The Appreciation Train Has Virtually Stopped
The Daily Times reports from New Mexico. “The San Juan County real estate market continues to be its own animal; active, healthy and stabilizing. That’s not, however, to say it’s an ideal market. ‘Listings are probably up by about 25 percent,’ said Elizabeth Tafoya, president of San Juan County Board of Realtors. ‘It’s the most I’ve ever seen. Today there are 12 new listings, and we’re averaging at least 10 a day.’”
“Tafoya said quite a few sellers are dropping their prices by as much as $20,000 in the hope of attracting buyers. ‘Prices are coming down,’ she said. ‘People want to unload their homes and get into a nicer place.’”
“Along with the high volume of sales is a growing number of foreclosures, Tafoya said. Tafoya said it’s the highest number she has seen this year. ‘I’ve seen eight of them,’ she said. ‘My sellers can’t make their payments. They get in, they refinance and they get in over their heads.’”
“Two changes may be contributing to the increased number of failed transactions, she said. One is the AmeriDream program run through the Federal Home Administration, which allows sellers to contribute to their buyers’ down payments.”
“‘If they don’t have any money of their own in the home, do you think they care very much if they lose it?’ Tafoya questioned.”
Your West Valley reports from Arizona. “The Valley’s median home price dropped to $210,000 in April, compared with $265,000 a year ago. That’s the lowest median recorded since February 2005 at $200,000, an Arizona State University report shows. Year-to-date through April, sales totaled 16,975, compared with 19,045 last year”
“The Sun City median sales price decreased to $176,500 from $210,000. Resale activity in Sun City West increased from 40 to 50 sales, and the price decline was less severe than in Sun City - $222,000 to $205,000.”
“While home sales in Surprise were stronger than they have been in months, sellers took a hit in the pocketbook as the median price plunged from $246,060 to $200,250. Sales in El Mirage increased from 55 to 85 and, like Surprise, sales prices plummeted, $199,000 to $140,170.”
“In Glendale, sales increased from 330 to 385, and prices dropped more than $50,000 per sale, $245,000 to $189,000.”
“The beleaguered economy continues to play a role, however, in some individuals’ reluctance to buy, said Jay Butler, who heads up ASU’s Realty Studies department. People are worried about getting laid off, salary cutbacks, high gas prices and other costs, he said.”
“They’re saying, ‘Now may be a great time to buy, but maybe we need to be a little bit more cautious,’ Butler said.”
The East Valley Tribune in Arizona. “Population growth in the Valley appears to have slowed to the lowest rate in at least 35 years, and maybe at any time since the Anasazi civilization flourished in the Southwest, according to a prominent economic analyst.”
“Peter Ewen, chief economist for Arizona Public Service Co., told the Economic Club of Phoenix on Tuesday he was basing that assessment on a steep decline in the pace of new residential electric hookups in the utility’s service area.”
“‘Growth is to Phoenix what the auto industry is to Detroit,’ he said.”
“Ewen said the supply of unoccupied housing units is also continuing to rise because construction is still outpacing demand. He said there appears to be 25,000 unoccupied units in APS’ service territory, based on a comparison of building permits with new hookups, and there could be 60,000 units if Salt River Project’s service area and Pinal County are included.”
“‘Just for our territory, this number represents a 30-month supply of vacant housing relative to current growth rates,’ he said.”
The Arizona Republic. “More than a dozen wannabe homeowners are camped out in northeastern Mesa for a chance to buy a Blandford Home in one of the last open patches of pristine desert in the area.”
“Potential buyers must wait at the home sites with their numbers or have a representative wait for them or risk losing their places in line. ‘People stand in line for (Sony) Play Station II,’ said Scott Needham, a 27-year-old first-time homebuyer.”
“‘And a home is a much bigger, better investment,’ added Tim Pinosonneault, who is holding the No. 2 position to Needham’s No. 1.”
“The two are among the first waiting till 9 a.m. Saturday to buy the first homes in the 1,200-home master planned development.”
“The developer plans to release at least 75 home sites Saturday morning and possibly more ‘if there’s enough latent demand,’ said Joannie Flatt, a spokeswoman for the development. The homes range from $239,950 to $790,950 depending on the model, location and square footage.”
“‘I guarantee you those prices are not coming down,’ she said. ‘The latent demand for homes in Mountain Bridge is quite likely huge.’”
The Review Journal from Nevada. “Clark County had 4,426 preforeclosures in April, more than double the 2,029 preforeclosures in the same month a year ago. The number is down from a record 6,152 preforeclosures in March.”
“REOs, or real estate owned by the lender through foreclosure, declined to 1,911 in April, compared with 1,937 in March.”
“Thomas Love, broker in Las Vegas, said he put about a half-dozen foreclosed properties in escrow in April after closing none in March. ‘We can’t get them to close,’ Love said. ‘The banks are so slow to act that buyers go down the street to another bank-owned home that’s a better deal, all because of the lack of action that banks take.’”
“The inventory of bank-owned properties in Las Vegas came about by investors hoping to jump on the ‘appreciation train,’ which has virtually stopped in the lower- to middle-housing market, Love said.”
The Las Vegas Business Press from Nevada. “A souring economy and a housing market downturn helped lower vacant valley land values in the first quarter of 2008, reports Applied Analysis. Median vacant land values were $598,700 per acre at the end of March, marking a 24.6 percent drop from a year ago.”
“‘The first quarter vacant land valuations reflect the impacts of the economic slowdown that was prevalent throughout most of 2007,’ Applied Analysis principal Brian Gordon said. ‘The number of properties being sold has reached a new low, which has the potential to place further downward pressure on pricing.’”
“Only 90 parcels totaling 252 acres changed hands in the first quarter. It marks a 71.6 percent year-to-year decline in activity.”
“‘Those with development plans are now questioning the feasibility of their projects as vacancy rates are increasing and rent growth is essentially flat,’ said Applied Analysis principal Jeremy Aguero. ‘On the residential side, reduced sale prices and carrying costs on underperforming communities are shrinking profits.’”
The Reno Gazette Journal from Nevada. “A penalty imposed on properties in areas considered to be ‘declining markets,’ such as Reno and Sparks, can result in a 10 percent down payment becoming 15 percent.”
“‘The days of simply stating your income are over,’ said B.J. Perez, mortgage broker in Sparks. ‘You have to be able to prove income and prove that you have money in the bank.’”
