A Metaphor For The Building Boom Gone Bust
The Chronicle Telegram reports from Ohio. “The idea seemed simple enough. Buy a foreclosed home through a sheriff’s sale at a below-market price; fix it up and then resell it making a small profit. It’s called flipping. Gary Cahill of Elyria knew the plan wouldn’t net him millions, but he and his wife, Janice, were eager to start a new hobby. But that was before a record number of foreclosures hit the county, leaving no neighborhood unscathed and ‘For Sale’ signs as far as the eye can see.”
“‘It’s not as easy as those television shows would make it seem,’ said Cahill, standing in the updated kitchen of a home he owns on Xavier Street. ‘I can’t even get one bad offer to turn down, let alone a good one. Now, I’m not even thinking about making some money off this house. I just want to break even.’”
“When banks start lowering their prices, people like Cahill realize they are stuck in a Catch-22 situation. If he lowers the price too much, he won’t make any money on the sale. But if he doesn’t lower the price, the house will stay on the market as buyers pass it up for cheaper bank-owned properties.”
“‘This is not Bank of Cahill. I can’t afford to just give this house away,’ he said. ‘I’ve put too much work into it.’”
“Cahill has come down on the price. He started out by listing the house for $159,000. Six months later, he lowered the price to $132,500. Now, he’s willing to let it got for $129,000. He is even prepared to pay up to $3,000 in closing costs.”
“‘It’s not like this is my only house. I have four mortgage payments to pay plus my business to run,’ he said. ‘I don’t know how long I can keep this up. I guess I’m going to have to get creative with selling this house.’”
“73-year-old Phyllis Stydnicki has a Jackson Avenue home she can’t sell. Six months ago, she stuck a ‘For Sale’ sign in the front yard, but only one person has even stopped to look at it.”
“‘It wasn’t that long ago that — if I was willing to sell — I could have gotten a good amount of money for it,’ she said. ‘I’m not defaulting on any of my home payments. But I’m still a victim of this foreclosure crisis. I put a ‘For Sale’ sign in my front yard in August, and it’s going to stay there until I sell or die.’”
The Middletown Journal from Ohio. “It wasn’t just a home loan, Steve Nusky said, it was the first step toward realizing a dream. It took only a matter of months for Nusky and his wife to qualify for a loan to open their own bar. The Hamilton resident said he was surprised they were approved, since they already had a loan for $61,000 on their home.”
“‘I couldn’t believe we were financed $100,000, but it’s what we needed,’ he said.”
“In June 2005, the bar closed. At the same point, Nusky’s marriage dissolved. In May 2006, he received his first letter threatening foreclosure on his home, which had been in his family for three generations. ‘It’s been a nightmare. It’s like I never know what they are sending me when I get home at night and check the mailbox,’ Nusky said.”
“Meanwhile, in Trenton, Tracey Tindall said her family of five was excited about building their $220,000 dream home. By the time the home was ready to occupy in 2005, Tindall said she was a bit worried because they were told their monthly loan payments would increase from $1,200 to $1,400.”
“‘But we had keys to a brand new home,’ Tindall said.”
“Within a few months, Tindall’s husband lost his job. They tried to work with the bank, she said, but soon received their first set of foreclosure papers. ‘I know it’s just business, but I don’t know how these (mortgage lenders) can go home at night and sleep knowing someone might not have a home tomorrow because of them,’ Tindall said.”
The Courier Journal from Kentucky. “The number of homes sold by members of the Greater Louisville Association of Realtors fell sharply last month. ‘We’re operating in a very soft market. January numbers are not what anyone had wanted them to be,’ said the Realtors’ local president, Nelson Collins.”
“The Southern Indiana Realtors Association reported 147 home sales in January, down nearly 20 percent from a year ago. The median price in Southern Indiana dropped 6.5 percent last month to $107,500.”
“Lynn Thomas, a licensed real estate agent for about a decade, said mortgage foreclosures and steep discounts on new construction are keeping home prices down. She’s advising some sellers to sit tight unless they absolutely have to move.”
“Buyers are hesitant, Collins said, and some people who were approved for loans early last year are having a more difficult time obtaining similar financing now. ‘This is just a cycle in the way that things happen in the economy,’ he said. ‘We all just need to keep our heads out of the sand on this issue, and understand that this too shall pass.’”
The Des Moines Register from Iowa. “The number of lawsuits that seek to foreclose on homeowners has doubled in Polk County over the past five years and climbed 75 percent statewide, records show.”
“It’s common, said Jane Hong, a Cedar Rapids bankruptcy attorney, to see families who have pulled equity from their homes through home-equity loans or lines of credit, which ‘can be used like a credit card.’”
“‘It’s a great way to lose your house,’ said Hong.”
“She said many borrowers took second loans thinking their home value would continue to appreciate so they could sell or refinance. Instead, they found they owed more than the house was worth. ‘They can’t really afford to keep their home anymore because their debt has far outstripped the house’s value,’ Hong said.”
“Rural Iowa is poised to be hit much harder by the nation’s foreclosure crisis, as a greater portion of borrowers in small communities struggle to make ends meet, according to a Des Moines Register analysis of lending data.”
“And even a few foreclosures can have a huge impact on a small town, said John Baker, an attorney with Iowa Concern, a hot line for financial and legal assistance for Iowans. ‘The value of every property in the town drops dramatically,’ he said. Vacant houses deteriorate, ‘and it has a cascading effect.’”
“Mike Ross and his wife bring home about $2,300 a month after taxes. Their current house payment, car payment, utilities, groceries, cell phone and prescriptions total about $2,000 a month. They’re paying about $50 a month on one credit card with a $700 limit.”
“Good-paying jobs, especially those with benefits, are scarce in their town, they said. There was no room to pay a couple hundred dollars more on their house payment. ‘And good luck trying to sell it,’ Mike Ross said.”
“Baker, the attorney with the Iowa Concern hot line, foresees rural and small-town families facing similar problems today as they did during Iowa’s farm crisis. But today’s homeowners have even less of a safety net in some ways than rural Iowans two decades ago, he said.”
“‘The big difference between this and the ’80s was when an acre of farmland dropped in value you could still produce income off it,’ he said. ‘Houses don’t produce income.’”
“Iowans refinance for a multitude of reasons: to pay off debt, acquire lower lending rates or make home improvements. ‘The loans with the highest rates tend to be refinancing or home improvement loans,’ said Guy Cecala, president of Inside Mortgage Finance. ‘That is the bread and butter of the subprime market.’”
“Higher-interest loans yielded higher profits, said Joel Rogers, president of the Iowa Association of Mortgage Brokers. ‘Some people refinanced two or three times. Everybody was competing to do these loans,’ he said. ‘Investors on Wall Street had a hunger for this investment.’”
“Lenders loosened their requirements and standards for loans, and ‘borrowers were able to qualify for loans that, in hindsight, probably shouldn’t have been made,’ Rogers said.”
