Once Immune, Now Sorting Itself Out
The Valley Voice reports from Vermont. “Despite national headlines, local realtors remain optimistic that the Addison County residential real estate market is strong and will improve throughout 2008. The first quarter 2008 closed with thirty-two residential sales in Addison County as reported by the MLS. Coldwell Banker Bill Beck Real Estate reports that this is a 24% decline from the first quarter in 2007.”
“The report explains that the drop in sales from 2007 to 2008 does not mean that property values are decreasing in Addison County. ‘This is a reflection of the activity levels in the lower priced homes. Of the houses that were sold in the first quarter only three were over $300,000.’”
“Local realtors are concerned about the grim outlook the national news is painting of the local residential market. Nancy Larrow, CRS of Associates in Lake and Mountain Properties explains, ‘Buyers are confused by the national news. Buyers are looking for bottom dollar deals and …sellers are not taking these offers.’ Larrow also explains ’sellers are being realistic in their pricing and are realizing that pricing is crucial.’”
The Republican from Massachusetts. “The median sales price of homes in the Pioneer Valley fell 4.9 percent to $195,000 in the first quarter of this year compared with the same time period of 2007. The number of homes sold in Hampden, Franklin and Hampshire counties also fell 27.6 percent in January, February and March from the first quarter of 2007, according to the Realtor Association of Pioneer Valley.”
“‘We did expect these numbers,’ said Susan M. Renfrew, of Greenfield, president of the Massachusetts Association of Realtors.”
“It is the first time the median price for the first quarter fell below $200,000 since it was $187,500 in 2005, also according to the local Realtor Association. The number of unsold homes on the local market has also doubled since the housing boom was going full bore in 2005.”
“Kevin M. Sears, of Sears Real Estate in Springfield, secretary and treasurer of the state association, said he gets a lot of sellers saying things like ‘Well, my neighbor just sold his house for X (amount).’ ‘Well, that was last year,’ Sears said.”
The Boston Globe from Massachusetts. “Once immune to the real estate downturn that hit Boston’s suburbs hard, the downtown Boston condo market is now sorting itself out. Condos in two buildings will hit the auction block in the next two months: the Broadluxe, a loft project in the Financial District near the waterfront, and The Modern, at the fringes of the South End.”
“‘There’s no urban pioneering in a soft market,’ said Debra Taylor Blair, president of Listing Information Network. ‘In a soft market, the fringe areas tend to depreciate a lot quicker than properties in known and established neighborhoods.’”
“Diane Maloney of the Marketing Group said her firm initially sold more than half of Broadluxe’s 44 units when the project was on the market about two years ago; those purchase and sales agreements were terminated in the foreclosure.”
“At the time, those units sold at an average price of $675 per square foot. This time around it will be ‘very difficult to get that,’ Maloney said.”
The New Haven Independent from Connecticut. “Westville neighbors got a rare firsthand glimpse at the housing crisis from a Willard Street lawn Saturday. Attorney Frank Capone oversaw a bidless foreclosure auction from the lawn.”
“In the absence of bidders, the light-green two family house went back to the bank. A bid of just one dollar over the bank’s bid of $270,000 would have won the three-story house, which was recently appraised at $350,000, said Capone.”
“Jennifer Blemings of 48 Willard St, said that she had seen the house for sale at least three times in the 10 years that she’s lived nearby, once for as much as $599,000.”
“‘Values are plummeting,’ Capone said later. He said that the house’s recent appraisal was $20,000 less than an appraisal just a few months earlier.”
“Capone speculated that the bank was trying to cut its losses by offering a bid that was low relative to the debt owed on the house. ‘To attract buyers they put it at $270,000. Maybe that was their thought process,’ he said.”
“He said that the bank, located in California, ‘has thousands of foreclosures. They outsource them to brokerage firms to sell.’”
From 13 WHAM in New York. “According to the Greater Rochester Association of Realtors, March home sales dipped 27 percen, with 655 home sales compared to 893 last year. February home sales were down 18 percent over last year.”
“Bob Miglioratti of ReMax Realty believes this is as bad as it’s going to get. ‘We have more people in the marketplace, which we think in the next 30 to 60 days will offset the declines we just experienced,’ he said.”
“Laura Ribbing has struggled to sell her Henrietta home for months. She blames the uncertain economy and fears over the housing market. ‘If it’s a starter house and they want to move in and maybe in a few years they’re going to try to sell it and it’s not going to sell because of the market, I don’t know,’ she said.”
National Public Radio. “The Washington, D.C., metropolitan area has been hit hard. Prices tumbled an average of 11 percent in the past year. That’s the big picture. But a look at Ashburn, Va., about 40 miles from the center of town, finds a steeper fall.”
“In parts of the county, housing prices have dropped 18 percent over that same period. New construction has ground to a halt.”
“Realtor Danilo Bogdanovic surveyed two rows of neat, new, brick townhouses on Falkner’s Lane. ‘These were selling for about $550,000 at the peak, which was about August ‘05, and they’re selling right now for about $350,000,’ Bogdanovic said. ‘Fifty percent of this community has been ether foreclosed on or is facing foreclosure.’”
“At a recent auction of foreclosed homes north of Washington, in the Maryland suburbs, there weren’t many takers. All of the addresses are far from downtown, and average commute times are among the highest in the nation.”
The Daily Press from Virginia. “The number of homes sold in Hampton Roads in the first quarter of 2008 continued to slide as prices held flat.”
