The Reverse Of The Cycle That Prevailed
It’s Friday desk clearing time for this blogger. “On average, Nantucket homes last year sold for 88 percent of their listing price, down from 91 percent in 2006 and 93 percent in 2005. Particularly at the high end, however, some prices were significantly slashed. An eight-bedroom compound on 14.8 acres in Quidnet, originally listed for $19.5 million, for example, sold in late December for $10.25 million.”
“Brokers are predicting continued price reductions, believing many properties are still overvalued by their sellers. ‘I think there’s a lot of overpriced inventory still,’ said Penny Dey, co-owner of Atlantic East Real Estate.”
“South Florida’s condo market has never been so hot. At least not from the perspective of private equity funds and investors who want to buy distressed projects at 40 percent to 50 percent discounts. Northland Investments paid $21.7 million, or an average of about $86,500 per unit, for 251 unsold units at a 364-unit Boynton Beach conversion project. Tarragon paid $74 million, or about $203,000 per unit, for the property in October 2005.”
“‘The dislocation and dysfunctionality of the real estate market has provided us with a lot of significant opportunities, said Steve Rosenthal, Northland’s CEO.”
“The final 2007 numbers are still being compiled but The Central New York Homebuilders and Remodelers association calls the market slow but steady. At Liverpool Lumber, owner, Joe Ehle’s seen housing slumps in his two decades in the business, and he says this one reminds him of the big downturn in the early 1990’s.”
“Ehle says, ‘when you’ve been through it and been through a real downturn you know what you’re going to see.’”
“New Future Building Group is feeling the heat in Kamloops (even in January) after the first phase of its Mission Hill development sold out in eight hours, setting a new record for the area.”
“‘A significant percentage of the buyers were from out of town and are intending to use their affordable ‘lock and leave’ luxury condo as a home base for four-season recreation,’ says Curt Woodhall, VP of marketing for New Future Building Group. ‘Kamloops is expected to lead the province this year in price appreciation, so buying in the area is a good investment.’”
“The MLS resale market set a new standard nationally in 2007 with the number of sales, new listings, average price and dollar volume in Canada’s major markets all reaching their highest annual levels ever. said Richard Corriveau, regional economist with the Canada Mortgage and Housing Corp, said the resale housing market across the country is experiencing a soft landing in many of the markets due to the escalation in prices.”
“‘A saving grace for the markets has been the introduction of the extended amortizations. If we consider our forecast one year ago, the overall result across Canada exceeded forecasts and the strong take-up of the extended amortization product is one contributing factor to that,’ said Corriveau.”
“Falling house prices in suburbs south of Wollongong are providing good opportunities for families and investors entering the property market, say real estate industry sources. Illawarra Real Estate Institute chairman Leigh Stewart said there was good value at the lower end of the market in suburbs such as Unanderra and older areas of Albion Park and Dapto.”
“‘In some of these areas properties are being sold at land value,’ Mr Stewart said.”
“For those frozen out of the housing market by high prices in New Zealand, data suggests cheaper houses may be on the way, economists said. The median price fell 8.6 percent in Southland to $191,000 ($A217,057), 6.4 per cent in Otago to $NZ250,000 ($A220,643) and Wellington was the other region to take a big hit, with the median price dropping 6.3 per cent to $NZ370,000 ($A326,552.23).”
“REINZ national president Murray Cleland blamed the holiday break, interest rate rises and slowing immigration for the fall. ‘However, it is unrealistic to expect the stellar increase in prices as seen over the past seven years to continue indefinitely with the market now entering a period of consolidation.’”
“Real Estate Institute December figures released yesterday show a third fewer houses were sold than in the same month last year. Christchurch was not immune to the decline, with a 32 per cent drop in the number of sales compared with December 2006. Prices have flattened and in some areas declined.”
“Real Estate company Simes valuer Phil Wilkinson said the slowdown was now ‘across the board’ whereas it used to be confined to certain sectors of the market. ‘Places are taking longer to sell. We’re no longer seeing the premium prices of a year ago,’ he said.”
“The Olympics are now only 8 months away and Beijing, the capital of China, has become the first city with a dramatic housing price drop in the new year of 2008. A report by a real estate research institution claimed that, recently, lots of buyers maintained a ‘wait and see’ attitude, leading to a large decrease on trading volume.”
“After several months of rising prices, a downward trend has started.”
“Kansas City area homebuilders willing to cater to consumers’ evolving needs should start digging out from the housing slump next year, industry experts said.”
“‘It is such a buyers’ market,’ said Dan Whitney, president of the Overland Park-based Landmarketing research firm. Buyers ‘are waiting to get the best deal and are trying to time the market, but they’re not moving yet. Bargain-hunting will become an Olympic event.’”
“A developer who has converted several local apartment complexes into condominiums is eyeing a similar project in Kirkwood.”
