A Well-Stocked, Buyer-Friendly Real Estate Market
KMBC Kansas City reports from Missouri. “You may hear a lot about all the great deals on foreclosures out there. But are they really bargains? ‘The market here on foreclosures is one out of every four houses sold is going to be a foreclosure now,’ said Mike Phillips, who owns Century 21 All Pro. ‘We used to do a lot of new homes and that’s all but dried up. For now, the business volume for us is all foreclosures.’”
“Why are people snatching them up? ‘The big advantage on the bank properties is being priced correctly seems like a bargain,’ Phillips said.”
“Phillips said that there are deals out there, but most foreclosures seem like a better buy because they are priced to sell in 30 days.”
The Indy Channel from Indiana. “Like thousands of Hoosiers, Michael Kaylor is behind on his mortgage payments. Indiana has one of the highest foreclosure rates in the U.S.”
“‘I can’t pay my mortgage because gas prices went up so much,” said Kaylor, who works in the home service industry. ‘I am paying $600 a month just to do my job.’”
“As a real estate agent, Kelly Clark was hurt in more ways than one by the downturn of the housing market. The market decline cut her income and forced her into foreclosure.”
“‘Things started to fall apart about a year ago,’ Clark said. ‘I have a sale date on Wednesday. I am trying to get that put off.’”
“A common theme emerged from some of the personal stories — adjustable rate mortgages. Payments that were low to begin with skyrocketed over the last couple of years for many homeowners.”
“More than a half-dozen houses on the same street Clark lives on have been foreclosed upon since she moved there two years ago.”
The Toledo Blade from Ohio. “Metropolitan Toledo homes are selling more cheaply than they did last year, but residents are even less likely to be able to afford them, a new study shows.”
“Local experts blamed the area’s high unemployment rate and tight lending practices as contributing to the decline in home affordability. ‘A lot of this relates to our economic underperformance, and our unemployment,’ said Richard DeKaser, chief economist with National City Bank in Cleveland.”
“It doesn’t matter how low home prices are if residents don’t have jobs and income to purchase them, he added.”
“Area home builders in Toledo said they continue to build homes of all sizes, but mostly focus on more entry-level houses and dwellings that are very expensive. ‘The lower end and the higher end is where the majority of the activity is,’ said Tony Plath, executive VP of the Home Builders Association of Greater Toledo.”
From WOOD TV in Michigan. “Hundreds of Michigan home builders gathered at the state Capitol Tuesday to let lawmakers know they need help. Home building created 153,000 Michigan jobs three years ago. Since then, that number has fallen by 69,000 workers.”
“‘Nobody’s buying homes,’ Dave Roberts, a Kalamazoo home builder, told 24 Hour News 8. ‘I’m talking to some people to build homes but it’s just extremely, extremely slow in the building industry.’”
“‘Right now, a lot of our members are paying on properties that are not selling, and those taxes are very difficult for them. If they could get a relief that would help them to stay in business…’ adds Judy Barnes of the Home & Builders Association of Greater Grand Rapids.”
“Grand Valley State University business professor Paul Isely said the construction slow-down runs deep. For starters, our state continues losing jobs.”
“‘And when you lose jobs people leave the state,’ said Isely. ‘You’re seeing a decrease in population, and if people are leaving the state they don’t need to buy a house here.’”
“Isely believes the housing bubble caught builders off guard when it burst. ‘Houses were already being built, materials were already purchased, houses were put up and that created a back-log of housing,’ Isely said.”
“The Grand Rapids Association of Realtors said there is a 12-month inventory in most places across West Michigan. It is an inventory that includes an excessive number of foreclosures. That results in banks scrutinizing home loans, with the effects suffocating the industry.”
The Fond du Lac Reporter from Wisconsin. “Amid a drooping housing market, Jessica and John Westphal are eager to break even when they sell their first home. They’ve given up trying to make a profit.”
“The young couple listed the three-bedroom home at 27 Sibley St. for sale in March while seeking bigger digs to start a family. They have already lowered the asking price by $5,000 after a sluggish first month, but they aren’t discouraged.”
“In fact, the couple is hoping to get a good deal on their next house. ‘In today’s market, we are able to find houses well below their appraised value,’ Jessica Westphal said.”
“The Westphals’ experience is becoming more common as prices drop in a well-stocked, buyer-friendly real estate market.”
“During the first quarter of 2008, home sales in Fond du Lac County dropped 12 percent compared to the same period last year, said Scott Swick, owner of First Weber Group Realtors. Prices also fell in the first quarter. The median home price tumbled 6 percent from the same period last year to $112,000, Swick said.”
