All Bubbles Burst And Prices Will Have To Fall Some More
A report from the Arizona Republic. “Home evictions have risen about 15 percent since January 2006 in parts of the East Valley, including Scottsdale and Tempe, constables said. They are substantially higher, up to 45 percent, in parts of Phoenix, Ahwatukee, Chandler, the north Valley and the West Valley, constables said. Among Arizona prime-loan defaults, 26 percent of the homes were not owner-occupied, according to the Mortgage Bankers Association. Among subprime-loan defaults, 18 percent were not owner-occupied.”
“‘We didn’t realize how much of an impact it was going to have on us when the market turned,’ said Constable Philip Hazlett, who works in the North Valley Precinct. ‘It used to be a standard tract home would be where you’d do your eviction. Nowadays, I do ones on houses that sell for $750,000 in Anthem.’”
“‘You’ll see people that have been there a year or two or three, and their luck changed,’ said Constable Dan Ryan. ‘On the other hand, you get someone that’s made a bad decision with a renter, and they got suckered. All of a sudden, somebody’s not paying.’”
“That’s what happened to homeowners Carmen Nuñez and her husband, Raymond Ordoñez. Almost four years ago, they bought a nice home in a nice neighborhood near 35th and Northern avenues in Phoenix. They kept the house as an investment property when they later moved to Laveen and in August rented it to a young, unmarried couple.”
“The tenants stopped paying the $1,200 rent in December, instead dodging Nuñez’s phone calls and giving lots of excuses.”
“On Wednesday, a team of constables descended on the home to evict the tenants, who weren’t home. The house was trashed: Half-eaten hamburgers and moldy bowls filled with cereal and milk sat on a table. Christmas decorations, dirty clothes and toys were scattered through the living room. The carpets were stained, the place smelled like rotten food and dirty diapers.”
“The tenants rolled up as the owners changed the locks, and the constables carried out the eviction paperwork. The tenant, Bobby Green, jumped out of a car, screamed, cursed and started to get physical with one constable. Within seconds, Green was Tasered, down on the driveway and in handcuffs.”
“‘I’m spending money I don’t have to pay the mortgage on that house, my house, to the courts for the eviction,’ said Nuñez, a real-estate agent. ‘It’s affected me really badly, and it’s just plain ridiculous.’”
“In metropolitan Phoenix…home builders are selling off land that they can’t sell homes on in the near future. Investors are buying home lots for bargain prices, which lets them hold onto the properties until the demand for homes picks back up.”
“In the last few weeks of 2007, as many as 8,000 vacant but finished home lots ready for construction sold in the Phoenix area, according to Scottsdale-based land brokerage and consulting firm Nathan & Associates.”
“‘Investors are offering about 30 cents on the dollar for finished lots now,’ Nathan said. ‘So if it cost a builder $700 a foot to finish the lot (get it ready for a new home), then buyers are offering $350 to $500 a foot.’”
“During the boom of 2005 and even as the market started to slow in 2006, publicly traded builders sparked bidding wars to buy huge tracts of land in the Valley. But now many builders who operated primarily as manufacturers and not long-term land developers in the past, need to get the dirt off their books.”
“During the fourth quarter, housing giants D.R. Horton, Pulte Homes, Lennar, Centex and Toll Brothers lost a combined of $1.47 billion due to falling land values. RL Brown, publisher of the Phoenix Housing Market Letter, tallied 61,000 finished lots sitting empty across the Valley.”
“Longtime builder Greg Hancock, who sold his last housing firm to publicly traded Meritage Homes of Scottsdale, has invested in some lots in Pinal County.”
“Market watchers say he plans to sell homes for $90,000 there, well under half the Valley’s median home price.”
“Pinal County existing-home sales picked up during last quarter of 2007 as lower prices enticed more buyers into metropolitan Phoenix’s southeastern suburb. The median price of a Pinal County used home fell to $174,000 at the end of 2007. A year ago, it was $191,500.”
“Resales during the last three months of last year climbed to 1,145, compared to 625 during the third quarter, according to Arizona State University.”
“‘Although affordability has improved, higher gasoline prices, more congested highways and limited employment opportunities continue to strongly hamper any potential recovery of the housing market in Pinal County,’ said Jay Butler, director of Realty Studies.”
The New York Times on Arizona. “South of Tucson on Interstate 19, just over the Santa Cruz County line, two rugged mountain ranges vie for your attention: the soaring Santa Rita Mountains to the east, and the smaller, but no less compelling, Tumacacori Mountains to the west.”
“Lonnie Wagner, who lives in Colorado Springs, and his wife, Linda, bought a second home with another couple at the Tubac Golf Resort in 2001 for $185,000. Both couples later opted for their own digs, and in 2004 the Wagners bought a larger place just north of the resort area.”
“‘The more we came down here, the more we liked the idea of having more space around us,’ Mr. Wagner said. ‘Plus prices were starting to climb fast, and we didn’t want to miss our chance.’”
“They paid $250,000 for a 2,400-square-foot, three-bedroom stuccoed house on three-quarters of an acre.”
“‘We were walking hand in hand, on one of those gorgeous starry nights they have here, and we thought, ‘Wouldn’t it be wonderful to have a place here,’ said Christine Priester, of Denver, who traveled frequently to the area with her husband to visit family.”
