Local Market Observations!
What do you see in your local housing market? Foreclosures? “Across the state, those who advise Vermonters facing foreclosures say they are starting to see a dramatic increase in the number of people seeking assistance — particularly among those who have subprime mortgages from out-of-state banks. ‘The canary is coughing at this point,’ said George Mathias, director of home ownership programs for the Northeast Kingdom’s Gilman Housing Trust.”
“The first foreclosure tour of its kind in the Midwest will take real estate buyers to 20 Omaha homes on Sunday. In late February, a third of Nebraskans were behind in their payments, state data shows. ‘I know of a home right now out in west Omaha that’s listed at $325,000 that they paid over $400,000 for just two years ago,’ said real estate agent Mike Pettid.”
Legal changes? “City Commissioners voted unanimously Thursday to ban panhandling in downtown, part of an effort to revitalize the city and compete with other major metropolises for tourists and business dollars. The area has several unfinished condo projects and city leaders want to insure the city draws and keep new residents, especially during the housing crisis.”
“‘If we’re serious about bringing about a standard for downtown that we would like to see - that we see in other cities - it’s time for us to act,’ said Miami City Commissioner Joe Sanchez.”
New marketing? “One of the more subtle signs of the shift in the housing sector can be found in my mailbox. For the last few years, I’ve been buried in piles of books promising to show everyone and their brother how to get rich in the real estate market.”
“And now that subprime mortgages have wound up as one of the worst Wall Street investments since Studebaker stock…the few property investment tomes I see these days have a definite funerary air.”
“‘Making Big Money Investing in Foreclosures Without Cash or Credit,’ proclaims one title. ‘Finding Foreclosures: An Insider’s Guide to Cashing In on This Hidden Market,’ shouts another.”
Lower prices? “These days Roger Lebbin, the Mid-Atlantic Builders president may have more frowns than smiles. The slumping housing industry has forced him to change a business model that until now has worked well. One way Lebbin is ‘fighting back,’ as he calls it, is offering buyers the chance to negotiate prices.”
“‘It’s the first time in 20 years we’ve done this,’ said Lebbin, who grew up in Bethesda. ‘Today we are doing that because all of our competitors are doing it. And I think it’s unfortunate, but customers now expect it.’”
“That’s because Mid-Atlantic’s inventory, which includes mostly homes in the $500,000-to-$1 million range, reached 19 homes earlier this year. ‘That’s the largest inventory we’ve ever had,’ said Lebbin.”
“‘You’re never going to see this again. This is a buyers market — it’s a great time to buy,’ he said. ”If you looked at graph [marking on a piece of paper], and this is price, and this is time, we saw over a long period of time the market went up steadily. Then I’d say in Washington over the last part of 2006 and all of 2007, this trend line has been heading down and it’s been going downward by a big chunk.’”
“‘Lately we’ve been bouncing around at what most people think is the bottom … but nobody really knows where the bottom is.’”
From the Austin American Stateman - I posted this last night but it’s very much worth a repeat:
Native Austinite John Anderson was a reporter at Forbes magazine working in New York City in the late 1980s.
Now the owner of a computer business in Austin, Anderson emailed me this week, questioning the findings in a survey of downtown’s condo market by local real estate consultant Charles Heimsath, conducted for the Downtown Austin Alliance (DAA).
Acknowledging he hasn’t lost the required journalistic skepticism, Anderson urged me to look deeper in the condo market.
“Good story about the Heimsath study on condos. Very interesting what the DAA/Heimsath are saying. It is revealing that their study “sought to dispel some myths”, as you wrote, which of course means they began with an agenda. Nonetheless, it is fascinating what they are claiming.”
One of those myths, according to Heimsath, is that the downtown condo market isn’t overbuilt, gauging by how well many of the projects are selling.
Anderson responds that he “wouldn’t underestimate (that the) DAA and Heimsath’s desire is to bolster confidence in the condo market by any means possible.
“The DAA’s basic mission is to promote downtown and Heimsath makes his living serving developers - some of whom are the builders of the very same condo projects he “surveyed”. If a DAA/Heimsath study concluded that condos were overbuilt, demand was falling, and they were owned significantly by investors hoping for a quick profit, would they be alerting the Statesman? Never in a million years - bad for business.
“No one knows how this will play out. But it is very possible that the “study” they did was a pure p.r. move designed to reassure condo buyers/owners. And, perhaps, just the fact they felt it necessary to concoct and promote such a study in the first place is an early sign that cracks are appearing beneath the surface in the condo market. Time, and more independent information, will tell.”
Anderson freely admits he doesn’t know more than anybody else.
“I’m not even in that business. It’s just as likely that I don’t know what I’m talking about any more than anyone else.”
But, having witnessed several boom and bust cycles, “I know that booms turn into busts,” he says.
A number of these sold for as high as $350K at the peak in 2005. They are very plain apartment style condos which rent in SD for around $1200/MO and have particle board everything inside. Even at $195K would rate them overvalued by 30%. These went for $110K in 2000.
Parcel Number: 311-200-44-06
Property Location: 10910342 SUMMERDALE WAY
Purchase Price: $195000
Living Area: 907
Bedrooms: 2
Bathrooms: 2
Document Date: 3-14-2008
“In late February, a third of Nebraskans were behind in their payments, state data shows.”
Wow.
Seriously.
Wow.
“…but nobody really knows where the bottom is.”
But it’s a great time to buy!
Hmmm…. Sort of like buying water in a leaky bucket.
http://www.azcentral.com/business/consumer/articles/2008/04/10/20080410biz-MortgageDelinquent-10.html
“Delinquencies in the first quarter varied sharply by state, but were highest in Puerto Rico (8.03 percent), Florida (7.03 percent) and Nevada (6.59 percent).”
33% in Nebraska? LOL! Another case of the reporter not checking the “facts” that are being spoon-fed to him.
Thanks for the correction, that did seem a bit crazy. Even for Cornhuskers.
No, those were just the delinquencies in the first quarter.
The article said that 1/3rd were behind on their payments. Not that surprised since Nebraska has only 1.8M people.
Bill in Carolina, what makes you think azcentral.com’s figures are accurate?
As I was making low ball offers on houses, i ran across one realtor. She told me there was a new game plan that some lenders with REO’s were using.
They would list the house or condo on a Friday at a ridiculously low price in order to get about 10-15 offers by Monday. The property would eventually result in a bidding war and that the place would wind up selling for 10-15K above what they originally listed it at.
I am thinking that might have happened once or twice but she was implying that they ALL were doing this. As Borat would say, NOT.
Thats a fairly common thing around the bay area if you want immediate interest, price a bit low and let the suckers bid it right back up. All you need is two suckers to bid against each other.
Thanks for the heads-up SD Renter!
