There’s Not Enough Buyers Out There
A report from the Idaho Statesman. “There was some good news for the Treasure Valley housing industry in April, but not enough to offset the bad news in industry figures. Part of the increase is simply the normal upward trend that occurs each spring. And this year’s growth hasn’t been enough either to reduce the number of homes for sale - the inventory rose in April - or to stop the decline in prices. Meanwhile, foreclosure filings continue to rise.”
“‘It’s going to continue to be a buyer’s market,’ said associate broker Shaun Tracy. ‘This (downturn) will eventually bring us back to affordability in the market, especially if you’re a dual-income home.’”
“An IdahoDataProviders report said there 1,498 new notices of default filed Valleywide during the first four months of 2008, a 138 percent increase over the comparable period a year ago. ‘And they’re just going to keep going up,’ said IdahoDataProviders President Charlie Nate.”
“Tracy said existing home sales continue to outpace new home sales strictly on price. ‘New construction is still priced too high,’ he said. ‘Somebody who can only afford so much is only going to go with what they can afford.’”
“One example was southeast Boise, where 43 of the 50 homes sold last month were existing homes with a median price of $225,000, compared with a median price of $479,900 for a new home in the area.”
“One in seven subprime mortgage loans in Idaho was in arrears during the fourth quarter of 2007, a survey shows. But notices of default did not begin going out in bunches in the Treasure Valley until the first quarter of this year.”
“‘They should have taken them (the homes) in ‘07, but waited until ‘08 because it gave them more time to liquidate them,’ said Ed Caron, president of Boise River Properties ‘Bankers don’t like to take a big hit like that late in the year.’”
“The Mortgage Bankers Association survey found 13.5 percent of the 25,035 subprime loans in Idaho during the fourth quarter had payments that were past due, and 8 percent were 90 days or more in arrears and were considered ’seriously delinquent.’ On Monday, IdahoDataProviders announced there were 1,498 notices of default issued during the first quarter of the year.”
“‘It’s especially really going to frustrate the resale market, because investors and individual buyers are going to migrate toward foreclosures and short sales,’ said Mike Pennington, an agent in Boise.”
The Seattle Times from Washington. “In the first three months of this year, existing home sales dropped 31.8 percent in King County, 35.6 percent in Pierce, and 34.8 percent in Snohomish County, compared with a year earlier. The statewide average was 29.7 percent. Those three counties accounted for 44 percent of the state’s 97,630 first-quarter home sales.”
“‘During softer markets, those households purchasing homes are finding bargains in the marketplace, which allows them to buy more home for the money,’ said Glenn Crellin, research-center director. ‘The total amount spent may be increasing, but the quality is also increasing, and the median masks some potential price weakness.’”
“Affordability is still a problem. The average King County buyer had just 76.6 percent of the income necessary to buy the average house, the center found. First-time buyers had just 42.7 percent.”
“Building permits fell 46.7 percent statewide in the first quarter compared with the year-earlier quarter. Permits were down 44.2 percent in King County, 46.7 percent in Snohomish County, 51.6 percent in Pierce and 32.6 percent in Kitsap.”
The Kitsap Sun from Washington. “Very slow appreciation for homes that lost as much as 25 percent of their value make for a double-barreled reason to give up trying to sell, for now. ‘We’re seeing people taking homes off the market,’ said Justin Travatte, broker and owner of Westsound Realty of Port Orchard.”
“All that said, the inventory of single-family homes continues to grow in Kitsap County - 22 percent so far this year over the same period last year, according to the NMLS.”
“Contributing to any run on rentals might be the fact that more people are facing foreclosure and having to leave their homes, or they are no longer qualified to buy.”
“‘Our housing counselors have seen in the first two months this year 30 times the amount of foreclosures as of all of ‘07,’ said Sarah Lee, KCCHA deputy director.”
“The year-to-date median price for condominiums in Kitsap County is a full $100,000 less than last year, according to the NMLS. Pending sales of homes and condos combined in Kitsap County were down 36 percent in April from a year ago.”
“Travatte said that now’s the time to buy. ‘Most likely, we’re nearing the bottom on the prices,’ he said. ‘In all likelihood, it’s going to be the best buying opportunity in a long time.’”
The Tri-City Herald from Washington. “The sales of existing homes in Benton and Franklin counties dropped about 22 percent in the first three months of the year, compared with the same time last year.”
“‘It’s not out of character with what we’re hearing about the housing market nationwide,” said Glenn Crellin, director of the center.”