“Bruce Mills, CEO of Clayton-based Mills Properties, is awaiting approval from the city’s planning and zoning commission for a $120 million, 10-year condominium project. If plans go through, Mills said, he’ll resort to his usual business model: lease units until buyers arrive.”
“‘It doesn’t work financially unless we get the additional units and the tax (abatement),’ he said. ‘(My company is) still around because I don’t want to do anything stupid.’”
“Portland-area homeowners saw modest growth in home values in December, welcome news at a time when housing prices are collapsing around the country. But Portland’s trend of relative housing prosperity might not continue much longer. Since August, prices have dropped 8 percent since hitting their all-time peak of $302,000.”
“Broker John Lee last weekend showed a North Portland house to young couples from New York and Boulder, Colo. The four-bedroom, 2,447-square-foot home is just a block from Adidas’ campus. It started at $450,000 in November. It’s now $388,500.”
“Broker Kathleen O’Donnell sees the same thing with the cottage she’s selling on Northeast Regents Drive. The home went on the market in October at $685,000, and the price hasn’t been dropped.”
“‘Portland continues to be a draw for people who want a better quality of life at a better price point,’ she said. ‘This is the last major city on the West Coast that’s affordable.’”
“Mortgage lenders are adopting a more cautious approach in the face of the housing market slowdown, according to a financial information group.”
“‘This more cautious approach of lenders starting to reduce their exposure to the property price fluctuations shows that they have a real concern over the future of the UK housing market. A case of negative equity is bad news for both the borrower and the lender,’ said David Knight, mortgage analyst at Moneyfacts.co.uk. ‘It is not hard to understand why this pattern has emerged.’”
“‘Perhaps it’s a sign that the ‘live now pay later’ culture that we saw take over in 2007 may gradually be coming to an end,’ he said.”
“On Wednesday, the president of the Federal Reserve Bank of Kansas City told Colorado lawmakers that things may not be as grim as the media is reporting. Sure, foreclosures keep rising, manufacturing is slipping, the subprime-lending fiasco has turned into a global credit crunch, Canada’s loonie is suddenly saner than our dollar, and the stock market is eroding faster than Rudy Giuliani’s presidential bid.”
“But employment, business investment and other key indicators remain strong.”
“This is quite a fix we’re in: No savings, no investment, no productivity gains, no more flat-screen TVs for you. The $9 trillion national debt isn’t helping, either.”
“‘The consumer has to begin saving,’ Hoenig said. ‘Now, that’s easy for me to say. Can we do it overnight? No. Because if the consumer suddenly decided to save 10 percent…what happens to consumption in the United States? It drops off dramatically. Inventories build, and this slows down the economy.’”
“It might even cause a recession. But a negative savings rate could cause one too. Hoenig has not lost his optimism to this economic dilemma, though. ‘It took us 15 to 20 years to get to this point,’ he said. ‘It will probably take us more than a decade to raise slowly, consistently, the savings rate. It can be done. We’re a great country. We find solutions. But it will not happen on its own.’”
“And, this is just my guess, but it also won’t happen before the next recession.”
“The shape of the new American housing market, the post-bubble market, is starting to emerge. It is one that favors the young who never owned a house. The ideal home buyer now, in a reverse of what was true for years, is a renter who is not burdened with a house.”
“But not owning a home, which may be hard to sell, is a big plus. Now…the homeowner cannot move until the old home is sold, and that is getting more difficult.”
“It is possible that we will see a negative spiral, in which lower prices reduce the availability of loans, and thus push prices lower. That, in turn, could leave more homeowners unable to refinance exploding mortgages, producing more forced sales that push prices even lower.”
“That would be the reverse of the cycle that prevailed until mid-2007, when easy credit made loans available even to those with dubious credit, driving up prices and, for a time, making it appear that there was little risk in mortgage lending.”
Another great week of big housing bubble reports! My thanks to those who support this blog. Please check back this weekend for news, your market observations and topics.
How does one support this blog? Is there some way to bill a credit card? It’s obvious that you put a lot of time and energy into running it.
Some of the posters here are very smart, very experienced, and/or very entertaining. In all cases, it is always good to see a variety of opinions and to read their anecdotes about what is happening in different parts of the country. Obviously, some areas are worse off than others but no one is going to be spared from the effects of this bubble.
Also, is there a ‘posting policy’ that new posters can review? IMO, a few of the posts are inappropriate and solely intended to harass (aka “trolling”) and it would be great to know your policy of determining when people cross the line and how to deal with them.
Newbie
damn noobies…..:)
There are some paypal icons near the top right.
Bottom of the green box.
Thanks… is there a suggested donation amount?
How about the posting policy? Ben obviously doesn’t want trolls to waste bandwidth, but I’ve seen some posters call each other obsenities, harass one another, or post misleading links and statements in support of some obscure political agenda.
Posting Policy: To Quote Dalton from “Road House”, “Be Nice, if someone doesn’t want to be Nice then we’ll show them to the door while being nice”
“Road House” one of the best late night cable movies ever! A true guilty pleasure. Yeah!!