“Soon after, in 2003, the couple learned that an adobe-brick house next door to an aunt and uncle was up for sale. They bought it for $260,000. ‘We play tennis and golf, but we also love to just walk around,’ she said.”
“Despite Tubac’s rising population of second-home owners — real estate agents estimate that 25 percent of homeowners have primary residences elsewhere — the village has kept its small-town charm. Residents like to point out that there’s no stoplight in town, and just one gas station.”
“Tubac has had considerable growth in the last five years. Barrio de Tubac, a 350-acre planned community just south of the historic village, has exploded in size in recent years. Its residential homes include town houses, patio homes and larger single-family dwellings. Prices range from $275,000 to $850,000.”
“Home sales were strong in Tubac starting in 2003, but have since begun to taper, said Gary Brasher, president of Brasher Real Estate. ‘We’re a niche market here,’ he said. ‘Even though things are not great guns like they were, things are still selling at a pretty good pace.’”
“There are two basic types of properties in Tubac, Mr. Brasher said — those in small subdivisions, like the ones found in and around the golf resort, and those found in Barrio de Tubac.”
“Overall, one- and two-bedroom town houses typically range between $268,000 and $425,000. Patio homes and villas, with more space, are priced between $350,000 and $550,000. Prices for single-family homes vary depending on location and lot size, with prices ranging from $400,000 to $800,000.”
“A third option is land, most of which is zoned as rural, meaning one home to roughly five acres. Those lots are typically priced between $250,000 and $325,000.”
“The most sought after second homes are those that are low maintenance, like the golf resort villas. ‘When one comes on the market they tend to get snapped up pretty quick,’ said Bill Mack of Coldwell Banker Residential Brokerage.”
The Yuma Sun from Arizona. “While national media continue to paint a bleak picture of the real estate market, Yuma is charting its own course, one that shows the worst may well be over.”
“Chris Hall, co-general partner in Cielo Verde Development, is banking on it.”
“A grand opening was held Saturday for the project south of 32nd Street along Avenue 8E. Cielo Verde brings a new concept to Yuma that combines homes and businesses in a planned community, all linked with a 25-acre linear park. The planned shopping center already is anchored by the Foothills Wal-Mart Supercenter.”
“‘Every home will be within walking distance of an ice cream cone or a haircut,’ Hall said.”
“But just when the project began to move from paper to dirt, the real estate market took a nosedive. ‘We held back opening,’ Hall said, ‘waiting for a sense of a turn in the market.’ Now seems like the time, Hall said.”
“Hall isn’t the only one who is bullish on Yuma’s housing market. ‘Activity has really picked up,’ said Jason Kehl, president of the Yuma Association of Realtors. While there are nearly 1,000 single-family homes currently listed for sale by YAR, he said, ‘houses priced under $200,000 are moving pretty quickly.’”
“‘If people are thinking of buying, this is a good time,’ Kehl said. ‘Interest rates are at historic lows and sellers are willing to wheel and deal … and I expect prices to rise again.’”
“Joe Wehrle, Yuma County assessor, said his fourth-quarter 2007 real estate report indicates that while there was still a decrease for the three months in the number of homes sold, there was more activity in December and the quarter ended with a slight increase in the average sale price. Now $217,000, that’s 5.4 percent higher than for the previous quarter.”
“And while that average price is 3.9 percent less than for the fourth quarter of 2006, he said, it is 77.5 percent higher than the average sales price of $122,240 in early 2003.”
“‘We’re not exactly what the Phoenix metropolitan area is experiencing,’ Wehrle said. ‘That’s not to say we haven’t had a downturn, but not to the degree in Phoenix.’”
“There still are neighborhoods where homes in foreclosure sit on one side of the street while on the other side, new homes are under construction, he said. And, yes, some houses have been sitting on the market for months. ”
“Optimism is reflected in city of Yuma building activity. For the month of January, 22 building permits were issued for single-family dwellings, said Randy Crist, city of Yuma building official. But new housing activity has a ways to go to recover. Crist said in 2007, a total of 213 permits were issued for single-family dwellings.”
“In 2006, the number was 699.”
“‘I guess the good news is that we haven’t dropped below where we were in 2005,’ Wehrle said. ‘We raised the bar and it hasn’t fallen as it did in Phoenix. That just hasn’t happened here.’”
The Reno Gazette Journal from Nevada. “Home foreclosures in Washoe County rocketed 614 percent in 2007 from a year earlier, a report on Monday showed, as sales and prices of homes continued sagging in a trend observers expect to last through this year.”
“‘It’s going to get worse before it gets better,’ said analyst Brian Kaise of the Center for Regional Studies in Reno, who helped compile the report.”
“The report summary said foreclosures have risen in all geographic areas of the Truckee Meadows, totaling 750 in 2007 from 105 in 2006. Additionally, 14 percent of the area’s active homes for sale in December were bank-owned homes.”
“Add in homes already on the market, which are taking 20 percent longer to sell than in 2006, and ‘it’s really not a good scenario,’ Kaiser said.”
“He sees no turnaround of the 6 percent drop in price last year for all housing countywide. And the glut in foreclosures could worsen as more adjustable-rate mortgages come due for big increases.”
