Local Market Observations!
What do you see in your housing market this weekend? Speculation? “For the first time ever, condominium prices in key areas across the GTA rose faster than those for single family homes in 2007, a Mississauga-based real estate firm says.”
“‘Condominiums are clearly a viable alternative to single-detached housing,’ says Michael Polzler, president of RE/MAX Ontario-Atlantic Canada. ‘With so many purchasers forced to compromise on their choice of housing, the ever-growing return on investment in the condominium market is proving to be quite the consolation prize.’”
“The condo surge isn’t expected to lag anytime soon, according to Polzler. ‘When it comes to bricks and mortar, homeownership can be cost-prohibitive,’ he says. ‘The surge in condominium sales and prices is a glimpse at the future. Not only is the condo lifestyle more widely accepted, it is also highly coveted by many.’”
“Just two of 13 residential projects proposed for the Central Business District in the 29 months since Hurricane Katrina have been scrapped. The condo real estate market, however, has slowed considerably, experts say.”
“‘The dynamics are different than they were three years ago,’ said Shaun Talbot, VP of Talbot Realty Group. ‘We didn’t get the population growth that we were thinking that we would get. You can’t propose something in a marginal location and expect (the same number) of buyers.’”
“‘There was such a rush for condos after the storm because so many people were living (in condos) while they rebuilt,’ said Garden District broker Joan Winchell. ‘That rush is not there right now and people see that the rush is not there right now and they are stepping back.’”
“‘Developments will still be able to succeed,’ Talbott said. ‘But in order to succeed, it’s time to cater to people who live here.”
“There’s an almost eerie quiet on the streets of the unfinished subdivisions in Shelby County’s northeastern suburbs, where new home construction permits for 2007 fell by more than 50 percent in some areas.”
“The drop in permit applications in part reflect a flailing real estate market, some city officials in Bartlett, Lakeland and Arlington said, as well as indicate the large number of houses already built.”
“‘You can drive through any of these subdivisions, not only in Arlington. I drove through them in Lakeland and Bartlett and there’s just not any activity,’ said Ed Haley, Arlington town superintendent.”
Lending changes? “Many of the country’s largest mortgage lenders are imposing loan restrictions in entire counties or ZIP codes that they rank as risky or ‘declining.’”
“In late January, a ZIP code for McLean, Va., which is a high- income, high-cost community and home of mortgage investment giant Freddie Mac, was rated a high-risk D. Ironically, restrictions imposed by Fannie Mae late last year have prompted lenders to compile area-by-area risk ratings and impose downpayment penalties.”
“Ted Grose, president of Los Angeles-based 1st Mortgage Advisors Inc., said labeling entire counties as ‘declining’ is ‘ridiculous. It totally fails to distinguish between areas where prices are rising or relatively stable, and other neighborhoods or communities where they are not.’”
Pessimistic oneupmanship? “Beazer Homes said Friday it would no longer build homes in Columbia, Charlotte and three other markets. The company also said it would no longer originate mortgages.”
“Metts Construction of Irmo filed a Chapter 11 reorganization petition in U.S. Bankruptcy Court in Columbia in early January. ‘We’re in a recession, and the construction market in South Carolina led the way into the recession,’ said said Barbara Barton, a Columbia lawyer who represents Metts.
“The chairman of Fort Worth-based D.R. Horton home builder warned Thursday that the sharp downtown in housing sales nationwide is expected to continue in 2008.”
“Donald R. Horton told company shareholders at their annual meeting that 2008 is going to be more difficult than 2007. ‘The home-building industry is not in a recession,’ he said. ‘It’s in a depression.’”
Or new marketing? “In 2006, according to the MLS, there were 38 new homes sold on Long Beach Island and in 2007 64 properties closed. There are currently 78 active new-construction properties included in the county’s listings, said Tom Wissel, MLS administrator with the Ocean County Board of Realtors.”
“In 2006, 26 new homes were sold in Stafford Township but just 18 in 2007, according to Wissel. There are currently 62 new homes in Stafford Township for sale in the MLS listings.”
“‘In 2003 we were selling between a low of 220 to a high of 450 properties a month,’ Wissel said. ‘In 2007 we had 3,500 properties available per month and were selling under 300 a month.’”
“‘Last year … was a very tough year when Kara Homes went bankrupt and then K. Hovnanian homes had trouble. The statistics for Ocean County on a whole have been fairly weak or anemic compared to earlier years,’ Wissel said.”
“Wissel said that many builders are so eager to move the homes that they are offering additional amenities. ‘I saw one open house that was advertising that for two hours only they would take something like $10,000 off the price. It’s a funny kind of incentive and it reminded me of something that you would see at Kmart on a Black Friday,’ Wissel said.”
D.R. throws out the “D” word…
“Donald R. Horton told company shareholders at their annual meeting that 2008 is going to be more difficult than 2007. ‘The home-building industry is not in a recession,’ he said. ‘It’s in a depression.’”
“A recession is when your neighbor loses his job. A depression is when you lose yours. And recovery is when Jimmy Carter loses his.” - Ronald Reagan
Actually the recovery only happened after Paul Volcker, who had been appointed by Carter, had successfully put an end to the inflation that had caused the economic problems of the 70’s.
Oh BTW who appointed Greenspan?
If you recall, Carter panicked from the effects of Volcker Fed’s policy. Carter tried credit controls, in addition to the Fed raising interest rates. When the recession started Carter backed away from the these attempts to control inflation. He could not take the political heat for a recession.
