Local Market Observations!
What do you see in your local housing market? Lending changes? “At a time when many lenders are pulling back on nontraditional mortgages, Wachovia Corp. is diving in deeper. The Charlotte bank argues that its ‘Pick-A-Payment’ mortgage gives customers more flexibility to manage their personal finances. But the product, amid turbulent times in the housing market, has drawn concern from the bank’s investors, consumer advocates and even some employees.”
“In recent weeks, current and former employees have told the Observer that they have felt pressure to sell Pick-A-Payment loans. ‘It’s amazing that all the big players are pulling out of the product, and we’re getting the full court press,’ said one employee who asked to have his name withheld because he was concerned about losing his job.”
Seasonal observations? “For years in the business of selling houses, the weekend after the Super Bowl was the time when people started house hunting. Yet if this year is like the last two, the Super Bowl is now just the last game of the season, not the opening shot of the home- selling year.”
“Indeed, there’s a chance the peak buying activity of 2008 may have already happened. In both 2006 and 2007, escrow closings, where all the paperwork is done and buyers get the keys, peaked in March, according to DataQuick. That means the homes were likely sold sometime in January or early February.”
Related industries? “Like many in his trade, Tony Vicari thought that when home construction began to dry up a year ago, it would lead to a boom in the remodeling sector. The logic was that after the housing bubble burst, consumers would fix up the home they already owned rather than build a new one. However, that hasn’t been the case.”
“Figures obtained from the Lake Havasu City Development Services Department show residential additions and alterations fell by 164, or 13.5 percent, last year.”
“Vicari anticipated that remodeling work would help sustain his business after home construction began to level off. More than a year later, he’s still waiting for a boom he admits will probably never come. ‘It hasn’t picked up. It’s dropped off as much as the new construction,’ Vicari said.”
“The Hawaii automobile industry is braced for lower car sales this year, with vehicle registrations expected to drop 4.1 percent as the economy slows, according to the latest report by the Hawaii Automobile Dealers Association.”
“Total vehicle registrations are expected to barely exceed 57,000 due to extremely tight credit markets, rising unemployment, declining housing values, excessive consumer debt and high gas prices, the report said.”
“‘The market has now moved below its trend levels as economic events have taken a predictable toll on new vehicle sales,’ the latest report said.”
New construction? “Northwest Wichita’s first high-end housing development in several years is on the way. Pier 37, a 29-unit development that markets itself as relaxation without leaving home…will include houses from $400,000 to $1 million around a 50-acre boating lake.”
“Wichita real estate observers say it’s the first northwest development dedicated to luxury homes in 10 to 15 years. ‘To the best of my knowledge, there aren’t a lot of high-end homes in that area,’ said Stan Longhofer, director of Wichita State University’s Center for Real Estate.”
“While lower-end home sales softened slightly in late 2007, the Wichita market remains strong for luxury homes.”
“‘I believe there’s a market for it,’ said Sharon West, senior VP of Plaza Real Estate. ‘Mainly because we lack that in the market, and we have people living on the west side who want to live in those types of houses. Not everyone wants to live on the east side.’”
I’ll repeat this one from the bits bucket, and add a couple of things.
My notice of assessment from NYC, for a 17 foot wide rowhouse without parking built in 1915 that was redlined 25 years ago.
This year’s market value, $1,053,000 (identical houses on the street have been selling at $999,000, and not a penny more, since 2004, but none have sold in six months. My new neighbors are either really rich or really broke).
Next year’s market value, $979,000, a 7 percent decrease.
The taxable value will rise from $21,104 to $22,408, a 6 percent increase (max allowed). My taxes are based on a market value of $394,000, because of that restriction.
Actual market value, based on rental equivalence and current interest rates — perhaps $640,000. Note that at three times income, that assumes an household income of $215K for what had been a cop/teacher/fireman/small store owner neighborhood since 1915. It is’nt bad for two (non-Wall Street) professionals either, even in NYC — it is more than double my salary.
Let me repeat that a similar house sold in 1987 for $300K to a Japanese couple. We bought in February 1994 for $209K. Since it was this time of year, at closing, the seller handed us the notice of property value from NYC, which had just arrived. It was for $208K.
Brownstone Brooklyn and Manhattan are two places where people say housing values have not fallen. But when NYC, which has an automated assessment system and all that data, says values have fallen 7 percent, I believe them. Expect a much bigger fall this year — if there are any sales to base it on.
People say I’m nuts when I say sales prices must fall, because Brooklyn will never be cheap again. I say I agree prices will stay high, but believe that it is a long way down to merely high.
I walked by a Realtor office off Flatbush in Brooklyn the other day which is posting, in its window, price reductions for a few area condos.
Newly completed buildings in the borough are sitting with maybe one tenant apiece in each one I’ve passed–if occupied at all. Construction isn’t proceeding at anywhere near a normal pace on others.
I know personally of condo projects in Brooklyn that are having big problems. The same can also be said of Hoboken. We are at the beginning, not the end.
brooklyn will be a major clusterf*** of unsold condo’s in areas that are not safe
i bought the local paper for the area where i live and the same homes and condo’s are for sale that were for sale last year and at the same prices basically
i will not buy-
wt econ- the area where i live is similar to wt-demographic just alot cheaper but still way overpriced
i will sign a new lease in may and be done with the fruitless search of delusional sellers for another year
i am in an industry that is slowing down so i may have to find new work at some point and the last thing i need is a noose around my neck like an inflated mortgage payment
Who would buy a market-priced condo in NYC? The taxes on it must be ASTRONOMICAL… The property tax codes in NYC favor older housing, the taxes on a condo that’s actually assessed like 600k or more must be mindbending, what’s the point?
from $21,104 to $22,408, a 6 percent increase (max allowed). My taxes are based on a market value of $394,000 ??
Am I reading this correctly WT ?? The tax on that same valuation in Cali would be roughly $4,000. with a MAX 2% increase per year…How the hell does a homeowner afford that kind of burden…Wow !!
Maybe it’s what “valuation” relates to. As WT notes these houses acually sll at near 1 mil. Here in Queens a SFH that sells for around $600,000 (and way overpriced) would have taxes around $3500.
NYC has much lower property taxes than L.I. and Westchester. The same priced house in L.I. would have taxes around $9,000 and in Westchester about $12,000.
