Local Market Observations!
What do you see in your local housing market this weekend? Builder defaults? “Red Bank-based builder Kalian might want to recalculate the price of the 48 units of its Harbor Lights on the Bayshore project in the wake of a federal lawsuit that contends it has defaulted on two loans. Prices for units in the five-story high-rise range from $429,000 up to $699,900 for a penthouse unit, according to the project’s brochure.”
“Mayor Lisa Strydio said she and a handful of borough officials recently met with a Kalian executive who asked for a tax abatement. ‘I was not too keen on the fact about giving anybody a tax abatement who paid $700,000 on a condominium,’ Strydio said. ‘It’s just not going to fly.’”
Or auctions? “Rick Crossley arrived outside the Prince William County courthouse recently and found it deserted. ‘This is a trustee’s foreclosure auction,’ he announced. ‘Any parties with interest, please step forward at this time.’”
“‘Going once! Going twice!’ he bellowed, raising his voice in the gusting wind. ‘Final call! Sold to Aurora Loan Services for $380,515.28.’”
“There was nobody from Aurora Loan Services, a subsidiary of Lehman Brothers, for Crossley to shake hands with or congratulate on the deal. Really, there was nothing to celebrate. The company had become the default owner of yet another piece of sinking real estate that it would have to resell.”
“Crossley auctioned several more houses over the next 20 minutes. One in Woodbridge was offered for $178,000, and another in Manassas for $244,000. It didn’t matter; no one showed up. And by the time Crossley was finished, seven more Prince William houses had fallen on the foreclosure pyre, reclaimed by banks.”
Foreclosure tours? “Saturday, February 23, 2008, Olive Branch real estate agent Margarita LeBlanc will hold a foreclosure bus tour. In one day, she and the participants will tour 10 foreclosed homes in DeSoto, Fayette, and Shelby counties.”
“‘With the way the market it is today, you’ve always got to be looking for something to do,’ say LeBlanc.”
Foreclosure statistics? “Long Island foreclosures rose 48 percent in 2007 to 9,700, according to RealtyTrac. At the same time, the median closing price in Nassau County fell 2 percent in January to $440,000. The median closing price in Suffolk tumbled 6 percent to $373,500, according to the MLS of Long Island.”
“‘The prices can only go in that direction,’ said Alan Rosenbaum, founding principal of a New York-based mortgage brokerage. ‘I do live on Long Island and I do see what’s happening.’”
“Nearly 800 foreclosures were recorded in January, the highest number of Bay State homes lost during a single month since August 2007, the Warren Group said today.”
“‘It might have seemed like 2007 was one of the worst years for foreclosures in Massachusetts, but the rising number of petitions to foreclose suggest that 2008, at least until midyear, won’t be much better,’ said CEO Timothy Warren Jr.”
“A free seminar sponsored by Tracy aimed to help people ward off looming home foreclosures will be in March. In Tracy alone, there are 1,000 homes owned by banks and another 1,000 on the verge of being taken over, according to Tracy spokesman Matt Robinson.”
Disgruntled borrowers? “A masked gunman held up a Prince Avenue bank Thursday morning, complaining that a bank foreclosed on his home, according to Athens-Clarke police.”
“The man entered Regions Bank about 11:45 a.m. wearing a black ski mask, pointed a handgun at a teller and said, ‘You took my house, now I’m going to take your money,’ according to Athens-Clarke police Capt. Clarence Holeman.”
The man entered Regions Bank about 11:45 a.m. wearing a black ski mask, pointed a handgun at a teller and said, “You took my house, now I’m going to take your money.” The FBI plans to review bank foreclosure records to look for the thief, Holeman said.
This robber was not as clever as I like my robbers to be. He should have shouted ‘I like grapes!’ or something, if he really felt compelled to chat during a robbery. On the other hand, the way foreclosures have gone up, it could take the FBI a couple years of file sorting before they track down this brilliant criminal, so he might be just fine.
A ha! They’ve narrowed it down to 4,521 suspects!
Hey… Looks like Casey will be getting a few phone calls.
Got Popcorn?
Neil
The funny thing is, if he wasn’t paying is mortgage (the most likely reason for the bank taking the house back), then this is the SECOND time he’s robbing the bank!
What about shouting, “You’ve sodom*zed me for the last time, you chicken-sh*ts!”?
Does that work too?
Why, yes, it does.
What about using BBQ mitts for gloves and shouting, “I like my branch managers medium rare!”?
Hard to hold a gun, let alone pull a trigger, wearing BBQ mitts.
the hard truth is, the robber is probably more of a straight up guy than the banker.. doubt this is the last FB turned robber stories we’ll read about..
He would have been better off cashing a bunch of bad checks and running up his credit cards. Much easier to get away with and if caught much lighter sentence. The Law punishes bank robbers harshly.
I guess I was wrong…it’s not all over but the foreclosing. Crime follows foreclosures.
Funny thing is - he probably robbed the wrong folks. The bank isn’t making out like bandits on the forclosure - they HATE forclosures; they lose money on them in most cases.
There is something admirable about this in a perverse Lost Cause/Little Guy Fights Back sort of way. I also think it’s pretty funny (I have a warped sense of humor). Maybe the guy will get away with it by using a justifiable bank robbery defense
I can admit it now that the statutue of limitations has long since passed, but on occasion decades ago, I would take some generic deposit slips from a bank, and write on the back of them “this is a holdup” and then stick them back in the pile, quite randomly.
I apologize to any innocents I may have harmed…
That is hysterical and frightening at the same time.
Aladinsane: There’s someting about the combo of clever and twisted in that - it’s quite an appealing revelation.
ROTFLMAO!!!!
You mean you’re the reason I spent 10 years at Folsom?
prices in queens are starting to level off
my co-op just sold some sponsor apartments they had and the rate of growth was less than last year
Based on median income and rent-to-own, Queens is still overpriced by 40% to 50%.
Based on where incomes are headed and the “Coming of the JT”, you may be an optimist.
Talked to a guy at work. He bought about a year ago. He’s interested in selling now. The place next to him is in a short sale for $200K less than his price.
Ouch thats going to hurt…if he actually has any skin in the game.
Sounds like a very poor time for him to sell. He needs to live in that there shelter in which he’s leveraged to the gills.
He doesn’t “have to.” Depends on the recourse laws of the state.
I’d walk in a heartbeat but then I would’ve rented based on price/rent too so where does that leave us?
