You Buy A Home, And The Next Week It Drops $30,000
The Daily Sentinel reports from Colorado. “A remarkable run-up in property values in the last few years appears to have reduced the appetite of some would-be buyers and left others on the outside looking in at what could have been. Real estate sales in Mesa County sank more than 11 percent to 6,424 last year from 7,241 in 2006, according to a year-end report produced by Stewart Title Company in Grand Junction.”
“Exasperating the decline was that real estate sales plunged 20 percent in the fourth quarter ending Dec. 31. That marked the sixth quarter in a row that real estate sales were lower than the comparable period in the previous year.”
“”It seems so healthy. Retail sales are strong … and we have job growth. They wonder how this can happen,’ said Bob Reece, who researched and authored the report. ‘I think the basic person with a pocketbook is looking at what they can afford or reasonably purchase … but they are struggling at this point.’”
“The report showed that a total of 19 homes, priced between $750,000 and $1 million, were sold between Nov. 30, 2006 and Dec. 1, 2007. At the same time total listings in that price range increased to 40. Data for homes priced above the $1 million threshold were nearly the same.”
“That, Reece said, showed homes in those categories took more than a year to sell. The slowdown comes on the heels of 65 percent run-up in local housing prices in the past five years, Money magazine noted in its December issue.”
“No question,’ said Denny Granum, president of Monument Homes in Grand Junction, on the length of time it takes to sell houses at the far end of the pricing spectrum.”
“Granum, whose company specializes in the $500,000 and up market, said he ‘peeled back the prices on a couple of houses in areas where they were a little higher priced’ than they should be for the market. ‘It’s business,’ he said.”
The Arizona Republic. “Single-family home resales and the median price are falling across the Southwest Valley, with Avondale being hit the hardest. Avondale saw a 31 percent drop in the number of homes resold in 2007 compared with ‘06, and an 11.5 percent drop in the median price of those homes.”
“Buckeye experienced an 8 percent drop in the median price of those homes. Goodyear, Tolleson and Litchfield Park also saw decreasing resales and the median price. Those are among the findings of Realty Studies of the Morrison School of Management at Arizona State University.”
“The declining resales and median prices stand in stark contrast to the booming real estate market experienced in the Southwest Valley in 2005, when people looking for homes were competing with investors, driving up sales and prices to levels never before seen in the area. That rapid growth of sales activity and prices was largely due to the ever-increasing involvement of investors in the market, according to Jay Butler, director of Realty Studies.”
“‘Many investors have found it increasingly difficult to rent and are trying to sell their homes before they lose them to foreclosure or to sell them to lock in any appreciation,’ Butler said.”
“‘Many investors have found it increasingly difficult to rent and are trying to sell their homes before they lose them to foreclosure or to sell them to lock in any appreciation,’ Butler said.”
“‘Another source of trouble properties are those households, in anticipation of continued appreciation, bought more home than they could afford and probably used non-traditional financing to acquire it. Thus, confronting financial issues, these households are trying to sell in order to obtain some appreciation and/or to avoid foreclosure,’ he added.”
“James White, with West USA Premier Properties in Avondale, said many buyers are just waiting for the market to bottom out.”
“‘You buy a home, and the next week it drops $30,000, nobody wants that,’ White said. ‘That’s the biggest problem. The buyers are there. I get a lot of calls and inquiries from buyers, and they’re hesitating and they’re waiting.’”
“‘Speculators were the guys who thought they were going to come up here and grab that bubble and ride it out, and they had that situation where they had to hold the house 18 months,’ said Realtor Carl Chapman.”
“In many cases, builders put 12- to 18-month deed restrictions on homes they sold, and wouldn’t allow the homes to be rented, Chapman said.”
“‘During that 18 months, the houses all came due about that same time, and that’s a whole ton of these brand-new houses,’ he said. ‘If you look at the Internet and look for homes that were completed in 2006 and never lived in, there are just tons of them out there, beautiful homes, great bargains.’”
“Chapman said Avondale has a lot of those homes that were never lived in and are considered resales. Resales are also facing a lot of competition from those selling new homes, Chapman said.”
In Business Las Vegas from Nevada. “What’s in store for the Las Vegas housing market in 2008? Dennis Smith, president of HomeBuilders Research, says 2008 can’t be any worse than 2007.”
“Smith says he expects new home prices to show year-over-year decreases of 10 percent to 15 percent during the first quarter. By midyear, it will be 8 percent to 11 percent and by the end of the year, price reductions should be about 5 percent over the last months of 2007.”
“That means, he says, there isn’t much more of a bottom when it comes to the new home market. ‘Homebuilders are very near the end of their price cuts in Las Vegas,’ Smith says.”
“An appraiser, he says, recalled going to subdivisions and seeing concessions as high as 33 percent with the typical concession offered by builders at 20 percent. Many subdivisions have lowered prices by as much as $80,000.”
“Those who continue to wait for more price declines are gambling, he says.”
“The number of homes bought with jumbo mortgages tumbled 80 percent in November compared with November 2006, DataQuick reported. It said 5.2 percent of total home sales were financed with jumbo loans in November, down from an average of 12.3 percent during the first seven months of 2007.”
The Reno Gazette Journal from Nevada. “After building permits for housing in Reno, Sparks and Washoe County dropped last year to the lowest levels since the early 1990s, home builders said they are waiting on the sidelines or cutting prices to survive through 2008.”
“Single- and multi-family residential building permits dropped 67 percent since peaking at 6,404 permits in 2005. The 2,089 permits for 2007 are 39 percent lower than the previous year and the lowest number of new home permits in 15 years.”
“The number of construction jobs in the Reno-Sparks metropolitan area has declined as well; the building trades employed 20,900 in November, down by 2,600 from a year earlier, according to state statistics.”
“‘The best thing, in the short term, is building permits fall even more,’ said Perry DiLoreto, a Damonte Ranch developer in south Reno. ‘As they fall, supply will have a chance to match itself with demand. But I don’t think it’s going to turn around soon. We have some problems to sort through.’”
“Paul Curtis,CEO for the Kiley Ranch development in Sparks, said his company has taken a similar tack. ‘We basically pulled all residential land for sale off the market,’ he said. ‘Why chase the market down?’”
“Curtis said large public home builders are dragging down the housing market. They’ve written down the value of their land and are pricing homes with the lower land values.”
