Local Market Observations!
What do you see in your housing market this weekend? Speculation? “A dream chance of owning a brand new condominium in the heart of Manhattan has turned into a nightmare for dozens of Irish-based investors who signed contracts to purchase apartments in a new development on the East Side two years ago, only to be recently informed that the entire building was sold to New York University.”
“But now, the Irish investors who signed contracts to buy an apartment sight unseen have been left bitterly disappointed. ‘I’m still stunned over what’s happened because it is so grossly unfair,’ one Irish purchaser. ‘We signed our contracts and handed over our money in complete good faith, and this is what happens. I know that real estate dealings can be tough, but this just isn’t right.’”
“The booming seller’s market is becoming a buyer’s market as it normalizes from an estimated 248,000 Hurricane Katrina evacuees…that deluged the Baton Rouge area in September 2005, buying just about anything sight unseen with a roof or slab at full price or higher.”
“It’s a ‘buyer-seller market’ now, says Judy Burkett, president-elect of the Louisiana Realtors Association. ‘You’ve got to really price that house close to market. We price our houses pretty much what they are going to go for. The prices are not inflated. I don’t think there’s a bubble here.’”
Complaining sellers? “Michigan’s real estate market has been in a slump for the past few years because of a number of reasons. ‘The complaint of home sellers is that the prices and the values of their homes have decreased,’ said Realtor Jean Watts in Ann Arbor. ‘Also a complaint of home sellers is that buyers want too much. They want the seller to do everything.’”
Inventory problems? “Staggering new numbers show 10 North Texas counties reporting a foreclosure increase in 2008. Five of the 10 are up more than 20%. Compared to this time last year, foreclosures are up 42% in Kaufman County, 38% in Denton County, 27% in Tarrant County and 15% in Dallas.”
“And as the foreclosures rise in the Metroplex, so is another problem: thieves preying on the misfortune of others. When realtor Ann Stewart arrived at a foreclosed house in Hurst, she was flabbergasted. Just months ago the home listed for $990,000. Now that thieves have walked off with everything including the kitchen sink, it’s listed at about $500,000.”
“‘You could come into a home like this and conceivably have to spend $100,000 to replace what they’ve taken,’ Stewart explained.”
Failed projects? “About three years ago, developer Wayne Colmer said the demand for dozens of his newly built Morro Bay homes far exceeded his supply. Now, the part-time Morro Bay resident said construction of his latest project—the Black Hill Villas, approved by the California Coastal Commission earlier this month— will be on standby indefinitely until the housing market improves.”
“‘We hope to continue building in SLO County,’ Colmer said. ‘But right now we won’t see anything good with Black Hill Villas.’”
Housing bubble spillover? “Marin’s cooling real estate market spells trouble for the College of Marin and other schools whose budgets depend on local property taxes. ‘Next year will be the last of our marginally good years,’ said Al Harrison, vice president of operations at the college. ‘The 2009-10 school year will be the beginning of our troubles.’”
“‘Nobody is unaware how housing prices nationwide and a lack of confidence in our monetary policy have put us at risk locally,’ said Trustee Philip Kranenburg. ‘We have to put our financial house in order.’”
“‘I really hope I’m wrong,’ Harrison said. ‘I’ve never lost sleep since working for the College of Marin. But I’ve begun buying sleeping tablets, because I think I’m going to start losing sleep this year.’”
What I see in Folsom, CA is that houses are not selling. No one is willing to catch the falling knife but there are still very few so called investors who are trying to find bargain but some of those did the same thing in 2006 and prices have fallen atleast 30% since then. I see lot of desperation among sellers and lots of frustration among realtors as I am receiving requests for referrels in response to my earlier emails to them when I questioned their optimiss bout the housing market last year.
Wait for those FB’s to all walk away then the banks will be selling them for half price to a new round of knife catchers, who in turn will walk away.
I remember when Folsom was only kown for it’s prison. no one actually WANTED to live in Folsom; it was a PRISON town for gods sake!
then, back in the 80’s my friend talked me into helping him work on a large house in Folsom, set on a few acres, painting,sanding, misc stuff. the house getting built belonged to some major league ballplayer, and we were definately in awe at the size of the project. nowadays its common for such houses, in fact, expected.
the only annoyance was his snotty yuppie-type wife who came out to the jobsite daily and started each visit with ” I have a concern ….” and started kvetching to the foreman about any goldarn thing she disliked. ok sure, yer paying fer the house, but jeezuz lady, yer money doesn’t entitle you to browbeat the help. a simple request & poilteness goes much farther.
(to this day when/if I hear that word “concern” I have flashbacks that set my teeth on edge)
Ahhh, memories.
I was around for the opening of the 2nd bridge across the American River.
My neighbor told me that what is now the DMV office, used to be the only grocery store in town. He must have known something because he sold his house - exact same floor plan and model next door to mine - for $150K more than mine. We both moved in within a month of each other, he just hit the exact top of the market when he sold about a year and half after I sold out.
I bet there’s rich folks eating in a fancy dining car
They’re probably drinkin’ coffee and smoking big cigars.
Well I know I had it coming, I know I can’t be free
But those people keep a movin’
And that’s what tortures me…
I’m stuck in Folsum Prison…
I believe I heard you sing this, tunefully, at the time, through the ether. I was kayaking, skimming along over the waves, because I had taken advantage of a momentary sunniness. Those lying weatherman predicted all over rain, but I know better than to trust them.
In this way WA is much more annoying than UT. See, in UT it’s either bright and hotter than Satan’s kitchen outside, or it’s bright, and colder than, um, I guess Satan’s stainless steel fridge outside. It’s not too difficult to plan for conditions. Here in WA is way more tricky.
Right this very minute it’s raining, but it won’t last long, never does, as you well know. And it may be another month or two before we get more…
And tomorrow is supposed to be in the low 60s, perfect for desert kayaking, which is like Olympia kayaking, but without the water and kayak and whatever you call those oar things - um, oars? I’m going to go desert kayak on the San Rafael Reef - no sharks, neither, well, maybe petrified sharks teeth, which I have found there, fossilized clams and sponges, too.
The winds of change have been blowing hard in el lay this weekend…
You don’t need a weatherman to tell you
You’re back, Lad?
Just saw a less than one year old home in Folsom go for $137/sqft, good comp info for those of you shopping in that area.
“‘I really hope I’m wrong,’ Harrison said. ‘I’ve never lost sleep since working for the College of Marin. But I’ve begun buying sleeping tablets, because I think I’m going to start losing sleep this year.’”
So, in like, case lots? Pallet loads of sleeping pills? I greatly approve of preparedness, but that might be going overboard. On the other hand, then he’ll likely have enough to offer to all his colleagues, just pass them out like Tic-tacs, little bowlfuls on his desk, situations like that.
There is more than one reason to stock up on sleeping pills.
Diagonal wrist slits in a warm water bath is the preferred way, no?
Down the road, not across the street. And I’d make the water a little hotter than just warm. It takes a while and you wouldn’t want to be chilly before you passed out.
‘…and you wouldn’t want to be chilly before you passed out.’
Because comfort is paramount, even when you’re dying.
death by jealous husband. (in my 90’s of course)
“Diagonal wrist slits in a warm water bath is the preferred way, no?”
Eeeeyoooo!! The blood!!!
