Local Market Observations!
What do you see in your local housing market? Construction trends? “With house prices softening, there is less of an incentive to remodel, said Kermit Baker of the Remodeling Futures Program at Harvard’s Joint Center for Housing. The return on remodeling dollar spent has dropped from 80 percent to 70 percent. ‘Since the first of the year, it is almost as if someone unplugged my phone,’ said Alan Hanbury, owner of House of Hanbury Builders in Newington, Conn. ‘In 31 years of business, I’ve never had the phone not ring, and I can’t explain it.’”
“‘Now is a great time to remodel,’ Hanbury said, trying to change the mood of his potential customers. ‘You might even get the boss on the job.’”
“The sluggish construction industry continued to sputter last month as building activity slowed to a standstill in nearly every sector, an ominous beginning to a year many hoped would mark a fresh start.”
“The Lake Havasu City Development Services Department reported four single-family building permits were pulled in January, the fourth consecutive month of single-digit totals. Nonresidential construction was even worse. No commercial or industrial building permits were issued last month.”
“‘It’s rock bottom,’ said Bud Schulz, executive director of the Colorado River Building Industry Association. ‘We have an industry that’s struggling.’”
Or foreclosures? “Austin and Travis County have a lot of reclaimed real estate — and you can see some of them by taking a tour. Realty Trac says there are more than 2,200 homes in Travis County facing foreclosure.”
“‘Be ready if you want to buy a foreclosure because everybody else is going to want to hop on it,’ said Gina Warrington with Keller Williams Agency in Round Rock. ‘It’s going to be there today and gone tomorrow.’”
“Hendry Street is just the tip of the iceberg in Boston’s foreclosure crisis. As City Hall turns its attention to the Dorchester street that’s been devastated by foreclosures and boarded up homes, there are about a dozen more clusters of abandoned and foreclosed homes in Dorchester, Roxbury and Mattapan.”
“‘It has just exploded,’ said John Anderson, a Dorchester-based housing expert. ‘Low and moderate income neighborhoods that were highly dependent on subprime lending, their values are just collapsing. The mortgage (products) that fueled this appreciation just don’t exist anymore.’”
Pricing plans? “Wisconsin is not experiencing the downturn in housing that other states are weathering and Sheboygan County’s Realtors are reporting that business is good. One adjustment sellers have had to make is on the asking price they put on their houses, said Realtor Linda Buchmann.”
“‘People were so used to putting whatever prices they want on their houses,’ she said. ‘Our market was hot for so long, (sellers) just were spoiled … they still have to price their house fairly but they’re not losing money. They’re still making money on their homes.’”
These reports on Lake Havasu City, AZ, sound disastrous. Surely a third of the people there are closely connected to construction, so what in the world must this slowdown do to the local economy? Anyone with news, please post.
Locally, I have been following a house for rent in an upscale subdivision; a 4/3 with a pool, which is unusal for Flagstaff, at $1,350/month. And it hasn’t moved. Spring 2008 may be the season that cracks this market wide open. One of the last in Arizona.
We had a customer in Lake Havasu City at my last job. A co-worker made that trip. He said it was absolutely beautiful but not many opportunities to make a living. Is this an accurate description?
I’d describe it more as otherworldly.
I was there in 2005. Construction everywhere. Looks like tourism and RE was about all they had going on. A big problem is some kind of bug in the lake that is a serious health problem for swimmers.
Brain eating amoebas, even. These were a problem in PA for a while, too. Any warm water brings some risk of encountering Naegleria fowleri, but this remains a very rare problem.
Didn’t they make one of those teen age ‘drive in’ movies about it? Throw in some Godzillas or Mofras or such as well as some hemp. What more could a teen ager want? hehehehehehe
Brain eating Amoebas??? Well…that explains the stupid, dumb rednecks over there who think drinking and acting like aholes is appropriate. God I truly hate that place.
What more could a teen ager want?
You have to ask?
Regarding getting construction work done in zip 95050-54 everytime I call for any assistance in any trade they respond within 48 hours….Property inspections, Termite inspections etc., 48 hours….1 ½ years ago it was two weeks min…
Ha! You are lucky. I have a major repair that I’ve been trying to get done for months. Four guys have come out so far and looked at it, promising me a bid in a few days. Weeks go by. Nada. I call someone else. Same thing. At the same time I hear around town about how contractors are starving for work. Do I have to stand on a street corner and wave cash around to get anyone to do the work?? What’s the deal? Are their wives supporting them? Is the industry full of flakes???
Is the industry full of flakes???
———————–
Hate to say it, but the construction industry probably has more flakes than any other industry (and we have many friends and family members in this industry, so we can say this).
OTOH, there are a rare few who do tremendous work, are dependable, dilligent, hard-working and do precise work. Wish there were more of them.
Lake Havasu — We used to go camping at “the river” back in college in the 1970s. I remember fainting in the heat — 120 degrees. Haven’t been back there since, tho my partner’s uncle owns a house in Havasu. No thanks.
I knew guys back in the Seventies that loved going to The River.
They’d drive three-hundred miles across the desert to wallow in the water and drink beer. They had to keep their bodies immersed in the water because it was so hot in the daytime. At night they slept ON their sleeping bags rather than IN them.
The attraction? The River was the IN place to go, nothing more.
Go figure.
Yeah, my cousin used to own a cabin near Black Meadow Landing (on the CA side). Having a cheap cabin there is nice if you are in to water skiing, because you need to get out of the sun somewhere. But last time I was in the area, there wasn’t much there but dirt and water. Some very pretty mountains, though.
I personally prefer Lake Powell. Now THAT is some awesome scenery. I have been to Rainbow Bridge twice, and would like to go again some time.