“The sales decline was especially pronounced in the Williamsburg area, which includes upper York and James City counties. A 45 percent drop in the number of homes sold in Williamsburg, compared with a year earlier, was the largest of the 22 areas tracked by the Virginia Association of Realtors. Statewide, the number of homes sold declined 26 percent.”
“Frank Hughes, a Realtor in Williamsburg, is still optimistic and thinks that there’s substantial pent-up demand. He pointed out that pending sales in the Williamsburg area are down only 22 percent from the year before.”
“The number of homes on the market has built up over the past couple of years, but the Virginia Association of Realtors doesn’t have inventory figures. The Hampton Roads Real Estate Information Network keeps track of inventory, along with performance by locality. But the group recently decided that it would no longer make its data public.”
“R. Scott Brunner, CEO of the Virginia Association of Realtors, acknowledged Realtors say so often that it’s a great time to buy, they lose credibility. But, he said, now really is a great time.”
“Potential buyers should stop listening to national media stories that paint a gloom-and-doom picture and quit trying to time their purchases with an anticipated bottoming of the market.”
“‘People are waiting it out,’ he said, ‘hoping there’s going to be a magic point when it hits a bottom.’”
‘The Virginia Association of Realtors doesn’t have inventory figures. The Hampton Roads Real Estate Information Network keeps track of inventory, along with performance by locality. But the group recently decided that it would no longer make its data public.’
I’m curious why this isn’t front page news.
Let us be thankful that we live in the age of the internet and that the truth can be found if sought for. For the rest that choose to trust MSM, you get what you get…….this JT is for you!
The hilarious thing: Classic economic theory tells us that lack-of-information drives prices down, since buyers need to be compensated for uncertainty.
So a big thank you to VAR for accelerating the crash in prices.
There’s no lack of information, just a lack of any information that may reveal the true situation. They’ll make up for the missing information with more lies. My favorite lie is the one about “Pent up demand”. Next time a realtor tells you that just ask: What pent up demand? Show me some numbers, show me anything to back up your claim of pent up demand.
“Let us be thankful that we live in the age of the internet and that the truth can be found if sought for.”
The truth is out there. Perhaps Ben could get a female sidekick and we could start a TV show… The FB Files.
Ben,
It looks like the NAAR in your neck of the woods is doing the same thing. They’re haven’t updatedthe “weekly” newsletter on the public area of their web site for over a month. I wrote to them asking if they were going to resume but got no response (duh).
Old Mason-Dixon Line = Geographical divide between north & south
New Mason-Dixon Line = Financial divide north & south (have & have-nots)
As someone mentioned yesterday: And the used house salespeople wonder why they are disliked and distrusted. You’ll see that data reported publicly again once it supports their own propaganda… way down the road, that is.
“R. Scott Brunner, CEO of the Virginia Association of Realtors, acknowledged Realtors say so often that it’s a great time to buy, they lose credibility.’
‘ But, he said, now really is a great time…Potential buyers should stop listening to national media stories that paint a gloom-and-doom picture and quit trying to time their purchases with an anticipated bottoming of the market.”
These REtards with their incessant lies, their steady stream of deceitful drivel and blandishments…I wonder, does ANYone, anyWHERE still believe the fiction coming out of a realtor’s mouth? It’s shameful. And it’s not even good fiction. If his mom knew about these crappy stories he’s telling, I bet she’d spank the blazes out of him, and not in a fun way, either.
Jeeze, if I were to put on my serious face and then tell you all a story about a bunch of mummies who steal a tractor and ride it to Hell, it would be a better story and much more believeable.*
*This really did happen. They stole a bunch of Barbies to take with them, is what I hear, and some snacks and things.
Olympiagal,
I heard it was “The Hellbound TRAIN” ( not tractor )? Oh and please elaborate on the spanking too.
No, that’s a different bunch of mummies, with more initiative.
These were simple farm mummies, and a tractor was the best they could do, I guess.
And who would want to spank a mummy? You’d send up clouds of ancient germy dust, and rip their cerements, so forth. Plus, a pissed-off mummy is not to be trifled with, as Bigfoot and I have learned to our cost.
These REtards with their incessant lies, their steady stream of deceitful drivel and blandishments…I wonder, does ANYone, anyWHERE still believe the fiction coming out of a realtor’s mouth?
The NAR and the realtors associations have lost the publics trust and their image has been severly tarnished! Their lack of credibility in the publics view has been their own fault by putting out false and deceptive information to the public.
They had that reputation long before the bubble — most disliked occupations: realtors and bottom feeding lawyers.
Dear Ben,
We here at the DHS really appreciate your “concerns” about the figures partaining to the Hampton Roads Real Estate Network Operation.
This information has now been classified as National Security Profitability Issue by our NAR Division and therefore as a (possible) US consumer and a anti-6%ter blogger, you have neither the Level 2 Super Secret Security Clearance nor the Low Level Citizens inquiring minds “Need to Know”. (Be very aware Ben, that we are still checking the CURRENT status of your citizenship )
Due to your expressed open inquiry on the internet, you have now become a “Person of Interest” to the Department of Homeland Security-NAR Division and your local full service RE Agent.
Please do not become unduely alarmed to find your front door wide open, your refridgerator raided, your computor missing along with your pet turtle after one of your morning runs in those lonely, dangerous “Pine Forests ”
Thank you for your cooperation. Here to Serve and Protect you from Yourselves.
RE Agent Suzanne Extrodinaire,
DHS-NAR Division
P.S. Oh…Please inform your evil doer Blogger friends that we have their ALL their names …and know where they live. It’s also still a Great time to Buy !