I guess our “Prop #13″ has me somewhat naive about other areas of the country and how they are taxed….So it appears that each muni has its own “tax metric” ??..If the assessed value is 400k and the real valuation is 1-mil what prevents the assessor from raising the assessed valuation at their own discretion ?? Is that where the 6% “Cap” comes in ??? Is it this way throughout NY ??
SC - the downside is for our cheap taxes, we get crumbling infrastructure and terrible schools. What’s really screwed up is commercial RE is under prop 13, too!
I agree there are some “gross” inequities in prop #13 but damit, we had to put a stop to the “tax man” pissing away the money….
I grew up in NYC and I now live in CA, so I know both tax systems well. The problem with Prop 13 from a valuation standpoint is that the “value” of the tax guarantee (basically an “insurance policy” that taxes won’t rise in excess of 2% per year) is capitalized in the value of the house, near as I can tell!
In other words, you wind up paying roughly equivalent taxes (for recent buyers anyway) whether in a nice NYC suburb or in a nice - say - SF suburb for roughly the equivalent house. It’s just that the CA house COSTS twice as much!
For example, my brother lives in Mamaroneck, a nice “near suburb” in Westchester on the LI Sound. His taxes on his $650K house are about $11K per year. An equivalent house in a nice near suburb to SF - Burlingame, or parts of Marin, for examples - would cost around $1 to $1.25MM, and the Prop 13 taxes would be even MORE (around $11K - $14K)! My other brother has 3 acres and a 3/2 pretty far out on LI (pays $12K tax on “value” of $500K - a far out house and property like this, again, in SF would be around $1MM is, say, northern parts of Sonoma or far east suburbs like Vacaville or Tracy). I really believe that Prop 13 - more than any other single factor - is what has driven prices for California properties so much higher than other parts of the country where there are roughly comparable wages.
Good deal for the long-term owners, but I suspect that the game is just about done. (There are limits to how high prices can be driven, and ultimately these are correlated with how productive the labor force is, that is, wages, IMO.) People buying at these prices are likely to see taxes that are no lower than for equivalent properties in other “high value” cities, regions, suburbs, etc. IMO.
You have not seen anything yet?
A 600K house in Syracuse NY will be 24K in taxes. A 750K house is well over 30K in taxes. This is a city with a median income of about 33K. 70% of the population makes less than 40K. 1/3 of the local population is on the welfare. The local realtors give you it’s different here mantra.
Here is the link for Syracuse NY properties and taxes
http://tinyurl.com/2amb3r
Estimated Monthly Payment:
(Principal, Interest, Taxes, Insurance) $5,807.26
And thats with $121,000 (20%) Down payment.
A woman at work still has her Westchester Palace sitting on the market at $775,000. That price ain’t budging. She deserves it. Everybody in Westchester is rich, even those that aren’t. The schools are the best on the planet, even though many send their brats to private school. This is one debt peddler that lived high in the boom. We’ll see how the bust works out.
the taxes on homes in nassau county long island ny are mind boggling
westchester is insane as well
don’t even get me started on jersey
my bil has a mcmansion in skillman outise princeton
22k a year in taxes and he sends the kids to private school
oh and they cry poverty
A former co-worker bought a condo in Princeton for $215,000. The property taxes were more than $400 per month. It’s a condo. You don’t really own any property. WTF?
jersey sux
taxed to death in that state
22k a year in taxes and he sends the kids to private school…oh and they cry poverty
I’d cry poverty too if I had that kind of tax burden. The assessment on my multi in SE Mass is $385K. I pay $2700/year for taxes.
Our plan has always been to send the kids to private school until we buy a SFH in a community with decent public schools… so much for “Taxachusetts”. NY and NJ take that title easily.
RE: so much for “Taxachusetts”. NY and NJ take that title easily.
Pfffffttttttt…NY and NJ are pikers.
The Great Peoples Socialist Republic of Maine takes the title of highest taxed state as percentage of income.
#1 in taxes-39th in per capita income.
That taxable value went up to $22,408, not the tax. The tax is about $3,000. Of course, that doesn’t include the local income tax.
the local pols spend all the money-it’s incredable
I have a relative who does an incredible business selling real estate in the upper east side of Manhattan. As if there were another “upper east side.”
She bought a penthouse in the 1970’s downturn and while she spits out “buy now” she also notes its cyclic, but she just cannot connect that we’ll repeat the time frame where she went two years without income and then bought a penthouse cheap. (She’s into sales, but has the family savings habits…)
There was a lot of flipping in NYC. New buildings are still coming online. And… the I-banks haven’t reduced staff in any numbers… yet. As the CDO divisions are shut down and they need to shift jobs to the host countries of the various sovereign funds to secure capital (its going to happen, probably in 2009)… NYC will see drops like everywhere else.
Click on my name to see my latest blog entry. It looks like all the California equity that was extracted to put into Phoenix and Las Vegas is causing five major metropolitan areas to decline in sync!
Its only a matter of time before Florida bites off NYC, DC, and Boston.
Got popcorn?
Neil
good stuff neil
and btw i did the re-up on the popcorn this am
my wife loves it too
especially the 100 calorie bags
Thank you. I’m rather happy to get that correlation online first (to my knowledge).
Got popcorn?
Neil
Just don’t inhale…
And not just new buildings coming on line in Manhattan–it’s an absurd amount of new housing towers. They’re still doing site work below grade on many of them.
And yeah, where are the lay-offs? They haven’t even started yet.
Which of you New Yorkers have seen that awful new condo building in the Meatpacking District that overlooks the Westside Highway? It is the building where some old bridge runs through the bottom of the building. You would know what I’m talking about if you have seen it.
not the one mary-waif olsen has a place in ? or the many other glass monstosities?
have not been over there in awhile
i remember when they actually packed meat there
no pun intended
my buddy rented a place on horatio back in 02
the west coast bldg $4300 for 2 bed and that was 02
Oh that’s awesome!! What you mean, man? Take a few minutes and circle around it. You’re hoping the whole time it’s not some hack, but rather some people with real talent, who worked on it (in fact it is: it’s Polshek Partnership).
The shapes of those concrete pilotis holding up the whole thing. The angles, and massing. Great job. Once you’ve walked around it, view it from way out at the end of the pier off 13th Street.
The problem is that it may look far worse than it does now once they add some of the cladding I’ve seen in renderings. For one thing I think they should have found a way to maintain visual exposure of the vierendeel truss.