Feelings mutual about Lake Powell. Many good times there. You’ll have to enjoy it while it lasts, unfortunately.
Yes, this is an accurate description of Lake Havasu. The jobs that are available cannot support the housing prices being asked. Everything is geared towards tourism or snow-birds.
Ben, etal,
I had a business trip to LHC in Jan and found out a few things. For the most part it seems like a resort town for Californicans in the summer and for snowbirds in the winter. Parties on the water are the main draw in the summer with rich CA people “heading to the river” to party down and get crazy. Don’t know much about the amoeba thing since I’m sure the locals bury this info since it hurts their draw for party goers.
Jobs have been mainly in the service industries (hotels, restaurants), retail, and construction. That is why the building permit #’s are so appalling, without construction this area is toast.
A few companies from SoCal have moved into this area since the economics are more affordable and the close proximity to SoCal allow for them to maintain their old markets. I don’t have any specifics, but a few auto parts companies have made this move, but they don’t have the #’s to have a real effect on what’s happening.
Housing wise their inventory is extremely high, demand is low, and prices have to be crashing. The problem is most of these homes would seem to be owned by SoCal people who’re known for their use of the toxic mortgage products and I doubt that prices have fallen that far since they can’t. I would guess that many of the homes are 2nd homes for most and therefore are expendable, but they can’t all go short sales at once, therefore the prices have been artifically supported because the people/banks selling them can’t/won’t go any lower.
In other words, LHC is screwed.
Reclaimed Housing?!! Awesome!! Sounds like the reclaimed water that they strain the sewage out of but its still not fit for human consumption. Perfect description!!
I suspect Austin/Travis is just late instead of different. The same houses on Craigslist seem to hang around forever. The Four Seasons Condos (right by the lake and a public housing high rise) are going forward though …
I gave up on Craigslist and go straight to MLS now. My initial thought that Craigslist would be used by homeowners that want to save on the realtor commission by selling themselves and that prices would be less because the buyers and sellers can distribute the saved transaction costs amongst themselves. After looking at their listings for a few months, my conclusion is that it is mainly ppl that are not interested in distributing the transaction cost savings but are so greedy they want to keep all the saved transaction costs themselves and in many cases are ppl that have been dumped by realtors for being unreasonable in failing to lower their price. Is anyone really seeing any good deals on that site, or mainly just over priced properties by greedy homeowners?
Sellers think buyers are ignorant of the market conditions…
IMO, the reverse is true..For the most part, I believe sellers who are trying to market their property themselves, particularly after they have tried a realtor are the ones that are ignorant (or in denial) of the market conditions…They look at their home as a savings account that “could not possibly” have less in the account then it did a few months ago…Besides that, there home is different because Fred down the street got X and my house has remodeled bathrooms….I would argue that any buyers in the market place that are acting on their own, independent of a realtor, are “very” sophisticated (at least of the market conditions) and will conduct business “Only” if they perceive they have got a value added deal…
True. I wonder how much of the inventory listed on Craigslist actually gets sold because of the fact that it was listed on Craigslist. Of course, im exempting out the sleazy realtors that try to use it for free advertising.
I think you are giving home buyers too much credit for being smart and informed. Too many FBs have proven otherwise.
Most of the houses I see for sale on Craigslist are for sale through agents. Perhaps FSBOs are not as popular in some areas, but I would expect to see more of them as prices continue to fall.
I dont think that was the intent though. Just realtors getting desperate and lots of free time on their hands.
I’ve had the same experience. After it sits on the MLS for a year and doesn’t sell, they pull it off and try Craigslist… at the same price. Or increasingly, FB’s list on Craigslist AND the MLS! As if someone looking for a $400k home couldn’t find it on the local MLS?
As someone who is from Austin and will be moving back later in the year, I have seen significant price inflation there over the last 12 years in 2 different housing booms. I suspect that there is some overvaluation, especially in the west austin hill country /eanes ISD area where I will be looking to buy over the next 2-3 years, although articles from the NYT yesterday would seem to indicate otherwise:
http://www.nytimes.com/2008/02/15/business/15homes.html
Couple weeks ago PHX had a story that based on resell numbers used by ASU Realty studies (largely funded by donations from the RE industry) that prices were off 4.5% Y-o-Y. Said price drops were mostly in the exhurbs while areas along freeways an inmature areas were fine.
I, of course, cried BS.
That story is not in thier real estatepage anymore, but here is a follow on.
http://www.azcentral.com/realestate/articles/0212biz-talker0213.html
“While some areas have recorded declining prices, other areas are increasing or remaining fairly stable, especially the mature neighborhoods that are close to freeways, shopping and schools. The median price fell 15.4 percent to $199,500 in the western suburbs, but rose 4 percent in east Mesa to $248,130. ”
Thursday we had info from the tax appraiser come out.
http://www.azcentral.com/realestate/articles/0214propertytax0214.html
“The overall median value of homes in metropolitan Phoenix fell 13 percent, to $199,800 from $229,500, according to the assessor’s latest report, which covers the market from mid-2006 through the fall of 2007. About 94 percent of all Valley homes fell in value.”
“In the latest report, Buckeye saw home prices drop the most with an almost 25 percent decline. Home values fell in all but four Valley communities: Gila Bend, Guadalupe, Paradise Valley and Carefree.”
25% decline from peak…. No wonder the NoDs jumped 40% from December to January. Even people thatput 20% down at peak, to avoid PMI, are now underwater with little hope of falling further underwater.
Game over.