“Certain lenders or brokers who wanted to refinance a house whose value wasn’t going up would simply find an appraiser to falsify and inflate the actual home value, said Kathleen Keest, a former Iowa assistant attorney general.”
“‘That’s why Ameriquest and others started inflating appraisals. They said, ‘We’ll just make it up.’ … The inflated appraisals were rampant, just totally rampant,’ she said.”
The Kansas City Star from Missouri. “In Kansas City, the housing market for sellers wasn’t all doom and gloom. Average resale prices downtown have jumped by one-third in the last two years. Some other parts of the area have remained hot. During the past four years, The Star found, housing appreciation surged at double or triple the rate of inflation in almost one-fifth of area ZIP codes.”
“Average prices in Brookside’s 64113 have appreciated 24 percent since 2003. On the Kansas side, old Leawood’s 66206 is up 43 percent. ‘People are attracted to those areas because of that kind of consistent, safe track record,’ said Pat Tholen, a Realtor of the Year in Kansas.”
“A seller like Elizabeth Nelson isn’t sure whether or not to be hopeful. Last spring, she and her husband finished fixing up their Prairie Village ranch. They priced it at $617,000 because another home down the street was priced even higher.”
“But they got no offers through real estate agents. Then they tried a for-sale-by-owner service. Still no offers. They reduced the price to $545,000. Still no offers. Now they are re-listing it.”
“‘It’s been frustrating because it’s taken a lot longer than I thought,’ Elizabeth said. ‘You feel like your life is on hold.’”
The Topeka Capital Journal from Kansas. “Residents of this blue-collar military town welcomed the forecast of an economic perfect storm in the Flint Hills.”
“Years of population decline and monetary stagnation in Junction City were about to be reversed. Raw material for newfound prosperity was the announcement that more than 8,000 Army soldiers would be reassigned to Fort Riley. Something akin to a gold rush ensued.”
“The rush to build has left the city deep in debt. The troops came, about 5,500 so far, but many couldn’t afford the new homes and instead are living on base, in rental properties in Junction City or in other communities.”
“Home developer Larry Sinks imagined a feverish construction atmosphere that would feel like the ‘Wild, Wild West.’ Carol Gould, the city’s public relations director, promised expansion ‘beyond your imagination.’”
“‘It makes my head spin,’ city manager Rod Barnes, giddy at the chance to be an architect of renewal, said at the time.”
“New Fort Riley soldiers…complained of single-family home prices beyond their financial reach. ‘We find a lot of houses to buy, but not a lot of units to rent,’ said Alison Kohler, a spokeswoman at Fort Riley.”
“Historically, Junction City has attracted 40 percent of the soldier population living outside of Fort Riley. That means the city could have reasonably expected to fill 3,600 new units. Problem: Junction City already has more than 6,000 units.”
“Black mold had grown inside a duplex that sits empty in a new subdivision on the western side of Junction City. The new duplex is one of hundreds of homes that remain unsold since the bubble burst on a Junction City building boom.”
“Unoccupied and exposed to the elements, the duplex has had much of its Sheetrock and carpet torn out because mold is a health hazard. It is a metaphor for the four-year building boom gone bust. Prices of new homes are falling because of an oversupply, real estate agents say.”
“Four years ago, the town lacked housing, so new homes sold within a few weeks. Today, about 443 homes are for sale in Junction City, but that is expected to climb by another 100 to 200 homes that are in various stages of construction.”
“‘That is quite a bit of inventory,’ said Laurie Crites, president of the Junction City Board of Realtors. ‘I think it is overbuilt now. There was too big of a boom too fast.’”
“Last year, 504 homes sold in Junction City, with an average price $140,809 — which is out of reach for most soldiers. Crites said no one could build a quality home for less than $100,000 unless the land was free.”
“Staff Sgt. Dorian Raines and his wife looked at numerous homes in Junction City and Manhattan before settling on a newly constructed house for $200,000 in Junction City. The Junction City home, bought a year ago, was his first home purchase.”
“After living in the home for six months, Raines received orders to move to Fort Stewart, Georgia. Now, the house is one of nearly 443 homes for sale in Junction City.”
“Raines said when he arrived at Fort Riley, he went to a small party where someone recommended he talk with Scott Johnson, a Realtor in Junction City. ‘We looked at three to five homes — my wife loved this one,’ Raines said.”
“He wants $205,000 for his house, but getting his asking price might not be easy. Many new homes listed on the Junction City Board of Realtors MLS say ‘price reduced.’”
“‘It was a lovely home, perfect for my family,’ Raines said. ‘I’m still making payments. That is the one thing that is difficult.’”
Gary Cahill of Elyria knew the plan wouldn’t net him millions, but he and his wife, Janice, were eager to start a new hobby.
I just want to break even.
Since when does a hobby necessarily “break even”? I have hobbies. They cost me money.
Gary should know that the difference between a business and a hobby, so far as the IRS is concerned, is that hobby costs are NOT deductible. My guess is that Gary wanted a hobby, not a business, because he had no intention of declaring any INCOME if he got any. Now that he is facing a LOSS, of course, he will want to write off his failed BUSINESS. But since he is on record as saying it was a hobby; no deductions permitted?
We’ve got your back, Larry; tell the world.
You still have to declare net income earned from a hobby even though you don’t get to write off a loss against other income (as you can do with a business).
ISTR that you have to make money 1 year in 4 to make it a business… So are Airlines hobbies?
You have to prove an “intent” to make a profit. If you make a profit 1/3 years then the IRS generally considers that to be evidence that you have a profit motive.
However, there are other ways to demonstrate a profit motive. If, for example, its an industry standard is that it takes 5 years to become profitable, you would probably have a good argument to take 5 consecutive years of losses when starting out in that industry.
I’m beginning to think commercial airlines are hobbies. I read somewhere, can’t recall the link, that overall, since its inception to now, the airline industry has not been profitable for stockholders, considering the bankruptcies, mergers and airlines going out of business. Components of the industry, e.g., some pilots, some businesses providing support services, have made money, but not airlines overall.
tresho, since we just had the Oscars, maybe it’s like the movie industry. Movies never “make money,” but the people making them sure do. It’s all in the accounting dept.
Every movie costs around $100 Million to make, a lot of the money came from hedge funds and the like, recently.
If all of the sudden the investment moneey isn’t there, how do you make movies on the cheap, after having been lavish with the moolah, all of your production life?
goodbye, Hollywood.
no great loss…
Every single one of my hobbies loses me money. They give me a hell of a lot of pleasure but money-makers they, quite emphatically, are not.
Isn’t that what a hobby is supposed to do?
Actually cooking is a hobby that usually makes (in this case, saves) you money.
Fair enough, and that’s one of mine too.
However, I will have you note that buying all those books pretty much negates any of my “savings”. Of course, you could argue that you only buy them once. The problem is I seem to buy a lot of them “only once”. LOL.