“You wrote a Christmas carol?”
“Yeah… based on my favorite movie, Roadhouse.”
“…’Let’s Have a Patrick Swayze Christmas?!?’ ”
—MST3K, “Let’s Have a Patrick Swayze Christmas”
How does one support this blog?
I will email you my address.
“Northland Investments paid $21.7 million, or an average of about $86,500 per unit, for 251 unsold units at a 364-unit Boynton Beach conversion project.”
On a regular basis, I read about private equity funds buying this or that. What kind of leverage are these companies using to finance these purchases. These days, I’m pretty speculative when I read about these private equity firms as you never know if they are the next enron or just another part of the credit bubble ready to burst.
Any thoughts on these types of deals? I don’t know much about these deals, so am not sure if these firms are financial wizards, or merely building a house of cards.
“I don’t know much about these deals, so am not sure if these firms are financial wizards, or merely building a house of cards.”
Been reading or watching the financial news lately? Anyway, I can tell you, as a Floridian, $86,500 for a condo in Boynton Beach at this point in time is a joke for a bulk buy. Half that, maybe I’ll call the buyers geniuses. Except I wouldn’t buy a condo in Florida under any circumstances.
Yea the HOA is nuts. This will just further drive down condo prices. One can get a condo for $30k to $50k in Texas but I would take a $50k minor TLC house anyday. Even a $80k house will probably end up costing me the same as a $50k condo. I don’t like condos. They are ok for renting if cheap enough while waiting for house prices to erode further.
With the way the world is evolving, I worry that institutions will end up owning a larger share of property nationwide. I sure don’t want to see more “Potterville” type communities in this country. But what are we going to do?
The key will be cash flow. If they can convert these back to rentals and still have a nice cap rate (including conversion costs) then the deal makes sense. A couple of potential problems: (1)overestimating annual returns given a rising vacancy rate in So. Florida; and (2) high maintenance for older construction (I have no idea how old these units are).
Off the top of my head, if they can rent out all of the units comfortably at $1000/mo then they got a good deal. $900/mo and they are okay. Below that and they will have a hard time getting their money back.
Does anyone have idea of the rental value of these units?
(3) Underestimating insurance
(4) Underestimating taxes
I think the property they are talking about is Via Lugano Apartments
http://southflorida.bizjournals.com/southflorida/stories/2001/05/14/daily13.html
After a Google search, I see the complex was sold in 2001- appraised value was $25 million at the time.
I read an article the other day that suggested the FED could legally loan money to individuals and Hedge Funds. Maybe the FED is giving them 0% loan to buy slow the collapse of the bubble. I’m assuming they would have to let us know about such a move.
An interesting observation today: On the college campus where I work, I came upon a young man in jacket and jeans talking to a group of students. As I overheard it, he worked as a customer rep for Washington Mutual and was passing out cards, saying that WaMu had a great new program: free checking and a low rate credit card if they moved their funds from their current bank to WaMu. There was also special promotional bennies if it happened by Friday at 5. Desperate times for the money changers.
Some ppl have questioned the timing of FDIC insurance payments. I guess we will find out shortly.
http://www.homespalmsprings.net/
Posted on Weekend topics.. the story that Rothermund was found dead of a gunshot wound to the head near Pinyon Crest along Hwy 74 on Jan 12 near Palm Desert.
She has been a RE agent since 78, suspicion is suicide, but women don’t go that route, usually, sadly for her family and friends etc.
RE industry here in desert is suspicious for the reasons.
I have posted here before that I think we can expect to see a big increase in bubble-related violence; FB’s who take out their families, etc.
Also on wall street. For many its their whole life. I already know many that are depressed about what’s going on. Suicide rates will go through the roof.
This one murdered his wife before jumping off a bridge:
San Francisco Chronicle-(AP)
Friday, January 18, 2008
(01-18) 17:20 PST Marlton, N.J. (AP) –
An executive of a collapsed subprime mortgage lender jumped to his death from a bridge Friday, shortly after his wife’s body was found inside their New Jersey home, authorities said.
Prosecutor Robert Bernardi said Evesham Township police went to the couple’s home in the Marlton section of the township around noon after a male caller asked them to check on Marci Buczynski. Her body was found in a bedroom.
..
Walter Buczynski was a vice president of Columbia, Md.-based Fieldstone Mortgage Co., a high-flying subprime mortgage lender that made $5.5 billion in mortgage loans and employed about 1,000 people as late as 2006.
However, it has since filed for bankruptcy and now has fewer than 20 employees. The company had recently filed court papers seeking approval to pay about $1.1 million in bonuses that would be divided among Buczynski and other staffers so the company could wind down its lending operations and go out of business.
RE: Suicide rates will go through the roof.
Another trend very much previously prognosticated on this blog.