I’m thinking of buying in Anthem Az. Prices are coming down down down. There’s a house listed at $149,900. This is a area where the average house was probably about $295,000 and up two years ago. Darrell what’s you thoughts? Should I wait longer like the end of the year. Hey I might even get one of those golf course houses for under $200,000.
Golf course front homes are pretty, but you can’t sit in the patio during the day. A golf ball sized bruise is what you could get, I got broken windows by bad golfers who disappear as soon as they hear shattering glass. No more.
Our golf course friends put up a 50ft net on the edge of their property to eliminate the broken windows. It also eliminated the golfers rummaging through the garden looking for their ball.
I saw a bunch of for sale signs
they all said ‘team smith’ ‘team jones’, ‘team underhall’.
So everybody is joining teams instead of quitting.
What am I looking for?
They should have signs that show the price as big as the phone #.
I’m too lazy to jump out of my car.
I do take photos when I stop.
Inspire me.
I saw a bunch of for sale signs
they all said ‘team smith’ ‘team jones’, ‘team underhall’
There is no I (income) in team.
Team Shmeam. It sounds like they are emulating the Donald’s approach to business, the elimination death match.
Or it’s a mechanism for mass RIFs: Team Bling, You’re Fired! Turn in your yellow jackets at the door…
A couple houses I referenced last week as looking like best-I’ve-seen-in-a-while deals that were “just listed” in Alexandria Va. (townhouses - one at 575k, the other at 500k) are gone from the active listings I can search - and, I guess, under contract. If the prospective purchasers were looking in, say, 2005, they probably feel like they just got about $100k or more in “free money” (unless these engendered some mini bidding wars, perhaps).
I think the sellers were smart to price these right and move them before spring inventory starts really rolling in the next couple weeks around here. That’s the mark of a smart seller around here these days - a listing price that makes you say “now THAT’s a good deal” the moment you see it - that’s what it’s going to take to cut through the clutter and uncertainty in 2008.
It will lead to the exact opposite of what the Realtors have been calling for. “If you don’t have to sell, then don’t put your house on the market.”
Quite the contrary. If you have to sell, then you can’t possibly go low enough on price to compete for the few knife catchers with the people that do not “HAVE” to sell, just really want to.
Anyone that “has to” sell is headed for half a year rent-free followed by foreclosure.
Even the banks are having a hard time selling their REOs in this market with few buyers and some people willing and able to undercut the market and snag the few buyers.
A year or two ago, it was new-home builders who were agressively lowering prices to the chagrin of fippers and over-extended home-buyers. Now, it’s equity preservers (my term for realistic sellers who are happy to escape with some gain on their pre-2003 purchase or sunstantial recoupment of their downpayment) and banks/lenders into the mix.
Over-extended purchasers getting it from all sides now. Yikes.
There are people who have been in their houses for 40+ years who are looking to sell. If my dad had his way, that would include my parents. These are depression era people, who look at what they paid for it, a realistic realtor tells them what it will sell for in this market to sell it quickly, that number is many times what they paid for it, so they sell at that price. Happy as clams. My parents paid $6,500 for their house when they bought it eons ago. Zillow says it’s worth $144,000. There ARE people for whom the 2000 valuation looks more than reasonable.
Some of these sellers aren’t trying to ruin your day, they are just long-term pragmatists. Your view is still skewed by the bubble, me thinks.
In my target areas in Denver, I’m showing that 68% of the housing on the market 4 months ago is still on the market (much higher than last year’s DOM), with such properties showing an average list price drop of 5%. PPSF on sold homes is down about 7% during the same period. Please dont use these numbers for all of Denver, as I target quality intown neighborhoods with housing older than 1940, Genesee, and Evergreen. For me its either intown or the foothills. There is a strong deviation between neighborhoods.
To clarify its a 7% PPSF drop YOY for homes sold in the last 4 months. Not a 7% drop in 4 months.
What about the homes near Wash park and great older homes like that area? What are those zones in Denver looking like?
I need some advice. I have a friend (definitely not me) that owns a home in Minnesota. He would be best to walk away, take the credit hit, and move on. So far he won’t consider that. What would walking away mean for him and what recourse does the lender have against him? There is no HELOC. I am not a foreclosure expert so I am curious to know.
NY.Boy….Recourse would be a important part of the equation in making the decision….Someone on the blog familiar with Minnisota reg’s on loan recourse ??
Sounds like he needs to pony up a couple hundred bucks for a good lawyer/accountant to lay it all out for him. This is one of those things in life that he needs to get 100% right.
Hi there NYCB. My only answer comes from a “yahoo answers” source, so reliability is not guaranteed. This source said AZ and CA have broad anti-deficiency statutes on residential RE (i.e., no recourse for lenders), while AK, ND, TX and OR have more limited anti-deficiency statutes; and that all other states permit lawsuits to be filed in cases where collateral is deficient in satisfying the debt. If anyone here knows of a clear error in this answer (even if not MN specifically), that would help in the evaluation of the expertise of the anonymous answerer.
A Minnesota bankruptcy lawyer is definitely worth hiring for advice. The Cal situation is not the same because of law differences.
There are also blogs just for this topic. Like loansafe.org it’s specifically for people trying to avoid foreclosure. Also Loanworkout.org but that is more general info about the programs available.
It varies from state to state, so dont listen to someone that does not know the process in Minnesota. Has he tried to call the lender and tell them that he is underwater and wants to try to get a short sale without recourse approved? That way he can try to sell it without ruining his credit.
“‘Be ready if you want to buy a foreclosure because everybody else is going to want to hop on it,’ said Gina Warrington with Keller Williams Agency in Round Rock. ‘It’s going to be there today and gone tomorrow.’”