‘The Virginia Association of Realtors doesn’t have inventory figures. The Hampton Roads Real Estate Information Network keeps track of inventory, along with performance by locality. But the group recently decided that it would no longer make its data public.’
The Santa Barbara Realtors started doing this a couple of years ago. I can’t find the details but I’m sure St. Barbara will know!
But the group recently decided that it would no longer make its data public.’
That just happened with the Pinnelas and Pasco county areas of the Tampa Bay region not posting their data due to a computer glitch.
These idiots think that by not providing the public their data will improve their sales. Little do they know that property sales are public record and we can easily determine how much is selling and post it so the public can see the truth in the numbers.
Bottom line realtor associations, you are only hurting your tarnished reputation further! Word of mouth travels very fast!
I’ll tell you why, Ben. Because in Hampton Roads, newspapers do the equivalent of child putting their hands over their eyes saying “you can’t see me, you can’t see me!” They think “if we don’t tell people that housing market is bad, it’s not!” Below is an excerpt of something I pasted on another blog that gives you an overview of Virginia Beach.
“I did some research today. I broke down the home prices for sale in Virginia Beach using the MLS listings at the REIN site. (I didn’t research foreclosures or FSBOs, by the way. These numbers were based strictly on homes for sale as of today, 4/12/2008). Using their price points and searching by all eleven school districts, I discovered the following:
Homes Under 300K – 1760
Homes Over 300K – 2156
I also researched median income in Virginia Beach and found a website that breaks income down: 82.98% of those in Virginia Beach make 100K or less, while 17.02% of those in Virginia Beach made 100K or more. The median income was stated as $55,069.
If you take the standard (pre-subprime) formula of three x median income, the median family home price should be approximately 166K. Out of the 3,916 homes listed, only 374 were under 170K!! 5-6 years ago, those 170K sold for MAYBE 80K. And trust me when I say the homes under 170K are junk.”
Please see the link below to see the pay grades for our “military town” (mostly enlisted) and tell me if people living here can afford 300K+ homes.
http://en.wikipedia.org/wiki/Pay_grade (sorry, I’m don’t know how to paste a link)
Great post. Did VA Beach get built up to lure outside speculators? That is what drove a lot of price increases along the coasts, including my area.
Speculators were a big part of it. HGTV’s “Flip That House” did much to put dollar signs into the eyes of many people who could buy a piece of junk and put in granite counter tops and stainless steel appliances. The phrase “putting lipstick on a pig” springs to mind. Then there are the developers who stopped building affordable homes. Instead, the big money turned out to be in mcmansions. So the only “affordable” homes are the ones pre-1995-2000. Those are mostly ranch houses with vinyl siding or townhomes or condos. And as I posted, even those are not affordable to the first time home buyer, or even someone with the median family income.
Another factor was, of course, the toxic loans. It was so incredibly easy for people to buy a home. And even when it went into bidding wars, who cared at the time? They could “afford it!” And no income verification! Or down payment! Hence the reason the prices artificially inflated to upwards of 250% in many instances for homes that truly are not worth it.
Here’s an example of what 180K will get you in Virginia Beach:
http://www.hrmls.com/jeffnelson/cgi-bin/aa.fcgi?+ZDk4MTU0N2E4MjRjZWEzODZiZmNhNDg2YTFmMDBjNTYSlI0iZbI78etCOGgMJaj6JPVnVte4iAHGr2jKXbBW+i%2fwLcrRRjnBF9+drSh6f13ed7wUZnaxWFQ%3d
Contrary to what folks might tell you from this area, it’s NOT different here. We have high gas prices, high food prices and foreclosure too, with no median income to sustain the overinflated housing prices. The only difference is: ours news media is terrified to report it because, heaven forbid, realtors and developers would pull their advertising.
Not to be mean, but the military doesn’t always get the best of the crop. I’ve seen a good number of military folks who buy or try to buy with 100% financing, even though they will be transferred in a few years. A few months ago someone was desperately trying to unload a $640K house because someone was transferred. They were offering all the furniture in the place. A few years ago it would have been a $350K house if that. I’m a lifetime resident of Hampton Roads. I constantly post on the local paper’s comments about the doom & gloom, but the paper is pretty weak on investigative reporting and generally just quoted NAR and local Realtors. Now I don’t have to post my point of view, all these other people do
It’s kind of nice.
The area is okay, but many of my young friends (that are employed mainly in technology) find the jobs unchallenging. Often times you get stuck with ex-military folks who aren’t “at the top of their game” and that doesn’t make the workplace that fun. It’s mostly an ex-military town. Don’t get me wrong, there are some really cool people, but they seem to leave.
REIN (Our MLS system) has always been “private.” It’s held by all the realtors that hold memberships. There was a huge stink not so long ago in that they wanted to charge non-realtors $5 a month to look at the houses listed in the database. Even the Realtors didn’t like this, as it’s how they got their leads.
Our market is as bubbly as ever, but no one that owns here will admit it. The 100%+ price gains over the last few years are “just the market catching up to what it should have been.” Mind you incomes (adjusted for inflation) since 2002 have DECREASED (source Virginia Pilot articles).
The only thing this area had going for it other than the water was the low cost of living. But that is gone.
VaBeyatch,
I recall this very clearly. Since I have rental property in Newport News (9 years this year), I would on occasion check my realtors website to see what was happening in the area. Low and behold, one day a couple of years ago, I noticed that you had to REGISTER just to take a look-see! I, too, thought it was ridiculous and refused to do it. THEN, as quickly as that new procedure appeared, it disappeared. And now you can see all the listings without registration….as it used to be. I’m sure glad they got over that.
