Sharks Are Swimming Around The Blood
The Denver Post reports from Colorado. “Homebuilders spend countless hours dreaming up promotions. They offer deep discounts. They come up with giveaways. They take out radio, television, Internet and newspaper ads. They even hire people with iPods to stand along the side of the road, listening to tunes, dancing, waving and swinging these really stupid signs. Peter Kowalchuk, president of Qgenisys, said it’s a shame many homebuilders are resorting to markdowns.”
“‘If they’re going to offer me $30,000 now, they’re going to offer me $40,000 later,’ Kowalchuk said. ‘For those who bought a month before the markdown, automatically their home values are depreciated.’”
The Arizona Daily Star. “Loft-style condominiums have sprung up in city centers across the country over the last decade. Eventually, developers in Tucson thought, ‘Why not here?’ They launched projects promising hundreds of new loft-like dwellings in Tucson’s central core. But now, many remain vacant lots or gutted buildings.”
“A few worry that Tucsonans may not be as eager to shell out luxury prices for living Downtown as they originally had thought.”
“‘What can and will consumers pay for?’ wondered Steve Quinlan, chairman of Long Companies and an investor in two loft projects. ‘If this was in Los Angeles or some other markets, then the answer would be easier,’ he said. ‘Affordability is a problem here.’”
“The loft building boom got under way in Phoenix in 2003 and 2004, said Scott Merrill, a real estate agent specializing in the downtown Phoenix market. But in Tucson, lofts didn’t catch on until after the 2005 success of the Ice House Lofts.”
“That put the beginning of Tucson’s loft movement about at the peak of the market. Now that the market has slowed, demand for all types of housing, including Downtown-area lofts, has dropped, developers said.”
“‘I think that market is affected just like the rest of the real estate market,’ said Steve Fenton, developer of the rental and condo project Academy Lofts. Fenton said he had no trouble finding renters for the 25 apartment units in the project, but could only sell six of 11 condominiums.”
“Investors in one would-be loft project at 1047 N. Main Ave. are considering alternatives for the site because of the slowdown, said Jerry Yarborough, a real estate agent representing the New Jersey property owners.”
“‘It never really went anywhere,’ Yarborough said about the investors’ condo plans. ‘We kind of missed the market.’”
“Some buyers interested in living Downtown might not be willing to pay an added premium, said Ross McCallister, a developer who was interested in the property for Bourn Partners yet-to-be-started The Post, 56 E. Congress St.”
“‘You don’t have the whole package,’ McCallister said, referring to dining and entertainment options. ‘If you moved Downtown, what’s going on to keep you down there?’”
The Arizona Republic. “Homeowners associations strapped by unpaid assessments related to the foreclosure-ridden real-estate market are mustering volunteer work crews, cutting maintenance jobs and scrimping on landscaping to save money.”
“Phoenix, Chandler and Avondale are among Valley cities fielding calls for help from HOAs that previously turned only to their own boards of directors and management companies.”
“‘We are in new territory and need to find creative ways to work with everyone, whether that’s stepping in with volunteerism or offering some training,’ said Annie Alvarado, deputy director of Phoenix Neighborhood Services.”
“Like miniature governments that depend on revenue to finance upkeep of common areas, community pools and private roads, HOA boards have to cut expenses or raise fees when revenues fall.”
“‘Unfortunately, in associations as in other parts of society, those who are able to pay are supporting those who can’t,’ said Brian Lincks, spokesman for City Property Management Inc. and an officer in the Arizona Association of Community Managers.”
“His Phoenix-based company manages 260 HOAs in Maricopa County, encompassing about 80,000 homes. A few years ago, Lincks said, he usually carried 15 to 30 pending foreclosures on his books; today, there are about 1,800.”
“‘Everyone’s revenues are off because of our housing crisis, and it’s truly becoming a crisis,’ he said.”
The Review Journal from Nevada. “More than half of Las Vegas home sales in March were foreclosures or short sales, the president of Greater Las Vegas Association of Realtors said Monday. Sales are down 7.9 percent from the same month a year ago. Inventory of homes listed for sale is at 22,763, up 6.9 percent from March 2007.”
“Foreclosures and short sales, or homes sold for less than the mortgage owed, accounted for 773 sales in March, 52.3 percent of the total.”
“While home prices are still declining, down 20.3 percent from a year ago, association President Patty Kelley said she doesn’t expect them to go much lower because they’re now selling for less than what it would cost to build that same home today.”
“‘It’s starting to become a feeding frenzy,’ Kelley said. ‘The banks, the title and escrow companies are backed up. They laid off all their people and now they don’t have the staff to handle the volume. We could get foreclosures and short sales out of the inventory. We have buyers coming back, but the banks can’t act fast enough.’”