“Tom Cargill, economist at the University of Nevada, Reno, agreed. ‘All bubbles burst, and the pressure came down,’ he said. ‘A lot of unwise decisions were made. Add in the slowdown in other economic indicators, and it puts even more pressure on. Prices will have to fall some more.’”
“Broker Ken Wiseman said his roster of homes added two more foreclosures Monday. ‘It’s ridiculous. I’m up to 22 right now. A year ago, I had zero,’ Wiseman said. ‘I have potentially another 50 homes not foreclosed on yet but are on the brink. And that’s just me.’”
“Wayne Capurro, Reno-Sparks Association of Realtors president, acknowledged that 2007’s tough conditions have continued into January. Capurro cited an association study that showed an easing in the drop in the median price of an existing home from 15 percent in 2006 to 10 percent last year.”
“‘The word is out that most people were way too high-priced,’ he said. ‘The ones motivated to sell made the adjustments. The ones who’d been on the market for a long time were not reducing their prices. Now, they’re doing that.’”
“Capurro said the regional housing market’s nadir will be reached perhaps as soon as the second half of this year. ‘It was going up and down in fairly significant gyrations,’ he said. ‘I see that now. I know there’s lots of gloom and doom. You have to go back to early 2004 to see today’s prices. But affordability is swinging much in favor of buyers.’”
“Complaining their real estate was overvalued for tax purposes, the owners of a record 3,493 Washoe County properties are appealing their cases starting today.”
“Many came from the south Truckee Meadows. Land values there and in Washoe Valley and Incline Village rose an average of 80 percent. Since this area hadn’t been mass appraised for five years, the latest appraisal covered years marked by a huge run-up in housing prices, peaking in 2005. Since then, prices have declined.”
“Gary Bria, owner of a home on a half-acre at the Fieldcreek development south of Reno, said his value jumped from $101,000 to $235,000 in one year. ‘I’m going to fight it,’ he said.”
“Fourteen developers filed appeals for 1,200 vacant subdivision lots. One owner filed appeals for 478 condominiums.”
“Assessor Josh Wilson said he will recommend other subdivision lots that have been slashed in price since July be reduced in value, even if no appeals were filed. Under state law, he said, the assessor cannot not appraise properties for more than their cash or market value.”
“‘It’s unprecedented territory,’ Wilson said. ‘The overall value of real estate in the United States has not declined since the Great Depression.’”
That Tubac area sounds like my kind of place. Or was. AZ Slim, what’s it like there. Any deals?
Oh, they’re dealing alright:
‘There are two basic types of properties in Tubac, Mr. Brasher said — those in small subdivisions, like the ones found in and around the golf resort, and those found in Barrio de Tubac. Overall, one- and two-bedroom town houses typically range between $268,000 and $425,000. Patio homes and villas, with more space, are priced between $350,000 and $550,000. Prices for single-family homes vary depending on location and lot size, with prices ranging from $400,000 to $800,000.’
‘A third option is land, most of which is zoned as rural, meaning one home to roughly five acres. Those lots are typically priced between $250,000 and $325,000.’
This stuff is aimed at bubble flush folk that don’t know how cheap this land was a few years ago. It looks great in a glossy morning shot in the NYT, but try August at 3PM. But you can walk around! Nice golf course, too. Good luck when the developer folds.
I’m one of those odd ducks that likes hot weather. The hotter the better. That might be an area worth watching for potential lowball or REO stuff.
I like Tucson in the Oro Valley area or Catalina foothills. You can drive to Tubac in an hour if you like. Tubac is too small for me. And it gets plenty hot in Tucson with better air quality than Phoenix plus 10F cooler at night.
I used to live on Ina Road in the late 1990s within walking distance to the Foothills Mall in the north side of Tucson. Things were great and things got even better - they put in an LA Fitness in that area. I used to go bicycling up to Oracle road and do a 20 mile ride on weekends along the beautiful Catalinas toward Oracle.
Ah, memories - I always stayed at the Ina Rd. Motel 6 in the old days when we did the Tucson Gem Show. I went out most every morning on my bike in the 40 degree chill at sunrise out on the roads west of the Interstate. (Lordy, where did my motivation go?- Now I won’t ride if it’s below 60.) In those days Ina Rd. was the last east-west road going north, and it wasn’t more than a 12-minute drive down to Congress St.
I spent an entire summer in Lake Havasu City where the low at night was 118.
You can’t walk your dog during daytime, the ground will burn their feet.
Tx, you’d like it once, maybe twice. Great golf, but you’d run out of things to do in about a day, unless you’re really into entomology. Stay in northern AZ, or check out the eastern Sierra, Bishop and surrounding areas, or western NV Minden and Gardnerville.
This is very true, (Tubac) a nice area for sure but little to do, Prescott and the N Arizona locations is much more appealing in terms of what a person has to have for everyday living.
Try Aug in any town at 3pm. We had a second place in Denver for years and tell us at 3pm in August it wasn’t hot?
Slim checking in from Tucson. Here’s what the Tubac stories don’t mention: Illegal Immigration. Lots of it. Long been a problem in this area.
In fact, I once visited a couple who lived in Tubac during the late 1980s. They were in the habit of taking winter trips to Mexico. To protect their house from the burglars, which were numerous in the area, they rigged loaded shotguns to go off if someone messed with their windows while trying to break in. Each window had a warning sign — In Spanish.