BayQT~
Yes! I believe Realtors were threatening to leave or compete if it wasn’t changed. Naughty News / Bad News represent
Nancy Larrow, CRS of Associates in Lake and Mountain Properties explains, ‘Buyers are confused by the national news. Buyers are looking for bottom dollar deals and …sellers are not taking these offers.’
Realtors are confused by the recent past. They’ve gotten the incorrect impression that the seller sets the sales price. Buyers are not taking these prices.
’sellers are being realistic in their pricing and are realizing that pricing is crucial.’”
How do you even respond to this? Some stupidity just leaves you speechless,
I’ve been responding to it by telling REALTORS(TM) what their listed property was worth to me, informally offering to pay that price, and then smiling and walking away when they say “oh, oh dear, I don’t think the seller would accept that.”
REALTORS(TM)
AUA: The following is the correct way of displaying the registed trademark.
REALTOR®
A realtor who posts by the K name and thinks they know everything could not even get this point correct! Lets see, a realtors course is equal to one college course or about 4 credit hours at the most and a B.A. in business administration requires 4 years or about 160 credit hours to receive the degree.
Agree that this is an asinine comment. The only thing that Vermont has going for it is that it used to be a thriving market for second homes, and Addison County in particular has scenic Lake Champlain. It will be NYC stockbrokers, foreigners, and glitterati priced out of the Hamptons who will keep the housing prices from dropping more quickly to a level appropriate for normal incomes.
Keyword: Used to be. Their trend is to buy high, sell at a loss 5 years later. Some financial geniuses they are.
Got ice cold weather?
My best friends live just south of Burlington in a community called Shelburne, and I’ve spent a lot of time there over the years. The only bad season in VT is the Spring because of all the mud. Summers are gorgeous, Fall is actually peak tourist time because of the maple leaves, and Winter attracts a lot of the ski bums and one-horse-sleigh crowd.
Considering I’m a VT native, I’d have to say Shelburne and points north are basically a $hithole.
RE: My best friends live just south of Burlington in a community called Shelburne, and I’ve spent a lot of time there over the years.
I was just up to South Burlington to attend the HABS vs. Bruins 7th game at the Bell Centre. You pick up a copy of the Burlington Free Press and the detachment from reality
for locals, smacks you right square in the face.
You see $8/13.00 per hour jobs in the employment section vs. an avalanche of house advertisements w/ av. prices of around $450k. It’s fookin’ nuts.
But hey-even my good bud who is a surgeon is complaining. The cutting business is down (no growth-maybe?) and it seems the multi million dollar Fletcher Allen expansion got financed with adjustable rate bonds whose coupon has risen from 2.75% to 10%. The head honcho has brought in a med services cost-cutter who now has everybody in an uproar.
However, even the high honcho’s ain’t gonna escape the gaz rationing that’s comin’ down the pike.
So much for the second home market in distant rural places.
Man, oh man. Okay, I think a person who actually lives here gets to comment. *grin*
Exeter - Shelburne is a crap hole?? It might have been years ago when actual farms where there. Now it’s the playground of the rich who commute into Burlington on an as needed basis. Actual middle class folks (the kind that run the services like fire departments, etc) haven’t been able to move there since the late 70’s or so. I’m not sure I’m allowed to drive my (gasp!) 9 year old car through the town anymore. *grin*
Addison county is a combo of rural farm land and playgrounds for the rich, which is pretty “typical” vermont. The premise of the whole article that Ben posted was basically “it’s different here”.
The truth is we are different: we’re about a year or two behind the curve on *any* national trend, have an increasingly socialist tax structure, and have very little other than skiing to recommend us to big corporations. (I’m not joking about the skiing: I can think of 2 big factories built specifically because the execs wanted to be close to their playground of choice.)
When VT falls, it will be harder than the rest of NE. We have very little job base to speak of. What’s breathing life into VT is the recreation and more than a little good marketing. Otherwise, we’d look exactly like our neighbors across the lake: dying industrial/mill towns with a dying agricultural base. Heaven help us when the “I wanna 2nd house in Vermont” trend dies.
Right now, based on the realtor’s site that I update, houses at $200K or below are moving - but those above languish. Even that is a generalization: my sister’s house is below $200K. I have a feeling it will sit there through this season if she doesn’t take my advice to cut until she sees some honest to god buyers.
VTgal. That is exactly my point. Sherburne has become a shithole beginning roughly 99-2000. I’m not sure if youre a native or an import but Sherburne will revert back to what it’s always been; the red headed stepchild of B-ton. And the half witted morons of CT/NJ/NYC will leave when the thrill is gone. It happened in the early 90’s and it will happen again.
I should listen to a SALESman Realtor…insert trademark to tell me when to buy. They are not biased… I’m sure. “It’s a commission based business” I think not so much. Timmmmmmmmmmmme is on my side…yes it is. 1997 prices.
“Potential buyers should stop listening to national media stories that paint a gloom-and-doom picture and quit trying to time their purchases with an anticipated bottoming of the market.”
“‘People are waiting it out,’ he said, ‘hoping there’s going to be a magic point when it hits a bottom.’”
Or could it be that people are waiting it out hoping for a point at which they can actually afford a home,……or maybe housing is just the last thing on their mind and being able to afford food is.