I think that in regards to real estate the “impending doom” close has lost some of it’s “oomph” Miss Warrington.
While amongst this group there will probably be a high percentage of ppl that will have enough cash to buy at the low. I think outside of this group the percentage will be very low. Of course im talking 2010 and she’s lost in 2008.
“‘Be ready if you want to buy a foreclosure because everybody else is going to want to hop on it,’
I guess they’re not making any more foreclousres….
Uh…………..
never mind!
At some point the deals will be lying there ready to pick up, like $100 bills strewn on the sidewalk. Folks will walk by them because it has to be obvious that real dollar bills would not be left on a sidewalk.
Costa Mesa (aka Costa Misery) is living up to its nickname. There’s a bunch of SFRs for sale on the west side, with prices in the 400’s. These home generally are 1000-1300 sq ft, with 6000 sq ft lots, built in the 50’s. Many are bank-owned.
Some examples:
671 W. Wilson: REO listed for 400k, last sale 680k
898 Darrell St: REO listed for 439k, last sale was about 630k (bank buy-back at auction shown as last sale at 550k)
834 W. Wilson: REO listed for 475, last sale 645k
Around here, the banks have been playing “comp-busters”! But even at the 400k+ price range they are too expensive!
The only thing funnier than all the foreclosures in Costa Mesa is all the foreclosures in Lake Forest! Try poinging realtytrac to Lake Forest - FC’s all over the place!
My wife heard another boo hoo hoo story yesterday at a volunteer function. High school friends who are a couple bought new shack in 05 without selling existing shack. RealTard set price of existing at 430k and in all honesty, the owners new it wasn’t worth half that (they paid 140k for it in 1999). This couple is coming unhinged under the weight of paying on 2 mortagages. She is working full time plus another half time. He seemed quite defenseless, doesn’t know what to do. My wife indicated both of them fell silent after her reality based forecast based on historical data. Wife indicated they still have a sense of entitlement as they “just want to get out of it what they got into it”.
And my father still wants $75/share for his cisco position too.
I dont know why ppl thought housing was such a safe investment, especially after seeing prices double in a few years. I assume your dad didnt buy on margin, but just lost a portion of what he put down. Leverage in reverse is a bitch.
newp. Margin. Moronic speculation and not the first time. Land in 70’s, gold in 80’s and wipe out in 2000. It was hard watching it as you can imagine but a priceless lesson for close bystanders. Primary and fundamental lesson? Markets cycle and take 20+ years to recover in some cases. Case in point, I was in and out of gold waaay early(420/oz) but still made 50% on my original risk.
I remember having to tell friends not to take out HELOCs to buy tech stocks pre-crash. Somethings never change.
I’m still visiting the Bay Area for work. The other day I went to a Kentucky Fried Chicken in Mill Valley for lunch (it can’t be sushi or micro-greens all the time … laugh) and ended up sitting next to three postal carriers, two older and one younger. I got the impression they’d lived in the Bay Area their entire lives. They weren’t transplants, just working class joes.
One of the older guys was related to the younger guy somehow — brothers or cousins. They were all obviously very comfortable with each other. At any rate, their conversation turned to real estate. The older guys started harping on the younger guy about the mortgage on his condo: “You don’t know when your rate goes up? Wait, you don’t know whether it’s a three or a five? Who pays the bills in your house, bro? You need to figure this sh!t out right now. You need to have a plan. You gotta get yourself a fixed rate as soon as you can.”
The cluelessness of the younger guy was interesting — he didn’t know his rate, when it adjusted, whether he was underwater or not … nothing.
The older guys were really, really hammering him to think about what to do. There was no talk of walking away, either. Of course, their advice might change drastically in a week or two if the kid finds out he’s 50K or 100K underwater.
Hah hah. I was never in the market for anything but a fixed rate when I bought in 2002. A couple years ago, I started getting a refinance-now flyers that referenced my adjustable $—,000 loan with —- bank at -.–%. After I got a few of them, I double checked my settlement documents and made sure I hadn’t somehow screwed myself into some kind of adjustable mortgage (of course, I hadn’t). But just the tiniest possibility of an adjustable mortgage scared the heck out of me.
I couldn’t imagine having an unknown like that hanging over my head.
The young guy seemed pretty damn clueless, but at least the old guys were looking out for him and offering some halfway decent advice.
Postal workers would be the ones to befriend for inside info in upcoming homes in forclsr or that sit to long only in areas you want. I would even pay them a finders fee after closing on dream home in 2 yrs.
I knew someone who sorted mail at the post office. Within a month he knew everything about everybody just from the mail they got, even from the outside of the envelopes. Medical bills, bank statements, magazines, what catalogs the boxes came from, lawyer notices, notice of utility disconnection, college bills, letters and invitiations…you name it.
ET,
You’re on assignment in Mill Valium? I hope you’re staying dry.
I recommend eating in Sausalito or Larkspur. Scoma’s used to be good, and I hear that Gaylord is good if you like Indian. And if you haven’t already, you must have an Italian steak at Marin Joe’s in Corte Madera. Serious Meat, no bean sprouts allowed.
I doubt that the postmen you encountered were Marinites, they were probably from across the bay to the east. Prices in Marin have been nutty for many years, more than I can imagine a postal worker managing to afford, even for a tiny shack.