Yeah, I’ve noticed some suspiciously low prices on a couple of places in my ‘wish areas’ (Topanga and Calabasas - L.A County - in particular) that have been listed recently - like, $600K on a place previously bought for over $1m less than 3 years ago, with a Zestimate of over $1m (not that Zillow gets it right, ever).
Funnily enough, these kinds of places tend to become ‘Inactive’ before day 30, with no sales records afterwards…
“All you need is two suckers to bid against each other.”
Or one sucker and one shill.
This type of auction behavior isn’t restricted to housing. Anyone who follows any particular type of product sold on Ebay knows that sellers who put the starting bid on the high end of the typical sale range won’t likely get bidders. On the other hand, start an auction for desirable goods at $0.01 and sit back with your popcorn and watch the action.
I’d say it’s a very shrewd move by those that need to move the REOs. You’ve just got to be willing to let some go for a lot less than you want.
“Frankly, my dear, I don’t give a damn… ” Bid away, bid away.. buy away, buy away… who cares really… home prices will not be returning to 2005 levels no matter how many shenanigans the RE machine creates.. home buyers in the Bay Area now are buying a depreciating liability, not an appreciating asset … both financially and maintenance / labor.
Have to say I much prefer sellers who start off with a high value rather than those who start off with an obsequiously low value but then have a bloody big reserve that you don’t know what it is.
It’s also not true that desirable goods will ALWAYS have a bidding auction–I’ve snapped up some good stuff simply because no one else noticed it.
Still bubbly here in Carlsbad, CA. Looking through Business Week this morning I found this article:
http://images.businessweek.com/ss/08/04/0410_numbers/index_01.htm?chan=search
“Homeowners have steadily taken on more financial obligations, including mortgaes, property taxes and home insurance. Meanwhile, the financial position of renters has actually improved since 2000.”
Now granted, if you bought in 2000 then sold at peak you’d be better…but only if you then rented. Still, that has to hurt.
On the Sat. morn financial roundup on FOX. Peter Schiff seems to be a regular now. Six months ago he was laughed off for predicting a sharp housing downturn ,and recession. Now that it’s in the bag he is now being laughed at for predicting a severe recession/depression with gold at $1500 by years end,and eventually several thousand in a couple more..Even Kudlow admitted we are now in recession which means look out below…
Cassandra couldn’t have said it better. But nobody makes money by being a pessimist. Investors only invest in the land of Make Believe if they drink KoolAid flavored with happy endings.
Doesn’t Schiff have a vested interest in seeing $1500 gold? Kinda like Bill Gross forecasting deflationary drop in l-t bond yields…
Of course he does - he claims 70% of his personal portfolio is gold and gold stocks. But who would you rather believe, some schill on Fox who tells you to buy, buy, buy while his firm sells, sells, sells, or Peter Schiff who tells you to buy gold, gives you a very reasoned explanation why, writes a book two years ago forecasting everything going on today and puts his personal family fortune at risk?
Yankton, SD is booming!! It’s different here because everyone wants to live in Yankton!
http://www.yankton.net/
For some reason all I can think of is this after visiting that link:
Star Wars
Nothing but Star Wars
Gimme those Star Wars
Don’t let ‘em end!
Ah, Star Wars
If they should bar wars
Please let these Star Wars
Stay!
And hey!
How ’bout that nutty Star Wars bar?
Can you believe all the creatures in there?
And hey!
Darth Vader in that black and evil mask
Did he scare you as much as he scared me?
Star Wars
Those near and far wars
Star Wars!
I don’t know how this will format, but here are Santa Barbara’s 1Q comparisons.
CORT REPORT - YTD THRU MARCH 2008 CORT REPORT - YTD THRU MARCH 2008
South Santa Barbara County
Month Number of Sales Average Sales Price Median Sales Price Number of Sales over $1 Million
Jan - Mar 2008 300 1,788,370$ 962,500$ 147
Jan - Mar 2007 418 2,039,312$ 1,000,000$ 212
Jan - Mar 2006 430 1,938,850$ 1,050,000$ 232
Jan - Mar 2005 504 1,448,504$ 987,500$ 245
Jan - Mar 2004 590 1,083,917$ 802,000$ 178
Jan - Mar 2003 450 1,067,508$ 699,500$ 121
Santa Barbara
Month Number of Sales Average Sales Price Median Sales Price
Jan - Mar 2008 127 1,307,362$ 925,000$
Jan - Mar 2007 204 1,300,027$ 962,500$
Jan - Mar 2006 219 1,327,576$ 1,045,000$
Jan - Mar 2005 246 1,144,709$ 990,000$
Jan - Mar 2004 323 955,578$ 836,500$
Jan - Mar 2003 214 1,024,115$ 735,000$
Goleta
Month Number of Sales Average Sales Price Median Sales Price
Jan - Mar 2008 84 1,095,160$ 733,000$
Jan - Mar 2007 85 847,126$ 814,000$
Jan - Mar 2006 95 1,426,821$ 881,000$
Jan - Mar 2005 124 1,138,415$ 807,500$
Jan - Mar 2004 128 863,340$ 720,000$
Jan - Mar 2003 112 664,133$ 616,250$
Carpinteria
Month Number of Sales Average Sales Price Median Sales Price
Jan - Mar 2008 21 1,651,048$ 750,000$
Jan - Mar 2007 29 1,676,103$ 950,000$
Jan - Mar 2006 25 1,297,000$ 850,000$
Jan - Mar 2005 25 1,150,380$ 735,000$
Jan - Mar 2004 47 845,670$ 600,000$
Jan - Mar 2003 53 796,169$ 575,000$
Montecito
Month Number of Sales Average Sales Price Median Sales Price
Jan - Mar 2008 49 3,753,449$ 3,100,000$
Jan - Mar 2007 70 4,580,112$ 2,600,000$
Jan - Mar 2006 65 3,524,562$ 2,374,545$
Jan - Mar 2005 79 2,830,164$ 2,200,000$
Jan - Mar 2004 68 2,070,113$ 1,777,500$
Jan - Mar 2003 51 2,356,723$ 1,600,000$
Isla Vista
Month Number of Sales Average Sales Price Median Sales Price
Jan - Mar 2008 5 1,037,300$ 932,500$
Jan - Mar 2007 4 1,282,125$ 1,065,000$
Jan - Mar 2006 5 12,454,500$ 2,000,000$
Jan - Mar 2005 12 1,290,625$ 1,350,000$
Jan - Mar 2004 4 4,953,250$ 1,002,000$
Jan - Mar 2003 5 711,400$ 702,000$
Hope Ranch
Month Number of Sales Average Sales Price Median Sales Price
Jan - Mar 2008 7 2,686,714$ 2,259,500$
Jan - Mar 2007 8 2,883,625$ 2,627,500$
Jan - Mar 2006 3 2,933,333$ 3,000,000$
Jan - Mar 2005
Jan - Mar 2004
Jan - Mar 2003
Summerland
Month Number of Sales Average Sales Price Median Sales Price
Jan - Mar 2008 5 6,663,600$ 1,200,000$
Jan - Mar 2007 17 6,804,353$ 3,950,000$
Jan - Mar 2006 15 4,710,967$ 1,475,000$
Jan - Mar 2005 13 2,593,346$ 1,550,000$
Jan - Mar 2004 16 1,012,656$ 834,000$
Jan - Mar 2003 10 1,469,800$ 1,335,000$
Unincorporated Area
Month Number of Sales Average Sales Price Median Sales Price
Jan - Mar 2008 2 1,290,000$ 1,290,000$
Jan - Mar 2007 1 2,135,000$ 2,135,000$
Jan - Mar 2006 3 1,386,667$ 1,685,000$
Jan - Mar 2005 5 1,148,100$ 890,000$
Jan - Mar 2004 4 955,500$ 606,000$
Jan - Mar 2003 5 1,238,000$ 1,425,000$
Thanks! Was about to post this similar info on Santa Barbara South County sales. Total number of sales per month since 2003:
--- '03 '04 '05 '06 '07 '08
Jan 161 176 163 139 120 94
Feb 137 168 146 132 129 89
Mar 167 258 201 160 176
Apr 204 239 199 142 169
May 197 244 234 138 178
Jun 213 271 257 166 158
Jul 234 227 221 132 167
Aug 304 206 263 178 161
Sep 212 207 196 129 111
Oct 214 184 146 151 110
Nov 155 173 136 123 100
Dec 206 202 156 143 93
Trying the code tag, hope this works…
which tag allows for emoticons?
