Sitting On A Powder Keg
A report from the Alaska Journal of Commerce. “Following in the footsteps of the Seattle housing market, Alaska may soon have its very own mixed-use residential/retail structure located in the heart of Downtown Anchorage. The proposed 100,000-square-foot, 16-story Crystal Plaza development will feature 40 high-end residential units…between 2,200 and 2,500 square feet, and will cost between $1.2 million to $1.9 million.”
“‘Downtown Anchorage desperately needs downtown living. This project can not only fill that void, but really make Downtown a truly vibrant area,’ said Steve Kirshner architect/project manager for RIM Architects. ”
“The property is owned by longtime Alaskan Eunice Silberer. Silberer spends part of the year in Scottsdale, Ariz., ‘which is just booming with high-rise downtown residential projects,’ Kirshner said.”
“The goal of the project, Kirshner said, is to give the Downtown area ‘a certain level of vibrancy 24 hours a day.’”
“‘We’ve just been bombarded with response from people who want these units,’ said developer John McGrew. ‘There’s a lot of interest, and much of it is from out of state. High-end mixed-use condos have certainly become popular in Seattle and in markets like Vancouver, Wash.’”
The Kitsap Sun from Washington. “Houses are still moving in Kitsap County, albeit not at the past rapid pace. At ‘The 400′ in Bremerton, …the price on some new condominiums has been slashed by 58 percent, from $259,000 to $109,000.”
“Perhaps at the height of the housing market this 577-square-foot, one-bedroom, one-bath condo was worth $259,000 — but no more.”
“Welcome to another slumping housing market. I’m sure the current slowdown has surprised those who think most investments, including houses, only move upward in value. Sorry, that’s never been the case.”
“New industry numbers released Wednesday show more houses and condominiums are going on the market in Kitsap County, but sales are slowing. According to (the) Northwest MLS, there were 2,489 houses and condos on the market here in February, a 31 percent increase over February 2007.”
“Pending sales, meanwhile, were down 38 percent to 240 this past month over February 2007, and closed sales dropped 11 percent, to 190. The trend was reflected across the state.”
The Columbian from Washington. “Home sales in Clark County dropped to a 20-year low in February, a decline that now appears to be chipping away at the real estate community. ‘The attrition rate for Realtors is extremely high,’ said broker Randy Hunzeker.”
“‘We knew there was going to be some kind of purging,’ Hunzeker said. ‘But we still see new agents signing up every day.’”
“Prices also have softened, dropping by about 4 percent from last February’s median of $255,000 to a median selling price of $244,900 last month.”
“Sandy Hendrick, executive director of the Clark County Association of Realtors, said he was not surprised by the February figures from benchmarks, which tracks all recorded home sales in Clark County for the month.”
“‘A sale recorded at the courthouse is a trailing indicator of what is actually going on in the market,’ he said, calling late December and January extremely slow months for home sales. ‘The February closings are just confirming what was happening,’ he said.”
The Whitefish Pilot from Montana. “A slowdown in local construction and real estate sales is real, and it could be a harbinger of more serious economic problems, a Whitefish financial analyst says. Jim Stack says he sees problems already in the Flathead Valley and Whitefish housing markets.”
“‘Whitefish is sitting on a powder keg,’ he said. ‘There’s a huge number of unsold homes. The planning department was shocked at the recent drop in building permits and subdivision applications.’”
“Stack said there is currently a five-year supply of homes on the market selling for more than $500,000.”
“‘Normally, a 12-month supply is bad,’ he said. ‘This is what drives the Whitefish economy — from builders, Realtors and title companies to furniture stores.’”
“About one-sixteenth of the area’s homes are on the market, and home sales have dropped by about 32 percent in Whitefish and 24 percent in the county. ‘Prices are last to drop,’ Stack said. ‘The problem first shows up in inventory. Then builders see a slow down and Realtors see a drop in sales. Then prices fall.’”
“Stack points out that in 2000, the median price for a home in the Flathead was about 20 percent below the national median price. The numbers have flip-flopped since then — the median price in the Flathead is now about 20 percent above the national median.”
“‘We’ve gone from being a good buy to being more expensive,’ he said.”
“‘Seventy percent of the new jobs in Whitefish that were created in the past 7-8 years are construction-related,’ he said. ‘If there’s a bust, there will be repercussions.’”
The Register Guard from Oregon. “The signs were even clearer in February that the Lane County real estate market is tipping toward the down side. The median price for a Lane County home fell 6 percent, compared to a year ago, to $220,000, according to the Regional MLS.”
“The number of pending sales fell or were flat in every neighborhood across Eugene and Springfield, compared to a year ago, except for the Thurston area where sales at a Hayden Homes development likely preserved this single bright spot.”
“With a surplus inventory — it would take nine months to sell the 1,925 homes on the market now — even some of the most optimistic real estate professionals don’t expect the prices now being fetched by existing homes to hold forever.”
“A lot has changed since June 2007 when Lane County witnessed its pinnacle median price of $243,300 — or 10 percent more than today’s median. ‘A year ago we had bidding wars. Today, it’s a totally different market out there,’ said broker Wendy Milbrett.”
“Builders are preparing to entice prospective buyers of new homes with bonuses such as $50,000 in cash or a BMW, said Rex Ballenger, president of the Springfield Board of Realtors. ‘You’re going to see an advertisement on that real soon,’ he said.”