I used to live in San Diego county (Eastlake), 91915/91914 and since selling in mid 2004 have continued to track the area (zillow for sales info, Realtor.com for current asking prices). Though things there have been dropping continually for the last year as we all know, I’m finally seeing some really drastic drops. In Eastlake Woods there is a house that last fall was listed for $1M and is now being advertised as forclosure asking price at $640!!! Another one across the way (lower subdivision, Eastlake Trails) sold for $685K in Dec 07 and is now on realtor.com for $499K, only two months later!!! That one is really confusing and smacks of fraud (how can that still be happening?). I toured the $1M home model a few years ago when they were being built. They went up in price from the initial development phase in Eastlake Woods from around $500K in mid 2003 to about $1M in early 2005. Ridiculous, with the associated taxes, etc. it is no wonder there are no buyers left at that range. Other than the current low interest rates, this is all playing out EXACTLY as I predicted 4 years ago. Even at $640K I think that is too much for that house, thou I am sure many people think it is a steal. What occured in Southern Cal from 2003 to 2006 distorted peoples value of a dollar. There is still a lot of pain in store for the people that acted like idiots.
A sale quickly followed by a listing is often a foreclosure followed by the REO listing. Often the drops are substantial now as the banks realize the houses aren’t worth even close to the value of the mortgage.
Aloha from Paradise! We are going into the crapper here. But it is still the prettiest crapper that there is. First of all Dec to Dec home sales are off 50% year to year. Median price is off about 20%. That was expected. Love to see the realtors spin this.
Other bad stuff is happening. We used to three big ships going between the islands. All together they left a round a billion dollars behind each year. Just announced one of those money pits is heading for Europe. Two days later another one is heading to Asia. The last one The Pride Of America is losing money too. I don’t expect it in these waters for long.
My mother in law fell down in her home in Calif and wifey had to get the first available flight out. This costs big money because all the flights are booked solid in winter. Took me one day and cost two hundred bucks. Her trip back was even cheaper. When my turn came to spell wifey I paid less than 300 R/T And when we took off comming home the 737 literly jumped off the runway. The airlines make big bucks bringing cargo to the islands. I would bet we had less than half the normal weight on that plane. And the plane was a bit more than half full
And there is more. I have been here all my life. I know every divivg and fishing spot that there is. Yesterday every spot was picked clean. I had to head out to the blue water to catch fish. When people here get hungry they go to the ocean for food. I have never seen it picked clean like that before.
Friends that work here in foodservice have a love /hate relationship with the Canadians We have choke Canadians here. Many bought condos long ago and winter out here. You can tell who they are because they are baking on the same damn beach for three months. They don’t tip worth beans but they are keeping the Island alive. Those Big Spenders are gone. Its done, put the fork in it. Aloha from Maui.
Interesting comments……..Even the “spendable income” group seems to be pulling back OR the spend more than you make group are gone OR both….
First off there are some people that are inded richer than God. Luckily I work for one. They get here on their private jets and I counted about 30 last sat at the airport. Big bucks. If you get that party you will be going home with $300.
Many of these people have a full on multi million homes up here by Oprah or down in Wailea. These are the big bucks Snowbirds.
When you can get here to Maui on a package deal for $1200. you get a lot of people that want to go see everything but im sorry they are CHEAP. The people I know that work for tips are going home with $60 average. Last year that was $200. And they work a lot harder for that $60. It is killing them.
Anyway all those people with “liberated equity” wanted to be like the richer than God group and they came here and played the part. They played it well they dropped a LOT of money. BUT it must be paid back now. Game Over.
One last thing that is real neat about living here. We are an island. You can not hide your sins. If you steal you will get caught. If you screw around… busted. Everyone knows your stuff. But when things get bad we all pull together. If we go into a depression and we have gone into them before nobody starves.
Aloha Crash and Burn,
Glad to hear from you.
Looks like I may be heading to Maui in March or April with my mother. She has never been to the islands.
Take care
Cool. We need more HBBer here. If you need advise let me know
I know a lot of people in California that have themselves ensnared in Hawaii. It will be very interesting to see what happens there.
What happens? They need cash flow, so they sell low! I picked up over a 1000 sq ft. house owned by a CA agent, listed by a relative (a HI agent) last May. The price was what Michigan houses go for! It’d been a rental, so they’d replaced flooring, windows, sinks & cupboards to make it more appetizing. Yummy! It already has fruit trees, I’ll only have to add solar.
Can I ask what Island you are on? It sounds like a Puna House to me. I hope I am wrong. If not we need to talk. Good Luck with that one. Think Lava.
You mean like this?
http://hvo.wr.usgs.gov/kilauea/update/maps.html
I love hiking out there to where it is flowing. Not this year…
In my younger days I drove a tour bus to Hana every day. I have met people from eveywhere. I can work with Californians. Hell I married one. She came and never left. A lot of people want to call this place home. If they go so far and buy a house on Maui 40% will stay 4 years. The secret is leaving California behind and embracing Maui. Do that and love it, you will be like me and die here.
I’ve been to Hawaii once - last year. I’m going back in March. Love it. But I remember in Hanalei on Kauai my sister and I listened to an old timer at the next table discussing the problem of adequate health care for older retired people. Those with major medical emergencies would be better off if they lived in San Francisco or Los Angeles. It made me conclude that Hawaii is the best place in the U.S. to visit but I certainly would not want to live there.
Kauai has about 60 000 people. one hospital, run by the state of Hawaii healthcare system. When lifesaving surgery is needed there is a medavac jet and helecopter ready to go in 5 minutes. Oahu has the best hospital in the pacific in Queens Hospital. We also have 6 other hospitals on Oahu.
Maui on the other hand sends only head trauma cases to Oahu. The State has been spending big money to upgrade Maui Memorial. Last year they doubled the size of the building. It used to be a joke here but not any more. My father was a doctor here and he was proud to work here. He lived to 87 so they must have been doing somthing right.