During the summer of 1980 inflation when out of control again. I recall seeing signs at gas stations saying, “Gas 10 cents a gallon in pre 1964 coins (silver coins). This when the price of gold when into the stratosphere, people were losing faith in the dollar. This was how Carter failed.
Reagen was able to take the political heat of a recession, and inflation was broken by the summer of 1982. That how Reagan succeeded.
If only Donald had had the foresight to not buy that $30 million dollar high rise building in downtown Fort Worth 3 years ago for a headquarters. Moving out of that failed strip mall that they had been located in since the early 90’s probably was not the smartest move(surprisingly, they have failed to sell the old headquarters building and it still sits empty).
D.R. throws out the “D” word…
“Donald R. Horton told company shareholders at their annual meeting that 2008 is going to be more difficult than 2007. ‘The home-building industry is not in a recession,’ he said. ‘It’s in a depression.’”
I posted this today in the Bits Bucket, but it is local market:
Just a summary report from FLORIDA.
Last week I was in St. Augustine and was staying with friends in JAX Beach. Four years ago I told them the prices were insane, I would not buy, this market will tank and there’s no way this former ghetto and crack town will keep the valuations we were seeing.
That was then, this is now. This market is schizophrenic.
I see it in transition, but not approaching reality as any sane person would see it. Like all coastal communities (i’ll be back in Clearwater Beach tomorrow), everyone thinks they are going to retire on their “Investments”, but can’t quite seem to get their price, or even have any idea what the price should be. Overall, prices are still high, some ridiculous, but their are sales and rental signs EVERYWHERE.
Here are some samples:
(and remember, alot of these are not NEW places, some are, but most are stucco’d over former apartments built in the 60’s and 70’s.) Most Condo’s were along 1st st., some on the water side, but none, unless mentioned are Oceanfront.
Condo 1/1 715 sf………..was $329K, now $289k. get real!
Condo 3/2.5…1530 sf………was $450, now $425k. how luxurious could a 3 bdr. 1500 sf living area be??
Condo 1/1 sf unknown….Oceanfront pool. ….$279,000.
Condo 2/2..S/S appliances…2nd flr…….sf unknown. $349k.
Townhouse (1st.st.) 3/3.5 2000 sf….the usually “luxury upgrades…………….$589,000 !!!
Vacant lots sold for about $20k to 30k before the boom starting in 2000-2001. Houses off the beach, closer to the intercoastal went from $85k to $125k.
When I looked 2 years ago………..lots were going from $80-$100k, if you could find a buyer.
Saw a pair of lots (typically 50 x 100 or 115) asking: 195K each, or the pair for $365k. You can buy nearby houses for less.
Another one on Seabreeze avenue (not near the sea) is asking $150k for 50×115 lot. They will add a 1900 sf house if you will bring $435k to the closing table.
An entire subdivision of remaining vacant land is near the JTB (202) intersection with A1A, south side of Jax Beach.
Not a single house has been built. None. We stopped by the sales office on Monday morning to find out about pricing. No one was in the office. The place was deserted.
Flippers still working the market. We saw a number of rehabs in process. Some for sale “as is”.
Sample asking prices:
Fairway Ln. 2140 sf. lot 100×150 on golf course..$475k.
Atlantic Beach..2nd st. 2410sf 4 bdr, 2 blocks to water……….reduced 50k to $699.9k Lot is 50 x 140.
The best part, if you buy this house, the agents will throw in 2 beach bikes, so you can ride from your house to the beach.
Everyone thinks that prices will hold because this area is special. Everyone wants to live there. The folks with money from Jax want to move there….blah, blah, blah.
I did find one tear-down lot. House built in the 40’s, a wood frame, termite treat with 7′ ceilings. Total trash. Previously asking $80k, but had a reduced sign on it. The free-standing 2 car block garage was worth more than the house.
A good 35%- 40% reduction in everything would make this all seem reasonable, unless some more Californicators come by with their easy house-lottery money, saying that these properties are “undervalued”.
When will this all end?? Please crash, California!!
Does that come with a hurricane, or without? How much extra is the hurricane? Anyone? Bueller?
Those Clownifornians won’t be able to sell their overpriced house so they can’t buy ours. Those that leave CA move to Texas, not Florida.
Another condo flip in my “gated” neighbrhd.
$399 9 mos ago
$459 today.
What ARE they thinking?
The other 2 that are in escrow sold at $399 under.
I know the area you are talking about near JAX and it is the same here 40 miles south. Within a half mile of the beach, everyone thinks their shitbox is a castle. No one is selling at these ridiculous prices. However, if you check out sales, the numbers are all at or below 2003 and still falling. gordo
Condo 1/1 715 sf………..was $329K, now $289k. get real!
Condo 3/2.5…1530 sf………was $450, now $425k. how luxurious could a 3 bdr. 1500 sf living area be??
I think it would do you guys all some good to face the facts here.
Someone really DID pay $329… maybe even $529 for such a condo. IT IS REAL. But it was at the height of it in 2005 or 2006. It was the ONE HUGE fish that someone landed and the seller bragged all over town about the deal, and the Real Estate agent is there to cheer it all on. These people are chasing what they view as reality. They just are too stupid to understand one thing: It isn’t sustainable.