“The precursors to a stronger real estate market — jobs and population growth — are looking pretty puny themselves. Lane County jobs are growing at an annual rate of 0.5 percent, said Brian Rooney, regional labor economist with the Employment Department.”
“Since home prices in California took a tumble over the past year, the stream of transplants coming with suitcases full of cash from home sales there is likely to have slowed, Rooney said.”
“Milbrett and her sellers have had to adjust. She listed a house six months ago at $209,000 and steadily dropped the price over time — to $206,000, $199,000 then $195,000. This week, she’s finally closing on that house at $190,000, she said. ‘A year ago this time (the seller) would have gotten the $209,000.’”
The Bend Bulletin. “Renaissance Ridge, a partially-developed, 210-lot subdivision in southwest Bend might be headed for foreclosure, according to documents filed with the Deschutes County Clerk’s office, but developer Randy Sebastian said he’s working hard to prevent it.”
“‘It’s not a Bend issue, not a Renaissance Homes issue; it’s a lender that wants out of the builder/developer market, and they don’t want to extend their loans,’ said Sebastian. ‘I’ve got my life savings out there.’”
“Sixty-four homes in the subdivision have been built or are under construction. Deschutes County land records — in which the subdivision is legally recorded as Aspen Rim — show that 36 homes have been purchased.”
“Homes in the development currently range from $369,000 to $590,000.”
“The development has dangled some incentives for prospective home buyers in recent months. It also shaved prices on its homes in February by 11 percent to 20 percent, according to The Bulletin’s archives.”
“Renaissance Ridge homeowner Bill Ormsby, a Southern California retiree who has lived in the development for a year, said he has wondered about the profusion of empty lots in the development but said he feels confident he and his wife won’t be leaving.”
“‘We’re gonna stay put,’ said Ormsby. ‘It shouldn’t affect us too much.’”
“Elsewhere in Bend, Buena Vista Custom Homes has rented 18 of the 29 homes in its Forum Meadows development since efforts to sell the homes in mid-December at auction failed to produce a single sale, said Mike Higgins, a spokesman for the Lake Oswego-based builder.”
“‘It was done in a loss position, but it was better than the alternative,’ Higgins said. ‘If we can’t sell them, we’ve got to do something. We looked to auction the homes, but it didn’t work. Builders right now are just trying to make the mess go away.’”
“Homebuyers and builders have moved from overconfidence to fear of a sluggish market that won’t recover, said Peter Storton, the owner and broker of RE/MAX Town & Country Realty in Sisters.”
“‘The next 12 to 18 months will be a reverse of what we have seen,’ Storton said. ‘We have to hang on to the customers that we have and convince people that it’s a good time to buy.’”
Oregon Public Broadcasting. “Bend is $20 million in the red. For years, the city relied on huge increases in building permits and fees to pay its bills, but now, Bend’s housing market is collapsing. And one local journalist is questioning whether the hometown newspaper was too much of a booster. Ethan Lindsey reports.”
“David Fisher covered the industry for the Bend Bulletin as it went from boom to bust.”
“David Fisher: ‘…you gotta realize that every editor in a market like this, is well aware that real estate and development is the 800 pound gorilla. A great deal of the newspaper’s wealth flows from the health of the real estate and development industry. And in the past year that has started, first slowly, and now more rapidly, to go away.’”
“Industry leaders wanted to change peoples’ perceptions, so at an annual real estate summit last month, they rolled out a turnaround ad campaign.”
“Tim Knopp, executive VP of the Central Oregon Builders’ Association: ‘Day after day, if people are reading negative national stories, it makes them think maybe this isn’t a good time to buy, maybe I should wait. And in 30 years, this is the best buyer’s market I’ve seen.’”
“John Costa is the editor-in-chief of the Bulletin. Costa points to positive and negative real estate stories the newspaper has run before, during, and after the housing bubble.”
“Central Oregon clearly relies on real estate development. Oregon job statistics show real estate and construction employment made up 17 percent of local jobs last year. That’s noticeably higher than the state average.”
“Real estate and construction are two of the biggest advertisers in Bend says builders’ association executive Tim Knopp. Tim Knopp: ‘We want to make sure that the media knows that if things are going bad for the entire industry, its going to affect them as well. And it has. We just need balance. We’d have discussions with any media outlet about that and I think they want to do that.’”
BTW, the OPB report surrounds the firing of a reporter, but the much bigger issue, IMO, is the press and the real estate industrial complex. I’m glad this is coming out.
But I do have to defend the Bend Bulletin here. I have found their coverage to be in depth, full of useful facts and very frank for years.
The news media has a conflict of interest issue when it comes to housing, among others. I understand this is not going away anytime soon. But people just need to know who is talking, what their hidden agendas are, and who is “paying” for the news story/article. Unfortunately this is usually not the case. People are very naive.
“The goal of the project, Kirshner said, is to give the Downtown area ‘a certain level of vibrancy 24 hours a day.’”
I know a bunch of people that can’t wait to be able to walk in minus degree weather for that outdoor dining experience…
“‘We’ve just been bombarded with response from people who want these units,’ said developer John McGrew. ‘There’s a lot of interest, and much of it is from out of state. High-end mixed-use condos have certainly become popular in Seattle and in markets like Vancouver, Wash.’”
Boy, that sentence could have been used for any high-rise project in the bubble. And they throw in the out of state purchasers, too! Where have we heard about that before?