The foreclosure next door to me sold for $208,000. We have several houses for sale in our neighborhood and none are selling though another is under contract. The house next door was in such bad shape the realtor couldn’t hold an open house because to see the house one had to walk through a maze of old radios and other junk.
The realtor priced the house at $245,000 - unheard of in this Tampa Bay area neighborhood where most houses sell at $300,000 or more. The family who bought it work for a construction company and have ripped the place apart, putting in brand new everything.
So I guess you can sell a house here - for the right price.
Sounds like some soon-to-be foreclosed flippers bought that gem. Good luck to them.
Please keep us informed as to their progress.
How do you think rents will be affected by foreclosures and the recession? I will be looking for an apartment in Los Angeles in the Summer. Rents went up over the last year or two, so a decent one bedroom in a good but not high end area should be $1300 - $1600. The theory I have heard is that people are getting foreclosed out of their houses and moving to apartment, so rents went up. It sounds like more people believe that they will continue to rise. I see reason for them to stabilize or fall. 1. People will eventually move into the vacant houses 2. The economy will worsen 3. Condo project going rental 4. People moving out of CA 5. Less spendable money due to inflation on gas and food 6. You can’t finance a rental It’s about income.
Am I missing something as far as why people think rent will go up, up and up in LA? I can understand why they went up if housing units are taken out of supply due to a long foreclosure process, but that’s the only part that I can see and that is temporary.
This is assuming those who foreclose or go bankrupt have enough $$$ left for appartments that require a first and last and extensive credit checks. The reverse will be true, as tons of condos go as rentals and the number of renters dwindle due to extensive credit mayhem.
Most of those who lose their house will simply go living among relatives or friends for a while before probably moving away to cheaper areas where renting is easier.
How do you think rents will be affected by foreclosures and the recession?
Any rental agent worth his salt with a decent complex will be checkin’ people’s credit histories before having them sign a rental contract.
Prospective tenants will also have to provide references.
So good fookin’ luck scorin’ a decent unit if you’ve stiffed the mortgage bank.
The mortgage deadbeats will be livin’ in the tenant-at-will old triple decker dirtbag stuff located in crap neighborhoods.
Quite a ride downhill from that McMansion they couldn’t afford.
Expect lots of suicides and divorces.
Once a deadbeat-always a deadbeat.
I will have 5 years of on time mortgage payments, but haven’t rented for 6 year. My former landlords may not know who I am anymore, although I always payed on time. I hope that is a good enough reference.
Some say the best renters are former owners?
I know we’re great renters, and former owners!
Leigh
There is going to be so much rental property on the market past credit problems are not going to mater that much. Any income is going to better then no income. I have see this before when the market tanks, in both Montana and Texas.
This is the situation in the outer areas of Phoenix right now. I see all kinds of rental ads for houses that are new, or nearly new… bad credit ok, pets ok, etc. Lots of nice 3-4br homes going for $800-$1000/mo. Even in Ahwatukee, which is a nice and very convienent location, you can rent a pretty decent 3br house for as little as $1200/mo.
That’s the situation in outer areas of Phoenix right now. I see rental ads for new, or nearly new, homes… bad credit ok, pets ok, etc. And these are renting for $800-$1000 in most cases.
Good question. I rent in a nice “corporate-type” 100 unit complex in Marina del Rey. My one bedroom started at $1940 in 8/06 and was bumped up to $2050 last yr. That’s about avg for MDR which is one of the more expensive areas to rent.
But I have noticed our underground parking area is a lot less full then it was last year. And I’ve noticed they put several new for lease signs on the back side of the building. There are all kinds of new apts, condos and lofts (total joke here in MDR) going up in this area. I jumped on Craigslist last week and noticed rents do seem to be moving down slightly here. In fact I just saw a nice 1 bed 1.5 bath condo in Azzura tower right next door to my buidling for $2800. The owner is taking a huge hit when you consider his mortgage and $1000 hoa dues.
I think there will be a divergence. Low to mid end apartment units will probably go up to accomodate those with bad credit. Luxury units, especially homes, will head south as ppl try to rent out the overbuilt housing supply. There is no shortage of houses and condos. There is a shortage of ppl with decent credit.
Moved ealier post to correct postion.
I think there will be a divergence. Low to mid end apartment units will probably go up to accomodate those with bad credit. Luxury units, especially homes, will head south as ppl try to rent out the overbuilt housing supply. There is no shortage of houses and condos. There is a shortage of ppl with decent credit.
Posts are moving all over for reason.
Among perhaps other reasons, that can happen when you begin to post, then change your mind and post after scrolling forward or back, but without having hit “refresh” in the meantime.
Tiger,
This is what I thought when we first started renting in 2004 (that rents would rise as homes were foreclosed on and those units taken out of inventory for a while, then drop as those units came back on the market). Also, as more people “got” the housing bubble, we’d see more people sell-to-rent, and they would end up in the better rentals. So far, this seems to be true.
So far, the rising rents is right on, especially in better neighborhoods. Homes for rent in our upper-middle neighborhood are gone within a week or so, and they are being rented for much higher rates than what we pay.
I think the lower-end areas are beginning to see rents drop, as those who can afford to bubble-sit will want to live in the better areas. Also, much more inventory at that level, as most recent buyers (since 2003 and even earlier) are underwater at this point. Many try to rent them out until “the market gets better.” They will lose them anyway.
IMHO, NEGOTIATE with any prospective LL. If you have cash and excellent credit & references, you are good as gold. Use that leverage in your favor.
Good luck!!!
One of the many lessons learned on this blog is the significance that psychology plays in the marketplace. Once positive psychology turns negative a market is really toast. Let me just say that the attitude towards commercial real estate in New York City is turning so fast that even I’m having a hard time believing it.
Some co-workers were at a conference last week. One of the speakers discussed the New York City real estate market. He stated that the correction would be “violent”. The sense of fear here in Fantasyland is becoming palpable. My how the perception of my beliefs has changed.
A glimpse:
One co-worker still has her house in Westchester for sale. She refuses to lower the price but now she is remodeling two bathrooms to help it sell. She has made huge salaries in the past few years but I think lives high on the oinker. I expect to hear complaints about finances very soon.
A friend that is in the underwriting business confirms the tightness of credit. Deals just aren’t getting done unless there is a ton of due diligence. The spigot has run dry. I think his co-workers think it will slow for a year and then boom. They don’t understand that the world has changed and 2005 is not coming back.