Go to a casino and really hang out with the people for weeks and months. Believe it or not, people really do win $1,000,000.00 jackpots playing slots. I’ve seen it first hand with real people I know. The casinos [most] really don’t cheat people in any way other then the fundamental economics / house advantage of the games themselves. The staff may cheat you out of comps and not tell you about free events they have [they are picky about their marketing dollars] - but the machines themselves don’t cheat.
Yet casino customers, many gamblers, just don’t GET IT. They don’t get that because ONE PERSON one $1,000,000.00 it means that everyone else had to NOT WIN MORE THAN $1,200,000.00. it is just a mental defect that some 25% (?) of the human population to think they are going to be the lucky one… and not realize that everyone else thinks the same too.
The huge denial is that a lot of people on stock market or housing don’t even GET that they are gambling. They won’t face that truth. they will throw out “buy the most house you can afford” (borrow) but not face the fact that this is only for the hope of better resale - not because it is a wise way to spend your money.
P.S. I think the best illustration of this is to jokingly tell people that the government should send out $1,000,000 rebate checks instead of $300. Then EVERYONE would be a millionaire and the USA would be free of poverty and everyone would be happy that they could buy what they wanted.
Instead of sending out checks, the government should send out Econ 101 textbooks, then offer a $100 refund on next year’s taxes if you can pass a simple test that proves you read the darn thing.
Of course the book/test would first need to be read/tested by Congress. Good starting place.
I’ve been telling friends for the last decade that we have a Lotto economy. Everyone forsakes common sense and fundamentals for that one in a zillion chance to be Rich! It’s their only Hope. And to think, with all our Ol’ Time Religion, that faith in the afterlife just ain’t cutting it.
Local Palm Springs..
friend who had idiot landlord for 7 yrs ( they are the kind of rare renters we all want ON TIME and more) raised their rent from 1300 - 1600 for March , then in July threatened to raise to 1800. No improvements for the last 7 yrs. But they painted, and well I might add…
Anyway, RENTED today a 3/2 condo with all new granite etc..Stainless etc.. Asked 1800 but landlord took 1500 today.
Driving around Palm Springs today and saw lots of open houses, but streets were bare.. no one at Open houses. And lots of LEASE RENT signs.
Ben, Thanks for the Toronto stuff
Everyone here is in denial. Realtards are holding multiple properties to flip. J6P here is clueless.
My last trip into TO was eye-opening. Huge Soviet style condo monsters going up everywhere. Vacant lots had signs of coming condo developments.
I remember the 80’s bust well and the overhang then was peanuts compared to the coming glut. It will takes decades this time to clear it out.
Don’t you mean the aarly 90’s bust? That was a doozer.
the ever-growing return on investment in the condominium market is proving to be quite the consolation prize
Hey Mike, if prices are going up, the return on investment, which to me means yield, i.e. income/price, is going down.
Oh you mean speculative gains? Of course, I forgot that real estate always goes up.
What I really find absurd is that houses and semi-detached in Toronto really aren’t that expensive, yet people are paying way more for condos.
A semi in a good neighborhood for 250K - what kind of idiot would pay twice that for a condo?
A young man who is like one of my own children came to me the other day for some advise….See, he and his college sweetheart have decided to divorce…They have been together for 10 years…Unfortunately a couple of years ago they purchased a home in Stockton California….With current pricing they have not only lost their entire down payment (10%) they are also underwater with value vs. loan…The fair market value as of today is off by $160,000….Ignorant kids ?? No…One is a firefighter and the other is a Nurse….He asked me if he should walk, or come up with the extra $35k to bring to the closing so he can save his credit……I will post what I told him in the next 30 minutes or so….What say you ???
Lets ALL keep in mind that the thievery, fraud, lying, manipulation that has occurred has broad consequences….Many here thirst for the pain and suffering that comes out of a bursting bubble like the one we have today…Lets all keep in mind that there are severe casualties that go beyond the cheaters and manipulators…compassion…At least for some…
Tough call.
On the one hand $35K is pain but not unbearably so. However, does he really need more or good credit?
I’d argue walk.
He is better served by using the time he is not paying the loan to build up savings, etc. Finding a better partner in life might not be a bad thing either, and without the credit, there will no bling, bling (a good thing, IMNSHO.)
Walk.
He should surrender his house and fight to save his marriage.
Make that “They should surrender the house and they should fight to save the marriage.”
The house can be replaced. The marriage worked for ten years, maybe it just needs a bit of fixing up.
“He should surrender his house and fight to save his marriage.”
Agreed, his wife should be more important than any house!
In my experience, which is more varied than my mom approves of, firefighters are an honorable bunch. You might have to smack that out of him.
And I agree, sadly–the casualties of this bubble go far, far beyond such greedy cheaters as deserve it.
These people are not kids. They must be in their 30’s.
They bought the kool-aid being sold by the local and national Boards of Realtors that real estate never goes down and that if they didn’t buy, they would miss out on the free easy inflation train. I know the pressure from the promoters has been high.
However, it obviously made NO ECONOMIC SENSE to buy a house anytime in the past 2 years. Prices were way beyond affordable, and so they stretched.
That is what destroyed their marriage. Strained finances are usually the PRIMARY cause of breakups.
I have no sympathy. They bought the lies and drank the kool-aid. They should find a good attorney and SUE THE BROKERS. They were sold a big lie. I am sorry, but these people are the reason that real estate has become unaffordable for others. I refused to pay the price, and have had to sit on the sidelines while I wait for sensible prices to return.