“Realtor Steve Hawks said he just received notice from the bank about a 2,480-square-foot home in Seven Hills going on the market for $334,000, compared with its 2002 sales price of $565,000.”
“Distressed property sales are among the greatest opportunities in Las Vegas right now, Jeremy Aguero of Applied Analysis said. ‘Sharks are swimming around the blood,’ he said at an economic forum last week.”
“The number of Clark County homes that entered preforeclosure status reached a record 6,152 in March, up 52 percent from February and more than double the 2,813 preforeclosures in the same month a year ago, Foreclosures.com reported.”
“The county has 15,937 preforeclosures through the first quarter of the year, or 3.11 percent of its 512,253 households. Nevada leads the nation with 2.42 percent of its households, or 18,087 homes, in preforeclosure through March, followed by Arizona (1.96 percent), Florida (1.87 percent) and California (1.05 percent).”
“Real estate-owned, or bank-owned, homes in the county also rose substantially in March to 1,937, up from 1,640 the previous month and 1,763 in January. The three-month total is three times more than a year ago.”
“Nicholas of CMPS Institute said the markets hit hardest by foreclosures are those with a high percentage of speculative investors who don’t necessarily have as much as incentive as a primary resident to keep the home.”
“‘It’s just an investment. They can just walk away from it,’ he said. ‘It’s going to have to play out in places like Vegas and Florida. You can’t bail out speculators. The problem is going to have to correct itself.’”
“Jeanette Young said she’s now faced with possible foreclosure on her home after losing her job at National Alliance Title, which closed in December. President Bush’s plan to give $600 tax rebates to help homeowners is a ‘joke,’ she said.”
“‘I don’t know anyone that has a mortgage that is $600, unless they’ve had the same loan for 10-plus years,’ she said. ‘Mine is $2,200 plus all the other bills associated with a home. I do not see any relief in sight for those of us who have lost our jobs, cannot find comparable income and now cannot make our house payments.’”
The Las Vegas Sun from Nevada. “It doesn’t take a Harvard MBA to figure out that, at a time of year when business conventioneers and tourists head to Vegas for near-perfect weather, the city’s economic engine isn’t firing on all eight cylinders. The proof: Rooms are going for $75 at Harrah’s, $69 at Bally’s and just $199 at Wynn Las Vegas and the Venetian.”
“Even one of the Strip’s most exclusive hotels, the Four Seasons, is offering a $50 credit on hotel services as well as rooms for less than $400 a night.”
“Then there’s the blitz of promotions, from two-for-one meal and show offers to free cocktails and concierge services. Even the just-opened Palazzo is offering a $20 food credit and a $25 gambling credit.”
“Las Vegas has been harder hit than other destinations by the combined effect of the subprime mortgage crisis, rising gas prices and the broader economic slowdown, said Ray Snisky, president of one of the nation’s largest operators of travel charters and packaged tours.”
“The company, which is stepping up special offers in vacations it packages for major airlines and big hotel companies such as MGM Mirage, has seen some Las Vegas rates drop by more than 20 percent from a year ago.”
“‘It’s been surprising to us because Las Vegas has always been considered recession-proof,’ Snisky said.”
“Gov. Jim Gibbons and state legislators cannot count on a quick recovery from the severe economic downturn that has left them scampering to find where to cut $898 million from Nevada’s two-year budget.”
“Economists and housing industry experts predict the state’s flat economy won’t turn around before the last half of 2009 and might not regain its usual robust growth for another three to five years. That means the state’s top elected officials not only face decisions this week on how to make dramatic cuts, they’re also likely to go into the legislative session next year with tax revenues no larger than today’s.”
“‘Our state is going to be in a world of hurt,’ said Assemblywoman Sheila Leslie, D-Reno. ‘That reality is starting to sink in at my level. It is frightening.’”
“The time when politicians could campaign for more full-day kindergarten classes and expansion of state services is over, said Eric Herzik, a political science professor at the University of Nevada, Reno.”
“‘It is not a rosy future,’ he said. ‘Remember, just six months ago people were saying Jim Gibbons was making things up when he started talking about budget cuts. Well, nobody is in denial anymore.’”
“Herzik said legislators are going to walk into the 2009 session with no ability to expand services unless they increase taxes at a time ‘when people in the state are hurting.’”
“‘This time it is affecting Nevadans,’ he said. ‘The housing slump, the foreclosures have hit Nevada worse than anywhere else. In the past, bad things happened to other people.’”
“‘I am not sure yet we have hit bottom,’ said Dennis Smith, president of Home Builders Research, about the slump in the housing market. ‘I do not see a return to the heyday (of 2004-06). Loans are harder to get. It will turn around. How long is it going to take? Maybe three years to five years.’”