Recession talk is everywhere in the City. Some still pray for foreigners. Some pray for the government. But the psychology is changing very quickly.
high on the oinker
Another NYCityBoy lexicon keeper. LOL
Oh, goody, there you are, losty. I had a meeting the other day and missed all the fun discussion about rhinestones and boots and stuff. I caught up later, at about midnight. (Had to have the HBB fix, or my hands shake.) I wanted to tell you that your bold and excellent theories about magenta boots and so forth have really caught my fancy. Here I’ve been all spending time in regular old boots with only a wee little bit of sparkling decoration. Oh, the wasted, wasted years.
LMAO!!!
OT - When I was a kid (between 8 and about 12), my biggest kick was to ride in the rodeo parade. I always wore white Levi jeans with white matching Levi jacket and a blue flowery shirt with mother-of-pearl buttons and a white cowboy hat. But my biggest pride was my purple cowgirl boots that everyone razzed me about.
When the boys gave me a hard time, I’d get the horse into canter and stand up in the saddle and ride. (Yep, I was a bit of a show-off back in those days, not a bit like that now, though.) So the thought of your magenta rhinestone boots brings back fond memories.
Please tell me you’re a woman…otherwise, the visual is quite disturbing!
BWHAHAHAHA-that’s too funny!!! Yes, that would be very disturbing if I weren’t a woman, which I am. You cracked me up, BB!!!
do you still ride? bet the riding is great in Utah … mmmm would love to visit with my faithful App someday
Not much, I still have horses, but in Colorado. I like to ride mtn bikes, though. That Appy would love it out here.
Speaking of boots, Google Bob Daddy-O Wade and check out his art - he does Texas kitsch and also hand coloring of vintage cowgirl photos.
Kind of lost me as well for a second there Utah, I had you pictured as a guy so when you went on about your “cowgirl boots” I was thinking “brokeback mountain”, not that there is anything wrong with that (seinfeld)!
NYCboy…. where in Westchester is this broad attempting to sell her shack?
Sorry, stepped out to see Young Frankenstein on 42nd St. Pretty good.
I’m not familiar with too much of Westchester. I don’t know the exact location but I’m sure it’s special and different.
Does anyone know how Scarsdale in Weschester county is holding up?
Re: Commercial RE
In case anybody is wondering, I’ve seen a change in the number of “For Sale” or “For Lease” signs on empty, or nearly empty, commercial properties in Silicon Valley in the last couple months (this would be in the Santa Clara / Sunnyvale area).
This is a noticeable difference from, say, November, for these absolutely soulless, flat office parks first popularized in the region by the semiconductor makers and Apple probably some 25 years ago.
Here’s a Q.. Why would any sane company have backoffice or serverroom IT within NYC?
I mean, short of gimmes from the city or state?
I can’t imagine that anyone could take an honest look at the rents, electricity costs, salaries, and just costs of doing business there in general.
(I couldn’t make the calculus work 2 years ago, so I fled to a lowtax, biz friendly state. Best move I ever made. NYC is a great place to visit, but hell to pay taxes or find a non-neurotic woman in..)
I going to check out some new house auctions this weekend, if the weather breaks. I’ll post what I see here. These are places way outside of town that I would never have any interest in, but I want to see how this works. Maybe I should take a camera.
‘Maybe I should take a camera.’
Yes, you should. And I reiterate my advice to drive safely in the snow, and my request that you have someone take photos of you in a variety of poses at this auction, ranging from thoughtful, to merry, to gulping coffee, to vigorously throttling an auction shill, etc. for our enjoyment, so we can feel like we are getting to know the Man behind the Mystery.
Ben, I still want to know what you have going in DC… does this have anything to do with this auction? Are you practicing up for something BIG in DC (say, for example, the White House???)???
I was thinking about placing the high bid on every one and then running out to the parking lot and driving off like a maniac.
Go for it - put some different plates on your car for the escapade. Carry on…report back so we don’t worry too much -
ROFLAMO!!!
Do it, Ben!
I went to an auction once, and the auctioneer was using a wireless microphone system hooked to his PA speakers. All I could think about was sitting off premesis with a modified HAM radio or similar wireless microphone, and cutting in on their show. can I get 100 now 150… 150 now 200 … *THUNK* “You’re all SHEEP”
OT - My dad was a Ham. He rigged a mike into my grandfather’s radio (this was back in the 40s). My grandpa was a game warden. My dad and uncle were watching through the window. He cut into the news program with a special bulletin about my gramps being seen poaching deer. Gramps got up out of his chair and started pacing the floor. My dad and uncle thought this was very funny. They came clean and my gramps ROTFL.
Any chance you will in Winslow Ben? My MIL’s sister is selling there!
Stars End
That’s not good, SE. Winslow is going to be a disaster. They caught the Flag specuvestor bug late but IMO, 50% off at the minimum.
No, I’m not going west, but east. These subdivisions are out in the middle of nowhere, off of I 17 and I 40.
Ben, Did you catch the Flagstaff mayoral debate on Channel 2?
Quite a discussion about what can be done to get more “affordable housing” in the Flag area. Nobody mentioned the idea that the burst in the housing bubble will bring housing prices down into the “afforable area” without any intervention on the part of local government. Just an observation from down the road in the Village of Oak Creek.
Ha, ain’t it the truth. They have absolutely no idea what’s going on, can’t make the connection, and just blab on about affordable housing like nothing’s ever going to change. The bubble just doesn’t fit into their little govt subsidy template.
I’ve given up on Flag. The local paper interviewed me, then someone spiked it. I’ve tried to warn these people for years, but nobody listens. Now the economy is going down. More foreclosures for me.
Don’t forget your man-purse for the photos.
BTW, it’s snowing like crazy, so I’m gonna pass on the auction. I bet it gets rescheduled.
Yeah, whatever, BC.
I suspect this is a Casey reference. As Casey’s houses began to foreclose, he had people take pictures of him attending the auctions. One of the more infamous pictures is of Casey wearing a man-purse or a murse at one of the auctions.
What the heck is a man purse??? (I know, I know, but I live in the sticks…)
I nearly had to use a microscope to spot this article in the online version of the AZ Daily Sun:
“DEVELOPER EXITS FLAG”
http://tinyurl.com/ywrgrx
[excerpt] The 102-unit Pinnacle Pines development is also where Empire’s impact is being felt the hardest.