Let them pay the price. It will soon be forgotten as the next mania takes off.
Come on, can’t you be a Good Samaritan and stop feeling sorry for yourself? Boo hoo, you’ve had to sit on the sidelines, and now you’re sitting pretty, renting. And you probably did well living in Florida during the boom time, house or no house. What more do you want? It’s easy to pass judgment and feel superior. To err is human.
I’m beyond the 30 minutes, but FWIW… I don’t know if he should “walk” per se. Might be better to put the house on the market, stop paying the mortgage, and try to get the bank to do a short sale. If he mails in the keys, he can be 1099ed for the difference, no?
I woulnd’t spend even $1 to “save” a house that won’t be worth 50% of what they “paid” for it. They lose their downpayment, why throw more money down the toilet?
Run, don’t walk (reversing the old song). Sunk money is sunk money - never figures into the equation. One of 20 million with a foreclosure in your background will be pretty easy to overlook.
Does this couple have the 35k to bring to escrow to close a current market price transaction? If the couple has the money ,than I would say pay your bill . It cost money to divorce .
I have a neighbor that did a flip and made a quick 35k . Than same neighbor bought a bigger place and now wants to run rather than bring 35k to escrow they would need to cure the short sale . It was ok to make money on the up-tick of real estate, but this neighbor wants the bank to pay for their faulty gamble . In the meantime I have to look at their foreclosure that is only 2 doors away from me. Also I know for a fact that this couple had a extra 100k in the bank at the time they walked (easy money that was gained by the boom ). Like a jerk, I’m taking care of the property until the bank gets to it . If you ask me ,I have no regard for these speculators that made money ,but refuse to pay their debt .
Anyway ,as far as the young couple goes ,I think they should pay the 35k, if the bank doesn’t agree to give them a short sale . It’s not as if this couple lost their jobs. At least this couple should try to talk to the lender and see if they are willing to do anything for them before they just walk .
SWColorado - where are you exactly, what area? Any comments about the market there?
Sorry…30 minutes turned into three hours…Went to eat with the Mrs.
I told him to pay the $35,000. and save his credit…With his job, good credit will be far more valuable than the $35k particularly with difficult lending underwriting going forward …
I agree with you scdave . Also ,in the near future this couple( who might not be together ), might be able to get a property that is far cheaper than the 35k lost on this investment .
And a response to some who posted;
Diogenes; Where the hell do I start…..
They are in their late 20’s not 30’s….
They did not drink Kool-aid, they purchased near parents and were planning a long happy life together and did not give a rats ass if the property went up in value….
They did not stretch to buy the house..It was a no brainer on their combined income and NO that is not what distroyed their marriage…Who are you Dr. Phil ??….
Sue the brokers ?? You mean her father ??
Your just the kind of person that I discribe in the last paragraph of my post….Full of poison….
combotechie;…Unfortunately the relationship is irreconcilable to the sadness of us all…
Kim;…There is no Mortgage over basis so no tax liability….
“They did not drink Kool-aid, they purchased near parents…”
Third party marriage manipulation; parents should buy a Spaniel!
I agree. Some posters are just plain cruel, like they want their pound of flesh, whatever the circumstance. Some of us homeowners who ARE responsible, and put significant money down, AND bought homes that were more modest than what we could afford at the time, are STILL sweating it. Life happens. And I don’t see people on this blog who cashed out for the big bucks in 2005/2006 seeing themselves as part of the problem, either. To them it’s all buyer beware, like we’re all marks in some con game. And they may have juiced their comps/appraisal to squeeze out more dough for their “retirement”, and act all smug about about how smart they were to see their house as an investment cash cow. I’m sure they bragged about their Bubble Booty and helped spur the craziness a few more months. So like it or not, we’re all in this together. So deal.
We may be “in this together,” but some are the bugs and some are the windshields. Happily, I’m the latter.
scdave,
Sorry to hear about that couple. I have a question for ya. Would your friend consider staying in the house, taking on a roommate and buying out the wife’s half of the 10% down? Could he do that? Or would she want to do something like that?
I know it sucks to be in your late 20s and have to take in a roommate, but…he (or she) could hold onto the house, save his credit and maybe work out something in the divorce regarding the house and a “buyout”.
It’s a thought…maybe a bad one, but hey…just thinking
Grey;…HE does not want to stay there…She is close to her parents…HE wants to move back home…Buy out;… does not work…
I consulted my crystal ball even though advice has been given. I see that these two have grown apart and no longer need each other, and no longer trust each other. The fireman has a beautiful life waiting… Financial issues loom large right now. I would advise him to walk away and short sell the home. Much anger clouds his usually clear thinking mind. I would advise him to move away, where he has wanted to move for quite some time. I also see him going back to school. He needs time to heal, and in 5 years, he’ll be able to buy the home of his dreams, regardless of what he decides to do today. He should have a creative outlet - perhaps now is time for him to write or get involved in the movie business.
Maricopa County (Phoenix Metro) Notice of Trustee’s Sales
Jan 08 5334
Two year history is posted in the Bits Bucket. Saw a post somewhere that Maricopa county regional MLS has 57,000 listings. There should be a big increase going into the spring selling season. Any bets here on whether we reach 100,000?