“DiLoreto said the big drop in permits in 2007 is not surprising, given the spike in 2005 and soaring prices because of speculation. Now, prices are falling as builders try to get rid of some excess inventory and find a price level to win back buyers. Construction materials also are on the decline.”
“‘The first thing is all the air has to get out of that bubble,’ said DiLoreto, who is also a land developer.”
“Tom Sabini, general superintendent for Bailey Dutton Homes, said his company cut home prices by $20,000 across the board this week at its four subdivisions in Reno to reduce its inventory of unsold homes.”
“‘We are at the bottom,’” Sabini said, of the housing market. ‘We have to crawl to get out.’”
“He agreed consumer confidence is the key. ‘It’s mob driven,’ he said.”
“To survive, Sabini said Bailey Dutton has reduced its work force from 145 to 25 employees. Sabini said a lot of his subcontractors also are hurting. ‘It’s a shame,’ he said. ‘Some of them have subcontracted with us for 25 years.’”
“One of them, Reno Truss Inc., dropped its work force from 200 to 60 over the past year, said Michael Ellis, sales and marketing manager. ‘We have cut back people. We have cut back pay. We have cut back prices,’ Ellis said. ‘We are trying to survive.’”
“‘(The year) 2005 was too much,’ he said. ‘The major builders came in and overbuilt like crazy. It has flooded the market.’”
“DiLoreto said some builders are offering a few homes for sale at huge discounts to find out what buyers are willing to pay.”
“‘Part of the problem is the false economy we were operating on,’ DiLoreto said. ‘There were a lot more buyers in the market than there should have been, both speculators and those who shouldn’t have been in conventional (lending) terms…Builders raised their prices and rushed to supply more product. But a lot of them weren’t buying homes to live in and they weren’t qualified buyers.’”
“But he also said a number of people are renting, waiting for their move. ‘I don’t blame them,’ he said. ‘They want to know a house is worth what they pay for it.’”
“About 400 new condominiums in Kiley Ranch are being rented. What would help, Curtis said, is for home prices ‘to come in line with wages.’”
‘Paul Curtis,CEO for the Kiley Ranch development in Sparks, said his company has taken a similar tack. ‘We basically pulled all residential land for sale off the market,’ he said. ‘Why chase the market down?’
I got news for you Paul, you are chasing the market down:
‘The chill on Northern Nevada’s housing market has cooled the cost of materials that go into building a new home or remodeling an existing one.’
‘Nowhere is that more apparent than with lumber, construction’s big-ticket item, where the price tags on two-by-fours and other cuts have shrunk as much as 30 percent from a year or two ago.
That has prompted builders and contractors, already scrambling for what limited business is out there, to tout the current market as ripe for buying a new home. ‘There’s not a lot of building going on. Everyone just wants to get whatever they can to keep working, and that’s driving costs down,’ said Scott Spracklin, owner of Spracklin Construction in Reno.’
‘In the third quarter of 2007, the median price of a new home in Washoe County was $351,840, according to Center for Regional Studies figures based on Washoe Assessor’s Office data. That was a minuscule 0.5 percent rise from the second quarter but an 11.8 percent drop from the $399,000 median price of a year earlier.’
‘Randy Blackwell, owner of B&C Builders Supply in Sparks said he’s had contractors apologize to him because they have no projects needing his products.’
‘Troy Means, co-owner of HomeCrafters in Reno, said costs have come down as much as $25 per square foot for custom homes, his business’s focus. He cites reductions in excavation, stucco, drywall and other costs that, when he gets to a bid’s bottom line, surprise him.’
‘We’ll go through our bid five times over because the overall price is so much lower than two years ago,’ he said.’
Reno was the original Las Vegas and never grew up, until this housing bubble…
It has nothing to offer, except proximity to Tahoe.
Read that Reno was the largest gambling market in the world in the early 1960’s. It is good for a weekend of gambling and food without the crowds of Vegas.
Some just can’t do the math to figure that a good weekend does not equal a 30 year mortgage.
Just like the hundreds of Indian Casinos if that is what you do for kicks. Reno is only good for TV: Reno 911
I LOVE that show! Hahaha! Oh, golly.
“‘We are at the bottom,’” Sabini said, of the housing market. ‘We have to crawl to get out.’”
351K median in Washoe the bottom? Now that’s comedy! We’re no where near the bottom. For median income to pencil with median home prices, we need that number just below 200K. Until then, enjoy the free-fall.
Given the building slump in tourism combined with the virtual end of non-casino construction, Vegas is absolutely dead meat.
And Heloc money that drove the casinos earnings, is no longer.
I’d imagine markers (cash advances to players at the tables) are few and far between.
The “bling” has gone out of gambling, in a big way.
Given the building slump in tourism combined with the virtual end of non-casino construction, Vegas is absolutely dead
Add the expansions of Indian Casinos which are happening everywhere.
A report recently said that Vegas casino revenues have started to drop sharply in the last couple of months.
The Strip is down something like 18% from last year. Especially strong decline in traffic from whales (high-rollers).
Saw this afternoon that one prediction for the bottom based on the futures market is November 2011.
Got Deflation? LOL
Cousin bought a 1300 sq ft ranch in 1992 for 114k, which I thought was too expensive at the time. She said it was worth 350k two years ago and that the house was her retirement. She said the place is worth 250k now and the end does not appear near, which is unfortunate, but expected.
The entire Reno area was bubbly for quite sometime and besides the usually clear skies and dry weather, I don’t see the appeal. After breathing Reno forest fire air for a week in September, I would rather inhale the air of my familiar upstate NY, believe it or not
Yeah, it’s dry except when it snow 3-4 ft in a few days and the whole city pretty much shutdowns. You don’t even need a forest fire, a couple of good temperature inversion will suffice.
I know a few people that bought small houses in marginal neighbors, thinking that could do some rehabbing and then move up in a couple of years. I think many of them will be trapped. Like you said unfortunate, but expected.
I lived in Reno/Carson City for more than a decade. I would describe it as a mix of Las Vegas and the people from “Deliverance”.
“He cites reductions in excavation, stucco, drywall and other costs that, when he gets to a bid’s bottom line, surprise him.”
This reminds me of a post about 12-18 months ago by someone in Florida who worked at a place like this, and due to this blog he was worried about a construction down-turn, yet his boss was talking expansion of the company’s facilities.