Currently, the project has been only partially built, with residents scattered between empty and unfinished townhomes. A salesperson is showing homes by phone appointment only.
About 40 have been built on the 22-acre parcel. A second phase of the development would have built 104 more homes on an adjacent 18-acre parcel, city records show.
Currently, the townhomes are priced between $299,900 and $440,900 on Empire’s Web site.
Scott Daniels of the Phoenix-based Fortress Framing Inc. said Empire stopped answering his phone calls about a month ago.
As the carpeting contractor for Empire, Daniels said he had up to two dozen employees working on between two to six homes at a time in the Pinnacle Pines development.
But the hammers and saws stopped after Empire contacted Fortress with an important message: They were not going to be able to pay their contractors.
“They are not paying their (subcontractors) right now,” he said.
Daniels said he isn’t sure what Empire’s next move is.
“They kind of quit answering the phones,” he said.
###
Do they still drink Kool-Aid in Flagstaff? Oh yeah.
Hell of a hangover coming . . . .
The Hood is on sale! Ghetto houses south of the 10, sold at the peak for 350K-500K, now 250K, bank-owned everywhere…I’ll jump in around 125K, but by that time, I hope they’ll take Kruggerands for a down payment, because that’s where all my cash is/will be…
Would you actually live in the ghetto or would that be for a rental? How many foreclosures are there in that area? one out of every 30, 50 or 100 houses? If it is a high % then that may reinforce my opinion on a temporary rise in rental rates. Any ideas when foreclosure rates will peak in that area of LA?
I don’t know the %, but there are a lot of for sale signs, and I’m receiving a lot of “bank owned” or “short sale” listings. Even if you don’t plan to invest, I’d highly recommend attending one of the many on-the-front lawn auctions going on over there, if for nothing else, it’s entertaining to watch the neighbors come out on their porches, one by one and half asleep still in their Crip slippers, watching the crowd of bidders. Once in awhile, they’ll come out and raise their hand when the auctioneer calls out “150K” or some such number, of course, with no cashiers check or other check in hand.
I’d like to buy a house or condo in a good area of LA in a few years if prices fall fast enough. Why aim for the bottom of the bucket in housing stock because it’s affordable right now or next year? I want to buy where I want to live for a long time and can afford. If we’ve learned anything from all of this it should be that.
I’m planning on buying about 10, to rent out.
I forecast that there will be new ghettos where the RE mobsters presumed would be safe. You’ll know it when you see new episodes of Cops filmed in Dutchess County NY.
McMansions=the new squatters villages.
RE: The Hood is on sale! Ghetto houses south of the 10, sold at the peak for 350K-500K, now 250K, bank-owned everywhere…I’ll jump in around 125K, but by that time, I hope they’ll take Kruggerands for a down payment, because that’s where all my cash is/will be…
Don’t forget to bring your AK-47 and ammunition bandoleers!
“Gun up and roll heavy.”
Oh, it’ll be spreading north of the 10 soon. Take a look at the REO/NOD numbers in 90019, parts of which are quite nice. Scary. In a good way.
Lot of snow around here(for downstate NY).
Location: Northwest Connecticut
I observed a Kountrywide held shack bought by FB in Jan07 for 340k. Lost by FB and relisted by Kountrywide at 379k May07. CKountrywide dropped price to 240k and fell off the Kountrywide website last week. Wife and I strolled through this dump last fall. Doors wide open, in disrepair. Wasn’t worth much more than 125k to me but I’m sure a koolade drinker saw it as a bargain at 240k but who knows what it went for considering the fact that Kountrywide came off the price 150k in just 6 months.
Some surprising (to me) local market news: we live in Arlington, VA (close-in DC suburbs). Another mom in our playgroup sold her house in 3 days, for more than the asking price, and with no home inspection. The house was in the “starter home” range (upper 600s) but she was still totally *shocked* because the neighborhood is iffy and the house is poorly-built. They are going to rent for awhile, something about her husband wanting to try a new career, I didn’t get the whole story.
Wow, that is pretty surprising. I live over near Glebe and Columbia Pike intersection and I’ve seen lots of houses in my area stay on the market for more than 8 months.
Yep, she was totally shocked, they were thinking it would take about 6 months or so. Here house is off Glebe, too, right before you hit Lee Highway in a very shabby neighborhood (she hosted playgroup once so I saw the shack in person)!
Again I say…….starter home……upper 600s………insane. Doesn’t matter where you are.
Meshell…do you think she’s telling the truth?
Well, her house definitely sold fast, because she emailed the link to our Mom’s group for marketing. So, I think she is probably telling the truth (and honestly, not really the braggy consumer type-very crunchy, food-from-scratch, reuses everything type). Shrug.
Has the sale closed?
I know someone who has “sold” the same house 3 times in the last 6 months. A sales contract and a check are not the same thing!
I just don’t know! It seemed crazy to me (no home inspection?) Its hard to get the full scoop in a room with 12 toddlers :). I’ll check the online county website in a month or so and check out the sale price.
Saw my first listed foreclosure in the MLS in one of the area’s towns, Price, Utah. A very nice brick house on one acre for 295k, still way higher (100k) than it should be, but maybe 50k less than comps.
I will admit to becoming discouraged at how long this is taking, though to look back at one year ago, it’s actually going very fast. I am very tired of renting. I have high (?) standards, I like to have things work properly, I hate it when I open the dishwasher and it falls out of the wall, that kind of thing. OTOH, I like the fact that my landlady lives 100 miles away and leaves me alone. Flip side of the equation. Plus I have cheap rent ($700).
I LOVE Price! It’s one of my most favorite towns in the Universe. I seriously considered living there. I wanted to. Alas, job prospects for me would be mighty few. Have Price, Helper, Castledale, areas been built up a lot in the last 4-5 years? I haven’t been to the area since then. If it has, how about you lie to me, and say ‘why, no, not at all.’
Right here on my desk, this minute, I have a large chunk of pink and red rock salt I found on a hiking trip up above Price–I forget the range. I thought it was a fulgurite–which, as you know, is fused glass from a lightning strike, because it looked all melty and shiny when I found it and I was wild with excitement and toted it all the way back. Then I went to wash it, and that was when I discovered it was salt. When half of it disappeared. Many were the words of dismay on that day. Here, I’ll lick my rock salt chunk, to toast Price the Fabulous.