Mind you, this was 20 years before the current publicity frenzy on illegal immigration.
Illegals in S. Arizona? I’m shocked!
Now is a Good time to buy.
where have i heard that before?
I am still the actual owner (sorry) of one mobile-home lot in Pinal County, in a condo situation (includes share of the swimming pool, billiard room, laundromat, etc). Maint & taxes are so small that I was not actually trying to sell it. Just now I have been offered $48K cash, which is the same as early-07 prices, and not much less than 2006 prices. Am I taking it? You betcha. Trying hard to hide my chortling glee.
We spent a couple months in Tucson this year (Saddlebrooke). Went down to check out Tubac. It was OK, kind of cute, but we weren’t that impressed. For me the area in and around Oro Valley is much prettier and has more to do.
“On Wednesday, a team of constables descended on the home to evict the tenants, who weren’t home. The house was trashed: Half-eaten hamburgers and moldy bowls filled with cereal and milk sat on a table. Christmas decorations, dirty clothes and toys were scattered through the living room. The carpets were stained, the place smelled like rotten food and dirty diapers.”
“The tenants rolled up as the owners changed the locks, and the constables carried out the eviction paperwork. The tenant, Bobby Green, jumped out of a car, screamed, cursed and started to get physical with one constable. Within seconds, Green was Tasered, down on the driveway and in handcuffs.”
___________________________________________________________
DO tase him, bro!
Now that’s a bitter renter.
so you wanna be a landlord huh?
no wonder i never hear a peep from my landlord
rent on the 1st like clockwork-quiet and clean apt
all of us renters are not so bad
I’ve heard mostly bad things from all but one of my friends who were landlords. That’s about 9 out of 10 people complain about their tenants, say it’s not worth it, and so on. There’s a far better way to save for retirement: Invest in index stock mutual funds with low expenses.
Overlording on crybabies or slobs ain’t my bag, baby.
Now if someone would have just Tasered Carmen and Raymond when they bought their other house and became ‘investors’, none of this would have occurred. I’m all for mandatory Tasering for anyone who confuses investors for speculators.
Only a moron gets confrontational with armed police officers. I’m not sure what getting “physical” implies, but if he assaulted the officer then he’s lucky that they only tasered him.
‘The more we came down here, the more we liked the idea of having more space around us,’ Mr. Wagner said. ‘Plus prices were starting to climb fast, and we didn’t want to miss our chance.’
‘They paid $250,000 for a 2,400-square-foot, three-bedroom stuccoed house on three-quarters of an acre.’
‘We were walking hand in hand, on one of those gorgeous starry nights they have here, and we thought, ‘Wouldn’t it be wonderful to have a place here,’ said Christine Priester, of Denver, who traveled frequently to the area with her husband to visit family.’
Even though the media has more or less admitted there was a housing bubble, they continue to faintly see all the different manifestations. The Arizona second home was one of the things that convinced me. These people would be much better off staying at a resort (in a room probably subsidized by a speculator) both financially and comfort wise.
But then we get the tip-off:
‘prices were starting to climb fast, and we didn’t want to miss our chance’
No, you wanted to get in on the boom! ‘We like to walk around…starry nights’ ?? This is Arizona, you can do that anywhere in the state!
‘And as for the SFR speculator renting to deadbeats in the Phoenix area; you get what you ask for.
Also, one look at the graph on the Yuma Sun page should leave no doubt about a national housing bubble.
They glossed over the fact that the slumlord is a realtor, didn’t they?
I can’t imagine a worse ‘investment’ than trying to rent out SFH in Phoenix. But yet there are tens of thousands, underwater, trying to pull that off right now.
BTW, does the AR even listen to themselves when they print things like this:
‘When the Valley’s robust housing market began to loose steam more than a year ago, real-estate experts predicted that commercial real estate would keep the economy roaring along.’
‘Real-estate trusts, pension funds, insurance companies and property developers continued to buy properties in metropolitan Phoenix at a torrid pace. They were drawn to the area’s job growth and booming population, which were among the strongest in the nation.’
‘But the commercial sector - specifically the number of properties being bought and sold - has cooled significantly. The number of bids for commercial properties has dwindled from a couple dozen to just a handful, Valley brokers said in interviews.’
‘While the commercial real-estate slowdown is not expected to be as severe as residential, it is a major departure from recent years. Back then, rapidly rising property values all but guaranteed that new buyers could sell their buildings in 12 to 18 months for a large profit.’
The “We’ll Just Rent It” mythology is still alive and well here in Tucson. The idea is to rent the house for a few months until that miraculous time when house prices start rising again. When that happens, it will be time to put the house on the market.
Unfortunately, I think a lot of these accidental landlords will be dumping the houses on the resale market long before that mythical rebound in prices. The reasons? Spelled out in that story about the Phoenix real estate agent with the tenants from hell.
Just try selling a house in the PHX area now, too many houses to look at and no financing available. Prices will have to fall a lot to get sales moving again.
In the my area there has benne alot of “Rentals for 6mos. preferred”
I can; how about the MBS that gave the “investor” the money to do it?