K.I.S.S. (Keep It Simple Suicide) checklist:
1 bottle of tequila (or equivalent beverage)
1 six-pack of beer
1 pack of smokes or a good cigar (weed optional)
1 mix CD of favorite tunes
start up car
leave garage door closed
sweet dreams . . . .
why not go out making an impact? I’d rob a bank of a large sum, then stash it somewhere on my getaway route with the exact location only given to someone trustworthy,with instructions to NOT touch it for awhile, and then no large single purchases.
that way no matter what happend to me the loot would at least be safe, while I did a ” Falling Down ” death-by-cop; armed with my squirt gun.
no need/desire to hurt any cops. they have a tough enough job dealing wth the real scumbags.
Oh for pete’s sake, I’m tired of hearing about folks killing themselves and not having the common decency to take out a few of the assh*les that created this mess in the first place.
How about having the balls to take down David Rockefeller and some of his cronies or barring that insight, a few of the local moneychangers that have spent the past several years defrauding the public? If someone has the willingness to kill themselves they ought at least have the sack to walk into the boardroom of Goldman Sacks, for instance, and take that crowd of scumbags out in a blaze of glory.
Start thinking about this in a way that makes your death a contribution to society as a whole.
Note to Feds, just kidding.
‘I’d rob a bank of a large sum, then stash it somewhere on my getaway route with the exact location only given to someone trustworthy,with instructions to NOT touch it for awhile, and then no large single purchases.
Oh, umm, aqius, so you know–I’m very super dooper trustworthy.
I’m sure the goldistas would tell you to hit the gym for a while before your caper on then skip the cash and go right for the gold!
“Marin’s cooling real estate market spells trouble for the College of Marin and other schools whose budgets depend on local property taxes. ‘Next year will be the last of our marginally good years,’ said Al Harrison, vice president of operations at the college. ‘The 2009-10 school year will be the beginning of our troubles.’”
That sounds about right. Prop 13 slows the increases when prices are rising and slows the decreases when prices are falling. There’s also a lag of not quite a year between when properties are appraised and taxes are due which also delays tax impacts for rising/falling markets.
Government services funded through sales and incomes taxes will get hit faster and harder.
? since rates are so slow to go up, I would think they would continue to go up even in a down market. Eg. my mom’s place in Fresno is on the rolls @ ~$100K, while it could sell for ~3x multiples of that.
I believe the rate of increase is 2%, so that’s ~40 years of increases baked into the cake unless prices really collapse back to 1999 or so.
if they don’t carry a gun or fire hook- who needs em
The Flagstaff council has a proposal to cut impact fees in half, to about $7k. Also, I hear things are getting bad in the Verde Valley.
anybody know of a bubble blog or information about north carolina? is there a bubble there too? any info would be greatly appreciated. thanks - liz
Check yesterday’s articles. There’s a few from N.C.. Not looking any better there.
I would say the North Carolina mountains saw a bubble. There was a huge influx of money from Atlanta and Florida. I know somebody that still owns in Highlands. He said the high end is still moving but the low end is completely dead.
Raleigh Durham is special so there can be no bubble there. They have the RTC and the colleges. That can justify any amount of $500,000 homes.
Charlotte is being turned into suburbia hell. Is there a bubble? They were awfully dependent upon banking and relocating Yankees. Those are two things I wouldn’t want to be underpinning my economy as gridlock becomes commonplace throughout the system.
charlotte is in a bubble. Don’t believe the hype that prices are up 2% yoy. Whats happening is that builders have raised prices 2 to 3%, but have tossed in another 4 to 5% worth of upgrades as standard features and are giving 15 to 20k in incentices instead of 5 to 8 like back in 05.
It’s mostly new houses selling. Resales are hammere since the cost of a new house shows an increse of 2%, but in reality it’s down about 8 to 10%. Some builders are also tossing in 7k or more for closing cost
ROFLMAO.
Gasp. Can’t breathe. Stomach hurting. Tears streaming.
Stop, Ben, stop!
The businessman… offered a full refund, plus an amount of interest… However, he believes that the interest will not account for the financial appreciation that the apartment would have realized since the start of 2006. Though most parts of the U.S. have been affected by a downturn in the housing market, New York City real estate values continue to rise.
“If I had known about this I could have bought something someplace else,” the businessman adds. “To buy a comparable apartment now will cost much more money.”
You don’t get out much, do you?
Just wait until the full impact of the crash on Wall Street hits the gangsters. Prices in NYC will crash just like everywhere else. And I hope the crash takes a lot of gangsters with it.
Happened last time. Will happen again.
I know this building. We walked by it last week. That is all for NYU? NYU is out of control. It would be nice if somebody reined in that beast. What happens if that fine institution experiences problems pulling in students at $50,000 per year? I don’t know the answer but I would love to find out.
Do we have a huge higher education bubble in this country?
Indeed we do…and a bubble in private elementary/high schools as well. Many people financed private school tuitions with 2nds & HELOCs and since they are quickly evaporating, many of these schools will have difficulties with admissions/enrollments and finances sooner than they’ve planned. Add to that the weak economy and you have a recipe for some schools closing due to fewer students. It will be ugly in the private school world for the next 3-5 years at least.
Not as much an education bubble as a credit bubble to pay for education.
A lot of people are going to be finding out that they have taken on way too much debt for a worthless degree. And student loans are not dischargeable in bankruptcy.
Oh, the humanity!
“Not as much an education bubble as a credit bubble to pay for education.”
Yes. You are so right.
The day I paid off my student loan was the best. day. ever. I saved about $18,000 in future interest, too. When I paid it, the bank teller congratulated me and then said, very sadly, “I’m never going to pay mine off”.
Student loans are the gateway drug to a credit lifestyle. Many graduates just get used to the idea of paying off the minimum on a big debt, and get used to large debt as a regular part of life. So what’s another pair of $300 jeans on that $70,000 tab, anyway?
Allowing 18 year olds take on thousands of dollars in debt for a liberal arts degree is sort of evil, actually. A lot of graduates don’t even have a practical skill!
Oh, but they don’t need a practical skill, right? I mean, we sent all our jobs making actual stuff overseas, so the “idea” jobs could stay here, right? Right?
That liberal arts degree proves that they can read and write well, and think critically, and that’s something that McDonald’s is really looking for in employees.
“That liberal arts degree proves that they can read and write well, and think critically, and that’s something that McDonald’s is really looking for in employees”
Outside of a few fields, most people 10 years out of college are working in an area that has nothing to do with their degree. I head up an IT staff in a small company and not one of them, including me, has a degree in anything remotely related to IT. Give me people who can read, write, and think, and if they have an aptitude for the job I can teach them the rest.
Student loan? Bank teller? Am I missing something?
The bank that held my student loan was not my regular bank. I took a money order from my regular bank and walked over to the loan-holding bank and handed over a payment for my loan balance (from my savings).
We have diploma inflation right now. More and more jobs that as recently as 10 years ago that could be done with someone who had a high school diploma now require a college degree. At my company, more and more jobs that only required a BBA/BS now require a Master’s degree. I imagine another 10 years, Ph.d’s will be required.
If colleges were smart, they would invent a degree beyond Ph.d and charge extra for it and give several to Fortune 500 CEOs after an intensive 2 week “executive” program.
They already do.
It’s called a “Master’s Program” for people who didn’t have a Bachelor’s Degree in that field (usually something technical like Financial Mathematics or Computer Science, etc.)
It’s a total snow job.