“But perception is keeping a large number of buyers out of the marketplace, he said. ‘They think prices are plummeting; they’re not. They think every other house is foreclosing; it’s not. Let’s hope what takes place in Vegas stays in Vegas,’ Crellin said.”
The Columbian from Washington. “Clark County home sales and prices continued to show signs of a market correction in April, according to a report.”
“A total of 452 new and preowned homes changed hands last month, down 36 percent from the 706 houses that sold in April 2007, according to Vancouver-based Riley & Marks Inc.”
“The median price (half sold for more, half for less) of homes sold in April declined to $249,764, down 5.5 percent from the median sale price of $264,000 in April 2007.”
“‘This is simply an adjustment to a more normal market,’ said Kale Dunning, a Vancouver broker. Dunning said he does not expect an upswing in home sales this year, calling the county’s recent home-selling boom something that could not continue.”
“‘No healthy market can sustain it forever,’ Dunning said.”
“Others say the drop in home sales through the first four months of 2008 - about 38 percent from last year - means investors and house flippers are leaving the market.”
“‘People are still buying because they’re relocating, divorcing or downsizing,’ said Rowena Lusby, a Vancouver real estate consultant, who called the April sales figures a return to normalcy. ‘People just aren’t buying three or four homes and hoping to make money,’ Lusby said.”
“While Clark County home sales have slowed, foreclosure activity jumped by nearly 238 percent here in April, according to RealtyTrac. Countywide, 304 homes were in some stage of bank foreclosure last month, up from 90 homes during the same month in 2007 and 236 homes in March.”
“When added to an oversized supply of houses for sale, the foreclosures are a headache to sell, said sales associate Sharry McNeel. ‘The listed price might not be the actual price,’ McNeel said, adding that the properties’ banker owners will try to negotiate for the highest and best offers. ‘And it’s taking longer because of that,’ McNeel said.”
From KDRV 12 in Oregon. “According to numbers just released by the Southern Oregon Multiple Listing Service, a home in Jackson County sits on the market for an average of 117 days. In 2007, the average was 91 days.”
“Workforce analysts say the slowdown has affected the construction and manufacturing industries to varying degrees.”
“‘We’re basically in a situation right now where we’re operating just to keep our employees employed. We’ve got a number that are laid off at this point, but we’re just looking to survive through this recessionary time,’ says General Manager of Timberland Logging Mark Gibson.”
“‘Our logging operations are down a minimum of 50 percent. Trucking is off 50 to 60 percent. Our construction business is probably off close to 70 percent. So it’s had a major effect,’ says Gibson.”
“Local real estate loan officers say there is a silver lining in the slowdown. With prices so low, people are now able to buy homes they couldn’t have previously afforded. However, loan officers warn home owners to hang on to their home as long as possible. They say in the current market, a home owner won’t lose money until they sell.”
“‘Sometimes, they can contact their lender, call them directly, and try to negotiate that into a fixed rate mortgage and make that an affordable property,’ says Real Estate Loan Officer Judi Robinson.”
The Oregonian. “The empty lot at 1949 S.E. Division St. is going to stay empty for at least another year. Plans for the Seven Corners Condominiums, a proposed mix of market-rate and affordable condos above street-level shops, ‘have been put on ice for a year or so,’ says Michelle Haynes, housing development director for nonprofit Reach Community Development.”
“The reason? The condo market collapse. ‘We have a waiting list for our affordable housing units and don’t anticipate any problem selling those. Right now, though, is a bad time to go ahead with building market-rate condominiums,’ says Haynes.”
“Prometheus Real Estate Development, a California firm that plans to build as many as six high-rise residential towers in the South Waterfront district, is backing off plans to build a one-story sales office just north of the Old Spaghetti Factory restaurant.”
“Instead, Prometheus will probably put its sales office in retail space planned for its first tower. ‘Retail space is going begging’ in the new district, says Ellen Brown, Prometheus project coordinator.”
“With buyers still wary, the Portland area saw its median home price drop 3.5 percent in April compared with April 2007 — the biggest such decline since at least 2001.”
“The year-over-year decline was the first reported by the listing service in the current housing slowdown. ‘That’s not startling or surprising,’ said Jerry Johnson, a Portland housing economist. ‘That’s not a disaster scenario, but it’s not good.’”
“Portland’s home prices have followed a weakening trend since peaking last August at $302,000. Since that peak, the region’s median has fallen 9 percent. The Portland area saw the number of closed sales fall 39 percent in April, compared with the same month in 2007.”