I wouldn’t expect a newspaper that can’t handle basic spelling and grammar (”…began to loose steam..”) to be intelligent about the housing market.
Really, what morons. Or “maroons” to them probably. LOL
Anecdotally, Ben; there’s a commercial/industrial center at 35th St. and Van Buren (Phoenix) that was completed one year ago…no tenants yet. Looks to be 20,000-30,000 sq.ft. on 5 acres.
There’s nothing like Arizona’s rattle snakes and black widow spiders to make star-gazing more interesting.
And don’t forget those adorable scorpions. I found one in the bathtub of my Prescott Valley house one day.
We have all three here, too, though I’ve never seen a scorpion. Tampa is probably the flea capital of the world, which is never mentioned in promotional brochures.
Don’t forget the Skunk families walking around at night.
You THOUGHT it was a cat…just wait..
“THEY” should hire all of us to do a Real promotional presentation.. thats the ticket.
But, skunks are all over the place in the US. They are the greatest night-time walking hazard in downeast Maine, in San Marino CA, in Louisiana, in Pennsylvania … my point is just, don’t think of the skunk problem as AZ-specific.
‘Plus prices were starting to climb fast, and we didn’t want to miss our chance.’
ahh… here we go again with more ‘panic’ language geared towards making buyers more jumpy. This is tha kind of language that fueled the bubble for people who pretty much believed anything the RE machine spat out.
I have an interesting story. My best friend lives in South Carolina. He’s a smart guy, and I respect him quite a bit. But he bought two condos for none other than flipping. Naturally, both of these are being foreclosed upon. The two troubling things that I got out of the conversation with him was that for one, he didn’t seem to really care that he was just walking away from the properties, and secondly, he STILL had an almost steadfast trust in RE and the agents, brokers, and banks that support it. I told him right on the spot that these guys are scum and none more than glorified shoe salesman… yet people entrusted sometimes millions of dollars into their expertise? I mean- what kind of moron would listen to someone say something along the lines of: ” This area is growing fast… I’d buy now before prices get too high.” Fear tactics. The OLDEST trick in the book. Yet people believed, bought, are now being foreclosed upon, and lastly- don’t care.
This problem is way the hell bigger than anyone on Wall Street knows. The sort of artificial inflation of the numbers over the last few days has nothing to do with the pending and encroaching reality.
“This problem is way the hell bigger than anyone on Wall Street knows.”
Wall Street knows it; they’re hoping WE don’t know it.
I think you underestimate the extent to which anything past 59th Street is just a bunch of abstract numbers.
All of the chief players in this house of games, live in NYC…
Once the hoi polloi in the rest of the country figure this out, won’t there be major league blowback coming at them?
All of the chief players in this house of games, live in NYC…
Once the hoi polloi in the rest of the country figure this out, won’t there be major league blowback coming at them?
“Once the hoi polloi in the rest of the country figure this out, won’t there be major league blowback coming at them?”
Halfwit peasants (also known as ‘useless eaters’) will be hit with a scapegoat event (black plague, mushroom cloud…) long before the true cause is revealed.
One of the things I’ve heard repeatedly is that the manufacturing economy doesn’t matter, because the future is all about skills and creativity, and that the world will still come to the U.S. to do business, because of all of the banking and financing “talent” and “expertise” that is here.
I wonder how that plan is working now.
… having more space around us,’ Mr. Wagner said. ‘Plus prices were starting to climb fast, and we didn’t want to miss our chance.’”
I doubt that the prices will start to climb fast ANYWHERE. Almost everyone has understood that there was a big housing bubble and that the full extent of the problem is as yet unknown. It is foolish to jump in this soon. It is foolish to think that one will miss one’s chance. There will be chances galore for those who wait until they make absolutely sure that the past excesses are truly wrung out of the housing market.
I sometimes notice in my area (Southshore MA) that impatient buyers jump in whenever they see small downward movement in prices. A couple of months later, a similar house becomes available for even lower price. One can go to zillow.com and see how the impatient buyers got screwed in the last 12 months or so.
yo ho yo ho, the landlord’s life ain’t for me…
“On Wednesday, a team of constables descended on the home to evict the tenants, who weren’t home. The house was trashed: Half-eaten hamburgers and moldy bowls filled with cereal and milk sat on a table. Christmas decorations, dirty clothes and toys were scattered through the living room. The carpets were stained, the place smelled like rotten food and dirty diapers.”
Wouldn’t be surprised to see that kid in foster care before long.
I have to tell this story:
On Saturday I helped a neighbor take some drywall over to his rental townhouse in an older part of Chandler. The current tennants have been there for six years, and are “sometimes a little late with the rent” but generally good enough.
Walking through the door, I could hardly believe the stench from dog urine and piles of dirty laundry all over the floor. I’m talking piles of dirty clothes two or three feet tall in every corner! The bed in the room we took the drywall into had probably 2 feet of laundry and other junk piled on it too.
Very disgusting, and when the day comes that this property is sold or re-rented, it will require a TOTAL gutting down to the studs and concrete, followed by a haz-mat level cleaning, then installation of new carpet, drywall, kitchen, bathrooms, etc.
When I had units the lease included a provision that with 24 hours notice I (landlady) could come in and inspect the place.