I saved a ton of money for many years sewing clothes for my daughters. Seems about 5 years ago it became cheaper to buy except for special occasion clothing. Now, I sew for pleasure and the treat of creating clothes no one else has.
A clear violation of Rule #1: If a get-rich-quick scheme is on television or in the news, you’re already late to the party.
Great for him if he wants a hobby. But this f’n flipper expects somebody else to pay for his hobby.
A clear conclusion from the above: don’t get into a business that other people consider fun. This is why bike shops, restaurants, niche retail stores, and even airlines typically have low returns. Nobody gets into a laundry for yuks, and so they generally provide a steady return.
““I don’t know how long I can keep this up. I guess I’m going to have to get creative with selling this house.”
Another one going to offer coffee and doughnuts to show off that fabulous new kitchen………
Just lower the price!!!!!
Hobby? We don’t need any stinking hobby!
Gee, will someone give this poor guy a break!
All he wants to do now is break even. He’s not a greedy bastard now.
It was just a hobby. Should a person not be able to break even once he declares it a hobby, and not a get rich quick scheme?
Give the guy a break. He has declared Play-sies!
Since when is flipping a hobby? Who would do it w/o the lure of making money? Do people really enjoy remodeling bathrooms, ripping up old linoleum, cleaning up trash, etc. that much? I bet the IRS doesn’t look at it as a hobby.
“Buy a foreclosed home through a sheriff’s sale at a below-market price; fix it up and then resell it making a small profit. It’s called flipping.”
What if his “hobby” was gambling instead of flipping houses? The tone he uses to talk about what happened (absent numbers) implies he hasn’t gotten in over his head, just that his hobby didn’t turn out as he’d hoped. “Investing” in real estate may not be any different than running off to Vegas to spend a few evenings at the roulette wheel, but it sounds better.
Given that he has 4 homes and runs a business. I suspect his remodelling is outsourced, so he only has to enjoy telling people what to do. I know lots of people who enjoy doing that.
It’s interesting to watch these news groups struggle to avoid admitting a price problem.
‘Average prices in Brookside’s 64113 have appreciated 24 percent since 2003. On the Kansas side, old Leawood’s 66206 is up 43 percent. ‘People are attracted to those areas because of that kind of consistent, safe track record,’ said Pat Tholen, a Realtor of the Year in Kansas.’
‘A seller like Elizabeth Nelson isn’t sure whether or not to be hopeful. Last spring, she and her husband finished fixing up their Prairie Village ranch. They priced it at $617,000 because another home down the street was priced even higher.’
‘She said many borrowers took second loans thinking their home value would continue to appreciate so they could sell or refinance. Instead, they found they owed more than the house was worth.’
‘Last year, 504 homes sold in Junction City, with an average price $140,809 — which is out of reach for most soldiers. Crites said no one could build a quality home for less than $100,000 unless the land was free.’
Over $600k for a typical ranch house in Prairie Village? Maybe in Mission Hills depending on the house, but Prairie Village? It’s a nice area - good homes, lots of trees, good schools, nice neighborhood. But $617K is way out of line with local incomes and with housing prices in general in the Kansas City area. Did the one down the street priced higher sell either? Is either worth 2 1/2 times what similar or better homes are worth in other decent neighborhoods?
If one really wants to sell, price to comps (or lower when prices are falling), not to asking prices of selected neighbors who may be equally uniformed or delusional about the current market.
But don’t you know, Johnson county Kansas is the new OC. At least, that is what the snobs there think.
That’s what they’ve always thought. At least the home presumably wasn’t listed as “Mission Hills adjacent”.
I put a ‘For Sale’ sign in my front yard in August, and it’s going to stay there until I sell or die.’”
Start the dead pool.
All the early dates are taken. By the kids!
In late 2006 and early 2007 I marveled at how small, local builders here were getting caught up in the bubble, buying vacant lots and putting up spec houses at a rate not seen for many years.
Even more stupid was their apparent lack of understanding of the market, building 2-story houses on raised foundations (meaning lots of steps) for the retirees expected to move here.
I just learned that the first four of those white elephants have gone back to the banks. It will be interesting to see what the price will be when they come back on the market.
One huge oversight during this massive bubble, is that there are 78M Baby Boomers growing grey, and their demand will be sensible one-story homes. Not just for physical reasons, but for financial ones too.
Single story, on slabs, wide hallways and doorways, energy efficiant and low maintenance, close to services….
Single story, on slabs, wide hallways and doorways, energy efficiant and low maintenance, close to services…. In your dreams.
Sounds like the house I plan to buy in a couple of years.
Very true. Already in regions with mature populations, the one-story homes are picked clean while the two-story (and three-story) homes languish on the market. There’s even a substantial per square foot price premium on the simple ranches and cottages. Wouldn’t it be ironic if it got to the point where builders razed McMansions to set up bungalows?
Nah…its only $20k to put in an elevator, a little bit less than the cost of demo.
One word “energy” to heat space you don’t use, will keep those with limited income sources away. Also, doesn’t the design of the house have to work to install an elevator?
Also, I would like to own one of those toon town electric golf cart cars (think Costco for example), so I could drive to the nearby grocery store in the rain, when and if my mobility gives way.
Also, doesn’t the design of the house have to work to install an elevator?
The best design would be if you have a closet on the second floor directly over a closet on the first floor. But I have been in many newer houses with media/formal dining/atriums/entry ways that are underutilized and pretty much a waste of space that could easily accommodate an elevator.
So the next bubble will be in… elevators!? UTX, owner of Otis Elevator, is trading at only 72.70. Buy now or be left forever on the ground floor. (That’s terrible, sorry.)
You can actually do a “bolt-on” where the elevator shaft is built onto the side of the house, outside. I’ve seen some (hideous) examples of that, though as you can imagine, it is far more expensive than using two closets because of the exterior work that has to be done as well.
One guy here at work is actually considering designing his next /retirement house with closets sized and positioned for elevators at a later date, just in case he needs the elevator in later life.
But like Skip said, there is so much space in the various oversized rooms in new houses that it might not be nearly as hard to install those things when the time comes.
It’s interesting that babyboomers want one story homes while two story homes are actually healthier for them. By not having steps, muscles and joints get weak and this lack of exercise contributes to a greater risk of broken hips, falls, etc. Maybe a marketing campaign focused on such would save these McMansions?
Just have to say… How in the heck did this house stay in this guy’s family for three generations and NOT get paid off long ago?
“In June 2005, the bar closed. At the same point, Nusky’s marriage dissolved. In May 2006, he received his first letter threatening foreclosure on his home, which had been in his family for three generations.”
Owning a two-story home adds very little exercise to your day. We owned a few two-story homes, and have used our treadmill for 20 years. It takes at least 30 minutes a day of moving to keep you healthy. Up and down the stairs doesn’t qualify. It helps a tad, but lets get real.
