Local Market Observations!
What do you see in your housing market this weekend? Price cuts? “James Matey, a Cape Coral builder, leans on the granite counter of an empty riverfront house he built for New York real-estate marketer Ted Kurz. Mr. Matey says the 5,139-square-foot house, with five bedrooms, wood-coffered ceilings and river views, was advertised at $4.2 million three years ago. The asking price is now $2.4 million — which covers only the cost of land and construction.”
“‘At this point, we’re just dumping it,’ Mr.Matey says.”
“Mr. Kurz says he’d like to hold on to the house for a few years until the market turns, but that would cost him more than $200,000 in interest, taxes and other expenses — money he doesn’t have now that the market has collapsed. ‘I’ll entertain any offer,’ he says.”
Or foreclosures? “Suffolk and Nassau counties accounted for 33 percent of subprime loans that were made in 2006 in New York State and that are now in foreclosure, according to a report. At the same time, Long Island has 30 percent of all subprime loans scheduled to be reset before October 2009, according to the study of subprime loans given out in 2006.”
“‘When you drove around two or three years ago, on every corner there was a new mortgage broker or a new mortgage banker,’ said Adrian Fassett, chief executive of the Economic Opportunity Council of Suffolk.”
“While Alaskans aren’t seeing the number of failed loans as some places in the Lower 48, plenty of people in the Matanuska-Susitna Borough are feeling the pain of bad home-buying decisions.”
“The number of people seeking foreclosure counseling — mostly linked to subprime loans — at the Anchorage office of the Consumer Credit Counseling Service of Alaska rose sharply in recent months. ‘The Valley is one area in the state where foreclosures are definitely increasing,’ said Wendy Romberg, for the nonprofit credit counseling service.”
Housing fallout? ” A nationwide slump in new home construction has hit one of Ashe County’s largest employers, Leviton Manufacturing Company, and prompted the closing of one of its three local manufacturing plants, according to company officials.”
“‘I think this is going to be a very severe housing downturn that’s going to last well into next year,’ said Lou Lovelace, the company’s general manager of North Carolina operations. ‘We had been clearing out that plant to develop and implement a new wall plate line, and it just became apparent that this is not the time to be making multi-million-dollar investments the way the housing market is right now. So we decided to just indefinitely suspend that project.’”
Legal charges? “Mark Strodtman, a Greeley developer who owns close to 400 acres in Mesa County, was indicted Tuesday on 23 felonies, including racketeering, a Class 2 felony.”
“A Weld County grand jury indicted Strodtman and two others who were involved with him in a mortgage fraud scheme that left many Greeley area families in foreclosure, reduced property values of neighboring homes and defrauded lenders, according to the Weld County District Attorney’s Office.”
Slower sales? “Sales of Central Texas homes dropped for the eighth consecutive month in February, and a bigger slowdown could be ahead. Pending sales plunged 49 percent, the greatest decrease on record, according to the Austin Board of Realtors.”
“‘It’s plateaued,’ said Mark Sprague, Austin partner of Residential Strategies. ‘But all that said, it’s going to be the third best year in new-home starts and probably the third best year in resales. It’s not as good as it was two years ago, but it’s better than it was five years ago.’”
Knife catchers? “During the housing boom, investors flocked to metro Phoenix and climbed onto buses that took them to the Valley’s fringes. Now, the bus tours to those edge suburbs are starting again. But this time, home buyers are looking for foreclosure properties they can flip for a fast profit.”
“Last month, 2,500 homes in metro Phoenix were foreclosed on, the highest monthly tally since the real-estate recession of 1990. One bidder at the auction, Saul Grotstein of Los Angeles, said there was more competition for the properties than he expected.”
“‘We aren’t done buying in Phoenix,’ said Grotstein, who was heading to Florida for another foreclosure auction.”
“‘Last time around, it was the amateurs who believed the infomercials and used all the home equity in their own homes to buy rental properties,’ said Jay Butler, at Arizona State University Polytechnic. ‘Now, many of those houses are in foreclosure and selling to a similar group of investors.’”
“Diane Drain, a Phoenix bankruptcy and foreclosure attorney, said she is working with two to three investors a day who are going to lose homes to foreclosure because lenders won’t negotiate with them.”
“‘If it’s money you would take to Vegas and drop on a table, then invest it in foreclosure properties,’ said Drain. ‘But if it’s your retirement account or home equity, don’t touch it. I am seeing too many people now who are losing everything because they invested in homes they thought they could flip for a profit.’”
Florida Contracting
http://www.tampabay.com/news/business/article434356.ece
Who is counting the people leaving like bats out of hell?
‘But all that said, it’s going to be the third best year in new-home starts and probably the third best year in resales. It’s not as good as it was two years ago, but it’s better than it was five years ago.’
Where have I heard that before? Was it NAR, CAR, FAR, Southern Nevada REALTORs, Arizona REALTORs? Welcome to the party, Austin. Get the door for Portland and Seattle, I saw them pulling up.
Spent time with 2/cpl re agents from portland yesterday, while they were on vacation, it seems that ‘now is the best time to buy’ and Portland is not going to be as hard hit as everywhere else. Along with that, it would seem that, there are ‘lots of buyers who are sitting on the fence’ and ‘ sellers aren’t lowering their prices’, sooo there is a “stalemate”. Meanwhile as a re agent for many yrs-them- there business is one where they can’t leave but a couple times per yr as otherwise ” they aren’t making money” (selling).
Also, another word of advice from Portland re, ‘buy plexes now’ ‘now is the time to buy plexes’, ‘ you can get financing for plexes’.
Confused me for a minute,until I realized that they were talking du,tri, and 4. It must have been the martini that made my head foggy, I almost bought that one.
In 93/94 that was the time to buy rentals. Seriously, the plexes were going for a song. But you had to hold them for 10 yrs before this runup would pay off big time.
“Along with that, it would seem that, there are ‘lots of buyers who are sitting on the fence’ and ‘ sellers aren’t lowering their prices’, sooo there is a “stalemate””
I LOVE this definition of “stalemate”. Every month I recapitalize interest on the CDs holding my down payment, and home slaves pay interest on a loan they can’t afford. FANTASTIC stalemate.
In the NFL, this type of “stalemate” is called “the victory formation.” When my team has more points, has the ball, and has the opportunity to run the clock out, we play “the victory formation” which assures that we win and you lose. Stalemate? Sure, WTF, call it a “stalemate”.
Preach it, dude, preach it!
then the Feds move in, add 30pts to your opponent’s score on the score board, award the ball to them, and reset the clock.
And then the Chinese and Saudi’s cut the power to the stadium.
While the Three Stooges loudly proclaim, “It is all contained!” while tossing out dollar bills to everyone. Except they are not dollar bills, but are instead used tissues. And yet, they are worth the same amount by that point.
“‘Last time around, it was the amateurs who believed the infomercials and used all the home equity in their own homes to buy rental properties,’ said Jay Butler, at Arizona State University Polytechnic. ‘Now, many of those houses are in foreclosure and selling to a similar group of investors.’”
Nice to hear these groups of dumbasses being called what they are.
“Nice to hear these groups of dumbasses being called what they are.”