And when the shoe was on the other foot, - a landlord who was considering me as a tenant dropped by my place pre-lease signing to make sure I wasn’t a slob. I don’t think the new crop of accidental landlords have thought about these contingencies.
landlording is not for everyone… but if the numbers work out i don’t see a problem with the tenant paying my mortgage bill. What i see is that there has been a preponderance of accidental landlords who unwittingly entered into the fray ; they had no business being a landlord in the 1st place. all the while the professionals just rolled their eyes when the numbers didn’t make sense and waited out.
i jumped outta my chair at the $1200 rent in the northern/35Ave area, no way it should be more than $900 for a 3/2 depending on what kind of area/jobs are available here.
my guess is that the owners were already bleeding at $1200, and after the eviction this house is about to join the ranks of REOs.
got cash?
Why launder your clothes when you can buy slave-labor crap clothes at WalMart? Disposable garbage keeps the ecomony humming…
Remember Idiocracy, with the pull-out, disposable cloths, just like tissues? Nice to see we’re moving towards that endgame!
I used to stay in Yuma on the way back and forth from San Diego to Dallas. It was a tiny little blip back then. I can’t imagine it being a bubble area now. Where do people in Yuma work to afford houses of any price?
Oh, yeah. In 2005 I posted YS reports of CA specuvestors buying preconstruction, sight unseen. That’s why they plotted about 600 houses that year and 700 the next.
I guess they can work at that Walmart, giving haircuts and making ice cream cones.
Also, I think another real estate sales ploy during the boom was convincing people ,who would be retiring in the next 10 years, to buy now before the cost of your potential retirement home goes up (and have a nice investment in the meantime ). So many speculators thought there would be a never-ending supply of rich baby boomers eager to pay another 20% a year to get a retirement home ,years ahead of real retirement . I remember how real estate was being marketed at the peak as the the next great retirement place for the baby boomers .I remember reading a article that claimed that baby boomers wanted big sq foot properties when usually retired people down size. Knowing older people like I do ,they don’t want to take care of bigger property, but people were speculating on myths created by the REIC.
Yuma is a bizzare artificial creation supported by agriculture, the military, and the medical industry. That, plus a lot of snowbirds who think they are doing the locals a huge favor by coming down for a few months every year and overrunning our restauraunts and crappy Hospital. There are a few very wealthy people here, but the vast depressing majority are poor, reflecting our location on the Mexican border. The California equity locusts were here and they drove the cost of entry-level houses over $200,000 for a while, but reality has reasserted itself and those days are over now. Ignore what the media cheerleaders say about this place.
Yuma’s shining future is as a low-cost but safer alternative to retirement in Mexico. Si se puede!
“Tom Cargill, economist at the University of Nevada, Reno, agreed. ‘All bubbles burst, and the pressure came down,’ he said. ‘A lot of unwise decisions were made. Add in the slowdown in other economic indicators, and it puts even more pressure on. Prices will have to fall some more.’”
As with everything else, NNV is a step behind. Months after the rest of the country has been reporting the bust, finally the bigger rags are reporting reality. The local papers are still all hopelessly optimistic. Getting quite pathetic actually.
They need those ad dollars from the realtHO’s
Our daily rag had a big builder insert yesterday, and two different articles made the same argument “If you put 10k down and the house appreciates 5% then you’ve made a better return on your money than the stock market blah blah.” Man they must really drive that one into the realtors’ skulls at those RE seminars b/c th they’ll all spout that one at the drop of a hat.
It’s an argument that generates “interest”.
“‘Every home will be within walking distance of …. a haircut,’ Hall said.”
As Dave Barry always says, you can’t make this stuff up.
…and ice cream cones. Don’t forget the ice cream cones!
The happy new FB’s should watch Last of the Mohicans to get a taste of the “haircuts” they’ll shortly be receiving.
So, who’s left to buy after the supposed knife catchers?
Bitter Renters?
This bitter renter isn’t buying anything until after the last resets in 2012.
As prices drop to the point where “they can’t possibly go any lower” a new batch of knifecatchers will emerge and will bail out the financially exhausted FBs.
Then prices will drop some more … and the beat will go on.
If you build a wal-mart, they will come?
“A grand opening was held Saturday for the project south of 32nd Street along Avenue 8E. Cielo Verde brings a new concept to Yuma that combines homes and businesses in a planned community, all linked with a 25-acre linear park. The planned shopping center already is anchored by the Foothills Wal-Mart Supercenter.”
If a Wal-Mart is the anchor, what is the rest of the shi-, I mean, ship? This in a fairly expensive development? Sounds like white trash paradise to me.
white trash?
Try poor white, black, brown, folks wearing blue aprons.
Low standards, always.
“‘It’s unprecedented territory,’ Wilson said. ‘The overall value of real estate in the United States has not declined since the Great Depression.’”
What a retard. The “value” of real estate isn’t declining, because the “value” was a fantasy to begin with. All that’s happening is that the mass hallucination is petering out.
OVERALL value - he said OVERALL, whatever that’s supposed to mean. lol
“The most sought after second homes are those that are low maintenance, like the golf resort villas. ‘When one comes on the market they tend to get snapped up pretty quick,’ said Bill Mack of Coldwell Banker Residential Brokerage.”