“Potential buyers should stop listening to national media stories that paints a gloom-and-doom picture and quit trying to time their purchases with an anticipated bottoming of the market.”
I happen to agree with this statement but probably for reasons other than those of the speaker, especially when it comes to anticipating the bottoming of the market.
combotechie,
I actually agree, and hopefully for the ‘right’ reasons. I used to work at a boutique house and Kevin Bannon was our CIO ( Bank of NY ) and while he never really brow beat people on product selection he was always on a “soap box” about not getting “too cute” with timing!
If you’ve have the good fortune to identify a trend in the market or a major shift in an asset class, well then good for you, but attempting to time with perfection is well… a waste of time.
Hey, if you want to be priced out forever. Suit yourself.
“‘There’s no urban pioneering in a soft market,’ said Debra Taylor Blair, president of Listing Information Network. ‘In a soft market, the fringe areas tend to depreciate a lot quicker than properties in known and established neighborhoods.’”
My wife and I took a drive through the city of angles downtown yesterday, and were amazed at all the bright & shiny condos built in the past 5 years, squeezed into Really Bad Areas.
In most cases, just a few hundred feet away from the condos, nobody else got the gentrification order, it seemed.
Has anybody seen a new condo, no matter where they build it, that isn’t a “Luxury Condo”?
Naah, they’re all luxury now, just like we’re all subprime now. It goes hand in hand.
edhopper,
Well said. As it just so happens “I”… live in an “upscale” condo my damn self! Whatever happened to the notion of a condo being considerably cheaper than a SFH? Again, during the boom, “downsizing” was almost an impossibility.
aladinsane,
I’m not exactly sure what “urban pioneering” means? Maybe they mean more like “prospecting”? You know, where you foray into an area no one in their right mind would go with only a pick, shovel and I/O adjustable rate mortgage looking for “pay dirt”?
In time I expect we’ll see that here in Portland OR as well.
I suspect “urban pioneering” is RE code for something like planting a rose bush or some pot plants on the edge of the city limits
mikey,
It’s another case of “hi-jacking the language” that realtors seem so adept at. I’d seen a special on young guys that do “urban exploring” that was actually pretty cool. They’d go into an abandoned missle silo or gigantic lumber mill and really make a day of it. Well in their “Leave No Catch-Phrase Behind” campaign I suppose we’re to take this as RE speculation at it’s most extreme? Venture into a run down part of town ( or have a developer do this part for you ) ARM’d to the teeth and when you reach critical mass and price-out and run off all the original inhabitants your “conquest” of the neighborhood is complete!
( In Portland we call it “bleaching” )
You know you’re an urban pioneer when you live within a few miles of skid row…
The building the realtor is referring to is ON a street that looks like skid row. I used to live in the renovated (and very outdated) factory building across the street. The sales material shows a photo of this very clean, minimal bedroom with a wall of windows. It doesn’t show you that the room looks down onto a dirty unkempt Shell gasoline station. Why anyone would pay 500k to 1.4 million for a unit in that building is beyond me.
The auction of this building has really concerned people in the South End of Boston. All I’ve heard over the last year is that downtown Boston is immune from the bubble. This may finally be the beginning of the downturn for the area.
‘The Virginia Association of Realtors doesn’t have inventory figures. The Hampton Roads Real Estate Information Network keeps track of inventory, along with performance by locality. But the group recently decided that it would no longer make its data public.’
What are they hiding? How sad. And these are the people you are supposed to trust. Tiiiiiiiiiimmme is on my side…yes it is. I like my apartment.
“‘If it’s a starter house and they want to move in and maybe in a few years they’re going to try to sell it and it’s not going to sell because of the market, I don’t know,’ she said.”
I honestly don’t get all this ’starter house’ business. Sure, in my parents’ day when everyone had 4-5-6 kids it made sense to buy a small house, then move into a larger one after the family increased. But why do today’s families which usually consist of the couple and 1 or two children need a 5 bedroom house? I keep seeing couples with one child on HGTV selling perfectly nice homes because they simply must have a 5000 sq. ft. McMansion.
The only trend that makes sense is if more people are working from home and need office space. However, I suspect that people just own more crap that they have to store as well. Another trend is the desire to have “showcase” living rooms, dining rooms, etc. that no one ever sets foot in except for special occasions.
You’re probably right. I just don’t see the point of financing, heating, cooling and cleaning large rooms that don’t get any use. I also hate cathedral ceilings and skylights. Am I the only one who remembers the 70’s energy crisis? Heat goes up. I predict that people will be roofing over their two story foyers and living rooms to save on the heat before too long.
It depends on where you live. With the short winters and more warm/hot months we have here compared to farther north, vaulted ceilings and skylights aren’t that much of a penalty BTU-wise. Of course flat ceilings and lots of attic insulation would be better, especially the farther north you go.
112 degrees F here in the summers. Last thing you want are those soaring great room - slash grand entry - look at me - spaces. High ceiling with ceiling fans were the way to cool in the old days. Now Keep it at 10 feet and under and insulate WELL.
We are Ex-McMansion owners, and I could not agree with you more. The dead air space you heat and cool is a waste , even with celiling fans. We had 5 bedrooms and no kids. Its a cute one-story (circa 1964) and a fabulous property for our next home. Skip the “model home” look, I am going for enjoying! Good neighbors is a must too.
McMansion folks seem to “save” things. Personally, I want to enjoy my nice things.
We’ve always found that “stuff” expands to fit the space available.
Downsizing after living in McMansion-size square footage is painful, because no one wants to pay much for your valued stuff, and no one wants to pay anything for old technology.