Why do people assume, because maybe NYC or Chicago have a downtown scene, that they can make it happen if they just put the right widgets in place? Build condos, lure stores, add people, make it happen. I can appreciate a vibrant city but I don’t think I can create one.
True. The vibrance of NYC and Chicago is derivived from their uniqueness and history. New condos; a chain grocery store; restaurants like Chili’s, PF Changs, Cheese Cake Factory; and an urban Walmart, Sam’s Club and/or Target just isnt the same. I do support density, underground parking and pedestrian friendly environments for our cities though. In short, it aint no NYC or Chicago but it is better than urban sprawl.
I heard so much about demand for urban living, I wonder how much of it was actually demand for easy to manage investment properties (e.g., assuming appreciation, you locked in before mortgage payments start, little maintenance, not hard to rent (assuming you can; and I know for a much less price, although investors never really got it)).
NYC has tons of different neighborhoods and downtown uptown eat side, west side areas. but NYC also has the lowest percentage of people with drivers licenses too. My GF is a city girl who never drove in her life.
You must have lots of public transportation to these areas and/or lots of cheap/free parking available something they always seem to forget.
I also remember a Crazy Eddie in my hometown that was next door to a bar/ live music venue in a small strip mall easily 300+ parking spaces…CE would close at 9pm the bar would open at 9pm….did well for many years
“My GF is a city girl who never drove in her life.”
Wow, in our car-crazed culture that statement is just astounding to me. Not that I dont believe it, it’s just incredible see/hear about it.
again, no judgement call on it, it’s just . .. wow, kinda like ” some lucky person has managed to escape a requirement most parts of the country must endure”. Our DMVs tell us that driving is a privilege, not a right. nice to see someone has the choice to decline that ” privilege”. I myself enjoy cars but just thinking about not HAVING to use one to get around is just … mind boggling. like life on an amish farm.
actually, I’m rather jealous of her.
I drove during our vacation in the fall. That was the first time since 2005 and I haven’t driven since. I don’t miss it at all.
Me neither. I use a car sharing program and possibly drive once a month. To be honest, I dont miss driving all that much. I probably save upto $800 ($300- parking, $300+ on car payments and gas).
I lived in London most of my life, and had to learn to drive when I came to Los Angeles, getting my driving licence at the hoary old age of 40…
During my recent visit to San Francisco I realised how much fitter, healthier and generally more energetic I fell if I walk everywhere - I’d move to a public transport/walk city in a heartbeat if it wasn’t for having to work in L.A
Aquius - LOL.
The husband and I spent our first 18 months in L.A carless. Its possible, but very hard to do here.
Funny story - I was buying something at Best Buy during that time, and when I produced my passport as I.D, the pimply mouth-breather behind the counter at first refused to take it as a valid form..
“‘erm, don’t you have anything, like, more official? Like a Driver’s Licence?” He said.
We’re doomed. Doomed, I tell you
NYC hasn’t always had such a great downtown. it was killed in the 60s and 70s and only had a few half-safe places left.
this is how many of our cities our, the downtowns were killed in the 60s and 70s but today still only have a few good neighborhoods left.
i see no reason, say Pittsburgh, Nashville, and Oklahama City couldn’t have great downtowns and neighborhoods (like Chicago/NYC). But anchorage? I’m not so sure.
Read on the cargo cults of the pacific… Same reaction here.
The only urban neighborhood I ever saw created from scratch was downtown Fort Worth, Texas. It took 20 years and the deep, deep pockets of one of the richest families in America, the Bass Brothers. But, by golly, it worked (finally)! They transformed a bleak, dangerous, depressing, and practically abandoned downtown into a vibrant live/work community with great restaurants, bars, and cultural amenities. So, it can be done, if someone is willing to make a long-term commitment to the community and has the resources to follow through.
I can see 20 years to transform a downtown. But some believe that it can be done in 5.
Viable condos CAN be built in downtown. But their target audience should be young adults. And the prices should reflect what these young adults earn. Not the million $$ price tags.
Fort Worth got lucky because oil crashed before they could follow the lead of Dallas and bulldoze all of those old buildings and put up some new fancy glass ones.
However, they still have not reached critical mass. They have given up selling some of those condo buildings and are renting them out (the Neil P. -it only managed to sell 14 out of 57 condos in 2 years). If you look in MLS, there are only about 100 condos for sale in downtown Fort Worth ( and about 1/2 are in “The Tower”).
I would wager that 1/2 of the condos in downtown Fort Worth are owned by Dallas law firms for use by their staff during trials in Fort Worth.
How long the rental units will be able to extract 50% extra in rent to live in near downtown is anyones guess, but in my experience renters can be pretty fickle and like to move a lot.
It will be interesting to see how bad they can screw up the TCC downtown campus.
Just for fun, I checked the MLS for downtown Ft. Worth and, of the 100 downtown listings, quite a few of them are not in what I consider downtown at all. They are in the slums of the East Side (E. Terrell, E. Humboldt, E. Pulaski). There do seem to be some nice lofts for sale in the restored train depot. I miss Fort Worth….
I dated a girl that was a sales rep for the old train depot. She said that they marketed them towards young people and people who worked in downtown Dallas, but wanted to live in downtown Fort Worth (the train does actually pickup there and you can get to downtown Dallas in about 60 minutes).
I asked her how many young people she knew could afford or wanted to pay $180k for a 600 sqft condo with a $500 HOA (about $2300 month). She said so far none.