I call BS. Any bets on where this Realtor ™ sells used homes? Why do I expect next month to be a quote on ‘buyers sitting on the fence’ from this used house salesperson?
Got popcorn?
Neil
Harking back to last week’s discussion on golf communities, there’s nothing like living in a golfball meteor shower…
Why are we supposed to believe that roofing materials and water heaters rot lots slower if they are located near golfball meteor showers?
It’s infuriating that, in the midst of this crisis, the daily press seems to be intent on reporting the problems of the poor landlord when, in the vast majority of tenants evicted from foreclosed houses, the landlord collected rent from the tenants and didn’t bother to pay the mortgage, sometimes rented the place out AFTER defaulting on the loan, and in a lot of cases, signed leases prevented the tenants from just moving as foreclosure approached.
Grrr!
Got proof of that ?
“This can only mean that people have financed more than 100% of even recent sales, and apparently at the peak of the lending boom.”
Ben mentioned this point a few days ago. I used to work for one of the builders in the internal finance dept so I got to see several HUD statements. The reason for this IMO had/has to due with 100% financing and borrowing the downpayment/closing costs. The builders would call these GIFTS thru Nehemiah and others, but what was really happening is those costs were simply being rolled into the cost of the loan. So for example, if you purchased a $150K home, your loan amount would be closer to $170k/$180k once the 3-10% BORROWED downpayment and closing costs were factored in. This is why we started hearing about the 115-120% LTV mortgages happening on new construction purchases. In addition to immediately putting the FB 10-15% underwater, this may also explain why home prices NEEDED to rise at least 10%/year in most metro markets across the country. If they didn’t, the recent buyers in 02-04 were screwed by 04-06 when reset time came around on their 2/28’s and 3/27’s ARMS. Just an insiders observation.
“The builders would call these GIFTS thru Nehemiah and others,”
Uh, what does that mean?
“Nehemiah” refers to the Nehemiah corporation who was in cahoots (sic?) with the builders. Here’s how it worked:
Under traditional lending standards, the lenders and secondary market poo-pooed loans with $0 down, 100-120% financing for obvious reasons; no skin in the game, etc… So when a buyer with no money comes into the sales office to buy a house, Nehemiah agrees to front the builder the cash to show on the HUD statement that a down payment exists to get thru underwriting. Well, guess what, it DOESN’T. Thru a clever shell game no doubt conceived by these douchebags, those funds are grossed up into the buyers loan and the downpayment funds sent BACK to Nehemiah at close of escrow with a hefty fee included. Nice racket, huh? One more parasite feasting off the real estate transaction host. IMO, this was a similar smoke and mirrors game to the transition from PMI on loans greater than 80% LTV, to 80/20 loans with inflated interest rates on the 20% second. BTW, as an OT aside, check out the wiki page on Nehemiah. Apparently he was an Old testament prophet but the signifigance of his life and the relation to the company escapes me.
Well, PROPHET’s probably exaggerated, I think he was just a dude.
Like many scams Nehemiah uses a biblical reference to put the unaware off guard as to their true purpose. They purport to be a Charity.
Unless I’ve missed something huge, the Bible does not condone 100% loans on housing. In fact in old testament times loans were heavily discouraged though then, like now,the prudent advise was often ignored.
Yep, the “Charity of our Benevolent Lady of Foreclosures”. They really need their status revoked.
Wooooooo-hooooooooo!! Superbowl’s over. Everyone ready for the avalanche of listings?
Why, that would be the Patriotic thing to do, wouldn’t it? It would have a Giant effect on the resale market.
Hey, maybe Eli liked Arizona so much he can save the market there all by himself with the endorsement deal money he’ll be getting. He needs to go buy 50 stucco s**tboxes in Chandler ASAP and make a killing.
“Gary Bria, owner of a home on a half-acre at the Fieldcreek development south of Reno, said his value jumped from $101,000 to $235,000 in one year. ‘I’m going to fight it,’ he said.”
Bu…But…I thought RISING Real Estate prices were a good thing. Think of the equity, the equity……….equity dreams………HELOC’s galore.
Why fight it ?? Go with it, man. Get your piece of the American dream!!
The crust of an American Dream pie is made of substandard sawdust leftovers from any old building site, and the filling looks like ground up granite…
Bon appetite~
Kool-Aid still on the Tucson menu - interview with local condo developer:
http://www.azstarnet.com/sn/biz-topheadlines/223298
OTOH, the newspaper’s readers are skeptical:
http://regulus2.azstarnet.com/comments/index.php?id=223298
Ah Yes,
An Arizona thread! How lovely! Something for everyone!
I have lived in the East Valley- (Scottsdale- Mesa-
Tempe-Gilbert) - for 23 years now, and totally enjoy this area. Came out West from New York, where I had lived all my life, in Orange County, Manhattan, and Garden City, Long Island, which were nice places to live, but I wouldn’t want to live there again. For those of you who have lived on the East Coast forever, the low humidity of the Southwest makes the high temperatures rather easy to take, at least for me. It is much more pleasant in 108 degrees at 4 per cent relative humidity than 89 degrees at 95 per cent. If you don’t believe me, OK, but that’s the truth. For those of you who have lived in the Southwest all your life, you cannot imagine how dark, dank, depressing, expensive and crowded the NYC area can be. If you don’t believe me, OK, but that’s also the truth. What’s the point of this story?