Why do people eat at nice restaurants when they can fill up at Burger King?
My parents worked hard to put me through college so that I can eventually buy a house better than the one I grew up in. Trying to get better stuff is the American Dream.
I think the next generation of people–kids who are just entering college today–won’t want 3800 sq/ft houses.
In fact, I think there’s a lot of technology that will make things like “TV Rooms” and space taken up for bookshelves obsolete. That’s 1000 sq/ft of space freed up right there!
In fact, I think there’s a lot of technology that will make things like “TV Rooms” and space taken up for bookshelves obsolete. That’s 1000 sq/ft of space freed up right there!’
Soooooo…space for even MORE books!? Whoo-hoo!
Will the “man cave” (with its mongo plasma/LCD TV), surround sound system and XBox really go away?
I love my “apartment theater” and that is one of the things I look forward to when I own a house. I can’t mount the 150 pound projector to the concrete crossmembers on the ceiling easily. If I owned a place, I’d put it in the main family room and just get a motorized screen. No reason to have a 2nd “theater room.” It’s kind of amusing with the size queens and their TVs. 42″ plasma, 56″ plasma… Uh, I’ve been doing 120″+ at near high-definition resolutions for 8 years on a CRT projector (good colors) that I got for $900 from ebay (originally cost some corporation or gov’t $22,000). I might upgrade in 2 or 3 years though, when I can get a smaller projector for $800 that does 1920×1080.
There should be a rule, 2600+ square feet and it has to have a electric solar array on the roof if sunshine permits.
I have a 10′ screen, front projection, in a 1500 sq/ft house. When it’s off, it retracts into the ceiling, and you don’t know there’s either a projector or a screen….
Hot! That’s what I was thinking. Just have to make sure the rafters in the room run the proper direction to put in a screen
I was at a party on Saturday in Montgomery County, MD. Most of the crowd there had purchased within the last 2 years or so and when the subject came up, I mentioned the local MRIS numbers from the previous month being dismal at best. Most of the people there felt confident that we had bottomed and that we were in a protected area. As the conversation continued, it was like being invaded by others. By the time we were ending the talk 5 people were looking at me like I was an idiot and ganging up on poor little me. Not one person there could debate me intelligently. I guess people just take it hard when the truth hurts so bad about losing money. I may have even lost some friends on Saturday. Can’t deal with denialist!
Always a bad idea to talk about money at parties.
Look at it this way. If they’re not your friends anymore, they’re less likely to hit you up for a loan when their ARM resets in the near future.
Quite the opposite is happening here. Around my circle of friends, I’ve become known as the real estate market expert. And where does that expertise come from? The HBB.
Thanks, guys and gals!
I know what you mean. My sister’s friend did a tear down in Montgomery. I was very surprised b/c I thought the guy was an astute investor and this was just a stupid idea. Good thing he paid cash and has the money to lose. I tried to tell my sister that the house will just sit until they decide to lower the price, but she thinks the area is “different” and “desirable”.
I’ve been wondering what’s going on in the minds of most sellers. I just can’t believe all the people still trying to get top dollar for their homes –and for homes that I would say are just ordinary. Why would anyone pay $500k for an ordinary middle class home, when the McMansions are quickly dropping into that price range. When I look at the Movoto for sale maps, each town gets thicker and thicker with homes for sale every month, yet very little is selling.
We just sold a house (sale finally went through on Tuesday, thank God!). When we first put the house on the market, we were one of the best deals in town, advertising below $300k. In January we had a couple people interested. They said they were 100% financed (which I couldn’t believe lenders still did), but they were not approved for more than $250k. When we got an official offer for $250k in March we took it. Another house down the street from us was advertised last year for close to $400k, and is now trying to get $260k –and still not selling. When we took the offer on our house, we were disappointed because we thought we could do a little better. But really, I am so greatful. Honestly: that house we paid $300k for three years ago is, in the real world, worth less than $200k. Most sellers in this area could slash prices by $100k and still be considered overpriced in a couple of years.
I had the great misfortune of spending 3 months training for a job in Howard County in 2007…Columbia to be exact.
Snoozeville…manicured lawns that you can’t really walk on, sprawling strip malls, and cookie cutter homes. I don’t know how Howard and Montgomery Counties are similar, but at least Howard County is not “different” from any other McMansion development anywhere else in the country.
dang, I own but would say I rent
everyone loves a renter
RE: Can’t deal with denialist!
COSTCO is putting up purchase limit signs to prevent rice hoarding
and all is right with the world…yup, ok.
WTF do your friends use for info sources?
The alphabet soup network’s evening news?
How do you think this one is going to work out? Last sold 11/2007 and back on the market already. NE Mass.
11/2000 364K
8/2003 560K
11/2007 507K
4/2008 519K
Ohh ouch… I see a lot of that on Zillow, where houses on the market show that they were sold late 2007. Many were sold several times in the past several years. Though I wonder with some if the last sale marked is just the bank buying it back. I’ve seen that on trulia. I saw one fancy house come up as a forclosure one day in a really expensive Granite Bay neighborhood, saying the balance owed was something like $720k. The next day the bank had it advertised through a realtor for $760k. I
I have a Mass. MLS login and let me tell you, for some crazy reason prices have escalated a small bit in 2007 in Massachusetts. Unlike the 20% drops in Cali and Florida, this market here won’t die. It did drop, and distressed neighborhoods like Chelsea are seeing their fare share of foreclosures, neighborhoods like Newton, Watertown and such are actually slightly increasing in price. I just don’t get it. Where do these people get the money?