“Herzik noted even cigarette and liquor sales are off during the current downturn. ‘What we need is for people to start gambling, drinking and smoking,’ said Herzik, not entirely in jest.”
The Las Vegas Business Press from Nevada. “Corus Bankshares, a Chicago-based lender responsible for $360 million in Las Vegas condominium-project loans last year, now faces high financial risk from the market’s dramatic downturn.”
“The firm has bet almost exclusively on luxury condominiums, with a $4.34 billion loan portfolio at the end of 2007. Corus’ fourth-quarter earnings were $1.9 million or 96 percent less than the previous year. As of Dec. 31, $286.6 million in condo loans were more than 90 days past due and had stopped accruing interest, representing a fourfold increase from the previous year.”
“‘Continued weakness in the housing and mortgage markets, combined with a general slowdown in the economy, has resulted in a significant decline in Corus’ 2007 earnings,’ Robert Glickman, the company’s CEO, said in a statement. ‘This is clearly the worst quarter we have seen in many, many years.’”
“‘The market remains in the midst of a rebalancing from an overheated demand profile to a skeptical consumer perception,’ said Brian Gordon, a principal with a Las Vegas-based financial consulting firm. ‘We believe end-users will ultimately dictate demand within the luxury condo sector and normalized conditions will prevail over the next several years.’”
The LA Times on Nevada. “They blow up aging casinos in this town. Now, some are wondering what to do about yesterday’s desert dream homes. Take the foreclosed million-dollar house realty agent Michael Antos recently showed. Please.”
“Antos pointed out that the house was showing its age. After all, it was built in 2000. In Vegas, that makes it as dated as a coin-operated slot machine. ‘Now you’ve gotta have at least 20 by 20 to sell something at this price,’ Antos explained.”
“About 1,000 houses are listed for sale in Las Vegas for $1 million or higher, more than 600 of them built since 2004. But unless they’ve been constructed in the last year or two, the properties are considered out-of-date, making them all that more difficult to sell, real estate agents say.”
“‘Once you get into the market over $2.5 million, a lot of people just prefer to build their own,’ said veteran Las Vegas real estate broker Michelle Sterling.”
“In 2000, 176 Las Vegas homes sold for more than $1 million, according to DataQuick. By 2006, that number multiplied nearly eightfold — to 1,385 before ebbing to 1,219 last year. Along with being out-of-date, developer Tom McCormick says, a lot of the mansions built hastily during the boom were poorly designed.”
“The housing slump has left Las Vegas strewn with empty houses, and at all price points. There are now more than 22,000 homes for sale here, 51% of them vacant, according to SalesTraq. That compares with perhaps 15% to 20% in Southern California, said John Burns, an Irvine real estate consultant.”
“William Derentz bought a 5,400-square-foot home in Las Vegas for $2 million in 2004. He never moved in, since he planned to resell it in a year or two at a hoped-for profit of $1 million. But after the home languished on the market, Derentz threw in the towel in February and relocated his family from Mission Viejo to the house.”
“He now hopes to sell it when the market recovers, even if that takes several years. Meanwhile, to make the property more competitive, he’s spending $200,000 to fix up the backyard of the house, outfitting it with a pool and ‘his-and-her’ cabanas.”
“‘It’s going to look like the Bellagio back there,’ Derentz said. ‘You’ve got to make it two cuts above.’”
The Reno Gazette Journal from Nevada. “For Brian Turley and other area repo men, business is booming. In the wake of the subprime mortgage debacle, more people are defaulting on car payments and repossession firms report their business has doubled or tripled in the past three years.”
“‘We’re doing more business than ever; it’s at least doubled,’ said Karen Regan, office manager for a Reno vehicle recovery firm. ‘About a year ago, before the foreclosure stories hit the news, we picked up a lot (of vehicles) in the Spanish Springs area. People were choosing between their homes or their cars.’”
“Two weeks ago, Justin Zane, co-owner of Zane Investigations of Reno, recovered two 2007 Corvettes, she said. Cars trundle into the firm’s yard every day: Chevy Tahoes and Silverados, Honda Elements, tricked-out pickups and brand new Toyotas. Motorcycles and all-terrain vehicles also are recovered.”
“‘That’s another choice, lose your toy or lose your car,’ said Kristen Ithurduro, Zane’s sister and partner. ‘But a lot of these folks, we get their motorcycle, and then three months later, we’re back for their car. It’s a vicious cycle.’”
“Local repossession firms said the subprime crisis is responsible for the upswing, but the usual causes of financial instability are still in play. Divorce, rising fuel prices, an inability to repair a car even when a consumer can make the payments and people buying more expensive vehicles than they can afford are at the root of many repossessions.”