“The inventory of unsold homes rose to 10 months for Clackamas, Columbia, Multnomah, Washington and Yamhill counties.”
“The housing market continues to be worse in Clark County. The once-fast-growing county suffers from an oversupply of new homes. Clark County home prices fell 5.7 percent in April to $250,000, down from $265,000 last April. The inventory of unsold homes was 12 months.”
“A lack of buyers across the market is part of the problem, said Kathy MacNaughton, a broker in Portland. MacNaughton cited three factors dampening buyers’ enthusiasm: Buyers find themselves ineligible for mortgages under lenders’ new tighter credit and income standards. They worry that prices will continue to fall. They fear they won’t be able to sell their current homes.”
“‘This has really become apparent in the last 60 days,’ MacNaughton said. ‘There’s not enough buyers out there.’”
From KTVL 10.com in Oregon. “A surplus of houses for sale is forcing homeowners to find new ways to make their homes stand out.”
“Doug Londergan has had his home for sale for more than a year. And while several people came to see the house he wasn’t getting any offers. So londergan decided it was time to get creative.”
“‘Now you got houses that have dropped in market value and a wide variety to choose from at bargain prices,’ says Londergan.”
“Month after month went by and still no offers. All the while, Londergan says he was on a mortgage rate rollercoaster. ‘Because we’re in an adjustable rate mortgage we decided let’s take advantage of the situation and get out of this adjustable rate mortgage. Because as rates kept going up our mortgage kept going up,’ he says.”
“He figured, if he was stuck with a nice house and a bad loan, maybe someone else was too. Now Londergan says he’s willing to trade.”
“‘We decided we’re going to try this trade or swap. You take over ours, we’ll take over yours. You get out of your adjustable rate, we’ll get out of ours. Life will be happy for everybody,’ says Londergan.”
“Realtors say homeowners are trying anything they can to sell their houses. ‘They’re including appliances, paying closing costs. One seller even included their Volkswagen with their sale. And that didn’t work but they kept trying anyway,’ says Broker Bobbie Lancaster.”
“Londergan says, anything to draw attention to your home and set it apart. ‘It’s just not the same as having ‘for sale by owner’ or ‘open house.’ People are interested because they don’t see that kind of a swap [they ask] what do you mean swap?’”
I’m running a little slow this AM with the new WP software. It’s kinda like getting in a car to drive and the controls have been moved around.
Just don’t end up driving like the Bushman in “The Gods Must Be Crazy,” Ben - standing on the hood driving backwards.
Great movie!
Yeah, I love the scene where the woman gets into her car, backs down the short driveway, leans out and puts the mail in the box, then drives back up to the house - sort of iconic for our lifestyles, (even though not filmed in the U.S.).
I agree with losty about this one, Ben. But other than the driving scene, ‘The Gods Must be Crazy’ could be an excellent referent point for daily life for ALL of us. For instance, Ben, why not go ahead and gussy up a string of beads and a leather scrap for a loincloth and a feather or twig or something in your hair and then run around the neighborhood like that? Lurking in shrubs, whooping, chasing wombats. Catch some rays, man! Catch a wombat!
That is what I’m going to do up here in Olympia, because it’s going to be warm and sunny. My only concern is, we’re clean out of wombats and also I’m fairly translucent to begin with and after a PNW winter…? Jeezily, I might burst into flames when the first sun ray hits me. Or else sunburn my kidneys. But these are trivial details.
‘gussy up a string of beads and a leather scrap for a loincloth and a feather or twig or something in your hair and then run around the neighborhood like that?’
In Flagstaff nobody would even look twice.
In Tucson, they’d ask if you needed sunscreen.
here in fabled ‘Clownifornia’ you’d be liable to start a spontaneous parade. and if you were in the San Fran Castro district you’d get plenty of fashion tips.
however, Sacramento capitol park area would elicit questions of ” oh, whats today’s protest? ” from the govt workers at lunch.
I can relate, Ben. I’ve been dragging my feet when it comes to “upgrading” to the new WP. Methinks it will take more than that famous five minutes to install and get it going right.
Geez, 5 minutes? This blogs database is so large that the host had to upgrade it manually. Plugins wouldn’t work, other function differently.
If anyone is having a problem with posting, please keep trying. I am working to straighten things out.
I’m referring to WP’s Famous 5-Minute Install. I must be a slow geek, because it’s always taken me longer than five minutes.