Karen, find the registry of deeds for the counties you are looking at. Lots of interesting data.
Mission acCOMPlished
“Capone speculated that the bank was trying to cut its losses by offering a bid that was low relative to the debt owed on the house. ‘To attract buyers they put it at $270,000. Maybe that was their thought process,’ he said.”
“He said that the bank, located in California, ‘has thousands of foreclosures. They outsource them to brokerage firms to sell.’”
“At a recent auction of foreclosed homes north of Washington, in the Maryland suburbs, there weren’t many takers. All of the addresses are far from downtown, and average commute times are among the highest in the nation.”
The first sign that rationality might be creeping back into Metro DC. People who don’t live here have no idea how truly bad the traffic is. Mile-for-mile, I’m not sure there is a worse commuter situation in the nation. Just going a couple of miles can take an hour during peak periods–which is pretty much from 3pm to 8pm during evening rush. Until modest houses in the hinterlands falls below $200k, I don’t think much is going to be selling out there.
But a look at Ashburn, Va., about 40 miles from the center of town, finds a steeper fall.” … “Realtor Danilo Bogdanovic surveyed two rows of neat, new, brick townhouses on Falkner’s Lane. ‘These were selling for about $550,000 at the peak, which was about August ‘05, and they’re selling right now for about $350,000,’ Bogdanovic said.
Exhibit A as to why the DC area has a LOOONNNGG way to fall. I predict that most of those townhouses will be going for around $250k a few years from now, and that’s only because there’s high-tech employment in the Dulles corridor within reasonable commuting distance. If those houses relied on Washington DC workers, they’d fall even further.
I blogged here about my visit this winter to the northern Virginia suburbs. In addition to the disturbing phenomenon of townhouses without towns, the memory that most stayed with me was the traffic, which was beyond atrocious. It influenced everyone’s daily decision-making, even on weekends, to an extent worse than Los Angeles. I was at a party when one person named the town where he lived, and several other people gasped aubibly, simply because of the commute such a decision represented.
Yeah - the weekend traffic is actually worse than the rush hour traffic - which at least makes sense (and rarely affects me, as I have a really short commute). Traffic on 1, 7, 29, 50, 123 — the big local roads — can drive you nuts on a Saturday or Sunday. Nobody stays home on a weekend any more, I guess — everyone’s always got a ton of places to take their kids, it seems. I guess kids don’t just “play in the neighborhood” any more.
And even the interstate — 66 and 95 — can be insanely crowded on weekends. 95 is the main north/south arterty for the east coast, so I guess it’s not a surprise.
Well there’s more trouble brewing in northern va - specifically Fairfax County. They pride themselves on having one of the best school districts in the country. Yet, the disparity between teacher salaries and the cost of housing is preventing teachers from living in the county that they work in. And Fairfax County is huge. And these are teachers have masters degrees. And they are beginning to leave the county in droves.
VT -immune to success ,so yea less to fall
remember that town that wanted to sacceed and join NH ?
“‘People are waiting it out,’ he said, ‘hoping there’s going to be a magic point when it hits a bottom.’”
What the REwhores don’t have yet to summize is that if we all wait and we are all WRONG about falling prices, then they will be RIGHT and prices will rise. Since the prices are going to rise for all these people that called the bottom but yet missed it, the commission checks for the REwhores would also increase.
By their own projections, they are screwing themselves out of money by telling us to buy now at the lower price.
or
If the REwhore weighs the same as a duck then they must be made of wood. And if they are made of wood, you must be…??
‘If the REwhore weighs the same as a duck then they must be made of wood. And if they are made of wood, you must be…??’
I’m made of meat, with some hair on it and some white sticks inside to help it all stand up. Is that what you mean?
Seriously, I don’t know what your question means. Is it a Zen koan? I like Zenny questions, and I’m always good at them, because I am like an ‘uncarved block’. (Of meat.)
http://www.mwscomp.com/movies/grail/grail-05.htm
I recently told my son he’ll know when we hit bottom. If after two years prices haven’t fallen, we’re at bottom. This barge of a house bubble will scrape along that bottom for many years. Nobody needs to be in any particular hurry.
A witch!!! A witch!!!
Who are you who are so wise in the ways of science?
“R. Scott Brunner, CEO of the Virginia Association of Realtors, acknowledged Realtors say so often that it’s a great time to buy, they lose credibility. But, he said, now really is a great time.”
Brunner, if you were joking, this would be hilarious. But seriously, you have lost credibility. And Randall is not such a terrible name, quite the R. Scott nonsense.
“‘People are waiting it out,’ he said, ‘hoping there’s going to be a magic point when it hits a bottom.’”
There is nothing magical about it.
I’m glad the spring buying season is going so well.
The used house salespeople seem to be a lot testier this spring.
Buyers are looking for bottom dollar deals and …sellers are not taking these offers.
The sellers will be taking the offers in the next couple of months as interest rates are ticking back up and that will most certainly put a downward preasure on housing prices.
It seems the tide has turned on the 10yr bond. I also noticed generally higher rates world wide. What does the board think about the RRPIX (ProFunds Rising Rates Opp Inv Fund)?
RRPIX seeks daily investment results, before fees and expenses, that correspond to one and one-quarter times (125%) the inverse (opposite) of the daily price movement of the most recently issued 30-year U.S. Treasury bond (”Long Bond”) with a 1.46% expense ratio. As the bond prices fall this thing goes up up up. Could the 10yr ever get back to 7 or 8 percent?