I guess my point is everybody dies. Maybe mother Mayo can keep you ticking for a few more weeks. Good Luck with that But when I go I want it to be here, sun on my face, and birds singing in my ears.
I lived in Hawaii (Wahiawa) for almost five years, back when I was an Air Force brat. Never could get used to the no-seasons climate. I prefer the four-seasons climate of my native N.C. mountains.
A lot of people find that to be a deal breaker. But there are seasons here, They just don’t hit you in the head like on the mainland.
I would like to spend enough time in Hawaii to get bored with its climate.
I mentioned the same thing regarding flight loads. With travel schedule, the loads during the High Season here in the desert are Full and then some on the wings, paying ppl off, but open seats and sometimes much more than a few open seats.
It is the way it works. A lot of that has to do with meeting or convention business. Also weekends and holidays. In my case there is one Flight from Kahalui direct to Orange County a day. If I miss that one I am staying home.
If you need to fly last minute for a family emergency, the airline will give you a break on the price. You need documentation, but they will lower the rate for you. I know this is true for a funeral, I expect it’s true for dire medical emergencies as well.
Excellent observations from ground level and very intuitive conclusions. You are smarter than at least 75% of the financial analysis I read daily.
Sorry to hear the islands are hurting though, truly one of the most awesomely beautiful places in the world!
Email from a Realor in Bucks County, PA to my question on high housing prices:
Hi 2banana,
Although every circumstance is different, I am seeing some listing prices being reduced (some drastically) and also some sellers accepting offers far below what the properties are listed for. It’s different in every case, but I am sending you properties which either fit or come close to the profile we discussed because I don’t want you to miss out on seeing what is on the market. As you know, deals are made based on motivation….so, right now you have the luxury of seeing what is out there and if a property is special enough and you like it, I can take you to see it. The market is in flux right now, and for many reasons, it’s a good time to look and to buy….I’ll keep you posted on additional properties as they become available.
Have a great weekend!
Regards,
xxxx
I wish someone was looking for me. Must be great to be so loved.
I own in an upper-middle class neighborhood in San Diego County. Foreclosure on the block (lender making no effort to sell it). Plus a tear-down with major structural defects went for $365K recently. Zillow has my house way, way down…I’m assuming because of these other two properties. I don’t really care since I plan to die in this house! (Maybe 20 years from now?)
From a Realator in Bucks County, PA: (2nd try)
Hi 2banana,
Although every circumstance is different, I am seeing some listing prices being reduced (some drastically) and also some sellers accepting offers far below what the properties are listed for. It’s different in every case, but I am sending you properties which either fit or come close to the profile we discussed because I don’t want you to miss out on seeing what is on the market. As you know, deals are made based on motivation….so, right now you have the luxury of seeing what is out there and if a property is special enough and you like it, I can take you to see it. The market is in flux right now, and for many reasons, it’s a good time to look and to buy….I’ll keep you posted on additional properties as they become available.
Have a great weekend!
Regards,
xxxx
Has anyone noticed the work stoppage at Southbay360 complex in El Segundo? I called the sales office and was told that the new upscale developement was “on hold” due to market conditions, and that they are no longer selling units. I researched the builder William Lyon Homes and within their SEC filings found out just how bad the company’s outlook is. They’ve been dumping land holdings and the banks have scaled back their credit lines dramatically. It appears that unless another builder is willing to “take the plunge” 360Southbay may never happen.
Reno, NV- Foreclosures outnumbered resales 203 to 171 in the month of January. To call the market a disastrous meltdown would be an understatement. Considering prices are only down around 30% from the peak thus far, the great depression scenario doesn’t seem that far fetched. Homes which were asking $250k-$275k late last summer, won’t even garner $175k. Falling out of escrow is the name of the game. The effects of the credit crunch are absolutely remarkable. I wouldn’t be surprised if all of the bubble gains were wiped out by this time next year. An overcorrection mightn’t be a stretch, either.
South Puget Sound area, WA- Inventories continuing to build, though prices holding thus far. Same scenario as other bubble areas, just later to the game. Wishing prices still in the stratosphere, with lots of complaining from delusional sellers as their properties languish (firsthand from a local Realtor). It’s different here, blah, blah, blah. My frequent proclamations of falling prices and rising foreclosures are met with fierce resistance and even anger. Not surprising since I rub elbows with builders. Land still selling for ridiculous prices, but inventories continue to grow. Overall market may get religion later this year. The bottom should fall out by next year.
I think the insanity in Canada may keep Washington State bubbly for a bit longer but once the music stops farther north the fall will probably be harder. So I expect more of a frozen market next year but a steeper slide in 2009.
The credit crunch hit everyone at the same time, thus forcing the late booming cities to play catch up in a hurry. The higher end, fueled by brainless morons flush with cash, is the only thing propping up prices around here. It’s just as ugly as anywhere else from the “lack of qualified buyers” standpoint. Game over.
I’m in the Columbia Basin, and we have been thawing for about a week now following a worse than average winter. Plenty of RE inventory on the books particularly the higher end homes that local wages couldn’t support. However, the J6P $80/ft^2 spec home construction continues unabated from last fall. The sales volume around here dropped with the easy financing gone, but the bubble was so late getting here that home prices didn’t have a chance to climb much. Many of the For Sale signs now have Price Reduced added to them. Microsoft, Intuit, and Yahoo now have their largest data centers here since reliable cheap hydro power is plentiful, so folks with disposible money are becoming regular around here. Farming is doing well around here, finally, but much of that work is done by machine or Mexicans. Many of working class folks around here are employed in the construction trades, so a recession will hit below the belt when it arrives, IMHO. There’s also been chat about getting the Northwest’s NASCAR track built here on this side of the Cascades; we’ll see. Winter still sux around here!