“‘When borrowing becomes too easy and you have enough people buying houses beyond what they can afford, then that can put the system in trouble, which is exactly what happened with the housing bubble,’ Mark Pingle, a professor of economics at the University of Nevada, Reno.”
“Lenders now ‘go through everything with a fine-tooth comb,’ requiring such documents as bank statements, pay stubs, employment verification, even tax returns, said Ken Wiseman, broker-owner of Reno Rancho Realty.”
“Appraisals have especially become a sticking point. ‘Underwriters are scrutinizing appraisals much more,’ said Kim Fleischmann, senior loan officer of Indymac Bank’s Reno office. ‘They’re asking for additional comparable sales in the neighborhood, additional listings. And you’re seeing that across the board.’”
“Instead of the traditional one to three comparable sales, underwriters are now asking for four to five comparables, plus one or two property listings, Fleischmann said. Underwriters are also more apt to request changes on appraisals, Wiseman said.”
“‘Banks are just picking apart the appraisals on houses right now,’ Wiseman said. ‘I’ve seen several cases where the bank doesn’t accept the appraisal and the loan just tanks.’”
“Another increasingly popular option involves ‘down payment assistance’ programs such as those offered by Nehemiah, AmeriDream and the Nevada Rural Housing Authority.”
“‘Are we creating another mortgage crisis on a smaller scale?’ Wiseman said. ‘At the same time, about 50 percent of my current deals would never happen (if it weren’t for down payment assistance programs). That means we would see an even further decrease in home values because we can’t get rid of housing inventory.’”
“‘It’s not like banks aren’t lending money, they’re not just giving it away,’ Perez said. ‘Back during the housing bubble, people bought multiple houses and just made up anything you could imagine in their applications.’”
“‘Now, lenders want proof of income, proof of how much money you have and proof of where that money is coming from. Now, they’re only making loans that make sense,’ he said.”
The Daily Herald from Utah. “Utah County saw a dramatic slowdown in new home construction in the first quarter from a year ago, as skittish builders took out fewer permits due to a severe glut of unsold inventory and weak new home sales, according to a local study released Wednesday.”
“New home permits in Utah County plunged 72 percent to 408 in the first quarter, down from 1,458 a year ago, while Summit county saw a 77 percent drop in new home permits. Statewide, new home building activity is declining at a record-breaking pace not seen since the ’80s.”
“‘This is more than just a correction for what went on during the housing boom. It’s a serious contraction caused by exogenous factors including the subprime lending crisis, which affected 15 percent to 20 percent of all mortgage loan originations in Utah,’ said James Wood, director of the University of Utah’s Bureau of Economic and Business Research.”
“‘Utah County went up the most. So it had the most to fall,’ Wood said. In 2007, builders took out 3,500 new home permits in Utah County, where 25 percent of all new homes in the state were built.”
“According to Newreach, the number of unsold new homes and condominiums in Utah County skyrocketed 275 percent to 982 in the first quarter from a year ago. Lehi led the state for the second consecutive quarter with the greatest number of unsold new homes, accounting for a whopping 263 units, followed closely by Saratoga Springs with 204 units and Eagle Mountain with 157 units.”
“In the first quarter, the number of default notices nearly doubled to 613 in Utah County, from 365 a year ago, according to Newreach. About 90 percent of homes under default notices tend to go into foreclosure, the company found.”
“If the housing slowdown continues to worsen, Jason Eldredge, executive VP of sales for Newreach, sees the possibility of more consolidation in the building industry locally and nationally.”
“‘Builders that are holding expensive lot inventory priced at $100,000 and above, or expensive home inventory of $400,000 and above will either have to reduce those prices or consolidate if they can’t get rid of the inventory,’ he said.”
The Deseret News from Utah. “Jeff Atkinson, a general contractor from Utah County, said that because of the sharp downturn, he and many others in the industry are finding themselves unemployed, with few prospects.”
“‘I’m looking for work right now,’ he said. ‘I don’t have a job. My company is gone. I’ve lost everything. Most of my subcontractors, and some I have never even heard of, call me on a daily basis looking for work.’”
“Atkinson, who had been a general contractor for the past 10 years, said that until last summer, he and his partner built between 20 and 40 houses a year. Since then, he said, he has lost his personal life savings and maxed out his home-equity credit line to cover interest costs for the homes he and his partner had built, because those homes have not sold.”
“Meanwhile, he has been unable to find a job of any kind in the construction industry. He said his partner is in a similar predicament.”
“Atkinson said he and his former partner are still trying to sell three newly built homes for up to $120,000 below appraised value, just to cut their losses. ‘We keep getting killed from interest, and there comes a point where you just run out of money, and you can’t do it any more,’ Atkinson said.”
“Atkinson worries he may now be forced to find another line of work. ‘I’ve been in the building industry my entire life, and I would build homes forever if I could,’ he said. ‘But I honestly don’t see an end to this for quite a while. I think it’s just going to get worse.’”
‘1,200-home master planned development…The developer plans to release at least 75 home sites Saturday morning and possibly more ‘if there’s enough latent demand,’ said Joannie Flatt, a spokeswoman for the development. The homes range from $239,950 to $790,950.’
‘I guarantee you those prices are not coming down,’ she said. ‘The latent demand for homes in Mountain Bridge is quite likely huge.’
Why don’t you really guarantee those prices in writing Joannie? Or better yet, why not you Arizona Republic? How dare you run this kind of a story without asking serious questions? When these 20 something fools turn into FBs, I’ll remind you of your role AR. Disgusting!
BTW, the DH in Utah mentions a 90% NOD/foreclosure rate. That’s a disaster level.
And the LVBP mentions:
‘Only 90 parcels totaling 252 acres changed hands in the first quarter. It marks a 71.6 percent year-to-year decline in activity, due, in part, to shrinking available land supplies. The real estate crunch isn’t expected to ease anytime soon. The Bureau of Land Management, Southern Nevada’s largest landlord, won’t hold another major federal land auction until November, with plans to offer only 150 acres in small parcels between 2.5 acres to 20 acres.’
Yeah, well I dug up the last big auction the BLM had and prices fell 50%. That was years ago. The fact is nobody knows how low houses could really be in the west because of shameful manipulation like this. Give us back our land BLM, state of Arizona, Interior Dept! It’s not up to you to decide what our houses should cost.