Comment by awaiting wipeout
2008-04-24 08:48:21
We are Ex-McMansion owners, and I could not agree with you more. The dead air space you heat and cool is a waste , even with celiling fans. We had 5 bedrooms and no kids. Its a cute one-story (circa 1964) and a fabulous property for our next home. Skip the “model home” look, I am going for enjoying! Good neighbors is a must too.
‘McMansion folks seem to “save” things. Personally, I want to enjoy my nice things.’
Testify! About a month ago I stopped at an estate sale. It was almost over and I got a giant paper shopping bag full of the most exquisite hand-embroidered pillowcases and napkins and linens, Jeebus, someone’s grandma spent hours, days, months making these lovely things, and they were mint. Untouched. Wonderful colors, crisp, cedar-scented. No one had ever enjoyed them or used them, probably only admired and marvelled and then put them right back in the cedar chest and they were there for years and decades untillll…I drove up and got the whole bag for 2 teeny dollars. No one there could even tell me who the maker WAS. It was, well, I guess unsettling, hard to describe how this made me feel when I consider it. I wish I knew who made them.
Anyway, I’m using these beautiful things. Carefully, of course, but I’m going to ENJOY them.
Word! I ran into a guy that handled estate sales and he said the first thing he did was make that call to have a dumpster delivered! With the aging WWII gen. now sadly leaving us there simply is a GLUT of nearly everything “collectible”. Mostly unwanted… garbage. I have an antique GE clock that I’ve always kept. It belonged to my godfather and they used it as “punch clock” at his shop back in Chicago. I’ve seen them on Ebay for $130. Well whoop-dee-do. It’s really the only “antique” I have and for me it’s more of a keepsake.
We hold an “Annual Purge” and trek down to GoodWill to harvest those deductions. At least someone will get some use out of that folk guitar?!
Collectibles are weird though. Certain items come and go in ‘collectability’. For example, I have a Bulova Acutron watch from the 60’s. You can see all the innards of it. I bought it years ago for $20. Anyhow, the value of these watches went through the wazoo to the point where some models were fetching $2,000 or more. Well… what happened was that the market was flooded with them , especially on sites like Ebay and Craigslist. So now, they usually cost $150.
The same with vintage radios. I have a fairly large collection of radios from the 20’s-60’s. When I started collecting, there were a lot of people interested in them. So eventually they started to become unaffordable. But again, with so many now available online, you’re lucky if you can sell them for 20 bucks, or maybe 150 for a super nice cathedral radio. Online availability has really put a damper on value.
It also has to do with whatever “power” generation happens to be collecting. They tend to like things that were fashionable in their youth. I have a 55′ Mercury family four door. Nice car, runs great, gets lots of attention, but I’d be lucky to get say- $4,500 for it. On the other hand, Dodge Chargers are going for 100k, which is ridiculous given that they were crap back when they were new.It just so happens that all those beer-gut-sporting guys in their 60’s want to own the car they had when they were 18. Years ago, cars from the 50’s were worth more.
Believe it or not, most of the furniture I have is pre-WW2 stuff. It is a hell of a lot better made than the crap they sell at Ikea and almost all of it was out on the curb waiting to be collected by the garbage truck. A real shame.
I refuse to use the Goodwill anymore because they stopped being non-profit, and once I was there looking for shelves and a little kid couldn’t afford to buy a tatty stuffed dog, so I was mad. (condensed version.)
Anyway, up here in Olympia I give my stuff to the Free Store over at the westside food co-op, off Rogers. It’s just this attached shack thing where you bring stuff, or get stuff if you see something you like. Hippies run it, volunteer hours. I love it, it’s like free-cycle except at a location, and you get to see a bunch of hairy Evergreen students get excited about your stuff right then and there. Plus, I got a fabulous old wooden frame there once, and a dashboard hula-girl, which I had long wanted.
Took a few courses at the old Ft Steilacoom CC - now Pierce College back in the old days. Can you still crab for Dungeness off the piers there?
“Potential buyers should … quit trying to time their purchases with an anticipated bottoming of the market.”
It is the realtor industry that is timing the bottom. Says Yun, (after dis-increasing statistics): “Trust me, this is the bottom.” Then after the following month’s mis-accellerating data: “Trust me now this is the real bottom.” etc.
The buyers are not picking the bottom - only acknowledging that this is NOT it!
Who knows there may not be a bottom during the next 10 years — ask your friend with property in Tokyo. The bottom may only develop when most believe there will never be a bottom.
Olympiagal, your story really resonated with me. My bed is graced by several hand-embroidered linens (done by who? when? I always wonder) that I bought from flea markets and ebay–my favorite are the “his” and “her” bluebirds, just exquisite. I can’t believe people would just get rid of these, in exchange for what? $30 Tommy Hilfiger pillowcases?
When did Goodwill go nonprofit? I always donate bags of stuff I don’t want to the Vietnam Vets of America. I discovered that they will take even your most ripped-up worn-out clothes, because they sell them to recyclers, so the ones I don’t turn into cleaning rags get tossed into the VVA bags too. “Reuse” is one of my favorite words
Goodwill uses the proceeds from their stores to help underwrite the costs of fixing up and loaning disability assistance equipment *for free* to anyone who needs it. Things like walkers, canes, wheelchairs, shower benches, you name it. There’s a lot of folks with long or short term disabilities who can’t afford to buy their assistance equipment and are grateful they can get it from Goodwill for nothing.