Who’d hire these people when you can get a smart undergrad from MIT or Caltech for cheaper?
However, they get a rubber stamp, and the university rakes in millions.
Skroodle: They already do: it’s called a post-doc (well, not a degree officially)
I have a friend who received a loan application along with her daughter’s preschool admittance letter in LA.
Absolutely enormous. There was a story on NPR one morning this week about lenders pulling back on private loans. They are starting with schools that have low graduation rates. Since much “non-graduation” isn’t academic flunking out, but is caused by money problems, that will create a classic self-reinforcing spiral. I imagine after a while the lenders will also pull back on schools that have low job placement rates, at least for schools that are supposed to be job training rather than general education - look for culinary schools to start going belly up.
I am certain there is a higher-education credit bubble and I am sure that I will eventually be let go in my position because of it. I work at a UC campus in an administrative position that is great, lots of perquisites, interesting work, great pay, and a chance to make use of my skills learned in my doctorate education. But it’s not an essential position and when our enrollments inevitably drop because of the credit tightening, we’ll have to consider where to cut. Good thing I have some money saved. I also could pay off my student loans if I wanted to, but the cash on hand is too valuable to me. But I keep telling myself if I ever want a new car or something big, I’m going to blow out the student loans first.
I just couldn’t bear paying the bank more on my loans than they were paying me on my savings
However, knowing that your net worth isn’t negative is a big part of the relief, isn’t it CCC? Whether you’ve handed the cash over or not.
“Marin’s cooling real estate market spells trouble for the College of Marin and other schools whose budgets depend on local property taxes.”
Others on this blog have said that colleges will do well during this recession, but to me, the jury is out. Here’s one reason - their tax subsidies are falling. Another is that people won’t have the money for tuition and living expenses, and the part-time student-type jobs will become sought after by non-students also. The local community colleges that also teach things like photography and yoga will see declining enrollments in classes that were their bread and butter, as they attracted adult learners who were just looking to study something fun, not get a degree.
I’m thinking in particular of Colorado Mountain College in W. Colorado, with 10 or 12 campuses around the state. I used to teach there - a two-year community college. A lot of their money comes from local adults taking classes of interest (non-degree). As the economy tanks, this will affect the college. They employed about 300 plus full-time support people (admin) when I was there, plus a large number of profs, as well as support positions and adjunct profs. They contribute a lot to the local economy in the way of facilities jobs, teaching jobs, admin and support jobs, and advertising and print matter jobs.
We’re going to see this thing affect things we never dreamt it would affect.
“We’re going to see this thing affect things we never dreamt it would affect.”
This is the bit that’s fascinating, but a little bit frightening. You get the scent of smoke in the woods, don’t you?
I had mentioned in an earlier thread that Valuline expected DeVry colleges to do well, due to a predicted recession. They expect people to retrain to find jobs. But I think DeVry is more practical, not like a photography course someone might take part-time for fun.
The main thing is that there are too many people in the business of selling things, and not enough in the business of making things.
This is a bit OT, but I am finding that I want to buy a few high-quality things and not a whole bunch of cheap things. I cannot tell if it’s a social trend I am tapping into, or just getting older, though. Also, I am buying local whenever possible, even if it costs more. I want to support the people making things where I am.
“This is a bit OT, but I am finding that I want to buy a few high-quality things and not a whole bunch of cheap things.”
Same here. I think it is an age thing.
One’s youth is spent in discovering who one is, thus a lot of money is spent during this discovery process buying lots of things in the search to unvieling one’s identity, of answering the question “Who am I?” .
After this discovery process is completed, and the answer is obtained, he/she can settle down and focus on purchasing quality goods that match one’s identity needs.
Of course JMHO.
“One’s youth is spent in discovering who one is, thus a lot of money is spent during this discovery process buying lots of things in the search to unvieling one’s identity, of answering the question “Who am I?” .”
You’ve hit it - the answer to why Americans are in the trouble we’re in - we can’t grow up! A national identity crises!
Actually, the older I get, the less stuff I want, also. The search for simplicity. I’m wondering if when I hit 80 or 90 I’ll even want to own anything - house, car, shoes, clothes??? What a thought.
“One’s youth is spent in discovering who one is, thus a lot of money is spent during this discovery process buying lots of things in the search to unvieling one’s identity, of answering the question “Who am I?” .”
Yes, I think you’ve got it, combotechie.I guess it doesn’t help that the commodification of youth culture is such big business now. In the old days I think young people would have a flurry of buying things that were meant to last for a while, such as a set of silver, dishes, a trousseau. Or is that just nostalgic?
There’s a fantastic documentary series by the BBC called “The Century of the Self” (about the 20th century) which tracks the development of psychoanalysis and advertising. It manages to condemn 60s radicals, hippies, and liberal therapy culture at the same time as neoconservatives, the military industrial culture and contemporary corporate culture. I am bad at links, but it is available on google.video.
There is no smackdown like a British smackdown.
Youth culture: some youth are sinking (as always) - but because of student loans they are still in college?
I survey several job related web forums regularly. Since I am involved in video games, a lot of the posters are college aged or younger. I can pick out a lot of college (game trade schools, really) posters just by the post titles. Useless titles concerned with the posters angst and frustration, rather than concise informative messages intended to attract the best local expert with the most free time to give them free hand holding help.
Inside, lots of whining about how hard it is or how the book they are following is incomplete and outrageously assumes they read the tutorial chapters in order, and discussion of when their study project is due but almost no details worth mentioning describing the actual problem.
A lot of bright useful young people on these forums too, but you can’t pick them out from older people because they sound like adults.
Buying housing was once the in thing. We put an extra 5% into houses that in retrospect shouldn’t have been there. I am concerned that convincing everyone to buy higher education is another laudable goal with unintended consequences…
I wonder if in the olden days, if you were one of the people in college who wasn’t the usual “college type”, you were there because you were either rather smart or had been out in the real world long enough to be mature enough to take it seriously and work hard past your personal obstacles.
“I wonder if in the olden days, if you were one of the people in college who wasn’t the usual “college type”
Is this to me? If so, I have to confess to you that I was about as wise as a box of rocks when I was younger.
I studied very hard in high school and then, in my first year of University, I burned out and I lost direction. I dropped out, and immediately had to find a job. I worked for a couple of years before deciding on a new career goal, and when I returned to school, I went with a job in mind.
Although, it seemed like I was drifting off course when I dropped out, I realize in retrospect it was a lucky break. I know many people who went straight to University from high school, graduated with a general studies degree, and then had to go back, once they figured out what they wanted to actually *do*.
I don’t think most 18 year-olds are ready for college. 1 or 2 years off doing public service, working, or even travelling is better off. A student who a) appreciates being in school b) knows what they are doing and c) has real world experience gets so much more out of a degree.
“We’re going to see this thing affect things we never dreamt it would affect.”
Most of my dreams I have involve naked women running around on Gilligan’s Island, so you are probably right about that one. I hope this doesn’t change the way I dream.
‘Most of my dreams I have involve naked women running around on Gilligan’s Island, so you are probably right about that one.’
That’s odd. Mine, too!* Are yours wearing oven mitts? **
* That’s a joke.
** But that part’s not a joke.
Actually, I don’t dream about people much, either gender, or their clothing choices, for which I thank my lucky REMs.
I see lots more of people than I want to see when I’m awake, so I welcome my dreams as being refreshingly people-less.