“dumbasses” should be the term that is repeated over and over — as Congress makes plans to rescue them from the consequences of their past decisions.
Friend of mine is at the 3 day FREE seminar to buy with no $ down.
Can’t Wait to hear how that went.
I couldn’t say anything to her, as I already know she is heloced in her Yucca prop.
For those of you who don’t know, Yucca is right next to the Joshua Tree reserve. Lots of those JTs!!!
–
Too many desperate people looking for income and getting trapped in bad ideas. This sort of stuff will only pick up as the economy goes down.
Jas
I’d be interested to hear from N. West Colorado observers, North of Steamboat Springs in Routt County. I spoke with a realtor friend up there who says “it’s different here” because European money is coming in propping up values b/c of the dollar-euro differential. Anyone know different? Thnx.
Oh lord, yes! The Europeans are everywhere. They are going to be buying Manhattan condos; they are going to rescue the Bay Area, and lord knows, that they just can’t get enough action there so they will be diversifying into Western Colorado. What’s not to like out there?
After that Lincoln, NE, and all of ND. You’re next in your Eurofication.
Those pesky Europeans are going to buy everything in sight, and next thing everyone will be having croissants for breakfast, and baguettes everywhere. No cappucinos after noon though; that’s a social faux pas, okay? OKAY.
Well, if the french are coming to save us, along with all the other Europeans, then at least we will finally have decent croissants. This is a wasteland for croissants.
The downside is that Europeans do not buy alot of chatchkes, junk to decorate with. Not the homes I have visited, so the furniture daycor businesses will still slide.
Bummer.(sarcasm)
Its the opposite. The French president is lowering the socialist barriers in France. There is a flood of business into France at the moment.
No french croissants coming this way? boohoo.
I suspect I’m not gonna get a straight answer. . . .
I think you already did. You failed to understand it.
Yeah…right. Glib responses are cool. I make them all the time. However, I wasn’t looking for a kool-aid housing bubble response but an evaluation of the specific market where I was interested in investing. Some of us are looking for an educated response as to the specific area we are intersted in. I got one and it helped me immediately from making a hip shot decision b/c the person that responded was VERY familiar with the area I was asking about. In fact, it probably saved me over $100-200k. Please understand that there are serious investor/owners on this site that respect opinions from all of us. You may not be playing in the purchase market but this blog is INCREDIBLY helpful to those of us who are.
BKLawyer, I replied to this Q a week or so ago, you prob. didn’t see it, so I’ll repeat. I have family near Steamboat and an aunt and uncle who own a condo on Mt. Werner, plus my family has a large historic family ranch near Hayden (close to Steamboat), I lived there until I was 15. Steamboat is no different than anywhere else in Colorado, it’s a town dependent on skiing and a tourist economy. Steamboat Lake is too far out to be practical and the prices there are a ripoff. It used to be a quiet place locals went to to fish and run from mosquitoes. Too much snow in winter to be practical.
Whither the economy goes, there goes Steamboat and the rest of Colorado. When tourism slows, Colorado hits the tanks. I’ve seen it happen. In the mid-80s in the Roaring Fork Valley (Aspen to Glenwood Spgs), you could buy nearly any property available for less than $150k, some NICE places (I bought a 2,000 sq. ft. nice house on 1 acre near the ski area for 100k. Realtytrac shows foreclosures in Aspen and Snowmass, haven’t checked for Steamboat. Your realtor friend is either scamming you or believing unfounded rumors. Believe me, it’s NOT different there. Tourism is down in Colorado, according to friends in the Aspen resort business and the local news there. Proceed with great caution, IMO.
Thanks! Even though I’ve been a perma-bear for many years I caught myself loving the area and believing the local RE publicity. I’m having tax issues (a good thing I guess) and am thinking about a 2d primary residence for the write off. Your post has straightened me out to stay cash fat and wait it out. Email me off post if you have more info or thoughts.
How will they get there? Drive from Denver? Places like Miami and Houston at least stand a chance with foreigners because you can fly right in from European capitals. NW CO is not even on the weak Euro radar, even among the dwindling tide of Scandinavian ski-fetishists (especially since every European has heard that America has become a sweltering tinderbox because of Halliburton-induced global warming). Your realtor friend is a mindless nincompoop.
Thanks. Points well taken. I’m sitting on the sidelines.
My God Corona, CA is tanking! Prices are easily back to 2002 levels. Nice, decent starter-level mid 1980s tract near the airport . . . what sold for $570K at the peak is listed for $335K and NOT selling. Similar very nice place sold for $536K a year ago and is now back on the market for $350K.
I’m interested in Fresno and it’s an odd bird. The periphery is tanking of course, my mom’s place has lost 50% of its peak value already, but the high-quality area where I am looking has just seized up. There’s a $500K place there that I’d take for $400K, but the situation needs to ripen more before I’ll make the bid.
Here in Sunnyvale, the psychology has definitely turned but there is upward and not downward pressure on rents so there is certainly a limited downside.
Corona has to be one of the worst parts of SoCal that I’ve ever seen, aside from maybe Compton. That its prices are at 2002 levels is not surprising; that they ever rose above that is the surprise.
I agree that the rents seem unfortunately strong in Silicon Valley, but there’s very little real estate price appreciation, and it still costs 2x or more to own versus renting, so ample reason to expect a correction even if rents remain high.
If we go into recession and the tech job market weakens, then rents will soften, and look out below!
Well, here in Austin my local market observations involve me still seeing a new condo development going up every time I turn around. I swear, if I drive in a neighborhood I haven’t been in for awhile, I find myself asking “Was that here last time?” Tyvek, particle board, or cranes everywhere. Most recently I saw a huge one going up near the UT campus that I hadn’t been by before. At least in that area there will be a constant stream of students to supply residents, but as for many of the other developments I’m not so sure.
Just from casual observation there doesn’t appear to be any sort of slowdown here. But I realize that most of these were begun at the peak of the boom and are just now coming together. They will get built anyway, even though the boom is clearly over, but once they are built - what will the environment be like?
One thing to note about condos or even new subdivision construction is that once funding is approved - it’s go time no matter what. The clock has started and the developer is paying interest every day the loans are out. Even if the developer sells at less then optimal prices its better then not selling anything and paying bank interest on dirt. Most of the current projects were financed in 2005 or 2006. They were envisioned during the time of easy money and optimism.
However, I can tell you that the new permits have stopped. At the city permitting office, we are seeing a lot of land being platted but construction plans have really dwindled. Also, several national builders have dumped their subdivision holdings in Austin in order to balance out their books. Believe me, things are slowing down - you won’t see it for another few months but it will happen. For example - check out the Muller development. Most people expected those houses to sell with in days of going on the market. Yet, when you drive through you’ll see for sale signs everywhere. After all - who really wants to buy a $350K 1500 sq-ft house? Only a fool from California would pay that and they are not moving here like they use to.
“After all - who really wants to buy a $350K 1500 sq-ft house? Only a fool from California would pay that and they are not moving here like they use to.”
Mueller not selling? But - you’ll be only a short drive away from an “upscale” strip mall! Only be a 20 minute walk to Best Buy! That’s gotta add an extra 75k to the value right there, right?