Hey Ben, why not have a topic on shart sales. Dos and donts and how to price a property right for short sales. And at what percantage price to tell the bank bye-bye.
“Affordability is still a problem…”
WAS the problem…IS the problem…Will still be the problem…for Americans that still have a job… that’s paid in US Dollars… without the multipulier of…. WAGE Inflation.
The New American Pioneer:
120′ x 40′ Homesteading in Texas / Oklahoma & Gov’t subsidized trailer parks, includes Bi-ANNUAL stimulus checks!
Forget about wage inflation. With a recession, corporate ability to move jobs overseas, and only 12% or less of the private workforce represented by unions we aren’t going to see wage increases. The employer response to “I need a pay raise” will be “get a job elsewhere.”
Will be? It already is.
I’m wondering about the current nod/foreclosure ratio vs. the 1990’s
betting current rate is allot higher
That doesn’t seem to be the case for San Diego County so far, though the rates for each are higher:
http://piggington.com/april_foreclosure_data
‘People just aren’t buying three or four homes and hoping to make money,’ Lusby said.’
UHS say the darndest things.
“Tracy said existing home sales continue to outpace new home sales strictly on price. ‘New construction is still priced too high,’ he said. ‘Somebody who can only afford so much is only going to go with what they can afford.’”
Wha..?! Home buyers are going with what they can ‘afford’? What is this crazy ‘afford’ word? This is just absurd. I’m not listening anymore, I’m putting my fingers in my ears and singing, la la la.
I liked his statement that the market is now becoming affordable for people with dual incomes. He nearly admits that before the prices began to drop, housing in the valley really wasn’t affordable for anyone.
And this hits on a point I’ve made a few times but I don’t think a lot of people realize. As we head into a deep recession the assumptions about a dual income and job stability go out the window. The US housing market will have to adjust to a average of one wage earner per family not two as job stability and taking lower paying jobs takes its toll. Increasing food/energy costs will also go a long way and eliminating the purchasing power of the dual income family. Basically its now toast. This means the bottom of the housing market and rental for that matter is 3X a single income thats lower than today not 3X two incomes. This works out to about 90k for a 30k wage and typical 1400 sqft 3/2 SFH.
Of course down payment requirements will head towards 20% under these conditions so 50-60k is not impossible.
Land will be dirt cheap
“Land will be dirt cheap.”
I wonder what effect this will have on Ted Turner, if any.
The real problem is that even with land prices removed builders will be constrained by high energy prices and even wages this limits how low they can go on a house. So as we go down used homes will eventually be at a significant discount vs new. Also of course heating and cooling a huge home will become a issue as prices fall. This pretty much makes the new home market only for those that have the money and insist on a new house and don’t care about the depreciation so the bank will be forced to require say a 50% down payment. Since once its occupied its a used house.
I think this is a lot more important then used house prices simply following the markets ability to pay regardless of how low used house prices go. Sure that blows out a lot of peoples equity but on the same hand they pay less so it pretty much all works out unless you planned on retiring off your equity gains. Wiping out the new house market is a bigger more immediate problem.
Michael Emmel,
Are you sure you’re not talking about buying a brand spanking new, gas guzzling SUV right off the lot?
( The similarities are uh-ma…zing! )
“The real problem is that even with land prices removed builders will be constrained by high energy prices and even wages this limits how low they can go on a house.”
You know, housing is not unique in this respect. Every other industry faces rising commodity prices and wages as well. The way they tackle it is through innovation.
If the housing industry was really motivated to reduce costs, newer technologies like high-quality manufactured housing would be much farther along. But compared to this kind of innovation, it is much easier to simply pass the cost to the consumer.
Michael Emmel,
I agree but that to some point could be off-set as older boomers ( not cusper or “un” boomers like myself ) drop out of the work force altogether? I don’t want to open a can of worms on a really nice ( for Oregon) Friday but I see this as a macro-economic factor.
Of course we can only “lean” on attrition so hard before the max. number of people that CAN exit the workforce HAVE. Economics aside, this could be good for the children of America ( be it mom OR dad ) staying home to use X-Box to teach them “life lessons”. Or the kids could educate the parents, whatever…
DinOR sure things will work out in the long run but your talking about at least 15 years as the boomer generation goes into retirement. With heating/cooling costs skyrocketing they will be unable to afford the big old houses they kept after the kids moved out. So they will put them up for sale and downsize. A general rollback of prices to 1980 levels won’t hurt them on the downsizing side since they probably will make the difference. It does mean that for most the return on investment for the house was horrible.