WTF???????? Pristine desert? Where are the environmentalists?
Pristine desert means that it hasn’t been ruined by all that water damage.
In Utarrr??? Environmentalists? People who rely on taking care of their home themselves, planning land use wisely, protecting water supplies? Rather than believing that Baby Jeebus will just make it all okey-dokey? And anyway, who cares if we make a mess! We’re going to the Celestial Kingdom!
HAHAHAHAHA! Oh, stop, oh, stttttttttttop! *gasp, gasp* can’t breathe, must pound on chest to restart heart…HAHAHAHA!
Actually, there ARE a few environmentalists in Utarr. I personally know all 7 of them. Oh, wait, losty lives in Utarrr. Okay, then–there’s 8.
No, Oly, I’m a environmeddler!!
The best kind.
The environmeddlers have fought this stuff for years. The state also sells off state lands every few months:
http://trustlands.utah.gov/
Scroll partway down the right for the latest auction. I know people who have acquired quite nice parcels of land for next to nothing. The state will even finance you.
State trustlands aren’t going for next to nothing in the desirable areas. There’s a lot of mobilization going on over here in WayneWorld (i.e., Torrey/Teasdale/Grover), to try to cough up enough collective funds to buy a couple of parcels for conservation easements. Prices are 6-7 figure steep.
You’d think I’d qualify as one of them thar Utarrrr enviros due to my working in and promoting solar power and agitating against ATVs and other unnecssary impacts. To all the old locals I’m just another of them tree huggerz. But since I question global warming orthodoxy, I also get run out of eco-church as an apostate.
Sigh. Sometimes ya just can’t win.
iftheshoefits,
I’ve been (unfortunately) on an Anti-ATV crusade for years. Even if you don’t give a rip about the eco-church do you care about kids? Every year mangled little bodies show up at ER’s and often don’t leave. It’s sad but I’ve seen first hand, parents that are aghast you would have the nerve to confront them over their 8 year old operating a 500 c.c, 5 speed machine without adult supervision!?
So it’s all too easy for them to dismiss you as an enviro-whacko than confront their own negligence. The Consumer Federation has a TON of info and are in the process of finally taking some action. We recently had two young (alcohol influenced) adults where the guy is a vegetable and the girl landed face first on a rock and didn’t make it. And everyone is just… “oh well..”
Hey, Shoe, church ain’t good for you anyway (or your pocketbook), not to worry..
DinOR,
Here in Utah the ATV thing has become a righteous crusade for those advocating ATVs anywhere, anytime. The whining about any area closed off to their use in never ending. You’re absolutely right about the unsupervised kid usage, they buzz up and down our street here in Torrey most days, especially on weekends when the warriors are in town. Kids and adults are now getting killed and injured regularly. Open BLM and National Forest land is getting trashed by ATVers who refuse to stay on the multitude of pre-existing trails.
/rant off
More to the subjects at hand on Ben’s blog, I wonder how many of these rigs of 4,5,6 or more ATVs, and the vechicles to haul them, from 3-4 hours away, were enabled by the heady re-fi days of yore? Maybe the problem is taking care of itself with credit tightening and high gas prices. Hope so.
Maybe I’m not an environmentalist after all. My parents taught me to use only what you really need, and leave the rest alone. That usually puts me in substantial agreement with progressive-midned environmentalists, which is odd, because it’s a conservative principle at heart. If we all did this, almost all of our environmental and energy and housing-related problems would simply and quietly just disappear. After a couple more rounds of foreclosures, of course
My parents taught me to use only what you really need, and leave the rest alone.
My parents didn’t teach me this, but it’s what I try to live by. *grin*
As you noticed, turns out you don’t fit with the ATV people (it’s my g_d damm outdoors to trash) or the extreme environmentalist crowd (I think Scott Adams put it well - the only thing we’re “allowed” to do die in the dark on a seed and decompose).
How do you explain to both crowds that dire predictions of global warming is scienfic bunko but it’s still not okay to waste oil, water, etc?
Or that maybe humans do have the right to reproduce and use some resources but we have a responsibility not to waste those resources? Or that the earth has been changing since day and just because a human did some changing, doesn’t make it “wrong”.
I hate how polarized the environmental movement has become. When did “conservatism” become, it’s okay to trash common natural resources and waste them because it’s “pro-business”? When did “environmentalism” mean that it’s okay to hate the humanity because somehow that makes you a better person and “lover” of nature?
Environmentalism at it’s heart is about saving the people. If 4 billion years of history is any indication, the earth will survive just fine after us, thank you very much. I’ve often thought that the environmentalists might get much farther if they focused on the fundamental truth of saving people rather than worrying about the planet.
“How do you explain to both crowds that dire predictions of global warming is scienfic bunko but it’s still not okay to waste oil, water, etc?”
I know that was a rhetorical question, V’gal - we’ll just have to keep trying to figure out how.
I really like what you wrote about environmentalism being people-oriented, I’ll have to cogitate on that a bit and work it in to some of my own arguments that I make with people.
Another approach I use on energy issues is, raising personal standards of living by decreasing excess consumption. It’s not simply about being a good energy doobee - if one is truly making a difference in their “energy footprint”, not only will they be doing the right thing, but they’ll have more money left over at the end of each month. If they don’t, then (more often than not) they’re probably not really conserving that much.
And the biggest single factor in decreasing excess consumption, I finally realized, is in where and in what type of house you choose to live. See, it always comes down to housing, at least here at the HBB.
And the biggest single factor in decreasing excess consumption, I finally realized, is in where and in what type of house you choose to live. See, it always comes down to housing, at least here at the HBB.
It’s so true.
People’s largest single expense and area of consumption is their housing. A simple willingness to live smaller affords a better and richer life (including the kind that buys lattes at Starbucks) and environmental rewards.
Heck, we downsized last year with two kids. Now that we are settled, we’re looking forward to a summer with more time and cash than we’ve had for several years. It’s tough, but somehow we’ll manage to enjoy ourselves on the several local trips we’ve planned while leaving the maintenance to the landlady.
I agree with you on focusing on the personal financial rewards, too. My landlady is very much into environmental issues but seems hesitant when I discuss how much money I save doing the stuff I do. What’s wrong with either saving money or being motivated by saving money while conserving resources? If someone is consuming less or investing in energy efficient whatever or buying a small house because they want money in the bank, I think that’s excellent motivation. (Mostly because it’s a large part of my motivation…*grin*)
The Utah School Trust just mothballed a “project” near me (45 homes) indefinately, yes!