Not to mention, of course, your kids will be rolling with ‘bangers and picking up extra cash as runners in drug deals if you send ‘em to the nearby school. So you might have to rent an apartment in a good neighborhood, so you can claim that as your address and get your kids sent to a different school. But, pick a one bedroom, and that’ll only add another 500 bucks or so a month to your expenses. Bargains, I tell ya! Bargains, these homes!
I agree with the condo observations. Too many condos downtown that are too expensive. They’re trying to sell downtown.
Things have slowed in my Austin neighborhood though. Builder is building less homes now. Had about 5 crews working when I moved in. Now its about one crew part time. But there appears to be more turn over of sold homes. Prices have been flat for the last six months.
JobMarket2009.wmv
I don’t know how to link/attach to this post, but in todays mkt, pretty funny.
I am pretty sure I saw this yesterday from another post.
Sales look pretty sluggish in the Northern Virginia/D.C. exurb areas…and inventories continue to grow.
I was visiting my step-sister and brother-in-law in MacLean last night. They live a block down from this $15 mm spec home that went on the market almost a year ago….it sure is a “dandy”, with turret, fake French style windows and a 3 car garage….I can’t imagine it’ll ever sell until they drop the asking price below $6 mm.
Meanwhile, further out beyond the beltway, there are 4 homes for sale along on the road to one of the entrances to the George Mason University campus….3 of these homes have been on the market now at least since September ‘07 and one of them is a fugly duplex-style house probably has an asking price north of $400K for one section of the duplex.
Finally, the Long and Foster Realty Company (the largest independent realty agency in the States) is set to move in to their new Corporate HQ out near Dulles Airport….their new HQ building is about 285,000 sq feet and it’s as ugly as it is gynormous.
Which entrance?
Which campus? Fairfax or Manassas?
It’s the Fairfax campus….when you turn off of Main Street (ie Hwy 50) at the intersection just pass the Gold’s Gym, you go down that street and just before you get to the community pool in that neighborhood, there are 4 houses, all right next to eachother, that are for sale…
Apparently there are builders in the DC metro area who think the faux French castle is the thing to build.
I drive Hwy. 7 (Leesburg Pike) each morning on my way to work in Tysons Corner. There is a tiny street off 7 close to where Georgetown Pike ends where there are 4 giant, cheaply made faux French castles (7,000 - 9,000 sq. ft) in various stages of completion. They sit right next to one another and each has the “turret-effect.” One of the houses has sat half-completed since I moved here from Atlanta 3 years ago. At the end of the cul-de-sac there is a mountain of dirt and construction debris is strewn everywhere. None of the houses have sold. Who would pay anything to live in such aesthetically offensive buildings. These houses (?) are eye-sores for people who live in the area and for the commuters who make this trek everyday. The zoning is atrocious. I can’t imagine who in the local government (Fairfax County) could approve the development of these amusement park pseudo-houses. That is what comes to mind when I see them…a cheap amusement park with a haunted castle. The solution: tear them down. In fact the tiny street is so short and at such an odd angle to surrounding streets, maybe the street should be ripped up and the area re-forested.
If a driver travels west on 7 (driving the opposite direction away from Tysons), there is another huge eye-sore on the left before the 7 and 7100 overpass. There sits a gargantuan faux stone building with an ugly fountain that is surrounded by a very tight circular driveway. The darn house fronts onto 7 with a relatively speaking tiny front yard. (Oh, and the owners have several sets of cheap plastic lawn chairs stacked up against the end of the house for ornamentation. You know, the kind of chairs one can buy for $3.97 a piece at CVS on sale. Nice touch.)
Hardly a day goes by that I (as an Atlantean who temporarily lives in the DC area) don’t discover several “new” architectural disasters in the “affluent” “everybody loves it here” Northern Virginia. Atlanta looks sooooooooo good when I go home even though it has its “areas” also, but it seems “those homes” are more “contained” there. Here? You can’t drive a mile without asking, “Why would anyone build anything like that? Why would anyone buy such an eye-sore?” Many of the local builders wouldn’t know “good taste” or “common sense” if either slapped them square in their faces.
My belief is that many of these visual disasters will sit unoccupied for years to come. In fact they may never sell.
I’m convinced that there is no zoning or planning around here. This is an area that could have been really, really, nice. Instead, i get the feeling that 30-40 years ago, back when NoVA consisted of little villages out in the country, they all got steamrolled by developers.
Even in the 5 years I’ve been out here, I’ve seen new housing go in places I couldn’t imagine (or at least I would never have allowed). For example, places that are served by a two-lane road and already suffering traffic jams. I would have forced the developers to widen the road before they even started building. The only hint of planning I’ve seen around here is the undeveloped areas left for clover-leafs on Rt28. You can see that on a satellite view of the intersection of 28 and Willard. That might be the only single instance of planning-ahead in the entire history of NoVA.
But, back to architecture — I can’t believe how many spec Mansions I’ve seen in the Oakton/Vienna area. Even worse, some of these have horrendous architecture. Did the builders hire an architect, or did they do it themselves on the back of a napkin? Did they do any research, because some of these places look bad — really bad. Whoever said that they looked Disney-esque is right. Talking to other people, apparently I’m not the only one to notice that quite a few of the raised-ranch pop-ups that have come on the market recently actually look nicer than than the made-from-scratch spec mansions (and McMansions).
Oh, and if I’m reading Yahoo foreclosures correctly, I’ve found at least one mansion that has been foreclosed on because it never sold in two years. That’s a helluva gamble building single houses in the $2-15m range: you’d better do your homework. I get the feeling that a lot of these builders didn’t.
How about those big places in Oakton right by the new library, not far from Flint Hill. 1/6 or 1/8 acre lots, perhaps - and the houses seem to have a 90% footprint on them? They’re kind of handsome looking places, at least (no fake-chateaux architecture, at least) - but they should have made them into actual townhouses, rather than single houses separated by 8 feet or so — and used the extra space for slightly larger back yards. I guess they’ve been there five years or more - blanking on the name of the street - right across from the mall.
Some of the same thing on Spout Run in North Arlington - some of the infill there is really wedged in tight (although that’s a denser area to start with, so at least it’s somewaht more appropriate).
On the Maryland side - in Potomac - there is better density requirements, it seems, along River Road - but some folks have sure built some monstrosities out there, as well - a lot more of the chateaux/Norman style that looks really out of place around here - and, of course, 3 and 4 car garages on all of them.
You mean right off of Hunter Mill, across from the Giant? Taken out of context, the houses look quite nice. But, taken in context — zero lot lines — they look ridiculous. Already two have been in foreclosure.
http://tinyurl.com/2zyx9y
Exactly.
RE: My belief is that many of these visual disasters will sit unoccupied for years to come. In fact they may never sell.
There was a time when an appraiser could tell a bank loan officer…”You know, this residential blueprint is a functionally obsolete monsterosity and a monument to somebody’s deluded ego.
You’d be wise to have your VP of lending really give this a good look. And if he has any smarts he’ll flush it down the rejection toilet.
Unfortunately all those voices of reason were run out businesses.
There’s a bazillion bad ideas out there now-all ready to be bailed out by the US taxpayer.