While taking my morning walk, checking out listings in my area for over $1 million (90039), it occurred to me that there may be a problem with some of the pronouncements out there.
(1) Buyers are sitting on the fence.
(2) Sellers are waiting for prices to improve.
If (1) and (2), then stalemate on inventory for quite some time.
Also, seeing an increase in rentals in the area and offers to sell or rent. This whole, “I’ll just rent it out” thing is going to be a disaster.
–
“This whole, “I’ll just rent it out” thing is going to be a disaster.”
Yes, rents will fall and that will put further downwards pressure on the prices. Let us see how long this game of sitting on the fence can continue.
Jas
This is what I’m seeing too. Many sellers in my area bought extremely cheaply as recently as 7 years ago and are sitting on a mountain of fake equity. However, if there is a real recession then falling incomes/divorces/illnesses and job shifts will change that and they will be forced to sell.
Pressure on buyers comes mainly from propaganda that they need to park their savings in a home, and the almost uniquely American belief that you aren’t really successful unless you own your own home.
Wow, free food, a free bed, and free medical care for a month! All you have to do is ask a Miami police officer for some spare change!
–
Q1: How much farther prices have to falls in various areas?
A: I don’t think that there were very many areas that were undervalued at the end of 2000 with the lowest unemployment rate in three decades. It is not a bad bet that the prices will fall at least to December 2000 levels. Here are price gains in Case-Shiller metros since the end of 2000:
Metro Area Change Since End of 2000
Miami 107.0%
Los Angeles 103.8%
Washington 90.1%
New York 79.2%
Tampa - FL 76.8%
Las Vegas 76.6%
Composite 72.6%
Portland - OR 72.2%
Seattle - WA 70.2%
Phoenix - AZ 70.1%
San Diego 69.7%
Chicago 45.1%
San Francisco 43.0%
Boston 39.5%
Minneapolis - MN 34.7%
Charlotte - NC 28.6%
Atlanta - GA 19.5%
Denver 12.9%
Dallas - TX 11.6%
Cleveland - OH 4.4%
Detroit - MI -6.3%
Composite-20 61.9%
Q2: Can the USG and the Fed arrest the price decline?
Q3: At what price decline % does the economy enters depression?
Depression will definitely not be uniform throughout the US. Would the biggest bubble areas suffer the most?
Jas
–
At the end of 2000 prices in SF metro were over-valued due to the tech bubble by as much as 50% (prices went up 93.6%
during 1996-2000).
Jas
“Would the biggest bubble areas suffer the most?”
IMO the areas that have an economic base that remains intact during this recession will do okay while the rest will be screwed.
The size of the bubble in these areas is secondary to the economic base that supports it.
But virtually every economic base has been hooked up to the FIRE economy.
Which base has been left freestanding? Wheat production?!?
A poster tell of Minot, SD experiencing a RE boom due to the construction of another B52 AF base. This should be a steady source of funds for the town.
College towns should be stable. As long as R&D money flows into the Bay Area jobs there should be stable.
But, yeah, many areas are screwed.
Minot, *North* Dakota
“College towns should be stable. As long as R&D money flows into the Bay Area jobs there should be stable.”
Income wasn’t a factor in the 2002-2006 price increases. Home prices are down roughly 15-25% in most of the bay area. Even if they came down another 20%, only might be fully corrected. I bought a house for 300k in 2003 that sold for 550k in 2006. People forget that even at 300k, prices had almost doubled in 5 years. That same house was around 175k 5 years earlier. There was a 300% price increase in about 10 years. The 20% decease from the 2005 peak means prices have increase 250% in the last year, instead of 300%.
i meant:
The 20% decease from the 2005 peak means prices have increase 250% in the “last 10 years”, instead of 300%.
I doubt ND will suffer that much, with their ag products & oil production. ND may have evaded the RE bubble altogether.
Actually, with everything going on up here (ag, oil, B52s), I wouldn’t be surprised to see our area (ND) go through its OWN RE bubble, starting now. Houses are going under contract (and closing) furiously right now. My own landlords, who didn’t get one offer on their house last summer, now want to sell it this Spring, and their asking price is $20K HIGHER than their asking price last summer. That means, I’ll be moving, yet again….
Q2: Can the USG and the Fed arrest the price decline?
Q2a: What dislocations will the FED and USG cause trying to stop the RE decline? Governments are like Sociopaths they need diasasters to thrive and grow.
Q3 Thats just scary.
We haven’t really talked about ski/resort/super high end areas in awhile. Right now in the Mountain West, three resort areas are in trouble:
Credit Suisse’s Trouble Empire
They are Tamarack in Idaho, Promontory in Utah, and Yellowstone Club in Montana. The former two are essentially bankrupt. Interestingly, all three are funded by Credit Suisse.
Oddly, these three states still have positive appreciation as far as general housing goes. It looks like the ultra high end will lead the way down!
Yellowstone Club in Montana is fascinating. Tim Blixseth purchased 140,000 acres there in 1992 for $178/acre. Recently, lots in the exclusive Club (where you have to be invited, pay a ridiculous initiation fee, and annual fees) have gone for over $1 million an acre! Tell me Montana has no bubble!