BTW, it’s going to be The Standard hotel in New York. (The owner has been reported to date Uma Thurmon.)
It’s a Pavarini something or other development. It looks out onto the New York City Department of Sanitation building. It is something special. Email me at nycityboyhbb @ nyc.rr.com and I will send pictures.
The Standard web cam is currently the fashionable way to judge the weather in Metro NYC. It is an Earthcam powered web cam that appears on the front page of the New York part of their site here. This came up on Curbed.com in this snowy post here.
Another attempt to link to the relevant Curbed.com page here.
Is that railroad tracks running under the building?
It’s the old “High Line” el. The city plans to turn the length of it into a park; in my opinion it would be a better park if they left its industrial cast mostly alone. As the plan currently stands, firms like Diller Scofidio + Renfro are masterplanning it into an overdesigned mess. Some of the drawings show the same contrived, billboard-sized electronic panels that are common to today’s attempted “festival”-type urban architectural schemes.
What is this ugly place? Sister lives in Farmingdale, where ‘prices will never go down because everyone wants to live in here’.
and brooklyn is way overpriced
just as much so as manhattan
lots of room to fall in brooklyn imo
RE: Brownstone Brooklyn and Manhattan are two places where people say housing values have not fallen
I’m currently reading a book called “The World Without” by Alan Weisman. The overall thesis is-what happens if there were no more humans and the earth reverts back to a natural state.
In the commentary on the demise of large cities, Mr. Weisman notes that NYC/Manhatten fights a continual and constant battle with increasing subsurface water-tables.
Shut down the 763 pumps necessary to keep the system running via a prolonged electrical outage and it’s hasta la vista, baby to any type of subterranean utility activities.
Kinda like NO Redeaux.
As it is at the moment, the steel & concrete substructures holding up the lower subway tunnels are already under assault and slowly rotting away-thus thing’s are becoming a tad precarious.
Out of sight-out of mind I guess.
So sure WTF..sign me me for a million dollar closet which is gonna sink into the East River.
It’ll all be George W’s fault when it all goes anyway.
Gub’mint will then bail me out.
“Manhatten fights a continual and constant battle with increasing subsurface water-tables.”
Absolutely true. Riverside Park on the west side, which is graded to slope down to the Hudson River, has serious problems with flooding and crumbling infrastructure because of the underground creeks and streams that crisscross the park. The constant costs of repair are picked up by wealthy donors to the Park Fund, since the city doesn’t have the cash to maintain the park. Even the park workers salaries are privately funded. Alot of the sewer and water pipes on the west side are close to 100 years old, and city can afford only patch work, not replacement.
S66~
You corroborate everything noted by Mr. Weisman.
My comments were very rudimentary relative to his narration. But the main notion you come away from reading his book is-time bomb ticking.
Boston is having an inverse problem. It’s water table is declining, exposing the tops of wooden piling which were driven during previous centuries to support the myriad number of foundations for the city’s structural expansion.
So the sections of pilings exposed to air are now dry-rotting. From everything I read it’s an unbelieveable expensive repair. Gotta a common wall townhouse-YIKES!
Gist of it all-Beware where you sink seven figures into a residential property-gentrification notwithstanding (snicker). Infrastructure in old cities is crumbling and the problems may not even be curable. Buyer beware.
a river runs under my (and the neighboring) townhouse, where i own a co-op on riverside drive near 100th street. not kidding. the solution was to construct the buildings (in 1896) with gutters around the edges of the basements and a few deep pools where sump pumps are planted to keep the basements dry. quite funny, though! the topological map actually shows a river called the “riverside river” running under the buildings! but since the buildings are blasted right into manhattan bedrock and built of stone, the river doesn’t really do any damage to the foundation.
I read that last year on a trip to Yellowstone - scariest book I’ve read in a long time.
Remember a few months back 3 inches of rain in one hour the subway system shut down:
http://cityroom.blogs.nytimes.com/2007/08/08/flooding-cripples-subway-system/index.html?hp
—————————————————-
Shut down the 763 pumps necessary to keep the system running via a prolonged electrical outage and it’s hasta la vista, baby to any type of subterranean utility activities.
“Northwest Wichita’s first high-end housing development in several years is on the way. Pier 37, a 29-unit development that markets itself as relaxation without leaving home…will include houses from $400,000 to $1 million around a 50-acre boating lake.”
A 50-acre boating lake? Surely that has to be a mistake. What kind of boat can provide entertainment on a body of water that small? A canoe?
Usually rafts and those little paddle boats……..which is good, because the lake will silt up in 20 years.
Generally those of us who are more rural refer to something that size as a “pond.”
Coming soon to an open house near you!
http://www.msnbc.msn.com/id/23056665/
This store for some bizarre reason reminds me of “American Beauty” and the RE Agent play by Annette Benning.
Cinch
That was just bizaree. FB becomes DB.
From the article: The owner, a single man in his 40s, is thought to have committed suicide. He inherited the house from his mother, who died recently, the estate agents said.
Any bets he thought he was going to inherit a bunch of equity and instead found out he inherited debt.
Got popcorn?
Neil
“So, how was the open house?” asked Betty.
“The squirrels were delightful. The cupcakes were delicious. But the dead guy hanging in the closet was in really bad taste,” replied Mrs. Bucket.
Closet space to die for
A few auctions here in N AZ this month being advertised. One is half million dollar lots in Prescott Valley. And that is the minimum bid.
The others are a group of mcmansion subdivisions built several miles outside of Flagstaff, in various directions. These places are going to get hit the hardest, IMO. They are away from any town. Nothing to do out there but golf. The locations were probably chosen for the cheap land, with the bubble expectation that everything was going to leap-frog out into empty spaces and that N AZ would fill up with baby boomers in no time.
These were originally priced at around $600k. If I had to live there, you couldn’t give me one.
One of those subdivisions is where I used to go to summer camp in mid 60s-70s. On what was called Shnebly (sp?) hill road. For an LA kid, it was paradise for 5 weeks each summer. Camp had 3 train cars that we took from Union Station. It was all very exotic. A couple of years ago they were selling lots out that way for over $500K.
Hey Ben,
News radio here in LA is now carrying adverts for Arizona property. Calling all LA investors, great deals, limited time only, in Scottsdale, I think. Or maybe just outside.