“‘Are you happy about a 12 percent drop? No. But compared to the state, it doesn’t seem so bad,’ he said.”
“Wisconsin home sales fell 24 percent during the first quarter. In the Midwest region, home sales dropped 18.3 percent, according to the Wisconsin Realtors Association.”
“Median home prices slumped 3.8 percent statewide to $154,000 during the first quarter compared to the same period in 2007. The WRA blamed bad weather and price moderation for the downturn.”
“Dawn Kimpel is hoping she doesn’t lose money selling the Fond du Lac home she purchased two years ago. Kimpel recently moved to take a job in La Crosse. She is renting out her home at 296 E. 11th St. and hoping to sell it before Thanksgiving.”
“‘I’m concerned about it going on too long. I don’t want to have to pay two mortgages,’ she said. Only one person has looked at the home since she put it on the market for $89,900 two months ago.”
The way sellers look at the market has changed, said broker Frank Adashun. ‘They are being realistic in today’s market. It’s a different attitude than there was in 2004 when homes were flying off the shelves,’ he said.”
“However, not every seller is sensible about the market. Both Adashun and Swick said they have had to turn away potential customers who wouldn’t set practical prices.”
“‘It doesn’t make sense to waste our time and efforts if the seller is unrealistic,’ Adashun said.”
The Post Bulletin from Minnesota. “Ask Rep. Tim Walz about the housing crisis, and he will tell you he sees it out the front window of his Mankato home. ‘My personal story is that the house right next to (mine) has been in foreclosure for a year and my property value dropped 20 percent this year,’ he said.”
“Walz is not alone in seeing the effects of the bursting of the housing bubble in Minnesota. Lawmakers from both parties and in both chambers of Congress have heard from constituents and community leaders about falling home prices and vacant properties resulting from the home ownership crisis.”
“Walz said he backed the notion of having the government insure refinanced loans made on a voluntary basis between lenders and borrowers. He dismissed the the debate over whether struggling borrowers should have been denied loans or lenders were lax as not helpful.”
“‘It’s almost as if, as the forest fire is burning, we’re arguing who started it,’ he said.”
“Walz said the crisis should be addressed at both the borrower level and the broader housing and mortgage sector level. ‘If it’s at all possible, it has to be both. I know our homebuilders are hurting,’ he said.”
‘Area home builders in Toledo said they continue to build homes of all sizes’
‘Home building created 153,000 Michigan jobs three years ago.’
‘Houses were already being built, materials were already purchased, houses were put up and that created a back-log of housing,’ Isely said.’
‘They are being realistic in today’s market. It’s a different attitude than there was in 2004 when homes were flying off the shelves’
‘I know our homebuilders are hurting’
153k jobs in Michigan sounds like a lot to me. And spec houses? What these simpletons can’t get into their head is these builders need to go under and find a new line of work. And any thing that keeps them building only contributes to the bust.
BTW, I got a chance to talk with some recent college grads from Michigan the other day. All of them acknowledged the state had participated in the housing mania.
Ben,
Agreed. I have no idea as to what that “new line of work” might be but it’s their’s to find. Their plea sounds a little extortionist to me? Give us a break on taxes or they’ll sit empty!
More “sophisticated debtor” strategies and mindset.
Be it builders marching on the state capitol or Jessica Westphal suddenly “needing bigger digs” for a family that may ( or may not ) happen, EVERYONE wants a new deal! And they’re sure they can make it work if only…?
I laughed at the tax break issue. Our pathetic governor will give you tax breaks to get you to come here, but if you’re already here, by and large you can forget it.
Just based on word of mouth and what I see at my work, the new Michigan Business Tax is a disaster for many small businesses. Even more so than the hated Single Business Tax. Here for example, our sales are down 25% so far this year, yet our projected tax burden will nearly double over last year. That doesn’t seem like much of an incentive.
luv those ads for MI biz on the tube- they’re always funded by unwitting taxpayers
MICHIGAN SOVIET DEVELOPEMENT AGENCY
dude
Let me be the first to predict AA charging for the first checked bag policy won’t last more than 2 weeks. Already boarding is miserable as you wait for about a third of the J6P’s to stuff absurdly overstuffed bags into the overheads. Now you will have to wait for EVERY person to do the same, there simply won’t be enough room. What they should have done is charge $15 for every carryon weighing more than 5lbs, that way the boarding process would take 10 minutes instead of 30+, then they could schedule more flights.
No meals, no pillows, and now charging for any checked bags.
What exactly distinguishes a ‘full service’ airline from a ‘discount’ airline?
“What exactly distinguishes a ‘full service’ airline from a ‘discount’ airline?”
Discount airlines have much better service.