Here’s the mansion in McLean I was referring to in my post above….asking price of $17.5 mm:
http://www.sothebysrealty.com/PropertyDetails.aspx?R=104079868&N=12+4294966828&No=-1&PSeq=0
Screw that! I’d rather pick up a foreclosed mansion in McLean for the low price of only 4.25million! We’re in a recession, y’know, and I need to do some belt tightening. And anyway, 11 HVAC zones is a little gauche given the times.
http://tinyurl.com/3ya2c3
I love how the description calls it a “3 level colonial”. I’ve never seen a colonial that looks like that!
Colonial???? Good grief. This isn’t American colonial for sure and since it is in the US I can’t see describing this as a colonial. The realtor apparently wouldn’t know a colonial if he or she saw one.
This area gets more bazaar the longer I am here. The DC area is an alternate universe and doesn’t realize it is. Ignorance is bliss.
Impossible! Haven’t these people heard that everyone in D.C, NoVa, and MD is “rich because we live near D.C.” - indeed, we are all rich, and money just rains from the sky, and… and… oh, never mind! Back to watching people making $60K a year trying to buy $600K houses!
Santa Clara California…95050-54..(silicon Valley)…Pop. Approximately 110k…My last post on this area I believe was in January….Our single family inventory has gone from roughly 50 to 180 over the past year…Just as a comparison, the inventory level in the 1991 down turn was roughly 500…Some areas of the city receive strong demand…95054 would be one of them…Homes selling for roughly $400. + per foot…On the other hand, there are homes that receive no offers at all…One builder that I know has had 4 brand new homes for sale for a year and has received no offers….Shea homes purchased a 6 acre site from Underwriters Lab., has put in ALL the infrastructure for roughly 300 condo’s, built the models and shut down the site….Generally speaking the mood hear is quite gloomy but sales still occur for what is considered desirable locations…When I travel through our R & D zones we have many vacant buildings and even more stark is the under utilized buildings….Other areas of Santa Clara Valley are quite depressed particularly in the east and south…I am not sure how I would compare this down turn vs. 1981 or 1991..??…I will say this, IF we get a shock to our job market, the fall out will dwarf both 1981 & 1991…To much leverage in the system…Next post will be in July…
There’s an 70s old-school R&D bldg on my walk to work that’s been empty for 2 years now. Ain’t Prop 13 grand.
–
dave,
Listings are above 200 now. Some are sale pending. Still months of inventory, 4-6 months, is lot better than San Jose.
Jas
SCDave,
My wife and I owned a home in Santa Clara for 18 years. We lived in the Cupertino school district which was a plus. We paid $148 a sq. ft. in 87′. Sold it for $495 a sq. ft. in 03′.
I won’t begin to try to explain the Sq. ft. prices where we live now (Los Altos).
Things are definitely frothy, no?
Mike
Yes they are Mike….You, living in Los Altos know that all to well…I have been through a number of appreciation cycles but none like this…
Morro Bay, Morro Bay. Watching watching watching. For a couple of years, the inventory of under-$600K houses/condos oscillated between 27 and 39 offerings, with slight increases in square footage per dollar (guess I should say, square inches per hundred dollars). Since February the number has finally gone up to 44, and the number of properties offered under $400K has increased from last year’s 5 to this year’s 16. However, the prices remain ridiculous: one item offered at around $400K brags about $1700 worth of monthly rents. I guess 20 years of rent is a better price than 30 years of rent, but what idiot would pay either of these prices?
Make it up on the appreciation! ha ha ha
I appreciate your Morro Bay reports, as that is one of the areas where I would like to find a retirement place. Unfortunately, it appears that too many others had the same idea before we did, and that area appears to be stable for now. We’ll probably have to wait for normal attrition to kick in after everyone has accepted that the bubble is over before we can buy at reasonable prices in that area.
All of the places that I am interested in are still holding up prices. Maybe after the next wave of resets hits we’ll see some loosening up, but the attractive areas still seem to be in the deep freeze, sales-wise.
According to the foreclosure sites, defaults have exploded in N AZ. It is really looking bad for the local economy. With gas so high, the spring tourism season is questionable. And if that leg goes, no one can say what might happen.
I’m happy I chose to drive N Az / SW Colo / NW NM from LV last year; I figured the longer I waited the more expensive the gas would be.
That area should go solar of course. We’re a nation of idiots for not PVing the sunbelt. HELLLO!
“We’re a nation of idiots for not PVing the sunbelt.”
Totally agree. Especially of the desert area of the sunbelt that bakes in the sun 365 days/year.
The power distirbution infrastructure passing through these areas is already available to be tapped into.
any steals in sedona or flag yet ?
I think many have been underestimating the negative effects of high gas prices on tourism. Tough times ahead for many, many locales across this vast nation. Keep us posted on your area.
NM & AZ had minimal population before the automobile, and that along the railroads. What will happen when gasoline goes to $10/gal?
Us bikers will own the roads.
“Easy, easy rider,
ridin down the highway of desire,
the free wind takes us higher…”
Hogs or Bicycles? ie, should I invest in leather or spandex?
Observations from southshore MA:
Most of the current sales (meager in number) seem to be lender-owned, foreclosed properties. Condo market is dead. SFHs are not moving. Properties listed months ago are still lingering as the sellers aren’t dropping prices fast enough. Actually, in the last one week there have been very few new listings. My guess is that the brokers are turning away sellers because it is all a waste of time!
Not far form you in Southern NH is not good. Every house my family has looked at is foreclosed or empty or in distress. Im seeing houses sold for 280 goingfor 210. You can tell who bought at the top by the listing price. Those who are reasonable and have a decent houses do sell. I think townhomes will be hit hard soon. Two many 2 bedrooms with no parking and high taxes and fees. Houses are the first domino and condos will soon be behind.
2 years ago I could dream of a two bedroom garden condo. now im looking at houses
In 2002, my wife and I were offered her friend’s house in San Mateo for $675K. At the time, combined income about $140K. I thought, how would be pay for that?”. We passed. Should have bought - same house was over $1M by quite a ways in 2005. So left CA and moved to NM. Similiar house, just under $300K. Also did financial services. Saw multiple people ask for my help - one couple made $50K year tops, bought an $850K house. Now if I understand these bailout schemes by Hillary, Barack, and other politicos, I should help these people that bought $850K pay for those. And I don’t benefit, because I thought about a purchase, moved, and bought something we can actually pay for? NO BAILOUT FOR DUMBASSES. All of these people deep in their gut knew they couldn’t afford that when push comes to shove. I don’t care what the lying scumsucker used house and debt slave providers said (and slow torture death isn’t good enough for some - break out the JTs).
Exactly! btw, gasoline here in LC is now $3.18/gallon even at places like Valero. You can just imagine what that is doing to people’s paychecks here in southern NM (which averages $8.00/hr).
We are paying a very high price to prop up dumbasses.
As far as I’m concerned, Hillary & Obama represent the FBs and are promising a bailout for them.