Ginger, Mary Anne …. Ginger, Mary Anne ….
an archetypal dichotomy
Mary Ann, of course. We always liked the fact that she had the girl next door look and would always bring you a nice coconut cream pie. Little did we know that she would also bring some killer weed with her. She might be the perfect woman.
Don’t forget Mrs. Howell - I bet she owned a lot of real estate!
Ha!
“What I see in Folsom, CA is that houses are not selling.”
Same here in the Columbia Basin; it’s the financing. Only the folks with the best FICO scores can close a deal, and these high score folks know which way the RE market is headed.
I know a handy fellow who bought fixers the last five years, and turned them over after making them into homes again. He’s done moderately well for himself, and his buyers have been satisfied. However, his last fixer hasn’t sold; been on the market over six months! He’s not making money, and the mortgage is killing him since he also has another mortgage for the house he lives in. “Priced Reduced” hasn’t helped either. Without a formal education his opportunities are limited to fighting over the scraps with others sharing his dilemma. He’s a nice guy too. It’s sad to see the strain eat away at someone. inexorably, like cancer.
My friend in Glenwood Springs, Colorado, just got a contract on his one and only experiment in flipping. He’s very lucky. Only losing 20k. He’s hoping to be out of it. Now to see if they get the financing…
It makes absolutely no sense to flip (I hate the term) a house if it will not provide positive cash flow as a rental. Why doesn’t he at least rent the house out to get a little payment relief?
I don’t have a lot of pity for these flippers in trouble because they were as responsible as any party for the massive price run-up. They didn’t do the appropriate due diligence, and paid way too much for their “flips”. The damage these people can do with their borrowed money is mind blowing.
The bottom will hit in 2009 - for both realestate and stock market. For now, invest in yourself.
2009? Hmmm… how do you know?
The bottom will hit in 2009 - for both realestate and stock market. For now, invest in yourself.
The only thing correct above is that 2009 will be much worse than 2008 (for Wall St that is, for those of us still with jobs it’s fantastic), that’s baked in. But bottom? After the biggest credit bubble in the history of Sheeplekind? Question is how much more worse 2010 will be than 2009, and when the snowball stops gaining momentum. Think 4-8+ years. We’re only in the second or third inning, and this monster could go extra innings.
I agree with invest in yourself though…and precious metals, and a little bit of everything else…diversification includes investing in yourself (I assume you mean education vs. foolish entertainment).
Got diversified assets?
Bottom in 2009 is impossible. Maybe 2012.
The 2012 thing keeps coming up from several and that’s rather scary, not superstitious at all, but, the Mayans predicted the end of the world in 2012, I think 12/21/2012 to be precise.
Ok, you’ve timed.
The bottom to the real estate bubble will come on 12/21/20012.
20012????
Holy Moroni!!!
Holy Moroni!!!
Ahahaha! HA! *Snort*!
That’s funny.
Yeah, would’ve been funnier if that strange lightning bolt hadn’t come from nowhere and nearly got me right after I typed that…
Just wait till 2112!
“The bottom will hit in 2009 - for both realestate and stock market.”
I think you forgot to set your clock ahead last weekend. We are in 2008 right now. And I thought I drank too much.
8-18 months for a bottom in stock market is not off in my opinion. The liquidity crisis will be recovering by then, or they will all be under. Housing is another story. At least 3 years of declines and then flatlining. Although in two years anyone with cash will be able to name there price on some properties in about 2 years if the banks have been taken over.
Thanks, Tim. When I first saw your post (through bleary eyes), I thought it said “if the banks have taken them over,” not “if the banks have been taken over.”
“Marin’s cooling real estate market spells trouble ”
There will be a run on sushi as Patrick readers celebrate.
‘I’ve never lost sleep since working for the College of Marin. But I’ve begun buying sleeping tablets, because I think I’m going to start losing sleep this year.’”
I took a 1/4 sleep tab this week. Saved up since 9/11. Anxiety is real this week, and when your heart is pounding it keeps you from thinking positive thoughts. Also, I usually weigh 119 and now Im 116. Too spooked to eat. Somebody make me laugh.
I took a dump the other day that weighed 116. You need to eat.
Anorexia of the spirit.
No shopping, no driving, no saving, no eating, no more light breezes, just harsh reality.
Have you considered a laxative?
AnnGogh, try reading a nice book about the Anasazi (Man Corn - cannibalism) while listening to Tommy Emmanuel’s “Initiation” (thanks, Lad). It will make what’s going on now seem very mild.
The other thing you could try is making plans to change your situation - moving, new job, whatever works, so you’re in less worrisome circumstances.
Better stay in NYC where there are still plenty of old style toilets. You’d never clear something like that with the lo-flo type.
Aww, you need a hug Ann.
Bear Sterns crashing is shock and awe.
A lot of investors got reamed and it is very sad.
Today is the aftermath from months of bad news.
Housing news is the only bright star.
9/11 started with a crash, followed by the fallout.
Now we are starting with the fallout, and waiting for the crash.
Where is MaryAnne?
Who wants Jello?
Come to Utah if you want jello! It’s the official state food.
Utah that’s so sweet of you. Jello is the only solid food I can eat, that and bon bons. Thanks to you, the boy from NY and the Bantering Cub.
Welcome to the reverse Twin Towers. From board rooms to law firms, from main st to wall st. Make it go away so I can pay my income tax in peace.
I’m starting to wonder if it’s prudent to buy in my town of Lodi CA, even when prices come back to earth. This fair city is starting to feel the pain for it’s bond fueled spending escapades. One of the bonds causing the city grief was a 43 million dollar bond issued in 1999. Here’s a brief synopsis from the Lodi News Sentinel:
“The bond was first issued by the city in 1999 for $43 million to pay for expenses that current city officials say are somewhat unclear. (It will pay for the upgrades of the Killelea substation, but no other large-scale capital projects have been built with the money). The 1999 bond had a fixed interest rate for each bond holder, between 5 and 6 percent depending on the specifics of their individual bonds.
As interest rates dropped, the city refinanced the bond in 2002, this time gaining a variable interest rate that was then close to 1.5 percent.
It paid $3.6 million in refinancing costs.
The rate is now between 3 and 4 percent, but some jittery investors have demanded cash repayments. If those demands escalate, the city may need to embrace complex and potentially costly options.
— Source: City of Lodi”
The reason the investors are getting “jittery” is that the bond insurer is MBIA. As most on this site probably know, that doesn’t offer much assurance these days! So, as more investors demand payment, the city is having to scramble to come up with the money to repay them. Of course, that money comes at a bit more of a premium. A premium that the city can ill afford at this point.
So, it seems to me, we need to not only wait for affordable housing, but to seek communities that are solvent. Any suggestions would be greatly appreciated.
“Any suggestions would be greatly appreciated.”
Forget buying that Lodi spec-house for a couple of years. In the mean time, drive on over to “The Parachute Center” where Bill D. has a Twin Otter, and make some skydives!
“One of the bonds causing the city grief WAS a 43 million dollar bond issued in 1999.” Shoud be “One of the bonds causing the city grief IS a 43 million dollar bond issued in 1999.”
““And as the foreclosures rise in the Metroplex, so is another problem: thieves preying on the misfortune of others. When realtor Ann Stewart arrived at a foreclosed house in Hurst, she was flabbergasted. Just months ago the home listed for $990,000. Now that thieves have walked off with everything including the kitchen sink, it’s listed at about $500,000.””