Wasn’t that bizarre??? Very rare for women to do that type of suicide. But she wasn’t the usual RE person. She was extremely successful and had sold out at the top. She was very bucks up and successful.
“But employment, business investment and other key indicators remain strong.”
Where have I heard something similar before? Oh yeah…
The leader of the American people during the Crash of 1929 and the subsequent depression was Herbert Hoover. After the first break of the market (the five billion dollars in security values which disappeared on October 24, 1929) President Hoover said:
“The fundamental business of the country, that is, production and distribution of commodities, is on a sound and prosperous basis.”
His Secretary of the Treasury, Andrew Mellon, stated on December 25, 1929, that:
“The Government’s business is in sound condition.”
http://political-resources.com/fedres/chap12.htm
I wonder how soon before we have gladiator fights to entertain the sheeple.
I’m not sheeple, as I have zero debt, but I certainly would be interested in seeing more violent reality TV.
NFL ??
Froma British newspaper description of the NFL. A series of commitee meetings punctuated by bouts of violence.
Haven’t you seen? Hulk Hogan brought American Gladiators back to prime time!
They brought back American Gladiator already.
RE: I wonder how soon before we have gladiator fights to entertain the sheeple.
So what do you consider Ultimate Fight contests performed in a caged dome?
Pretty soon they’ll give’em small weapons to draw more blood, and we’ll pretty much be there along side the Romans.
Who says history doesn’t repeat itself.
Professor,
Thanks for the historical perspective. It does appear as though history is about to repeat itself. Crap.
‘This is the last major city on the West Coast that’s affordable.’”
And when we’ve sold the last condo here thats it ! Forget about about moving to the west coast and all the RE agents and mortgage brokers will magically find new employment.
Gawd how I can’t wait until the hype surrounding Portland goes away. It’s not like this place magically appeared out of the abyss 10 years ago. Feh.
Yeah. Did they mention that it rains here 250 days a year?
That much rain? And I thought 180 days in Pennsylvania was alot! Well itll be great post peak oil, id love to live on the west coast. No a/c, no heat, plenty of water to drink, great farming for your own food, etc.
Oregon is lovely, but Portland is the only place with any real job market. Washington is very built up on the wet side— both Oregon and Washington have a wet side and a dry side, split by the Cascades.
California also has that unfortunate bit where the affordable places have no jobs, and yes, there are affordable places. They just happen to be in Modoc County.
Then I should see 75% drops in most of Oregon. Why should some small town(similar to the Oil City in Pennsylvania) have $300k starter homes? Even $75k is pretty expensive when the same house in Oil City is half that price!
Rain ain’t bad. I just moved to Indiana from California and can’t believe how much I’m enjoying the gray skies.
It seemed like the sun was constantly in my eyes in California - it just wears on ya after a while.
I’m sure people think you are joking, but it’s true for me too. And I live in Portland! You’d think I’d want to see the sun more. In the summer, if it goes more than 3 days of straight sunshine I get depressed! Weirdest thing.
I moved to Alaska from California after having lived all over the country. I’m very happy here. I have no regrets, but I worry about my widowed mom and how she has most of her retirement money wrapped up in her home equity in Orange County.
“The shape of the new American housing market, the post-bubble market, is starting to emerge. It is one that favors the young who never owned a house. The ideal home buyer now, in a reverse of what was true for years, is a renter who is not burdened with a house.”
More Gobbels inspired propoganda.
So who the hell wants to get into the housing ownership musical chair game at any point, now?
The instablity in the US economy accruing to globalism
makes having instant mobility the key to economic survival in the 21st century.
Homewowner’s will also become the point men in the tax collection game. Property taxes, utilities, and upkeep will continue to dramatically outstrip inflation.
I don’t give the GEN XYZ credit for much-but I do know there are a sufficient number who are astute enough to realize it’s a one-way trip to Nowheresville to get tied to a $500k starter home.
Watch for a potential elimination of mortgage interest deductions as more people chose not to be tied down by a potential white elephant.
Today’s dead albatros-is still tomorrow’s dead albatros, albeit a bit more stinky from the decay.
How telling, a house in now a “burden”. So why buy again ? The housing market is begining to look like a giant roach motel, you can get into it but don’t try getting out.
Oh how true. My in laws watched a house in Mexico take 6 years to sell, then bought one in the same neighborhood. Over $300k in a small town. I just hope they don’t have to sell in a hurry. At least they still own a place to live in the US.
Was it a good time to buy when everyone was talking about it being a good time to buy, circa 2005?
Will it be a good time to buy when everyone is saying it is NOT a good time to buy?
When the checkout bagger tells me how bad the housing market is, then I know we’re close to “the time”.
When the name “homeowner” holds the same derision as “renter”.
Folks, let’s face it, most of us would like to own a home. I know, I know, some of you don’t, but if you really didn’t want a house then is blog would mean nothing, absolutely nothing to you!
