January 27, 2008

Cold Realty Is At Hand

A report from the Coloradoan. “The number of city building permits pulled for new homes, duplexes and condos in Loveland dropped 37 percent in 2007, reflecting a national trend of a slumping home building industry. The 2007 numbers mark a dramatic 68 percent decline when compared with 2004, when residential building permits spiked to 923. ‘Business is way down,’ said David Keirns, owner of Keirns Construction Co. in Loveland.”

“Keirns maintained a steady number of new starts through 2006 until things began to slip in 2007, and now, that’s spilling into 2008.”

“‘Residential is doing the same thing here (in Fort Collins),’ said Delynn Coldiron, who compiles the permitting data for the city of Fort Collins. ‘The last couple years have been the sharpest decrease. There has been a pretty sharp decrease in single-family attached and detached.’”

“Home sales are at a 30 percent to 40 percent cancellation rate locally, meaning people want to buy up, but they can’t sell their existing homes, said Joe Knopinski, VP of neighborhood development for McWhinney Enterprises. ‘Our basic problem in Colorado is that people are interested in moving up (to a new home), but they are worried that they can’t sell their house,’ Knopinski said.”

The Arizona Republic. “Look for the downturn in metropolitan Phoenix’s home-building market to mirror the run-up of a few years ago. So the difference between the spike during the boom and the slowing now will be similar.”

“Housing analyst RL Brown said the build-up of new-home inventory through speculation and home-buyer cancellations will cut into future building this year ‘beyond.’”

“‘It has been a long time since we last had to deal with a market disrupted by inventory overages and low consumer confidence, a market where populations weren’t almost standing in line to buy new and resale homes,’ Brown said.”

“‘The five-year builder lot strategy has turned into a humbling nightmare,’ Brown said. ‘Bonuses have gone. Wink-wink financing is no more. Local governments are panicked as revenues from growth vanish. Appraisals are very problematic. The ‘my home ATM’ has closed. Cold realty is at hand.’”

“Brown said he, the industry and in some cases even the Federal Reserve had to learn some new words during the past year. Risk: It ‘denotes a potentially negative impact on an asset’ and ‘tends to be ignored during periods of euphoria,’ he said.”

“Market value: ‘The price an asset would trade at a pure auction or garage sale.’ Appraised value: ‘This is a term that has become really problematic in today’s environment.’”

“Scottsdale’s last major planned community is continuing to build and sell new homes, although the pace is slower than what might have been expected a few years ago. In the past year, Toll Brothers has sold 176 homes at Windgate Ranch.”

“That is nearly 30 percent of the roughly 600 homes planned for the community that borders the McDowell Sonoran Preserve.”

“‘People are worried about selling their home and getting the equity out of it,’ said Mark Bailey, a Toll Brothers assistant VP. ‘Nobody is objecting to the pricing.’”

“The smallest homes at Windgate start at $636,975, or about $277 per square foot. The base price for the largest models is $1.5 million, or about $238 per square foot.”

“Toll has indefinitely suspended construction of its 62-unit townhouse project downtown. But the company continues work on its 6-story condominium there and is still building at Windgate Ranch.”

The East Valley Tribune from Arizona. “In the first few weeks of January, the number of properties entering foreclosure shot past the number of Valley home sales during the same period. About 4,000 properties entered the foreclosure process, and nearly 1,600 others were actually foreclosed on, compared with roughly 2,600 sales of new and existing homes, according to Information Market.”

“It’s not a pretty picture, said Tom Ruff, a partner at the Glendale-based company. ‘You have declining prices,’ he said. ‘That’s what’s causing it. No equity, no options.’”

“In 2005 and 2006, Valley homebuyers took out 244,839 mortgages, 36 percent of which had adjustable rates, according to Elliott D. Pollack & Co. Nationwide.”

“In the past, relatively few homes that entered foreclosure proceedings were actually foreclosed on, Rounds said. Today, only 20 percent of homes that enter the process are being rescued from foreclosure, said said Jim Rounds, senior VP of the Scottsdale-based company.”

“Then there’s the massive oversupply of homes for sale, which could take three to five years to work off with a potential 10 percent further drop in home prices and more job losses to come in the local construction industry, he said.”