Does anyone recall the world’s most expensive spec home? It was announced a year ago. It was going to be in Yellowstone club, have 53,000 sq. ft., and sell for $155 million. Was supposed to be built by now. Here’s the article:
Blixseth spec home
Choice quote: “You can’t believe the number of people interested in this thing,” Blixseth said of possible buyers. “And the guys who are calling aren’t going to have to borrow any money.”
Uh-huh. So now it’s a year later. Guess what? That house ain’t gonna be built. Blixseth is so low on cash that he had to sell the 160-acre parcel it was going to be on. Price? $62,000/acre. We’re getting closer.
I just saw a report about how the Big Sky resort area (of which Yellowstone Club is a part) contributes so much to the rest of the Montana economy. I think the high end downturn is going to hit us hard and lead the rest of the market down.
Blixesth’s financing seems to be drying up, here is the evidence.
He sold the land on which he was going to build the “worlds most expensive house”. After all the publicity, the house was never started. The sale of club didn’t happen because the financing though a Boston investment bank failed. In order to allow for the sale of the club Blixseth had to settle the lawsuit with Greg LeMond, Bilixseth is late on paying LeMond 20 million.
Last week in Madison County District Court, his wife claimed at a hearing over control of the Yellowstone club, the club is nearly bankrupt. Blixseth can’t get financing anymore, and is selling land at “fire sale prices” to keep the club going. Of course the hearing was due to to their divorce, but it shows there are big problems in Blixseth land.
I have heard for months through people that are employees of the Yellowstone club that Blixseth was in trouble, I just didn’t know how to judge the truth of the stories. I am now seeing a lot of the things I heard are true
Who is buying the club?
Nobody, Blixseth said he is going to remain the owner. Although his wife might have some say in the matter.
Oh, yes, also:
Montana Foreclosures expected to rise
The news here is that foreclosures are expected to go from 800 to 1200 this year (up 50%). And our house prices haven’t even started to decline yet.
But the lead line in the article is:
The number of home foreclosures in Montana is expected to rise this year, but the rates still remain lower than the rest of the country, real estate agents and lenders were told.
Yep. It’s different here.
I heard a new one over the radio last week. An add by a local realtor, he is selling repossessed homes. Not foreclosed homes. I guess there are no foreclosed homes in Bozeman Mt.
REO sure looks better than repo.
Another cute, little, 1950’s rancher sitting on .17 acre listed in my area. Would be ideal for me. But not at $270,000.
I thought I was seeing some price reductions for a while there, but anything new on the market these days seems to be back to the old high prices. Maybe because folks assume it’ll have a better chance of selling now that it’s spring. Don’t know.
“…but anything new on the market these days seems to be back to the old high prices.”
You are talking about the prices of homes that have not sold, right?
Correct. I haven’t been keeping up with what actual sales prices are. I’m not sure how to easily find this information out.
I live near Hanscom AFB, in the MetroWest suburbs of Boston, in a little town I like to call Lexinghamfordshire. According to Zip Realty, there are 12 homes for sale within a 1/2 mile of our home. Some, like the house across the street, do not have a sign up. One of my neighbors is in the process of trading up to a larger house in our development, so stuff is still selling a little. Some of the older houses on main roads are finally selling for under $400. The school district is slowly running out of money, and will now offer full day kindergarten for the introductory price of $1000 per year. The state allows a maximum of 4K.
The two articles on Vermont are very interesting to us. We are seriously thinking of relocating there. We already own vacation property there (unheated cabin on five acres without running water). With the price difference in housing between Mass and VT, there is a possibility that we could come close to paying 100% cash. Not sure if we’d build on our land or look for something already built. It would free us from the need to find high paying jobs, just one(s) with health insurance.
I also spend time looking at the Nashua, NH market, since we used to own there. I’m seeing unrenovated houses, similar to what we used to have, for a little above what we sold our updated house for in 2002. Our updates were pretty basic, no stainless or granite.
New to this blog here. Last weekend, yours truly met with an acquaintance, a divorced woman half my age and who has a young son. Haven’t seen her for 2 months. She told me she lost her house. Now she and her son are living in a hotel. This is the first person I know who took a greedy gamble on real estate and lost.
I did not offer any assistance of course. Had some economic challenge myself at one point in my past and am now debt free and financially independent. Took a lot of sweat to get here. Feel sorry for her, but conveyed to her that she will learn from this. I told her that she is better off not having house payments.
This bubble is certainly big time. Looks like it will bottom out by spring of 2010 and house prices will be at 2001 levels. Hoped you nice folks on this blog saved lots of cash so that you can go shopping for your dream home in 2010! Coastal California? Florida? Las Vegas?
I did not offer any assistance of course.
Of course. Naturally. That advice of yours was worth its weight in gold. Who knows, maybe the kid can eat the advice.
The world is gonna be filled with moms and kids needing money and a place to stay. Choose the one with the biggest rack, of course.
I just had a vision of what Quagmire would do in that situation. Giggity-giggity.
It would be far better to drink muddy water & sleep in a hollow log than to be forced to live in a hotel.
And you hate hotels this much because?….
Charlotte here. Casual conversation with a locksmith yesterday… business is down a little for him, but he said he has friends in the restaurant biz spending much more than last year on coupons, trying to get people to come. Then he told me his VISA card called him to remind him to pay. He said he always has… why the call? He was told it was a new policy by that issuer, apparently so many people are late or defaulting that the billers are becoming more proactive.
Hah hah hah. Proactive. Hah hah hah.
These boots are meant for walkin’.
Sing, Nancy, sing.
Interested in buying the median-priced used home in our zip code (92127)? There four identically-priced slightly-used models currently available (unless you consider price per square foot
):
8305 SANTALUZ VILLAGE GRN E SD - Rancho Bernardo, 92127 $1,150,000 - $1,150,000
Beds: 3 | Baths: 3 | Sq. Ft.: 2,180 | Lot Size: N/A
Year Built: 2003 | Listing Date: 02/04/08
Description: Highly upgraded single level casita perched on a corner lot with panoramic westerly views…. more
Price per square foot (PPSF) = $1,150,000 / 2,180 = $528
7404 RANCHO CATALINA TRL SD - Rancho Bernardo, 92127 $1,150,000 - $1,150,000
Beds: 4 | Baths: 4 | Sq. Ft.: 3,975 | Lot Size: N/A
Year Built: 2004 | Listing Date: 12/13/07
Description: Huge price reduction*bank owned* beautiful mirasol home, highly upgraded in gated community at the… more
PPSF = $1,150,000 / 3,975 = $289
15243 HEATHER STONE CT. SD - Rancho Bernardo, 92127 $1,150,000 - $1,150,000
Beds: 5 | Baths: 5 | Sq. Ft.: 3,990 | Lot Size: 13,939 Sq. Ft.