So thing you need to think about when you get ready to buy (in the next few years) is “Do I really want to have this anchor hanging around my neck?” or “Do I really want to live here the rest of my life???”
So think about it y’all, when you finally make the decision to buy that home you always dreamed of. Because the way things are today, you might be living there (or paying for it) for the rest of your lives. I’m living this nightmare every frickin day.
God Bless,
Rant Off!
Good point. We all want to buy a home when it makes sense. But as this recession gets going I doubt a lot of people will be stepping up to the plate to do it.
I’m not crazy about home ownership. We own a home because it’s always been my husband’s dream. We bought in 1997 and can afford it, but I think it’s a money pit. I hate to spend money just to maintain what we have. I’d much rather airily tell the landlord to fix the roof while I’m off on my cruise. KWIM?
But I’m a strange woman; I don’t like ice cream either.
I hope you like chocolate
Not only is it the money pit (there’s always something that can be fixed or improved or needs to be) but it’s a time pit. I’m glad to have my nights and weekends back. It used to be there was always something that needed to be done.
Those two questions have stopped me many many times in the past 15 years.
Unless you buy small in middle America. My mortgage is 4.75% interest and the balance owed is less than 1/2 of my 401k balance (or almost double my emergency cash fund). My house payments are less than renting(but I’m stuck with maintenance ). I just don’t see how selling my house and having even more money tied up in the US financial cesspool will make me any happier either. If you rent where do you bury your gold? If you don’t have gold do you really trust your bank?
My mom owns her house free an clear. It’s a sure thing that her house will sell for something, so it’s still an asset. She may lose money on it, I don’t know, but she got hosed on IBM stock too.
I should add that I love my house, I love my area, and I love my wife. I bought this thing right, my payments are less than reasonable rent, and yes I have to maintain the damn thing.
Have a great weekend folks.
but if you really didn’t want a house then is blog would mean nothing, absolutely nothing to you!
Actually what is most fascinating is watching “THE” major commodity collapse which is (1) the cause of the credit crisis and (2) the major source of the consumer spending which has kept the US functioning even though the US doesn’t really make anything anymore.
It is a theorectical economics problem in action.
(But then I actually enjoy reading the August releases of the US Census data on income and the December Treasury reports on taxes……..)
I think homeownership is a great thing under the right circumstances, but it’s been bastardized into a get-rich-quick greedfest, which has ruined it for a lot of people who want to buy a house for the right reasons.
Plus, life changes and what you want out of life changes. All those years imagining what life could be like after the kids were gone. Now that they’re gone I don’t want anything I thought I would. I got really sick of being stable and responsible. I want to be much more of a vagabond. I don’t want to go back to school, I don’t want to do hardly anything I thought I would. And that isn’t even considering financial issues.
I do own one. Mostly. It was set up for our next 30 years - it’s manufactured, one level, enough space but not too much. Lots of people told us to build a big house/make lots of money, etc. but I’ve questioned that for 15 years. Glad I did, too. I’m here watching another bubble pop, and thinking about the people at work who were way smarter than me and bought a place in the Alameda despite my telling them prices had peaked. You know how 30-somethings have all the answers?
“Watch for a potential elimination of mortgage interest deductions”
Why would that happen? The government wants to keep house prices high so people can have “fake equity wealth” and as this evaporates, a recession is brewing.
I used to really want to own but I’ve lost a lot of the urge. I’m tracking it and watching for it to be cheaper than renting.
When its cheaper that rent again, I’ll buy. Maybe.
The flexability of renting is pretty good too.
God help you Lip.
Remember you can walk away and take the loss. You will just have to rent. Sounds like you are badly upsidedown and that might be the best option.
If you stop paying the mortgage its probably better to do it so the forclosure will happen around Christmas. Probably buy you an extra month of time.
Then take the mortgage money and use that for a rental.
Its just your credit rating. You will live and recover.
I have to admit that want to own a home someday. I have been renting all my adult life (now 40 years old), I like my landlady, and I live in a desirable area but it still sucks for a variety of reasons. I just don’t want to own a home I can’t afford, or get cheated when I buy one, that’s all…
They won’t have to take away the mortgage deduction. The alternative minimum tax will take care of that and all other deductions. As dollars fall, people will get raises (purchasing power will still fall). This will make more and more feel the bite of AMT. No deductions for anything. The only deductions will be for business. Of course the elite will still have their 10-15% dividend tax break and no taxes on inheritance. Everything this gov does is designed to strip wealth from the uppermiddle class the middle class and even the poor.
‘It will probably take us more than a decade to raise slowly, consistently, the savings rate. It can be done. We’re a great country. We find solutions. But it will not happen on its own.’
How about growing a set of balls and raising interest rates so saving money makes sense again ?
Preach it, Mo!
Testify!
Thank you, Brother Mo.
We don’t want savers…we want spenders, ie “consumers”. Just look at the “stimulus package” the prez and congress is favoring.