~Misstrial
Every third person in Colorado drives a huge SUV or pickup truck. I’ve also noticed a definite inverse correlation between the size of the truck and the ability of the driver to pilot said vehicle, especially during inclement whether. I’d love to see gas spike to $5 a gallon so we could start getting these behemoths off the road, except for people who actually NEED such huge vehicles.
While I drive a truck because I need it for its utilitarian value, sadly I must agree with the $5 per gallon thing (or more). We need to get rid of internal combustion as a source of power for automobiles. I know that, with the help of the very bright minds of today, we can come up with a different power source. I know it’s going to take some time. I think rechargeable battery powered cars and trucks sound promising. It’ll be interesting to see how things play out.
Well good news on th bloated behemoths in the northeast. I’m seeing alot fewer SLOBurbans and TaWhores and even fewer Ford Excretions. Those worthless rolling mortgages have been a peeve of mine for years. Oddly enough, back home SLOBurbans were mostly used for trash wagons back in the 70’s and 80’s. Running barbed wire fence, hauling hose/tubing and pumps etc. It’s sickening when they did to the monstrosities.
Yeah but every kid who dropped out of high school ceased competing with me for a job. Everybody who paid $60k for a vehicle has a vehicle and $55k less wealth than me.
We’ve almost eliminated “survival of the fittest” from the human race. Why get upset when you see it in action? I’m really tired of society propping up these idiots and treating them like they’re my peers. In a few years they’ll be financially wiped out due to their cosmic stupidity and THANKFULLY (HOPEFULLY?) the fittest will have a chance to enjoy what they deserve - a better lifestyle than these mental defects.
So please, everybody, buy more SUVs so your kids have a place to play during your 2 hour commute to and from your 300% overvalued McMansion.
Don’t get angry. It is natural selection at work.
RE: ell good news on th bloated behemoths in the northeast. I’m seeing alot fewer SLOBurbans and TaWhores and even fewer Ford Excretions.
You think the Soccer Moms for Higher Property taxes are
gonna be caught dead hauling precious Jr. around in a domestically produced SUV? Ah, Gawd-the humiliation!
Check your models closely…I think you’ll still find plenty of Toyotas, Lexus’s, and BMW’s still blowing your forward view as you tool on down the road.
“Every third person in Colorado drives a huge SUV or pickup truck. I’ve also noticed a definite inverse correlation between the size of the truck and the ability of the driver to pilot said vehicle”
There also seems to be an inverse correlation between the size of the truck and the height of the driver
And why can’t Expedition drivers ever manage to keep their running boards in the same lane as the rest of their trucks ???
They can’t keep their running boards in the right place because they’re on their cell phones to their bankers looking for more credit.
Except that we all pay for the $5 gas in terms of groceries, public safety, and everyone else who uses gas besides our own selves.
Maybe it would get the cops to stop running their cars while idled for an hour or more, or bus drivers for that matter.
Seeing the hummers and suvs of the the world off the road would be nice - but not nice enough to see even higher food and govt. services taxes and airfares and more.
How about home heating oil? there should be no tax on heating oil, its a necessity, like food.
We are paying High price to pay for W’s mistake. Period.
No, not just “period”, since it just wasn’t Bush’s mistake. Only about 1/3rd of the country was actively opposed to taking Saddam out the way we did. In a democracy, that’s close enough for having a mandate to act.
Plus I think their are larger reasons why oil is over $100/bbl right now.
W didn’t have a mandate. Congress didn’t authorize him to go to war. He did anyway.
As long as you have a war, there is money to be made and Halliburton/Kellog B and Blackwater etc all made and are making $ hand over fist. Still there never was a 2/3 mandate as you indicate. Again, congress never passed the “lets go to war”.
Very naive. Congress NEVER passes the “got to war” thing. It is the presidents decision whether or not to go to war. Poindexters can whine how this or that thing was not passed, till the cows come home.
And oh my God, companies make money during wars? Film at 11!!
While I agree the run up to war was bogus, No impeachment, no illegality.
Yes, the war was launched to strengthen existing Republican power blocs in the MI sector. You think this is news?
As for the mandate, the nation was pretty evenly split 30-30-30 (unconditionally for, unconditionally against, for with UN mandate). After we took Baghdad the FOR group didn’t diminish (obviously), but 20% of the AGAINST and MOST of the fence sitters swung for the action, resulting in a 70% approval ca. June 2003.
Between 200 and 400 billion barrels of oil beneath North Dakota… Folks scoffed because it would only be economical to drill at $40/bbl or so.. Not scoffing so much nowadays though..
Dont worry the sierra club will find a rare pizzle or two to protect from those evil capitalists who want us to be energy self sufficient….
After all they helped create OPEC by delaying the Alaskan pipeline..
http://www.mcall.com/business/local/all-foreclosures.6334713mar29,0,578466.story
The lehigh valley area of PA has experienced a bubble just like FL & CA. The local paper was in complete denial (morning call) but even they couldn’t keep the lies going for long. Now they are starting too hint at the basic reality.
Our prices more than doubled while our local inflation was 2-3 X’s the national average. We are heading for a disaster on a HUGE SCALE.
I LOVE IT!
Bantering Bear, did you see the film
“Who stole the electric car”??
I drove a Saturn electric years ago. Nice.
Ashland, OR:
Median prices down 16% since last year. March closings (so far): 10, compared to 27 during March last year. The buyer pool is just drying up.
One of those 10 sales in March went for $600,000. Original asking price: $850,000.
I think we’re finally starting to see the market turning down here. Of course, the local real estate spin is that “we’ve hit bottom!” In my mind, the downturn has only just begun in earnest.
AshlandRenter;..A friend of mine lives in Eagle Point on the golf course…He said his neighbor paid $450k and just sold for 300k…
And here in Grants Pass, all the portapotties are
gone. All the builders I know are looking very
scared.
Areas like Eagle Point are really going to get hurt. As expensive and out-of-control as Ashland is, it didn’t experience the dizzying run-up and rampant development that other parts of Jackson County did.
The Five-year price stats tell the tale:
Ashland house prices are up 36% over 5 years.
Eagle Point, on the other hand, is up 94.3%.
http://www.jacstats.com
I’m not saying Ashland doesn’t have far to go on the downside, but some areas of Jackson and Josephine County are probably in for something akin to what’s happening in California’s Central Valley.
“Ashland, OR: Median prices down 16% since last year. March closings (so far): 10, compared to 27 during March last year. The buyer pool is just drying up.”
That market was 100% dependent on outside money given the house prices. And the buyer pool will just continue to shrink given buying a second home or eventual retirement home makes zero sense right now.
Are you seeing any changes to the downtown yet, or is tourism enough to keep that propped up?
I think Ashland is a nice area, but those prices were laughable as compared to local wages. Once CA cracked, Ashland was shattered. Look out below.
Talking about high gas prices. I do a lot of gas station evaluations. One of these to check is time it takes to do a transaction. I am to report the number of people ahead of me. Usually there is no line when I go to make my transaction. I have done gas stations for all over northern NM area. Same in all areas, big city (Albuquerque), small town (only station between 3 houses), travel centers on freeway, etc.