These adverts are displacing some of the re-fi with cheap money “Biggest No Brainer in the History of Mankind” spots.
500K could still probably get you a section (640 acres) of good dryland farmland in Saskatchewan. I really and truly marvel at the insanity of prices of spec raw land building lots and houses in most “civilized” (more likely soon to be barbaric) cities in the U.S. and Canada and probably most of the rest of the uncivilized world.
Not with $18/bu spring wheat.
The little tourist town of Moab, Utah (pop. 7,000) is still building like crazy, with new condo developments planned and being built. In the meantime, the monthly real estate mag gets thicker and thicker. I’m seeing the same houses that were for sale a year ago, with the few cheaper ones sold. Very few reductions, it’s all just sitting, stagnant, like the wetlands down by the river where the moskies breed.
Same thing in W. Colorado. This part of the world seems to think somebody from somewhere will miraculously show up and buy buy buy (kind of a cargo cult thing). That train of thought is from the good old days when most sales were to out-of-towners who bought second or retirement homes. In the meantime, the used house salespeople are in heavy denial.
It’s getting old. I’m about ready to put up a yurt out in some canyon where nobody ever goes on gubmint land (which really belongs to you and me, and you wouldn’t care, would you?).
I am looking at the 30′ Pacific Yurt. They are fairly popular this far north. Nice weekend getaways.
Probably less risk to buy the canyon from International Paper. And cheaper. lol
We were in Moab last year, and it’d been 7 years between visits, and we were amazed at the overbuilding going on, there.
Maximum Overthrive
And you can out this next to your yurt, Hoz.
http://growingdomesofcrestone.com/
Lad, I love the land of Moab (Ziggy, is that really you?).
Lost:
I’m not Ziggy, but…
I decided I want to be Tommy Emmanuel, when I grow up.
To watch him coax 20 different wonderful sounds out of a guitar, like he does on this one, blows my mind.
http://www.youtube.com/watch?v=x346VoDX3pA
Very nice. Also great control of the Echoplex.
Vaguely reminds me of what Ian Anderson does with the flute.
If you’re into guitar, what do you think of These Guys?
Lad, a few years ago I spent a full-moon night alone at the famous Holy Ghost Panel in Horseshoe Cyn (once called Barrier Cyn, home of the Barrier petro designation). If you haven’t been there, Google Horseshoe Canyon. That music captures what it was like.
Thanks for sharing that, awesome, am going to get more of his music. Perfect for wandering down canyons looking for petroglyphs. I’ve always felt that the guitar was the greatest of all musical instruments.
sm landlord…
nice selection there, they have a great sound.
Lost:
You should see him in person~
He’s very entertaining…
Same story here in St George. The developers have watched Field of Dreams to many times. They keep hearing “If you build it they will come”.
I’m in Marin County, California, this week for work, and I was amazed to see real estate auction ads on local TV — this particular company has four auction days scheduled over the next two weeks.
Haven’t been in too many residential areas yet, but did visit a co-worker’s (rented) apartment in a somewhat marginal area of Oakland this week. His building is condo, with a bunch of rented-out units therein. The standard “luxury upgrades” that get mocked in these parts. The neighborhood is apparently not too great safety-wise, and seemed it.
My sources at HSBC are saying corporate is doing something weird - It seems they are pushing HELOC again. Though this time sum of loans should not be more than 80% of value, it is full-doc and it requires FICO over 700.
80% of value. Is that last month’s value, this month’s value or next month’s value?
It is based on appraisal done within 15 days of application.
over 700 fico! what are they communists?
lmao-
my heloc consists of me opening a lock box and taking some cash
or x-fer from my money mkt to checking from my home
A co-worker with very good credit had his HELOC spigot turned off. They will turn it back on but it will cost him. He has to say goodbye to his low-rate HELOC. I could tell when he told me this that he is not happy about it.
nycboy this week i was talking to a couple of the people in my office about saving money
they asked me how to do it. seriously
i said well just spend less than you make!
presto the extra goes into a high yield savings vehicle
like a cd or just a plain old account
sounds pretty simple but for some impossible
btw i kind of flaked on the meeting in nyc you guys had last year, i was working too much. i would really like to get together with you and a few others. seems like there are alot of locals coming here now. let me know what you think
I could be up for it.
we should do a sunday brunch and then open house tour
or stroll soho and hand with the euro-trash
just kidding.
i know nyc boy- adjnyc and ed hopper i believe got together but there many others from the vicinity
i am in western queens but work in chelsea
i will post something early next week on the bits bucket
and see who else is interested
got to meet this nyc boy has had me spitting coffee for some time now
have a good day i am off the lga airport to pick up mom and sis -
Yooz guys need to come north a little to Westchestah land so that I might brighten your soiree.
I believe that about saving. I would guess that less than 50% of the people at work that are fully vested in their 401k are claiming their entire match. “We just can’t do it”, they say. But they always seem to have money to fritter away on little things. I am good at frittering away, especially on happy hours, but not until after the “saved money” is put away.
I work with people that buy lunch every day - and not just fast food. Then they go out to dinner several nights a week. But yet, I’m the one they think is strange because I go home for lunch or bring lunch with me.
I don’t give a cr*p how people fritter their money once they save the first cut.
After that, you can spend it on lunch, “happy hours”, haircuts, bl*wjobs, whatever makes you happy.
Unfortunately, very few save that first cut.
I eat out a lot, but can afford to do so because I rent anyway. Can still save a lot. Some people at work brown bag it and their expressions are like envy that some of us go out all the time. But we are renters! LOL
My eight-year-old daughter told me something kind of sad the other day. She usually takes her own lunch to school, which typically includes home-baked cookies for dessert. A lot of her classmates NEVER get homemade treats, and crave them - they always want to trade their twinkies, Ho-Hos, etc. for something that says, a mother actually took the trouble to make this from scratch.
My wife is a stay-at-home mom, and I’m guessing that a lot of my daughter’s classmates wish their moms were, too - even if it meant downsizing out of a McMansion or driving the same vehicle for more than three years.
You’re projecting, Sammy. My mother worked and was very successful in her chosen career. I was always very proud of her and never resented the time she spent away from home. She was happy, so I was happy.
Besides, I’m a stay-at-home parent, and my kid prefers Twinkies to homemade cookies. There’s no accounting for taste!