“Those who continue to wait for more price declines are gambling, he says.”
And those who don’t play, don’t lose.
“Those who continue to wait for more price declines are gambling.” Nope! Those who buy NOW are gambling because the whole financial system is under pressure. Not just in the US but everywhere.
Anyone who steps in to buy assets, be it property or anything else at this stage of the game, is going to end up a Greater Fool. On top of that, by the time this mess is over which could take 12 months or 12 years, assets like property will languish on the market for a long time. Why? Because people will be shell shocked from the downturn experience.
Once assets (such as property) do it bottom it’s going to stay there for several years for many reasons. One already mentioned (shell shock) but the banks are not going to start throwing money around for another 20 years because THEY will also be shell shocked. Added to that, if we get a few perp walks from this debacle, that will just be iceing on the cake which will keep the CEO’s of financial institutions on the straight and narrow…..for a little while anyway.
Got news for him — this time “the house always loses”.
These people are so desperate for a commission. Get a job!
“Those who continue to wait for more price declines are gambling, he says.”
I like those odds
There’s nothing I hate more in the MSM than crappy, single-sourced stories that quote one “housing expert” or “housing consultant” or, even worse yet (I saw this in a Las Vegas story recently) “local housing guru.”
I’m from Las Vegas, and Dennis Smith is the second-worst housing bull in town (trailing only the truly embarrassing Steve Bottfeld, one of these self-styled experts who talks his book, which is that housing only goes up and Vegas is different!).
Smith and Bottfeld lost any credibility long ago, yet InBusiness and the other local LV rags continue to quote their lies on a regular basis, with no opposing view from street level.
Would it have killed this reporter to call at least one person in town to talk some reality, someone without a vested interest in jawboning the housing market back to health? Truly crappy journalism, which should embarrassing everyone associated with the Greenspun publications that put out the story.
– Judge Smales
“You’ll get nothing and like it”
Telling Nevadans they’re gambling isn’t exactly a warning.
‘…Homebuilders are very near the end of their price cuts in Las Vegas,’ Smith says.”
How is this statement related to Mr. Prof Bear seemingly elusive: “Ground Zero”?
“Smith says he expects new home prices to show year-over-year decreases of 10 percent to 15 percent during the first quarter. By midyear, it will be 8 percent to 11 percent and by the end of the year, price reductions should be about 5 percent over the last months of 2007.”
“That means, he says, there isn’t much more of a bottom when it comes to the new home market. ‘Homebuilders are very near the end of their price cuts in Las Vegas,’ Smith says.”
Unfortunatly banks are not near the bottom of their price cuts. Plus all the other long term holders that really need to sell.
More importantly the banks are not near the bottom of what they are willing to lend. Right now is still easy credit compared to the early 90s but is trending downwards.
And employment is dropping like a stone in construction… formerly some of the best jobs in the country.
“And employment is dropping like a stone in construction … formerly some of the best jobs in the country.”
And these best jobs will be replaced by … what? By jobs paying less than half of what “some of the best jobs in the country” used to pay.
That’s if one who used to have one of these “best jobs” can get rehired somewhere else.
The ripples generated from this downturn are gonna be very painful for many. Very painful.
One of the best jobs? But I thought construction was one of those jobs that “Americans won’t do” because of the poor pay. That’s why we needed illegal labor!
I think everyone knows there were good jobs in construction compared to Walmart/Target/BestBuy/Starbucks….
Then all sorts of people went into real estate and mortgage brokering… Those jobs are gone for a long long time.
Just wondering hwo will survive all this.
I’m thinking LA is a losing proposition. With the tensions with all the Mexicans escalating…. Heck the wife and I got in two fights this weekend (she is Mexican and I’m German/Irish).
Seriously think there will be tension though… poor people looking to survive will resort to crime. Minorities will be very resentful when told “no” in the refinance process. It will get ugly.
James,
I don’t know what to do.
I’m in WI, nice neighborhood, so far, so good.
I have this impending sense of doom. (Yeah, it’s different here, God’s country and all.)
AK-check
Ammo-check
Moody hubby-wants his toys-check mate (Honest worker).
Wants us to buy a house yesterday–not without my signature! (I read, he checks the numbers too.)
We both have one thing in common–get the heck out of Dodge and we love AK’s and the likes!
More so:
-no debt
-cash
-PMs
-land
-energy
Lord, I could go on.
This is the Cali thread, not the WI thread.
Not all poor people resort to crime. Hecks. I don’t know.
You are closer to the situation–tell me–are we going into the fetal position?
Looking for answers,
Leigh
Well my prediction is this: Reno has a large percentage of transient workers. When the jobs dry up in Reno, they will just leave town. Fewer people in Reno actually have roots there than most towns. Of course, with people leaving town, that makes the inventory situation just that much worse.
“‘During that 18 months, the houses all came due about that same time, and that’s a whole ton of these brand-new houses,’ he said. ‘If you look at the Internet and look for homes that were completed in 2006 and never lived in, there are just tons of them out there, beautiful homes, great bargains.’”
Umm…didn’t I just see a special news report about all the thief, vandalism, crack freaks camped out, etc. in these “beautiful” vacant houses? Whole air-conditioning units, gone. Windows broken. Dead landscaping.
yes, just “beautiful”.
Um, yeah…those beautiful Potemkin Village Garage Mahals, slapped up by illegal-immigrant crews and fly-by-night subcontractors; gaudy, shoddy, soulless oversized crap-boxes. Yes, those cathedral ceils will be REAL popular with $100-bbl oil. And let’s not forget the sense of community that will spring up among the pot growers, copper-strippers, squatters, meth dealers, and other human vermin that will gravitate to these instantly blighted ‘hoods.
Yes, just “beautiful.”
Samuel, you are on a roll today, sweetie pie…
please don’t hold back….
lol
(two hairy asscheeks….lololololol)
Potemkinkaide Village Garage Mahals…
Don’t forget the “art”
RE: Yes, those cathedral ceils will be REAL popular with $100-bbl oil.
LMAO…SS~Also gotta luv those massive 2 story front foyers with the massive ostentatious cental winding stairways…no more than a huge, functionally incurable, siphon to take all that $100pb heat from the 1st floor and send it all right up thru the attic scuttle.