Year Built: 2004 | Listing Date: 01/16/08
Description: This gorgeous standard pacific, highly sought after, terreno plan 3 home is less than four years… more
PPSF = $1,150,000 / 3,990 = $288
9661 DEER TRAIL DRIVE SD - Rancho Bernardo, 92127
$1,150,000 - $1,250,876
Beds: 5 | Baths: 5 | Sq. Ft.: 4,193 | Lot Size: N/A
Year Built: 2003 | Listing Date: 02/14/08
Description: Seller will entertain offers b/w $1,150,000-1,250,876. This is it! 4s ranch-talavera plan 4… more
PPSF = $1,150,000 / 4,193 = $274
For reference, the lowest PPSF I have seen recently listed in our zip code is below $200.
–
I haven’t posted any local stats on Tehachapi because my source, a realtor that I worked with, moved to Arizona.
Listing prices are coming down in dribs and drabs and most are sitting on the market for 12-30 months. Some have withdrawn and hope to list later. What happens to empty homes (listed or withdrawn) if prices are down another 10-15% in a year? I think that more and more people will fall into the category of “forced to sell” within a short period to stop the bleeding after the denial period is over.
Jas
I wasted a week under contract with a buyer’s agent. I him why someone in this situation wouldn’t take a lower bid (read: what it was worth to me). He said it would take months of carrying costs to equal the drop I expected. So I naturally asked if they wouldn’t be worse off paying the carrying cost and selling for that same price. It got quiet, I signed a rental lease.
Hi Jas, so how was the wildflower season in your part of the desert?
I have some land in Juniper hills CA near pearblossom availible to me with a well and a power pole nearby. I just don’t know if its worth trying to build and live there with what has happened to Palmdale, landscatter. Pretty area when I lived there 25 years ago. I think I can see the Tehachapi’s from the property. Way off north across the antelope valley.
Last summer I tried to sell my house before th BIG downturn, but didn’t get out on time.
The Realtor I was working with still sendsme occasion updates. Here is her latest.
Metro PHX active listings: 55,643 up 11.1% YoY
March Sold: 4,208 down 28.7%
Month’s supply: 13.2
“There was one big surprise this month- there was a marked increase in sales in Queen Creek and Maricopa:
QC-Maricopa
Active 2,990
Sold 337 +68.8% YOY.
8.8 months of inventory
The following is a breakdown for Queen Creek sales:
80% are lender-owned or short sales, 15% new build and 5% owner occupied.
Not exactly a promising picture.”
Darrell,
North Anthem RE sales have been picking up, with the March sales doubling from an avg of about 30 to 56. Of course, 26 of the 56 were bank owned properties.
I heard about one guy that bought a 4,900 sq ft McMansion for $525k (about $107 per sq ft). Unfortunately we have lots more bank owned properties. My contact said that Wells Fargo is starting to dump their REO so if your so inclined, go ahead and low ball them. IMO its way too early for that nonsense, our inventory is about 20-22 months.
Which home listed below will sell first? (Hint: Brand new homes usually command a premium.)
Beds: 4 | Baths: 3 | Sq. Ft.: 2,390 | Lot Size: 6,882 Sq. Ft.
Year Built: 1985 | Listing Date: 04/01/08
Description: Seller will entertain offers between $685,000 - $725,000. Magnificent style in high country west!… more
PPSF = $650,000 / 2,390 = $272
15530 NEW PARK TERRACE SD - Rancho Bernardo, 92127
$649,900 - $699,900
Beds: 4 | Baths: 3 | Sq. Ft.: 2,460 | Lot Size: N/A
Year Built: 2008 | Listing Date: 02/27/08
Description: Seller will entertain offers between $649,900-$699,900. New construction builder close out! Never… more
PPSF = $649,900 / 2,460 = $264
18213 SUN MAIDEN CT SD - Rancho Bernardo, 92127
$649,900 - $689,900
Beds: 4 | Baths: 3 | Sq. Ft.: 2,443 | Lot Size: 5,227 Sq. Ft.
Year Built: 1990 | Listing Date: 04/10/08
Description: Quiet view location on cul-de-sac street. Enjoy custom paint, mirrored wardrobes, skylight, tile… more
PPSF = $649,900 / 2,443 = $266
18138 CHIEFTAIN CT SD - Rancho Bernardo, 92127
$648,000 - $700,000
Beds: 3 | Baths: 3 | Sq. Ft.: 2,317 | Lot Size: 5,227 Sq. Ft.
Year Built: 1991 | Listing Date: 01/24/08
Description: Seller will entertain offers between $649k and $700k * views. Warm family home on cul-de-sac…. more
PPSF = $648,000 / 2,317 = $280
8359 KATHERINE CLAIRE LN. SD - Rancho Bernardo, 92127
$645,900 - $645,900
Beds: 4 | Baths: 3 | Sq. Ft.: 1,961 | Lot Size: N/A
Year Built: 2007 | Listing Date: 01/08/08
Description: Bridgewalk captures the rich charm of the san diego lifestyle. All the amenities a busy life… more
PPSF = $645,900 / 1,961 = $329
11443 WINDY SUMMIT SD - Rancho Bernardo, 92127
$644,900 - $694,900
Beds: 4 | Baths: 3 | Sq. Ft.: 2,410 | Lot Size: 5,227 Sq. Ft.
Year Built: 1986 | Listing Date: 03/08/08
Description: Best of hcw! Panoramic view, cul-de-sac, & manicured yard. Upgraded eat-in kit with new range,… more
PPSF = $644,900 / 2,410 = $268
17881 PUEBLO VISTA LN SD - Rancho Bernardo, 92127
$639,000 - $669,000
Beds: 4 | Baths: 3 | Sq. Ft.: 2,281 | Lot Size: N/A
Year Built: 1990 | Listing Date: 03/31/08
Description: Slr will entrtn ofrs bet$639,000-$669,000.What a spectacular view!No houses behind.Gated entry… more
PPSF = $639,000 / 2,281 = $280
15702 NEW PARK TER SD - Rancho Bernardo, 92127
$626,900 - $699,000
Beds: 4 | Baths: 3 | Sq. Ft.: 2,465 | Lot Size: N/A
Year Built: 2006 | Listing Date: 12/18/07
Description: Subject to lender approval***located in the new beautiful community of del sur. Professionally… more
PPSF = $626,900 / 2,465 = $254
“Which home listed below will sell first?”
None of the above.
The one on katherine st.
WTF? “Seller will entertain offers between $639,000-$669,000″
Buyer will make offer of $299,000.
“(Hint: Brand new homes usually command a premium.)”
BUT - some (but not all) longer-term owners may have more room to lower the price more and still walk away with a decent profit.
I live in a nice area in Atlanta, Cobb County, and this morning was surprised to see an auction sign on a house in my neighborhood. Very few homes for sale in this subdivision.
Another one or two of those could really hammer the comps.