BTW, that used to be the norm; combined LTV not to exceed 80%. Also, you needed an outstanding credit history plus sufficient proven, stable, income. The asset-based lending of 110% LTV for seconds is, for now, history.
I suspect the CDOs that have a near-zero market value have the “hopeless” seconds as the underlying asset.
People w/ 20% equity in their homes either bought 7+ years ago - or maybe 5 years ago (but put 20% down to start). If these folks were bright enough not to jump on the HELOC train during the unleash-your-equity, everyone’s-doing-it days of a couple year’s back, what makes HBSC think these people are going to want to get on board now, in the days-of-downturn?
“If these folks were bright enough not to jump on the HELOC train during the unleash-your-equity, everyone’s-doing-it days of a couple year’s back, what makes HBSC think these people are going to want to get on board now, in the days-of-downturn? ”
Loans to family members?
RE: Though this time sum of loans should not be more than 80% of value,
Ho-hum…
The appraiser’s will be coerced and manipulated to lie to get the valuation as high as needed so everybody gets what they want.
No laws have been implemented by Congress which make it a federal felony to influence or coerce the reporting of a valuation estimate.
It’s business as usual.
The new conforming limits are “The Buzz” around here…The perception is that it will be the “Panacea” that gets buyers off the fence and changes the negative psychology regarding the future of home valuations….Will see….
Some observations from New Jersey:
I have a friend who has been trying to sell his house for about a year. The house is currently listed at $800k. He has gotten a few bids that range from $50-100k under list. It is not clear all of the bids he is getting are genuine, he has responded with what I have thought have been reasonable counter offers only to hear nothing back, the potential buyer does not even respond. My guess is some people are simply probing seeing what the market will bear, but have no intention of buying right now. The other problem that occurs is that potential buyers will make their offer contingent upon selling their current residence, which makes the deal practically impossible to close. This is a neighborhood where comparable houses were selling for $900k two years ago. My guess is he will be lucky to get $650k and it likely could be less.
Title Insurance: I have relatives who work in Title Insurance. The office they work in has put the employees on a four day work week and done a small layoff. My understanding is that the weaker title companies are simply going out of business.
From the people I speak to I think there is now a general sense that the market is bad, but there is still a feeling that this a temporary disruption. The magnitude of what is happening has not sunk in for most people, yet.
I now call that group of people “The Ostrich Farm”.
It is clear to me that your friend is an idiot.
You are saying he has had offers 50K-100K less than his retirement fund price and “counter-offered”????
He did not immediately sign the papers and slap himself on the back for his good fortune??
You don’t get it, do you? I wouldn’t have returned a counter-offer, either. I would have walked down the street and made an offer on another property.
If I decided to even go back to the unreasonable person, by second offer would be less. I would probably have felt relief that he didn’t take my offer, so I didn’t get stuck with an overpriced turkey that I wouldn’t be able to unload for 20 years.
You are saying he has had offers 50K-100K less than his retirement fund price and “counter-offered”????
No he didn’t say that.
He said “I have a friend who has been trying to sell his house for about a year. The house is currently listed at $800k. He has gotten a few bids that range from $50-100k under list. It is not clear all of the bids he is getting are genuine, he has responded with what I have thought have been reasonable counter offers only to hear nothing back”
NOT a thing in there about “retirement fund.” Do get off that schtick. That is not the only reason people are selling even now. Aside from resetting loans there are still things like divorces, death, needing to move for a job, needing to move for family reasons……..
When an offer is made the seller can’t just “sign the papers”. Example: A buyer made an offer that was dependent on the sale of his current home. The dollar amount was fine and my friend instructed instructed his realtor to say yes to the price, but he wanted some details on how the seller wanted to structure the contingency. The potential buyer stopped returning phone calls. As I said in the original post it’s not clear to me that this was a legitimate offer.
I was at my dry cleaners yesterday and she said that business was getting real slow because all her clients are in real estate. And really all the Realtor offices around her shop are pretty much closing down, kinda sad.
Sorry, but kinda sad to you is good news for those of us who want to see a return to financial accountability. Think if it like this, what would those good people be doing if there hadn’t been an asset bubble? Well, hopefully they can return to gainful employment that actually does some good for society instead of being leeches that make money off other people’s bad decisions (which they helped influence).
i asked my dry cleaner the same thing she said business was still ok. god knows i spend a fortune there
The Spanish housing bubble has collapsed along with their capital markets. It looks like, contrary to popular elitist opinion, Americans aren’t the only people who are greedy, corrupt, and stupid.
http://tinyurl.com/3bm7s4
Concerns over Spanish government’s housing rescue plan
By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 2:53am GMT 09/02/2008
The Spanish government is reportedly considering a rescue package to “refloat” the housing market and slow job losses in the construction sector, raising concerns over investor appetite for the country’s sovereign bonds.
Premier Jose Luis Zapatero is eyeing the Public Credit Institute for a €10bn (£7.5bn) credit line to help developers and homeowners weather the squeeze following the partial closure of the capital markets, according to the financial daily Expansion.
The Credit Institute is an arm of the Spanish treasury, used to promote technology and green energy.
The government has also proposed a tax rebate of up to €400 per person, comparable in scale to the new fiscal package proposed by George W Bush in the US.
The bail-out scheme has caused a serious rift in the ruling Socialist party. Finance minister Pedro Solbes has reportedly warned that use of public funds could cause markets to reassess Spain’s credit-worthiness, triggering a further rise in spreads between Spanish and German 10-year bonds.
The Zapatero government is holding a series of meetings with key property and construction groups to discuss the scheme, which would reportedly involve loans rather than direct subsidies. However, even this could fall foul of EU state aid rules.
Of course when some mentioned as far back as almost 30 years ago that greed was destroying the U.S. and that houses should be first of all for shelter, they were dismissed as elitist, communists and nuts. Take care of your own nation first.
Ambrose Evans-Pritchard seems to be the only MSM columnist who’s allowed or inclined to tell the truth about the global housing and credit bubble.
Rumor mill in our small town here in the Ozarks (SW MO near Springfield and Joplin) is that several of the small builders in town are about to go bankrupt…they can’t sell their spec houses and can’t make the building loan payments. These a very small-time builders just a house or two or three in the works at a time.