It’s gritty, but delicious.
Hey, check this out:
realsalt.com
You probably already know about this stuff, it’s awesome.
Anyway, I like Price too, and may buy there someday when the Price is right (haw). And no, it actually hasn’t built up much at all (honest!) and Helper is kind of losing people. They’re trying really hard to be artsy and all, but no jobs. I love the trains. You can buy a house in Price/Helper for 40k, the nice ones are about 160k and up.
But check this out:
http://tinyurl.com/2cgj6g
I’m thinking about buying it, about an hour sw of Price. And all good rockhounds taste the rock to see what’s in it, you know that, of course!
Darn, the link didn’t work. Go to the page it does open, click on land, and check out the 400 acres for around 160k in Emery.
“Mayor Lisa Strydio said she and a handful of borough officials recently met with a Kalian executive who asked for a tax abatement. ‘I was not too keen on the fact about giving anybody a tax abatement who paid $700,000 on a condominium,’ Strydio said. ‘It’s just not going to fly.’”
Although I thought think the project is a dumb idea, I don’t understand the Mayor’s argument. I thought the idea of tax abatement was to encourage new development in areas that could be helped by such development as opposed to helping out those buying in the new developments because of need. Shouldnt her focus have been more on the surrounding neighborhood and whether or not the success of the project could be deemed a worthy public purpose in light thereof.
Besides the usual asinine realtorspeak and/or mailers, this past week in San Francisco I heard two conversations:
a) Why is my house going down on Zillow?
b) The market will recover in under a year.
I say: “Pay attention and good luck with that!”
One of the many, many things that cannot die quick enough with this bursting bubble is the time lost in “how much is my house worth” research and “how much did they get for their house” gossip BS that has replaced oh, so many more important things and conversations in our communities..
“zestimates” have finally come to my town of Alexandria, Va. (zillow used to just provide the assessment number.
For some reason, my home has supposedly increased in value since October - but is still off it’s supposed “high” in Jan 07.
Doesn’t seem to reflect market conditions here very well - but I can see where this would have been crack-like-addictive to some folks during the run-up years of real estate values. I’d pack my bags in 10 seconds if someone actually offered me up to 50k less than my zestimate.
Comment by hd74man - “How do you think rents will be affected by foreclosures and the recession?…Any rental agent worth his salt with a decent complex will be checkin’ people’s credit histories… so good fookin’ luck scorin’ a decent unit if you’ve stiffed the mortgage bank. The mortgage deadbeats will be livin’ in the tenant-at-will old triple decker dirtbag stuff located in crap neighborhoods…Expect lots of suicides and divorces. - Once a deadbeat-always a deadbeat.”
I can believe lots of suicides and divorces, but as for much of the rest, your eyes are stuck on the rear view mirror.
Credit histories by today’s reckoning will be irrelevant. A good part of the nation will be “once a deadbeat”, but a lot of jingle key-ers will also enjoy relative liquidity. You need a tenant who can pay and who has a really good incentive to stiff the landlord last, and credit reports don’t tell that story. Oh, and they give a glowing picture of people one layoff or medical bill away from catastrophe. Again, rear view mirror.
It’s going to be a dandy time for continuing renters and walkaway Fbers with stable employment and cash. Landlords will care about history, sure…but put up a Fber family with a take home of 100K and a willingness/realistic ability to pay say 1500/mo vs. a family on 40K who have a spotless history but are possibly questionable as to whether the budget is going to hold up at 700/month…or even a never-delinquent-on-anything-in-this-life renter who can pay maybe 1100 responsibly — it’s always going to be the money, honey.
I’m not approving or disapproving of this reality, it just is. Oh, and for the short term, we are looking at a really scary time where a lot of involuntary(ish) landlords are going to be passing on their pain by going into foreclosure and getting tenants evicted, going postal towards tenants who expect them to act like “real” landlords, etc. Fairness has little to do with anything.
RE: your eyes are stuck on the rear view mirror.
Credit histories by today’s reckoning will be irrelevant.
Ya think so?
At the moment I know one friend who is juggling $150k in cc on 12 different accounts.
The financial plan-whichever creditor screams the loudest gets a buck.
Who the fook would want to stand in this line?
That is incredible. $150k? Gee, if I owed $15k on CCs I couldn’t sleep at night. Even $5k. How do people get themselves in these situations? I’ve read a lot of these credit trap stories over the past few months, its just unbelievable.
Credit histories irrevelent?
Not to this landlord. No vacancies over the last 3 years. Though this May I am losing my Ridgway tenant. Woe is me. Colorado in the spring. My wife and I are fighting over who gets to go.
I had a call this morning from the manager at my Long Beach apartments. Potential tenants have ding on credit due to jingle-mail. I spoke with them and they are down to one car. The apartment is near bus line to blue line to downtown LA where both work. When they said they read HBB and decided to send in keys after months of trying to sell OC home, I rented to them immediately.
I want to spend the summer in Ridgway. Have family there. Grew up nearby. If you see this and are interested, post a contact.
“One week I spent a year in Ridgway, CO”
Homey, please elaborate
I can be reached at JJOHNROSSJR at aol dot com. House is in Elk Meadows
Comment by hd74man
RE: your eyes are stuck on the rear view mirror. - Credit histories by today’s reckoning will be irrelevant.
“Ya think so? - At the moment I know one friend who is juggling $150k in cc on 12 different accounts. - The financial plan-whichever creditor screams the loudest gets a buck. - Who the fook would want to stand in this line?”
150K is a little extreme, but again – rear view mirror. Lots of debt at the moment , very very bad. Discharged or “forgiven” debt? Pretty bad. Still beats a ticking time bomb though, one which credit bureaus, historically, have underweighted – proportionally – in my opinion. Hence “by today’s reckoning”.
“I had a call this morning from the manager at my Long Beach apartments. Potential tenants have ding on credit due to jingle-mail. I spoke with them and they are down to one car. The apartment is near bus line to blue line to downtown LA where both work. When they said they read HBB and decided to send in keys after months of trying to sell OC home, I rented to them immediately.”
Bingo. And they probably aren’t on any higher ethical ground than the $150K credit card debtor, but the one thing that’s forgotten with the advice not to mortgage the house for short term purposes, is that the bankruptcy laws today actually make it tougher in many ways to walk away from plastic!