Collapsing SD list price distribution (predicted by moi a couple of years ago or so…):
List Price / Number of homes / Price range per home (density measure)
Over $30m / 1 / NA
$20m-$30m / 6 / $10m spread over 6 homes = $1,667K per home
$10m-$20m / 35 / $10m spread over 35 homes = $286K per home
$1m to $10m / 2276 / $9m spread over 2276 homes = $3.9K per home
$60K to $1m / 16,578 / $940K spread over 16,578 homes = $57 per home
Conclusions:
1) The listing density below $1m has collapsed.
2) Good luck selling a SD used home priced below $1m.
3) Better luck still selling above $1m.
Top end list price data (SD ziprealty.com listings):
929 BORDER AVE Del Mar, 92014 $76,000,000 - $76,000,000
6114 CAMINO DE LA COSTA La Jolla, 92037 $29,950,000 - $29,950,000
15651 PUERTA DEL SOL Rancho Santa Fe, 92067 $29,900,000 - $29,900,000
5425 LOS MIRLITOS Rancho Santa Fe, 92067 $28,900,000 - $28,900,000
14497 EMERALD LANE Rancho Santa Fe, 92067 $26,900,000 - $26,900,000
8542 EL PASEO GRANDE La Jolla, 92037 $25,950,000 - $25,950,000
6292 CAMINO DE LA COSTA La Jolla, 92037 $23,000,000 - $26,000,876
2621 CALLE DEL ORO La Jolla, 92037 $19,000,000 - $24,000,876
6314 EL APAJO Rancho Santa Fe, 92067 $18,995,000 - $18,995,000
6896 POCO LAGO Rancho Santa Fe, 92067 $17,900,000 - $17,900,000
6402 PRIMERO IZQUIERDO Rancho Santa Fe, 92067 $16,000,000 - $16,000,000
5974 RANCHO DIEGUENO Rancho Santa Fe, 92067 $15,988,000 - $15,988,000
5979 RANCHO DIEGUENO RD Rancho Santa Fe, 92067 $15,900,000 - $15,900,000
00 FORTUNA DEL ESTE Rancho Santa Fe, 92067 $15,000,000 - $15,000,000
8606 RUETTE MONTE CARLO La Jolla, 92037 $14,990,000 - $14,990,000
6019 AVENIDA CRESTA La Jolla, 92037 $14,900,000 - $14,900,000
8538 RUETTE MONTE CARLO La Jolla, 92037 $14,900,000 - $14,900,000
7455 HILLSIDE DR La Jolla, 92037 $14,500,000 - $18,500,000
4511 RANCHO DEL MAR TRAIL SD - Carmel Valley, 92130 $14,500,000 - $14,500,000
7132 LAS COLINAS Rancho Santa Fe, 92067 $14,298,000 - $14,298,000
6342 LAS COLINAS Rancho Santa Fe, 92067 $14,298,000 - $14,298,000
17576 RANCHO LA NORIA Rancho Santa Fe, 92067 $13,995,000 - $13,995,000
5959 LADYS SECRET Rancho Santa Fe, 92067 $13,700,000 - $13,700,000
8554 EL PASEO GRANDE La Jolla, 92037 $13,500,000 - $14,998,876
18220 VIA DE FORTUNA Rancho Santa Fe, 92067 $12,995,000 - $12,995,000
17273 AVENIDA DE ACACIAS Rancho Santa Fe, 92067 $12,950,000 - $14,950,000
5019 TIERRA DEL ORO Carlsbad, 92008 $12,800,000 - $12,800,000
1127 F AVENUE Coronado, 92118 $12,500,000 - $12,500,000
1325 PACIFIC HIGHWAY #PENT SD - Downtown, 92101 $12,500,000 - $12,500,000
15931 VIA DE SANTA FE Rancho Santa Fe, 92067 $12,500,000 - $15,350,000
1865 SEFTON PLACE SD - Ocean Beach, 92107 $12,450,000 - $12,450,000
401 1ST ST Coronado, 92118 $12,000,000 - $13,500,000
311 DUNEMERE DR La Jolla, 92037 $12,000,000 - $14,000,876
1912 SPINDRIFT DR La Jolla, 92037 $11,900,000 - $11,900,000
14750 ROXBURY TERRACE Rancho Santa Fe, 92067 $11,900,000 - $11,900,000
903 1ST ST Coronado, 92118 $11,900,000 - $11,900,000
4552 RANCHO DEL MAR TRL SD - Carmel Valley, 92130 $11,000,000 - $11,000,000
14732 EL RODEO CT Rancho Santa Fe, 92067 $10,995,000 - $10,995,000
5316 CALUMET AVE La Jolla, 92037 $10,750,000 - $12,750,876
5111 EL MIRLO DR Rancho Santa Fe, 92067 $10,750,000 - $12,225,876
4706 EL MIRAR Rancho Santa Fe, 92067 $10,500,000 - $10,500,000
645 FRONT STREET #PENT SD - Downtown, 92101 $10,000,000 - $10,000,000
I feel small reading that list.
If it helps any, that is the entirety of MLS listings for San Diego north of $10m.
Had to go to Grand Junction, CO yest. - oil patch country, which is immune to everything bad, according to the papers there. Saw several billboards saying something like “Waiting is for the birds” with giant ducks, referring to RE… seems like they must be having a slowdown over there or there would be no reason to try to con people into buying, even though the used-house salespeople say times are still good. Picked up some RE mags and prices are still high and holding, though the same old houses I saw last time, for the most part…
As long as the prices are holding and the same old houses are on the market, does it really matter whether the prices are “high” or “low”?
“Picked up some RE mags and prices are still high and holding…”
More like, “Picked up some RE mags and WISHING PRICES are still high and holding…”
Apr 11, 2008
Perched on an economic fault line
By The Mogambo Guru
Sandicor March 2008 SFR sales statistics are available online (caution: .pdf file link).
For the zip code where we reside, Rancho Bernardo 92127, the median new listing price ($1,125,000 over 66 homes) and median used SFR sale price ($705,000 over 22 homes) are still way out of kilter. Given that there are currently 227 used homes on the market in 92127 (SD ziprealty.com), I guess one could argue that we have a 10.3 month (227/22) supply of homes for sale at the recent rate of sales. However, judging from the disconnect between the median new listing price and the median sold price, I am guessing the high end is frozen while the low end is still liquid (at least for homes priced to move). This is how new, lower comps are set.
P.S. Gap between median March 2008 used SFR sale price and median new listing price:
(705/1,125-1)*100 = -37 pct
P.P.S. Not to panic! This 37 pct gap is likely an overstatement of the true drop in market value of the median priced SFR in our zip code. The true market value can only be learned through price discovery, but that won’t happen until they lower the offer price to what the market will bear.
P.P.P.S. The median used SFR price for January 2008 was $810K — $105K higher than in March. The two-month drop in median SFR sale price was
105/810*100 = 13 pct.
On an annualized basis, this median sales price decline occurred at a rate of
((705/810)^6-1)*100 = 56.5 pct.
