The Losing Side Of The Game Of Hot Potato
The Post Independent reports from Colorado. “Garfield County Public Trustee Bob Slade isn’t concerned with the increase in foreclosures the county has seen in the first quarter of 2008, but it’s still a little early in the year. ‘Our numbers are up significantly over last year,’ Slade said. ‘But I’ve not had any go to sale yet.’”
“Slade said there are different statutes in foreclosures as of Jan. 1, giving the borrower more time between when the foreclosure is filed and when it proceeds to final sale. This change gives homeowners more time to get their situation in order, Slade said.”
“‘I’ve had several withdrawn already and have had none go to sale,’ Slade said. ‘So far everything I’ve had for May has been continued to future dates.’”
“With the foreclosures on the rise, home sales have plummeted over the first quarter, down 32 percent in total property transactions countywide. March alone saw a 49 percent decrease in property transactions over March 2007.”
The Standard Blade from Colorado. “A foreclosure report released last week by the Colorado Department of Local Affairs had bad news for the state in general and Adams County in particular. The report says new foreclosure filings in Colorado between January and March were 23 percent higher than in the first quarter of 2007.”
“Adams County had the dubious distinction of having the highest rate among all the counties. In total, 1,704 households were in foreclosure in Adams County in the first quarter of 2008, a 17 percent jump over the same period last year.”
“Local real estate brokers say they have seen the effects of the high foreclosure rates first hand. ‘I’ve been doing this for 16 years,’ said Deanne Kouba Day of Day and Co., Inc. ‘This is the weirdest market that I’ve ever seen. I’ve never seen the prices go this low, I’ve never seen auctions like this, I’ve never seen banks go so low.’”
“Day said the market is excellent for buyers, because banks are scrambling to get rid of an overabundance of properties. Local broker Brian Margolis, who sells properties on behalf of large national banks, agreed.”
“Margolis said home values are down about 5 percent this year in Brighton, and he predicts a double-digit decrease by the end of the year.”
“‘Business is really good right now, but it’s a shame it’s all bank-owned properties,’ Margolis said. ‘It is going to be very difficult for normal sellers to sell their homes.’”
The Daily Planet from Colorado. “An early-season slowdown in the local real-estate market is starting to ripple through Telluride’s finances and the town’s earnings from its all-important real-estate transfer tax. Revenues from the town’s 3 percent tax on property sales are lower now than they’ve been since 2005.”
“Property sales across the county are down some 32 percent for the first four months of the year. The decline follows a record-busting 2007 and years of nearly uninterrupted growth in the local real-estate market.”
“‘I’m hoping that it’s only an aberration and that it’s not a long-term thing,’ said council member Thom Carnevale. ‘But we can’t know for sure.’”
“The town officially expects to earn $4.7 million in transfer taxes this year, she said, after taking in $4.9 million last year. Last year’s haul was actually 6 percent below Telluride’s 2006 earnings of $5.3 million in RETT money, which represented an all-time high.”
“As Telluride built out over the 1990s and watched home prices rocket and property bounce from owner to owner, the transfer tax turned into a mint for town government, more than quadrupling over the past 15 years. In 1991, Telluride took in $952,000 in transfer taxes. In 2007, it grossed $972,000 in a single month.”
The East Valley Tribune from Arizona. “With home sales still in a slump, Valley builders and real estate agents are working to mend strained relationships between the two sides and boost business for everyone.”
“During the boom - when sales were nearly effortless - some builders slashed commissions to agents who brought in clients. Others offered flat fees that were a fraction of a standard commission amount.”
“Some agents felt, ‘You pushed us away when you didn’t need us, and now you do need us,’ said Diane Byrne, VP of marketing for Cachet Homes.”
“With so many abandoned homes, people think the best deal is always the foreclosure home, but that’s not necessarily true, said agent Alicia Conley.”
“Builders may be offering new homes in the same area for only a few thousand dollars more, said associate broker Dawn Matesi. Buyers also know what they’re getting instead of having to accept a foreclosure home ‘as is,’ Matesi said.”
“‘It’s brand new. It’s got the warranty,’ she said. ‘It’s really a no-brainer.’”
“With a massive oversupply of homes in today’s market, it’s crucial for builders and agents to work together, said Karl Tunberg, co-owner of Chandler-based Sanctuary Builder.”
“A little bit of distance has always existed between real estate agents and builders - a rift that widened during the boom, he said. Some builders gave agents a $1,500 flat fee on $300,000 and $400,000 homes, he said. Usually, that commission would be closer to $15,000, he said.”
“Many people in the industry are struggling and falling on hard times, he said. ‘It’s really easy right now to get down about what you’re doing and not feeling like you’re worthwhile,’ he said.”
“Two years after one big condo tower got the green light in Tempe, the site remains a fenced-off dirt lot. Just down University Drive from that site, a larger cluster of towers has yet to rise more than a year after the city signed off on that ritzy development.”