Wonder if all those cut-rate immigrant crews even put insulation in the attic?
You know the saying-outta sight- outta mind
However, the area does provide an impressive back-drop for all those debutante and high school prom photo-ops.
Easily worth the $100k construction cost.
I love how every new house is a just a garage when you drive by! So ugly! Then people fill the driveway with cars and that is all you see, a sea of leased cars. blah!
You’re no one in L.A. unless you live in a house with a really big door.
– anyone remember the movie that one came from?
Harris: “You know, you’re really nobody in L.A. unless you live in a house with a really big door.” - L.A. Story, 1991
You know, you’re really nobody in L.A. unless you live in a house with a really big door.”
Yes, a house with a really big door needs “Great knockers”
No but I remember “Italian Job” and the infamous Micheal Cain quotiaton “You only supposed to blow the bloody doors off!”. http://www.youtube.com/watch?v=8g_GeQR8fJo&mode=related&search=
I wonder how many desperate flippers will be trying something similar to this….
Ain’t going to be any money left to send the precious kinder to any debutante ball or high school prom. Daddy’s working the late shift or is long gone.
Paraphrasing a Seinfield episode: No prom for you !!!!!
Yes, I’m obviously a bitter renter (albeit one with no debt and with gazillions stuffed in US and Foreign CDs!!)
Potemkin Village Garage Mahals
A lovely turn of phrase, man.
“That means, he says, there isn’t much more of a bottom when it comes to the new home market…”
Hey today is my birthday…I intent to find the bottom of a 24 year old single malt Scotch sometime before mid-night…my present: Global markets validate that: rain can turn to hail…rather quickly.
Happy Birthday, hwy! And good choice on the self-present. Add some chocolate truffles and some loud singing to that, and you’ll get your next year older off to a great start.
Happy Birthday, Hwy.
Slainte!
Enjoy the single Malt! (one of the primary food groups.)
Happy Birthday HWY! Enjoy the drink, but don’t stay out too late or you might miss the fireworks tomorrow morning when our markets open!!!
Thanks all!
I’m not quite sure …but I think tomorrow is a First Day…then again, it might be a back to back: A Fourth Day.
Red balloons and confetti everywhere!
:::clink:::
Leigh
Happy birthday, hwy, I’m sipping cognac to try to get myself to sleep. What happens tomorrow has me a little edgy. Now I’ll drink it to you.
“That means, he says, there isn’t much more of a bottom when it comes to the new home market. ‘Homebuilders are very near the end of their price cuts in Las Vegas,’ Smith says.”
Oh, are they now? What happens when the get to “the end of their price cuts” and they’ll still standing around twiddling their thumbs?
Price goes back up?
New Zealand first market to open for Tuesday - DOWN sharply…
Dollar/Yen unwind continues for Tuesday - the global meltown continues…
105.78 yen to the dollar…
Must suck for those doing the Yen carry trade at 115 to 120 Yen to the dollar. Both sides. One side now cannot afford to repay. The other side of the trade won’t get repaid. When money becomes too easy…
Got popcorn?
Neil
I’m gone for a few short days. My beloved Packers not only can’t cover the spread, they lose to a rag tag team from New Jersey. So, like the rest of the world, I’ll have to sell my longs to pay off my losing wager.
Fortunately, being and staying short the Euro and long the Yen has been profitable YTD and should continue to be profitable.
How many alliance currencies have ever survived? (The Euro is an alliance currency).
What is the cost of a country to leave the Euro? For example, Italy would love to inflate its way out of this problem… But could they opt out and re-introduce the Lira? Note that I’m asking… is there any structure for a country to pull out of the Euro?
Got popcorn?
Neil
Hoz baaaaby!
I cried in my wine cooler after last night’s GBP game
Leigh
Leigh you better give me your email address so’s I can pay off the wager! Losing weekend, out played.
I wanna change my tag to “mellowyellow”…
Okay - I’m on top of the alliance currency issue. Over the next two - five years the dollar may recover significantly vis a vis the Euro as they face pressure divorce… This is getting interesting in a hurry. Oops - just heard an exploding butter dish in my microwave. This popcorn’s sure yummy!
Ol popcorn buddy, When the pistachio shells hit the floor, the Euro is crushed. There are already serious problems forming in the Euro nations.
“…Time and again in history…a leap in inflation has been the line of least resistance for governments in fiscal difficulties: the defeated powers after the First World War, for example, or Russia and the Ukraine since the collapse of the Soviet economy. This, of course, would be the moment of truth for the single currency. One possibility—which cannot be ruled out—is that the ECB will cave in, allowing the euro to depreciate and inflation in the Eurozone to rise. It seems unlikely, however, since the Bank is explicitly prohibited from acceding to a request for monetary financing under the institutional framework established by the Maastricht Treaty. To be precise, there is a strict “no bail-out rule‟ enshrined in Article 104 of the Maastricht Treaty and in Article 21 of the Statute of the European System of Central Banks. This is the crux of what has been called the “unprecedented divorce between the main monetary and fiscal authorities‟ brought about by EMU.
“It is therefore not difficult to foresee a series of collisions between national governments, struggling to bring their finances under control, and the European Central Bank, which is bound to maintain price stability as its primary objective (under Article 2 of the Statute of the European System of Central Banks). The ECB is likely to ignore the “unpleasant monetary arithmetic‟ implied by the budgetary imbalances of the member states, and to retort with some “unpleasant fiscal arithmetic‟ of its own by raising interest rates.
“If all countries were in approximately the same predicament, a political resolution of this conflict might be conceivable. But because there is such variation in the scale of the generational imbalances within the Eurozone, and indeed in their rates of growth and inflation, some countries will get into difficulties sooner than others. It is not hard to foresee the kind of inter-country conflicts this could lead to. Most attempts to assess the likely durability of EMU have sought to estimate effects of an “asymmetric‟ shock to the system. Generational accounting suggests that the system already has asymmetry and many not need a very large shock.”
“…Still, the fact remains that history offers few examples of democratically agreed budgetary adjustments on the scale necessary in certain European countries today. What it does offer are several examples of monetary unions between sovereign states disintegrating when the exigencies of national fiscal policy became incompatible with the constraint imposed by a single international currency.”
“The Cash Nexus: Money and Power in the Modern World 1700-2000.”