Haven’t noticed prices coming down in Philadelphia. Looked at two places on Craigslist.
2418 Delancey St.
2427 Naudain St.
Both in Fliter Square. Both forsale for 700k+ and both bought in 2001ish for less than 200,000. No renovations done to them in that time.
Over in Montgomery County homes are still selling for redic prices.
For example over in Montgomery County this house:
MLS: 5269861 135 Rolling Rd Bala Cynwyd, PA sold in less than a week, don’t know the price yet but it was listed at $799,000.
I live at 26th and Pine. There is NO WAY that those homes haven’t been renovated if the owner (same guy, btw) thinks he get those prices. My 1300 sq. ft. was bought in 1998 for 190K. I did some renovations, but not a complete gut job by any means. I have a garage, too. My place would get $525K right now, tops.
Hey I’m just saying what’s out there. I saw a sweet house in Narberth (434 ANTHWYN RD) for 799,999. I call that a “I want a pony” price. But that still means people here have plenty of denial. Seems the owner bought an other house in Penn Valley for 810,000 (128 E PRINCETON RD).
http://propertyrecords.montcopa.org/
“Debts start to bite homeowners”
“Mortgagee sale - two words likely to place a chill in the heart of homeowners and, according to a number of real estate experts, a phrase we will hear more as the property market continues its decline.”
http://www.nzherald.co.nz/section/1/story.cfm?c_id=1&objectid=10492911
Central California Coast–I heard an advert for a collection of bank-owned foreclosures presented at a local hotel. I stopped by; it was pretty lame. They had only pictures of houses up, each with a ID; no addresses, no cities, no prices. I asked for a price sheet, and the sales droid said I had to work with her to get a price.
They’re trying to limit information available to the buyer so the houses don’t compete directly with each other and the buyer can’t quickly compare prices and location. Screw that noise; I can get better information faster from the web. Maybe in a year or two they’ll start getting serious.
In the meantime, it still costs less to rent than to buy, foreclosures and defaults are stacking up, and nothing is selling. A local condo conversion has stopped work after the first phase, and the conversions already done are sitting on the market with no interest at all for about the last six months.
See ya in a couple years, suckers.
“still costs less to rent than to buy” re Central Coast:
– Here’s a humorous comment from three days ago by a RealtWhore in Morro Bay, whom I met in a social situation. On the one hand, she was declaiming wisely about some of the “good values” out there; on the other hand, when I started talking about investors wanting to cover expenses by renting out, and (I) mentioned a case of an investor elsewhere who had been covering only 1/3 of total expenses by renting out, the R’W'or said, “Around here you’d be lucky to cover one third by renting out.” Someone else who was talking with us asked for a confirmation and/or clarification of this statement (a lay-person who felt surprised), and the statement was repeated.
Personally, I think it’s a bit exaggerated; as I look around at current asking prices for both purchases and rentals, I would say it should be very easy to cover one-third of the purchaser’s expenses by renting out. Probably even half. Beyond that, it would be hard. Thus, asking prices are 100% too high!
Yep. This one:
http://monterey.craigslist.org/apa/564873011.html
Is being advertised for rent at $3K/mo. Identical models are being advertised for sale at about $850K. If you put $50K down and got a 5.8% fixed rate 30 year loan you’d be paying over $4,500, plus about a thousand a month in taxes and insurance. Plus HOA fees. The rental cost is around half the purchase cost.
That particular house has been advertised for rent for months. No takers.
“They’re trying to limit information available to the buyer so the houses don’t compete directly with each other”
A friend said his fiance just invested $35,000 YES $35,000 for a foreclosure training course here in Los Angeles. I told him all the Bank Owned REO’s are avaible for free, including phone numbers directly to the bank.
ATTENTION! Bank owned foreclosures. 1000’s avaiable.
Google: Bank of America REO, Washington Mutual REO, Chase REO, Citibank REO, Wells Fargo REO.
Inventory is down 30% in my upstate NY town. There is a lot of cross buying here w/people upgrading or divorcing or going the empty nest and downgrading but staying local. It’s still “pre selling season” although weather is not an issue this year w/only about 4″ snow on the ground. (Usually we have a few feet by now w/multiple white out storms) I’m wondering if the move up crowd is taking a breather.
There were quite a few new listings that came on this week and I don’t think one of them was equal to the wishing prices I saw coming on before Christmas. If there’s room to come down on these list prices, we’ll definitely be in the red, yoy. In burbs north of Syracuse however, it is my opinion that the new listings are still overinflated. I do see some who look like they want to move quickly but not many. They’ll sit.
There is a new crop of sold signs around. All smaller homes or even dilapidated housing. Who’s buying? Out of towners? These are the homes that have already sat at least six mos to even 2 years that are sporting these signs. I was really shocked at one very dilapidated home I saw sold today. It was across from a country club. Perhaps someone is planning a refurb flip.
Sacramento here— tales of the house next door (to my parents.) The family who lived there got a job offer in Utah that was basically dream job— excellent pay, great area, close to family, everything. They packed up and moved out… around October of last year. I was wincing, because I knew what would happen.
First real estate agent listed at $250K. That’s not a bad price for the neighborhood, actually, quarter-acre+ lots*, neighborhood so well-established that my parents’ tenure of 30 years is only average, good schools… but. The neighborhood was built in the 1950s, and this happens to be perhaps the only house on the block that hasn’t had an addition or other upgrades made. 3/1, 1340 square feet. Hookup for the washing machine in the tiny kitchen and the dryer hookup on the back porch. My parents, with almost twice as much space, estimate that their place is worth about $250-$280K at current prices. (Their addition was built by a moron; bad design, sub-code, and after thirty years they’ve finally stopped the leaks, but the space is nice.)