But people still need to run away from their problems. Fortunately, casinos to the rescue (to take away the last few $$$). I also evaluate them. They are as busy as ever, as the local rag reports. A few win, most lose their A$$es.
http://www.abqjournal.com/news/state/296107nm03-26-08.htm
People are still swimming in the kool-aid. A friend has put up her 2BR+ 2BA condo in santa monica for sale at a preposterous price of 640k. according to her she thinks that if someone offers 600k she will jump at it and cut her losses to 20k. I asked her what if she offer 500k or 400k or… No answer.
Sounds about right for Santa Monica.
Truly, madly, bonkers prices.
I’ve been tracking a few perfectly ordinary SFRs, down wind from the Santa Monica Airport landing strip, asking from $1.8 million to $2.5 million.
Porque-why? Cos its Santa Monica - fool
Don’t know if you know about Westside Bubble -
http://westside-bubble.blogspot.com/
but there’s often heated (and funny) arguments about the totally insane prices people are asking in sunny 90401 - 90405.
As for $650K being preposterous - while I agree with you, its not that uncommon to see condos like that with prices in the upper 800s, if not over $1 million in ‘toney’ parts of SM north of Montana.
“James Matey, a Cape Coral builder, leans on the granite counter of an empty riverfront house he built for New York real-estate marketer Ted Kurz… The asking price is now $2.4 million — which covers only the cost of land and construction.”
The horror! The horror!
Bring on the B-52’s.
“Mistah Kurz, he dead”
The horror! The horror!
Bring on the B-52’s.
Are you referring to the music group or the bombers in the military?
LOooooooove Shack…
Roam if you want to, roam around the world….
Great harmonies in that tune.
I am living — On Channel Z!
And we are members of the Deadbeat Club….
Rock [bottom] Lobster
“You’re living in your own private Idaho”
“There’s a moon in the sky
It’s called… the moon
And everybody is THERE”
(or underwater on thier mortgages, you decide)
Let’s guard our checkbooks from these thieves who want to ’save’ those who went to the housing casino and lost.
http://news.yahoo.com/s/ap/20080329/ap_on_go_co/housing_help
I would actually like the loan reset by a bankruptcy judge if the bank had to take the hit and not the tax payers.
Suffolk and Nassau counties…
My know-it-all attorney sister (former XX Agency and then FINCEN money launderer analyst) used to say housing prices in Farmingdale only went up, and that my advice to her best friend to sell just before the market top was ‘idiotic’. (Friend did sell). Now it’s, ‘well, they’ve only gone down 2 or 3 percent - everyone wants to live here.’ ‘What about all those Bear-Stearns folks?’, I asked. “My neighber just listed his for 800,000!!”
Big money still in real estate. Just attend this school and you too can make $150K and up. Compliments of spam email.
Become A Realtor” Add Mobile Alert
Yahoo! DomainKeys has confirmed that this message was sent by uniquelistmanagement.com. Learn more
Very neighborhood dependent within my sphere of observability. The lettered and numbered streets of Lake Oswego (a square area with about .5 mile on a side - .25 sq. mi.) shows 80 properties that have been sitting for months. For sale signs everywhere, more new townhouse inventory in building stage.
“Cheaper” areas of NE Portland ($275K-$350K) are showing some pendings. Inventory in greater Portland still up 35% over last year.
LO is my neck of the woods…I keep wondering about the newest houses on the market for 1.4 M and more. Will be interesting to see just how long they sit..and sit…and sit.
Craiglist abounds with “instant equity” promises. Hmm, if it’s such an “investment opportunity, why are they parting with it? I smell fear….
Same with ebay residential listings.
Talked to a couple friends about real estate they own here in Vancouver. They both think prices will rise perpetually. These are educated people, but they can’t conceive of a scenario where Vancouver real estate prices drop. Their reasoning is basically this: prices have been rising for several years so therefore they will continue rising. No deeper analysis necessary.
What’s a townhouse worth in your area? Here a townhouse in a worse than average neighbourhood built with no special construction materials is apparently worth 700k and will climb in value forever. I can’t imagine that the construction and materials cost more than 100k for the unit. I can’t imagine that the townhouse’s share of the land was worth more than 100k when the builder bought the land a couple years prior to completing the project. But now it’s “worth” 700k and rising. Stupid, stupid stupid. BTW it would rent for about 1500 per month.
One thing I’ve always wanted to know about this city….who the hell buys the $1,000,000 crappy small houses and the $700k small townhouses? I’d love to interview some of these people. I mean where do they work? What are they thinking? I guess they’re thinking that having their name on a tiny crapbox is worth all of the after tax proceeds of a 40 year career.
I always laugh when I read people on this blog saying “300k, that’s alot for a house”, “5k, that’s a lot of cash, no one has that much cash on hand” and so on. Try 700k for a townhouse or 2 bedroom leaky condo. Try 1.5 mill for a crappy house in a good neighbourhood. I’m in the never buy camp now. I’ll never buy here barring complete real estate armageddon - 50-75% declines.
I think there is something fundamentally wrong with the loan decisions being made by banks here. Who the hell is lending 500k plus at 5-6% to average Vancouverites with inflated real estate as collateral? If and when the SHTF here it’s going to be something to behold.
“One thing I’ve always wanted to know about this city….who the hell buys the $1,000,000 crappy small houses and the $700k small townhouses? I’d love to interview some of these people. I mean where do they work? What are they thinking? ”
I have often wondered about this too. “Why I Bought This House” would make a good reality show.
Vancouver is insane: I grew up in a perfectly ordinary 3 bed, 2 bath 1920’s 1 1/2 storey in Kerrisdale, and it’s now somewhere in the region of 1.4 million, if not more.
I’m currently in Saskatoon, where we have our own little boom; prices have doubled in a year, and small, rundown bugalows in bad areas are approaching 300K. Worse are the condo conversions: the most recent is the Milroy. Prices for converted 2 bedrooms in this lovely building are in the 300- 350 range. When challenged about the sanity of paying this much for a 2 bedroom apartment that previously rented for 600 bucks a month, the boosters cry “Imagine how much this would cost in Vancouver!!”
Yes, we have so much in common with Vancouver. The forcast is for flurries this week, and it was -14 today.
I just got back from the PetSmart and Tom Thumb (grocery store) and it seems like every item I bought went up another 10-20% from a week or so ago. Then to add insult to injury I filled up the MINI w/ $3.50/gallon super unleaded. Boy, I’m sure glad the government excludes all this worthless stuff from the “core” inflation figures, otherwise we’d be in big trouble right now.
I wonder when the riots are going to start.
I was talking with a lower middle class lady this week about food costs. She said her daughter had been complaining because they hadn’t been feeding their goldfish. The lady didn’t have the money to buy any fish food.
I went to a Super Walmart this weekend to buy groceries, because they supposedly have dropped prices. It wasn’t any cheaper than any other area grocery store, & the quality was very low. One of the items I bought was something that was allegedly fresh strawberries–They did LOOK like strawberries, but they tasted like rice cakes.
Here in Bozeman MT the manure is starting to hit the fan. At the city planing office, zoning change application slowed to a trickle. Sub-division review applications have stopped.
At the Clerk and Recorder office the number of construction liens being filed is exploding. There are more and more notice of trustee sales.