In any case the obvious solution for many will be for the retiring parents and 40/50 year old kids to move in together. Which house depends.
It means a lot of working through personal conflicts but if the retiree’s work part time or help with the grandkids etc costs are a lot lower. Once everyone gets over their attitudes its probably a better life anyway.
All this is going to do however is put one more house on the market. If you think the market is bad now think about how much inventory would open up if retired boomers and their kids moved in together because of the economic conditions. Even if 10% of the people that could do this do it its a hell of a lot of inventory.
Also of course you have all the vaction homes etc that are not for sale now that would be on the market as house prices tumble. If you do sqft per capita then you will see that the US has a enormous glut in living space.
In 2000 we had 115 million housing units.
http://www.census.gov/prod/2003pubs/c2kbr-32.pdf
http://www.oftwominds.com/blogapr08/new-revolution.html
Figure its at at least 126 million now. Population is 303 million so its one housing unit for every 2.4 people. 75 million sfh 25 million no mortage.
Or or 1:4 for homes.
UK is 60 million people and 25 million homes
http://news.bbc.co.uk/2/shared/spl/hi/guides/456900/456991/html/default.stm
This gives a ratio of 1 house/flat per 2.3 people.
So if you just go to say 3.4:1 in the US thats 37 million homes. Sure this may be tight but you can see that if enough people decide to share dwellings just a little bit more then we have the potential for a lot of additional housing. Lets say its 5 million units. Also the census say 109 house holds average 2.6 so you can figure it that way.
Even with no consolidation we have 10 million extra housing units now. We are still building way to many.
It will take decades to clear all this out esp if you agree we will have a crippled economy for a while.
‘Somebody who can only afford so much is only going to go with what they can afford.’”
What astounding insight this person has! Why, I bet if we applied this same logic to um..I dont know, Housing for instance,…oh nevermind.
Mind you, many of the articles Ben posted for this particular thread are in areas where having a job at “Wilco Co-Op” is considered a “decent job”. The UPS driver is envied and a state job is the equivalent of “hitting the lottery”!
Ben, sometime back you ran a thread on the “Treasure Valley” and the endless realtors (TM) touting it’s endless growth potential. Funny how much things have changed in just that short time?
‘The UPS driver is envied and a state job is the equivalent of “hitting the lottery”!’
I love my UPS man. He’s cute and he brings me presents out of his magical brown truck. He’s much better than Santa, because I don’t have to be good first in order to get the presents. I have forgiven him for almost squishing me in the road, because that was mostly my fault for darting out of the forest without looking. Those UPS trucks are quieter than you’d think, especially when you’re singing or chasing Bigfoot.
Does he ever wear a loincloth?
Olygal
I sincerely hope you can get another weekend pass as I would miss yer ensuing hilarity.
lemme know if you need a reference.
(but please try to make it between 9:45 - 10:00am as thats my reserved computer slot at the local library. any later & I have to compete with the horrible smelling can collector for screen time.)
No, but he can wear shorts. What can brown do for you?
“The UPS driver is envied and a state job is the equivalent of “hitting the lottery”!”
WRONG - he didn’t post anything about Montana, LOL
Here is an insight into the homes sales around Boise- these were the lowest April sales since 1998. You know the market is rough when you have set a decade low. What hurts is that the market for homes above $300k is pretty much dead- very dead. The $300k+ market was geared towards the California Equity locust market and that is mostly gone. It’s going to be a long, hot summer in Idaho.
Yeah I can’t believe how many 300k+ homes I find in Missoula - on tiny, unlandscaped lots because “retiring boomers don’t want to do yardwork.” We don’t want to hear the neighbors’ bathroom sounds either (and they sure don’t want to hear ours).
Isn’t that ridiculous? How could somebody possibly drive out in the county, passing by huuuugggeee….tracts’a'land, and then decide to buy a cookie cutter on a postage stamp lot, right next to another postage stamp lot? I’ve seen a number of these and it just feels so wrong on so many levels.
You’re better off buying a huuuugggeee tract of land and living in the double wide on it (there’s always a doublewide on it) while building your dream house on it.
You mean all those well paid HP folk are “snapping” them up
–
“There’s Not Enough Buyers Out There”
That is why we need govt programs to create more buyers by giving huge tax credits, especially, if someone wants to buy a foreclosed home. If this doesn’t work we need to create a Home Trust Corporation to buy homes until the inventory falls to below 6 months of supply.