So. After a few months the realtor advertises a “price reduction” of all of $5K. No interest. My parents’ former neighbors let the contract lapse.
Now it’s for sale with a new realtor at $200K, and there is interest. I got to watch my parents yesterday tell a look-see couple about the benefits of the neighborhood— and the couple did mention that they were interested in immediate upgrades to any property they bought. I hope it sells for the sake of the former family; they were nice and bought at a decent price with a sensible mortgage and just need to unload the sucker quickly.
Of course, I told my parents to let me know if it were still for sale at $150K. I’d still have to underbid it— the plumbing needs to be redone, and while you’re at it, why not put in new lines for a second bathroom and better kitchen— but the advantage of the next-door childcare might just be worth it.
*Around here .125 acre is advertised as “a large lot.” As if.
Condo Auction DL Freeman in Palm Springs. 6 modern condos/starting $405k when earlier this October, they were listed at $695k, in fact while doing the Model home circuit in October, chose Not to go inside a 695 condo.
Frankly even 405 is 2x too much.
Avenida Caballeros/ Alejo.
Neighbors house for sale at 299K I rent for 1200 month. 250x rental income for a house in Phoenix. Uh no I don’t think so.
“Neighbors house for sale at 299K I rent for 1200 month. 250x rental income for a house in Phoenix. Uh no I don’t think so.”
No calculus required; it’s as simple as: price v. rent x 100
No, actually, it’s not that simple. The landlord is building equity toward owning outright the underlying property. They aren’t just offsetting costs, they are investing in future wealth. The actual landlord rule for investment purposes is 7-15 times annual rent should equal the purchase price. If the price is higher than 15 times annual rent, you are looking at a loss, if it is higher than 30 you have a bubble.
I wouldn’t pay more than 10x annual rent, and once bought an 8-unit building for a little over 3x rent. Sold that one for 2.5x what I paid for it after about 6 years (this was in the 1970s). You make the money when you make the purchase. Fifteen is way high unless you think you can double the rents, which is almost impossible unless you have roaring wage inflation and no rent control.
Is that 10 for a property already cut into apartments and perhaps even with intact renters, or is that 10 including modifications needed to make the property ready to rent?
Just curious.
The top price I’ve seen quoted on this blog is 10 times annual rent. After that, the RE investors on this blog don’t seem to think you’re making enough money to make it worth it. That’s because maintenance, taxes, etc eat into your cash flow. If you’re making less than 5% on your investment, time to switch to Treasuries. Treasuries don’t call you at 2am to let you know the toilet overflowed.
I just looked at a rental today in Seattle, 1850/month for a three bedroom brick tudor. Two doors down, a house that looks identical (but tricked out), on the market for 730K. Even with the Viking stove, etc., it’s hard to make sense of those numbers.
Hi Folks,
Have not read or posted in a while. Had to go cold turkey for a bit to concentrate on work.
This place on Capitol Hill, Wash DC started on the market at about $1.5 million last summer. Still no takers. Asking price now $1.1 million. No parking. Good luck with that. The agent seemed like a decent fellow - he acknowledged that the market was crazy. He had worked in finance before getting in RE about 10 years ago.
http://washingtondc.craigslist.org/doc/rfs/576013507.html
Yep. I’ve had to do that, too. Internet is not always easy on the brain.
FB gets a 130K (and growing) haircut in my mom’s old neighborhood.
Check out the sales history at 24445 Lisa Kelton Place (zip code 91321)
Last sold: 550K on 08/30/2005
Currently listed at 419.9K at realtor.com
Who knows what it will end up selling for? (How much bigger will the haircut get? — looks more like a decapitation than a haircut at this point, though…)
Instead of establishing land banks, I suggest that cities consider figuring out how to get out-of-town investors (and investment banks) holding residential real estate to lower their asking prices to levels where their properties will sell. Otherwise, city governments risk becoming bagholders of falling knives.
A land bank for foreclosed properties?
Task force looks for way to keep ownership local
By Emmet Pierce
STAFF WRITER
February 17, 2008
http://www.signonsandiego.com/uniontrib/20080217/news_1n17landbank.html
Do you know if this will be an open hearing? Any SD HBBers willing to go?
Update:A Flagstaff builder, Empire, the largest Northern Az builder, has just stopped in the middle of building a subdivision and left town. Empire also disappeared from Clarkdale, which was reported by one of your bloggers last week.
http://www.azdailysun.com/articles/2008/02/17/news/20080217_front%20page_23.txt
This is an ad for a Conroe foreclosure. An acre of land and a fixer-upper for 25K. The Conroe area has been listed as one of the best places to retire, and although it still is a little hickish in areas, it’s close to a gorgeous lake. This listing is on realtor.com- didn’t show up on the more selective har.com which services the greater Houston area.
http://www.realtor.com/search/listingdetail.aspx?ctid=4546&typ=7&sid=befc77cd4045463f88340938867492c0&lid=1095074255&lsn=3&srcnt=815#Detail
Magnolia Bend is located about 5 miles South East of Conroe. The “bend” refers to being in one of the many bends in the San Jacinto River. The San Jacinto River was dammed back in the 70s to form Lake Conroe.
In 1994, the dam gates were opened to relieve high water in Lake Conroe after heavy rains. 3 friends of mine that lived in Magnolia Bend had 7+ feet of water in their homes. Needless to say, they lost everything.
Most homes in MB were bulldozed. Good luck getting a permit!