All around town there is house after house sitting with for sale signs, many of them are empty. There are also for rent signs all over, even near the university. It used to be there was nothing for rent near the the university while it was in session. About four blocks away from the university is a fourplex apartment which was built last year, it is for sale and empty.
I here more and more about home builder sitting on houses they can’t sell and how they are unable to service their debt. Small contractors are unable to get jobs, because the larger operations are biding on smaller job because the big jobs are no longer there. The whole industry grinding to a halt.
On the radio there is add after add about it’s never a better time to buy. The paper has puff piece after puff piece on local developers, bragging about there big plans.
All of this can’t be happening, Bozeman is different.
#*@#&# I meant “I HEAR more and more”.
Duane, I’m usually not much more than an occasional lurker, but I do appreciate your updates. Thanks. Sounds like Yellowstone Club might be the next big one to drop in your area!
Comment by Mo Money:
any steals in sedona or flag yet ?
nada..
but Realtors will tell you there are, but it’s always an opportune time to buy in their opinions.
Philadelphia suspends sales of foreclosed homes!!!
http://www.reuters.com/article/marketsNews/idUSN2833879020080328?pageNumber=2&virtualBrandChannel=0
So much for 200 years of contract law. They should close down the Constitution Center.
That’s really going to encourage banks to lend money, isn’t it?
The Constitution Center probably has a subprime loan on it, so maybe they’ll just foreclose on it (and then suspend the sale!)
“”… was advertised at $4.2 million three years ago. The asking price is now $2.4 million…”
Dyslexia sale?
ATLANTA:
Foreclosures are up 45% YOY in January & February. This is on top of an already very high foreclosure rate–Third in the nation in 2007–So if my math is correct, our foreclosure rate is up to about 8.7% now. I do wonder where all these people go after they are foreclosed on–No one seems to be leaving the area (popluation keeps increasing), there’s not too much in the way of decent SFR rentals, and living in apartments here is like death by 1000 gang bangers.
All of the same houses for sale in Dunwoody ( upscale area) that I have been driving past since last spring are still for sale, plus a lot of recent adds. I am now seeing bunches of for sale by owner signs in this area too. And the Dunwoody Costco seems to be the new hot spot to eat lunch–swarms of people getting the free food samples.
Here is a local auction in Rhode Island that turned in no successful bidders http://www.projo.com/business/content/BZ_auction033008_03-30-08_F09IGU9_v15.33ce2be.html
Sunday San Diego Union Tribune used home sales person sales pitch is excerpted below (snide editorial remarks in italics):
Opportunity and hope in real estate
By Penny Nathan
Borker-Owner, Ascent Real Estate
According to Merriam-Webster’s dictionary, the definition of “opportunity” is: “1: to desire with expectation of obtainment; 2: to expect with confidence.”
It is apparent that there has been a significant change in the real estate market over the course of the past few years. Headlines scream the opinions, people talk about it at cocktail parties, over the backyard fence, in offices and everywhere we go. But then there is nothing really new about that. Yes there is! Don’t buy until this chatter dies down to its historic low background level. Why is it that real estate always seems to be such a hot topic? Because the housing bubble imparted a bizarre form of collective amnesia? It may be that, since the early origins of our country, the concept of homeownership has been at the heart of the American dream. The foundation of that American dream and the collective American psyche has always been based upon the foundation of hope and opportunity. Don’t buy until this propaganda gives way to a collective realization that “real estate is the worst investment.”
Agree.
The bottom will be in when we get back to 5-10 posts per thread on the HBB.
We’re a long way from that.
I have been a avid reader of this blog and it is fun to read your post and comments.
A question to you guys:
A property in a very very nice neighborhood with PITI about at least $200-500 less than rent (depending on how quickly u want to rent it out etc.) after tax savings would not be considered overvalued — would it? The location is the best in the city. Also, this property is about 22-25% below what it was being sold at peak by the builder in 2006 and at exact inflation matching growth starting from 2000 it would be worth within 2-3% of what it can be been bought for.
I don’t think this is overvalued by large amount and I am willing and able to stand that loss if it happens. Also, I am putting 20% down and the payments are about 18% of my gross income (NOT counting my wife’s salary) I expect it to go down another 5-7% beyond the 22-25% it has already gone down. Am I being stupid by buying this in the current market, or should I back out? I have been able to negotiate the builder down to this price because this one of the last houses sitting in his inventory in this completely built out community and he doesn’t want to carry the cost anymore.
What’s the city? Describe the house and actual cost.
If you can afford it and like the house and neighborhood, then you may be able to buy with some level of peace of mind. But - I’m curious to hear how you came up with 5-7% as the maximum potential future downside.
Its hard to say. Every situation is different. My wife and I bought our house 15 years ago at what I thought was way over-priced but it was comparable to other houses in the neighborhood. Maybe it wasn’t over-priced, just a lot more than I wanted to pay. And although it had a lot of what we were looking for, it wasn’t a perfet fit. Primarily, one story instead of two - but now that we are in our 60s we love it just for that reason. And especially we like it because we’ve chipped away at the mortgage over the years and don’t owe very much on it plus the appreciation has been great (even after discounting for the increases the last 3-4 years).
So you might see some short-term loss. If that doesn’t bother you, its in a best location (ours is), you like the style, etc, etc at least make a reduced offer, see where it goes. It does sound like finances aren’t a problem for you.
Here is my post to a person who is in total denial regarding the Tampa Bay housing market. He often posts on this site and this was my response to his post on the sptimes blog site:
Ralph says, “I call BS on your undisclosed models. Let’s see ‘em!!!!”
“In fact, I think you’re a landlord or burned speculator just trying to rationalize a bad investment!”
Ralph:
I am not a burned speculator or a landlord and I do not have any bad investments in real-estate that I am trying to rationalize as you have falsely accused me of in your posting. As a matter of fact, I am very financially secure and the details are simply none of your business.
In fact, I do not invest at all in single homes as they are very risky and can be more of a liability than an investment when you subtract the cost of ownership during the period you own the property. Land on the other hand can appreciate, but over a very long time.
This blog site is not an appropriate place for me to post pages of research, data modeling, etc. just to answer your questions. In fact, I highly suggest that you do your own research and base your models on your own situation. The models I use are for specific geographic areas and businesses and are not intended for individuals like you. In fact, the data is very clear that there is a large disparity between rental costs and home prices in the Tampa Bay area. One of the main reasons rental costs are so low is the investor/flippers that got caught up in the housing bubble and could not sell their properties are renting them below what it costs to own. The huge influxes of rental houses are putting pressure on apartment complexes to lower their prices via many types of incentatives in order to compete. Rental costs are what first time home buyers can afford to pay and are tied to incomes for the geographic area.
In the Tampa Bay area, home prices appreciated by 138% from 2000 - 2006. The long term growth rate is 4%. By simply doing the math, anyone can determine that the housing market in the Tampa Bay area was significantly and artificially inflated. That is what caused the large disparity between rental costs and home prices and the correction is well underway and will continue for some time. In the meantime, wages have not kept pace with inflation let alone the huge increase in home prices in the Tampa Bay area. In fact, wages are in the negative territory overall.