“During the boom, anyone with a pulse could get a loan, said Warren Potter, senior loan officer with Indymac Bank. ‘Obviously, that was a recipe for disaster,’ Potter said.”

“Many are also watching what’s going to happen in the larger economy, Potter said. ‘If you don’t know if you’re going to be laid off next week, you’re probably not going to be interested in buying a house no matter what the price,’ he said.”

“Real-estate investors‘ headaches can be bargains for people looking to rent in the Southeast Valley fringes. Rental rates on single-family homes in outlying areas of Queen Creek, Maricopa, portions of East Mesa and far southeast Chandler and Gilbert are falling thanks to a poor housing market, abundance of investor-owned houses and high vacancies, local experts say.”

“Three area property managers said some are as low as half what monthly mortgage payments would be on identical homes, and tenants are successfully haggling over rates and lease terms.”

“Steve Urie, owner of Mesa Verde Property Management in Gilbert and a Gilbert Town Council member, said many investors are charging low rents and heavily subsidizing the cost of their properties just to get some help with mortgage payments and avoid foreclosure.”

“All three property managers said they have known investors who collected rents but did not make mortgage payments, a practice that eventually forced the tenants out when the property went into foreclosure. Security deposits paid directly to property owners are also often at risk in foreclosures, the managers said.”

The Arizona Daily Star. “For a couple of months, Miguel León has watched the parking lot at his Midvale Park apartment complex empty out. ‘The parking lot used to be full all the time. Now there’s a lot of empty spaces,’ he said.”

“A lot of apartments are empty, too — a likely indicator of the growing impact of Arizona’s new employer-sanctions law. The departure of foreign workers to other states and to Mexico has combined with the declining housing market to increase vacancies, apartment management executives said.”

“On top of that, the housing slump has increased the supply of rental homes, making them more competitive with higher-end apartments. The slump also has meant fewer jobs for construction workers who might rent apartments”

“The vacancy rate on Tucson’s South Side jumped to 11.9 percent in the fourth quarter of 2007, up from 7.1 percent a year earlier, according to Phoenix-based RealData Inc.”

“Construction worker Julio César Castaños said he has seen a lot of people leaving Tucson to go back to their hometowns in Mexico. Castaños said people leaving have no plans to come back.”

“‘Because of the new law, companies are asking for Social Security numbers, so people have started noticing they can’t get jobs easily, and they prefer to leave,’ he said. He also has noticed workers leaving their apartments without giving notice, he said.”

“‘Besides, people don’t have money to pay the rent because there are no jobs,’ he said. Castaños has lived in the U.S. for eight years, but he is also planning to return to Mexico if the construction industry doesn’t pick up.”

The Yuma Sun from Arizona. “Ron Codling, owner of Kirstin’s Southwest Decor in Yuma, said the economy could be better and they are not getting the crowds they previously had. ‘The housing industry has taken a dive and it’s difficult to get loans now,’ Codling said.”

“In 2006, 800 homes were built in Yuma while only 300 were built last year. One reason fewer homes sold last year could be attributed to speculators who bought them as an investment and that market became saturated, explained Randy Crist, spokesman for the city of Yuma Department of Community Development.”

The Daily Courier from Arizona. “Four groups representing the public and private sectors and nonprofit organizations suggested pblic/private partnerships, higher density and other proposals can help to create more areas for affordable housing for police officers, firefighters, nurses and other people with average incomes.”

“The gathering drew 40 people to the Quailwood subdivision…that housing experts would not consider ‘affordable.” Home prices at Quailwood, in eastern Prescott Valley, range from $201,400 for a 1,619-square-foot, two-bedroom model to $392,400 for a 3,076-square-foot, four-bedroom house, according to literature from the sales office.”

“However, a number of the models are less than the median home price for Prescott of $319,000 for 2007, according to a report from the Governor’s Housing Forum this past September. The report states that a person would need to earn $48.68 an hour to afford the house.”

“The median income for a family of four is $50,000 a year in the county, Kathern Mitchell, executive director of Choices AZ Inc. in Prescott, said during the meeting. Mitchell said she was ‘really excited’ about the number of people who attended. ‘I think the right people were here,’ she said.”

The Arizona Daily Sun. “Mirroring a national trend, house sales in Flagstaff have not just stalled but gone into hibernation. There were just 44 sales of single-family homes in the city listed by the Northern Arizona Association of Realtors. That’s down 25 percent from the same month year ago and 44 percent from December 2005.”