Plat maps and permits (water, septic) were in place. Prices were going to be in the $900,000.00+ price range if you include the projected lot costs and minimum Sq footage required for a built home (3500+).
I talked to the guy in charge of the development last week and he told me that the both the National and local current real-estate market “environment” made the deal (in their opinion) unprofitable. It’s on hold for an indefinate period.
I guess that he hasn’t heard about all those “boomers” coming here to Washington County and that he also didn’t notice the new Airport that is being built to make it easier for all the Companies that are champing at the bit to get here and fuel our local “economy”.
Wahoooo!!!
The trust land managers are very open about their policies of being willing to wait things out, for decades if necessary, if the overall longer term trends in a given area point toward development and depreciation. Very little if any cost to them to hold, unlike typical sellers. And there’s always some other area of the state to work on for now. Hope your good news doesn’t mean that they’re going to re-focus on Wayne county..
oops, I meant appreciation…
Those AZ Republic stories of people camping out, and increased sales, etc, REALLY set me off the last couple days.
They are crowing about 5200 sales for April. We are going to have 4000 houses sold on the court house steps just for Maricopa County. Add the southern exurbs in Pinal county plus many hundred “walk aways” and we are likely to see an many houses going back to lenders as being sold for May.
But how many of those sales are short-sales? Many hundreds if no tthousands.
It is my opinion that a majority… probably over 66%, mabye over 75%, of the houses being sold in PHX area right now are either post-foreclosures liquidations or short-sales.
Is it true that people were waiting in line for homesites? I thought all of that was over a few years ago. I was waiting for something to identify this as a flashback piece. Is their something special about this place?
So the story goes… But it has to be some publicity stunt by the builder, or some scam, or something. Those prices, location, or anything else about this deal make it in anyway special.
WAHHH !! WAHHHH !! I HATE how the media has RUN UP THE PRICES in this desert parcel builder’s sale ….. WAHHHH …. the damn media …. its ALL THEIR FAULT that I have to pay more than fair market value …!!! It’s all so UNFAIRRRRRR !!!!!!!
yeah, well I sure enough have had to endure all the foot-stomping whining tantrums from the real estate industry about the so-called “media negativity” influencing home prices to fall, I figure its payback time to spout the same line for this INCREASE in prices.
whats that??! oh, cant hear any response from real estate wags regarding this same circumstance because its IN THEIR FAVOR !!!!
fukin self-serving hypocritical azzholes. if I lived close enough, I swear by all thats holy, I would drive over to this article’s sales office & say it all in-person. betcha the lying cowards wouldnt even come out from behind their desks but instead radio ” tiny ” off a forklift to deal with me. (no problem there either, as long as we agree the loser doesnt wuss out and call 911.)
effin heee-larious, I tell ya what.
great rant!
i’m with ya dahlin!
leigh
typing with one hand is difficult grrr…
What happened, Leigh? My sympathies. I’m sort of doing that myself, had a little rotator cuff thingy happen.
After I read it, I had to check my calendar to make sure it wasn’t April 1 and I hadn’t just read an April fool’s joke!
It’s hard to believe fools like this still exist with all the FREE information available to that screams DON’T BUY NOW !!!
From the story:
“She said the couple will hold onto their Gilbert home until the market rebounds and then sell it.”
Two mortgages for the next few years?
“Many of the campers said they were waiting for their spouses to rent a travel trailer so they can be comfortable during their wait. ”
Don’t they have a job to go to?
Don’t they have a job to go to?
Whaddya mean? Being a shill is a job!
demand “is quite likely huge.”
the propaganda they use to reel in the suckers!
And best of all it’s ‘latent’ demand, must be really good, she said it twice. I was being to think the retard volume had decreased, guess not!
–
2008Q1TD price decline for Phoenix metro (PPSF, Radar Logic) is 26.9% Annual Rate, up from 22.4% during 2007H2. Only areas doing worse during 2008Q1 are Deeetroit and DC, but they weren’t doing as badly during 2007H2.
Overall Vegas is the worst Since July 2007 with 31.9% Annual Rate decline.
Jas
Took a year to lose the first $20K off my house.
By the end of that year… one year ago… we were dropping at 1% a month, accelerating to 1.5% a month. Took 6 months to lose the next $20K.
Call it 2-2.5% a month through the winter. A bit over 3 months I was down another $20K.
Now it is 5% a month. In 2 months, I have lost another $10K.
The bottom is really dropping out from under the market here in PHX now!
Isn’t it only a loss if you have to sell?
no. it is a recognized loss as soon as the “market value” is less than what you paid, or what you owe.
Failing to recognize it for the loss that it is keeps speculators, gamblers, and investors in deals that should have been sold out before more loss is incurred.
Most speculators assume that falling prices will rebound and the can get out “even”.
That’s why they lose money. The price falls further, and when the sale is finally made, they are much worse off than if they had recognized that they had already had a loss.
–
Mark to market accounting?
Jas
It was a loss the moment the Realtor talked my wife into listing for $250K insted of the $235K I wanted to sell for a year ago. After that, my wife got attached to the $250K price, then lost the momentum I’d built up trying to cinvince her to sell near the top!
Yikes…If Vegas wasn’t radioactive before, it sure as hell is now !
mikey,
“buyers go down the street to another bank-owned home”
Man I tell ya’ these Vegas realtors can’t win for losing. They finally find and qualify a knife catcher and the damn bank is sitting on the offer! Mikey, I’m going to have to call that “greased radio-activity”. Even if you wanted to expose yourself to a dose of radiation, you can’t get a good enough grip to hang on to it!
bear in mind, these price decline stats are 12 month rolling numbers. Summ these with significant decreases for the prior 12 months and purty soon we’re talking some real butt-pounding
–
Sorry, Sacramento is the worst since July 2007 with 33.8% Annual Rate decline and Vegas is second and San Diego the third.
Jas
Jas,
I don’t recall challenging that!? Music to my ears. Of course I wouldn’t live in SAC on a bet… but, good to hear.
“…the AmeriDream program run through the Federal Home Administration, which allows sellers to contribute to their buyers’ down payments.”