Even when it’s dark 20 hours of that time!
“The goal of the project, Kirshner said, is to give the Downtown area ‘a certain level of vibrancy 24 hours a day.’”
You’d NEED at LEAST a totally wild topless Hooters bar Emporium with a really select take out menu on every street corner to get a 24 hour viberant downtown Anckorage for 1.2-1.9 Million a POP
I live in downtown Anchorage. Compared to other cities I’ve lived in, there isn’t much residential activity here, especially considering that most of the best restaurants, shopping, and jobs are located in this area.
I agree that mixed use will “spice things up” around here, but only because things die down pretty early during the tourist off-season.
Implying that Alaskans live in darkness 24 hours is pretty ignorant, considering that most of the state lives below the Arctic circle and the temperatures in Anchorage are moderated by the Japan current, whic makes us frequently warmer than Minneapolis or Chicago (though not as warm as you Bubbilistas in CA, AZ or FL).
I disagree that there is a significant market for 1.5 million dollar condos though. Most of the stuff that was recently built at that price is not moving at all, even in the downtown area, and I know of at least one builder who has already gone bankrupt. They are probably relying on info from 1-2 years ago when we had a bunch of speculators buying that stuff up here.
I grew up in (downtown) Anchorage. It actually has a developed downtown area (lots of shopping, restaurants, tourist stuff, it is rather nice), but those prices are way out of line. A two bedroom [built in the 40s - 70s] house near downtown used to cost (at the peak) about 350k (yep, the typical boom idiot pricing) which is out of line for area incomes. These are still the wishing prices on such places, but they aren’t selling. When the dust settles, I’ll bet you’ll be able to get a small SFH near downtown for 250k or (possibly a lot) less, so why would anyone pay over a mill for a condo!?!?! It isn’t going to happen…
Where art thou, equity refugee?
“Since home prices in California took a tumble over the past year, the stream of transplants coming with suitcases full of cash from home sales there is likely to have slowed, Rooney said.”
I believe the correct term is, “bucket full of money and box full of stupid.”
New neighbor did just that a month ago.
From Alberta, came one week to look/buy.
Looked/bought.
Fully moved into weekend/winter condo.
Canadian.
I’m having an interesting discussion with a few local realtors on a blog about the PNW market - http://tinyurl.com/2oyg3y
I put forward some theories about were the market is and is heading - they of course disagree - still waiting to hear why though…
Fell free to comment - but keep it polite and constructive.
We want rational discussion - not name calling.
Oh, like this attempted post by a troll on todays Florida thread?
‘Enzo’
‘Do you sheeple renters really think rents will stagnate when non-homesteaded property taxes aren’t capped?’
And this was tame compared to what we used to have to put up with. I say pa-tang to the UHS.
Ben, Ben, Ben!
I love your sense of humor - and remember, you get the rope and pitchfork, I’ll get the horses, ya get ta slap the horse(s) butt.
Leigh
The powder keg is really the viability of most daily newspapers, advertising is the lifeblood what keeps them going, and it’s going away.
“‘Whitefish is sitting on a powder keg,’ he said. ‘There’s a huge number of unsold homes. The planning department was shocked at the recent drop in building permits and subdivision applications.’”
Should it be shocking if building slows when there is a large unsold inventory?
“Stack said there is currently a five-year supply of homes on the market selling for more than $500,000.”
If Californians can’t afford $500K homes in CA, how are they going to afford them in MT?
Equity locusts from California coming to MT off course!
No, rich Canadians are going to save the housing market. At least that what I am starting to hear.
Calgary oil sand money! I’m loving it already.
Actually that may be possible as the canadian market is running a bit behind the US. It just might be possible for a Candian to sell at the high there and catch a 50% off sale here.
Although Whitefish is already dependent on Canadians, least for their tourist business.
As mentioned in above post, new neighbor from Alberta.
Cash, came in one week last month, looked, bought, moved here for wknds/winter. Just got an interior design out of the yellow pages and are going to redecorate the “turnkey” 3/2 condo on greenbelt.
Cash.Asking $435k.
Was hoping the prices were going down in “my” gated ‘hood.
Good points.
But, here at last, a financial anal-yst that understands how markets work. NO financial miracles, no new paradigm, no ‘its different here BS, just the facts:
‘Prices are last to drop,’ Stack said. ‘The problem first shows up in inventory. Then builders see a slow down and Realtors see a drop in sales. Then prices fall.’”
Which is why it is so, so difficult to tell people who says its’ different here, there’s a lot of stuff for sale, but prices are holding up. They just don’t get it.
They will get it when the huge supply meets minimum demand at some economist’s intersection of PRICE.
Million dollar luxury condos in Alaska? These builders must have failed marketing 101. Do they have any idea who the customers for this product is supposed to be?
Why is it so hard to understand that prices cannot stay out of line with incomes? It seems so simple that if house prices are beyond what income levels can afford, sooner or later the mortgage payments have to stop.
why not- lubbock-racine-asheville-
join the party !
high rise
I’m giving him the benefit of the doubt. Perhaps he is thinking of Irish investors who got screwed in Manhattan, NY but hasn’t learned their lesson.
Cinch
Vibrancy in downtown Anchorage - are they nuts. In summer it’s vibrant and full of locals and tourists because it’s light nearly 24/7. In winter when it’s cold and starts getting dark at 2 pm, no one is going to wander around downtown no matter what they build. And seriously - condos over $1 Mil - they are completely nuts.
paying a million to live in Alaska doesn’t sound like a good time or investment to me.