I settled for a split though I hate most of ‘em, but at least got hubby to put in some good rails for when we’re old. The steps up to the living room aren’t nearly as bad as some places I’ve seen, but I can just see myself going ass over teakettle down that thing when I’m in my dotage.
Which reminds me, what is up with all the split-leve and tri-level (worse) stuff being built? You’d think it would go out of style or is it just cheap sf?
I love two story house but am not sure that I want to have to climb stairs when I’m 80.
As someone with two elderly parents let me assure you they can’t handle a 2-story house. The hips are gone. Cutting the risks of falls is critical. They can handle things quite well in their 1-story ranch, but my mother can’t walk down the basement stairs and my father fell 4 weeks ago.
I understand why baby boomers want this. It makes sense and in the 55+ neighborhoods being built the vast majority are 1-story in this area.
I live in condo building with quite a few older residents. I have decided when I get that old I will not live in a high-rise condo. The building has one elevator and when it undergoes repairs many of the people can’t get out of the building. They are trapped.
With the impending “aging of America” there will new ways of building for older people.
When I had knee surgery at the age of 45 I was glad most of my home was accessible from the same level, and that I owned one vehicle with an automatic transmission. If you want to exercise, go for a walk or use a treadmill.
It depends upon where you live if split levels and split foyers are still being built. In the large metro area I am from it would difficult to find split levels that are newer than 30 years old. They came in the 60s and left in the 70s. Where I live now they are everywhere, but are still 30 years old or older. In my hometown it seems most of them were grazed, modified or became ghetto homes. The ones that were “modernized” still look awful. Pieced together like a puzzle. I hated the design then and hate it more now.
I like a 2-story with stairs that are not at a steep angle. The house I brought my family up in was very large with low angle stairs that had a landing midway. The house I bought after the divorce was on a small lot so the stairs quite steep and almost appeared vertical. My mother could never use them. She never saw the upstairs.
Now I am temporarily in a one-level condo and stairs are not an issue. When I approach 70 or 75 for sure I want a single level. I have seen too many seniors struggle with the stairs in their adult children’s and grandchildren’s homes.
The two story homes I have owned all had masters on the main. It really helped when feeble family members came for a visit. My ex and I would stay in one of the guest rooms while his grandmother visited. She had to use a walker, God rest her soul. There are a ton of considerations with housing the elderly.
Builders are starting to get it, but they still have a way to go.
scdave & Spykeeboi-
We sold a large garage mahal to downsize to a sensible one-story, with oversized spa (no pool anymore), and a walk to a grocery anchored shopping center. We will be dealing with peak oil, inflation, lack of mobility, and all kinds of other issues. We will buy with cash, when the prices reflect its time to buy.
Del Webb, the developer of 55+ planned developments, missed the boat, building these huge developments in the middle of nowhere. Plus an HOA, no light rail, dreadful high density living, etc…
We aren’t ready for the wave of old farts coming our way. (I am a geezer in training, myself.)
I believe I heard, W cut the budget on our rail system. What a stupid thing to do.
yes I never did understand California City being way out in the middle of nowhere with the good hospitals 100 miles away. Not sure how far away Sun City is. I’ve known retirees to build their dream home here in MT out in the middle of the woods, only to turn around and sell because one of them needed chemo etc.
Now you really disappointed me. You mean to say, with all that natural beauty, clean air, somewhat clean water (I’m guessing, it once was pristine), and all, chemo is needed. Cancer in Montana? Now I’m bummed.
A modest-sized one-story ultramodern house of stone (or brick) and glass inside and out, with spectacular views, sounds good to me. Climbing or descending stairs can get really annoying after a while, and with so many animals, I like to be able to see what they’re doing without having to bring in a search team. Going to on-line house plan sites has been an eye-opener, since houses such as I like are apparently completely out-of-fashion. Huge pseudo modern Miami Vice mansions of concrete and glass built entirely to impress (but looking very cheesy), or gitchy “traditional” McMansions (equally cheesy) seem to be the norm. The kind of stuff I like is usually listed under “retro,” but finding more than one plan on any given Web site hasn’t happened, and most of the plans I’ve found depict cheap, tawdry simulations of 1960 modern.
Don’t get me started on the house plans online. I swear they’re all the same house. In addition to the McMansions and Miami Vice mansions (good call!), there’s the country-ish McMansion, which looks like and overdone cape with extra gables added on (most fashionable is a fake gable within a gable). Hint: Don’t look at houses designed by the Donald A. Gardner group. YOu’ll pull your hair out.
I’ve seen the Gardner group plans, I think. Your warning is appropriate. If you’re familiar with the children’s movie “Nanny McPhee” (great movie), the scene of the trashy wannabe bride done up like a wedding cake, and everything that went with it, should strike a happy chord. Clearly, what some people find beautiful, others recognize as ridiculous. Putting a doohicky (sp?) on every inch of space is now considered “luxurious,” but when I was growing up, was considered the epitome of bad taste.
And you’re right: All the sites have the same houses. If I were an architect responsible for any of them, I’d be mortified.
You can find the houseplans you like at small town libraries and half-priced bookstores wich sell used books. You’ll have to tweak the plans a bit to reflect your personal taste- we met a man here at the Home and Garden show who specializes in that kind of thing; avoids the higher costs of hiring an architect.
Thanks.
Yup - we particularly said don’t even show us houses with stairs because this is the last one we want to buy. We have a full basement and we can always put quarters for someone to take care of us in our old age, but 1700 sq. ft on one floor is exactly right for us.
That’s what we have here. Three bedrooms (one’s used as an office/den) with about 1900 sf on the main level, plus another 1000 sf downstairs for a guest bedroom and bath, hobby room, and storage. We also could convert the downstairs for a live-in care provider in lieu of moving to progressive care.
“‘The big difference between this and the ’80s was when an acre of farmland dropped in value you could still produce income off it,’ he said. ‘Houses don’t produce income.’”
Sure they do. See there is this thing call a HELOC, commonly referred to as a Home Equity ATM.
Oh, wait, they don’t have those anymore?
Wow, oh well, what a shame……………
Houses have always produced income, always will.
It’s called “rent”.
Here in Flagstaff there are hundreds of empty houses that ain’t producing nothin. Sounds like it’s the same in Kansas too.
There are a few thousand here! (they are called flops, foreclosures and former hobbies)…
To many vacant houses ,which proves that a user demand wasn’t really fueling the boom in the last years . I wonder why the government doesn’t ask the builders to stop building in light of their ongoing contribution to over supply . All these players think its up to the taxpayers to bail out the FB’s ,but you don’t hear much about the idea of a “freeze on building “.
Builders certainly didn’t make prices go up. If they had that ability, they would be practicing it now. Indeed builders were responding to increased prices. When prices are high, you increase volume if possible, when they are lower you do other things.
Many empty houses produce toxic mold. Maybe a fungo-flipper can produce a profit from that.