And the talk is to watch the Fed papers (book ?)…I guess somewhere to the rear of these publications there are postings of failing banks…Expectations are you will see a lot of small community banks go under for the reasons you outline…
And new banks will be formed and take their place. Community banks are in serious trouble. They let common sense fly away from them, especially with construction loans.
The problem I see for the banks..is who wants to buy a REO in a community of 5 homes and 100 empty lots?…
Those lots are often so small… if they would sell me the land at acre prices instead of by the inch… might be a way to actually get a decent size (1 to 3 acre) lot.
Entire towns can just disappear - can you find Ink on the map (near you) - where my dad was born, tiny railroad town for the tie-hackers.
RE: These a very small-time builders just a house or two or three in the works at a time.
The question is-in the aggregate-are they gonna take down the small time banks who lent them the money?
Choo-choo…train comin’ down the tracks!
anyone who lives in ny just take a drive on the bqe from say the lie to the prospect expressway
you will see a unbelievable amount of new construction
who is going to buy all of these? are there that many hipsters
in brooklyn with trust funds or wealthy parents?
Hipsters rely on parent’s HELOCs.
A look through local (Old Town, Alexandria, Va.) listings this morning show a couple nice (albeit small) 2 bdr towhouses at around 500k - and these are in good parts of town (not on Route 1) - and a really nice looking 3 bdr in the SE quadrant (best part) for 575k.
All of these would have listed — and moved — for 75-100k more about 3 years ago. I live next door to a nice guy who bought a similarly-sized property for almost 700k.
Your neighbor must have had the same mind-set of the equity locusts from New York, California, and New Jersey that descended on Florida a few years ago.
I had heard several make comments, “The property here is undervalued”. I had never heard that before.
We’ve always had people here from other parts of the country that thought our prices were relatively cheap, compared with their neighborhood of origin.
But, that comment, “undervalued”, was the new investor psycology, not the comment you would expect of a home-buyer. It was clear they had some seminar training on how to profit with no-money down, easy payment real estate investments.
Your neighbor must have thought the properties there were “undervalued” also, so he decided to Buy!!
I suspect renting made much more sense at the time.
I guess if you are willing to make the higher payments, and you really enjoy the place, that’s a fair decision.
I just seems we lost all sense of sanity when Greenspan pushed the easy money buttons.
My neighbor was moving up from tiny house (that he was unable to sell, and is now renting out) to house he and wifey could feel comfortable in for a while. I think they saw this as another stop on the path to “big house to raise kids in” a few years down the road. I don’t think it was so much about “undervalued” as it was about “prices will continue to climb” - although those ideas are pretty close cousins, I guess.
Even when I bought in 2002 - I knew things wouldn’t keep going up like they had been since around 2000(in fact, I was sure the market would stop going up immediately after I purchased) - but I never thought prices would tumble this fast in an area that is doing reasonably well economically and not seeing a ton of new SF and townhouse development (although there has been a lot of condo construction in the area, which I expect will do even worse).
It’s amazing and interesting — and I’m really looking forward (not in a cruel way, but in an intellectually curious way) to see how people deal with it - and, although I feel like I’m in good shape myself (fixed mortgage payment = prevailing rent), that includes me.
Anybody know the name of the new 11 (total 150 units) story Condo building in downtown SJ located at St. James and Gaudelupe Parkway? They have been selling for seven months, yet at 9:00 pm at night, there are only total 20 units with lights on.
Parkview Towers ??
Yes, that’s the building. I have been meaning to stop in and say hello. I wonder how they are spinning the sales pitch when all the windows are black in in the evening and it is obvious nothing is selling.
http://www.emporis.com/en/wm/cx/?id=parkviewtowers-sanjose
“Like many in his trade, Tony Vicari thought that when home construction began to dry up a year ago, it would lead to a boom in the remodeling sector. The logic was that after the housing bubble burst, consumers would fix up the home they already owned rather than build a new one. However, that hasn’t been the case.”
It sure has been for me. I’m an electrical contractor and I experienced a third quarter that was off about 40%. Starting in January remodel work has really picked up and I’m pretty close to capacity again. I’ve always done a fair amount of remodel work in the last ten years so I’ve got an established customer base of serial remodelers.
My service work is way up as well. I’m getting calls to repair the hack jobs other contractors did on some new work. Just this week I pulled a burned up 30 amp HVAC disconnect out that had been carrying 67 amps.
The NEC must not have been available in a Spanish version.
Articles about a large Madison (Dane County, WI) condo developer facing foreclosure.
Metropolitan Place, Manager In Mortgage Foreclosure
http://tinyurl.com/2gxuwr
http://tinyurl.com/ysmjpc
Looking at December MLS stats had slight increases in both median and mean sales prices from Dec, 2006.
Sales were down 16% (http://www.scwmls.com/public/stats/stat_search/stats_07/dane/monthly/dane_december.html).
In another county I track, December sales were down 34% from a year ago, mean was down 19%, median was down
15%. This is in a county where it is still possible to find decent homes for 3X median income, and it still
had a large decline. (http://www.scwmls.com/public/stats/stat_search/stats_07/rock/monthly/rock_december.html).
The friend I’ve mentiond in other posts who just sold his condo on the South Shore (Boston), just had his offer accepted for a house in Plymouth. Not sure on the stats of the house, but I think the offer was for $375K.
The good news is that they have $50K for a downpayment and a dual income of between $125K-150K, depending on whether the wife works part-time or full-time. They are right in the “3X income” rule for housing and have 10% down. They also have very stable jobs in healthcare and school administration. I warned them that housing values were going down, possible another 20%, but they didn’t care… wanted a house now, what with the new baby.
RE: healthcare and school administration
Yeah-it’s interesting how the sacred cows of financial services, healthcare, and public education all seem to be the industries the pundits say can keepin’ everything afloat.
Heavens forbid this country should produce anything of material substance which goes into the consumption kitty.
