it was worse than the media was saying, and they said that’s just because I’m living in a bubbly area, and it’s made me think things are worse than they are. I let it go at that…they knew what I was saying.
Hmmm. Most of the people I talk to in Loveland are VERY aware that the housing market here is in the tank and that prices are falling.
Sorry, I’m talking about Montana, northern Wyoming. I’m living close to you, and I agree that people down here are getting it. That was the weirdest thing…the incomes were definitely lower up there, but right now it costs just as much to get a house there as it would in a reasonably nice Front Range location. Hence, my belief that they’re about to get rocked…
Name this tune:
Movin’ to Montana soon…
Gonna be a Real Estate tycoon…
Well I might
Ride along the border
With my tweezers gleamin’
In the moon-lighty night
And then I’d
Get a cuppa cawfee
‘N give my foot a push . . .
Just me ‘n the pygmy pony
Over by the Money Tree Bush
‘N then I might just
Jump back on
An’ ride
Like a cowboy
Into the dawn to Montana
Movin’ to Montana soon
(Yippy-Ty-O-Ty-Ay)
Movin’ to Montana soon
(Yippy-Ty-O-Ty-Ay)
Movin’ to Montana soon
(Yippy-Ty-O-Ty-Ay)
…
Frank Zappa. Dental Floss Tycoon.
Trick Question: The name of the tune is “Montana”.
My favorite version is from Overnight Sensation, probably Frank’s best pop album. But you get 99.9 out of 100 points for almost nailing it
“Who would pay $600K in Montana!
See also: Kalispell, Bozeman
NYT Article
WOW : But Mr. Steidl told the court he had never received the letters. Furthermore, he noticed that his address on the first Countrywide letter was not the location of his office at the time, but an address he moved to later. Neither did the Chapter 13 trustee’s office have any record of receiving the letters, court records show. …
—-So CountryFried was just caught with just making stuff up. Who would have thought?
“After the boom year that was 2007, and in the face of a host of potentially worrisome economic indicators…”
Not ONE statistic on the 2007 residential real estate crash. Just a lot of rah, rah about how commercial real estate is a great investment. The Bozeman Comical doesn’t even acknowledge, except indirectly, that there is an elephant taking a dump in the middle of the room.
The articles From the Bozeman Daily Cronicle is an example of why it should be called the Cover-Up. The Big problems are elsewere, not in Bozeman, it might cause small trouble in Bozeman, but nothing to wory about. Go find a couple of people to tell that story, and print there quotes. Hey this story has four sources, It must be true.
How about asking Shawn Cote about how many of his SWMBIA members are sitting on custom homes they can’t sell, and how many of them have debt they can’t service? How many sub-contractor havn’t been paid? Or why are there so many empty home around the valley with for-sale signs in front of them.
What about office space? With for lease signs everywere why is more being built? How come it takes so long to lease out retail space?
I could go on and on with thing like that, but you never read about In our local press.
Hi Duane..I went and looked at those goofy condos, and someone asked about the mkt and the realtor said “oh - it’s - not - that - bad - really”..I asked about down pmt and she said there’s still “creative financing” available including no-down, and my bank is one of the perps.
Thats why we aren’t even halfway to the bottom. Montana seems late to the game
There are some condos in Bozeman that look just like the ones in Missoula.
TRied to get a IO on Fourplex in Butte, 4 yrs ago and they said no, no IO’s or even creative financing. And it had signed leases.
Dang, But it probably didn’t go up that much in value anyway, so my timing is off, or Bozeman really is different that Butte.
Still a renter.
Yeah, Bozeman is definitely different than Butte. One has mountains all over the place….the other has a hole.
This is actually where the rubber meets the road. As we all know most of the REIC is just about keeping up RE for their own good. However, I think the problem with others is just that no one wants to admit they are toast. Heck, we just had 25 years of economic boom the likes this planet has never seen. Now, you have to admit to family and friends you are negative 500K or a mil or even millions with no waaaaaaaaaaaay to EVER pay it off. That is tough.
The real irony, however, is that so many in this country are in the same boat that the misery loves company factor should begin to come into play.
Just come clean. This country has a seemingly never ending supply of forgiveness, except for OJ and Pete Rose, but it seems that people just don’t want to admit they overdid it and now need help or a new start.
I realize we don’t want anyone to get a free ride, but denial is still pretty strong, is what I guess I am trying to say in all that.
LOL - Pete Rose. Good pull.
NO way, not me, not ever, aint tellin, you got the wrong guy, but but but look at my stats…
20+ yrs later and …Yup I did it. Gonna fess up. It Was me, gamblin and lying like a fool…
Goin to make bigger $cratch from my books.
Circa 2005, I rented a small office in Bozeman just 1 block off Main and Willson for $125/mo. And when we moved a year later, the management company begged me to renew. Bozeman commercial rents were, and are, extraordinarily cheap. There is no way that these new commercial projects pencil out using standard “cap rate”, “return on investment” metrics.