I went to a seminar on mold, that a PI Attorney gave, and he said its a cottage industry, that most mold isn’t toxic.
Remember in your way back machine, those coolers our parents had in the window, the ones you added water or ice to the unit. They were loaded with mold, and we all lived. This Attorney had a list of examples of the hype. It was one interesting day.
My first little (old) house had mold in the corners and it never bothered me. Just looked like hell is all. Gee, I guess I should have sued myself anyway.
lol…I need that. Its Monday morning, and I can’t seem to get to work. Maybe after lunch…
Yes, but “rent” only turns into “economic rent” after all the costs are paid up.
Only economic rent matters. That’s what an investment is.
That home can grow crops, too. It might not be quite as legal as what was grown on the farmland, but it would be income. There’s also the Nevada variety of home-based business, maybe something for those budding entrepreneurs conveniently located near riverboat casinos.
“‘This is not Bank of Cahill. I can’t afford to just give this house away,’ he said.
wow. that’s funny for so many reasons………..
Yep that was my thought. At least (most) bankers have the business sense to know that it’s OK to sell something at a loss. I venture the Bank of Cahill will be doing that a bunch, if they haven’t already.
Bill in Carolina said
“Even more stupid was their apparent lack of understanding of the market, building 2-story houses on raised foundations (meaning lots of steps) for the retirees expected to move here.”
Its a major oversight during this bubble, that there are 78M Baby Boomers growing grey, and the real market will be one-story average sized homes to age in place in, imo. Those Del Webb 55+ pud’s aren’t going to cut it for most of the retirees.
Del Webb 55+ pud’s aren’t going to cut it for most of the retirees ??
I do not have numbers but I believe these developments have held up quite well given the difficult circumstances in the market…I have been watching a Pulte/Del Webb tract progress relatively well in the Manteca, Ca. market…
Thanks for that info, scdave. We saw a huge Del Webb 55+ community in NV that was sitting empty, overall. Maybe a combo of the timing and the state?
I am in commercial (shopping centers), so I try to keep my finger on the pulse.
I’m so glad I didn’t buy a house yet. I was so tempted over the recent years, but I’m so glad.
Reminds me of that old song by the Cream…I’m so glad, I’m so glad, I’m glad, I’m glad, I’m glad.
Heavy duty lyrics.
“…which had been in his family for three generations.”
more like IN the family for 2 generations and ON the family for 1 generation. that is after these 2 boneheads heloced it.
my wife has a house her father built. the land has been IN the family for 3 generations.
I would never (and i know she would never) consider leveraging it for financial gain. NEVER.
her father was a full time cop and a small scale custom home builder for many many years working 80 - 90 hours a week at times. i could never take advantage of his toil for my on gain. it makes me sick to think that others would.
Michael- that is honorable. That type of respect seems to have vanished in our society.
“Last year, 504 homes sold in Junction City, with an average price $140,809 — which is out of reach for most soldiers. Crites said no one could build a quality home for less than $100,000 unless the land was free.”
Junction City math class:
Ok kids remember $100,000 = $140,809
“The troops came, about 5,500″
Junction City marketing class: 5,500 is the new 8,000
““Historically, Junction City has attracted 40 percent of the soldier population living outside of Fort Riley. That means the city could have reasonably expected to fill 3,600 new units. Problem: Junction City already has more than 6,000 units. but that is expected to climb by another 100 to 200 homes that are in various stages of construction.”
Junction City gym class.
Just keep swinging those hammers kids. Dont stop now, 1,2,3 1,2,3,
“Prices of new homes are falling because of an oversupply, real estate agents say.”
Junction City French class: Je n’ sais pas. C’est la vie.
“‘That is quite a bit of inventory,’ said Laurie Crites, president of the Junction City Board of Realtors. ‘I think it is overbuilt now.
Junction City stupidity class: Gather ’round kids Professor Crites is about to begin……………
Did anybody here see CNBC report the housing numbers? To me the numbers seemed about as bleak as possible. Over 10 months of inventory. Median below $200,000. Realtors say foreclosures are now going on MLS (they say that is not normal) and are going on the MLS at a faster pace. The downward slide is speeding up.
The lenders holding these properties are finding they can only hold their breath under water so long … After that they have to sell, and it is this group and this group alone which can and will lead the housing market back to it’s fundamentals.
Speaking of fundamentals, my wife and I went out looking at cars this weekend. We found prices way up and quality way down.
Very discouraging indeed!
Go used. There should be a great supply of flipper beemers and contractor trucks clogging up the used car lots soon.
why is that new ???
Realtors say foreclosures are now going on MLS (they say that is not normal) and are going on the MLS at a faster pace.
According to CNBC the banks usually sell foreclosed homes directly now they are going on the MLS because they can’t sell them.
adding 5% commission should help a bundle
NOT !
Would they be dumb enough to hire a real estate agency? Or, will they have (salaried) “agents” of their own, managing the sale of the properties; interfacing with the MLS, etc? If I had a few hundred properties to sell, I would certainly be looking for creative ways too save that 6%.
(About as bleak as possible…Realtors say foreclosures are now going on MLS (they say that is not normal) and are going on the MLS at a faster pace. The downward slide is speeding up.)
That’s good news. The faster prices come down, the faster the priced out can buy, or rent from investors at a price that provides a life. And we’ll need that savings given what is going on with the price of everything else.
Also, seeing the bank competition directly on MLS is going to aid in showing a seller the competition in a way that is harder to ignore.
True story from Tucson: Yesterday was a beautiful Sunday, and I took full advantage of it by going for a nice bike ride. Toward the end of the ride, I stopped to pick up some groceries at the store.
Who should I see at the cash register but a former neighbor. She and her husband decided that this place wasn’t to their liking, so they bought another house in a much hipper, more happening neighborhood. Only problem was that they didn’t sell the house they were living in first.
That house took something like nine months to sell, and I hear that the carrying of two mortgages put quite a strain on their finances. So much so, that she’s had to come out of retirement and take a cashiering job.
Well, enough backgrounder. Back to yesterday afternoon. She was behind the register, and she obviously wasn’t too happy about that. To me, she lamented that she had to be trapped inside on such a nice day.
The temptation to open The Troublemaker (my mouth) was overwhelming. But I kept it closed and locked. What I will say to you-all is that her job is keeping her off the streets and out of stupid real estate deals.
‘The temptation to open The Troublemaker (my mouth) was overwhelming.’
Slim! I’ve got one of those too! My Troublemaker would have opened right up and laughed loudly and heartily with such provocation, so good on ya for the incredible self control. Or did you just use duct tape over it? Because that does not count.
Well, I would’ve paid cash, and then My Troublemaker would’ve jingled the pennies and said, “I’m saving the pennies for a house after prices collapse.”
Best defense is a good offense. It’s fast, cheap, and out of control.
Good stuff. The equivalent of teen-age midnight baseketball for boomers
Lets introduce a program to save FBs from themselves.