Anyway, How stupid/crazy WERE you is going to be a very secondary question to “how stupid/fiscally irresponsible” ARE you?” Particularly if the landlord’s situation doesn’t allow for a lot of negotiation as concerns the asking rent. Particularly if the location or house itself has some limitation on its desirability. The A list candidates will be able to afford to be choosers, but I suspect the B list will be as well. Or maybe everything will foreclose, sit and rot. I just can’t envision in whose post-market-unwinding utopia will penitent “deadbeats” be forking over wheelbarrows of cash to mustache-twirling slumlords? Anybody who gets out from under the house with half their skin intact and a good job/employment history is not going to live out anyone’s Schadenfreude wet-dream of “just desserts” — not unless that fantasy includes an awful lot of rentals going vacant.
ATLANTA
The foreclosure rate as of 4th quarter 2007 was a little over 6.5%. The state of GA’s percentage foreclosure rate was much higher than FL, and led the SE. GA was also 3rd in the nation in total foreclosure volume. The main causes of this is no doubt the state government’s “wink, wink, nod, nod” approach to “supervision” of predatory lenders.
The Snellville/Grayson suburbs, which is a middle class area just east of Stone Mountain, is supposed to have huge amounts of new home standing inventory, with many half built houses where the builders just walked away.
The price of the foreclosed townhouse in my neighborhood has been reduced by the lender. It is now about $40K less than what others have been selling for (a 25% haircut). There have been lots of lookers, but no takers, because there is about 40K worth of deferred maintenance/renovation needed. There’s no up side for an investor (if a small time investor could even get a loan these days.) An owner occupant would have to have a lot of cash-not only down payment money, but also renovation money—since HELOCs have pretty much gone bye-bye. I think it will be sitting there vacant for a long time. I imagine there are a lot of foreclosed properties across the country that have this same problem.
The latest non-workable proposal to end the problem of too many people, not enough water in Atlanta is to annex the part of Tennessee where the Tennessee River is located. Apparently our state government just thinks they can do this because they want to, and the rights of the state of Tennessee should just be ignored. An official for the state of Tennessee summed it up best when asked for his opinion on this, by saying “Georgia legislators are idiots.”
I know that area very well. A lot of it (where the Tennessee River is close to the Georgia border) is within the Chattanooga city limits. The state of Tenessee will end that fantasy promptly and especially, NO WAY is Chattanooga going to give up part of its city so that Atlanta located 100 miles south can continue on with its ever increasing stupidity re water conservation.
Incredible. Still laughing over the Georgia idiocy.
These 5 spec houses two blocks from me are going to be “auctioned” tomorrow and I want to check that out. I’m sure it’ll be a phony deal, but a new marketing angle for this area.
I rode my bike out Mullan Road today and saw this brand new horse property all fenced and cross fenced, empty and for sale. It wasn’t out there last year. It’s a head-shaker & I don’t get it. A divorce? A dream-home project gone too far?
Got a note from a pol in Bozeman: “Word here is that engineers and surveyors, and gravel haulers, etc, have no work at all.
“With construction slowed to a halt (no septic permits, no addressing at the county) there will be a delay before it spreads to auto dealers, retail, banks, lenders, etc.”
We still have a lot of dirt-moving going on here, a new bank, new Safeway, other CRE and a FEMA flood control project next to my property next summer. That ought to be fun…
That’s amazing to me. Less than five acres out in the middle of what looks like nowhere and they want almost $200 a sq. ft. for that?
You’ve got to love the 4500 sq ft house with all the trappings of McMansion…with the last picture from that website showing the yellow room with “Simplify” painted on the wall.
I’m not sure what to make of that other than the people who “own” it are completely out of touch. Simplify, indeed.
Another weekly Maui report. Went surfing yesterday. Waves were smaller than expected but still a rare winter south swell. As we drove down the coast, boss and I both were amazed because there were so few adults out. Lots of kids ditching school but very few adults in the line up.
On a normal day no crowds means better waves down the road. So we drove. All the way down to the end of the road. And the waves got better as we drove. End of the road is a break called Garbage Dumps. The waves were beautiful. The line up was 50 kids and 8 adults. Between swells I asked where is everybody? One of the guys was playing hooky like us. The rest were unemployed. One of the guys laughed at me and said “wait to 3:30. By 4PM there were around 50 adults and 8 kids.
Now boys and girls a south swell is a gift from God. A couple of years back we had one around this time and Dumps had easy 200 people fighting over the break. Just about half of those 200 were calling in “sick”. Bosses that called in sick were busted by and busting their workers that called in sick. Yesterday there was one person that admitted calling in sick. And the crowd piled in AFTER work. We bailed out at 4 and there was car after car with boards on them comming in as we left.
I have lived on this rock for 40 years now. I have NEVER surfed Dumps with just 8 people (kids don’t count, they get what we don’t want) on an out of season south swell. I guess it is all a matter of priorities. Used to be surf to live now it’s work to live.
On another topic. Boss wants to buy the land in front of him Though it will never happen he wants his view and is willing to pay to keep it. He asked me what I would pay for the two acres with a water meter. I told him $400,000. That was the 1999 price of land up here. He made the offer and was laughed out of the office. He was pissed at me too. I told him to cool his jets and just wait. On our drive home he sheepishly tells me his lot is in escrow. Price? $450,000. I called him a dummy because he just overpaid to the tune of at least $50,000. All the way home I got to harass him. It was so sweet.
Anyway yesterday was a one in a million day. Good waves, No people, And I got to call my boss a stupid f#@k to his face for an hour.
RE: And I got to call my boss a stupid f#@k to his face for an hour.
…always makes for the one day in a million.
C & B,
Thanks for the update from Maui, please keep them coming. I’m not a surfer, more of a surf fisher, but I enjoy the tales of surfing and love to watch you guys do what you do.
Lip
Greetings from Amesbury, MA. House up the street from me, similar to mine, went on the market last year for 299K, same as mine. It’s now at 249K, short-sale price. Auction notice was in the paper yesterday. Owner is RE broker, sucked all the equity out and blew it on who knows what. So, thank you very much, “Ms. Real Estate always goes up” for knocking 50K off the market value of my house.
It it wasnt for ppl like her, the prices would have never risen above $200k. Their type created the increase, reality created the drop.