Not to worry — these are noisy statistics, and they confound quality change with price change. Besides that, California real estate always goes up.
As an indication of how unhinged the market in 92127 became over the past four years, I looked up the March 2004 Sandicor SFR numbers:
New (used SFR) listings = 45
Median list price = $699,876
Used SFR sales = 35
Median SFR sale price = $665,000
Gap between median March 2004 used SFR sale price and median new listing price:
(665,000/699,876-1)*100 = -5 pct
My hunch: We are in a period of historic equilibrium adjustment, as those who bet that $1m+ homes would always go up in price are now unloading inventory onto a market with few qualified buyers in that price range.
P.S. “Investment gain” since March 2004 (assuming the median then and the median now are comparable):
(705,000/665,000-1)*100 = 6 pct gross, cumulative
((705,000/665,000)^(1/4)-1)*100 = 1.47 pct gross annualized (before expenses).
Looks like real estate investors who bought in our zip code in 2004 (like my landlord) could have done better parking their cash in a short term T-bond fund than trying their hand at real estate investing.
Two towns away from Atlantic City, NJ,where third world infiltration has yet to spread: Within two blocks of me there are two newly constructed, typical McMansions that have been sitting for roughly one year. By typical, I mean four BR, vinyl siding, Mexican labor, $650-700K. Early 1950’s cottage/bugalow was knocked down for each; 1200 sqft replaced with 3000. At least two open houses at one of these, at which I’m looking right now, apparently produced no falling knife catcher. One thing in which I’m interested is seeing how these and similar structures fare in the next big blow, for which we are long overdue. Atlantic City was hit with one devastating hurricane in 1944 and, in 1962, by a nasty Northeaster (not Nor’easter, though recent transplants employ this New England contraction almost as if to convince you they always have had “sand in their shoes”). I almost can see the peeled siding and exposed insulation that will result from this big blow. I won’t even get into the effect a storm surge will have on homes that have been developed on the back bays, on what now are called “meadows,” but which we used to call “the weeds.”
Drving around earlier today (Albuquerque), I passed one of the big Ford dealerships and out on the corner they had a mound of dirt (maybe about 4-5 ft high) with a car standing straight up in it, nose down, and a big sign saying “Upside down on your current car? 125% kelly blue book value on trade-ins.”
First time I’ve seen being upside-down used as a sales plus
“First time I’ve seen being upside-down used as a sales plus”
Chumming for losers.
Some observations from North Central North Dakota (Minot):
First, some background: I’ve been on this blog since August 07, I’m aware of the real economics of the housing bubble/bust, and I fully support and try to live out conservative financial living. Like many of you, I detest most realtors, who know far less than I do about economics (and I’m no financial mental giant). I’m currently debt free. The only credit card I have gives me 5% back on gas purchases, and I pay it off almost immediately (via the web). I also understand that, although real estate “is local,” the credit crisis and dollar crisis is a global phenomenon. All that said, the economy is totally different here in Minot, ND, because it’s driven by different things.
First, there are nearly a dozen oil companies trying to move into the area because of the Bakken formation and all the oil reserves about to be drilled into. Next, the Air Force Base here was just awarded another B-52 squadron, which will bring about 1000 more Air Force personnel here, and base housing is already 95-98% occupied. There’s no room to build more (the base cannot sprawl out like the desert), and the town is filled with crappy old housing to begin with, except for the new McMansions they’re building now.
All that is to say houses are flying off the market (closed sales). Prices are going up compared to autumn. Now, I’m not sure about how many purchases are speculation vs owner-occupied, but prices are ridiculous and they’re getting wore, not better. I hate to say it, but, “It’s different here.” Unfortunately, maybe what’s happening here is the housing bubble here is just about to start.
Sorry: “wore” = “worse”
Also meant to say, the Air Force Base cannot sprawl out like the bases in the desert southwest, both because of state zoning laws and farmers unwilling to give up their land.
Speaking of farmers, this is also an agriculture-driven economy. Grain prices are sky-high, so local farmers have been raking it in (although they’re also in the midst of extreme drought, so they’re not doing as well as they could if weather conditions were better).
Looks like a local problem. How far would one have to go from Minot before RE wouldn’t be affected by the sudden housing shortage?
Good question. Not that far (in miles) if this were a major metropolitan area, but there’s nothing around Minot for miles around, and with these roads in the winter (at 30 below, etc.), you don’t want to have a long commute. Bismarck is 100 miles away. The next closest cities are Grand Forks and Fargo, which are all the way over at the MN state line (4 - 5 hours away).
ATLANTA:
Last month 14,303 houses in GA were in foreclosure. That’s a monthly rate of 1 out of every 457 households. If these foreclosure numbers stay within the same range for the entire year, it would equate to an annualized foreclosure rate of 1 in 38.
Usually on Saturday mornings there is a show on local TV that showcases new home subdivisions. Today, instead this show was on foreclosed homes up for auction.
The BF was watching CNN today. Bless his heart, he is never going to be a financial genius, but even he was laughing hysterically at some woman who was advocating Reverse Mortgages as a way to avoid foreclosure.
Hey Ink, I drive by the same car dealership. The car in the dirt is hilarious. I trust the car dealerships as much as the used house turkeys.
Well the wife wanted to go shopping for a glider-style rocking chair today so off we went to Lazy Boy at around noon Saturday (peak time for retail) and there was only *1* other customer there. When we drove up there were so few cars in the parking lot I wasn’t sure they were open. That must explain the rapid propagation of insanely bright (and sometimes obnoxiously flashing) OPEN signs in stores around here. Wasn’t really interested in spending $700-$2000 on a fricking recliner so we headed out. Maybe the employees should park right in front of the store in the primo parking spots…
Anyway we headed over to Furniture Row (once again during around noon on Saturday) and scored a parking space right in front. There were a few more customers in there but they were still far outnumbered by the salespeople. We had 2 salespeople helping us at the same time, guess they didn’t have much else to do…
Looks like home furnishings are not moving here in south Denver which is a far cry from how it was just a few years ago when even getting close to one of these stores on the weekends was a chore due to the massive crowds. Those stores have GOT to be hurting as I imagine weekdays are even more dead…
San Diego County Foreclosure Statistics - 2008
Take home points:
- NODs have run at 3000+ for each of Jan, Feb and March 2008 = 36,000 / annum (highest on record)
- Trustee’s Deeds have averaged 1,340 / mo so far this year (first three months) for an annual rate of 16,080 = an amount nearly equal to the current used home for sale inventory on San Diego ziprealty.com’s listings
- Sandicor shows new used home listings of 19,606 (78,424 rate per annum) for 2008 so far and used home sales of 4491 (17,964 rate per annum). The sales rate is barely adequate to keep up with the rate of increase in Trustee’s Deeds, much less the deluge of new listings.