Govt needs to put a floor on home prices. We cannot afford to let people’s hard-earned wealth disappear and create risk to the financial system failure. No cost is too high to prevent that.
Spokesman for Prof Leamer and Congressman Barney Frank,
Jas
“We cannot afford to let people’s hard-earned wealth disappear”
Well, not all at once anyway. Now, over the course of a lifetime - that’s fine - that’s more what they have in mind.
Jas Jain,
On one side of the scale you have a mouse and on the other side you have an elephant! If you were a REIC disciple what would you do to “balance” the scale?
Knew it!
(Force feed the elephant!)
–
Kill the mouse!!
Jas
Jas,
LOL!
Agreed. The mouse must DIE!!
“They say in the current market, a home owner won’t lose money until they sell.”
This may be one for the record books. I would argue that every month you pay more to own than to rent on a flat or declining asset, you’re losing money.
And he plans on never selling his Lucent stock, so that he won’t lose money.
As soon as you closed Escrow, you’ve already lost 3-6% because that’s the agent’s commission you would have to pay assuming your house still worths the same.
Very good point. There is a house down the block from me that was bought, new, in late October for $605,000. For whatever reason it has been for sale (and empty) since February. My quick calculation is that the ‘owners’ will have to sell if for $652,000 just to break even; 6% real estate commission & 1.78% excise sales tax in Seattle. That means the house will have had to increase in value 7.8% in 7 months, or at an annual rate of 13.4%.
This is just to break even and does not including carrying costs on an empty house. Amazing.
“investors and individual buyers are going to migrate toward foreclosures and short sales”
?
As well they should. Not that realtors had a hand in creating this mess? Dang right. So if you’re out there with a home you just gotta’ gotta’ sell and you’re reading this blog for the 1st time, KNOW that you’re going to have to wait behind all the screw-ups first! (And THAT my friend could be a very, very long time)
So if you’re out there with a home you just gotta’ gotta’ sell and you’re reading this blog for the 1st time, KNOW that you’re going to have to wait behind all the screw-ups first!
Not if they price lower (WAY lower).
aimeejd,
My bad. With all the entrenched, engrained stubborness on the part of sellers that’s one angle frankly I hadn’t considered?
Sadly, neither have they.
In conclusion…almost 8 years of disastrous GOP policies come to a crashing end. And now the Democrats are going to take this disaster and make it even worse. We need to stop bashing one side or the other and all agree our government completely blows. Throw everyone out. And I do mean everyone.
Great solution, how tight is the tinfoil hat today ?
Mo Money,
I understand joe’s frustration. Really I do and I don’t want to start passing around a lit stick of dynamite on a gorgeous Friday but this ALL goes back to 1997 when they changed the tax code and invented “Flipping for Fun and Profit”.
500K of tax-free money (every-other-year) was bound to influence people’s behavior. Of course changing the tax code NOW seems pretty meaningless b/c we won’t LIVE long enough to see that brand of “appreciation” again!
It was also a major contributor to all the widespread fraud. In that regard I DO hold BOTH parties equally accountable.
–
“We need to stop bashing one side or the other and all agree our government completely blows. Throw everyone out. And I do mean everyone.”
Nature abhors vacuum. And fill with what? With new set of elected agents??
Just curious,
Jas
Once again, for the history-challenged, the GOP only had total control of gov’t for about 4 months of 2001, then from January 2003 - January 2007. Four years and four months out of the last almost eight years. At all other times the Democrats controlled either the Senate, House, or now both.
But as for the second part of your statement - yes, the Demos will probably control all three branches again starting on January 20, 2009, and anyone who is sentimental for the Carter days will be very happy again.
I for one am looking forward to CDs and T-bills paying 18%.
“…the Demos will probably control all three branches again starting on January 20, 2009…”
Not so. At least one of the conservative Supremes will have to die or retire before the third branch (the judiciary) is controlled by the Dems.
I agree that Obama will be Carter II, with the shortages, gas lines, high inflation and interest rates, etc. But Hillary would have been Nixon II, and McCain would be Bush III. Some choice!
I may end up wasting my vote by giving it to Barr.
“I for one am looking forward to CDs and T-bills paying 18%.”
Me too, but probably for a different reason; I love the way high interest rates demolish the price of stocks.
Don’t buy ‘em when they’re hot; Buy ‘em when they’re not.
“all agree our government completely blows.”