“The once white-hot condo market saw few sales in December, with only 10 townhomes and condos sold.”

“Local Realtors said they are unwilling to draw conclusions about whether the December figures represent a trend in the market, saying the number of sales is too small. Realtor Stephen Brighton said the weather was a factor in the small number of sales.”

“‘It is just hard to try a sell a home when it is snowing,’ said Brighton.”

The Review Journal from Nevada. “The housing slump in Las Vegas has been a tough pill to swallow for a lot of people and there’s no way to sugarcoat it, housing analyst Larry Murphy said Thursday.”

“Sales volume plummeted 45 percent in 2007 and median home prices declined for the first time since 1993. Businesses tied to the housing industry have seen sales and revenue drop by 40 percent, he said.”

“‘The good news is it won’t continue to get much worse,’ Murphy told about 500 real estate professionals attending his 2008 Crystal Ball seminar. ‘I think we are very near the bottom of the decline in prices.’”

“Murphy admitted he hasn’t always been right in his market assessments. After 40 percent appreciation in the first six months of 2004, Murphy said it couldn’t go on forever and correctly predicted that prices would plateau. What he did not see coming was another surge in prices in January 2005.”

“Now he sees another plateau, this time on the bottom side.”

“‘We’re pretty much right on track had none of this happened in 2004, 2005 and 2006,’ he said. ‘If you didn’t buy or sell a home during this period, if you owned in 2002, guess what? You’re right on schedule.’”

“The tightening lending market is jeopardizing the ownership of a multibillion-dollar hotel-condominium development under construction on the Strip.”

“The owner of the $3 billion Cosmopolitan confirmed that he received a notice of default from Deutsche Bank after payments on a $760 million construction loan came due.”

“Although Deutsche Bank and Merrill Lynch have approached MGM Mirage officials about the site, MGM Mirage President Jim Murren said gaming company isn’t interested in the Cosmopolitan project, at least for now.”

“‘It’s not something we’re looking at,’ Murren said. ‘We hope somebody can find a way of fixing this because it doesn’t help the Strip, Las Vegas or us to have a half-finished project sitting there.’”

In Business Las Vegas from Nevada. “Two of the top 20 builders in Las Vegas are in such a financial crunch that a guessing game has started as to which companies will be left standing in Southern Nevada by the end of this year.”

“Last week Tousa Inc., which operates in Las Vegas as Engle Homes, announced it has failed to make its semiannual interest payment due Jan. 15 on less than $200 million in principal and is considering options for restructuring the debt. The builder was ranked 18th in Las Vegas in 2006 with 375 sales.”

“‘I think you can take a list and put it up on the wall and throw darts at it and see who is going to be here next month,’ said Dennis Smith, president of HomeBuilders Research.”

“Something has to give in Las Vegas, said Tim Sullivan, president of Sullivan Group Real Estate Advisors. Housing starts are half the amount of two years ago, and in theory that means there should be half of the builders and half of the employees. There are problems because builders aren’t generating the sales needed to pay their land acquisitions debts, Sullivan said.”

“‘Those loans are being called due, and that is putting them in a position where they have to change their business significantly or go out of business,’ Sullivan said. ‘We are not going to see every builder go out of business, but some are going to leave the industry - that goes for public and private (companies) alike.’”

“Even builders in much better positions are laying off employees, a reflection of their financial woes. Pulte Homes laid off 50 employees in Las Vegas last week, sources familiar with the layoff said.”

“It’s a tough time for some to be an office building owner. Local brokerage CB Richard Ellis released its fourth quarter report showing the office market had a vacancy rate of 15.2 percent.”

“‘The underlying fundamentals of the Las Vegas economy remain strong, but the combination of the subprime crisis and overbuilding of office properties have created the perfect storm, causing substantial market softening,’ says Craig Shute, managing director of CB Richard Ellis’ Las Vegas office.”

“In 2007, 3 million square feet of space came on line, up from the 1.2 million Las Vegas averaged since 2000. That expansion isn’t expected to slow down this year with another 3 million square feet hitting the market.”

“Tenant concessions such as free rent and tenant improvement allowances will be at their highest level in 10 years, Shute says. As a result, that should help hold down construction during the next 12 to 18 months, he says.”