My brother is the proprietor of a transmission shop in northern Virginia. He was telling me that business is very good because people are keeping their old cars rather than trading them in if the automatic transmission goes bad. This also holds true for fleet accounts, especially in the construction business. A lot of vehicles are also being foreclosed and so the old cars in the driveway are now being refurbished with a rebuilt transmission to take the place of the repo. He put an ad in a free advertiser newspaper saying he also works on old cars and was surprised how large the response was. By the way, it is his observation that a car with a standard transmission lasts almost twice as long as one with an automatic before it is junked.
I’m seeing an interesting price compression in the Vienna area of Fairfax County. My guess is that two things happened at once:
(1) Larger houses that had been sitting on the market dropped their prices.
(2) Smaller houses went on the market a little early to get a jump on the spring rush.
But, the smaller houses are priced like the larger houses. Whoops!
So, you’ve got places like these (800-900k range):
FX6623150 (3475 sq ft/ 10k lot)
FX6607764 (3706 sq ft/ 15k lot)
FX6637731 (3121 sq ft/ 11k lot)
Competing with (within 50-100k) smaller houses like this a few blocks over:
FX6543191 (2628 sqft/ 15k lot)
FX6640605 (2226 sqft/ 19k lot)
FX6663182 (2416 sqft/ 21k lot)
FX6667507 (2874 sqft/ 15k lot)
My boyfriend owns a beautiful black Lab that probably is a better pal to him than I ever will be. The dog is not an indoor pet and has had 2 acres to roam backyard in metro Atlanta. Yesterday my boyfriend spent the afternoon looking at SHFs with so-called fenced-in yards close-in to his office in Tyson’s. He discovered much to his chagrin that people often have a different idea of fenced-in. He has, also, finally realized that people here have a different concept of adequate housing. I tried to tell him before he moved that the types of housing we were accustomed to in Atlanta aren’t available here. Though he said he knew, apparently he didn’t.
He can rent a house with a yard in some of the suburban areas such as Reston and Ashburn, which both are in a reasonable commute to Tyson’s where he and I both work. He doesn’t want or need a house with 2500+ sq ft. and he won’t consider a TH.
Back home SFHs are the norm, not the oddity. We both owned new brick and Hardie plank houses with 1600 to 2000 sq ft. back home. In fact I still own there. Neither of us is interested in buying here since sinking good money into depreciating assets doesn’t sound like a good financial decision. Neither of us will retire here. The one and only reason we are here is for our individual careers
Frankly I don’t know what he will decide to do. I encouraged him to go ahead and rent one of the larger houses and close off the rooms he doesn’t need or want. At some point he will have to move from the extended stay hotel and live somewhere. The dog is currently at his father’s house in Georgia. He is anxious to get the dog here and I don’t blame him. The dog is quite a wonderful dog.
I lease a 3 bedroom 2 bath designer condo near Great Falls for $1585 a month and have no condo fee. The owner couldn’t sell it and said he won’t try again until 2009 or 2010, so I have a great deal. (To be quite honest the landlord paid so much for this place I have doubts that he will ever recover any equity.) Ah, the dilemmas of living and working in Northern VA.
Depending on your budget (and whether you two are ready to live together), there are some nice 4br SFH in the Vienna area renting for $2500-3000. Trying longandfoster.com
And, yes, houses are rent far less than what PITI would be.
$3000/month? I am laughing. There are houses behind the condo complex for rent. One is 4 bedroom, 3 bath with 3200 sq ft. renting for $2200. Not much of a backyard. (It is one of the $575K houses that some not-so-smart person paid $875K. Unbelievable.) No, he nor I would pay $3,000 rent for a run down split level or split foyer in a high traffic area regardless of its proximity to the office. He and I could spend $3000; we won’t. It is just plain silly to spend that kind of money on the type of houses he saw. Most were dumps.
I found something doable and he will too. The dog is important. The dog’s happiness is more important.
I’ve been surfing the DC area craig’s list postings under furniture. I’m thinking about getting a new sofa and if one I really like comes up fairly new and really cheap, I might buy a used one. Also interested in a very particular IKEA desk/table if it comes up at the right price.
Now, I’ve only been looking for a week or two so I can’t tell if the current activity is any different than it has always been, but I am struck by two things.
First of all, there are a huge number of ads that essentially say the person bought the furniture very recently, tried it out in the space, it didn’t quite work, so they are selling it because it is too expensive to return it. This may be a huge recurring lie to convince people that old furniture isn’t that old, but some ads offer to transfer the bill of sale and warranty with the piece(s). I guess those aren’t entirely untrue. Who buys furniture without checking if it is going to fit? You can figure it out with a tape measure, a newspaper stencil, a stack of boxes to approximate the size of the piece, almost anything like that. Isn’t furniture a major purchase? Don’t people usually plan a little bit for major purchases?
The other common theme is moving to smaller space and must get rid of this as it won’t fit. One said they were “moving in with family.” Another said purchase of a new house fell through. Furniture stores are going to be dying off faster than they already are. Don’t we still make some furniture in the United States? There go some more manufacturing jobs.
The last thing I noticed (number 3, but more personal than the other two) is that there is a huge amount of really ugly ass furniture out there. Really, really ugly. I’m sick of my 16 year old sleeper sofa, but it is tired, not ugly. And to the DC area craig’s list posters? I don’t care what the style of your couch is, if it is covered in plaid fabric it is not “sleek” and it is not “modern.” Plaid and sleek do not go together. Never have, never will. Plaid and modern may have gone together around the time that weaving was invented, but that is it. Once hand looms were a well established technology, plaid ceased to be modern. It has been a while.
I like a nice plaid, in the context of an “English country” or “Coastal Carolina” type look. But definitely not modern. Isn’t furniture the fastest-depreciating purchase you can make?
Maybe I should have made the plaid comments in a separate paragraph from the ugly furniture stuff. The ugly stuff is mostly pale with lots of swirly patterns. There is nothing wrong with plaid furniture. Not my particular taste right now, but nothing wrong with it at all. But it sure isn’t sleek or modern.
I don’t know if any of these items are actually selling, but even the asking prices for sofas are mostly about half of what they claim was paid. Less if it is more than a year or two old.
Asking prices on heavy, hard to move desks are even lower, even when the stuff looks like it is solid wood rather than particle board.
who buys furniture without checking if it is going to fit?
Like houses, furniture can be purchased with “no money down”.
If you can sell $3000 worth of furniture for $1000, you come out $1000 ahead!
Purchase $3000 worth of furniture at 5 different stores on the same day - you can clear $5000!