More incentive for banks to sell REO fast!
First, the debtors walk.
Then, the granite countertops walk.
Oh, the humanity!
I call shenanigans! I have a friend that lives in Hurst. There are no houses worth $1 million, much less $500k in the city of Hurst. Maybe in nearby Colleyville, but not in Hurst. No way. Ziprealty doesn’t show anything about $400k.
So the place was listed at $990K, thieves stole a bunch of crap and now it’s listed at $500K, and it would take $100K to replace the crap the thieves stole. More fuzzy Realtor math w/ no follow-up from the MSM.
Oh, and I agree, unless the thieves stole the fully-functioning industrial-sized meth lab, there’s no way this house is worth even close to $500K in Hurst.
Those of us who live in the Metroplex know that theft of materials is not just limited to foreclosures. The question is, where are the materials winding up?
Sure, the thieves who make off with the copper and stainless steel probably first fence it through an unscrupulous scrap metal dealer, but what then? Does the dealer ship everything to new construction sites in, say, Orlando or Las Vegas? Does he ship them to the Manhattan offices of a commodities speculator to fill a futures contract? Where do you think all this stuff being stripped off foreclosed houses, church air conditioners, and power poles is going?
With apologies to Louis Armstrong …
I see homes for sale…..too many stale.
Loans are void…….schadenfreude
and I think to myself….what an interesting world.
I see sales going down….. yards turned brown
Agent’s cheers….turned to tears
And I think to myself …..what an interesting world.
Wishing prices on the way down…..so pretty ..in the sky
The fear on many faces…..of people ..who did buy
I see prudent shaking heads…..sayin.. what can they do
They’re really sayin……sucks to be you.
I hear FBs cry…… I watch them grow
They’ll learn much more…..than I told you so
And I think to myself …..what a wonderful world
Yes I think to myself …….what a wonderful world.
Turn it into a you tube video. Classic
Lou Minatti is the HBBer for that. Lou, where are ya man?
Poignant–wiping away tears!
Outstanding! The great Satchmo would be proud.
I’d love to see the 900K house in Hurst, Texas. That’s a redneck Nascar burb if I ever saw one.
Hurst is not redneck. It is actually a very small city, I think the population is only 40k. It is a very poor city. I don’t think there is a single non-ethnic grocery store in the city. Lately, there has been a large influx of Hispanics in the area and the crime rate is sky rocketing.
There is a small portion of Hurst that is in the Grapvine-Colleville school district, that would be the most desirable location in the city, but 900k? No way!
“With apologies to Louis Armstrong …”
I think he might be proud.
This collapse will be a long term benefit to society in general and young folks in particular. Dam, I will probably be singing that all day today.
Hmmm… this is more of ‘what I did on Thursday’ story. I posted it late Thrusday night but with most people being off-line for the night, I’ll put it up again.
Thursday 3/13 while Ben was posting the link to Traverse City (“The Record Eagle from Michigan. “Mark and Sandy Piotrowski flipped through a binder of foreclosed home listings as they rode in a packed tour bus bound for another bank-owned property. The Traverse City couple were among 16 potential homebuyers who boarded Sherry White’s Repo Buyers Bus Tour on a recent Saturday.”……) , I was enroute to a regional housing and planning conference in Traverse City. (For those who don’t know I live 25 miles west of Traverse in Leelanau County in a village with a median list price of $389,000, median incomes of $45,000 - and where $2,00,000 beach houses are slamming into foreclosure out in this county.)
One of the sessions was a review of the real estate market - presented by none other than the head of the realtors group known as TAAR. (I think I bit a hole in the side of my check trying to keep quiet.) That topic group was heavily attended by banker types and elected officials.
Anyway, the realtors’ pet economist got up any claimed that incomes are rising. Then the head honcho realtor got up and presented the data for YTY median sales prices (ie: 2005, 2006, 2007 etc) and then presented 2/2007 median sales price and the 2/2008 median sales price (which when you did the math, showed a 14.3% price drop YTY.) He wrapped up by saying that sales are off 43% BUT it is a great time to buy because interest rates are low.
Now came the time for questions. Not being shy and being right in front with my 115 lb Service Dog sprawled at my feet so I was hard to miss, I chuckled to myself and had some fun.
I started with the economist.
“You stated that incomes are rising. Are your numbers adjusted to for inflation based upon the CPI data?
I get a very pained look as he says “inflation-adjusted……oh……uh no they are not.”
Me: If the income numbers which you are relying are adjusted for inflation, does the data show that income is rising above the CPI rate, remaining flat or falling?
Him:….uh flat or falling - it depends. Sort of.
Me: Falling? By what %.
Him: Oh uh……. about 3% behind if inflation is included.
Me: So you told us that incomes are rising in the area but in fact they are not even keeping up with inflation so consumers have less DPI (aside to audience: “That means Disposable Personal Income”) ?
Him: well yes, that is true that incomes buy less now than they did 3 years ago because they are going up less than the rate of inflation.
(Chuckles in audience.)
Moving on the realtor:
Me: Now lets, pick on my county since we are the highest income of the 5 county area and that means $45,000 per household. I’m correct that your data showed the current median sales price in the 5 county area to be $159,000 right? BTW, median list price in my county is more like $389,000 – all those dratted 2nd home people so obviously prices are completely disconnected from incomes.
Him: Yes.
Me: If you can find more than 10% of houses in my county at that price or less, I will happily buy everyone of them (Note to HBBers: I know all the listings in this county so it was no risk). Now at $159,000 that is roughly 3.75 times income even for my county and for Benzie County which has a median of $37,000 it is over 4 times income. Historically to be affordable the price:: income ratio should not be more than 2.8-3 times income. Given that the prices are not aligned with the price:income ratio, isn’t it correct that to return to historical norms, they have to fall more?
Him: Well ummmm…yes, that was the rule but if there is any more of a drop it won’t be much and we are still doing better than the rest of the US. ( And I’m thinking ‘not much – try another 20-25% drop in the least expensive counties and far more than that in the pricier counties.)
Me: Lets go back to that data. Taking the 2/07 to 2/08 median prices, my calculations show a 14% price drop based upon your numbers. The Case-Schiller numbers just recently released showed a 10% decrease in prices nationwide - some areas were more, some were less. Since Case-Schiller is the gold standard for the Wall Street and the Mortgage Bankers Association, we can assume the data is valid. This area, by your data, has had a 14% YTY drop in prices - and you said that sales are off 43%. Case-Schiller showed around a 14% drop for many parts of CA which is one of the hardest hit areas in the US. How can we be better off than the rest of the US when we have had a price drop that is in line with CA and worse that the national rate?
Him: Well…..I don’t like to compare one month to another. The prices here are stable and should hold and even go up by the end of the year.
(Bankers in the audience snickering behind me.)
Me: One more question if that is okay. (Pause, he nods warily.) The funny money loans have gone south and the lending standards have returned to traditional criteria, and now in particular that Freddie/Fannies’ new guidelines required downpayment and larger down payments, and DTI (aside to audience ‘that means debt to income for the non-bankers here’) ratios are now being utilized, won’t that reduce the number of potential buyers - particularly in an area with incomes that fail to keep up with inflation - and thus depress prices further due to a lack of demand?
Him: I’d better let that go and hand the question over to some of our bankers who are here.
(Giggling behind me.)