You recall were Hardee’s was. That has been torn down, the “Snowload Building” is being built in it’s place. It is a three story office building. This is in addition to buildings being built on Oak Street and along 19th. Plus the old Chambers-Fisher building down town which the second floor has been converted offices. To say there is going to be a glut of office space is putting it mildly.
I find it ironic people make such a big deal about the cold in Pennsylvania when Montana is far colder. Not only that, Pennsylvania has cheaper houses. Id like to see your responses to that
I don’t know anything about PA except I used to have an uncle in Jersey Shore. I always wanted to visit but never did. I’d probably like it ok but just have no connections there. Like, no job, no family, no friends.
Hannah Montana?
No, but an incredible fascimile thereof.
(You gusy scan the fluff stuff too, don;t ya?)
Another story from that holiday trip to Pennsylvania…
My mom and I were reading the paper, and Mom spotted the story about the outdoor NHL game that had just been played in Buffalo. Mom’s from Buffalo, and any news about her hometown gets the word-for-word read.
But, once again, the story did nothing but annoy her. Why? Because it kept harping about the COLD and SNOWY weather that accompanied the hockey game.
Mom’s reaction? “It gets cold and snows in Buffalo during the winter. So what else is new?”
So, don’t complain about Pennsylvania’s cold weather around my mother. She’s seen worse, and she’ll be happy to elaborate.
Got stuck flying into LGA blizzard of ‘78, took off again to Newark-dropped off psgrs, took off again for ???? to get out of the blizzards path????? BUFFALO…
Good lawd. Stuck in Buffalo airport hotel for 5 days, spent a few of them in a bar and the only movie theatre in walking distance to view Saturday Night Fever 4 times in a row.
Yep, Buffalo is a nice town, and it does snow a bit.
Can you say, airline management makes stupid decisions?
I have never seen snow mounds that high.
Personally I’d love it if everyone thought all of Montana was very cold. It keeps a lot of people away that I’d just as soon stay in Las Vegas or Florida. And thre are no cockroaches, no rats, no termites here.
Pay no attention to what the thermometer says. I’ve done 40 below in the northern Rockies and found a windy single digit day on the shore of Lake Erie to be far more uncomfortable. It’s all about the specific heat capacity of the air moving past you…based on both density and humidity.
Western PA is seldom bitterly cold. Lake effect snow can be an issue at times, especially in areas north of I-80.
Housing is relatively in-expensive to purchase, but the housing stock in general is older and a little bit more run-down than areas with higher re-sell values. Massive re-models, just don’t make a lot of economic sense, so homes tend to be a bit dated and run-down.
Oil City is a nice little town, with the Allegheny River running thru it. I doubt that public transportation is all that great, but that is typical of most small towns in Western PA.
If you are lucky enough to have a good paying job, it is a great area to live. Crime is very low, people are very nice, Spring, Summer and Fall are excellent seasons, and the winters aren’t as bad as many would have you believe. What gets to me more than the cool temperatures, is the steel gray skies that seem all too common in the Winter time.
But there are reasons why housing is so in-expensive. Jobs are not that plentiful, nor are they all that well-paying. Unless you are working for the School, Hospitals, Utilities or a few other higher paying jobs, it will be a struggle to maintain a middle class lifestyle even with the cheap housing. The Seventies/Eighties were particularly harsh to this area, and it has never fully recovered from the decline in Oil, Mining and loss of manufacturing jobs. Hence you will see a high proportion of Senior Citizens to the number of younger people. A lot of the younger people have left for greener pastures, which has kept the demand for existing and new housing in check.
Pittsburgh is actually a far better city than most people would expect. It has come a long way from the Depression that it went thru with the collapse of the Steel industry in the 70’s/80’s.
Unless you are able to work from home, or are in a high demand field, I couldn’t reccommend to anyone to move to this area without a job lined up, because in some small towns a job at WalMart is challenging to get at times.
Pittsburgh has a pretty good market for Engineering jobs, Healthcare and a few other industries, but again it is far from a boom town. If you are in the right fields, you can live like a king in a wide variety of Urban or Suburban Neighborhoods. With what people from California are paying for entry level homes, you could buy a house in some of the nicest areas of Pittsburgh.
And for 1/3 of those same prices you could purchase an old Mansion in most small river towns of Western PA. Just be prepared for some high heating bills. But Summer days are seldom so hot that you can’t live without A/C, so you will save there compared to a large part of the rest of the country.
I would highly suggest you rent before purchasing, and have some kind of employment lined up before making the leap.
Good luck in your move.
Montana
It keeps a lot of people away…
That reminds me of my roomate in the Navy(1970) He was from Missoula, and always said he loved the winter because all the tourists left.
Update on Whidbey Island, Washington: There are currently 137 new construction SFR and Condos listed for sale (this is a very big number of new construction units for the island). Only 5 out of the 137 listing has a offer. Most of the construction is built by small, local builder. Lots of pain to go around.