“What exactly distinguishes a ‘full service’ airline from a ‘discount’ airline?”
the peanuts you fool.
solvency
gascap
you’ve touched upon a sore subject alright, and I know it’s a bit off-housing topic, but I agree with yer comment about the selfish azzholes who insist on bringing the damn kitchen sink onboard the plane.
baby jeebus, joseph & mary, if the freekin ground crew would ENFORCE the carry-on policy then this crap wouldnt happen. I’ve had to fly cross crounty a lot the past few years & lemme tell you all the airlines are complicit. there is a sample square frame that carry-on luggage should match, but it’s usually pushed off to the side out of view as the lazy terminal staff just dont want to start confrontations with all the idiots who insist on bringing aboard way, wayyy more than they should. I’ve personally seen half the boarding line with the pull-alongs stacked with extra bags AND a few more pulled along with the other hand. It’s just complete BS!
and of course the one’s that DO comply with policy see the scofflaws & think ” hell with it. why should I follow the rules if no one else does?”. so now it’s Bender’s worst nightmare because Andrew got to carry on extra bags. its anarchy!!
(whats really a sight is the smug attitudes on the bizness class types as they pull their huge stack of luggage on-board. not for THEM to suffer the indignities of the hoi poloi, no no, they are SPECIAL and by god they DESERVE the rules to be bent for THEM.
and if any mere ticket agent DARES rebuke them then out comes the major attitude w/corporate AMEX with threats about how much we spend on this airline, I demand yer supervisor. or the whining about just this one time. u can easily spot em with the huge look-at-me laptops. the women/gay dudes use apple products. oh so trendy. one MUST be seen as just coming from the center of the universe aka NEW YORK. its always more hip in NY.)
hilaryious.
ok, I’m done. for now
Aqius you nailed it.
The business/fc class are so smug…the agents are indifferent to making people adhere to carryon size policy, and you nailed it.
If the people in BC/First Class were REALLY important, they would be flying in their own/their company’s airplane.
General Aviation (including business jet) sales still going like gangbusters. And sales worldwide are bigger than the US. Nobody has figured out a way to relace TIME.
Airplane sales people have started going to airline terminals, look for the most pissed off people wearing business attire, and handing out business cards.
Deplaning takes less than ten minutes for a full airplane.
Why is that?
Funny how boarding takes forever and the exact same thing in reverse,
they be taking and counting yo money on the way in. on the way out they be kicking your *ss. Kicking *sses takes less time than counting money.
“…home builders gathered…to let lawmakers they need help.”
This is just too tempting to pass up. I am a builder in Michigan’s upper peninsula. About 6 years ago I started noticing that just about everyone I knew had a relative going into construction. It seemed to me that something was wrong (I hadn’t yet discovered Ben’s blog). I decided to learn a different skill (computer programming) and the only person who thought it was a good idea was my wife (she’s great).
Sorry MI builders…the gov’t doesn’t owe you a livelihood. It’s time to move on.
I grew up in Michigan, went back to visit a couple of years ago and was appalled to see my little country home town had been swallowed whole by suburban sprawl. Now, these houses are going begging.
“It doesn’t matter how low home prices are if residents don’t have jobs and income to purchase them, he added.”
This is the key point for the ” can’t go to zero” folks to realize. There are times when real estate can indeed go to zero.
My aunt really wants my grandma’s house. My mom and I say “she deserves it”. (She isn’t my favorite aunt.) The house is in a town in Ohio with employment opportunities that are best described as dismal.
Ben, Toledo sits in Ohio. There was even a war between States (no not the Civil War) to settle this. Ohio won and Michigan got the Upper Peninsular as a consolation prize.
I know of a company that moved out of MA here a few months ago to go to MI. The guy said the cost of living is much lower and it is easier to find workers. So I really hope MI doesn’t get hurt too bad. I’ve been seeing those commericals on tv promoting MI, and I’d move out of MA to MI if I could, but family is tied down here.
Having gone to college in Michigan, I can attest to the fact that its residents have quite the work ethic. Much more robust than what I’ve seen here in Arizona. So, don’t count the Great Lake State out. I sure won’t.
Michigan would be a stronger state if they could somehow get rid of Detroit. Maybe they could pick another fight with Ohio or Canada and lose.
Ohio “won” the war with Michgan and “won” Toledo.
Not sure we are stupid enough to go after additional Michigan land.
boo hoo hoo, let’s prop up the market so real estate agents, land speculators and home builders can put that in ground pool in their vacation home this summer that they promised little billy…poor babies
seesaw,
“I’m sawing a saw in half with a saw, see?
( I just had to say that )
Ahem, WHAT in this bubble wasn’t done “for the children”? Hmm?