Saving is unpatriotic, it tanks the economy and lets the terrorists win.
I’m surprised the money isn’t given out as Gift Cards. Not redeemable as cash, to avoid anyone saving it. Welcome to the black market.
Don’t let them see that expiring gift card idea although that’s basically what they did to stim business spending. I think they offerred a huge break but only if you use it in the next year.
“How about growing a set of balls and raising interest rates so saving money makes sense again ?
Last week I lost a car load in equity value.
This week my treasuries are worth half in income.
I can stop buying vitamins and pet toys, but what about the
folks who pay mortgages and car payments?
If I bought a house instead of bonds I’d be defaulting.
Today is truly Ouro Verde’s Black Friday.
I and everyone I counsel have exited equities and gone cash to wait out the unavoidable recession. Hence me being completely PO’ed at how this crisis is being mishandled. Stimulus Package my A$$. What am I supposed to spend that tiny amount of money on that is made in America anyway ?
Don’t tax all interest on savings but only the part above inflation. Interest is also compensation for inflation, and without it, you guessed it, there is less saving.
RE: How about growing a set of balls and raising interest rates so saving money makes sense again ?
Tonight The McGlocklin Group just forcasted a three quarter cut in the FF rate on Jan. 30th.
Bushe’s $800 rebate will fill a New Englander’s fuel oil tank enough to get thru next month.
We are SUBPRIME Nation
You know, aside from my house mortgage, $800 would put me totally out of debt. Gee, I hope it goes thru.
$800 would put me totally out of debt.
Um, the government is borrowing that $800, and who has to pay it back?
You
the money is just a LOAN from next years tax refunds, so in the end it is just a year sooner.
Not real money, and none to keep.
“Broker Kathleen O’Donnell sees the same thing with the cottage she’s selling on Northeast Regents Drive. The home went on the market in October at $685,000, and the price hasn’t been dropped.”
“‘Portland continues to be a draw for people who want a better quality of life at a better price point,’ she said. ‘This is the last major city on the West Coast that’s affordable.’”
The stupidity in these statements…wow…
Cottage and $685K should never go together, unless your are talking about ‘cottagesssssss’.
And since when did $300K for a median house become ‘affordable’?
I swear Portland is the land of the delusional and attracts the easily deluded.
The grass is, in reality, only greener here in a literal sense…
Oh no, it’s greener, all right, but there’s a reason for that… a reason outsiders discover about mid-March… after it’s been raining since October. Example: How many clear days did we have in Feb+Mar 2007? One. Yes, ONE of the 58 days was clear.
Portland believes in it’s own hype. I’ve only visited the city, but found the whole city to be clastrophobic with too much traffic. The city is pretty, but they are convinced that they are worth “world city” prices like Seattle and San Francisco.
Everyone thought their city was worth as much as San Francisco or New York (before bubble prices).
Even San Francisco wasn’t worth San Francisco prices, as the recent DQ numbers are pointing out.
Good thing im considering Pittsburgh(but Oil City/Franklin are good too) prices are quite reasonable there. The only real advantage I can see to Portland and Seattle is the wonderful weather(mild summers and very mild winters)
What is your definition of mild winters?
Is this a mild winter?
http://www.kptv.com/wxmap/9430868/detail.html
Granted, it ain’t always this way. When it’s “milder,” it’s a full week of rain with high 30s, low 40s.
Portland Oregon 45.4 latitude.
Wow it got to 105 degrees in July 21, 2006. Seems like most summers there will be dangerously hot days with 90-105 degree days.
Seattle, Washington has milder summers with the occasional 90-95 degree day. The average winter Jan temperatures is 47/36 which means the high is almost always above freezing and the low is above freezing most of the time. People can grow palmetto palm trees on the west coast
I would like summers not to exceed 80 for a high nor go below 40 for a low and winters to be a little cooler than that.
I consider a mild winter if it rarely gets below 0 for a low. I checked Pittsburgh and it only got below 0 at -2 once in the last 10 years. USDA map rates Pittsburgh as zone 6a and the west coast as zone 8a and 8b depending where.
Very, very little snow on the west coast as it just doesn’t get very cold. 20-25 is about the lowest it gets. It’s winters are as mild as Tallahassee, Florida regarding minimum temperatures. Of course the average temperatures are lower on the west coast.
Look at the weather map now. Notice how the actual temperatures in the north midwest is minus 20s with windchill in the minus 40s! Pittsburgh is going to get down to around 10 degrees with windchill of near zero. That is cold but nothing compared to -40 windchill!
I’ve lived in both Ausitn and Portland and both cities offer a better quality of life than most cities, but are a bit over-rated.
They also suffer from job markets that are not very diverse, and it will be interesting to see how they fare if technology companies get hit hard in this recession
Local business closing - somebody turn the lights out when you leave…:
http://www.bakersfield.com/hourly_news/story/338974.html
There’s been quite a rash of such stories in the Tucson papers.