More questions from audience and then in response to one, the realtor rep says “Well, the houses sold out of foreclosure or all these short sales do not reflect the market price and are what skewed the median price downwards.”
(Okay guys, I could NOT resist - just could not. It was too good to pass up. So on behalf of all of you, I piped up again.)
Me: Let me get this straight. You are saying that bank -owned houses sold to a willing buyer and short-sales sold by a willing seller to a willing buyer where the sellers just want to get it sold and not sit and wait for some mythical possible buyer to show up in 1, 2 or 3 years - and houses around here have routinely stayed on the market that long - are NOT the current market price because the seller wanted to sell at a price the buyer would pay - no matter what some fool had paid before?
Him:….. uh well, I mean those sales lowered the median price from the market price.
Me: Are we defining market price the same way? All the economics classes I took to get my fancy degree in economics defined ‘market price’ as the price a willing seller would take and a willing buyer would pay in an arm’s length transaction of an item, be it a house or a lawnmower. We ARE talking about the same definition aren’t we? I mean I don’t think my car dealer would really go for the idea of giving me what I paid for a car as a trade-in.
(Snorting and strangled laughter behind me)
Pet Economist jumps in: Oh …well yes, if you define the market price the way economists do, then I guess the market price would be whatever it actually sells for. I mean - you are right in the definition…..but ..um……
Realtor rep cuts him off: - I think we are out of time
They escape. The audience gets up and several bankers come up laughing and tell me that the whole thing was the funniest thing they had heard in years, was everything they had wanted to say to the realtors and how could I think so fast on the questioning. I just shrugged and said economics degree – law degree –litigator, its a walk in the park. The non-bankers (elected officials mostly) told me that the whole presentation was nothing but a rah-rah boost for the realtors and they had been disappointed as they had been expecting real data and information – but my relentless questioning and hard data made up for it and gave them the needed information. We then happily spent the lunch break with me expounding on what Case-Schiller is and what it means, and why the credit crunch will last longer than 2008 and laughed ourselves silly over the rah-rah ‘it’s a good time to buy’ nonsense.
AnnScott, I like your style.
That was priceless! Great job! Throw the lies right back in their faces. Love it.
Game-Set-Match to AnneScott! Well done indeed.
Now THAT is something I would like to see on you tube. I might even pay for it, if it were only available on itunes. I mean, think of the commute time that could make whirl by….
Ann Scott kicks ass and takes no prisoners…
SubKommander Dred
Holy Toledo! This was a book, not a post.
Madame, you are the distaff Peter Schiff.
(I mean that in the good way, not the whack tax protestor/libertarian permabear)
BEAUTIFUL!!!
What a shame you took the dark path and studied law Ann. You could have done some real good in the world.
Glad you guys found it amusing. I had a blast. When I got home, my husband sighed, shook his head and said “oh dear - at it again. Engaging in a battle of wits with unarmed men.”
Actually the law degree was one of several - there is also the economics degree; the degree in public administration with a specialty in planning and zoning and land use; and the degree in social, political and economic history with a specialty in the 1930s. (I picked up degrees inmy 20s like most people buy popcorn and mumsie and daddy paid the bills.)
The law degree did come in handy when I routed a developer at planning commission last month - that long written brief on why his application violated the zoning code did the 90% of it and tossing in the expert opinion on land use and planning clinched it.
Marry me!
I noticed a changing attitude here in Bozeman Montana, at least among contractors. Building is slowing down. Small contractors are losing bids on small jobs because bigger firms biding on smaller and smaller jobs in order to keep busy. This is happening because the big jobs are disappearing. It’s to the point were there is nothing large to bid on.
The guys in the construction business who are forty or over are realistic about what is happening, they have been through it before. The younger guys are shell shocked, can’t believe what is happening.
The people that don’t get it are the realtors and developers. I got into an argument with with one last night. His belief was there were going no problems because “Bozeman is different”. He then gave a whole litany of reasons why. The usual reasons.
Here didn’t understand or what to understand the world’s financial system is melting down. It will effect everywhere, no place is different.
I am beginning to wounder about the business sense of these guys, they can only rationalized problems away. Their are so greedy, they don’t know when to quit.
Went through Bozeman last summer, but I couldn’t see the town for the forest-fire smoke. Unreal.
They have no business sense. They are sales people, Used and New House Sales People. They are not trained in economics, business ethics, or any related discipline. They are trained to do one thing. Sell a thing and maximize their take. To do so in a deteriorating market means that they must be blind to the market conditions if knowledge of such would contradict the “story” they tell to sell. It also means they will disregard any negative consequences to either buyer or seller. They have done this for years and will continue to do so until sheeple stop dealing with them.
It isn’t much compared to the rest of you lovely people, but I am seeing a LOT more signs trying to pull people in for rent specials. Since this is the DC area, I think that it may be the rentals are losing knife catchers who are buying the slightly less expensive condos but still hugely over priced condos. Big signs on the sides of buildings, little signs with arrows pointing the way to rental offices, signs, signs, signs.
100% financing is still available around here. Here is how it works. List condos at a certain price. Get at least one sale (this is the hard part, but you could pay someone to do it as a conduit transaction). Immediately sell a bunch more for a lower price in a very short period of time using the previous sale as the comp and convince a “pet” mortgage originator to call it a 95% or lower loan to value ratio even without a downpayment.
Fraud.
I was looking for a new apartment for about $1200. At two different buildings, both leasing agents told me the deposit was $300. This shocked me. In San Fran it was I think about about 1 or 1.5 month’s rent.
Nope, San Fran is a rip-off. I moved from San Mateo, where my deposit was $2000 on a $1500 rent. Moved to Indiana, deposit was $300 on a $850 rent.
1 to 1.5 months rent for security deposit is pretty common in Chicago. But I’ve noticed a lot more places advertising “no security deposit” or a non-refundable move-in fee of $250-500.
Charlotte observations… We aren’t in recession here yet. There are still some “help wanted” signs in merchant’s windows. But the RE market is definately slower. More FSBO signs than in the last few years. There was a house on my street from last summer that finally sold in February, came down from $170 to about $140.
I’m getting some “we’re available for your business” type flyers from subcontractors I have used in the past. And I’m hearing that submissions to the planning departments in nearby towns are wayyy down.
There appear to be two towers in uptown that have ground to a halt, incomplete. Search for “The Park” and “The Tower” on UrbanPlanet.org to catch up on that gossip. Several proposed towers sound like they have been shelved.
None of this really surprises me. North Carolina is traditionally late to economic trends. Next year will be much more interesting!
Spent the week in Bradenton, FL. It feels like someone hit the “pause” button. Two major commercial corners on Cortez have been vacant for what seems to be at least a year. Home decorating mom & pops going under. The only surprise was that the food in a couple of favorite restaurants was not nearly as good as “normal” - places I visit at least every other month. If it had been just the one, I’d think the best cook was off that day, but it was odd for two meals to be way below expectations. Or maybe my taste buds are dying off.
I live in Bradenton. Believe me, there is turmoil and strife going on. The major builders have been having some fire sales but the local builders and existing home sellers are still out to lunch. Sorry about the cuisine; if you are looking for better food (not including any chain restaurant), you need to go to Sarasota or Tampa. Hey, it’s my town; I can opine!
AMAZING.