That article from Iowa does a good job of explaining why Flyover Larry is dead wrong. It does not matter that IA is cheaper than CA or FL, what matters is the ability of the local economy to support its own prices - which it clearly cannot. “Non-Bubble” areas will likely suffer for far longer - even if the declines aren’t as heartstopping as those on the coasts. Kind of like how farmers had it tough for a decade prior to the Depression, while the cities were jazzing through the 20s.
Same thing for TX. It’s not cheap for the locals. Maybe for some Heloc-slinging loser from Long Beach CA but not for someone in Mesquite TX
$15/hr doesn’t go all that far these days.
The idea seemed simple enough. Buy a foreclosed home through a sheriff’s sale at a below-market price
The problem is that you’re not buying at a “below-market” price. You’re setting the new market price.
“During the past four years, The Star found, housing appreciation surged at double or triple the rate of inflation in almost one-fifth of area ZIP codes.”
They just never stop with the spin do they? During the past 4 years, San Diego is up (15%) quintuple the rate of inflation. The problem is, it’s down 15% (but actually 20% including the rate of inflation) in the past 2 years.
Isnt math amazing!!!
I like the quote from the lady who says she doesn’t understand how bankers can sleep at night knowing someone is losing their house because of them.
Uh . . . no, they did nothing but lend the money. You’re losing your house because of YOU.
My sister lives in rural Iowa. That is truly hell on earth there.
Yeah, that one caught me too. Like, what if depositors were told, sorry, you can’t have that money in your account, that money was loaned to a homeowner who didn’t make payments.
perhaps she should pay cash next time she buys a home so she doesnt have to deal with those pesky bankers.
after all, that’s why i dont commit crimes….’cause i hate dealing with those pesky lawyers…..see, it’s a winning strategy im telling ya
It’s always so interesting that FB don’t see the part they played in this housing mess. These FB borrowers seem to think that their fraud on the loan applications or their desire to buy something they couldn’t afford didn’t have any effect on the inflated prices .In fact, these self serving FB’s think that the society they live in owes them ,but they don’t owe anything to the society they live in . FB’s remind me of the type of people that throw trash along the highway thinking someone else should pick up their mess.
During my entire lifetime ,I have never purchase a house for more than I could afford (even if the bank would of let me ).The fact that these people think that they should make a profit on a house with out holding it for at least 5 years was another myth that was generated during the boom ,but under normal circumstances a 2 year holding period would net you a loss on real estate . I know that homes were marketed as short term easy money investments during the boom ,but that’s a high risk gamble ,and people/ buyers should of been alerted to the fact that real estate and financing can turn on a dime .The outright lies from the industry to sell homes were silly such as .
(1) If you don’t like the loan ,you can just refinance in 2 years
(2)You can’t afford not to buy because real estate always goes up .
(3)We are running out of land ,or supply of homes .
(4)The rich baby boomers will be dying to overpay for your flip.
(5) Let your house pay for your lifestyle . Use your equity to get what you want in life .
(6) I know a mortgage broker that can get you into this house that you will make a killing on .
Let us not forget that the FB’s in so many cases were sold on these false concepts and easy money was the big lure and it explains why FB’s took on more than they could chew . The fact that the real estate industry supply loans to these la la land borrowers was the greatest mistake . But ,horse out of the barn ,and I just got to stop bitching about it ,but I can see that a lot of powerful forces want me (a taxpayer) to bail out all these market makers and stupid FB’s. (rant off )
This is one reason the price of gold is over $900. Many banks DID lend the money and now, it IS gone.
Banking failures>FDIC fails>financial chaos>dollar plummets>gold soars
Coming to this blog has convinced me that I want to spend my income this year to get TOTALLY out of debt. I was saving for a home but now I’m done. I have $30K in student loans, and a $40K tax bill due for 2007 that is only partially paid, so that will be my sole priority. Credit cards, car, and other debts all paid off now.
I plan to sell all of my junk so that I can comfortably live in a studio for rent, and I will just save save save because I don’t see any investments making money for awhile, and I don’t want to be a part of the commodities bubble.
Bank failures are deflationary (because they result in less money supply) and should result in a falling price for gold. This is exactly what happened in the 1980’s. The bank failures of 1929 resulted in a pretty good spell of deflation too, although at that time the nominal price of gold was fixed.
The rising price of gold is not caused by the fear of bank failures, but by fear of the Fed’s attempts to stave off failures by creating inflation.
I’m not saying you are totally off, but after Nixon closed the gold window and the price of gold started going up (to the eventual ~$830-850 that it reached in the early 80’s) the Treasury Dept. started selling massive amounts of gold which had been held out of the market for years. I can’t claim to what significance but surely this had a downward effect on the price of gold.
As far as I know, this possibility doesn’t exist today.
That is the way it used to work. That’s what that heinous govmint intervention called FDIC insurance fixed.
well the problem isn’t the banks or the lady, its the Fed and TPTB.
Its going to funny to see what happens when the walk aways really happen. It will bring new meaning to the term “counter party risk”
Anyone see the note that US approves of IMF gold sales ? This means the Fed likely wants to buy gold at a lower price.
“she doesn’t understand how bankers can sleep at night knowing someone is losing their house because of them.”
They should sleep very well thank you. You were not the house ‘OWNER’, you were the ‘MORTGAGE RENTER’ and like all renters when you can’t afford the rent you are evicted without prejudice.
It took only a matter of months for Nusky and his wife to qualify for a loan to open their own bar. The Hamilton resident said he was surprised they were approved, since they already had a loan for $61,000 on their home.”
“‘I couldn’t believe we were financed $100,000, but it’s what we needed,’ he said.”
———————————-
The recession and home lending freeze will reveal how many mom ‘n pop businesses have been relying on HELOCs to stay afloat. Many answered the siren song of being your own boss by tapping home equity.
Everyone ’round here would want to know why there was a loan for $61,000 on a house that had been in the family for generations. Now it IS perfectly reasonable if that was because of one sibling buying the others out. But if that’s just a new truck….
Pronoun use - consider revising: ‘. . . someone might not have a home tomorrow because of themself.’
with all the foreclosures, i’ll even offer the plural: themselfs. What a nitwit this lady is. How about all those mortgage bankers who sleep at night knowing they PUT someone in their homes….oh right, that wouldnt count would it….cause it actually it is people’s own good fortune, hard work, lucky spirit, or good credit that put them in the home. Mortgage lenders only take homes away……’cause actually, mortgage lenders arent in the business of making loans, or collecting fees for loan creation. They are actually in the business of collecting homes and do in fact brag to all their frends whilst smoking big churchhills sitting in fine oak chairs at the yacht club about the poor suckers who they were able to swindle out of homes and kick into the street like empty spam cans.
Oh the humanity…….