Greenspan’s productivity miracle at work.
“And his family’s finances took a hit after they bought a new home but found themselves unable to sell the old one.”
Oops… This raises a question I’ve had for a while: will banks stop lending in this scenario? I.e. will they require that a borrower sell the previous home before lending on the new home?
Wasn’t this the rule at one time? I seem to recall my parents selling one house outside of Pittsburgh, then we moved to the Philadelphia suburbs and rented while they figured out their next move.
After almost two years’ worth of thought and research, they decided to have a house built. They still live in it.
The idea of buying another house before selling the current house would terrify me - I’m talking needing major major doses of tranquilizers!
If - and only if - the first house could be rented so that (1) the rent would cover the mortgage, taxes, insurance and maintenance and (2) do so even if the vacancy rate was 50% and (3) do so if the rent was priced at 66-75% of that for comparable properties would I even consider it.
is there a list someplace I can add my name to receive government money I can spend to make economy better?
And what a boom for drug dealers, lotto sellers, liquor and tobacco companies.
With this “stimulus,” the US govt is now in the payday lending business. The money is a loan, it adds to the national debt, it has to be paid back, with interest.
And like payday lending customers, we’ll just roll it over by taking out another loan.
Ya heard it here first.
“Kansas City area homebuilders willing to cater to consumers’ evolving needs should start digging out from the housing slump next year, industry experts said.”
Bwahahaha! There must be a lack of oxygen in KC if people there think that the home building market will recover next year. With its major employer, Sprint, going down the tubes, KC has all the makings of becoming the next Detroit.
Don’t forget H&R Block.
Note the elevated foreclosures in the area:
http://tinyurl.com/2u65sc
That doesn’t bode well for a quick recovery.
“But for builders to provide what consumers want, area municipalities must drop planning and zoning rules that limit development of town homes and affordable villa-type homes, he said.”
This is a tired argument. Builders price based on what the market will bear. While I don’t mind higher density housing, if it’s affordable, not everyone wants it. It’s still a tough sell in areas with available land though this will change as energy costs go higher.
“Tim Underwood, executive vice president of the HBA, noted that the gap between the average new-home price, which was $290,282 in 2007, and the average existing-home price, now at $159,429, had widened in recent years, making it harder for many households to afford a new home.”
The existing home prices aren’t too out of line with the 55K median income for the area, though new home prices of 5x median do need to come down. Nothing like the extremes in CA (10x income), but still a little high.
All is well now - gas prices have fallen a dime or so:
U.S. Economy: Confidence Rises, Leading Index Drops
http://tinyurl.com/3bzluw
Gasoline Relationship - Since the start of the fourth quarter, the sentiment index has tended to fluctuate in the opposite direction of gasoline prices, according to data compiled by Bloomberg. The correlation in the period was minus 0.76.
It’s interesting that the price of gas is the main economic issue that sways the optimism of j6p. Maybe instead of the feds giving $800 a head, why not take all taxes off of gas and as a result, the sheeple will be happy with the economy and spend more on stuff.
“South Florida’s condo market has never been so hot. At least not from the perspective of private equity funds and investors who want to buy distressed projects at 40 percent to 50 percent discounts. Northland Investments paid $21.7 million, or an average of about $86,500 per unit, for 251 unsold units at a 364-unit Boynton Beach conversion project. Tarragon paid $74 million, or about $203,000 per unit, for the property in October 2005.”
Knife catchers! I remember predicting $50k condos in south FL when those were $150k and not a single person on City Data(which sucks) thought I was realistic. I pointed out you could get a such condo for $30k to $50k in Dallas or Houston Texas. You could fit 50-100 condos per acre of land so the land value comes out to around $5000 per condo. Even if the land were “free” in Texas, this would only account for a $5000 saving. I expect to see very little difference in condo prices in Florida vs. Texas soon. For houses, the disparity will be a little larger as land is so expensive in Florida. Comments?
I expect to see very little difference in condo prices in Florida vs. Texas soon. For houses, the disparity will be a little larger as land is so expensive in Florida. Comments?
I live in Texas out of choice… but I have family in Florida and have lived in Philadelphia in my past.
There just is no way that East Coast people will come to Texas without some HUGE change in social coolness. i really doubt it. It is considered an uncool flyover state just like the rest… and no enough of them will ever come here to find out otherwise. Florida on the other hand has had huge historic busts and that never stooped the East Coast from starting another one.
Even where I grew up in northern Indiana - people took spring break in Florida… never knew anyone who went to Texas.
Mortgage firm exec jumps to death; wife’s body found home
A high-ranking executive of a collapsed subprime mortgage lender jumped to his death from the Delaware Memorial Bridge on Friday, shortly after his wife’s body was found inside their Burlington County home, authorities said.
Sort of gives new meaning to housing downturn.
I feel sorry for their two kids.