True. I would like Ben Jones to run the Fed, though, if we must have a Fed. Whether he wears a loincloth or not is immaterial to me. Twigs in his hair would be a nice touch though.
Spike 66,
And *jag as NYSE Chairman!
( Controlling the amount of LEVERAGE in the system?! ) It’s so crazy it just might work!
I’m all for Ben running the Fed, too, but I’d rather see him in the loincoth, personally.
What’s next? The Ben Beefcake Calendar?
Might be a good hook for the next quarterly fundraiser…
Let’s have Volcker run the Fed.
Ben can keep doing what he’s doing and, hopefully, obtain a wider audience - eventually supplanting much of the MSM’s “work” on the housing bubble and crash.
“They’re including appliances, paying closing costs. One seller even included their Volkswagen with their sale. And that didn’t work but they kept trying anyway,’ says Broker Bobbie Lancaster.”
If there is not a law requiring the FMV of concessions to be disclosed to the lender so that the lender can make sure that the initial property value for Max LTV purposes is no greater than price pd less FMV of concession there should be. I wont go into the obvious about reducing pricing and letting the buyer spend the money on what they really want, as it appears to be a back door way to wrap it into the loan for ppl with no cash to the detriment of the lender.
I note that non-recourse states would also have an interest in making this practice illegal and prosecuting all involved as it turns car loans and such into non-recourse loans and increases the risk of foreclosure and scams.
“The reason? The condo market collapse. ‘We have a waiting list for our affordable housing units and don’t anticipate any problem selling those. Right now, though, is a bad time to go ahead with building market-rate condominiums,’ says Haynes.”
Erm…..WHAT? If you have a waiting list and anticipate no problem, then why wouldn’t you build? Does not compute….
Translation: “People are lining up to buy our cheap stuff. But nobody wants our luxury market-value (read: HIGH-PROFIT) condos with the granite and stainless. Gee we don’t know why…”
“‘Our logging operations are down a minimum of 50 percent. Trucking is off 50 to 60 percent. Our construction business is probably off close to 70 percent. So it’s had a major effect,’ says Gibson.”
‘Trees stay up! Builders go down! Ra– ra– ra! Trees stay up! Builders go down! Ra– ra– ra!’
That’s my new joy chant, and it is super chock full of super joy joy!
I’m hearing that most of the S. Oregon timber industry is shutting down.
So much for my wood-burning car idea…
Nothing like Oly having more tall trees to climb :-).
Sigh.
Logging is a pretty significant industry in these parts. However, you see a totally bare hillside for just a short time, and then the baby pines are planted. 20 or so years later (considerably longer for hardwoods) another crop is harvested and the cycle repeats.
Or maybe we should get ALL our wood from places like Brazil and Indonesia.
I have no problem with responsible logging. I have a big problem with silting of salmon streams and logging on steep slopes. Oregon can’t compete in the chipboard market, we have to compete in the premium-quality structural lumber marked.
“A lack of buyers across the market is part of the problem, said Kathy MacNaughton, a broker in Portland. MacNaughton cited three factors dampening buyers’ enthusiasm: Buyers find themselves ineligible for mortgages under lenders’ new tighter credit and income standards. They worry that prices will continue to fall. They fear they won’t be able to sell their current homes.”
Another one to add to the list of Most Stupid Broker Quotes. Why do these morons always start with the assumption that the asking price is reasonable, and look for reasons that buyers are not buying at those reasonable prices? The fact of the matter is simply that prices are way too high and you would be stupid to pay that amount. Why do they find this so hard to grasp?
What the hell was that “swap” stuff at the bottom? It sure is hard to understand somebody when they’re using their ass to talk with…
He means that rather than paying me just for the property that is being mortgaged, I will give you “free” stuff like a car that you can keep if it goes into foreclosure and which will not be included in the lender’s security interest and we can defeat the intent of non-recourse statutes and stick it to the man. Wink. Wink.
here’s my take: It sounds like an attempt to escape the adjustable rate mortgage.
You and I own homes of nearly equal value, with ARMs attached. We could both qualify for a fixed rate mortgage and we both have money for a down payment.
We both want to keep our homes. We can’t find buyers and we can’t get the bank to refi into fixed rate..
So, we trade. I buy yours, qualifying for a fixed rate. You do likewise. Our ARMs are paid off and disappear.
Seems to me that the missing step would happen next year.. we trade backwards so we both have our old home back while the ARM is no longer attached.