“Construction was the big job loser with employment falling 2,500 from October to November. The construction industry has lost 7,300 jobs in the past 12 months as the housing industry has shown no signs of improvement, the Nevada Employment, Training and Rehabilitation Department department reported.”

The Nevada Appeal. “Nevada’s housing trends closed out 2007 with some of the most dismal numbers in recent history, according to a report by RealtyTrac.”

“But there was some good news: The most recent foreclosure numbers, while increasing by about 200 homes on average from this time last year here, bumps Nevada down from the top spot to No. 2 in the nation. Colorado leapfrogged Nevada.”

“Local Realtors said they are not wholly laying blame on their counterparts in the lending industry. ‘I don’t think there’s any animosity toward (lenders),’ said Art Angelo, a Realtor who has been selling real estate in the area since 1980. ‘I think it’s a shame that some people got loans that shouldn’t have gotten a loan.’”

“‘You can’t blame it all on the lenders. Everybody got excited about owning their piece of the American Dream. If you look at it closely, these individuals thought their income would adjust to meet (the mortgage). It didn’t. I wouldn’t pile up on the lenders though - everyone piled up on the bandwagon,’ Angelo said.”

“That the housing inventory is being given time to ‘catch up’ to what the market will bear is a good thing, Angelo said, even though he shared empathy with those who make their living doing construction.”

“‘Essentially, we’re all in the same boat,’ he said. ‘When the industry’s down - it’s down across the board. I think the first six months of ‘08 will get even worse, until we absorb some of that housing inventory, but I think overall this will be a short-term trend. I think that you got to kind of hang in there and ride out the market. Real estate still is the best investment you have.’”

“Others decried the practices of predatory lenders within their field - especially upstarts in Southern Nevada.”

“‘I can’t speculate too much on what happened (in Las Vegas),” said Carson broker Debra Nevins. ‘But rumor has it there were many just horrible, horrible scams going on in Vegas. If those rumors are true, that greatly contributed to (foreclosure) numbers.’”

“‘Here in Northern Nevada, it’s a different kind of market, a different place. I do think we have some more of that down-home attitude,’ she said.”




RSS feed | Trackback URI

60 Comments »

Comment by Ben Jones
2008-01-27 10:45:03

I don’t know if the title quote is a typo or a play on words. Here’s one on the big game:

‘While hotel rooms are expected to be full during the Super Bowl weekend, it appears area some hotels are complaining of light bookings in the days before and after the football crowd is here.

On Thursday, Debbie Johnson, president of the Arizona Hotel and Lodging Association, told members of the state’s Sports and Tourism Authority that reservations outside the Super Bowl timeframe were ‘much lighter than normal.’

‘It’s hard to tell if it’s Super Bowl-related or economy-related,’ Johnson said afterward. ‘We haven’t really put any numbers on it, and we won’t know for sure until later.’

Comment by aladinsane
2008-01-27 11:11:46

The Super Bowl looks so much better on tv, when you’re broke.

Comment by arizonadude
2008-01-27 11:37:37

I was looking at some room rates for this upcomeing week and even motel6 is gouging people.Don’t know about any of you but a motel6 better be less than 50 bucks if you even dare go there.I might be sleeping in the car.

Comment by Bye FL
2008-01-27 12:39:45

I suggested this with my dad in order to save $60 a night, but he would not hear of it.

(Comments wont nest below this level)
Comment by aladinsane
2008-01-27 17:38:55

For $60, you could be a slumlord in American Siberia.

 
 
 
 
Comment by edgewaterjohn
2008-01-27 11:39:15

Sounds like a good PHX hotel manager will fleece the boyz from New Yawk and Bashtin while the gettin’s good.

THX to Spike who kindly informed me the other day that the New York Giants and New England Patriots are contestants in this year’s Super Bowl.

Comment by Ouro Verde
2008-01-27 12:00:14

I just talked to someone who is renting a posh place for 10k for the week.
6 Bedrooms blah blah blah.
He got tickets fo’ free
I wish there was a jewelry bowl.

Comment by sfbayqt
2008-01-27 15:58:39

Yeah, there are several of these Super Bowl rentals posted on the internet from 2 bd and up, all with the same price tag…$10,000 for the week. Someone here posted a craigslist ad for a similar offering a few weeks ago. What a waste of good money.