SD_FotBotD and I sold an east county (San Diego) condo on 11/05 for about $300,000. It is now up for a short sale by the folks that bought it from us for,…(drum roll)…$175,000! A 40% haircut!! Even more amusing is the fact that they are using Help U Sell (or some such) and have extremely poor photos of the place on the MLS listing. I mean, never mind the fact that the $310 (!!) Hoa fees would turn any potential buyer off, but to include such unflattering photos! They will receive NO interest! I know for a fact that much better photos can be taken of the condo…our realtor did a wonderful job. I plan to track the condo until it sells (forecloses, more likely!).
Stars End
For any of you who need a good laugh after yesterday, check out this listing.
http://tinyurl.com/2×7na5
Land here is going for between 2K-4K/acre. On a really good day this washer/dryer box might bring 50K, but given all the compliance issues and the fact that it is sitting exposed on a barren sunscorched hilltop, even THAT is a stretch. The poor guy bought from flipper #1 in 2007 for 123K–about 100K more than it was worth. He built a deck and is now trying to flip it for 195K. A newer 3/2 across the road with decks, spa, corrals, lawns, huge trees, major upgrades is renting for $600 a month including utilities. I sent the following letter to the Realtress:
We noticed on your website that you’ve listed the mobile home at (address,) for sale.
In your ad you state that this is a “newer” “2000″ model home.
This is not correct.
The mobile, LAP# 5271/ HWG# 70895/6, was manufactured in March of 1989 in San Diego, CA. and licensed on 9.27.89.
The Fuqua Homes “Carefree” model was discontinued in 1989 when the company went out of business in San Diego. Fuqua Homes itself went bankrupt in 1993. So as you see, your stated date is not possible given our current understanding of particle physics.
Attached is a copy of the Notice of Public Hearing on the variance request which clearly shows the mobile was built in 1989. The variance was granted because the owner represented that he intended it to be his “retirement” home –and was not trying to flip it for a fast profit. This, as your current client discovered, was not the case. The mobile was falsely recorded by the owner’s relative (who worked for KC Assessor’s office,) first as a 1998 manufacture, and then after the variance, as a 2000 manufacture– as reflected in the Recorder’s filing. Notice also that the title transfer does not reflect the fact that there was a house on the property in 2007…hence no property tax assessment.
Several other discrepancies and violations have been registered with County Code Compliance and will need to be disclosed to any potential buyer of the property.
1. The access road and driveway to the mobile crosses a natural drainage site in violation of the KC Building Code. The road washes out every rainy season to the extent that at one point, a full-grown bull fell into the rut and died because it was unable to get out. The road needs to be engineered and a culvert installed to bring it into compliance.
2. The previous owner buried a burned-out travel trailer under the house in violation of County Environmental Code. This trailer is a health and safety hazard which is polluting the neighborhood aquifer. A civil suit is pending.
3. All water to the property must be pumped to the holding tank by transporting a generator up to the community well on a neighboring property and running it for an extended period of time. There is no electricity to the well itself.
4. This “newer” nineteen-year-old mobile is not up to the 1993 CA. Uniform Building Code. Moreover, it was built to San Diego specifications and not to the altitude and exposure issues it faces in its current location. That it was towed 500 miles from San Diego and sat for six months in a parking lot for sale with an asking price of only $4,000 should speak volumes to its current $195,000 listing. And those “fruit trees” you mention are year-old sticks –which will require far more water to thrive than is currently available for delivery.
While we sympathize with your client’s desire to get out from under this property, it is incumbent upon you as a Real Estate Professional to make certain any potential buyer is aware of these mitigating issues, and that the asking price fairly represents the costs of remediation. We further expect that it be accurately represented in your advertising literature.
Sincerely,
Torpedoing the price hoping for a non-flipper? (Or hoping the new owner is prepared and can afford remediation?)
If the price goes too low, one of the earlier owner’s many cousins may buy it. (He may need trailer parts for his house.)
OK, we’ll correct all that. What’s your offer?
That’s poetry. I hope the current mortgage company gets a copy. LOL
Good for you! This is truly an example of self regulation, as practiced by citizens. Another example, though not as flagrant: The sale flyer for a house down the street listed HOA fees circa 2001 and said they covered trash pick-up. I contacted the listing agent who blamed the false info on the homeowner. Bull. It’s their job to get the facts right.
Here is a very crude estimate of the magnitude of lost home equity in San Diego county housing:
- 3m ppl X 1 house / 3 ppl = 1m houses
- Assume they were worth $500,000 per house on average before dropping by 20 pct on average.
- Average loss per house is 20 pct X $500,000 = $100,000
- Aggregate drop in home equity wealth in SD county =
1 m X $100,000 = $100 bn
That will leave a mark which remains to be felt.
Sorry if this is crude — I wanted to do the calculation in less than 60 seconds if possible without using a calculator. I think the calculation is roughly correct in principle, but perhaps a bit too crude to be convincing.
Please feel free to sharpen the pencil and offer up a better estimate if you have the time and inclination.
DataQuick Information System’s San Diego Union Tribune Zip Code Chart for Home Sales Recorded in February 2008 appears in today’s SD Union Tribune’s Home Section. It somewhat vindicates the price figures I used in my above back-of-the-envelope estimate:
Peak median price (all houses and condos) = $515K (early 2006)
Current median price (all houses and condos) = $415K (Feb 2008)
Drop in overall median from peak = $100K
Fair disclaimer: I estimated the $515K figure by eyeballing the graph; I think the actual peak was slightly higher (maybe $517K?).
It is likely that this drop in the overall median is larger in percentage terms than the percentage decline in high end housing, but also smaller in absolute terms than the decline in high end housing. For illustration, in Rancho Santa Fe (92067), the YOY median fell from $2,325K (2/07) to $2,000K (2/08), which is only a 14 pct decline in percentage terms but a $325K drop in absolute terms.
The graphs shown in the SD Union Tribune edition paint a rather bleak picture for the current housing situation in San Diego County. Here are a few observations, based on eyeball estimates taken from these graphs:
1) The five-year-median resale house sale price graph shows a peak price of about $590K in late spring 2006, which held up quite well until the onset of the credit crunch (I am guessing $580K in 8/07). Since last summer, the median SFR sale price has tumbled to $430K. Assuming this played out from 8/07 through 2/08, the median SFR sales price decline occurred at an annualized rate of
((430/580)^2-1)*100 = 45 pct.
2) The rate of SFR sales peaked around 3,800/mo (5/04) and has tumbled to a level of 1,106/mo (2/08). The rate of SFR sales has been in the basement (below 1200/mo) since November 2007 — four months straight of sales lower than any previous months over a five-year period.
3) The story for resale condos is similar, but I am bored and disinterested, so I will leave it to the condo flippers in the virtual room to figure this one out for themselves. I will mention the median price decline is happening at a comparable rate for condos as for SFRs — what one might expect for an investor-driven market:
$400K (8/07)
$300K (2/08)
6 mo price decline = 25 pct
Annualized rate of decline over past 6 mos =
((300/400)^2-1)*100 = 44 pct
4) The “all houses and condos” graphs paint an equally grim picture. The overall median sales price fell from $500K (8/07?) to $415K (2/08), slightly less than the pct decline seen when condos and SFRs are separated. This is probably a manifestation of Simpson’s paradox, as an across-the-board drop in housing purchase budget constraints due to the credit crunch results in substitution into cheaper housing (condos).
The monthly sales rate peaked at maybe 6,500 (8/04?) and has skidded down to a 2/08 level below 2,000/mo (1,954) with no sign a bottom has been reached.