That there are advantages and disadvantages to any particular location you can find, and that though many of us want to to live near our family and origins, many of us also are happier moving to another climate, location, altitude, or whatever. This is in itself, a reason NOT to put mega $$$ into a house until you have at least visited a few other locations. Don’t be closed-minded about where you could live and be happy. Try to visit a few corners of the country and/or globe before deciding on that major R.E. purchase.
I can tell you one thing - seeing a foot of snow being dumped on Chicago while I was walking around the Phoenix zoo in a sweatshirt and jeans with my daughter in 60 degree air reminded me why I left the midwest 13 years ago. I wonder how the Monday morning commute in “Chicagoland” was today?
Piece of cake, as long as you weren’t coming in on the edens as the reversibles were closed.
(I realize the above is only interpretable by Chicagoans and ex-chicagoans)
Now thursday afternoon, that was a bear.
nice posts. But remember, we’ll be drowned out in merely 5 months from now by the whiners on the HBB hurling insults such as saying how Phoenix is the armpit of the nation.
I lived in hot climates most of my life. In 115 degree weather last summer I would finish a hot lunch at Pei Wei and follow it with a fresh brewed hot starbucks coffee. I timed how long it took me to walk between my air conditioned car and the office: 30 seconds. 30 seconds of misery, perhaps a total of 4 minutes out of the day for going in and out, and I pay no more than $300 per month utilities 6 months out of the year. But bozos here think it’s better to pay $8,000 monthly mortgages on the California coast so that they would not have to pay $300 monthly for air conditioning. Go figure!
I love the sunshine and the dryness of the desert. I love the plant life too. Bonus: No fires, no earthquakes, no icy roads, no fog, no tornados, and no hurricanes.
But life-threatening electrical shocks every time you get in and out of a car - seriously, how do you deal with that?
Happens here the opposite way in Baltimore in January and February (30 seconds duration between office and car door) on days when temps are in the 20s and wind chill much lower. But then we have shock plus treacherous driving on icy roads. I’ll pick 119 degree temps instead.
Phoenix in summer is hell on earth to me, and I am a native Floridian!
We never get snow like that here. Very disappointing for a SoCal skier (which I used to be)>
“‘Investors are offering about 30 cents on the dollar for finished lots now,’ Nathan said. ‘So if it cost a builder $700 a foot to finish the lot (get it ready for a new home), then buyers are offering $350 to $500 a foot.’”
Brilliant! and this guy runs a brokerage house!
0.3 x $700 = ?
I guess what is meant is that the builders would’ve previously been offering finished lots at $1100-$1600 a foot, at a time when (a) the market would bear it and (b) finishing costs may have been somewhat higher. Interesting how these people use the words “on the dollar” to mean “on the dollar of 2005-06 housing and land prices.”
I’m hoping the writer is just using a far-fetched hypothetical as an example….otherwise, how do the numbers on this make sense???? If it costs a builder $700/ft to finish the lot and get it ready for a house, their cost for a 10k lot is $700 x 10,000 = $7,000,000?!?! Hypothetical is one thing, using numbers that fall within the realm of possibility is another.
People want to sue Cramer because they bought Google based on his prediction that it was going to $1000!
http://tinyurl.com/2t6ydo
I wouldn’t say “people” - just one dumb “person” getting slammed really hard.
FWIW I shorted at 700 and covered at 500 - thank you Google! Hope they don’t sue me!
TxChick,
Some of the old estates or houses with acreage by the river from Tubac to Nogales are great, very country, horse country. Old Tubac is OK, but a whole lot of development nearby. You could buy an acre by the river in 2000 for $4K, last I looked they wanted $80K. The golf course in “Tin Cup” is down there. Your just a long way from civilization.
I have not seen a single ultra modern house down there, however.
My stepson hunts in those mountains each fall. There have always been lots of illegals passing by, he mentioned that this year was weird he didn’t see a single illegal.
This story may offer some insight:
http://www.azstarnet.com/sn/fromcomments/223532.php
Well yeah- drive through Houston (90 minute one-way commute) like I do three times a week and you can learn Spanish just by looking at the billboards.
It’s less “caliente” here than in Arizona in the summer, and the grass grows fast and tall; lots of yardwork available. But this past year, I’ve seen homeowners doing a lot of their own work in affluent neighborhoods. Construction is down here and spec houses with huge incentive packages are selling very slowly, so that has a profound effect on the throngs of laborers who depend upon construction for their living. The Mexican guy who painted my kitchen last week said things were very “slow”. In a three man crew run by an estalished immigrant, he’d been working for three years and the other guy (flunkie) for eight. When I went to buy paint at the local Sherwin Williams, the Mexican counter clerk sent a compadre away because his driver’s license and SS didn’t check out. Said “Sorry, can’t do it”. I assume the guy wanted credit for paint, but the clerk wasn’t taking a chance with his own job to do any favors… It’s interesting to see it- people who have learned the language and assimilate to some degree have gotten a toehold. They might make it through this if they don’t get sucked into the credit trap. Unfortunately, Spanish advertisements for junk loans are all over the place, and I see lots of new-monied business owners driving spiffy new trucks on I-45. We’ll see.