“Within a few months, Tindall’s husband lost his job. They tried to work with the bank, she said, but soon received their first set of foreclosure papers. ‘I know it’s just business, but I don’t know how these (mortgage lenders) can go home at night and sleep knowing someone might not have a home tomorrow because of them,’ Tindall said.”
really!
me. yeah. i don’t know how these (mortgage holders) can go home at night and sleep knowing they are in effect “stealing” a house by not making the payment on it.
Well, go get a new job and beg the bank to re-write the loan because of new employment . Lenders never said that they promised to carry people during unemployment ,(that’s what savings and unemployment insurance is for ).
It’s a real problem that this society doesn’t have a good savings rate anymore for at the very least emergency job loss . The Lenders had no business putting people into property where the borrower didn’t have any saving accounts . In this day and age it’s even more important to require savings from a applicant who purchases a home because of the lack of employment security that seems to be present.Borrowers and Lenders alike were in la la land .
FHA and Hospital Mortgages : ( I didn’t know this until now)
http://portal.hud.gov/portal/page?_pageid=33,730189&_dad=portal&_schema=PORTAL
It’ll be there after you die too, Phyllis, unless you face reality and price lower.
I took a look at the CountryWide website last night which lists over 15,000 foreclosures in California they are attempting to sell. Quite an education. Several things lept out at me as I scanned the prices and locations.
#1. A lot of the foreclosures were in “clusters”. I suspect that whoever was writing up mortgage applications in those cluster areas, were making fortunes by getting the realtorwhores and the appraisers to inflate prices. You could almost picture the mortgage brokers searching the freeway underpasses looking for drunks and shouting, “Anyone under here wanna buy a house!? Why live in a cardboard box when you can live in a $200,000….I mean a $350,000 house!” The “clusters” were in areas where there isn’t a snowballs chance in hell that the wage structure could support a $3,000 a month mortgage. Places like Stockton and Sacramento and Moreno Valley and Merced and…..well, I’m sure you get the picture. Anyway, it’s going to take some hefty price drops and it’s going to be a looooong while before CountryWide’s inventory is reduced.
#2. I was also struck by the price variations and the reductions. CountryWide lists the price which, I suppose, they think a property is worth OR what they are on the hook for. In most cases that price is scratched out and they put a price they will accept. The interesting part was, that in some places the initial asking price on, say, a $500,000 property has been dropped to $400,000. However, in some places, a property initially listed at $500,000, has only been reduced to $490,000. It’s probably a case of location, location, location but it seems CountryWide is desperate to get rid of these p.o.s which are located in areas which only a few years ago was productive farmland and are now a sea of foreclosed properties.
#3. Whoever is carrying the paper on these properties sure is taking a financial shafting. 15,000 properties, empty and decaying, being stripped of fittings and vandalized, does not make for an investment which is growing in value.
#4. If anyone has any doubts about the dire straights the property market is in and is dumb enough to be actually thinking of buying property (in California at least) at this stage of the game, just a quick glance at CountryWide’s website will make them change their mind. I stick to my prediction. The property market will not hit bottom for several years.
Why will it bottom out ? Peak Oil/Global Warming/Debt Bubble will put the kebosh on the economy. So we are heading for serious rough times. With gas prices/food prices through the roof and wages falling rents have to fall. The house price/rent for cash flow will drop for the foreseeable future.
The only thing that stops house prices from falling is when rental are cash flow positive and better provide a healthy return. At best maybe in 10 years but by then the retiring baby boomer problem will be in full swing. I don’t see a bottom.
Mike,
Where do you see 15,000 listings for Countrywide in California? I only see just under 4300 in CA. What site are you using?
Thanks!
Wilson
Probably a typo - - http://countrywide-foreclosures.blogspot.com/
It looks like 15K is the total number, nationwide.
That site surprised me. NY state has only 127 on that listing, relative to population that’s almost noise in the data. I like to think Spitzer scared countrywide enough that they were not nearly as aggressive here over the last few years. Someone must have made the bad loans tho in NY state. Anyone happen to know who, or how to find out?
I’ve got two Countrywide “owned” properties (repos) in my small SoUtah town. Both were built on “spec’ last year and both failed to sell.
They are marked with a small piece of paper on the window that says “no tresspassing with the “owner” listed as Countrywide finance.
Neither one of these properties are listed in the Utah section of REO’s on the Countrywide site.
So many properties they can’t keep track of them all.
So, I randomly surveyed the listings for NY, all existing homes. Maybe new construction like the two in your town isn’t on countrywide’s site yet.
Sorry. Was a typo but remember, these are only CountryWide’s numbers. There are scores and scores and scores of other lenders, maybe smaller than CountryWide but who have foreclosures on their books.
“Lenders loosened their requirements and standards for loans, and ‘borrowers were able to qualify for loans that, in hindsight, probably shouldn’t have been made,’ Rogers said.”
Ya think?
Carol Gould, the city’s public relations director, promised expansion ‘beyond your imagination.’”
But I like to imagine trees, and prairie birds, and big cornfields and a farm or two, with some cows. I’d even imagine goats, although I mistrust them. I DON’T like to imagine a ‘feverish construction atmosphere that would feel like the Wild, Wild West’. I wonder how much farm land got paved over and buried under craptastic McCrappy Crapbox subdivisions in Junction City?
Oh, wait, I also am presently enjoying imagining Carol Gould being eaten alive by Bigfoot, out in a Kansas cornfield. Yes, I know he’d have to take a long bus trip, but he should make the sacrifice, since he’d be the best for this job. He could then go right on and also eat 73-year old Ms. Phyllis Stydnicki while he’s at it. Right there in her front yard, next to her ‘For Sale’ sign.
Ok, why do you mistrust goats?? They can’t be as conniving as cats (disclaimer: I have 2).
If you want to email me a mailing addy, I have three cd’s of material from a trading seminar I can send you. They’re pretty good.
So, Tx, you and Blano trading goats?? Whatupwiththat?
This is one of the better articles I’ve read here because it comes to show that the saturation of the housing bubble was and is now indeed part of every community, state, town, and even rural areas outside. I think it is too easy for people to simply assume that where they live ” Isn’t Florida or California” when in fact the exact same cause and effect scenarios are playing out before them. In fact, as the series of stories indicate above, some of these seemingly “cheap” areas could very well be hit harder than some of the more expensive regions.
I have warned friends here in San Diego, not to buy houses at foreclosure auctions - first, houses are off peak by only 15 to 20%, and the housing bubble here was worse than most parts of the country. . .houses bought in November at 20% off from peak are already down by another 5% or worse. Folks - don’t try to catch a falling knife - if you want to live in a place for 10 years - ok, but we are WAY to early in this cycle for trying to flip.
Mark
Tell them to look at the CountryWide website and log onto the foreclosure section. The areas are in alphabetical order so tell them to scan down to San Diego. Many, many properties and prices still dropping there.
It’s still, “NOT A GOOD TIME TO BUY EVEN THOUGH INTEREST RATES ARE LOW.”