OK, I’m still learning here. Is this for real? Why are our government agencies aiding and abetting this sort of finiancial chicanery?
Doesn’t this whole concept fraudulently undermine the intent of the lenders with regard to down payment requirements? Sheesh. I’d love to hear some background from other HBBers on this.
Some of these programs are run by builders and have resulted in thousands of foreclosures in places like Ohio. I think even the FHA tried to shut them down, but some powerful interests stopped it. Notice the contrast in the NM article and the NV report.
FHA reported that the delinquency rate on the 0-down program is 4X that for the traditional 3% down program. That is why FHA officials wanted to stop the program. Also, there was quite a bit of builder fraud in the 0-down program (Beazer?). I suppose that more politically savvy officials at HUD overruled their subordinates at FHA.
During the last mania sellers were loaning buyers the money needed to buy the house.
The thinking at the time was that if the buyer defaulted the seller would get his house back, and since “housing prices always go up” there was little risk to the seller.
all gov programs promote failure- they’ve succeeded again !
Forbes/MSNBC had an article on this on Monday.
Link here.
“But for those who lack the wherewithal to put even a little skin in the game, there’s a workaround: a not-for-profit organization can give prospective buyers the teensy downpayment. The spigot is wide open. Of the 180,881 loans that the FHA insured in the first half of fiscal 2008, 36.7 percent, or 66,337, were seller-funded. With home builders and sellers desperate to make sales in a slowing real estate market, this percentage is likely to grow.”
Thanks for the link, that answers a lot of my questions. Arrghhh! I can’t believe they’re getting away with this crap.
Just prolonging the correction, and adding to the taxpayer costs. I didn’t think I could muster any less sympathy for the builders, realtors, lenders, and FBs that have perpetuated the bubble, buy my loathing of all of them just reached a new record high.
Senators hammering out mortgage deal
Key members of Senate Banking Committee huddle on proposal to offer more
Pressure has been building in Washington to respond to the huge increases in foreclosure filings. Republican lawmakers from states with high foreclosure rates who are up for re-election this year might feel inclined to get behind the rescue effort.
http://money.cnn.com/2008/05/15/real_estate/Dodd_Shelby_announcement/index.htm?source=yahoo_quote
i wonder where the pressure is comming from? any guesses?
a thousand pardons if my input is less than usual, i broke my left hand - don”t ask. lol. no - i did’t punch anything!
anywho, the more the jokers talk and pander, the closer we get to summer congressional recess - yay!
i’m not saying the fools won’t attempt to mess this up - chances of a bailout grw dimmer by the moment - yay!
Leigh
Not enough will flip to override the promised veto. It’s just a pandering ploy. Won’t work regardless. Anyone who is willing to sell their vote either set the price in the billions (bankers / corps) or already votes (D).
In Las Vegas and Phoenix, do they run the electric on REO homes? I can imagine home shopping in the 120 degree heat and walking through 2 story houses with no a/c- that must help the resales.
In North Texas there are plenty of REOs without electricity.
If true–it’s gotta cut down on the squatter problem maybe??
Vacant rentals get so hot in Palm Springs during the summer months that you have to leave plastic trash cans filled with water to keep the woodwork and furniture from warping. These stucco palaces are uninhabitable without A/C. In the “old days” homes were made with thick adobe walls which kept them cool, like a wine cellar.
“Population growth in the Valley appears to have slowed to the lowest rate in at least 35 years, and maybe at any time since the Anasazi civilization flourished in the Southwest, according to a prominent economic analyst.”
The Anasazi were the 1st people in America to willingly walk away from their condos, en masse…
‘The Anasazi were the 1st people in America to willingly walk away from their condos, en masse…’
Yeah, after they ate their neighbors. Probably because the stupid neighbors were always bitching about the flower bed color scheme and whether or not their rock piles were ‘thematically cohesive’.
The Anasazi ate their neighbors?
Are you sure you don’t mean the Aztecs?
Countrywide Can-ibals
Maybe Aztecs did too, I don’t know any to ask, but could be. Pretty good evidence of Anasazi cannibalism–buncha bones with rather incriminating cutlery marks and ‘pot-boiled’ bone effects. Then there’s also the ancient ceremonial serviettes and bibs recently uncovered, that are embroidered with ‘I’m Going to Eat My Neighbor’.
Google “Man Corn” if you have the stomach for it…
Wow! Interesting stuff! Chaco Canyon should be re-named Charcoal Canyon.
Read “Cannibals and Kings” many years ago that talked of Aztec cannibalism that horrified Cortez (and that says a lot).
Pass me an A.R.M., please
if you ever travel to Wisconin with your lady, hubby and i would be thrilled to host!
you;re a hoot!
best,
leigh
As I read this thread, I kept oscillating wildly back and forth between hysterical laughter and revulsion… I’m so confused today.
Shoe, get out, go to church - the Church of the Holy Redrock - you’ll feel better immediately, the confusion will disappear…
Not sure it’s safe, Gaia’s mad at me for blaspheming - gotta go assemble some solar gear to make penance.
Thank goodness the real Lord is merciful…
“‘If they don’t have any money of their own in the home, do you think they care very much if they lose it?’ Tafoya questioned.”
Looks like the light bulb has come on for this woman. But it’s amazing that none of the bankers figured that out until way too late.
They do care very much. They don’t want to lose the house. They don’t want to trash their credit. They don’t want the psychological hit and embarrassment of losing.
For many, when the pain of staying equals the pain of leaving, they will leave. Not having any money in the house just makes it less painful to leave.
‘People want to unload their homes and get into a nicer place.’”
I guess fixing up the place you have is too much trouble, lets pay a UHS an amount of money that could have paid for a new bathroom instead. Yeah, that makes sense.
I know the words are English and the grammar is correct, but they just don’t make any sense.
“The Valley’s median home price dropped to $210,000 in April, compared with $265,000 a year ago. That’s the lowest median recorded since February 2005 at $200,000, an Arizona State University report shows. Year-to-date through April, sales totaled 16,975, compared with 19,045 last year”
—————————–
Median household income in Maricopa County was about $56k in 2007.
Ratio of median house price to median HH income: 3.75:1.
Getting better.
http://www.muninetguide.com/states/arizona/municipality/Phoenix.php
My elect rates just went up another 10%. Why? Cost of generation? Nope. I’m almost 100% nuke from Palo Verde.