Jezz - its only money. WOW!
“Chinese Central Television (CCTV) reported that, by the end of Nov 2007, the average housing price in Beijing was 15162 yuan per square meter. By the end of December, the figure went down by 19.67% to 1218 0 yuan per square meter.”
A rough and dirty shows that to be a decline from around $180 to around $150/sq ft. Not cheap - how do you like that price/income ratio?
Check the volatility:
“According to data published by the China Real Estate Index Research Institution regarding housing prices during the last four weeks of 2007: housing prices dropped by 10.09% during the first week, again down by 0.75% in the second week, but the price reversed to increase by 12.88% in the third week, and again dropped by 20.25% on the last week. Beijing housing prices rose only during one of these four weeks.”
Hmm, I wonder how accurate those figures are.
Still, the takeaway I get is: Beijing prices are inflated, there was a lot of speculation going into the Olympics, and the bubble was inflated as far as it could go and the air has to come out right now, Olympics or no.
And when we stop buying so much of their crap, their bubble will go down yet more!
Prepare to Be Stimulated!!!
Official Washington rallies around a stimulus package.
It seems that political panic puts paid to partisanship.
In a telephone lovefest, George W. Bush and the Democratic congressional leadership reached agreement on the need for and the contours of a fiscal stimulus package, or what the president prefers to call an “economic growth package.” They agreed that the economy is slowing, or worse, and that it needs care and feeding not only from the Fed, but from the feds.
“Soon, your check will be in the mail.”
http://weeklystandard.com/Content/Public/Articles/000/000/014/605mavkx.asp
What a way to end the week, stimulated!
Cramers Game Plan: Feds Need to Buy Mortgage Insurers.
http://www.cnbc.com/id/22728371
“Add a 100 basis-point rate cut to Cramer’s plan, and he figures the Dow would add 2,000 points in two weeks.”
Nothing in it for him and his buddies. No self interest here. Just looking out for the good of the American economy.
I’m guessing we’ll see a 100 basis point cut this month, 75 for sure.
And a jet-engine strapped to gold prices.
Ben STein wants them to buy up shares of big banks.
Funny how the mantra of free markets free markets disappears for these guys when the tide is going out.
“Bruce Mills, chairman and chief executive of Clayton-based Mills Properties, is awaiting approval from the city’s planning and zoning commission for a $120 million, 10-year condominium project. If plans go through, Mills said, he’ll resort to his usual business model: lease units until buyers arrive.”
I despise condo conversions, especially those that take buildings that were barely suitable as apartments. As for those that might buy them, why would one buy into a property where units are being leased out in the interim? That’s like paying extra to live in an apartment.
sorry if this is posted elsewhere…
Mortgage Exec kills wife, self
Gotta love this - company is in it’s death spiral, but… “The company had recently filed court papers seeking approval to pay about $1.1 million in bonuses that would be divided among Buczynski and other staffers so the company could wind down its lending operations and go out of business.”
Folks…. there has to be something in the water in upstate NY because the dichotomy in the comments of these clowns is unreal.
First this; “The final 2007 numbers are still being compiled but The Central New York Homebuilders and Remodelers association calls the market slow but steady.”
Then this; “At Liverpool Lumber, owner, Joe Ehle’s seen housing slumps in his two decades in the business, and he says this one reminds him of the big downturn in the early 1990’s.”
If the latter is correct, which I believe is fact, then how does one reconcile this with the bull$hit in comment #1? Denial or flat out lying by way of misrepresenting the facts? As of Oct07, an RE believer intoxicated on massive doses of koolaid said, “real estate is still going up around here (Saratoga County). I know for a fact it wasn’t but he himself was convinced it was without providing any evidence. I really believe these people were intoxicated with exhiliration up to late 2006 and have since slipped into such a state of dense denial that only complete disaster will shake them into reality.
Unemployment was 13.2% higher in Dec. 07 vs. Dec. 06…a major recession indicator is here, per the NYTImes.
http://www.nytimes.com/2008/01/19/business/19charts.html?ref=business
“Before December, there have been nine cycles in the United States since 1950 in which the annual change in unemployment rose to 13 percent or higher.”
“In eight of those cases, by the time the rise got to 13 percent, the recession had already begun…”
Cloverfield. Fun movie. Condos crash and hit the ground. Highly recommended.
Unemployment in California now 6.1% .
http://www.latimes.com/business/la-fi-caljobs19jan19,0,4174787.story?coll=la-home-center
Sallie Mae Laying Off 350, 3% of Workforce
http://www.washingtonpost.com/wp-dyn/content/article/2008/01/17/AR2008011703051.html?hpid=sec-business
Looks like the fireworks are just getting started for the banks
http://finance.yahoo.com/real-estate/article/104221/Dirty-Deeds
Whew I thought that bonus money might disappear
http://www.washingtonpost.com/wp-dyn/content/article/2008/01/17/AR2008011703050.html