Fred,
My guess for 100,000 is mid to late summer, July-August ‘08. I would guess sooner, but I think the owners (the banks) aren’t as quick to get these homes back on the market.
May I ask where you get that data?
I started keeping a graph of the info you posted the last time. That figure is almost 1500 more homes than were recorded in Dec 2007, and a big jump off the slope of the graph.
For a copy you can find me at web 4 swedes at hot mail com
http://recorder.maricopa.gov/recdocdata/
Doc Code is N/TR SALE. Enter the date range. The first page only shows the first 20 or so, so select 1000 per page in the dropdown. I simply cut/paste the results from each page into notepad then import .txt file into excel to get the count.
“… a big jump off the slope of the graph.”
Yes! I don’t expect your chart to rollover this year, and we could be up to 10,000 per month by year end.
Thanks for link.
Yes, after today’s data, I already bumped the end of the year # to 15,000, in order to give me a good visual on where the graph could go. Are there enough homeowners in trouble to have 10,000 NOD a month? That is where we’re headed I afraid.
Thanks, got it, it works, it’s awesome and terrifying at the same time.
Can’t tell you anything about sales, but in Rockville, Maryland I told my landlord I wanted no increase in my rent and an 11 month lease (moving end of December will be easier for me in any year than the end of January) and got it.
I asked for them to “do better” a few weeks ago and they reduced a 6.9% proposed increase to a 3.3%. I brought in comp information for the slightly newer and much larger complex a block away and told them that the new guys were setting the comps for the area.
I’m not that proud of the smaller details of my negotiation process, but practice makes perfect. I’ll do better another time. The result is satisfactory.
I’m glad to get the no increase. It looks like the changes I made to my tax withholding/401K contribs/flex spending account/higher insurance payment/etc. combined with some pay increase will leave me with about $8 a month more in take home pay this year than last (though that is off set by not having to pay for $x of medical/dental bills and quarterly tax payments out of regular pay). I’d say I won’t spend it all in one place, but I think that this is about the amount of the recent increase in my comcast bill. It’s already gone.
but I think that this is about the amount of the recent increase in my comcast bill. It’s already gone.
comcast = evil empire.
(I have a lot of nerve saying that, considering they’re one of this area’s biggest employers.)
I recently switched from comcast to ATT satellite TV. It’s an improvement, plus you can rewind and record programs. I was afraid that it would go down during storms, but it held up fine during a recent doozy of a storm that took out electrical power.
This is the latest thing I’ve seen on Rockville:
http://www.washingtonpost.com/wp-dyn/content/article/2008/01/30/AR2008013001942.html
In Rockville, for example, the average price of existing homes in the 20853 Zip code, an eastern stretch of the city along Norbeck Road, fell more than 17 percent in the fourth quarter of last year, compared with the same period in 2006, according to data from Metropolitan Regional Information Systems, which tracks home sales in the area.
But just a few miles away, in Rockville’s more central 20850 Zip code, the average price rose 12 percent.
“There is a lot of granular difference in the county,” said Stephen Fuller, a professor at George Mason University’s Office of Housing Policy Research.
Our renters are out of luck at any price - we’re coming home!
I don’t believe that 20850 was up 12% unless it was entirely based on the mix of housing sold. That zip includes Rockville Town Center which just went through a huge redevelopment. The overpriced condos wouldn’t be included in existing home sales, but add a few green spaces and opening some restautants doesn’t up the value of the little 3/1’s in that area 12% by a long shot. And there wouldn’t be so many of them for rent (check Craig’s list) if the sales price was still shooting up. 20850 also includes the area right around 270 and bordering Potomac which is considered much more upscale. Some office friends live in Potomac and they are talking like recent sales in their area are way down from previous years - like from $800K to $690K or so.
Assuming the numbers are derived from real sales and not listing/wishing prices, I would guess a reduction in volume and a significant collapse of the lower part of the market. We are way behind the curve of this bubble bust in Montgomery county. It is nice to get some evidence that we are finally starting the process.
It finally sold! Short sale in my neighborhood of the Los Angeles South Bay - purchased for $1.65M in 2005, just sold on a short sale for $1.4M
http://www.zillow.com/HomeDetails.htm?zprop=21324969
The fact that lenders were allowing people to buy $1.65M homes with very little or no money down is unbelievable.
My neighbors all think this area is “immune” from a correction in home values. I think we’re in the second or third inning and prices will continue to fall substantially through 2011 or so. I’ll continue to watch from the sidelines…good luck to the rest of you.
1.4 million to live in torrance/redondo beach? For a 3 bedroon, 2,000 Sq ft house….wow!…
Exactly. Prices have a ways to fall, don’t you agree? This house does have an ocean view, but it’s also on a busy street. Homes like this will be under a million before this is over. The correction is “just getting its legs”.
“This house does have an ocean view”
If it’s this close to the water, then they overpaid. The beaches in CA are disgusting. And any of the houses I ever went to that were near or on the water were stinky, musty and everything always seemed to have a salty film on it.
Built in 1963 no less. And no yard.
Unbelievable.
Probably gonna be worth no more than $500k at the bottom
Right now in L.A., $500K gets you a place in the hood with bars on the windows and doors…
Jeesh, when I first saw that satellite picture on Zillow. I thought it was a picture of an industrial park.
A 3/2 in mid-Pinellas I was thinking about low-balling sold in a few weeks for 20% off asking. I’ll hold out for 40%-50%, if at all.