For reading along these lines I recommend Daily Reckoning
Plymouth sure beats Southie for schools. - The commute is going to suck, however. 375K should buy approx 2500 sq ft in good condition from my observations of the market. (My in-laws live there)
375K should buy approx 2500 sq ft in good condition
LOL. I think they paid $375K for 1600 sqft. They are near the ocean (within walking distance) and while they don’t have a view, suposedly you can see the ocean from their yard. Still, seems like they paid more than they should have…
RANCHO BERNARDO 92127
Number / Average Price / Median Price / Total Value
New Listings / 92 / $1,453,578 / $1,100,000 / $133,729,211
Sold / 16 / $1,011,838 / $810,000 / $16,189,409
New Listings as % of Sold / 17.4% / 69.6% / 73.6% / 12.1%
P.S. Those numbers are January SFR sales results figures from Sandicor. The one that most grabs me is the total sold value as a share of total value of new listings (12.1%). The inventory avalanche continues (yawn…).
http://www.sandicor.com/statistics/stats2008/01statistics.html
Analysis of Sandicor Monthly Sales Report for San Diego County — January 2008 (Note: The date is wrong in the right column; s/b 2008, not 2007)
New Listings / Number Sold / Total Value of Sales
Jan-07 7,276 / 1,768 / $1,036,452,704
Jan-08 6,794 / 1,335 / $720,343,595
YOY % chg -6.6% / -24.5% / -30.5%
http://www.sandicor.com/statistics/stats2008/01-2008/January-2008.pdf
P.S. Current used home inventory according to ziprealty.com (SFRs + condos) = 18,410 (likely an undercount due to absense of Craig’s listings, vacant new homes never sold / never lived in, FSBO etc)
January sales = 1,335
Months of ziprealty inventory at January sales pace =
18,410 / 1,335 = 13.8 months
Luckily the red hot spring sales season is just around the corner!
Average Sold Price
Jan-07: $1,036,452,704 / 1,768 = $586,229
Jan-08: $720,343,595 / 1,335 = $539,583
YOY pct change = (539,583/586,229 - 1) * 100 = -8 pct
test
I have a “local observation.” I found out that the home I’m renting and living in has a notice of default on it. Great.
So I’m in the LA area, does anybody have any links where i can start to research this? My rights, or lack of there of, etc…
Thanks for your help.
that stinks left out-not sure what your rights are sorry
before i signed my lease i looked up the owners of my apt
and she has the house owned free and clear since 1983
no helocs no equity withdrawals
she lives off the rental income
gotta check out your next rental really well
good luck
how do i get that info (leins, etc)? thanks
First American Title Co (in LA, aka as “FATCOLA). Call them and ask for Customer Service. Be prepared to give the agent a fax number to fax the info to (they do not give out info on the phone anymore). Give the property address and ask for the lien history to be sent to you.
Additional history can be found through the LA County Clerk-Recorder.
~Misstrial
I appreciate it, at least that way you reduce risk…that was an informative link as well,
thanks, were would i get that info for the next rental?
I would venture to guess that the first thing you should do is…stop paying rent immediately.
Tenants & Foreclosure in California - great info on your rights:
http://www.patrick.net/housing/contrib/tenants.html
~Misstrial
google “california tenant rights.
It depends a lot on rent control, etc. but essentially you will be facing eviction, but not until the foreclosure is completed.
left out, i’m really sorry, as a renter this is my nightmare too.
you can check a lot of this information (mortgages, helocs, etc) on propertyshark.com - you have to sign up with a username and password but you get six free searches every day. also a good clue is if property tax isn’t current.
as a tenant in CA you have a lot of rights, and if you’re not legally served notice i believe you can put up a fight for a while… but still, get out of that situation while you can. check nolo.com for legal info on this.
good luck!
“I found out that the home I’m renting and living in has a notice of default on it. Great.”
Well, one nice thing is it’s probably going to be months before you have to leave. I am no lawyer but from what I understand, even when it goes to auction you’ll have at least 30 more days to hang around.
Don’t fret, but try to avoid recent buyers for the next rental. Even zillow has a sales history you can access for the address. And you can pump the prospective landlord for information before you sign a lease. Just be smart and patient. Good renters like you (and me) are highly sought after right now.
Update from Eastern Massachusetts:
Dreamers returning in droves to Zip realty, same crap as last year with little in the way of price reductions. Some savy sellers are getting out while the gettin’s good, a house on my street in Newton recently sold for 687k after being listed for 919k. In lower end communities it’s a bloodbath. A friend of mine in 2004 was looking for a starter home in Framingham and found only one SFH listing below 300k , a search today finds 78, most with discounts of at least 35%….
lol, 300k to live in Framingham?
Oak Hill Park (in Newton) had houses for around $200K before the 2003-2006 craziness… I’m sure they would go for that much or less now. My mother still lives there and says it’s a blood bath. Better Newton than (ugh) Framingham … although for Newton it’s a crummy location because you’re nowhere near any train stations (you actually have to drive 1.5 miles to West Roxbury, and that line is s-l-o-w). Pretty, though. The teardowns and 3-story monstrosities turned my stomach. What happened to sanity?
i know the us saving rate has been negative for quite awhile
but $500? will that make a difference
http://articles.moneycentral.msn.com/SavingandDebt/LearnToBudget/WhyYouNeed500InTheBank.aspx
“will that make a difference”
I believe the savings rate could see a brief upward blip, as stimulus money is used to pay down debt and add to rainy-day funds.
These 3/2 townhouses in my old hood started at 283k about six months ago and now I notice in the paper they’re now down to 249k. They’re in a not very good part of town and overpriced per median here. So I’ll bet none of the six has sold, OR who over bought just took a beating mkt value.
But they’re greeeen!
The restaurant industry here in North San Diego county could sure use some economic stimulus. I ate out last night with the whole family at Mimi’s Restaurant (@ Mira Mesa & I-15). This was the first time we went to this restaurant since a Friday night three weeks or so ago. Last time we decided to go somewhere else, rather than wait 45 minutes for a table. Last night the place was only 25 percent occupied.
Today I took my three sons to one of our favorite local sushi restaurants for lunch (Little Tokyo at Carmel Mt Plaza). Normally we would expect to wait for a table if we showed up at 12 noon on a busy Saturday shopping day. Today there was no waiting, and the occupancy statistics were as follows:
Indoor Tables: 4/14
Chairs at the sushi bar: 0/6
Outdoor tables (on a beautiful sunny San Diego spring day — 75 degrees F outside w/o a cloud in the sky): 0/6
Overall occupancy ratio during lunch hour (tables + chairs occupied as a share of capacity): 4/26 = 15 pct
An awful lot of small businesses are going to get the hint, and cut their losses and exit, stage left.
15% occupancy rates @ restaurants, isn’t getting the job done.
Wifey and I have taken to playing a new game where we guess which new small restaurant will go out of business next.