BayQT~

(Comments wont nest below this level)
 
 
Comment by implosion
2008-01-27 12:58:59

I hear you. I have to bet on the game to make myself watch it. I don’t know which teams are in which leagues, same with baseball. GF knows more about pro/college sports than I do, and my father is a sports fanatic. Played in HS, but never followed it. Enjoy going to the sports bar though.

 
 
Comment by Faster Pussycat, Sell Sell
2008-01-27 11:39:49

Isn’t the Super Bowl part of the economy?

Comment by aladinsane
2008-01-27 12:06:31

Anybody else notice how much more violent the NFL has become, lately?

Comment by Ouro Verde
2008-01-27 12:42:26

Explain lad.
I am sure I never watch it.
Is it like ice hocky now?

(Comments wont nest below this level)
Comment by aladinsane
2008-01-27 12:49:09

I grew up watching the L.A. Kings, must’ve gone to hundreds of games…

Each NHL team has a goon or 2, and they typically goon it out with the opposing teams goons, while the rest of the team are skill players.

The NFL games i’ve seen lately, it seems like every player, with the exception of the quarterback and kicker, is out for blood, and I cringe sometimes, as the violence has definitely gone up a few notches.

 
Comment by Lost in Utah
2008-01-27 17:43:16

I visited some friends last week who have a tv, we watched the last 8 minutes of a game and I was fascinated by the slams - I asked my friend (a football fanatic) how they kept from hurting each other, his wry reply, “That’s what the padding is for.” We switched to hockey and it seemed about the same level of slams. If you’re not desensitized to it (no tv), football seems pretty brutal, hockey violence is to be expected.

 
 
 
Comment by Darrell in PHX
2008-01-27 12:11:39

This morning’s local news sure thinks so. Between the Super Bowl and the stimulus package, Arizona’s economy is going to be as hot as the airport tarmac in August.

 
 
Comment by fred hooper
2008-01-27 12:29:05

I know that Enchantment Resort in Sedona is pretty empty this week. Usually it’s pretty busy this time of year.

Here’s a sneak preview of the Notice of Trustee’s Sales for Maricopa County (Phoenix Metro). I think 4365 NTS is greater than the total number of sales in the Phoenix MLS (but does not include Scottsdale or Mesa/Tempe/Chandler, which are also Maricopa County). We may hit 5000 this month:

Jan 07 1624
Feb 07 1577
Mar 07 1720
Apr 07 1709
May 07 2007
Jun 07 2325
Jul 07 2501
Aug 07 3248
Sep 07 2834
Oct 07 3458
Nov 07 3544
Dec 07 3875
Jan 08 4365 thru 1/25/08

Comment by AnonyRuss
2008-01-27 20:19:26

The Arizona economy definitely has momentum. Look at Fred’s numbers. Just not the direction favored by the chamber of commerce.

 
 
 
Comment by combotechie
2008-01-27 10:54:36

“If you look at it closely, these individuals thought their income would adjust to meet (the mortgage).”

Wrong. These individuals thought their eternally rising home equity would allow the house to pay for itself as well as kick out an endless stream of cashout money.

 
Comment by WantsOut
2008-01-27 11:00:02

Tx … Here’s one for you … from the Saturday Boston Globe … Across the region, dogs and cats are arriving at shelters in growing numbers

http://www.boston.com/news/local/massachusetts/articles/2008/01/26/owners_lose_home_and_pets_suffer_too/

Comment by Ouro Verde
2008-01-27 11:56:30

Micheal vick killed unwanted animals quickly.
Some of these FB’s lock their former pets inside to die a slow death.
This news is the worst so far.
There is no way to giggle my way out of this very sad scenario.

Comment by aladinsane
2008-01-27 12:24:58

We get city slickers that abandon dogs in our neck of the woods, occasionally.

I think the feeling is, they think a dog can make it in the wilderness.

Not really…

Comment by Ouro Verde
2008-01-27 12:39:58

Those feral cats can survive in the rocks.

(Comments wont nest below this level)
Comment by Lost in Utah
2008-01-27 17:44:57

Not true. Some of these abandoned cats are declawed, to boot.