Cooper thefts still going strong:
http://www.baynews9.com/content/36/2008/2/2/321954.html?title=Copper+thefts+still+going+strong
I assume you mean “copper”.
If they are actually stealing “the makers of barrels”, we are in deep doo-doo. I need my wine to sit out this downturn.
What you see here is illegal aliens doing the work Americans won’t do.
Thanks, Bush and all you other “conservatives” for helping bring more industrious workers to our communities.!
In South Hillsborough County, Florida: actually saw a realtor showing some people a condo in the building where I’m renting. The manager, however, told me last week that they only have half the people they usually have in residence this time of year.
I was just checking out realtor.com just to see what was available below $100,000 in this area. Three listings so far. One is actually in a part of town where I’d want to live. However, it is a frame home listed at $84,000 that would have been $50,000 to $60,000 pre-bubble, so we’ve still got a ways to go.
“The chairman of Fort Worth-based D.R. Horton home builder warned Thursday that the sharp downtown in housing sales nationwide is expected to continue in 2008.”
I hate DRWhoreton. By this I mean not the idle, careless kind of complete and utter animosity I feel for the planning and development department of Mason county or the lobbyist for the state farm bureau or for axe-murderers, or like when I accidentally eat a pickled jellyfish and spit it right out and shout ‘I really hate pickled jellyfish! Take it away!’, mild hatred like that. I mean I really, truly hate DRWhoreton and all pertaining thereunto.
If ill-will was a wind, every single person tainted by the merest touch of DRWhoreton personnel, including all their dentists and dry-cleaners, they would all be blown straight into the next parallel universe this instant.
Okay, and now it’s back to my scrambled eggs. Have a nice morning, everyone!
If you ever had `cooked jellyfish’ in a classic Sichuan sauce, or even `fried jellyfish’ in Malaysia (pasembur), you might change your mind.
About the whoretons, blechhhhh. Why are you harshing my food buzz, lady?
Sorry this is so long but I feel compelled to share this with you all,
I had the opportunity to meet and speak with Ron Paul and his wife Thursday night.
I was invited to attend a pre-rally reception by a business associate and I almost did not go because I told him I wanted to do more research on him before I would bother voting for another Republican or, more importantly, another Texan:) It turns out RP is from PA originally.
Certainly I don’t know how the rest of you feel, but I think this lineup of presidential candidates, now with the exception of RP, is the weakest this country has ever seen.
As the readers of this blog know, past and current economic policy has lead to this fiasco that will unfairly affect all of us, especially the fiscally responsible.
As part of my due diligence I researched campaign contributions vs. spending of all of the GOP candidates and was surprised to see how well RP was doing and that he was not spending more than he took in.
Anyways, I asked him a few questions about business regulation and foreign policy and based on his quick and concise answers I can now personally attest to the fact that this guy is sharp as a tack, witty, and really knows a lot more about sound policy than any other current candidate from either party. I don’t buy into conspiracies much, but I do think that the complete and blatant lack of media coverage, including in the debates, is because the MSN is afraid of the simplicity of this guy’s message.
His wife is also very nice. As we were entering the room, she was about 6 people ahead of me and had been separated from her husband. Since she did not have a VIP name tag she was stopped by security. She just smiled and politely said “but I’m Mrs. Paul”. A seemingly insignificant thing I know, but could you imagine how Hillary or Barbara Bush would have reacted to the same situation?
He spoke of how the message of freedom promotes unity, at which point I began to take note of the demographic makeup of the audience. First of all the crowd was huge, spilling out into the lobby. There were people from all walks of life, lots of college kids, longhairs who held doors open for the elderly, guys that looked like lumberjacks standing alongside guys with dreadlocks, men is business attire with their wives, a group of what appeared to be Mennonites, and just plain old folks wearing their work uniforms or slacks. Pretty neat really…. And every one of them with twice the enthusiasm of the attendees of past political events I have been to, namely a GOP rally at the Westin SCP and the Clinton rally at the pacific amphitheater.
All I can ask is before you make up your minds based on what you have heard about RP, do you own research, like what happens here on a daily basis, and then see what you think of him.
Well, I’ve seen a bunch of ‘Ron Paul’ signs posted around Thurston co., WA, and nary a one for any other pres. candidate, so he has some strong grass-roots supporters around here, I think.
Drove to the dentist office this week in Burke (NoVA) Virginia. Saw my first signs for any presidential candidate, and it was for Ron Paul.
Yep, RP is my choice as well. I do think he is marginalized to “Ross Perot” status by the MSM and the republican party. As a libertarian (small L) I of course agree with his views on nearly every issue/policy.
Dr. Paul is the only candidate to proprose the strong medicine the country needs to get back to fiscal responsibility as well as constitutionality. Like telling a 400 lb patient they need to lose weight and it will be hard work.
He is very intelligent and has obviously studied economics and history for himself.
Even if only some of his policies came to fruition it would go a long way to turning back the insanity.
Yesterday at the FBR Open in Scottsdale I saw a plane pulling a giant “Ron Paul Revolution” banner. Had a huge picture of him and was very visible from any distance.
Ron Paul cured my cynicism. He is a genuine American hero.
I have seen all of these builders on the ABC show where they build a “poor” family a new house(I mean McMansion). Who thinks that show will be with us much longer……
Who thinks ABC will be with us much longer?