APS ran a ton of lines out to these new neighborhoods planning to recoup the expense from builders’ impact fees, hook up fees, and selling electricity to these new owners.
APS even spent hundreds of millions upgrading the generators at Palo Verde to increase production by 20+%.
Only problem… many of these new neighborhoods they wired up, are not being built, many of them that are built are emptying out, and a lot of those are leaving behind unpaid elect bills.
So, my elect bill goes up to cover APS’s costs they can’t get back.
ooh, having played SimCity back in the day I can visualize that . . .
“‘Growth is to Phoenix what the auto industry is to Detroit,’ he said.”
I’ll take “things that are going away” for $200, Alex.
Phoenix has something like 40% of its employment geared to growth. There is no way to transition from that fraction to a sane number when there is 30 months of inventory and the unoccupied inventory is still growing!
Got Popcorn?
Neil
Not being a cheerleader here, but it’s about 30% (or at least used to be a couple of years ago). Still far too much for a sustainable economy, but if it can shrink by 1% every month or two, then eventually we reach the “normal” level seen in mature cities (what is that - 10%?).
One interesting factoid I read a couple of days ago - AZ took in 107,000 “surrendered” driver’s licences from other states between Jan 1 and March 31 this year. Despite the slowdown, despite national economic pressures, this is still potentially over 400,000 people a year leaving other states and moving to AZ, not counting the children they bring with them. I hate to say this, but, “They have to live somewhere”.
There is demand, just not at current prices.
AZ is a freak of nature when it comes to driver’s licenses. Most states you have to renew every couple of years, here you get a driver’s license and it is good until you turn 65.
Not to mention some killer cheap vehicle registration and income taxes.
My guess is that a lot of people that have or are speculating here are getting AZ residency even if they don’t actually live here.
How else do you explain all these people moving here as we lose jobs. What are all these people doing for a living?
Yes, but this only tells one side of the story. How many people are actually leaving that don’t turn in their driver’s licenses? I found an article in a Business Magazine that had a U-haul report that more trucks were being rented to leave Arizona thatn to come into Arizona.
http://www.bizjournals.com/phoenix/stories/2008/04/28/daily49.html
I think the theory that there is an “infinite” supply of transplants from California and the Midwest is not so true anymore.
wink - hubby and i have looked at nearly 5 homes/week over the last year or so.
to break the ice, i often ask why they’re selling.
har! too my suprise, many desire to move to az!
anecdotally, az may be increasing in population - if some would sell their pesky homesteads.
wishing on a star, they are!
leigh
Mo Money,
That’s too funny!!!!!
If anyone on this BB ran a bank they would have been hedging by 06 Super Bowl
aren’t there any banks that got it ?
Got what — a free bailout insurance policy?
tell that bonehead at the fdic what you think of her stupid housing bailout plan
chairman@fdic.gov
Sheila’s bailout.
Tell sheila to F%^$ off.
chairman@fdic.gov
I am checking out rentals in the phoenix area and I am seeing what I think are high rental prices. What should an 1800 3/2 house rent for? Is it kosher to offer lower rent than property management company is asking for?
They have to cover that high mortage paymentl…
You’re looking at between $950-1200 for a 3/2 close to a freeway and shopping center.
Agreed. Add about $100 - $200 a month for a pool, especially this time of year. Getting into the sub $900 range on a 3/2 puts you in so-so neighborhoods.
I definitely don’t want a so so neighborhood as we have young kids. I have been looking in gilbert within 3-5 miles of the freeway. The norm is $1200/mo with no pool, but that is only for about 1200- 1400 square feet. Are the asking prices by property management companies set in stone or should I offer lower?
Everything is negotiable. No matter where you go, ask for a discount. You’d be surprised what you get if you just ask for it.
Oh! You’re killing me w/those prices.
Is that for a dump or something sparkly?
Although a bit larger than 1800 sq ft, locally nice 4BRs in good shape are listing above $2k/mo.
I pay 1200 for a 3 bedroom 1700 sq ft in Ahwatukee a little more expensive area of Phoenix.
We moved to a rental property in the east valley this spring. The property management company was asking $1400. per month without a fridge, washer, or dryer. I negotiated a rate of $1300. including all appliances. The house is 2150 sq. ft. and brand new. I did my homework by checking rates on Craigslist and other online sites, driving around the neighborhood looking for other rentals and making lots of calls. If you think the rate you’re proposing is fair, then it’s kosher to offer less than asking.
“Is it kosher to offer lower rent than property management company is asking for?”
Absolutely, that empty house is burning a hole in someones pocket and getting any rent is better than no rent. All they can do is say no.
“Vegas…Median vacant land values were $598,700 per acre at the end of March, marking a 24.6 percent drop from a year ago.”
They sure don’t make any more desert, or do they? One lovely acre of desert for the bargain price of $598K? WOW! Just wait and see how desireable that land will be once the Colorado River runs dry.
Why would the Colorado river run dry? Will it stop snowing on the western side of the continental divide? It just snowed again in Flagstaff on Monday or Tuesday!
Just because your property adjoins the river doesn’t mean that you have any water rights.
You’re right, Skip. And there are 3 major metros sucking the river dryer and dryer. Snow? We’re in a drought cycle in case anyone forgot. A couple of days of May snow doesn’t mean anything.
Mike,
And farm land is going for… what!? I never grudge a man a reasonable profit. Really I don’t, but with builders paying these kinds of prices is it any wonder they’re in trouble? In the end I’ll always agree with Robert Schiller, “it was a LAND bubble!”
Hey, fellow Zonies, wanna join me at this event? We could be the HBB Truth Squad, especially when references are made to the Arizona housing market recovery. We all know that means “Lower the prices, you fools,” but events like this one tend to attract REIC-ers in a big way.
Details:
2008 Mid-Year Economic Outlook Breakfast
Breakfast with Eller College economists Marshall Vest and Gerry Swanson.
Jun 4, 2008
7:00AM - 8:45AM PNT
Doubletree Hotel Tucson at Reid Park
Grand Ballroom
445 South Alvernon Way
Tucson, Arizona
Description:
Join us for breakfast as The University of Arizona economists Gerald Swanson and Marshall Vest review factors affecting the current contraction of the nation’s economy and its impact on the mid-year economic forecast for Arizona and its Metro economies.