 
 
Comment by chicagorefugee
2008-01-28 02:04:33

In homage to my favorite author (Terry Pratchett), I would hang the offending “humans” upside down over a scorpion pit and leave them to contemplate a sign consisting of the word “DOMESTICATED” followed by its definition.

(Comments wont nest below this level)
 
Comment by Austrian School
2008-01-28 08:07:07

I guess I’d give ‘em a fighting chance rather than gas ‘em but from what I hear, domesticated dogs are the equivalent of animimal frozen in there adolescent stage. Putting them out with the coyotes (which are fully mature) is like ditching a teenager in a big city.

(Comments wont nest below this level)
 
 
 
 
Comment by az_lender
2008-01-27 11:01:39

“massive oversupply…could take 3 to 5 years to work off, with a further decline of 10% in home prices”

N.B. This is an “economic consulting” firm speaking, not an obvious Realtwhore. Of course it’s hard to believe this person’s perjury has not been suborned by the REIC. Are PHX rents really only 10% below buying costs? I don’t think so.

Comment by Bye FL
2008-01-27 11:37:51

only 10% decline? How will people afford those houses that are 2-3x too high?

Comment by Arizzzona
2008-01-27 11:59:48

That “10%” caught my eye, too. I would say 20-35% lower form here if - IF - our credit system doesn’t lock up. (And I fear it will sometime this year.)

 
 
Comment by bill in Maryland
2008-01-27 11:50:32

I anticipate returning to live/work in Phoenix when it’s nice and hot (June or July). Rent 2 years ago: $950. Rent now: $1003. My AAZBX fund has been yielding about 3 or 4 percent per year since I started investing in it in 2001 and reached the $100,000 point this month in AAZBX. I suspect (not certain) I got a better deal than if I bought a house back in 2001. Could have bought a new Gilbert model for $132,000 back then. But I didn’t like Gilbert.

 
Comment by Darrell in PHX
2008-01-27 12:21:44

My house just appraised at $237K. 20% down at 4.75% for 15 years = $1650 a month PITI. Drop it to $1500-ish for 30-year at 5%.

Houses on my street are renting for $1300 a month.

13% more drop needed… IF people have $50K to put down. AND they ignore the $200 a month you could make on the $50K in a 4% cd or treasury bond.

If you take the oppertunity cost of money into account, then it is another 25% or so. That would put it at $177K. I still think that is too high since we bought it for $130K 4 years ago.

Of course, the extra drop is reserved for when interest rates go back up….. and they will, eventually. Put interest rates back to 7% and the house would need to be $150K…. assuming rents don’t drop, which with all the excess inventory, I think they will.

Comment by Bye FL
2008-01-27 15:08:11

You forgot about factoring in property taxes, HOA, insurance, maintainence and other expenses. Mortgage is just one variable.
That house should drop to $100k and the rents should become $800

Comment by Neil
2008-01-27 21:57:13

Not to mention bottom on prices is a 7% ROI on rent with a 15 year mortgage. I’ll agree with Bye FL, we’ll also see national rent deflation.

Got popcorn?
Neil

(Comments wont nest below this level)
 
 
 
 
Comment by Tom
2008-01-27 11:10:02

You think people are desperate? How can this Unit be at $153,900 and the same one at $243,000?

http://condosaleinflorida.com/

It just goes to show that people have no idea what RE is worth here.

Comment by combotechie
2008-01-27 11:14:15

“It just goes to show that people have no idea what RE is worth here.”

They are about to learn.

Comment by Bye FL
2008-01-27 11:46:04

This is going on everywhere. Even in Oil City, similar houses go for very different prices. Theres someone selling one for $80k, I can get one like that for $40k on a smaller lot. This one does have a nice .66 acre lot by a hill, but not worth anywhere near $80k in NW PA

Comment by combotechie
2008-01-27 11:52:32

In Cleveland you can pick up a pair of houses for the price of a Two Buck Chuck.

(Comments wont nest below this level)
Comment by aladinsane
2008-01-27 12:41:00

Yeah, but the hangover afterwards…

 
Comment by combotechie
2008-01-27 12:50:49

Agreed. You get what you pay for.

 
Comment by Bye FL
2008-01-27 15:11:08

And in some locations you don’t get what you paid for

 
 
 
 
Comment by WAman
2008-01-27 11:44:02

Most condos are like apartments and if I had to live there I would want the second floor. Not only are second floors units more secure, they also give better views. Of course a second floor unit is not worth 90k more.