“‘People make bad choices,’ Ithurduro said.”
‘Our state is going to be in a world of hurt,’ said Assemblywoman Sheila Leslie, D-Reno. ‘That reality is starting to sink in at my level. It is frightening.’
Where oh where are the Vegas trolls, with the bullet-proof line? You are officially the worst housing market in THE WORLD. How’s that!
on the msnbc this am LAS Vegas trolls big time
it’s booming !!!
You didn’t really expect them to go quiet into the good night, did you?
The level of unbelief is unreal. Even among absurdly smart and successful people. They just don’t get it.
Reminds me of the conversation I had with a neighbor over the weekend. She was trying to tell me that renting was like throwing one’s money away. I wasn’t convinced.
She also tried the tack that putting money into a house was some sort of investment. Because you’ll get it back over time. I have yet to get any sort of money back from my house, and I’ve looked all over for the danged ATM!
Renting is only throwing money away when it costs more to rent than “own”
I might consider a rent to buy in Oil City but 100% of my rent must be credited towards the purchase price if I do end up buying.
And, bad news in from that metropolis to the north, Phoenix. Looks like it’s now cheaper to rent than buy.
Wow. Talk about a lag in the media. It’s been cheaper to rent than own since early 2005.
–Chet
Actually, Dean Baker (one of the economists/authors of this report) was calling a bubble as early as 2003.
Who wants to live in Vegas? It’s a miserable desert climate. Let’s see how it does when gas goes to $20 due to peak oil.
Got ghost town?
RE: Got ghost town?
Gonna be a lot of those in the southwest when the water runs out.
Where oh where are the Vegas trolls, with the bullet-proof line? You are officially the worst housing market in THE WORLD. How’s that!
Whew! It’s nice to hear that Florida is not number one again! I think the chads may have caused Florida to be voted out of the number one spot.
“Where oh where are the Vegas trolls, with the bullet-proof line? You are officially the worst housing market in THE WORLD. How’s that!”
LV Landlord’s been on hold for three days to “Hope Now”
Evil but funny.
Since this seems to be a W. states thread, the Salt Lake Tribune today has an article on the effect a 6.0 earthquake would have on the structures in the city (www.sltrib.com).
“William Derentz bought a 5,400-square-foot home in Las Vegas for $2 million in 2004. He never moved in, since he planned to resell it in a year or two at a hoped-for profit of $1 million. But after the home languished on the market, Derentz threw in the towel in February and relocated his family from Mission Viejo to the house.”
“He now hopes to sell it when the market recovers, even if that takes several years. Meanwhile, to make the property more competitive, he’s spending $200,000 to fix up the backyard of the house, outfitting it with a pool and ‘his-and-her’ cabanas.”
Thats right Brain Surgeon. Sink another 200k into that boat anchor. Thats the way to solve the problem.
Mr. Derentz is a realtor with Prudential. His photo is about halfway down the page, on the left.
http://tinyurl.com/6pkvdy
Wow… thats quite the collage of posterboys for the world of no self-esteem.
Wow. I looked at his picture and he looks just like one of the husbands on that tv series ‘the real housewives of Orange County’ plus that’s where he was living according to the article. Could it be?
Would someone please edumacate me on why real estate agents need to have their pictures all over the place?
Beauty shots are the best substitute for empty skulls. And even their photos make you want to puke.
He’s certainly one that is not getting the big picture, the gamble has to pay off for this guy or ELSE !
I think he realizes he is “priced in” forever
After reading some of the local realtors (admittedly belated comments) it seems there were a LOT of warning signs Derentz simply chose to ignore? Like the fact that just above his price point (where he might actually make a profit) most folks would just as soon go ahead and build their own mansion!
Then there’s the fact that in 2000 there were only 176 $1 mil. + sales, by 2006 it’s 1,385 and even with a 2004 entry point this ditz can’t eke out a profit? Was he thinking he could list this through a sat. office or affiliate and have that commission be part of his pay out structure?
See, this is what’s so damn difficult to explain to a lot of people but where NAR is concerned there’s absolutely no cap to the amount of self-dealing a realtor can do!? He/she can buy homes through totally leveraged mortgage connections, then the amount of his commission over his cost basis and just roll it into his NEXT deal and no one has any problem with this?
Imagine some guy at Merrill Lynch generating the brunt of his commissions from his/family/friends accounts and then using the profit to buy even MORE stock! Uh… I think the NASD (finra) might have a little something to say about that?
Believe me Derentz didn’t have to sell for any where’s near a million over his cost for this to make a lot of economic sense (for him). Why did we let this go on?