My girlfriend and I do that too. She just read “Kitchen Confidential” - not my kind of reading but from what she told me about it, running a restaurant requires dealing with razor thin margins even in good times. Where we live the rents alone are going to bury these places - even before the coolers get stocked.
That’s just it — the rents on these places pretty much force them to charge prices that cash-strapped customers w/o a working home equity ATM machine cannot bear. If they lowered their prices to levels that filled the floor space, they would not be able to cover the rent, not to mention the input cost of highly volatile (and upwardly ascendant) food prices.
Wheat limit-up for the past week.
Dude,
Maybe you and wifey should try playing healthier games - may I suggest the role-playing game of “The escaped convict meets the warden’s wife.”
Another local observation…
Sold house in July and was on the market two months….the house across the street, that went on the market at the same time, sold six months after mine for 25K less. House down the block was on the market for almost three years (had been purchased and buyer tried to flip it immediately) - it finally sold this week for 57K less that what I had sold my house at and about 70K less than what the flipper had purchased.
For those of us in Los Angeles…
…Time Warner adverts on TV for the horrible “Top O Topanga” gated community!
I’ve been following property here for about 18 months - small houses on small (under 4000 sq ft) lots. Yes, they are right on top of the hill between Topanga and Woodland Hills (and, consequently, very hard to get to), so have a view.
However, multiple houses have been on the market for years, with prices anywhere between 500K and 800K.
Along with the TV ads (mmm….toasty), they have recently been trying to rent some of them - lowest price $2400 pcm, highest a whopping $4000 pcm - for a simple 2/2 house. Guess if they can’t sell ‘em, they can rent them out, eh?
My advice - never, ever live in a place that sounds like a dairy product.
Isn’t that a trailer park? It sure looks like one from the web site.
http://www.topotopanga.com/
Let’s see:
Community Room? Check.
Community Pool, Gym, and Laundry facilities? Check.
Outside Management Company? Check.
Permission needed to improve your property? Check.
No street parking allowed? Check.
Application needed for permission to live there? Check.
Oh, wait it is! They have a broken link to Title 25 information on the site, and talk about “manufactured housing”. Alrighty then, prices between $500K and $800K in a trailer park? Plus heaven knows what sort of HOA fees and assessments.
This reminds me of that $1 million double-wide out at Paradise Cove last year. Maybe they should re-name “Top ‘O Topanga” after another dairy product: “Land ‘O Fakes”.
Both Paradise Cove and the Heathercliff Rd down the road in Malibu are upscale trailer parks, as, I believe, is the Top O Topanga.
We tried to go and see both Heathercliff Rd and TOT a while back, but were thwarted by the gates…and two very snooty guards there.
Cool, don’t want to sell, then don’t let us in to look. Good luck with that.
Paradise Cove seems to be taking a beating - actually saw a few places there listed for less than $400K - wow.
Only a 20 mile commute down the PCH, to live in a place who’s only amenity is a restaurant…
SoCal has a long way to go.
The Open House signs are back out in Santa Monica today, after an absence of many weeks. Nothing has closed around here since last November (according to Zillow, for what that’s worth). I am hoping to see some some new comps by sometime this Spring. Expecting that the DOMs are all reset now. Let the lowballing begin!
I’ve got my main brokerage account with Wachovia. Needless to say, I’m looking to park that account someplace safer. Can anyone provide recommendations for safer, sounder brokerage firms?
I’m diversified between TDAmeritrade, Scottrade, Schwab, Vanguard, and American Century. All eggs in one basket doesn’t give me the warm and fuzzies. If you can find a single one that you trust with everything, please let me know.
Knock Knock:
Q: Who’s There?
Fore!
Q: Fore who?
Foreclosure
We’re completly surrounded by forclosures. Literally. The house next door has been empty for over a year. The house behind us has been empty for at least six months. And the house next door on the other side looks like jingle keys took place last weekend. The Realtors here in Lodi CA keep saying we’re special. I have to agree… I never thought a rental in a subdivision could provide so much privacy!
That would creep me out big time. Just a matter of time before those places get torched or become meth labs. I’d be sleeping with one eye open, a Glock on the night stand and a fire extinguisher by the bed.
Good advice in many parts of Cali right now. Riot season starts in April.
Hour-long mid-day AM radio program 650KENI with local mortage broker, who said Anchorage housing market is invulnerable to a downturn because of oil at $90 bbl - but 2 SFH ‘middle-class’ houses on my street (where I rent) are vacant for months on end, with realtor signs dangling. You can see from the absence of human footprints in the snow that there has been no interest (moose tracks though).
I passed through the town of Maricopa, AZ (SE Phoenix suburb) and what a site it is to see. In less than two years has gone from campers and waiting lists to desperation. I saw at least 4 sign spinners on major intersection all for different builders and those small roadside signs with the single wooden stake were placed about every 5 feet all the way up and down Maricopa road. Saw many builder signs saying from the 110’s to 130’s…Ouch! Many folks in my office bought in the upper 200’s to over 400 down there. I need to take my camera next time for some classic bubble photos.
Boston Globe is opening the spring selling season with the usual pumping and puff pieces you expect from them, today announcing that any recession in Massachusetts would be short and “shallow” because the floor is in with housing and, you know, it’s different here and stuff. We should be seeing plenty of garbage from Kim Blanton, the Warren Group and other MARtians over the next 2-3 months, and then by the time June and July rolls around and it’s evident that the market sucks worse than last year, they’ll go back into silent mode. This is actually a fun time of year, those articles are hilarious.
http://tinyurl.com/yq5wgr
Mission Landing: Syracuse, NY condo
3300 sq feet, List Price $899,900
In Chicago, the foreclosures are picking up on the North Side now. The majority are still on the South Side, but there is a steady trickle oozing to the North Side.
Also, I’m seeing more cases of what looks like obvious mortgage fraud.
For instance, there were two West Bucktown custom mansion homes built in 2006 that weren’t selling at $1.25 million. The developer mysteriously raised the prices on both to $1.475 million and lo and behold they both finally sold (in the same month) for that exact amount.
One has already gone into foreclosure. The bank has it listed for a little over $900,000. Good luck.
The second one is about to go into foreclosure.
That is just one story. I’m seeing others though. They’re pretty obvious when you look at the neighborhoods or prior sales of condos in the same building.