Comment by NotInMontana
2008-01-27 16:19:03

They built some new urban condos here downtown, sold for about 100k and they seemed to have moved..but one occupant is obviously female because she put out a mess of flowers in her patio, across from the local bar/casino. I would be afraid to advertise like that in that neighborhood.

 
 
 
Comment by ex-nnvmtgbrkr
2008-01-27 11:14:33

I see one of my former LO’s finally made the news.

Comment by crispy&cole
2008-01-27 11:23:32

“‘Here in Northern Nevada, it’s a different kind of market, a different place. I do think we have some more of that down-home attitude,’ she said.”
____________________________________

LOL!!!

Comment by Faster Pussycat, Sell Sell
2008-01-27 11:42:18

Yeah, and soon you’re going to have some of that “down with the JT” attitude.

Or is it “up with the JT”?

 
 
Comment by aladinsane
2008-01-27 11:23:37

Today’s Officer Of Loan (TOOL)

“During the boom, anyone with a pulse could get a loan, said Warren Potter, senior loan officer with Indymac Bank. ‘Obviously, that was a recipe for disaster,’ Potter said.”

Comment by edgewaterjohn
2008-01-27 11:48:18

Yes, and those of Mr. Potter’s ilk would have branded someone a tin foil terrorist for using housing and disaster in the same sentence…just a short, very short, while ago.

 
 
 
Comment by edgewaterjohn
2008-01-27 11:28:48

“…they are unwilling to draw conclusions about whether the December (or insert any other month for that matter) figures represent a trend in the market, saying the number of sales is too small.

Why? The broader NAR seems happy enough to use m-o-m data to call (yet another) bottom every chance they get? They are flailing.

Comment by az_lender
2008-01-27 11:33:07

Kind of like that FB last week who said he couldn’t figure out the correct market price because he had no offers. Duuuuhhhhhh…

 
 
Comment by dearieme
2008-01-27 11:38:45

If I wanted a retirement house at the coast, I’d want to be right next to the beach, with sea views, not a drive away. If prices fall far enough I might be interested but I’d be very choosy. My attitude is bad news for sellers.

Comment by Faster Pussycat, Sell Sell
2008-01-27 11:51:42

This is always the attitude. The last few years are an extreme aberration.

If you have the money to burn, and you plan to be there, why would you compromise in the least?

 
 
Comment by aladinsane
2008-01-27 11:48:18

H8land, apparently.

“The number of city building permits pulled for new homes, duplexes and condos in Loveland dropped 37 percent in 2007, reflecting a national trend of a slumping home building industry. The 2007 numbers mark a dramatic 68 percent decline when compared with 2004, when residential building permits spiked to 923. ‘Business is way down,’ said David Keirns, owner of Keirns Construction Co. in Loveland.”

 
Comment by Darrell in PHX
2008-01-27 12:05:04

“Tribune from Arizona. ‘In the first few weeks of January, the number of properties entering foreclosure shot past the number of Valley home sales during the same period. About 4,000 properties entered the foreclosure process, and nearly 1,600 others were actually foreclosed on, compared with roughly 2,600 sales of new and existing homes, according to Information Market.’”

On CNBC the other day Dianna Olick was presenting the NAR existing home sales data.

Christopher Thornburg says that a lot of those sales are forclosures.

No they are not she says.

Well, it seems a lot of them are… sort of.

http://www.cnbc.com/id/22824844

Seems Yun intentionally mislead Ms. Olick…. SHOCK!!!

They aren’t counted when they are sold at the foreclosure auction, however the banks are frequently using Realtors to clear the REOs, and they are counted.

AND, new homes are also being sold through realtors, and THOSE show up in the existing home sales numbers too.

“I guess I can’t fault you for reporting what NAR tells you, but I think they are wrong. Houston’s MLS is the nation’s largest, and I can tell you that here, the percentage of total MLS sales that are foreclosures is large and rising. (I don’t have the exact number, but I believe it will be 30% of the total, maybe even 50% very soon).

Also, 18% of our reported “resales” are actually new homes listed with realtors. NAR does not back those numbers out either, so there has been a huge double counting of actual resales all the way up.”