I lived near this downtown one summer. You can get rentals a couple miles away starting at about $1k/month. Some people make good money there, but not that kind of money. Just some developer fishing for fools.
Hey Ben,
You run this show. Without being to biased and I’m with you on this housing crap - do you think all these efforts by our fabulous fed are going to stop the demise of prices in areas like immediate suburbs of places like DC and NY?
Thanks
Yes, the fed has miraculously repealed the laws of supply and demand. Get one of these Alaskan condos before your priced out forever!
ME 1ST!!
Or kidnapped by that SunYung Moon who is friends with the Bushs.
Where is Ben???
Oh, Ben, how it the market in Prescott?
Preskit? Ask me. I live here and have watched this craziness unfold for many years. And in 2 words, “what market?” There’s so much freakin’ inventory, it’s like a peek into Britney Spear’s pill bottle. I don’t see a huge discount yet, (although it’s kinda fun reading all the “notice of trustee sale” in the local paper)…but it’s coming. If you’re interested, seriously, I can hook you up with someone who won’t stab you in the back with a stupid stick.
Isn’t the climate of Anchorage similar to the climate of Stockholm? I mention this because Stockholm rocks, with a vibrant downtown, plenty of hotels, bars, clubs, shopping, restaurants and culture, summer and winter. So, it doesn’t seem that climate alone would make it impossible for something similarly vibrant to be created in Anchorage, if someone had deep enough pockets and a thoughtful plan for the long haul. Perhaps there is another reason that this is not a suitable plan for Anchorage (don’t know, have never been there).
Sweden has excellent schools, medical, and guaranteed retirement, so the folks in Stockholm, can and do party alot with no worries.
Alaska is experiencing an oil and minerals boom right now, so there is quite a bit of money here. Fishing and tourism also bring in a lot of money so people in those industries work 6 months a year at the most.
Unfortunately, most of the people who earn the big bucks here are carpetbaggers and the money doesn’t stay locally. Heck, Alaska Airlines isn’t even headquartered in Alaska. But there are a lot of Californians who have moved here recently (myself included).
I do find it interesting that the people with the strongest negative opinions about Alaska are the ones who have never visited and have umbilical cords that don’t stretch far beyond the border states. That’s fine with me…negative stereotypes are probably the reason we haven’t turned into another Seattle or Los Angeles. There’s still a small town feel here I hope we never completely lose…have run into the governor, legislators, and other big shots at the local supermarket, and there is a friendlier atmosphere than in most large cities I have lived in (i.e. NYC, LA, SD, Boston, Chicago, Seattle, Vancouver, Montreal).
I love Alaska and I love Anchorage. If I wasn’t such a big baby who needs socks when it hits 60, and a husband I can’t blast out of the living room, I’d consider living there. Actually, you’re lucky that’s it’s so far and beyond what most people can manage…that eliminates a lot of dorks.
Ah… so it starts with the bottom calling.
http://biz.yahoo.com/cnbc/080320/23725629.html
“‘There will be more negative developments, but they will be meaningless’, bove wrote.”
Meaningless, such as a few trillion dollars vanishing into thin air.
Who’s calling whom a bottom? I thought the big bulge of ARM resets was happening this month, or next.
“Home sales in Clark County dropped to a 20-year low in February, a decline that now appears to be chipping away at the real estate community.”
This, in one of the Portland area’s higher growth regions…
“Bend is $20 million in the red. For years, the city relied on huge increases in building permits and fees to pay its bills, but now, Bend’s housing market is collapsing…..”
Well, shoot. How could this happen, what, with all the deep-pocketed Californians now living there? Pathetic.
“And in 30 years, this is the best buyer’s market I’ve seen.”
What???? I can’t be sure, but I think I wish I would’ve bought some property in Central OR in 1985. I was only 15 and lived in Ohio at the time but oh what I coulda been with some Microsoft stock and a farm in Sisters….
“Real estate and construction are two of the biggest advertisers in Bend says builders’ association executive Tim Knopp. Tim Knopp: ‘We want to make sure that the media knows that if things are going bad for the entire industry, its going to affect them as well. And it has. We just need balance. We’d have discussions with any media outlet about that and I think they want to do that.’”
—————-
All but threatening the local media - “Say bad things about us and we won’t advertise with you any more, and you’ll go down too”.
What does he mean by “we need balance”? That only 1 “bad” article can be written for every “good” one? Or more likely a 1 to 4 ratio with lots of new home development ads interspersed with the happy columns? Will there be a REIC “Fairness Doctrine” to ensure that “both sides” of the housing collapse issue are represented?
Is it any wonder why those on the losing side of an argument must always call for threats of retalliation and Orwellian regulation of the media? Truthful media will do well, and untruthful media will not. The fact that these local papers relied so heavily on the advertising of a single industry means that their “news product” was never worth much to begin with, and was just an excuse to deliver the advertisements to “eyeballs”.
A very interesting side effect of the housing bubble burst is the downfall of “traditional print media” - now that they cannot hide behind the revenue of classified ads the poor quality of their primary product is being revealed, and they are losing the “information delivery war” to radio and the internet.
well, you know, most local papers have cut back on coverage of nitty-gritty issues like city council meetings….because they are “boring” to the average reader. So the “news” well gets filled with more and more fluff. You should see our local paper–it’s hilarious. “Features” on local businesses, high-school sports, and real estate. The Police blotter is, of course, the most closely scruitinized.