Greetings from Christchurch, NZ
In the local paper, there was a story about numerous properties in Auckland, being auctioned off for 60% of appraised values…
timber!
That’s amazing, aladin. I was in Wellington almost exactly a year ago, and each every day there was a story in the local rags about the rising cost of RE. Every day. In every major city the cost of mortgages went above 100% of income.
Sounds like 60% of appraised value represents a reasonable guesstimate of current market value.
North County San Diego:
Been looking at open houses the past few weeks and there has been A LOT of activity. Even the realtors seem stunned and admit that homes which didn’t even get a look for months are having multiple people express interest in just the past few weeks (since Superbowl, seriously).
Went to a couple of restaurants and thought it might be slow. No, we were early, and they had lines out the door and minimum 45 minute wait times (upper-middle class neighborhood).
OTOH, it’s not consistent. In La Jolla (very upper-class, for those who aren’t familiar with it) had many “trinket-type” and clothing stores with 50-70% off sales. Restaurants were busy, but less so than previous years.
Home prices in “starter” neighborhoods are off by 50% in many areas — and still not selling, in many cases. Homes in the better areas still stagnant since 2004, but a few are popping up at late 2003 to mid-2004 prices, so there’s a bit of weakness coming finally.
Went to a public hearing in San Diego the other day (met SD RE Bear, Poway Seller and Bob Casagrand!
) and they are toying around with the idea of using public money to buy foreclosed homes. This is an ongoing trend, and I think more people need to get involved, attend hearings, write letters, etc. to make sure the politicians — at all levels — understand there is a VERY large contingent of the population that does NOT want to see taxpayer money wasted on bailing out lenders & FBs.
In summary, there is definitely a flurry of activity not seen since the spring of 2003/4/5. Pulling up to open houses, there are 3-5 cars pulling up behind you. People asking the realtors about REOs, as they are looking for “investments”, etc.
The Kool-Aid is still being passed around and everyone seems to be aware of the govt’s attempt to “fix” the market. They think it’s actually going to work (HA!!!).
Same thing going on with the stock market. 2 out of 5 days every week it is jumping up and everyone is buying.
But few seem to understand the fundamentals or the decline.
Day trading of houses I guess.
“…they are toying around with the idea of using public money to buy foreclosed homes.”
I guess they did not already throw away enough money in the pension mess?
Who ever knew the rapture would descend upon humanity, this way?
“Rick Crossley arrived outside the Prince William County courthouse recently and found it deserted. ‘This is a trustee’s foreclosure auction,’ he announced. ‘Any parties with interest, please step forward at this time.’”
“‘Going once! Going twice!’ he bellowed, raising his voice in the gusting wind. ‘Final call! Sold to Aurora Loan Services for $380,515.28.’”
This is one way to get in the “black”
“The man entered Regions Bank about 11:45 a.m. wearing a black ski mask, pointed a handgun at a teller and said, ‘You took my house, now I’m going to take your money,’ according to Athens-Clarke police Capt. Clarence Holeman.”
(Repost from the Bits Bucket here; sorry for the double post, but this properly belongs on this thread.)
SD DataQuick numbers appear in today’s SD Union-Tribune Homes section. Here are the YOY (Jan 07 to Jan 08) single-family residence sales volume and median sale price changes by area:
Location / Pct change in no. sold / Pct change in median sales price
—————————————————————————–
Central San Diego / -39.7% / -11.2%
East County / -27.1% / -20.9%
North County Inland / -39.3 / -12.7%
North County Coast / -38.7% / -11.6%
South County / -16% / -17.3%
Tentative conclusion: Real estate does not always go up.
The most telling SFR sales statistics on the page are not hard numbers, but can be gleaned by a close inspection of the graphs at the bottom of the page. Based on my best visual approximations, I see a peak sales volume over the past five years of about 3,900 per year, in late winter-early spring 2004, compared to a current level of 995, for a 75% drop in sales volume over four year’s time.
By contrast, the median SFR sales price appeared to have reached a permanently high plateau of about $580,000 as of Spring 2005, which continued until the onset of the credit crunch last August. From August 2007 through January 2008 the median SFR sales price fell from around $580,000 to $451,500, for roughly a $130K drop in five months. This recent decline occurred at an annualized rate of ((451,500/580,000)^(12/5)-1)*100 = 45% per year. Good thing the economy is merely slowing down and not going into a recession, or this pace of home price decline would be quite worrisome.
One more thing: I know it is different this time, but traditionally, declines in sales volume have been leading indicators of future home price declines. The fact that sales volume is off by 75% from the peak in early 2004 while prices are only down by 22.1% ((451,500/580,000 - 1) * 100) from the peak offers a hint that prices may have a ways to go from here before a bottom is reached. Looking on the bright side, if prices continue falling at a 45% annualized rate for any length of time going forward, a bottom cannot be that far off in the future.
Conservative estimate of lost aggregate value in SD residential real estate since August 2007 –
Assumptions:
1) 10 pct decline in value (pretty conservative given the above data)
2) 3 persons per hh (higher than the actual figure, but useful for a conservative estimate)
3) 3m SD county residents
4) Value (as of August 2007) of $500,000 per home (based on DataQuick median sales price for ALL HOUSES AND CONDOS).
————————————————————————–
- Assumptions 2) and 3) imply 1m housing units, which by assumption 4) had an aggregate value in Summer 2007 of roughly
$500,000 X $1,000,000 = $500 bn.
- A ten pct drop implies a loss of aggregate value in the nbhd of $50 bn = 1/3 the total value of upcoming U.S. economic stimulus.
Many apologies for this very rough calculation — you can tell my pencil is not very sharp (especially since I am making this estimate while typing at the computer, rather than with pencil to paper). I am sure the accountants in the virtual room can come up with a much more accurate estimate, but I claim the order of magnitude of my calculation is correct, and my conservative assumptions suggest a refined (but unbiased) estimate would look even worse.
Correction:
$500,000 X
$1,000,000 homes = $500 bn.More foreclosures than sales in all of CA in Jan 2008:
http://www.mercurynews.com/realestatenews/ci_8344134
I think this points to more downside risk…
We spent a day in Christchurch NZ, yesterday and did a drive-by and walk-by…
Compared to the sheer nuttiness of Auckland and any place 2-3 hours to the north of it, the real estate scene
here seems tame in comparison.
Maybe 1/2 as many houses for sale, compared to the big smoke.