Ken, who seems to be a real estate agent–but I don’t know that for sure–then went on the Houston MLS and found that of the 1,751 Single Family closings in January, 2008, 412 of those were foreclosures.

Comment by fred hooper
2008-01-27 12:38:08

See my post above. I’m more confident than ever that Phoenix will see a 40-60% drop from the Aug 2005 peak, or back to 1998-2000 prices with a slight inflation adjustment.

 
 
Comment by hd74man
2008-01-27 12:08:27

RE: “The owner of the $3 billion Cosmopolitan confirmed that he received a notice of default from Deutsche Bank after payments on a $760 million construction loan came due.”

“Although Deutsche Bank and Merrill Lynch have approached MGM Mirage officials about the site, MGM Mirage President Jim Murren said gaming company isn’t interested in the Cosmopolitan project, at least for now.”

How’d you like to be the commercial appraiser who fudged the cap rate on this disaster. $3bil projects don’t just go poof…albeit I do remember one foreclosed $250mil NYC building which never attracted a single tentant upon completion.

So much for 2% projected vacancy estimates.

MAI-”Made as Instructed”

 
Comment by aladinsane
2008-01-27 12:12:18

She’s talkin’ down-home price, isn’t she?

“‘Here in Northern Nevada, it’s a different kind of market, a different place. I do think we have some more of that down-home attitude,’ she said.”

 
Comment by vmaxer
2008-01-27 13:14:42

“Market value: ‘The price an asset would trade at a pure auction or garage sale.’
Appraised value: ‘This is a term that has become really problematic in today’s environment.’”

Appraised value is even more meaningless now. Sellers trying to use an appraisal to set a listing price, are deluding themselves.

 
Comment by darkmatter
2008-01-27 16:12:31

is the superbowl part of the economy.

damn straight.

now i don’t do pro football at all but my neighbor across the street does. big new trucks..new sports cars…everything parked outside my house every sunday to watch the big game. hollerin, hootin, and chortling til the late hours.

but he is a nice guy. bought at the peak in late 04. livin on negam, hasn’t paid a single property tax dime since the close. he now owes more than 20k in back taxes including penalties. but he nagams his way to riches. his payment is less than mine and i bought in 98 at less than 1/3 he did. contrast that to the house on the other side of me. kind of a fraud item sold in 07. person never made a payment. same model as “mr football” but with a pool. what do i expect here. the fraud model will go for 250k less than “mr football.” is he worried? not really. his rent payment is fixed. he is in the negam endzone so to speak. he will move out in 09 when he is behind by 50k in taxes.

damn superbowl.

 
Comment by bizarroworld
2008-01-27 17:04:42

“‘The five-year builder lot strategy has turned into a humbling nightmare,’ Brown said. ‘Bonuses have gone. Wink-wink financing is no more. Local governments are panicked as revenues from growth vanish. Appraisals are very problematic. The ‘my home ATM’ has closed. Cold realty is at hand.’”

His candor was refreshing and “‘my home ATM’ has closed” will be the what drives the recession.

 
Comment by tj & the bear
2008-01-28 00:17:19

“‘The good news is it won’t continue to get much worse,’ Murphy told about 500 real estate professionals attending his 2008 Crystal Ball seminar. ‘I think we are very near the bottom of the decline in prices.’”

“Murphy admitted he hasn’t always been right in his market assessments.

Looks like his record of being consistently, egregiously wrong will continue.

Like the overall economy, the bad news hasn’t even really hit yet…

Housing starts are half the amount of two years ago, and in theory that means there should be half of the builders and half of the employees.

What happens to LV when half the builders and half the employees are gone? [BTW, IMO "half" is way too optimistic. LV is way overbuilt in every category.]

 
Comment by chicagorefugee
2008-01-28 02:40:33

“For a couple of months, Miguel León has watched the parking lot at his Midvale Park apartment complex empty out. ‘The parking lot used to be full all the time. Now there’s a lot of empty spaces,’ he said.”

Ah gee, people who aren’t supposed to be here in the first place are leaving! Let me find my tissues . . . .

// I thought they said enforcement couldn’t possibly work?

 
Name (required)
E-mail (required - never shown publicly)
URI
Your Comment (smaller size | larger size)
You may use <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong> in your comment.

Trackback responses to this post