ATLANTA
The new ex-urban subdivisions seem to be the ones who are hurting the most. They have been hit hard by the triple whammy of the bubble burst, higher gas prices, and Atlanta traffic. I heard of one subdivision this week, located on the north side of town (which is more upscale) that has more than 40 spec homes on the ground, and only 2 have sold. Every time the BF drives out to the exurbs he comes back ranting about miles & miles of new houses saying, “ Who’s ever going to live there? What are they going to do with all those houses, bulldoze them?”
Rumor has it that one of the high volume local McMansion builders is in big trouble. As one of their subcontractors so eloquently put it, they are “Pfffft”.
Atlantic Station, one of the flashiest of Atlanta’s in-town condo developments was built at the start of the bubble, which sold out with average prices in the $400s. There have been several murders there already. But now 10 of the buildings have underground water pipe leaks due to faulty construction installation, and it will cost millions of dollars for repairs. Haven’t heard if the water is undermining the building foundations, but wouldn’t doubt it as the place was built on fill on top of an old hazmat site. The people who bought there are really FBs.
I also found these GA foreclosure notice totals for 2007 in the Atlanta Business Chronicle…I haven’t seen any year end numbers for just the Metro Atlanta Area.
“Georgia ranked seventh in foreclosure filings — default notices, auction sale notices and bank repossessions — with 99,578 for the year. This marks a 31 percent increase over 2006 and a 118.4 percent jump over 2005. The state’s foreclosure rate was 1.6 percent in 2007 “
Bad news from Punxsutawney, PA this morning. Punxsutawney Phil saw his shadow, which means instead of an early spring, it will be six more weeks of winter.
This will totally delay the huge bounce after the Super Bowl in used and new home sales.
I am hopeful that the greedy bankers will stop revoking easy access to home equity lines of credit for Used Home Salespeople and others in the housing industry, because they will need the access to their “Bridge the Gap” money that they have saved in their homes equity. It’s not their fault that the spring selling season won’t be coming early this year.
Happy Groundhog Day to all of those that can hang on for another six weeks, until this housing mess finally gets back on track, and people start making low six figures with very little effort or talent.
and on the other end of the state:
just checked realtor.com
New listings are appearing, pre-Super Bowl. Going forward, I predict a profusion of new properties for sale come March and April.
On pricing - I’ve seen a stalling effect, as well as actual erosion. This is on homes in the $150k-$250k range. The bottom is falling out. (I’ve been watching a couple zips since spring of ‘06)
The farther out from the center, the more erosion. However there’s also bad news: rentals in the desired zips are still asking top dollar. (they’re asking, but I don’t know if they’re gettin’)
hate to say it Philly people, but this year is not the year to buy, unless you get a seller who will accept a decent lowball.
Buckeye Chuck is, I think, the official groundhog prognosticator for Ohio. He operates under different rules than Phil, i.e, if he sees his shadow, Ohio will have six more weeks of winter, if he doesn’t see his shadow, Ohio will only have another month & a half of winter.
Boots on the Ground, Anthem, AZ
Just got back from a bike ride with the kids and Ms Jetta. Stopped by a garage sale that turned out to be a “Mailing in the Keys” sale, which are quite the rage around here. The couple bought at the peak, they owe 3x what I owe for the same model, their bank will not negotiate with them, and they can rent a larger house with a pool for 1/2 the mortgage payment. Oh yeah, they have two newer model cars.
Question, do I feel sorry for them? No.
Do I think the government’s plan to rescue people like this is going to work? No, they owe way too much to finance using a 30 yr fixed.
The kicker: The neighbors across the street were moving out and mailing in the keys themselves.
Conclusion: Soon everyone we talk to is going to understand the width and depth of this problem. Smart people who think a little time or even Hillary (OK, maybe Obama) is going to change are very soon going to understand what we all know.
Not sure if I agree with Jas Jain, I hope he’s wrong and I’m worried hes’ right.
PS: How’re the mountains in CA?
Last Summer, my mom put her house in the market (Santa Clarita, zip-code 91321). The realtor had it listed somewhere north of 500K. No bites. Dropped the price 10K. No bites. After another three weeks, my mom told the realtor to drop the price 20-30K. Got a couple of bites. Sold in September for 469K.
Fast-forward to today. A home with an identical floorplan to my mom’s (and just a couple of blocks away from her old place) is now listed for 399K, and is sitting on the market, waiting for a buyer.
Sounds like Loudoun county VA.
For those of you in Alexandria, I’m starting to see this in Fairfax. Just wait — sooner or later it will be your turn.
One more note about my mom’s house.
She got an earful from a couple of other realtors for dropping the price so aggressively. “Why are you giving the place away, they asked?”
Well, she ended up “giving away her house” for at least 70K more than she could “give it away for” now…
I don’t buy this. Realtors are market savvy experts on her neighborhood. Their fingers are on the pulse of who is buying what for how much. They are seasoned professionals, which is why you should hire them.
Right!
News from the hollywood hills. I have a friend who went through a divorce about 2 yrs ago. In the summer of 06 he bought a 2.2 mil home in the hills. Now ex-wifee has moved to the so bay and because they have a kid, he needs to move there too.
He’s told me he will lose between 3-400k by selling now. He put 20 percent down.
I hope he can come to grips quickly with the idea that between now and any date in the foreseeable future, the 300-400K that he stands to lose now is likely his minimum expected loss. Of course, he could rationalize that given his down payment, 450K or so is his maximum out-of-pocket loss no matter what happens.