Niall Ferguson
2001
amazon link
http://tinyurl.com/2l4vcd
Quote taken from Jack Crooks currency news letter
RE: My beloved Packers not only can’t cover the spread, they lose to a rag tag team from New Jersey. So, like the rest of the world, I’ll have to sell my longs to pay off my losing wager.
My sympathies from here in Tom Brady country.
We look forward to trashing Peyton Jr. and his fellow Big Apple imposters.
Packers? Hah! Giants schooled em. Patriots better not order the champagne just yet….
Were we watching the same game? The game was the Packers to lose. Where’d they go in the second half? I am soooooo bummed…..:(
“We look forward to trashing Peyton Jr. and his fellow Big Apple imposters.”
Well, they didn’t look like imposters last night. As a looooong time Niner and Raider fan, I’ll sit and watch, seeing as my guys self-destructed early on.
Australia opens in an hour - lets see what happens there…
Panic begets panic. Fear breeds fear.
that’s what Bearnanke must be feeling just about right now.
Too dumb to be scared.
You’ve misunderstood academics. He has already stated that growth could stall or even be negative for a time. As human as he may try to be and appear to be, this is all a kind of numbers game to him. William S. Burroughs captured this way of viewing the world quite succinctly, if obscenely: “No job too dirty for the fucking scientists.” What mainly concerns him is that there is no way of easily finding out what this stuff that has been extensively traded is worth, and that makes his calculations go all funky.
Actually too smart not to be, but unfortunately has the leadership-negating quality of not being able to hide it.
The CSS (Contracting Sphin**er Syndrome!)
How’s he gonna bail out ALL the world’s markets?
Incidentally, the bailout is DOA.
$800 by when? And it’ll prop up what for how long? Put a fork in it. Next.
“$800 by when?”
Funny thing, but we all probably know at least one person who has already spent that $800 - just this weekend!
At the rate this is transpiring it will never get to them in time. Think Custer/Little Big Horn.
This is too big to bailout. Everyone knows.
They can’t hold the line at the monolines either, incidentally. They may try that but that’ll fail too.
I think everyone’s going to learn how a absurdly leveraged FIRE economy deleverages. However, it never proceeds in a straight lines Just build that into your expectation.
Impressive. No, really. That’s really impressive.
“Just build that into your expectation. ”
I have tried to…anyway. Despite the pretentious nature of some of my posts these past 15 months, I am entirely at a loss as to what we will all be saying 24 hours from now. This is very humbling.
Chill. It’s all good.
And soon I will make my way to Chicago (lived there for many many years) and we’ll party.
Edgewater. Some people turn to the bible. Some people refer to historical greats. I turn to this….
http://www.youtube.com/watch?v=jHPOzQzk9Qo
Some things in life are bad
They can really make you mad
Other things just make you swear and curse.
When you’re chewing on life’s gristle
Don’t grumble, give a whistle
And this’ll help things turn out for the best…
US Futures open in about an hour.
Will be interesting to see how much activity there is overnight. Usually there are crickets chirping but somehow I think tonight will be different.
I agree.
However, it would be funny if this turned out to be a big non-event day…Where is Jas when you need him?
Oh, Death Spiral…where art thou?
prediction: Dow ends day in positive territory. Take it to the bank.
Agree — only because of manipulation to stop the momentum. Good chance to get out of longs if this is the case, IMO.
I feel a bit like Ed Norton in FIGHT CLUB’s final scene, serenely holding hands with Marla (Helena Bonham Carter) and watching out the window as all the skyscrapper-headquarters of the credit card companies and other financial titans imploded and crumbled before their eyes.
http://www.youtube.com/watch?v=LZizOAR6a-c&feature=related
Here’s the scene.
Sammy - those buildings fell so well…it almost looks like a conspiracy to take them out…
I heard on NPR interview at noon PST that they expected futures to open at -500 on the stock market.
those granola heads on NPR would love that. They hate it when anyone makes money.
Laugh.
I worked for an NPR station a decade ago, and made peanuts.
So has that enormous grant from MCDee’s changed them?
Are you kidding, they get a lot of their money from very wealthy donors. They depend on the public to support them, how many will write checks when they can’t afford food.
I have two owls outside tonight.
The sound is such a turn on for city girls.
Aha, so the whole country DID get drunk today.
“It seems so healthy. Retail sales are strong … and we have job growth. They wonder how this can happen”
Simple. Growth was driven by the housing market. Remove the bubble and you remove the growth.
Plus, houses in a lot of places are still unaffordable.
The normal economic theories go like this:
Too much inventory –> reduce prices to move it –> remove excess –> learn your lesson and apply it in the future
You missed the most important piece: REPEAT!
Otherwise, it would work just like a planned economy …
“The report showed that a total of 19 homes, priced between $750,000 and $1 million, were sold between Nov. 30, 2006 and Dec. 1, 2007. At the same time total listings in that price range increased to 40. Data for homes priced above the $1 million threshold were nearly the same.”
In Grand Junction? Where everybody is an oil tycoon?
Dear Folks,
The Grand Junction area is on the verge of finding out that they aren’t immune to national trends. We have been enjoying an energy boom as well as a housing boom. I think we are about to discover that it takes both components to fuel our growth. Energy is still percolating nicely (natural gas development), but housing sales are slipping nonetheless. It makes me curious as to what will happen to all the people in construction….
As an avid listener to CNBC and Larry Kuntlow I am so happy I diversified my stock portfolio to Global stocks like in China, India and South Korean.
Let us know how that comes out!
i’m joking.
Goldilocks is on her death bed and larry K is beyond belief.
Umm… Yes, Goldilocks is in a bed, but its not her death bed…
I believe the agreed upon phrase is that she’s ‘bitting her pillow.’
She has to get out of debt somehow…
Got popcorn?
Neil
I hear there’s a shortage of proctologists so at least you get to beat the rush to the emergency room and have an eight hour head start in case of traffic.
lmfao!!!
“He agreed consumer confidence is the key. ‘It’s mob driven,’ he said.”
I knew the mafia was involved, somehow.
Happens a lot in Nevada…
“Exasperating the decline was…”
Exasperating the floundering decline.
“Exasperating the decline was that real estate sales plunged 20 percent in the fourth quarter ending Dec. 31. That marked the sixth quarter in a row that real estate sales were lower than the comparable period in the previous year.”