When does John Costa think the bubble started?
I was at a meeting with Thurston county, WA, personnel the other day and heard that the planning & development dept has had staff layoffs recently due to declining permit applications. Talking about the building inspectors I heard “We used to have 100 inspections a day, now we’re down to 25 to 30″.
I don’t know what the lag time is from permit application to finished residence/structure here in Thurston–I knew once, but since have forgotten– but wow! A 70 to 75% reduction in finished structures, right now? All I could think was ‘This is an ouch moment’, for someone, or a whole lot of someones. And inside the warm privacy of my head I cackled wildly, with sincere joy. On the outside of my head I wore an expression of calmly professional mild interest. It takes practice to do both at once, but it can be done.
Oh, and this was another, not important bit of info, but somewhat funny: the planning and development dept is evidently changing their name to the ‘happy bunnies in forests department’, or something like that, to give the impression that they’re not only about hammers and drywall and whoring out wetlands and streams to developers. Oh, how nice.
HAHAHAHA! I guess it’s NOT different here!
Now that’s funny.
My town had 31 new building permits last month, 15 were for swimming pools. I think there are 5 inspectors on staff.
A most excellent scenario. This gives each inspector time to do a “performance test” on the new pools.
I suspect this should take about 3-4 trials at 4-5 hours per day, depending on whether there is ample sunshine during the day.
Yes, ma’am, your pool passed our inspections!
Yep. My inspections have dropped 50% from this time last year.
‘The supply of homes continues to grow in communities across Pierce County, with all of them well into buyers-market territory. Several are deep into the double digits as measured by months of supply, according to Northwest Multiple Listing Service statistics supplied by Dick Beeson, a Windermere broker and MLS director.’
‘As of mid-March, 16 areas around the county range from 8.1 months of homes listed for sale to more than double that in Gig Harbor, where there were 905 homes for sale, or a 16.7-month supply.’
http://blogs.thenewstribune.com/realestate/
The article provides:
“The supply of homes continues to grow in communities across Pierce County, with all of them well into buyers-market territory. . . . [s]ix months of supply is generally considered the point where a market moves from one favoring sellers to one favoring buyers.”
Huh. Doesnt excess supply just mean the houses are over priced and the potential buyers are giving the wannabe sellers the bird?
Does anyone ever just get sick of reading these stories?
I am so dam bitter over the housing bubble, all my plans getting ruined and placed on hold.
I just wish this whole thing never freakin happened already.
I am tired waiting for the prices to resemble something of what they used to be.
I am tired of listening to some that say “we are at bottom” “why are you not buying a house now? it is a buyers market”. Interest rates are coming WAY down, you should buy next month, or you will be sorry”.
Just a few of the bullsh## things that have been said to me over the last few days.
Like a fool I looked up my nest door neighbors property records, he paid 130,000 in 1998 for a really lovely home and his taxes are in the 2,000 range. Something else for me to feel bitter about.
Outside of reading this blog, how does everyone else here deal with their own bitterness?
I am tired of talking about this, defending my beliefs, tired of wanting something so badly that it brings tears to my eyes. I am tired of being tired of this.
At least we are past the peak in most areas, offering vindication and hope for what is to come as you use the time to save for the home. It’s been so long that one’s ability to save outstripped home appreciation. I find that to be a relief. Could be worse.
Try not to be too disheartened. I am in the same boat.
I have had to put my life on ‘hold’ for 5 years while this madness has played out. I never thought the FED would let things get so out of control.
Just goes to show how wrong you can be. Our government is run by fools pandering to imbeciles and theives. The end-game is at hand though, and you must not let your life be dictated by these circumstances. I go about my life, doing things I would do, as though I had already relocated. Life’s too short to let bubble-mania wreck your sense of the little enjoyment you can find.
Go to the beach this weekend, get some sun, read a book and come back in a few days so you can join in our tirades over housing lunacy in 21st century America.
And remember, you are not a financial slave, like many FB’s are. They are underwater. They can’t meet their obligations. That’s a lot of stress. Relax. Be content.
Try to smile. Get a dog. Life is not about housing.
We just get a little over-exuburant here, on occasion.
“Go to the beach this weekend, get some sun . . . ”
I guess Florida does have some benefits. Many of us are still cold.
I am sure you would find it tiring watching the value of your house go down each month by the amount you just made a mortgage payment for. I’d rather be tired (which I’m not) of renting for another short while than be tired of my purchase for the next 30 years.
The sometimes/often frustrating pace of events is actually an advantage. This valuable time can be used for making preparations: saving, cutting costs, and doing research. It has become like a whole new hobby lately.
Humor. I tell those who question my lack of ownership, “Oh, I’m actively looking in the market”. That gets the conversation going. Then, when the mouth foam is at its peak, I ask, “Do you know any Sellers or Sellers Agents who are willing to make a guarantee that I won’t lose money on my home purchase over the next 7 years, if I decide to or have to sell?” Then I go play golf. I wonder what house poor people call themselves when they are house poor? They know they are house poor, but it does seem a harsh realization.
i enjoy renting for less than half the price of interest alone.
why not do this for the rest of my life?
Do you or a person you love have a terminal illness? If not, you have very little to feel bitter about.