If you still do not believe me, go back and research past history. One other example of bubble markets I like to show to those in denial is the dot com bubble that burst in 2000. The NASDAQ was heavy into Technologies and was driven up to 5300 or so prior to the 2000 correction. Today, nearly eight years later, it is at 2261.18 and has lost more than half it’s value from it’s peak and has never recovered. I believe that the housing market in the bubble areas will closely resemble what has happened to the NASDAQ and the data clearly suggests this is well underway.
Once again, you simply do not have the facts correct Ralph and that leads you to make incorrect assumptions and false statements about me in your postings.
Cleveland Plain Dealer today has a full page ad fronting the Sunday Real Estate section.
Features heads of prominent local real estate companies or other local big shots whose income is based on real estate transactions.
They are urging people to petition Congress to save the housing crisis by giving a 5,000 tax incentive to anybody who now buys a new or existing house.
Is this a local thing, or is this a new NAR campaign nationwide?
Holy smokes. OK, I’m not really sure how accurate realty sites like Realtytrac.com are, but I would assume they are somewhat accurate (give or take a few REOs and pre-foreclosures). But about once a month, I like to have a “look-see” at the area.
The north shore, here in Cook County, IL is a disaster. My husband and I call this area “Twinkle Toes Forest,” because its so idyllic and it looks like nothing bad ever happens here. It consists of Wilmette, Winnetka, Kenilworth, Glencoe and maybe Evanston, if you’re being generous. These areas are homes that are easily in the 600K range, with a generous amount of homes in the 1 mil + stratosphere.
Last month, there were a few “P”s on the map, with some “A”s and “B”s sprinkled in (pre-foreclosures, auctions and bank-owed). Well, we just looked at Realtytrac again. My God. It’s a “P” explosion!
Did some of those option ARMS reset recently? Has Realtytrac made a huge mistake? And you can kind of tell these homes (just judging by the outstanding balance) have been HELOC’ed to the eyeballs, so did the banks freeze access to the “bridge loans?”
This looks pretty darn bad. Pret-ty. Darn. Bad.
A question for the esteemed denizens of HBB:
Based in no small part to the reinforcement I found here to my own assessment of the bubbleicious nature of the RE market in the last few years, I managed to sell my typical suburban (Maryland) home very close to the peak of the market and I have been renting for the last 2 years. My wife and I are now expecting to retire sometime soon, and have found a home that seems very appealing in the middle of nowhere in Ontario (between Ottawa and Toronto, but hours from either.)
I would be vary interested in the opinions of the people here about such a plan — particularly since I am concerned that the US dollar will continue to slide. I have read here about the bubbleiciousness of many of the urban markets in Canada, but I have not seen much discussion of any of the more remote areas.
Thanks for any information from a long-time lurker — first-time poster.
Well if you’re talking that part of the woods (favorite camping spots here) you’ve got it made in the shade! I like the country 1 hr. north of Kingston myself…and it is insulated from bubble prices unlike Muskoka or the Lake Huron shoreline.
It is about an hour northwest of Kingston. 100 acres with a large pond, solar-powered electricity and organic gardens. I think we are going to take a trip there this summer to look. From what I have heard it will be worthwhile just to see the area even if we decide to wait before buying.
Schmendrick,
My wife and I are in a very similar situation. We sold our house in Orange County Calif in the fall of ’05 and have been renting ever since. We have been exploring Montana (Bozeman and Missoula) and Wyoming (Star Valley, south of Jackson, which is quite rural and mostly farming). It appears that prices are falling but I think there is a lag compared to areas that are more heavily populated. However, I expect even the most rural areas to suffer price declines commensurate with the gains that were had for the 6 to 8 years preceding 2006. I think if you look back as to what the prices of properties were back in the late 90’s you will get a glimpse of what prices might be like within a few years. Some areas, by their rural nature, will likely suffer even more from a deep recession if we should have one, causing prices to be depressed further.
My wife and I decided that, after exploring a little more this summer, we would go to the place highest on our list and rent for at least 4 months to see how we like it before actually buying. We believe that to rush into buying anything now could waste some of our after-tax nest egg.
Rick
Thanks for the response, Rick. That sounds like a good strategy. My main concern is that further declines in Canadian RE may be overshadowed by continued drops in the US/CAN exchange rate. If we decide we are going to stay in the US, I am pretty comfortable with waiting for what I believe is an inevitable continued fall in price.
“While Alaskans aren’t seeing the number of failed loans as some places in the Lower 48, plenty of people in the Matanuska-Susitna Borough are feeling the pain of bad home-buying decisions.”
The Alaska market definitely underwent a bubble. Prices have doubled and tripled in the past 8 years. However, because we had a housing crash about 20 years ago, many people bought homes and land dirt cheap and can afford to wait out the buyers. This is the source of the “stability” mentioned in the article, and not because our economy is all that strong. Incomes have not been rising.
However, the housing crisis is definitely creeping up on Anchorage, as reflected by empty high-end condos, and it is percolating to cheaper areas. It took awhile for us to join in the bubble, and it might take us awhile to feel the crash…but it most definitely will happen if the recession lasts long enough.
Here in Maryland (Anne Arundel County) it is build, build, build, with no end and no green patches in sight. A recent govt. report just came out and said that this county is the worst in the state in terms of development vs. conservation of green space, something anyone who lives here could have told them. They keep building and building and hoping that these places, which all start at 600K (our median income is 67K), will magically be snapped up by the magical Spring buyers. Oh, and by BRAC, because BRAC will save us and all those people coming in for BRAC jobs will be just thrilled to pony up 600K for a cracker box on a postage stamp in the middle of what’s becoming the worst traffic in the tri-state area.
There was an interesting article in the Washington Post yesterday (Sunday) noting that prices have not dropped one cent in DC’s most expensive neighborhoods. They specifically cited Burleith, Georgetown, and Palisades, all places where average prices are still around 900K (and that is for a rat-infested chicken coop), and unaffected by the housing bust. The article mentioned one neighborhood as “affordable,” meaning the houses were under 300K — and of course a realtor calling the neighborhood “lovely,” which I guess it is if you like rats and gun violence.
Bingo: Maryland is a joke of state, but Anne Arundel County deserves the Paradise Paver Prize. Everything will be paved over, either with useless houses and condos or with useless shopping centers. The end result is a runaway collection of lunacy, where the average “entry level” house - usually a condo - costs 4 to 5 times the median household income for the area, and that’s just for starters.
And still the paving continues - gotta kill all those trees since they don’t “go up forever” like real estate prices! Argh!!
The Weld County developer (who was tagged on felony charges in Mesa County, Colorado) is an interesting example of an eastern slope modus operandi being exported to the western slope of Colorado. Several western counties in Colorado are still booming and they are attracting developers and speculators from the faltering towns and cities of the eastern slope (as well as money from Arizona, Nevada, and California). This, to me, smacks of their last hurrah, one last boom market to profit from. I wonder how long this will last before it, too, ends in tears….
“runaway collection of lunacy,” LOL. Pondering, have you noticed a high level of denial among your Maryland friends? Mine are all singing the denial song loud and clear. All I get is “La La La BRAC BRAC BRAC You’re a silly renter La La La.” I’m thinking it must be something they put in the water.