This line of cooperative buying/selling has many interesting possibilities, imo…
Right now it is easier to get a fixed rate FHA or GSE loan on a purchase than on a refi. So, let’s say there are two people with similar houses, similar debt loads, etc. I buy your house from you for a tad over what you owe, IF you agree to buy mine from me for a tad over what I owe.
Now we’re both in nice fixed interest rate loans.
The stuff about adding in cars and such is just icing on the cake.
But doesn’t going from an ARM mortgage to a fixed-mortgage raise the monthly payment? And isn’t that higher unafforadable payment the exact reason you got an ARM in the first place? And since the house price is about what you owe, and if you both bought with near 0 money down, then both of you are overpaying 2005 prices for the houses, which contributes to the high fixed payment. And of course you would have paid 0 down. If you had paid 20% down, you would still have enough equity to refinance without the swap thing. Unless you live in California where values are dropping 35%, in which case you’re underwater, and no bank would approve any loan for you, swap or otherwise.
I guess I’m just asking my usual question: refinance into WHAT?
i dunno for sure, so tell me if this makes sense. If i get this right, the problem is LTV limits and the refi appraisal.
Lets say our homes have $500K mortgages on them while fair market value has dropped to $450K. The bank will go 80% max of that… $340K. We’ll each need $160K in cash to pay off the ARM and refi.
If we agree to buy eachother’s property for our loan amount, $500K, the bank will use that 500K as the appraisal. The new bank loan is 80% LTV or $400K, and we contribute only $100K in cash to pay off the ARM.
While an investment of 100K was required, that is still less cash that what would be needed in the refi. The result is a reduction in monthly payments due to the smaller $400K loan, and the payment is fixed..
True that is the most common version, I too was confused by the order of the statements. I cant ever really see that happening much. What is the chance of finding two ppl that want to exchange properties. Hell I look at at least 50 before I make a decision. Housing is not very fungible.
“But perception is keeping a large number of buyers out of the marketplace, he said. ‘They think prices are plummeting; they’re not. They think every other house is foreclosing; it’s not. Let’s hope what takes place in Vegas stays in Vegas,’ Crellin said.”
Perception?! How about affordability Glenn? Prices don’t have to plummet, even if they stay flat purchasing is a bad deal when PITI is double equivalent rent.
And guess what, inventory is WAY up in Washington State and prices are starting to fall. If you want a bit of plummeting, just give it a year.
While not immune to the housing and credit crisis, up here in Northern Idaho there was far fewer loans fueled by outright lying and manipulation seen in the boom states of CA, FL, NV, and AZ. Hence, the foreclosure problems, while present, have not destroyed the market for the rest of us.
We did see a huge surge in developments and the average price of homes from 2001-2004, but after that prices have remained pretty stable at 2005 prices (going up in 2006 and then falling back). What we no longer have are new developments of suburbs targted toward the high end. These houses, $500K-$800K, were built for Seattle, Portland, SF, and SoCal transplants. Not only are they not selling but their prices have come down $100K+. So the fall in median home prices is largely due to a shift in home purchases away from these new suburban behemoths.
The other things we have are (a) large increases in urban condos and (b) continue building of waterfront. On the waterfront, these prices seem outrageously high, but I know nothing about the waterfront market. As for the condos, I also know very little of their market dynamics, but they also seem way overpriced.
Bottomline, if you are smart and do your due diligence, there are pretty good deals for homes in N Idaho. But the good deals are for those planning on being in the area for 25+ years. Due to high inventories, even with great econ fundamentals gong forward, the inventories and overhang are such that prices will be pretty flat for most houses for the next few years. Only those houses with something special have any chance to appreciating, and if so, only very modestly. The houses most at risk are those priced above $350K or so. The market for such homes is largely out-of-state, as few locals can afford the sticker. But the numbers of such buyers has fallen dramatically. So price declines are most obvious in the upper stratosphere of upper-end cookie cutter houses and condos.
Two different views
Economists see credit crisis nearing end
Forecasters expect credit conditions to improve in the second half of the year; outlook for economic growth scaled back.
http://money.cnn.com/2008/05/19/news/economy/nabe_outlook.ap/index.htm?postversion=2008051909
ECB head: Credit crunch ‘ongoing’
Jean-Claude Trichet (L) and Robert Peston (R)
Mr Trichet warned against cutting interest rates
The credit crunch is continuing and it is not evident that the worst is over, the head of the European Central Bank has told the BBC.
http://news.bbc.co.uk/1/hi/business/7407759.stm