Have a nice day.
I’m sort of with you AZ — Most of my frustration with the whole bubble is with recognizing how many in our population are clueless, stupid or immoral. Beyond that, I just don’t care all that much about owning a house. Ain’t got whole lot of money either. Maybe it’s an age thing. After raising kids, I’m happy to have my life back to do whatever I want with it. Happy to be relatively healthy and happy to have no debt and no worries. Looking forward to a little travel, lots of laughs with friends and family and catching up on all the books and movies I never had time for. 1st day of spring, garden is kicking butt. Doesn’t get better than this IMHO.
My close family member has a deadly heart problem and she needs a transplant, she is only 44.
I need back surgery and I have a lot of pain I live with every day and I have a heart arrhythmia.
But this tread and topic was NOT about that.
My complaint is due to the fact that I saved 150,000 over a five year period while we lived overseas for my husbands job.
We watched helplessly the bubble unfold and there was nothing we could do about it.
The money we saved was all from our jobs, overtime,and a deployment to Iraq and me working so hard in a brutal industry I ended up with the heart arrhythmia and a burnout.
We finally came to Florida after dreaming our dream for such a long time, to buy our home and enjoy all of our animals and our horses.
I am bitter because unlike other people we are responsible, sacrificed a lot by saving so hard. For what we now have a decent down payment, big deal.
We wanted to have a 50,000 mortgage.
We don’t want 1% teaser rates with a 2/28 on an overpriced home that may or may not appreciate in value to have the chance to refinance it later. I honestly do NOT get that and why that idea was so freaking exciting to so many people.
Even if we had been here in the USA during the bubble there is NO way were would have jumped in like that with such a gamble.
thanks for all of the real support from the members here, very nice to get that today. It was a rough day.
I hear ya loud and clear. These assholes screwed everything up. And while we didn’t partake in the madness, we will certainly be getting the bill. Look what this mess has done to our currency. Every time I fill up I think back to the sanity we had in the 90’s, along with 99 cent gasoline. You see, it wasn’t just housing. Every single damn thing I buy cost way more today than it did in the 90’s. Inflation destroyed all my buying power. But you have to think this through. Sure these assholes screwed everything up. But how happy will you be if you buy today? I imagine reading the news stories will be very depressing when you see how much you lost. Seeing your down payment get wiped out in a month or two, combined with no chance of ever selling the place, should be all the reason you need to stay put. And let’s face it. This country is loaded with morons and crooks, and I am only talking about our government! The populace is no different. You are one of the few bright ones. Hand in there and you will be rewarded.
SKB, some days are a bit bleak, yeah? I am a real nest-er type, so I feel your frustration (and prices where I live are still going up). But, I shrug my shoulders at the market.
Maybe just don’t talk about the bubble anymore. People who own property get mad, and many people who don’t feel left behind/bitter, so it’s just not a good topic. Also, most people, unlike you, are not interested in fundamentals, they are interested in feelings and exciting anecdotes about overnight millionaires. It’s practically designed to be a frustrating conversation, unless you really enjoy a good fight and/or have thick skin.
I am not saying this to be mean, but I want to point out to you: you are caught up in the mania, too. If you feel that renting is ruining your life and you can’t be happy til you buy…well, you’re buying into the myth of a dream home. Like any advertising campaign, this myth is designed to make you feel like your life is incomplete without the thing being sold (ie a house).
Like me, I’m sure you could actually buy right now if you wanted, just not the size/location/price you want. I am really glad I am not tied to an unaffordable mortgage. The stress and day-to-day poverty would make me miserable. Think of it as a holiday. Until this is played out, what can you do? Nothing. So, relax. In the meantime, you’ve got loads of time to save and to give yourself a very thorough financial education, which will come in handy after the smoke from the apocolypse has cleared.
Finally, thank your stars that this mania is happening in the internet age, so you know you’re not the only one. You’re only one of millions, and we’re none of us alone.
nice comment, ella…totally agree.
don’t bitch about it, get smarter, prepare, and thank your lucky stars you aren’t holding a devaluating asset you can’t afford.
I sold ALL property in 04 and 05, precisely because I paid attention (thanks Ben, I owe you like, 8 million beers), and currently live at (on top of) our business. Being a nester (like you, ella) it gets tedious and frustrating, but compared to the stress it would be otherwise…well, it doesn’t compare.
Well, I’m annoyed because this bubble seriously hurt my ability to RENT a good place.
See, we’re in kind of a weird situation. The city I’m in incorporated in 2000, and has more than doubled in population since then. The housing bubble started when? That’s right, somewhere shortly after that. So ALL of the building in my area has been in housing, not in rental properties— and many of the local apartment complexes were converted to condos as well.
End result is that we have a baby due in May and we would really like to move someplace with actual storage (all of the baby stuff is currently stored at my parents’!) but there is literally no. place. to. rent. Except, of course, for panicky subprimers who want you to cover their mortgage for approximately twice the going rental rate.
I’m ready for the trials and frustrations of homeownership, but I’m digging in my heels until the price is reasonable*. What’s funny is that Evil Rob is the one who is antsy about owning, but thankfully he’s willing to follow my lead on financial matters.
*”Reasonable” is a good price, not necessarily the best price, on the right house in the right neighborhood. I intend to follow our parents’ example and stick around in the same house for decades, so the latter qualification is more important.
I too am tired of this bs.