“Dawn Kimpel is hoping she doesn’t lose money selling the Fond du Lac home she purchased two years ago. Kimpel recently moved to take a job in La Crosse. She is renting out her home at 296 E. 11th St. and hoping to sell it before Thanksgiving
It also appears that Dawn is becoming a little skittish about becoming the MAIN course at this years Thanksgiving Foreclosure Dinner:)
Have some compassion! The realtors need to keep up with the lease payments on their Lexus SUV. And the contractors! You must understand how much fuel the ski boat eats up and new oversized tires and lift kit for the F250 are not cheap. So keep buying!
My idea of compassion when it comes to Stealtors is that we don’t give them the death penalty.
But we could take their photograph-infested marketing materials out back and shoot them. Why, this could become quite the project for the evil-thinking HBB gun club!
“The young couple listed the three-bedroom home at 27 Sibley St. for sale in March while seeking bigger digs to start a family.”
OK, I can see looking for a bigger place if you currently live in a 1-br apartment, but they have a 3br, 2ba house. Isn’t that enough for a family of 3 or 4? This is just another reason why the typical USA resident will never achieve financial security.
Hmm I like the part about it being to start a family. They don’t even have kids yet. I’m still boggled at the way people think. Given the number of liquids spilled squeezed or otherwise deposited on my apt floor drawing on the walls etc. I’d never dream of buying a house till my kids are 5-6 years old at least.
Every time I discover a new Picasso or wet spot of unknown origin I’m a thankful renter.
“…wet spot of unknown origin…”
aieee!!
You are speaking my everyday truth ;).
tuxedo_junction,
I… WANT a new DEAL!!!
“Yeah um, we “thought” we got a decent deal on our 1st house but now realize we got hosed so we need a new home with a functional ATM! Had we been informed we would have remained on the sidelines but we went with the crowd and well… Damn’it, we WANT a new DEAL!!!
( Evidently this is what happens when an entire nation goes from being momentum players to bottom-feeders overnight? )
That boggle my mind- we have a 3 month old and live in a 2b/2ba 1200 sq foot rental. Sure, it would be nice to have a spare room for guests/office/storage etc., but we get by. When we have another kid, we’ll need another room, but for now it’s ok.
Th problem is that society has been conditioned by Realtors, builders, and HGTV that a house must be big and fit your “lifestyle”. Lifestyle= much more square footage for a play room, master retreat, nursery, office, wine room, yoga and workout space, man cave…..3000 sq ft min should work for a family with one kid.
When I was a growing up, my parents rented a tiny 2-bedroom home. My brother and I shared a 10×10 room with one closet until I was 18 years old (and I’m a girl!) and he was 13. The entire house had 1 bathroom for all of us to get ready in in the morning. It wasn’t pleasant, but it’s all they could afford.
Today, I walk through model homes and see the palacial spaces (aka bedrooms) they build targeted at kids. It blows my mind. I feel old, but I always find myself saying “kids today are so f-ing spoiled. Look at these rooms - some with walk-in closets and their own bathrooms. No wonder our society has the entitlement attitude it has.”
I think it’s going to take a generation or two to work this crap out of our systems.
Back to mudhuts for 290+ million Americans, while the other 10-20 million will live in 1960s style homes.
Don’t forget about the media room.
Brandon-
We rent a little place too–one of those 3 bedroom 1950 ranches. I think it is around 1500 sq ft. There is plenty of room for the 3 of us, and the next one coming in October. We will set up the crib in our bedroom anyway for SIDS prevention and night-time wake-ups, so we will still have an extra bedroom. I wouldn’t mind a little more elbow room in the 1950s bathrooms, though! I guess you can’t have it all!
There’s a pattern there:
Kids get a new car before proving they’re responsible drivers. Graduates get a new wardrobe before landing their first job. Couples get a trophy house before the seven year itch. City councils and county boards spend projected property tax revenues. Federal government spends the income tax of the unborn. BOOM!
edgewaterjohn,
So true. I would add that the trophy house also comes before that “big promotion” as well.
Ahem, I worked out of the home for FIVE years before getting a “store front” office! ( You know, just to make sure it wasn’t a flash in the pan? ) I actually had a larger client that said he had more business to refer to me but said he was reluctant to do so as long as I worked out of the home?