This article is about a local art gallery in Saint John NB having a sale:
http://telegraphjournal.canadaeast.com/front/article/200668
The connection to the housing bubble:
“Besides works owned by the gallery, the show includes canvases owned by an American client who collected New Brunswick art but was recently hit by the downturn in the U.S. real estate market and needs to liquidate, fast.”
Oh that will really make the American client happy…nothing like letting your buyers know you’re selling under duress!
Not necessarily in the world of artsy prestige goods. How many times have I passed dealers in expensive oriental carpets holding “going out of business, everything must go” sales? And then passed them again, and again, seeing the same thing every time, year after year. When you are selling something for which comparison shopping is impossible, it helps to make everyone think they’re getting a steal.
One small town I’ve been watching in FL has about 450 listings. I looked up sales and 8 were sold in December and not one in January. I think things are really slowing down. Also the people who bought in December will probably wish they hadn’t, because they way overpaid.
I looked today at the inventory in Signal Hill, Ca. This is an area of new view homes and condos. There were 78 homes and condo’s for sale. There were no Single family homes pending and just 4 condo’s in excrow and 3 were distressed sales.
Nice Haircut!
McLean, VA, which is arguably the premier place to live in Northern VA. I am tracking these 1980s condo conversions that went exponential in the bubble. $90k (plus subsidies!) in 1999 to $375k in 2005 (the “ask” peawsk at $419k in June 2005). This is probably the cheapest housing in this zip code. SFHs that cost ~$350k in 2000 probably peaked at ~800k if we are looking at the median house in this area.
In this condo development the new buyers shifted to 100% investors in 2004 and most new residents were renters. Lots of Iranian, Arab, Turkish names among the peak buyers. The people who live there are very “white bread”.
The latest is that a short sale asking price of $185k (i.e. 50% off peak) is a pending sale. I am a housing bear but I was shocked to see this. The moron investor bought for $300k in 2006 probably thinking that he was getting a deal. (Catch that falling knife).
The normal now “ask” is ~240k, but there are only 3 units on the MLS. There is a Wells Fargo REO that foreclosed in June 2007 (another 2006 $300k buyer). Obviously this ask is not working since the short sale went down to $185k.
Another unit just listed for $249k. I looked it up and the buyer bought in 2004 for $247k….. good luck on that one. A friend who rents there told me that they are hitting everyone with a $20k assessment, which is probably really yscaring off the buyers. During the bubble a $20k would have been shrugged off, as the units were going up that every month.
So we are already back to 2003 prices in this development if you want to sell, i.e. the “bid”. The $185k is probably late 2002, early 2003.
The media will tell you that prices in this specific sub-market have not gone down here because of strong employment, but the low end is obviously being hit bad. I am sure that PG County (suburban area in MD adjacent to the bad part of DC) will be a bloodbath soon.
Someone else commented on another thread with reference to DC how the low end appreciated %wise much more than the median. That is correct and the low end is already melting down.
I have specific interest because I had the opportunity to buy a unit for $120k directly from an owner in late 2001 but the permabear in me stopped me…… (I couldn’t get over the ~15% yoy appreciation and the uncertainty post 9/11 didn’t hep.)She and others had bought in the late 1980s boom when they converted from apartments; she had let the unit sit unoccupied but did not want to sell at a loss during the 1990s. (I think she lived there before she got married.) Then in 2000 when nominal prices came back to the 1989-90 prices a lot of people decided to sell.I probably would have cashed out when it doubled — in 2004 — but who knows, maybe I would have been caught up by the frenzy. It would have been nice with a a nifty $120k profit in 2.5 years.
It is still Christmas in Eastern Iowa and Western Illinois, all the mall parking lots in my area were packed as if it were still the day before Christams Eve. Last year at this time the malls were empty. Every furniture store parking lot I passed was filled to capacity, unusual for furniture stores, imho. Delayed shopping due to last months subzero temps.?
There is a noticable decrease in the number of rentals advertised, however; I get the impression many of the ads were pulled rather than rented, too many ads disappeared at once.
You’re smack in the middle of the farming boom, a big countertrend pocket of economic strength in the country’s midsection that is underappreciated.
The same farming boom is keeping prices (both rentals and sales) insanely high in North Dakota.
I was out walking around in Mountain View today, saw several “short sale” properties for sale, lots of regular “for sale” signs including at several shabby apartment complexes that had presumably been converted to condos. Crossed the pedestrian bridge over into Palo Alto, and the signs disappeared. Give it time, though.
My BIL just purchased a shabby little 4 plex in Palo Alto for just over $1 million. This place has been grossing less than $6000/mo in rental income so as far as I can tell he paid double what it is worth. But don’t worry, there is no bubble in commercial real estate.
Nice summary from Smartmoney:
http://articles.moneycentral.msn.com/Banking/HomebuyingGuide/WhyRentToGetRicher.aspx?page=1
…
House prices and rents have been closely linked throughout history, with both increasing at the rate of inflation, or about 3% a year since 1900. A house, after all, is an ordinary good. It can’t think up ways to drive profits like a company’s managers can.
…
So to sum up why I rent: Shares right now cost 16 times earnings and over long periods return 7% a year after inflation. Houses right now cost 19 times their “earnings” and over long periods return zero after inflation. And they look likely to return less than that for a while.