Tired of my corp threatening to take away my earned income.
Of them paying themselves huge bonuses and still
telling all of us that the neg-35% isn’t enough, they need more.
And tired of paying more for everything.
Cut backs at home started 5 yrs ago. What else to cut?
Just stop taking from me, and ceo’s /mgmnt stop giving themselves mega bonuses.
I hear you. I feel the same way, maybe worse since I have only ever rented and never owned, even though I went to grad school and work like a dog. I feel like a gypsy without roots. Life isn’t fair, and I can only barely keep my temper and bitterness under control…hopefully long enough that I will be glad I did.
What’s to be bitter about? I rent for a fraction of what it would cost to buy, and I don’t have to lie awake at night listening to my house decline in value.
My rental gives me shelter and storage space just fine, and that’s all I’m looking for. If the numbers pencil out for buying, I’ll buy. If not I’ll just continue as is.
Nope. They serve for me as validation that all wasn’t what it seemed and that I’m not as insane as I, and others, thought I was. The others still aren’t convinced (of my insanity or that housing is going down).
You want a house? Go start making lowball offers at what you value the home at.
…response to SKB…
“Elsewhere in Bend, Buena Vista Custom Homes has rented 18 of the 29 homes in its Forum Meadows development since efforts to sell the homes in mid-December at auction failed to produce a single sale, said Mike Higgins, a spokesman for the Lake Oswego-based builder.”
Odd that. How would a no-reserve, honestly run public auction fail to produce a single bid?
Ahhh…
Can I get this deal?
Big Wall Street investment companies are taking advantage of the Federal Reserve’s unprecedented offer to secure emergency loans, the central bank reported Thursday. The lending is part of a major effort by the Fed to help a financial system in danger of freezing. Those large firms averaged $13.4 billion in daily borrowing over the past week from the new lending facility. The report does not identify the borrowers.
The Fed, in a bold move Sunday, agreed for the first time to let big investment houses get emergency loans directly from the central bank. This mechanism, similar to one available for commercial banks for years, got under way Monday and will continue for at least six months. It was the broadest use of the Fed’s lending authority since the 1930s. Goldman Sachs, Lehman Brothers and Morgan Stanley said Wednesday they had begun to test the new lending mechanism.
On Wednesday alone, lending reached $28.8 billion, according to the Fed report.
The Fed created a way for financially strapped investment firms to have regular access to a source of short-term cash. This lending facility is seen as similar to the Fed’s “discount window” for banks. Commercial banks and investment companies pay 2.5 percent in interest for overnight loans from the Fed. Investment houses can put up a range of collateral, including investment-grade mortgage backed securities.
Can I use this facility? The 2.5% sounds good, and I have a 1974 Pinto I would like to use as collateral. Trust me, it’s safer than “investment-grade” mortgage backed securities.
I will lend you $35 at 2.5% against that investment grade PBS.
Your money is safe!
Downtown Anchorage urban living? I lived in Anchorage in the past and am still a frequent visitor and am amazed by this assertion. Downtown is a marginal place to visit in the summer, with plenty of vagrants in tourist central. The place is mostly tacky tourist shopping with a few bars mixed in.
Go a few blocks from the city center and there are junky hotels, offices and the odd mobile home or old log cabin.
Good thing they have the resounding success of Arizona as a backstop. Of course they will get the city council to subsidize their ‘vision’.
Love the state, but think Anchorage is generally a haphazard weather-beaten mess.
jb
“..think Anchorage is generally a haphazard weather-beaten mess.”
Ever been to Fairbanks?
Heh, most of the towns and villages in the state are a weather beaten mess. Primarily because of the weather. :-). Interior Alaska is the worst — something to do with weeks on end subzero temps.
Fairbanks does deserve its ‘armpit of Alaska’ designation though. -40 in the winter and +85 in the summer doesn’t help.
I don’t go up there to have an ‘urban’ experience though. The wild places up there are spectacular.
jb
What I find absurd is the idea that 40-150 outsiders are going to somehow turn downtown Anchorage into a “vibrant” city. My question is, where will they do their grocery shopping? Nearest grocery store is over on Gambell, IIRC. Way to far to walk from downtown in the winter when it’s dark, the wind is blowing, and the snow hasn’t been removed very well from the sidewalks. I’ve spent 27 of my last 38 years in Alaska and go into Anchorage from Valdez 4-6 times a year. I stay in mid-town where you have access to movie theaters, bookstores, decent but not upscale restaurants, and other amenities. Only reason I go downtown is for restaurants, cultural events at the civic center, and to let my son wander the 5th street mall. But you can certainly do that without having to live there. Besides, if an earthquake hits, I really don’t want to be in downtown Anchorage. No thank you.
“Besides, if an earthquake hits, I really don’t want to be in downtown Anchorage. No thank you.”
I lived in Anchorage (was a tot, mind you) when the ‘64 earthquake hit (magnitude 9.2). A big section of downtown was on soil that liquified, and slid downhill. Well, the area was essentially park for quite awhile, and had a nice plaque that illustrated the effects of the earthquake.
Years go by, memory fades and RE greed sinks in. Next thing you know, the plaque disappeared and the area was blanketed with commercial buildings. Apparently, the gov’t didn’t bother to take possession of the ruined areas even though they bailed out the owners, because they figured nobody would be idiotic enough to build there. So, I would doublecheck the location of those downtown condos if I were you…