Since there was an opening a HALF block from my house and I ALREADY had everything I needed except a couch, I reluctanly agreed. I will probably still maintain a home office but on a smaller scale and ATC my overhead should remain about the same.
hey DinOR
alright now, this Panera Bread Store aint big enough for the two of us, so yer gonna have to keep the home office . .. or head over to (shudder) Starbucks.
and the power outlet is mine too. I need both openings for my laptop AND Blackberry because Regis is gonna call any day now.
aqius,
LOL! You know that’s funny you’d mention that. I’m… reluctant to bring it up until that get that last office leased but I already have a host of CPA’s that I’m looking to sub-let to. The office itself is about 275 sq. ft. ( so half the size of a McMansion master bdrm. ) and I STILL don’t want to foot the bill alone! Even if I could just charge a LTC ( or whatever ) $100-150 per mo. “desk fee” or just have someone that’s in charge of making sure there’s plenty of beer in the fridge for Friday pm. I’d be good w/ that.
Oh man I wish you were in Missoula. I had a little office after doing my law practice out of my house. Little house, too, now THAT was embarrassing..but all I need is just a place to put a desk and a file cabinet. It was nice to get the ofc stuff out of the living room finally LOL
I’ve worked for myself for 12 years now. We lived and learned the hard proverbial lesson of self-employment - “It’s flexible! You can put in your 80 hours a week whenever you want!” That’s what it takes, at least if you accumulate overhead so that you look like “a real business.” Once we cut back to what the bare minimum, the pressure to put in the constant long hours subsided.
iftheshoefits,
LOL! Like my dad said, “I’m just working “half days”, just 12 hours a day”. Since I can blog and talk at the same time it hardly seems like work?
I totally agree though. If a client complained in the past I would simply say that I could always hire a do-nothing, ex-stripper/eye candy recept. and pay her 30k a year to listen to her single mom problems if that would make you f-e-e-l better?
I was always about keeping overheads to an absolute minimum. By recycling paper clips from incoming mail I’m still on my original supply! I’ll be disconnecting my cable TV service at home b/c I can’t see keeping up (2) ISP’s and cable hook-up’s within a half a block of one another?
With directional antennas you could most likely transport the internet connection from home to the office, or vice-versa using wireless.
“If they could get a relief that would help them to stay in business…’ adds Judy Barnes of the Home & Builders Association of Greater Grand Rapids.”
Maybe they shouldn’t be in business Judy, the less builders the better it is for the survivors. Why do we need to extend the lives of the walking dead business models ?
Mo Money,
Why do we need to encourage 1 ton pick-up drivin’, cell phone dialin’, egotistical jerks period!
Wow, what a great life! No boss, no real work, bossin’ illegals around, working primarily on your own dream house, drunk by 3 in the afternoon, stop by the strip club and yet never quite gettin’ around to filling out those bothersome tax forms! What’s not to like? ( No wonder so many guys want to be contractors? )
Masters of nature - 100-year old trees on that lot? no problemo, down in a morning…
Well put. These people are in for a real doozie of a hangover.
And no one deserves it more.
DinOR,
You just described half of the people I see on a daily basis in metro Detroit. That was spot on. There was a HUGE housing bubble here in MI.
“Isely believes the housing bubble caught builders off guard when it burst”
Bulls$$t….The business was rampent with speculation not much different than the dot com era…Everybody wanted to be a builder…Everybody thought they could be a land developer…It was so easy because the mentality was that there would always be someone at the end of the day to take it off your hands…Now they are crying for help saying we are losing to many jobs…All those jobs were a bubble also..They were created with easy money…Those jobs will never return…
Builders are always caught “off guard” because the guardians are the bankers and bankers tend to be dumb and greedy (the worst combination for those in business). Without ADC loans developers and builders can’t do anything.
I find it very offensive that builders would actually try to bully Congress for taxpayers aid to stay in business and profit when they over built ,conspired with the lenders to sell to speculators ,took advantage in one-sided contracts that are creating a legal nightmare now ,and in general built tracts with no long term demand in strange places .
I have not yet seen the SUV car dealers having the balls to march on Congress crying the blues that people don’t want to buy SUV’s now, so the taxpayers have to do something (but that might be coming next).When BB bailed out Bear Stearns it just set the ball rolling for all these industries wanting a bail-out. All these articles about FB’s needing help who purchased property they couldn’t afford and only planned to stay in that property for a short time is enough to make me want to scream.
I’m taking a small-time contractor type scheduling class right now because I need to know how to run scheduling software…so get this - 18 other people in the class, half of them small time builders…
We’re getting ready to turn in our final project, construciton of a good sized office building. My schedule has (at last count) 804 coordinated tasks, all linked, scheduled, and arranged for fastest completion and no overlapping of trades (eg, electricians and plumbers working in the same space at the same time). Even ran a few alternate schedules to see if I could accelerate construction, and have what I think is a great schedule without too much excess detail. But during the last class meeting one of these guys asks what is expected on the schedule, becuase his has 6 tasks, just like this:
Foundations -> Rest of Structure -> Mech/Elec/Plub -> Arch Fit out -> Civil/Site -> Turn over to client.