RSVP by May 29, 2008
sounds like a plan, Slim. just one question . . can you be the ‘go-to guy’ for my bail in case things get ugly?!
I know yer a female n all, but I’m just axin.
Sure. I’ll put the Arizona Slim Ranch up as collateral :-).
Slim is a girl ? Wow…I was picturing someone like Curley in City Slickers.
Ooops…that would be az-lender
Do these people know what they are saying?
You have to be able to prove income
Lenders go through everything with a fine-tooth comb
Underwriters are scrutinizing appraisals
Banks aren’t just giving money away
They make it sound like these things are new and onerous: for some odd reason the banks are imposing rules that protect their money and verify the lenders ability to pay. If they’d done that in the first place we wouldn’t have gotten to this point in the first damn place.
Every day ‘RE” professionals are sounding more and more like Casey Serin. It would be funny if it wasn’t so sad.
What’s changed? The lenders have to keep the loans, that’s what.
The market set up for passing on the risk is gone.
combotechie,
As I’ve often said just making the brokers keep every 14th. loan they write on the 3rd Thursday of the month could have prevented a lot of this.
My wife was on the phone yesterday talking to a friend in Bakersfield who has a small (900 sqft) in Cambria purchased at the market top in the $400K range. There is a vacant lot next door owned by a RE agent who wants to sell for $150K and she put a bid in at 150K so they could expand the house; guess what, the property has no water or water rights, it was bought by the RE agent hoping to get a number for water in the future. Unfortunately she is one of the FKC’s who thinks that coastal property will go right back up and now is the time to buy. Her husband was pissed and said to get it cancelled now!
I’m in shock what is the big deal about pristine desert land the view or the heat. Did we have a earthquake last night and California fell in the ocean. The article states 1500 homes site right so even if this is heaven in the desert what the hell is the rush. People are weird they see a line and just get in it because they think some one getting a deal. This make me think of a promotion in Cleveland, where lines were so long at a Papa John’s store offering a large, one-topping pizza for 23 cents that people stood in it for five hours to get one. So I guess if someone is willing to spend two/three days camping out to purchase a deluxe home in the desert it is alright with me..
The development is south of McKellips Road, west of Ellsworth Road not far from Usery Mountain Regional Park. The 717-acre development is the last major piece of land in the Desert Uplands area.
looks like the 202 freeway is going to go right through it?
hours in line for a damn 23cent pizza? GEEEEEZ whata a buncha no-life lemmings! kinda reminds me of watchin a similar stuck on stupids situation at the ARCO gas station at Greenback & Auburn with a long line of cars, when the 7-11 pumps ACROSS THE STREET were empty with gas for a whole 2 cents more a gallon
so at an avergae of 20 gals, thats a whopping 40 cents savings for waiting 30 minutes in line, sometimes in 100+ heat! THEN you see the drivers waddle out of the food mart with $20 worth of junk food while smoking $5.00/pack cigarettes.
So much for “recession proof” Las Vegas.
http://www.msnbc.msn.com/id/24582165/
“So much for “recession proof” Las Vegas.”
This is main stream media kissing Disney’s ass, so Disney can pump and dump their stock options before the $4 gasoline kicks their ass this summer. Gambling in Las Vegas was down in March 2008 from March 2007 only two per cent
-2%. The gambling industry in Nevada generates $7 Billion dollars
a year, probably 7 times what Disney generates in its two US
theme parks. If they count foreign theme parks, we are comparing apples and oranges. Main stream media SUCKS!
How about a paper owned by one of LVs most powerful families? Would you believe that?
‘Hooters Hotel, Hard Rock Hotel and the Las Vegas Hilton increased promotional efforts to help drive customers to their properties during the first three months of the year, filings with the Securities and Exchange Commission during the past week show. Hooters Hotel increased promotional expenses 24.5 percent, cut operational expenses 10.2 percent and slashed room rates 11 percent from the first quarter last year.’
‘Of the three properties, the Las Vegas Hilton was the only one to report positive income for the quarter, although income dropped slightly due to a 9.2 percent increase in promotional expenses.’
‘the Hard Rock Hotel is contending with challenges beyond the economy. Although the property increased promotional expenses 33.4 percent, its quarterly loss was driven by a 15.4 percent increase in interest expenses and deferred financing from the property’s acquisition in February 2007. ‘
Paid too much for the dirt. If you believe in Vegas so much, loan the Tropicana some bucks, I hear they’re BANKRUPT. Or buy a condotel from Trump. Oh yeah, you gave all your money to the bail-out queen. How’s that working out for ya?
“Oh yeah, you gave all your money to the bail-out queen. How’s that working out for ya?”
I deal in certified numbers direct from the Clark County MLS (I am a member) and the government reports on employment, construction, etc. taken from the UNLV website. These are the exact figures the so called “economists” use to sprout their predictions. This was the source for me to jump on board your efforts over 2.5 years ago in sensing the coming bubble. The experts missed the crash then, and anything they report as fact now is “spin”. I might be off the mark if you asked me about Phoenix, Flagstaff, or any other city in America. I know Vegas, and it has worked out very, very well for me.
“‘Utah County went up the most. So it had the most to fall,’ Wood said. In 2007, builders took out 3,500 new home permits in Utah County, where 25 percent of all new homes in the state were built.”
Damn! This is where my now-divorced SIL bought a home last August, and where she and her ex-hubby now are trying to sell said home. She has not bugged us recently about why we don’t own a home the way she used to on a regular basis…
Wishing the AZ Republic reporters would do their jobs, I decided to do it for them.
But, where to start?
Oh, I don’t know… How about I go to the county recorder website and pull up the first recorded Trust Deed for today. The trust deed is what is filed when a house is actually sold on the court house steps.
Okay… Elias Uribe. The lender took it back for $190K even though a total of $240K is owed.
So, I open a new web session and look up Mr Uribe… GOLD MINE!!!! 6… Yep 6!!!! defaults.
This is going to take a bit to unwind!
First up:
4831 N LIMONERO CIR
PHOENIX, AZ 85037
10/31/2001 URIBE, ELIAS $104,000
Purchased with a $102K loan.
Refi to $108K in Mar 2003.
Refi to $125K in Sept 2004. His first ARM 6 mo LIBOR + 7.75. I/O first 10 years. Prepay penalty of 6 months interest if paid more than 20% in first 3 years.
Start at 7.75 with first rest Oct 2007.