EXASPERATING???????? WTF???????? Are illegal immigrants writing news stories or is it an FB?
“Exasperating the decline was that real estate sales plunged 20 percent in the fourth quarter ending Dec. 31. That marked the sixth quarter in a row that real estate sales were lower than the comparable period in the previous year.”
Exasperating?? WTF? Are illegal immigrants writing news stories now?
They were afraid that exacerbating sounds dirty.
Exasperating is correct. Used more in the UK maybe?
Exasperating is not correct at all. Exacerbating is correct, but as ron said, they think it “sounds dirty”.
LMAO!
Check your dictionary.
Hey PB, exacerbating means to increase. Read the sentence again in a ‘causing an increase in the decline’ sort of way. Exasperating means annoying. ‘Annoying’ the decline? Not.
Comment by cayo_ron
2008-01-21 16:19:53
They were afraid that exacerbating sounds dirty.
Hahaha…that would be funnier if it weren’t true. Jeeze, I hate it when innocent words are brutalized.
Another pet peeve word misuse:
“Flaunting the rules”.
It’s flouting.
Flaunting means showing off, e.g. flaunting your gold jewelry. Flouting means deliberately disregarding.
Freudian slip.
For your amusement before it gets flagged off:
http://dallas.craigslist.org/com/546726115.html
What are they asking for? What are they offering? Obviously money - but for what? They are “interested” in real estate but don’t seem to have an investment opportunity to offer. What are they going to do - manage the property?
I’m confused. I guess I would have to be an attorney to understand.
/Is the attorney business really that bad?
It is if you’re an illiterate from a cracker law school in Oklahoma.
Thinks residential real estate is “personal property.”
I beg your pardon!
“Cracker” is reserved for those of us who are illiterates from Florida. I resemble that remark!
“/Is the attorney business really that bad?”
These people must either be really stupid or running a scam or possibly both. As this credit/debt/housing bubble unwinds, there’s going to be plenty of demand for attorneys with the right specialties. How bad are they as attorneys if investing in real estate now, of all times, is what they consider a better option?
Ugh…I can’t stand lawyers and I am one..
Send em here
https://hiringcenter.walmartstores.com/OnlineHiringCenter/initialPage.jsp
oh, sweet cheezus. Right, because the real estate investing world just have enough newbie FB’s. They must’ve finished last in their class.
Can you say “bad timing”? I knew you could!
Oh, hahaha. I thought these were dead. Another one of those scammers looking for straw buyers.
http://dallas.craigslist.org/com/546554082.html
Rather than do sting operations on small-scale marijuana dealers and prostitutes, why don’t the feds do a sting on some of these guys?
It would bring them more publicity. Hookers and Drug Dealers is too boring. It happens all the time. But Mortgage Brokers, Flippers, and Realtors?
I’ll start watching “COPS” again.
bad boys bad boys, what ya gonna do, what ya gonna do when they come for you?
It can be confusing, (Makes my head hurt) trying to figure out the details on money supply M1 M2 M3 and how it relates to the cause or effect on inflation, recession or depression. Many hundreds of thousands of people and companies have made hundreds of billions of easy dollars during the past 30 years “investing” in Real Estate, where did all this easy money come from? Some one had to lose it, who lost it??? It‘s like every one has been cashing post-dated checks against funds which have not really been deposited in the bank yet
Like this comment? [yes] [no] (Score: -1 by 1 vote)
The closer the M gets to M0 the more real the money becomes, the more it resembles the spendable kind.
Throw a shrimp on the babrie - AUSSIE market down 2.7% at the open…
Now down 3.5% - TIMBERRRRRRRRRRRRR
clarification? is this the market Tue morning in Australia? wow
Right now - Tuesday morning. 12 days in a row of DOWN…
Now I am very busy, in panic there is opportunity.
Agree!
Down 4.2% now - its a good time to buy???
Forgive me for the basic question, what could be the possible effect of the Aussie market moving down on the standing of the Australian Dollar?
In the short term not much. But if the markets smell a worldwide recessionary trend they’ll anticipate a fall in commodity prices, which will mark down the resource-oriented Aussie economy and currency.
Thanks for you response!
Aussie down 4.8%
and they actually have some sht to sell China-whata we got ?
Lots of good reading on Prudent Bear today: http://www.prudentbear.com/
“Curtis said large public home builders are dragging down the housing market. They’ve written down the value of their land and are pricing homes with the lower land values.”
Another HBB prediction, made years ago, coming to fruition.
“Dennis Smith, president of HomeBuilders Research, says 2008 can’t be any worse than 2007.”"Those who continue to wait for more price declines are gambling, he says.”
Sorry Dave, but I think you know those who BUY are gambling at much crappier odds than waiting.
DOC
Futures market is showing the Dow will open 451 points down. We will probably hit trading curbs right off the bat.
They changed the curbs a few months ago, the first one doesn’t go into effect until 10% off the DOW.
Then it could be worse than I expected.
At 10% off the exchange shut downs for an hour, I imagine Pisani would come unglued. LOL
Pisani will find some good from what happens tomorrow morning.
I know. It’s a good time to buy long.
CBS New did a story on small businesses hurting from the recession, and Exhibit A was an Oil and Garlic boutique. I’m really tore up about that one.
When taking my Saturday morning walks I am amazed at the stores that did not exist twenty five years ago - and might not exist one year from now.
I took a little drive today. Coastal Florida is of course strip mall city and there has been an acceleration in vacancies just in the last couple of weeks. Lots of people at the low dollar places like car wash/detail, Dunkin’ Donuts, Walgreen’s, but very little traffic in Office Depot, bike shop, etc. (MLK has never been a holiday for retail, only banks/gov.)
No doubt, there has been another small but discernible move downward in retail activity since the first of the year. Also went by first place I rented down here, which was a duplex that the owner thought could take up to 3 months to sell (I inwardly smirked) when he put it on the market in Spring 2006. It’s still for sale, and for the first time has no tenants.
RE: the low dollar places like car wash/detail, Dunkin’ Donuts,
Dunkin’ Donuts-low dollar?
$2.35 for an incredibly shrinking medium black coffee is pretty stiff for me.
I watch soccer mom’s load up for themself’s along with their spoiled brats with a hodge-podge of bagels, breakfast sandwiches and some quasi-coffee drinks. They drop $25.00 easily.