Yep, bub. You paid over $1.0k to take this class and that is all you learned? No wonder all the small time builders go broke.
Bad Chile,
You mean there wasn’t a Step 7?
“Cash check, become ridiculously wealthy”
THAT’S the important “step”!
Housing Wizard,
Here we go again with that incredibly short “holding period” horizon on primary residences! I’m sure nothing pleased the REIC more than seeing a “2 Year Turn-around” model, but now that they’re dealing with the fall-out I wonder if they’re as tickled with themselves?
Looking at the attractiveness of recently-built houses, I’d say that many people got into the design aspect of “homebuilding” who shouldn’t have. I lack artistic talent, but I swear the stuff I built out of Legos or Lincoln Logs when I was a kid looked nicer.
You build boxes because they are cheap to build but you can still deliver lots of square footage…Much less waste in materials and you can put them up fast so your analogy about “legos” is quite accurate…
Cheap to build, but not so cheap to heat and cool!
Head to your corner and get ready for the next round FBs - hikes in electricity and natural gas are already in the pipeline.
Agreed. And still almost no one looks at the passive heating and cooling aspects of home siting and window orientations.
It’s an interesting mental exercise to drive through McMansion developments with a basic knowledge of north-south orientation, and see how many houses have little or no windows on the south side for natural winter passive heating. Or they have massive view windows to the west, which just fry the insides of the place during the hottest portions of the summer days.
Just another reason why a fair number of these McMansion Crapvilles will end up being bulldozed at some point because they cost more to feed and maintain and commute to and fro than their worth.
OH don’t forget they cut down all the trees too……at least i have a big tree blocking sunlight in the summer and i can see the skyline of Manhattan in the winter..
————————————-
Or they have massive view windows to the west, which just fry the insides of the place during the hottest portions of the summer days.
I love this quote:
“Phillips said that there are deals out there, but most foreclosures seem like a better buy because they are priced to sell in 30 days.”
Meaning, they’re priced to sell for the current market rather than some future market (which probably won’t exist.)
off topic sorry
see this email sent to mozillo and his response
http://gawker.com/392370/americas-most-villainous-ceo-finds-the-little-people-disgusting
Let them eat cake. Hopefully, the result will be the same, although I don’t know of any states that can legally use the guillotine.
Mozilo Antoinette?
“Walz said he backed the notion of having the government insure refinanced loans made on a voluntary basis between lenders and borrowers. He dismissed the the debate over whether struggling borrowers should have been denied loans or lenders were lax as not helpful.”
“‘It’s almost as if, as the forest fire is burning, we’re arguing who started it,’ he said.”
No - we are proposing providing financial rewards to the arsonists.
His house lost 20%, when something like that happens to a pol - then its a real crisis. Reality cannot be allowed to intrude on the perfect lives of our glorious and heoric pols.
Long time reader of this blog. Found it after going to many family gatherings and hearing about the housing fortunes being made over the last several years, but I could not understand how it was happening with people who were making marginal income and buying multiple properties or very expensive homes. Now I know!! What has happened since is that those “investors” have given back properties (jingle, jingle) and now are basically broke and getting relatives to support them. No sympathy for bailouts as I do not believe in the theory that the borrowers were cheated by lenders. If they could not afford the house yesterday, what changed to make the house affordable today? The mortgage fairy? If you could not answer that simple question you were not smart enough to own a home. Absolutely no bailouts!
If they could not afford the house yesterday, what changed to make the house affordable today?
This is a key point that most people missed. Even if the fundamental laws of physics changed and house prices didn’t start to drop, FB’s with I/O, neg-am, teaser rates, etc, simply couldn’t afford the houses they moved themselves into.
The decline of prices merely hastened their demise.
(Of course, median prices will drop to about 3.5x median income. I’m 100% certain of that.)
Wait, wait, wait… I’m am confused:
“Local experts blamed the area’s high unemployment rate and tight lending practices as contributing to the decline in home affordability. ‘A lot of this relates to our economic underperformance, and our unemployment,’ said Richard DeKaser, chief economist with National City Bank in Cleveland.”
I thought “incomes no longer matter!” and “we’re working on an entirely different economic model that has never been seen before.”
Funny, I think I have seen this model before: Dot.bomb Bubble, Florida swampland in the 1920’s (okay, I read about that one), and other great “economic models” that lead to huge losses and crisis.
Then, there’s this:
“‘I can’t pay my mortgage because gas prices went up so much,” said Kaylor, who works in the home service industry. ‘I am paying $600 a month just to do my job.’”