Yeah Las Vegas is gonna be in a world of hurt. As someone who patronizes the city often, that’s music to my ears. $199 for Wynn is still a rip off, but at least $100 less of a rip off than usual.
I think HELOC and easy credit really distorted LAS. I used to really enjoy LAS until a few years ago because it was a decent value- even on the strip. Then the cash started flowing to LAS and the strip was taken over by places willing to take the big money: ultra lounges with $30 covers and pricey bottle service, dining that costs $100+ per person, weekend rates at $300-$400 per night, and no more cheap blackjack and craps on the strip.
Really good point. And… after Vegas success, most other towns began building their biz model on the “$1,500 night out”. Which is really sad because in the recent past spending that kind of money would’ve covered the legal expenses from same said night as well.
$30 covers? To see a “cover” band? I don’t think so. Bottle service, WTF exactly is “bottle service”?
Ya brings your own wine, and they charge to open it.
…WTF exactly is “bottle service”?
Also, at many of the more hip clubs, you can’t sit down unless you buy a $300 bottle of vodka - then you might get a table.
Bottle service is the way to go!! You get a couch, a roped off area, a semi private scantily clad waitress at your beck and call. You purchase alcohol by the bottle. It does cost a lot but I did the math and the cost per drink is the same. You don’t have to wait 30 minutes with the HELOCers to get your drink. If you have a large group on a really busy night that can agree on 1 liquer then it is well worth the cost!! I hate going elbow to elbow with people to get a drink. I tried it once because I didn’t want to stand in line over an hour and fight the huge crowd, I immediately discovered some things were worth paying more or more up front in this case.
Agreed. My last trip was to the Bellagio, the room was only $250 per night and that was only because I was with a ‘high roller’ otherwise it would have been $650!
I completely agree, I bought a condo in Vegas in 2002 and have been going there ever since. I am one of the few who actually like L.V. on this blog. Where else on the west coast can you get great shows, great food, great free enertainment in people watching downtown and on the strip. There is great hiking in the red rock etc. I found it more an more annoying of these thousandaires blowing their money and acting as if they are whales. Way too much ego and not enough substance!! I used L.V. as my confirmation of how crazy the credit bubble had gotten. It was research. I would have to go back to the statistics - number of household that make XX money to recage and shake my head. Weak hands end up folding or busting. Strong hands are getting ready to enter the game.
What we need is for people to start gambling, drinking and smoking,’ said Herzik, not entirely in jest.”
Now, what would President Monson (Church of Jesus Christ of Latter Days - Mormons), the Pope, Jerry Falwell, Billy Graham, or other well-known religious leaders say regarding this moronic advise? What would Jesus himself say (or whoever other individual one regards as their deity)?
I liked that advice, myself. Except for not the gambling part, because gambling’s dumb. Also, I don’t smoke.
Cthulhu fhtagn!
AHAHAHAHA! Laughing my bum off, treshy!
So…yes on the smoking, then? According to the Elder Ones? I should think they’d be all critical of the practice, since hot embers would be so risky to those facial tentacles.
Where did my post go? Let’s try again in different words:
Good for you that you don’t smoke nor gamble. You do drink, it’s probably called milk
Wonder what a house is going for on the Plains of Leng nowadays? Total bubble market.
AHAHAHAHA! Again I laugh hysterically.
But you are right, Steve. I understand that Eldritch Meadows is half vacant, and the other half mostly occupied by the Goat with A Thousand Young. Man, think of all the incessant bleating and little round goat-poopies. And then the incredible evil, of course. And everyone keeps saying, or you know, howling and burbling, ‘But it’s *different* here’, and ‘Yog-Sothoth Industries is relocating here, high-paid jobs for all’ and so forth.
Yeah, I say good luck with THAT, evil minions.
“Antos pointed out that the house was showing its age. After all, it was built in 2000. In Vegas, that makes it as dated as a coin-operated slot machine. ‘Now you’ve gotta have at least 20 by 20 to sell something at this price,’ Antos explained.”
That last line refers to the dimensions of travertine floor tiles - meaning the installed 12 x 12’s are just so April 2004. With attitudes like that, the cute-showgirl-to-offthestrip-hooker look is coming to a neighborhood near you.
turnourthelights
thanks for that clarificaton on the 20×20 : I had no idea what he was talking about ….
lot line size border in feet?
Plasma Tv ??
amusing when these pretentious types throw industry jargon around for the image.
“Gov. Jim Gibbons and state legislators cannot count on a quick recovery from the severe economic downturn that has left them scampering to find where to cut $898 million from Nevada’s two-year budget.”
I love to scamper! I scamper, wander, bound, and sometimes trudge when I locomote. No way I simply ‘walk’ around betwixt destinations, because that’s just boring and lacks style.