But what I always especially like about the place is how these doting mother’s will hang up a line of 15 people up so they can bitch to a harried clerk that little Audrey’s bun wasn’t toasted to perfection, and that she want’s another one prepared-complete oblivious to those waiting.
Oh Gawd, people are such idiots.
Don’t worry. That will correct itself shortly.
my favorites are the “scrap book shops”. wtf ?
The others are business’ associated with pets like dogie birthday cakes. wtf2?
Oil and garlic are GREAT. Those and bread and beer and cheese are all you really truly need in the world.
That really is sad, unless they were that sort of posturing pretentious boutique kind. Then it’s okay.
As I keep saying, people overestimate how cheap it is to cook with even the fanciest ingredients.
For $2 a person, it will be a tasty modest snack. For $5 per person, it will be excellent food. For $10, I give you fancy excellent food. For $25, I will rock your universe.
Wine extra.
Pink Kangaroos may make the world rock harder too. (You buy me some!)
Don’t forget the candles.
Bake some more dog biscuits.
Nikkei DOWN 514 at the open - TIMBERRRRRRRRRRRRRR
Now DOWN 621 - Which does to 10k first - DOW or NIkkei??
Holy cow batman! That chart is almost a cliff! Hey… New Zealand is recovering a little… hmmm… PPT?
Oh, tomorrow will be interesting. I’m going to have to say home through the opening.
Got popcorn?
Neil
It’s bounced back. Down 450 poins from 650.
BSESN,
down 9.75%.
Jakarta down 9.1%
Hang Seng down 8.04%
Nikkei 4.91%
Yea… I think tomorrow will be interesting.
Got popcorn?
Neil
HOLY CRAP. This is Armageddon. Get your guns. Start stocking up the goods. Head for the hills.
Why am I picturing that Red Dawn invasion where people piss in the radiator?
Let’s see, we had late February - then August - then November - now January.
Well, at any rate the contractions are getting closer together and more pronounced - seems like someone’s getting ready to have kittens.
Ha ha - I hadn’t noticed that. I don’t think it’s going to be kittens though. More likely this guy:
http://www.fns.org.uk/ac.htm
Hundreds of Layoffs Expected at Yahoo….
http://www.nytimes.com/2008/01/22/technology/22yahoo.html?_r=1&hp&oref=slogin
Sunnyvale, Mountain View, Palo Alto, Atherton.
Your epic destiny with fate and deleverage are here.
Put a JT in it. Next.
There goes SF RE prices. : )
Who is laying off next???
All these markets are pretty meaningless now - this is just local forced selling. S&P futures really haven’t moved much since morning. More money to be made scooping up the bottom in Tokyo right now than long or short tomorrow in NY. Would somebody please move MLK day to August?
Indeed.
August of the year 3000.
Comment by Tom
2008-01-21 17:18:12
It would bring them more publicity. Hookers and Drug Dealers is too boring. It happens all the time. But Mortgage Brokers, Flippers, and Realtors?
I’ll start watching “COPS” again.
bad boys bad boys, what ya gonna do, what ya gonna do when they come for you?”
Perhaps you just hang out with the wrong hookers and drug dealers?
And by the way, Mr. Scofflaw, did the cops ever come bang down YOUR door and haul you out screaming and kicking ’cause of all your traffic tickets? I bet you’ve got a hundred. No, a thousand of them. Maybe you’ll be on Cops one of these days.
http://www.youtube.com/watch?v=Ivp4YqGCI-s
If it was a Polka….alas. I’ll have to write a HB polka. lol
Funny, I thought it was country music!
It was. That’s cute.
Times like these just beg for folk music to help put it all together for us.
Nice work by Dave Girtsman (sp?). Flash animation proves that the housing bubble has now fully permeated the public consciousness
Hmm… Dow futures down 500, N225 off another 4.5% so far Tuesday AM. In the immortal words of Scooby Doo, “Ruh-Roh!”. Like many of the posters/lurkers here, I get some perverse pleasure from finally seeing the endgame in this credit bubble. But it’s tempered with the knowledge that there’s going to be lots of pain for everyone, not just FBs. I barely remember the early 80s recession - just enough to remember lots of friends’ parents getting laid off and out of work for months/years. This is not going to be fun.
Endgame? Ha.
hahahahahahahahahahaha.
That’s very funny.
This is going to be worse.
Stocks Headed for Freefall As Bull Market Nears End
http://www.cnbc.com/id/22771281
What most on this blog predicted many moons ago is now begrudgingly being accepted by MSM.
Ahhhhh. A good read.
I had to spend alllllllll day with stupid and/or wicked people, so I am very happy to get home and get a HBB fix. It was just in time.
How wicked were they?
Although I know November was a big down month, I date the official end of the (mini-)bull market to November 28, 2007.
The day Lenny Dykstra made his last post on thestreet.com.
I’m in some ES at 1267.5. Ludicrous. If I don’t make something on that, I’ll quit trading.
Here’s a trading horror story - I’ve been fooling around for 30 years and was even a pro for awhile (fixed-income side) but this never happened. Sold a March ES (on IB) last night but the market wasn’t moving so covered for virtually no profit because I didn’t want to hold it overnight. Woke up and discovered not only that I had blown it by not letting it ride, but that I had somehow double-covered - have no idea how it happened but it cost me $2000. So it’s made for kind of a miserable start to the day - did a quick 50 pushups and went out for a bike ride in the heavy wind and wrote it off to a bad break rather than a trading screw-up, kind of like getting in a fender-bender.
Trust me, I’ve done that too. Shorted when I meant to be long, and vice versa. I changed software a few years ago and the buy and sell hot keys were on the opposite sides from the old one. I don’t even want to tell you how much money I lost buying when I meant to sell and vice versa. Lots.
I’ve bought options whilst being on work related conference calls on to find they were expiring that day and not the ones 4 months out that I really wanted !
whats ES?
e-mini S&P futures
and before someone asks. This is a good firm for that
http://www.infinityfutures.com/experiencedtraders.aspx
Extra sexy.
Wait a minute, wrong blog
Looking at Loxahatchee/acreage in south FL prices are dropping nicely. Theres now a whole page of homes for under $200k(cheapest is $160k) where at the peak, the cheapest was a 1000 square foot shack for $250k and you needed $350k minimum to touch a decent 3/2 house. Prices are still at least 100% overvalued and must drop another 50%.