Didn’t Dear Leader and his minions tell us that a collapsing dollar would be “good for ‘merica” because we don’t import anything anyway? Oh, yeah… there’s gas… we do import that… oops…
“Mission Accomplished!”
No doubt Richard DeKayser belongs in the Housing Bubble Hall of Shame but if we’re being truthful here, if the add’l $25 a week you now pay for gas means you can’t make your mort. payment then you weren’t “qualified” in the first place.
Those of us that remember the 70’s will recall that fuel prices became a catch-all crutch for all KINDS of excuses.
Wait. You’ll get your chance to see how the other side of the aisle will do.
The one thing you can count on is that intelligence is a missing commodity in Washington. Those that have it go elsewhere. To those that don’t, seems like a good way to make a buck without working.
“Local experts blamed the area’s high unemployment rate and tight lending practices as contributing to the decline in home affordability.”
Imagine that. No income, no affordability.
And yet there were millions of cases of “Small income? Who cares? We’ll MAKE it affordable!!”
“As a real estate agent, Kelly Clark was hurt in more ways than one by the downturn of the housing market. The market decline cut her income and forced her into foreclosure.”
Mmmmm let me lick you tears Kelly…….[slurp slurp slurp]….mmmmm they’re so delicious…mmmm
Yeah, what’s the big deal? Many a pusher has been gunned down on their street corner while conducting business, or O.D.ed after sampling their own wares.
Oh, it’s just the general irony of it. I think you’re right though, and this won’t be an uncommon occurrence.
Still, the irony and even poetic justice is sublimely delish.
Also, my Stepmother(stepmonster) of 12 years was a RE agent, and I got to see WAY more of them in action than any human should ever have to. Honestly can’t recall any of them that seemed to be conscientious human beings.
Not that they might not be out there, I just never met any of them in 12 years….
With apologies to Cartman and Scott Tenorman
‘Mmmmm let me lick you tears Kelly…….[slurp slurp slurp]….mmmmm they’re so delicious…mmmm’
HAhahaha! Funny!
And let’s see…hmmm…yes! Kelly’s tears ARE like nectar!
We flipped on My House is Worth What? last night and there was a Chicago condo (show copyright was 08) that the couple bought in 05 for $550k, put 70 something into, and then wanted to sell for $729k. Realtor tells them it is worth $700k, but if the put in another $50-$60k they could sell for $850k. I wondered what alternate universe they were living in that they thought they were going to make a profit on a condo in the West Loop that they bought in 05?
Oh who, oh who will buy up all those Chicago condos?
They expect a GF to pay $850k to live in an apartment, when before them generations of Chicago apartment dwellers did everything possible to snag a SFH.
Lemme guess, Peak Oil will change all that?
I’d be shocked if indeed they could get 700k in the west loop right now, let alone 850.
And, wonderfully, I received my property tax reassessment 2 days ago, and apparently my near west burbs house has gone up in value 25% in last 3 years! hurray!
or rather, dammit. dammit all to hell.
I don’t have a TV so I only get to see those shows when I’m in hotel rooms. I can only take 2-3 minutes usually.
They should come up with a new reality TV show - get a collection of underwater FB’s, follow them around from calamity to calamity, and see which one holds on the longest before walking away! Heck, I might even get a TV to watch that one.
In 1999 I was looking at 2 BDRM loft conversions with 12 foot ceilings for $160K. It was right across the street from Oprah’s studio.
I thought they were overpriced.
Supposedly mine went up by 400% in the 5 months since I bought it….WTF?
Time to pull out the lawyer.
I saw that too. What a joke. The entire city is so overbuilt, I think condos under 100K will be the norm by 2012.
Many will be completely worthless since the assessment and taxes will be more than you could rent a comprable box for.
It’s incredible that so many new projects are still starting up. Surreal. What planet are people living on?
The economy is NOT in a recession YET. It will be, and it will be bad, and lending will tighten further, and it will no longer be cool to “live in the city” and everyone will leave town. Condos will be a joke.
Who says we can’t have a mini-detroit situation happening in Chicago? All it would take is bad economic times — and those are on the way.
I love that show. It is my post-bedtime guilty pleasure.
“Ask Rep. Tim Walz about the housing crisis, and he will tell you he sees it out the front window of his Mankato home. ‘My personal story is that the house right next to (mine) has been in foreclosure for a year and my property value dropped 20 percent this year,’ he said.”
“Walz is not alone in seeing the effects of the bursting of the housing bubble in Minnesota. Lawmakers from both parties and in both chambers of Congress have heard from constituents and community leaders about falling home prices and vacant properties resulting from the home ownership crisis.”