There’s a right way and a wrong way to scamper, as we all know. You should also also squeal and clap your hands, and bounce your ponytail, if you’ve got one, whilst scampering. I bet this Gibbons guy and his careless legislator pals completely suck at scampering. I bet they weep, and wring their hands, and clutch at their temples despairingly. Therefore, their activities are more like ‘feckless darting’ or perhaps ‘frenzied lurking’.
Jeeze, get it right, stupid reporter!
why-they’ll still get paid
The Ministry of Silly Walks is looking for someone just like you.
Contact Monty Python.
Boy-o-boy-o-boy! It’s a Tucson post! Better yet, it’s a Downtown Tucson post! Where to begin?
Well, first of all, Downtown Tucson after dark isn’t the world’s greatest place to be. Our city, state, and federal courts are all Downtown, I’ve heard that judges don’t allow jury deliberations to go on past 5 p.m. Instead, they dismiss for the day. Reason: Safety of the jurors.
I’ve also been baffled as to why people would pay so much money to live Downtown. Not too long ago, there was talk of condos that would sell for $800k. Peeps, you can get a nice house in a much more desirable area for a LOT less.
BTW, the $800k condo project is now on hold until the market improves. (In 2020?) It’s on 6th Ave. at 5th St. and I went by it yesterday. Dead as a doornail.
Wonder what the rentals are? $2000/month?
You can rent one of these oh-so-cool lofts for around $1k a month:
http://www.icehouselofts.com/
I think they sold for something like $300-$400k. And I think that a lot of those sales were to “investors.” We know alllllll about them.
And then you can enjoy the trains that blast their horns 3 feet from your window at all hours of the night.
Tell it, ‘01. I’m living and working near ‘01, and those dang whistles are pretty loud up here. I’d sure hate to be closer.
Which is why I fail to understand the appeal of neighborhoods in and around Downtown. I mean, I like the railroads as much as any other consumer. But I don’t want them sounding like they’re rolling through my living room.
I mean, I like the railroads as much as any other consumer.
The last house I had was off el Camino del Cerro in the Tucson Foothills (I called ‘em “The Budget Foothills” because they were much more reasonable than the fancy-pants Catalinas).
Even that far out, you could hear the constant rumbling of freight trains.
Most people don’t realize that Tucson is right in the middle of two of the most heavily traveled freight routes in the country, I-10 and the Santa Fe RR.
Trucks and trains taking asian crap to Wal-Marts in Florida with numerous stops in between.
better hurry
? has denver ever had a good 3 years in a row ??
http://finance.yahoo.com/real-estate/article/104794/Where-the-Subprime-Mess-Has-Created-Buying-Opportunities
“‘If they’re going to offer me $30,000 now, they’re going to offer me $40,000 later,’ Kowalchuk said. ‘For those who bought a month before the markdown, automatically their home values are depreciated.’”
We call them knife catchers.
“About 1,000 houses are listed for sale in Las Vegas for $1 million or higher, more than 600 of them built since 2004.”
If that doesn’t show the rampant speculation in every price range, I don’t know what does. You could bet that several of those mansions will eventually get torn down.
“Las Vegas has been harder hit than other destinations by the combined effect of the subprime mortgage crisis, rising gas prices and the broader economic slowdown”
And don’t forget the rampant overbuilding in hotels, also. There are way to many hotel rooms, with more on the way. This easily dilutes profits and price.
“If that doesn’t show the rampant speculation in every price range, I don’t know what does. You could bet that several of those mansions will eventually get torn down.”
why do you believe they will be torn down??? To put something else bigger there??? why would they be torn down instead of selling for pennies??? Just curious.
Because at one point the maintenance factor of the mansion becomes too large. You can have a decent payment, but between utilities and any other typical maintenance factors, the cost can still be too high.
There are limits to how big of a house we want. I have already seen 4000-5000 sq.ft. houses that we could afford but would never ever move in to at any price.
And the longer these homes are not well maintained, the more $$ spent to get them to a decent shape.
And lastly, most of these homes were built to the ‘avocado green’ standards of the last few years. This will make the homes (as already noted) seem dated fairly quickly.
Once read a ‘home maintainence guide’ that noted 3000 sf. was about the limit that the average family could maintain without contracted help. Bigger lawn, massive rug areas and vaulted ceilings have built-in costs that sellers never mention.
I used to want a 5000+ square foot house but after reading about maintainence costs and labor, I decided 2000 square feet was enough. I could always buy storage sheds if I need more space for my stuff. I would rather have lots of land so I can grow my orchard and the only maintainence is harvesting
“Local repossession firms said the subprime crisis is responsible for the upswing, but the usual causes of financial instability are still in play. Divorce, rising fuel prices, an inability to repair a car even when a consumer can make the payments and people buying more expensive vehicles than they can afford are at the root of many repossessions.”