- Given that the MLS inventory is currently still below 19,000, either sellers are testing the market then withdrawing their listings at a rapid rate, or else something does not compute here. Is there any chance the MLS limits the number of listings they post in order to avoid the common perception that the market is crashing? (Not that I would ever doubt any statistics cooked up by a used home salespeople’s organization…)
Here’s an interesting link from the Asian Times about Australia & the housing/credit bubble. The author of the article, James Cumes is a former Australian ambassador to the European Union and Australian representative at the United Nations.
http://www.atimes.com/atimes/Global_Economy/JD10j03.htm
“From their peak, prices could fall 30% to 50%. Industry researcher BIS Shrapnel does not agree; but we must expect that our housing boom, even more robust than the American, will collapse along the same general lines as the bust occurring right now in the United States.”
“Will the Rudd government this time listen to the Americans and the likes of US Federal Reserve chairman Ben Bernanke? If they do, catastrophic outcomes might not be in short supply.”
Inventories are rapidly climbing in the metro Vancouver area.
Could people actually be trying to bail out of “The Best Place On Earth”? (It really does say that on our BC licence plates!)
I’ve noticed this as well. But it’s hard to get excited or even care at all when most places at 50% off don’t interest me. Van would have to experience the worst real estate crash in its history for me to consider buying due to the over-valuation.
The RE section in the Sunday edition of the local (Canberra, Australia) paper had the following headline for the feature article:
“Sky-high prices slip in market lull”
That’s the first time in years the headline’s been even REMOTELY negative. Looking through the text, I can see agents protesting that quality areas will be fine, it’s only a temporary dip in the lower-priced suburbs, yada yada yada. Almost word for word what the CA/FL Realtors were spouting a couple of years ago.
And we all know what’s happened since then …
From the Milwaukee Journal Sentinel
Transactions, prices fall in most counties; condos hit hardest.
http://www.jsonline.com/story/index.aspx?id=738125
The article goes on with the infamous Journal NAR writer imput angle b..b..but ALL is well here” because some RE agency is suppousedly wheeling and dealing with closures at the end.
The Wisconsin media is incredably stuburn
stubborn .. Yikes…my rough drafts before proofing are really awful but you get the drift..sorry
A shift in the market
By Rick Hoffman
President and CFO
Coldwell Banker Residential Brokerage
When did the market turn from a seller’s market to a buyer’s market? Depending on whom you listen to, you can get as many opinions as there are people on the street.
My analysis of the market indicates that the market began to shift in July of 2005. While the shift was slight, it was still a shift. The media really didn’t get on to the trend until some six to nine months later. So would it really surprise you that recent media reports might not be all that accurate or that they might be lagging behind what the market is really doing?
The best indicator of the market starting to normalize is the number of new purchase offers accepted between real buyers and real sellers. I’ve been watching this trend with great interest since the third week of January. Based on my observations, I’m ready to make a bold statement.
The market is showing definite signs of recovery.
(Lead comment from the linked NC Times article):
Randy[-] wrote on Apr 8, 2008 3:27 PM:The financial mess we are in is going to last a lot longer and hurt a lot more people, contrary to the optimistic predictions of local real estate agents!
I could agree with that… we ARE beginning to read about land and REOs being liquidated at prices enticing to speculators. But the bottoming process itself could take years to play out. We’ll be hearing this “signs of recovery” mantra for a while.
Bottoming in the last CA bust lasted from maybe 1990 through 1996.
Last night a local newspaper columnist said a house in his neighborhood in Raytown MO that sold a couple years ago for $160,000 sold in foreclosure for $114,000. A 28 percent haircut.
City Commissioners voted unanimously Thursday to ban panhandling in downtown, part of an effort to revitalize the city
I despise getting panhandled. I will avoid going to areas where I think I will get approached, or see any panhandlers. Countless businesses lost my patronizing them because some ‘bum’ was opening the door and expecting a $1, pumping gas, washing windows, etc. I don’t want to judge, so I choose to ignore all of them.
I’m still seeing people my age (youngish) moving out of Santa Monica/Venice because once they have kids, they can’t afford a decent living space. It’s so expensive, prices seem to be stabilizing and in some cases rising. Everywhere else in LA, though, you can find price declines, even REOs out in the SF Valley.
Just ran some median list price calculations on the SD MLS (thanks ziprealty.com). What a difference a year makes!
Median condo list price
4/28/07 $357,415
4/13/08 $287,020
Dollar decline in median list price = $70,395
Percentage decline in median list price = 19.7 pct
Median SFR list price
4/28/07 $589,971
4/13/08 $477,032
Dollar decline in median list price = $112,939
Percentage decline in median list price = 19.1 pct
My untested hypotheses about this median list price calculation are
(1) that it provides an upper bound on the median market value;
(2) that the bound is much looser in a “buyers’ market” (aka “falling knife market”) than in a “sellers’ market”;
(3) that it is a lagging indicator for median market value (i.e., the median market value of homes has already fallen well below these levels), as it collectively takes sellers a long time to get over the denial stage of the housing bubble stages of grief, and many sellers will foolishly hold on to their falling knives until they one-by-one individually realize they are holding on to a falling knife and capitulate.
All vacant real estate is local. For SD-Carlsbad-San Marcos, the 2007 vacancy rate was 3.0 pct (1 out of every 33 homes was vacant). You would think that both rents and prices would fall with so many homes sitting around unoccupied and on the money-losing path to dilapidation.
2007 Homeowner Vacancy Rates
Vacancy capital of the U.S. is Orlando, FL at 7.4 pct (2 out of every 27 homes sits vacant).
In the Western suburbs of Chicago I am not seeing any appreciable decrease in wishing prices, from my perspective 500K is a fair amount of $ to spend on a house, yet I don’t see anything better in the market from $550 on down than I did this time last year…just more of it
from my perspective 500K is a fair amount of $ to spend on a house, yet I don’t see anything better in the market from $550 on down than I did this time last year…just more of it
Great observation. I see the same thing here in ATL but being patient has paid off. Some of the homes we are looking at have seen reductions to below 500k recently, which is about a 50-60k reduction. To me though, I still think they should be priced in the mid 300’s at the most, but we’ll see. I’m a tough person to judge the price of something, ‘casue I’m pretty tight with it.
Everything is proceeding as expected.
Checked out Feb’s stats by zip code in the paper, almost all negitive. In my hood, 90048, we are down 11.4% from ‘07, with a median price of $998k - first time it’s been under a million since probably ‘05, but that’s a guesstimate. I would have to look it up.
These homes should be selling for about $850k, as this is a very nice area. But, not $1.6M, which is what many of them have sold for recently. I believe the median peaked around $1.3M, but I would have to check to be sure.
No one denies it is declining now, the only argument is how bad it will get. When it’s time to buy, no one will be talking about it anymore, and I imagine trafffic on this blog will recede down to where it was when I first came here in ‘04.
Cheers, everyone! Thank you for saving me from financial indentured servitude.