We have most likely currently entered a period where the rate of sales is nearing a bottom (it cannot go below 0!), but price declines are likely to play out over a period of a few more years, as latent declines will only be realized by those who have to sell. Try not to catch yourself a falling knife!
When realtor Ann Stewart arrived at a foreclosed house in Hurst, she was flabbergasted. Just months ago the home listed for $990,000. Now that thieves have walked off with everything including the kitchen sink, it’s listed at about $500,000.”
Good. Now that lender might develop a sense of urgency about getting their other vacant foreclosures off the books, poste haste, even if it means - gasp! - DROPPING THE PRICE until buyers emerge.
http://www.dfwhousingfacts.org/
Ross Perot Jr. says: “D/FW is different from the east and west coasts. Our local economy is still strong and North Texas is still one of the most affordable real estate markets in the country.
See the pretty blue “DFW Buy Now” graphic!
“Find out why you’re in the best place in America to buy a New Home. DFW is Different!”
Small local newspaper Grapevine Courier says about this website (March 14, 2008):
DFW area recently launched an industry wide promotional campaign - BUY NOW - to combat negative national press that is affecting the local housing market.
Funded by the area’s leading builders, developers, financial institutions, gvendors, Homebuilders Assoc. of Metro Dallas, …
“Industry leaders in Dallas/Fort Worth aren’t alone in the fight to reduce the amount of negative press about the market. Home builder associations in St. Louis & Eastern Missouri, Atlanta, Houston and Florida, have launched similar campaigns but none have been the size and scope of this campaign.”
—
My takeaway: It’s different everywhere! But luckily for us, it’s MORE different here!
Unfortunately Ross Junior only inherited his daddy’s cents, and not his daddy’s common sense.
‘I’m still stunned over what’s happened because it is so grossly unfair,’ one Irish purchaser. ‘We signed our contracts and handed over our money in complete good faith, and this is what happens. I know that real estate dealings can be tough, but this just isn’t right.’”
It would take a heart of stone not to laugh at these fools.
It’s like the blob - it creeps and slimes along and is everywhere!
Got a letter today from my landlady, who lives in Colorado. She’s declaring bankruptcy, but her attorney assures her she can keep the house I’m in even though she’s not living here (she’s renting in Colorado, so I guess it’s still considered her primary residence).
Here’s the kicker (in a good way, I guess) - the house is on expensive propane, and we agreed to leave it in her name, I would just pay her and she’d then pay them. The bill is now up to $1000 and she says I don’t need to pay her anything, it will go away in the bankruptcy.
I’m stunned. Free utilities, and the house is already cheap. But what will she do next winter for heat here? Yikes.
First hand anecdote from Canberra, Australia.
(And to put things into context there are reasons why, TO SOME EXTENT, things really are different here. The biggie is that, due to the legislative framework under which Canberra was set up, the local Government owns all the broadacre land. So they can, and do, control the rate of development to keep block prices, and their subsequent tax take, high.)
Nonetheless; I was in conversation yesterday with a lady and her boyfriend who were on a computer looking at a local RE Website which more or less acts as an open-access MLS. She pointed out a house that she herself had been interested in a month or so ago, which at the time had been scheduled for sale by auction.
Her comment was that when she rang the selling agent for an indication, she was told that the vendors wouldn’t consider anything under $600K, and that the agent was “really snooty” about the matter. She was only prepared to go to $550K-$560K, so she didn’t attend the auction at all.
Well lo and behold if the house hasn’t come back for sale at $579K, and has since been reduced to $549K. The lady’s comment was that she had been rung back by the same agent (not nearly so snootily this time), and took a fair amount of pleasure in telling him that she had bought elsewhere.
She also commented that the house she did purchase was valued (appraised) at $520K, and she got it for $445K (with a $250K loan so she obviously had a pretty fair deposit).
One swallow doesn’t make a summer, but this is the first time in years that there’s even been a HINT of softness in the Canberra market.
Well it looks to me that in my 2 zip codes there seems to be a lot of seller/agent denial
98258 all sfh mls 279 pending 9 Lake Stevens Wa.
98205 all sfh mls 184 pending 7 East Everett Wa.
of course we are not in a bubble in this area because people want to live here. Or are these numbers normal? How do they compare to your local area?
From Boise:
“Commercial construction, the lifeline that has kept Boise-area building activity afloat during an almost two-year slump in housing, is showing signs of slowing.
Nowhere is the weakness more evident than in Downtown Boise, which last year was awash with plans for combining affordable and high-end condominiums with office and retail development.
Today, Downtown developers are facing an economy apparently in recession, bankers who have clamped down on credit and material costs skyrocketing because of overseas demand. ”
http://www.idahostatesman.com/eyepiece/story/325107.html
“The major investment bank Credit Suisse is suing Tamarack Resort, claiming the resort defaulted on a $250 million loan.
In the lawsuit, filed this week in 4th District Court, Credit Suisse asked a judge to allow it to foreclose on the resort property near Donnelly and collect the more than $260 million it is owed. Tamarack said it might seek a buyer to take over the resort.”
http://www.idahostatesman.com/business/story/322237.html
ATLANTA
After 2 days of tornados everyone here is a little shell-shocked. Yesterday was really scary, with giant hailstorms. I’m sure there were a few builders yesterday who where hoping for the mother of all wind storms to hit their standing inventory.
The long term impact of the tornado that went through Downtown will not be good for the area’s economy, as the GA World Congress Center, that hosts most of our conventions, received over $100 million in damage. Convention business is about the only thing left in Downtown, other than government offices. This comes on the heels of last week’s announcement by the Mayor of Atlanta that 25% of the city’s workforce will be cut due to a $65 million budget deficit.
The state Lieutenant Governor is trying to do us all a favor by freezing property taxes at the 2008 rate. Yep, freezing taxes at the highest ever property valuations really helps out.
Developers have to do joint ventures with builders because no one will buy their lots. The listing price for lower end homes (bottom 25%) has dropped 9% since 3/07 in the close in suburbs. I am still hearing rumors about 2 large local builders who are in trouble. It’s become pretty common for subcontractors to have $150K or more in work that builders have not paid them for, at the same time that they are having to lower prices to get new work—most are getting squeezed pretty bad.
In immediate neighborhood, we have had our 2nd foreclosure in 4 months in our 72-unit townhome complex. Used to be on the weekends the place looked like they were filming a home makeover show, with everybody having all sorts of work done. Haven’t seen any of that in the last few months—now I only see only moving trucks and weedy yards.
I can’t get the image of a liquidity tornado bearing down on Wall Street out of my mind. I realize that tornadoes are rare events in NY State and all, but this time is different.
Another speculator/builder in deep…….
http://phoenix.craigslist.org/rfs/608110922.html
A builder looking for WORK?
http://phoenix.craigslist.org/rfs/605637271.html
800.00 to 850.00 a month,4,000 a month return.? MAybe a couple years ago.Way too many rentals there right now.
Owns FIVE homes??? wow..Willing to take off $7k if you buy them all LOL…..
I somehow think the “Bankowned house in the neighborhood that went on listings this week for same area at $109K has them on the run.
Calls for 1-point rate reduction grow louder
Bear Stearns shocker triggers forecasts for whopper cut to 2%
By Laura Mandaro, MarketWatch
Last update: 7:52 p.m. EDT March 14, 2008