“‘People make bad choices,’ Ithurduro said.”
That last line sums up 99.99999% of the problem with people; BAD CHOICES. Of course unexpected shiot happens, thats life, but at some point people need to just use all those years of experience to make some better, more realistic choices.
My choice of buying a used but quality 1995 Corolla has never come back to haunt me, including hearing the brake pads start to grind the front rotors last night. A little sandpaper, $19.99 replacement pads & an hr of elbow grease = all is OK.
(No need to spend hrs on the phone comparing repair shops, then more hours transporting to & from, then a day or two without said vehicle. Just use yer brain to get a very common, inexpensive, easy & cheap-to-repair vehicle as main transport).
choices. like how my choice has allowed me to spend less time @ the mechanic and more time here annoying everyone . . . !!
salute
“bad choices” — I connect this final line of Ben’s post with the story a little further up about the woman who says the $600 tax rebate is a “joke” because everyone’s mortgage is $2200. I have a good mind to phone her and suggest that she just make over the $600 to me, since it’s a joke anyway. Not my fault her mtg is $2200.
good point you make, AZ Lender, about the rebate checks , and I also wonder if the tax prep companies are offering any sort of extra tax refund aniticipation loan amts, based on filers pretty much getting back the extra cash later in the year?
I like to save money as much as the next guy. But fixing my own brakes with sandpaper? I think I draw the line there and will spend a couple of bucks to have it done by a mechanic.
manny
relax. the sandpaper just removes any glaze on the rotors.
My grandmother’s house has crossed this point. It is no longer worth while trying to fix it. Furthermore, it’s in a midwestern town where the houses consistently sell for less than it would cost to build them and have for decades.
Then have her sell it. How much can she get for it? If more than $30/foot it’s bubble prices. If more than $50/foot, she can move to a new house at this point.
Not to mention that a lot of these bigger homes were bought by people that were more concerned about the size rather than quality.
I have seen million dollar homes (not anymore, but that is what they originally sold for) with master bathroom lights of THE cheapest kind. And oak all over the place.
I have rarely seen one of these large new McMansions that are worth as much as they think they are.
Increase in auto theft fraud prompts changes in San Diego:
http://www.nbcsandiego.com/news/15820216/detail.html?rss=dgo&psp=news
It is amazing how many criminals there are in this country. It’s the one thing we have a surplus of.
“It’s the one thing we have a surplus of. ”
Ohh… we have lots of surplusses. Surplus debt. Surplus houses. Surplus high end autos. Surplus get-rich-quick schemes. Surplus of people expecting to collect Social Security. Surplus of $400K downtown condos in cities where no one wants to live downtown. Surplus of gamblers. Surplus of garbage on TV. Surplus of stupid, spoined, hoes getting famous by making sox tapes….
From the Denver post article:
“”Jen Gordy really wants to buy a new house.
She’s gone from one construction site to the next in the Denver area, popping into sales offices and touring model homes.
Mostly, she has been ignored.
Sometimes, she can’t even find the sales office, and then when she does, there is often not a salesperson to be found.
And when there is an actual salesperson in the sales office, he or she is on the phone. Or jawboning with a co-worker. Or simply can’t be bothered by some eager customer wanting to buy a house.
On several occasions, Gordy said, she was greeted with this line: “I’m just a temp. I don’t know anything. But have a look around, and someone will get back to you.”
“And then they never do,” Gordy said. “One girl even told me she wanted to follow up with me, and she never even took down my information.”
One of the few homebuilders that did follow up sent Gordy a blank postcard. It had her address on it, and the company’s address on it, but no message. Just blank, white space where the message was supposed to go.
One of the biggest problems with the U.S. economy is an unsold inventory of more than 4 million homes. One reason that this inventory will probably be with us for a long time is because too many homebuilders do not have a clue about how to sell a house.”"
The article goes on to state she does want to buy a home, but was also conducting research for a marketing two marketing firms. Here are the results of that research based on mystery shoppers reports:
• Not greeted whatsoever, 16 percent of the time.
• Agent did not ask for permission to follow up, 44 percent.
• Agent did not follow up, 64 percent.
• Agent did not follow up with relevant information, 86 percent.
Oh dear,
Leigh
In my experience with house peddlers, those percentages seem way low.
REIC doing the customer a favour? Doubt it. Apathy/hopelessness has set in.
In contrast, my one visit to a Troll Brothers development in Philadelphia proper has resulted in follow-up phone calls and monthly snail-mail “news”. Guess they are selling enough to support the sales force.