Just how many of our representatives and their families are in the same boat?
Don’t forget, lots of congresspeople own two or more residences — one in their own home district and one in the DC metro area. So not only do they have to worry about wherever “home” is, they have to worry about the DC / NoVa / MD market as well.
You think there may be a conflict of interest with our politicians who voted for the bailout bill?
I don’t understand the rush to buy foreclosed houses.
If I were buying something for an investment, I wouldn’t consider buying anything for a particular price when there are other instances of the same product for sale at the exact same price.
Even when an investor buys a stock, he usually doesn’t make a “market” order, but puts in an order for a price at the bottom of the bid/ask spread, or slightly lower.
So why would anyone buy a foreclosed house as an “investment” when there are other similar foreclosed houses nearby? Considering the hefty transaction and carrying costs with real estate (you lose 6% right off the top, plus tax and insurance, HOA fees, etc) there’s little room for error here.
Reuven, you have a lot more on the ball than the average foreclosure buyer of mid-2008. These are the people who go to those weekend “get rich in foreclosed real estate” seminars and think the whole thing will be a breeze.
It isn’t. And it never has been.
Back in the day, house flipping was done by people with the skills to do work on a house (e.g., a general contractor who’s having a slow period) if they should come across a distressed house. It was worthwhile because you could do the repairs at a “wholesale” cost and have a good chance of making a profit. And the money you earned was the result of a very real production of something of value.
Anyone who thought he could have a sustainable income based on buying NEW houses and selling them again a month later was nuts. Yet this happened all over Florida, California, Las Vegas, Idaho, etc.
reuven,
Well said. I’ve found myself wondering the same thing? My target was a 2nd home in LV but for every listing at a certain price-point I can show you several dozen more just like it. So why bother? Especially when they become a commodity like that.
I mentioned to my wife just last night that if “we’re” thinking along these lines how many other couples out there are thinking the same way? Evidently a lot. Your “entry-point” on stocks analogy is spot on.
My target was shot at the range this past Saturday.
Exactly. PULL!!
When you go to call up listings in a given price range and it says: “Your search has 2,492 results” ( kind of takes the whole sense of urgency out of it now doesn’t it? )
A few years from now when the dust settles, someone will write the definitive book that condenses all this idiocy down into a readable volume. I won’t be suprised at all if the author of that book turns out to be Ben Jones, at least if he’s interested in taking on the project. He sure is accumulating the world’s best source database from which to do it.
It will be an interesting read for millions of folks, who are unaware of just how crazy this whole mania really is.
STAGflation pics
I’m sticking w some reits as many will just move into their offices and abandon their homes
“It doesn’t matter how low home prices are if residents don’t have jobs and income to purchase them, he added.”
I have seen many of my friends from the Indiana, Ohio and Michigan areas suffer from the lack of good paying industrial jobs. All of them lack a formal education, but lived within their financial means.
If you dig deep enough, the global economy is a mere cover up for cheap labor by shifting industrial and certain professional jobs to low wage countries. In the meantime, nothing is replacing these lost jobs and the continued increase in the unemployed due to offshoring of jobs is starting to have a significant negative impact as more and more people in this region lose their homes due to jobs lost to low wage countries.
“Area home builders in Toledo said they continue to build homes of all sizes, but mostly focus on more entry-level houses and dwellings that are very expensive. ‘The lower end and the higher end is where the majority of the activity is,’ said Tony Plath, executive VP of the Home Builders Association of Greater Toledo.”
…and the liquidation of the middle class continues.
Sometimes a forest fire does some good. They are part of the natural ecosystem of forests.
Sometimes forest officials even set forest fires on purpose.
Off topic (slightly)….
Dear Abby,
My 16 year old daughter is “dating” one of her schoolmates, let’s call him “The Shiftless Hippy” (their “dates” basically consist of hanging out at my place, or at his place to play “Guitar Hero”, but I digress…….)
TSH’s mom is a Realwhore. She has managed to sell a few houses this spring, so they are currently in a big toy-purchase spree (new car, in progress of buying new SUV/CUV, I-Phones, etc.). Daughter sees all the new toys, thinks these people are geniuses, now looks at me like I’m a dumbass. She just can’t understand that, just because people will sell you things on credit, doesn’t mean that you are actually able to afford them. She also doesn’t understand that getting something “free”, contingent on signing a 2-year service contract, means that you are actually PAYING for the phone.
Time will demonstrate that I know what I’m talking about. But is there any way that I can demonstrate this NOW, without listening to 2-3 years of bitching/moaning?
Signed,
Chernobyl-in-Progress