Doesnt matter as theres so much better for cheaper in Pennsylvania and ill enjoy the four seasons and it’s beauty. Theres beautiful hills, lakes and forests as well. I am bored with Florida and also refuse to pay those prices or risk the crime and hurricanes. Theres good reason 1000+ a day are leaving FL.
(posted before, but its good news for us bears)
we sold a property to a knife catcher, they paid $405k (cheapest house at the time), by the close of escrow new listings for the *exact* same homes were at $299k — still declining. another knife catcher just bought at $505k, values will decline in the $300k’s by the end of the year.
We all knew this was going to happen. Does anybody have a general idea when the Dow will hit the bottom?
There is going to be a lot of pain and even though I want to yell I told you so, I cant.
What really aggravates me more than anything else, other than economists with their bad predictions, are the shills on MSNBC.
“Does anybody have a general idea when the Dow will hit bottom?”
Since this Secular Bear seems to rhyme well with the 1970s I’d suggest one think in terms of years, and think of single digit P/Es.
Pre-1982, before the credit bubble started?
(joking, but one never knows)
With all the trouble going on in this housing mkt, what would Scooby do?
Crap on the carpet and call for Lassie.
What happens when Lassie craps all over the carpet, pukes her guts out and dies?
Bill the Cat will come to the rescue.
Hang Seng 22,663.51 9:09PM ET 1,155.35 (4.85%) …Holy Crap , all day traders are gone with the wind. do they soup kitchens
I wonder how many of these guys jump out of buildings today?
Hang Self??
LOL. Didn’t see that one coming.
next stop 18k for HAng Seng,
Does anybody have a general idea when the Dow will hit the bottom?
Nope neither the Dow or the housing market ? Notice how much faster the stock market corrects than the housing market. I would guess the stock market will go down to a PE of around 12 and homes to a rent = mortgage towards the bottom. So far it looks like I was wrong about inflation but lets see what gentle Ben does this week.
Maybe he will freak out and lower rates 1% wouldn’t that be the icing on the Housing Bubble cake? What a mess.
It goes down because it it liquid. There are market makers.
For RE, it is illiquid. There are long silences whilst they wait. And wait.. and wait.
But think about how many flippers who are long housing and equities are now illiquid, and possibly facing margin calls, overnight.
Synergy isn’t usually used as a negative term, but I think we may have some going on here.
Will the cure be worse than the disease? Why Ben Bernanke shouldn’t cut rates.
http://money.cnn.com/2008/01/18/news/economy/cure.fortune/index.htm?postversion=2008012107
Politicians are scrambling to offer a stimulus package, and Fed Chairman Ben Bernanke is slashing interest rates. But they may be paving the way for a bigger calamity down the road.
HAHA this guy I worked with mortgaged his house here in Phoneix, used the money to buy a home cash in FL and moved out of AZ. Hes just gone no notice or anything he told one or two people goodbye and did the Midnight Dash. AZ house is abandoned. Boy this reminds me of Cali after the Northridge Quake just gets more and more freaky by the day.
Tomorrow, it’s going to be a slaughter. I need one of those garbage-can sized jumbo popcorns. Neil, pass the salt.
It will be a learning experience no matter if we get a big snap, a big drop, or even if we stay level. Take notes, people.
I know I’ll be watching and taking notes. People are going to notice that I am somewhat distracted in meetings tomorrow.
I’ll bet a lot of suckers taken in by BB’s bluster at the beginning of the month loaded up for this one. I went from 5% stock to 15% on Friday buying oil, thinking BB would throw a bucket of gas on the fire over the weekend. Monday is going to be interesting. Just imagine what will happen if he doesn’t come through with the 0.75 to 1pt cut.
The committee that manages my pension fund decided to notify us that last week that next month they are getting rid of the treasury bond fund. I’ve made almost 10% this year on that all other options are crap. Wells Fargo told them they should consolidate to fewer investment options, how convenient for Wells Fargo that their non SEC regulated funds and non insured funds are still options.
Criminals
Disgusting. Can you cash out? Possibly organize a revolt? Problem is that most folks probably don’t understand or care, and they’re taking advantage of the ignorance.
Roll to a Roth IRA.
Roth is not worth it - better off with a traditional. It’s an almost universal misconception.
You pay less taxes with Roth - but you pay the taxes at the beginning rather than the end. You’re better off making a gain on the $$ that you would have used for taxes, then paying tax on that gain later, when you’re taxed a lower rate - since most people have less income when they’re retired.
Hey Benjamin,
What’s up with no Cali thread today? Did someone bet you you’d never get 200+ posts on a Colorado thread?
I hope you enjoy your steak dinner, ’cause it frustrated the heck out of me. LOL
It’s deflating all over everything out there!
http://www.kitco.com The World Spot Price - Asia/Europe/NY markets
MARKET IS OPEN
(Will close in 13 hrs. 37 mins.)
Metals Date Time (EST) Bid Ask Change from NY Close
GOLD 01/21/2008 23:51 856.30 857.30 -25.60
-2.90%
OUCH!!! 856.30 Bubblecious !
The pause that refreshes…
DJIA INDEX 11,615.00 -491.00 12,130.00 12,140.00 11,569.00 00:00
I wonder if maria, bob Pisiani and Larry will still be asking guests if we are in a recession and how to make money in this market.
Nikkei now down 750 points. WOW… Now I’m kinda freaked out.
The common theme from a variety of international media is “panic selling”.
From Bloomberg:
`Most investors believe in the health of the global economy, and are only now beginning to see the flaw in their logic,” said Taku Yamamoto, who helps oversee about $107 billion at the Pension Fund Association in Tokyo. “This correction hasn’t finished, and will continue until the optimists have been wiped out.”
There may be some sore ankles on Wall Street Tuesday.
There is always a bull market somewhere, and I will find it for you.
I’m already going to use my “play money” to bet on a pop after the initial panic, but I don’t know if my greed is enough to allow me to commit ‘real’ money as well.
And market bull which isn’t hard to find.
India down = 15%
CNBC India - http://www.moneycontrol.com/cnbctv18/live_video_audio/live_videohigh.php
Cell phones must be ringning off the hook on Wall Street insiders this very early morning. Yikes.