Mail merge,and you ‘touch’ millions. You only need one $8/hr assistant to send you the New great offer….
I know some of the local Denver builders have scalled back and laid people off not too long ago. For example Ryland went from 12 communities to 5.
One of the biggest problems with the U.S. economy is an unsold inventory of more than 4 million homes. One reason that this inventory will probably be with us for a long time is because too many homebuilders do not have a clue about how to sell a house.””
I have a clue about how to sell those home…
LOWER THE EFFING PRICE BY 50-67%. Those 400K puppies for 150K will go in no time. Those 600K McMansions that are 3K sq. ft. will move instantly when reduced to 200-250K.
You see it isn’t just location, location, location. It is also about pricing and affordability.
What dolts. No wonder they are builders.
Dolts
Re homeowners’ associations being in trouble because of unpaid assessments…in one of my 2003 re-po actions, my AZ lawyer informed me that my lien was senior to that of the association. I decided to pay the back assessments anyway, because I had a number of other liens in the same HOA and thought it behooved me to be on the Good Side of the association. Today, though, the many HOA’s that are suffering are not going to experience that kind of generosity at the hands of Countrywide or whatever. None of the HOAs for the various mobile parks where I lend has had any problems recently. That makes me realize it is not my lending policies that are mainly responsible for the good performance of my borrowers. It’s in the nature of low-low-end housing — a clientele on Social Security who have cautiously chosen housing that SS can actually pay for.
And it also explains why there are so few foreclosures in NW PA, almost everyone can afford them and they can always rent them for big cash flow. $50k houses are fine and dandy, $250k houses aren’t
Exactly, Bye. 250K means you should bring home, I mean bring home, not before taxes or with OT, close to 83,000 a year. Sure, we got them all over this board and country. In addition, it should be w/1 wage earner because in this recession 1 half of a married couple might lose a job. It should also include all the extra impounds.
Which is why 250K homes are too expensive for most ‘Merikuns. Freaking build 150K homes! Is this too much to ask?
“And it also explains why there are so few foreclosures in NW PA, almost everyone can afford them and they can always rent them for big cash flow. $50k houses are fine and dandy, $250k houses aren’t”
I know you are concentrating on Oil City, but as someone who lived in NW PA (Erie) for 35 years, I have to laugh at this comment. “Almost everyone can afford them” - Erie has the distinction of having the highest % of it’s minority population living in poverty in the USA, so no, not everyone can afford them. Even the $20k crack houses that far too many live in and around.
“And they can always rent them for big cash flow” - Erie has been ranked as one of the most economical cities to live in many times for 1 big reason - some of the cheapest rents in the nation. There is no big cash flow in any part of the city being a landlord.
And Oil City was a ghost town when I visited many years ago - I heard that they turned the wells back on when oil hit $45/barrel (what I was told is the break even point financially for that to happen) - maybe that has attracted some life back to the city.
….and also oft repeated Jim Stacks chart. If it ends up symmetrical like the internet bubble chart we have another 200% plus correction back to the mean..
http://investech.com/
“Like miniature governments that depend on revenue to finance upkeep of common areas, community pools and private roads, HOA boards have to cut expenses or raise fees when revenues fall…in associations as in other parts of society, those who are able to pay are supporting those who can’t…”
I lived in the confines of an HOA for ten years and would never do it again. The only time in my life where I was required to waive my constitutional rights. Even in prison I wouldn’t have to do that.
People think HOAs will protect them from bad neighbors. Trouble is, HOAs actually protect the bad neighbors and charge the good neighbors for the privilege.
I’m sure others have had better experiences with them.
I’m sure others have had better experiences with them [HOAs].
Remind me to tell y’all about the time I was chased (at 25mph) through a subdivision by an HOA cop for not stopping at a Pulte stop sign.
Ah, my wild youth.
Loft-style condominiums have sprung up in city centers across the country over the last decade. Eventually, developers in Tucson thought, ‘Why not here?’
“Why here?” should be the default question with regard to any prospective real estate development.
“While home prices are still declining, down 20.3 percent from a year ago, association President Patty Kelley said she doesn’t expect them to go much lower because they’re now selling for less than what it would cost to build that same home today.”
“‘It’s starting to become a feeding frenzy,’ Kelley said. ‘The banks, the title and escrow companies are backed up. They laid off all their people and now they don’t have the staff to handle the volume. We could get foreclosures and short sales out of the inventory. We have buyers coming back, but the banks can’t act fast enough.’”
More utter B.S. from the LV PR firm known as the Review-Journal.
I would say to Kelley: “Prove it”
– Judge Smales
“You’ll get nothing and like it!”