Refi to $177K Jan 2006. Libor + 4.86%. Had been his sole and separate property, but now brings his wife on.
Refi to $215K Oct 2006. NOVASTAR!!! Libor + 6.25%, Ballon at the end, 6 month intrest prepay for 2 years.. the works. This is the one that was taken back by NOVASTAR on the court house steps that led me to this guy.
Current owed on the property is $240K. Zillow puts an infalted peak value of $228K and current $175K falling $5K a month.
Okay.. this takes a turn….
In March 2007 Novastar filed a Notice of Trustee sale so he must not have made even a single payment after the Oct 2006 refi. Then he signed a Asignee Deed handing it to them in April, so they cancelled the Sale recorded in May 2007.
In August and Sept and December they were filing 3 more Notice of Trustee Sales for same property, same amount. cancel and refile, cancel and refile. By March they must have finally got it figured out because they did the last cancel/refile. Finally took it from him in May.
My guess is the difference between $215k and $240K is unpaid interest, tax, etc for the 18 months he was there rent free.
Not what I first thought. Not a flipper losing multiple houses. Just a serial refi-er that took a lot of cash out of a house, then lived there rent free for over a year and a half, and left Novastar with AT LEAST a $50K loss.
Today’s second recorded Trust Deed.
7216 W LUKE AVE
GLENDALE, AZ 85303
08/18/2005 RAGAN, CONNIE $118,500
80/20s for $95K and $23K.
This is an anomily sale as it is a transfer from the estate of a guy with no other AZ transactions and the market price at the time was $160K. Wonder why the 80/20s on a place that should be worth $160K.
Sold outside of MLS to Yajaira Luna in April 2006. Ms. Luna took out $170K/43K 80/20 loans both from Indymac.
Trust Deed says they were only owed $188K at time of sale. They must not be including their 2nd.
Current market price = $175K.
7742 W CRITTENDEN LN
PHOENIX, AZ 85033
03/21/2006 OSORIO, CHARLEX $160,000
10/05/2004 COSSIO, JOSE A $99,000
Mr Osorio took out 80/20s for $128K/$32K from Agent Mortgege Company out of Deleware (I’ve never hear of them). Lender took it back Jan 2008 for $138K… Again, must be writing off the 2nd already. Current Zillow = $160K? It is under 1000 sqft. One listed and not selling for $130K. No wonder Zillow says prices are off only 18% when Case-Shiller says over 20% in the last year.
BUT this is not the property that borught me to him.
9967 W MONTEROSA AVE
PHOENIX, AZ 85037
06/26/2006 OSORIO, CHALEX $252,000
03/28/2005 SUBASIC, JASMINA $185,500
80/20s for $202K/50K Aegis Funding.
Was in default by Oct 2007. Looks like Aegis passed the first to U.s.Bank National Association on behalf of Asset Backed pass-through certificates.
U.S. Bank National Association had to refile in Feb 2008 and actually took it in May.
Is this some of that, can’t even prove who owns what, issue we have heard about?
Anyway, they took it at auction for $140K sayig they are owed $220K. Again, must be writing off the second. Zillow says current market is $190K down from a peak of $252K.
I’ve used up my avbailable putzing around time.
You know… looking back, it strikes me. We here have theses cliche’s of serial refi-ers, dumb and innocents buying at the top, and failed flippers.
Without even trying… yep, just grabbed the first 3 foreclosures recorded today… POOF, confirm all three cliche’s are dead on accurate!
Hey, You’re FIRED!!! We (AZ R.) don’t want none of that kind of reporting around here…
muckraker! just reprint the AP/Rueters newswire & leave room for the local lead n bleed story, and plenty room for the car dealer/real estate ads. done in time for afternoon golf.
Wishing the AZ Republic reporters would do their jobs, I decided to do it for them.
Your way of reporting looks like a lot of work and also gets the editor upset. Drinking coffee with realtors and whipping out a story based on “expert” opinions that doesn’t offend the major, regular advertisers is a whole heck of a lot easier.
Hey, it works here in Tucson.
Here’s the best haircut of the day, from Malden, MA
3 Bed, 1 bath SF 1612 sq. ft. Now bank owned
14 LAWRENCE ST Malden, MA 7/27/2006 $429,900
14 Lawrence St Malden, MA 2/19/2007 $309,900
14 Lawrence St Malden, MA 2/13/2008 $202,900
http://www.azcentral.com/realestate/homes.php?pgAction=homedetail&address=27119+N+143RD+ST&city=SCOTTSDALE&zip=85262
27119 N 143RD ST
SCOTTSDALE, AZ 85262
04/01/2008 HORTON, ED & MAUREEN $525,000
01/16/2007 KULKA, MATTHEW $880,000
40% haircut…
Good thing Scottsdale is different. Everybody still wants to live there!!
Saw this mentioned on the Bits Bucket, bears repeating over here, very good flick - Maxed Out (on Google videos). I’m probably way behind the rest of you on this one…
Lost - thanks for the mention. I’ve started to watch it - it looks very good.
Another story for this thread….
People stripping foreclosed houses!
http://www.azcentral.com/community/surprise/articles/2008/05/15/20080515gl-nwvforeclosures0516.html
“Since January there have been 30 reported burglaries or thefts that have occurred in vacant homes, according to Surprise police data.”
“While there have been reports of random theft, in a majority of cases those culpable are homeowners trying to walk away from their foreclosed properties with as much as they can in order to make some money, Ortega said.”
Came as no Surprise
The majority of items that have been reported stolen from either foreclosed or vacant homes are air conditioners, cabinets, dishwashers, stoves and decorative ceiling fans. In one case, the Astroturf was torn out from a front lawn.
Partner…don’t look now but I think we’ve got house rustlers
What a dang minute, isn’t Surprise the megachurch center of the universe? These pious folk wouldn’t be strippers!
‘People stand in line for (Sony) Play Station II,’ said Scott Needham, a 27-year-old first-time homebuyer.”
“‘And a home is a much bigger, better investment,’ added Tim Pinosonneault
The ineptitude of their thinking process is breath-taking.
See follow-up article in six months time: “Dude, where’s my condo?”
Also — the price went down on those Play Station II’s since then…the dudes haven’t quite mastered this investing thing yet.
people also stand in line for Celine Dion tickets. and port-a-potty at the state fair. and the DMV.