Also, remember to tell them this is only CountryWide’s foreclosures! There are scores of other lenders in just as much sh*t as CountryWide and added to that we are about to get another tsunami of foreclosures because of resets.
If your friends buy now they are going to be VERY sorry. They need to wait AT LEAST 2 years.
One more thing about buying foreclosed property (outside of that fact that there can be some serious risks like liens) and that is, if they have been attending any of these scam foreclosure seminars, they should ask themselves one question: “If there is so much easy money to be made in buying foreclosures, why aren’t the people holding the seminars doing it instead of selling seminars?”
I always get a laugh when I hear about “seminars” be they buying foreclosed properties or trading stocks or anything else. If it’s such a great way to make money, hard or easy, then why are these guys offering to show you how?! I’ll tell you why. They make more money writing books and holding seminars. As a “wanna-be day-trader (lol)”, it’s taken me close to 10 years to work out a stock trading system with a high success rate and I wouldn’t show anyone how it works. Ever heard of a gold miner showing you a map of where his gold mine is located? Suckers are born every minute.
Anyone fooling around buying or selling property over the next few years is stepping into uncharted territory for one reason. This is NOT, underline NOT, your usual mild to medium size bust. This is bigger than the tech stock boom and bust. However, it’s worse because people are maxed out financially and not just getting their credit cards torn up but losing their homes. Inflation is eating disposable income if they have any left, a recession is in the works, etc. There is a report on CNN news website today that states Americans are still sucking money out of their credit cards at an alarming rate. Credit card debt is up 315% since 1989 and very few are paying on time. Bad sign. In other words, if the consumer (America’s pillar of economic vitality) appears to be holding up, it’s only because they are living off their credit cards. That’s probably the next “bust” by the way.
I know I sound like Chicken Little but I’ve been around for a long time and I’ve never seen so many bad omens like I see now.
My former landlady bought a property (with two houses on it) in a foreclosure auction. Although she was a pretty handy gal, it took her many years to fix those houses up. Seems that the previous owner wasn’t into repairing and maintaining things.
Have your friends watch the video on cnbc today….its kinda easy to understand…..
http://www.cnbc.com/id/23337997
The video is under the article.Its been discussed here but no one posted the link.Im sure most here know where to find it.If you have friends that are wanting to buy they might want to see this first.
side bubble
http://biz.yahoo.com/ap/080225/getty_images_sale.html
images are more or less free
My Hometown made the Housing Bubble Blog !!!! Unbelievable !!!
I’m from Middletown, Ohio, and know Trenton and Hamilton very well. I live just outside the area even today.
Middletown is a company town, home of AK steel (formerly Armco Steel), and is home to one of the largest steel plants in the world. Most of the steel in automobiles roles out of that place.
The city began to go downhill in the mid 1970s when employment at Armco peaked. Since all local jobs are tied to it, all the youth have moved out of the city over the pat 2 decades. The city is now a time capsel of 1970s midwest (not a pretty site these days).
The Union and the company went through a year-long lock-out recently, which ended about 12 months ago. According to a good friend of mine who is a local realtor, the union workers survived by taking out HELOCs. When they returned to work, they found they could not keep up on their payments, and the foreclosure rate began to soar.
Very sad picture of a city that up until 1975 was a nice place to grow up in. Most of my family worked in Dayton, so we did not have many local ties to the steel mill. But many of my friends did, and a couple of my cousins married steel mill workers.
House Flipping is like singing on American Idol… don’t do it unless you’re professional material or ready to be embarrassed big-time! Professional flippers have the resources, financial and human, to make it through downturns by capitalizing on their lower material margins, speed and established contacts. Even so… I betcha those people who buy “ugly houses”, aren’t offering quite as much as they did a few years ago.
Diana Olick: RealtyCheck CNBC was just on saying even though the buyer and seller agree to a price the bank is coming back and reappraising the price lower,and the seller at that point has to make another decision…
Thats good news…….
Here is the link…..
http://www.cnbc.com/id/23337997
Ohio- Holy Toledo! I did some googling this WE and was saddened and amazed to see how many “free” to 10K shacks are bank-owned and foreclosed in North Toledo. It scares me to see whole neighborhoods break down like that. I know someone who is buying up said shacks, doing quick rehabs and renting to Section 8 tenants. Right in the same area of as the 2005 riots. What’s going to happen to these vast tracts in the outlying suburbs, inner-city ghettos, will they become ghost towns? Or revert back to the 1970’s-style hoods of Compton where you would be shot on sight- just for breathing? Bulldozed? It’s sickening. I can’t find histoircal precident for this kind of economic breakdown. Half of California’s sales were foreclosures last month? Seems like our country has been hawked at the Big Bank Pawn Shop.
Hasn’t been this depressing since the Depression?
Hello 1929, welcome to 2009
Did anyone else hear the interview with Tom McClintock (California) on KFI640 am radio last Saturday? He said that the budget shortfall will probably be more like 20 billion dollars for California this year, and that for the first time he had heard that California may have to default on some of its obligations.
Sounds like CA has some major problems…
I wonder if Ahnold is still glad he won the election.
I recall that in the 80’s that Cali was also broke and had to pay its bills with “warrants” as opposed to checks. Backs back then honored the “warrants” (basically IOUs that paid interest) as if they were checks. Of course now banks are in the crapper as well. Maybe the governator can sell Yosemite to Disney (oh wait, that belongs to the Feds).
Well, that’s what happens when a once thriving economy is turned into a 3rd world economy. Other states should heed this lesson.
Expect people to have to show SS numbers for all public assistance soon. Finally.
Association of Realtors reported existing homes fell less than forecast. Some experts interpreted this as a housing market on the verge of bottoming out with a rebound expected to start toward the end of this year.
Where did these people go to school? How in the hell do we rebound with this kind of inventory. NAR ought to be banned for a year with comments like this.
“The past five months’ sales activity has been very soft, but stable,” said Lawrence Yun, the real-estate agents group’s chief economist.
Lawrence Yun, stop your cheerleading and tell the truth to the public for a change!
Sales have not been stable and in fact, most realtors are losing 75% of there sales because most of their clients cannot qualify for the loan! Sales are down because the NAR and most realtors as a whole, helped drive up the prices beyond most incomes. Sure there are a few good sales, but overall the market is just way too overpriced and needs to drop further. Until prices hit 2000 levels, your not going to get much activity.
“‘It’s not like this is my only house. I have four mortgage payments to pay plus my business to run,’ he said. ‘I don’t know how long I can keep this up.
I know how long you can keep this up, until the bank takes all four properties away from this idiot who thought he could corner the market and force people to pay the high prices so he could make a fast buck.
Now his greed will turn into financial ruin!
Has he ever considered renting the place out? Of course, then he’d have to pay taxes on that income.
I was under the impression that you have to pay taxes on the profits of a real estate sale. Wouldn’t that mean that you could also write off any losses, in the same way you can write off capital losses?