“The consensus is some of the planned luxury condo towers won’t sell in today’s economy and will have to wait years for demand to rebound.”
“Tempe Mayor Hugh Hallman, who holds an economics degree, expressed exasperation at the idea that some delays could jeopardize the larger vision for a denser, more cosmopolitan community.”
“‘The real story is: My God! - people are still investing hundreds of millions of dollars in Tempe,’ Hallman said.”
“Some city-approved projects won’t ever happen, Hallman acknowledged, but only because some ‘bottom-feeders’ structured unrealistic transactions that unfairly tarnish the reputation of other projects. ‘The silly deals are going to shake out,’ Hallman said.”
“City officials and developers will only privately speculate at what deals they consider silly or realistic.”
“Several forces have collided at once and hurt the condo market, said Randy Levin, the project manager for Hayden Ferry Lakeside. The credit crisis has left some buyers unable to get loans. Others can’t sell their existing homes. And the supply of condos has surged past demand.”
“‘What’s going on now is kind of a cleansing process,’ Levin said. ‘You have to ask yourself, were there really too many condos that were put on the board here? Was that too much all at one time?’”
From Sedona.biz in Arizona. “Scott Cole, the developer for the 158-unit Cole Sedona Preserve condominium project on both sides of Hwy. 89A in Uptown, successfully requested a 24-month extension for his development agreement with the city on May 13.”
“Mr. Cole said one major obstacle is he cannot get loan financing to do the project unless he can pre-sell up to 50 percent of their projects. The local condo market was good when he began the Preserves project more than two years ago, but he is not so excited about today’s market.”
“‘Banks have completely turned their backs on new condo projects so I am not sure an advance sellout of even more than 50 percent will turn bank heads at this point with the general softness in the market,’ said Laurence Ross, an investment sale broker with Bensen & Associates in New York.”
“‘What I have seen over the last few years is a ton of amateurs - fly-by-nights - who are now on the losing side of the game of hot potato; and are scrambling for dollars after paying astronomical numbers on a price per buildable square-foot,’ Mr. Ross said.”
The Tahoe Daily Tribune. “What does the Chapter 11 filing earlier this month by Tropicana Entertainment - the parent company of Horizon Casino Resort and MontBleu Resort Casino & Spa - mean in the future?”
“The unknown is nothing new for South Shore casinos. But the potentially higher stakes these days are reflected in the emergence of Indian gambling in California, the absence of major airline service to Tahoe, the continued growth of Las Vegas casinos as a worldwide destination and a fickleness among gamers themselves.”
“‘Overall, there’s been a tremendous growth in gaming. It just hasn’t been here,’ said Eadington, who has tracked casino gambling at Tahoe for 30 years. ‘Reno hasn’t done as well, either, but not as badly as South Tahoe.’”
“He pointed to Lake Tahoe’s North Shore condominium and timeshare projects planned for Cal-Neva and the Tahoe Biltmore. The idea is to focus less on gaming and more on high-end retail and destination visitors.”
“‘The old model is the hotel feeds the casino,’ Eadington explained. ‘The new model is the casino can’t do that, and so you generate business and condominiums. Right now, it might be a tough sell because of housing and the national markets.’”
“While the South Shore is separated by a state line, the effects of a Horizon closure would put further financial constraints on the city of South Lake Tahoe, said City Councilman Bill Crawford.”
“‘We have to make the adjustment to the reality, and the reality is Tropicana is in serious trouble,’ Crawford said. ‘It looks like within three years, the Horizon will not be a gambling house. The handwriting is on the wall there.’”
“Add to this a real-estate downturn and a convention center redevelopment project - considered among some as an economic silver bullet that has run into financing problems - and South Lake Tahoe could be in for a wild ride, Crawford said.”
“‘My position is we adjust to the reality,’ he said. ‘The reality here is we are in decline.’”
The Review Journal from Nevada. “Lehman Bros., which recently gained control of the financially troubled Vegas Grand luxury condominium project, has hired CB Richard Ellis, a commercial real estate brokerage, in Las Vegas to market the property.”
“‘What this really gives somebody is a clean slate,’ CB First VP Geoffrey West said. ‘It was originally intended as a for-sale condominium project, but that market has all but disintegrated. This gives an opportunity to utilize it as luxury apartments, a nongaming hotel and resort or a time share.’”
“As if waning taxable sales and slumping gaming revenue weren’t enough, you can add Clark County property taxes to the catalog of levies feeling the economic slowdown.”
“The number of delinquent parcels advertised in a public notice in Wednesday’s Review-Journal rose 51.2 percent when compared with the number of lots published in the paper a year ago, Clark County Treasurer Laura Fitzpatrick said Friday.”
“What’s more, 2.3 percent of the county’s properties in Wednesday’s notice were in arrears, compared with 1.4 percent a year earlier.”
“Astoria Homes claimed the single-biggest number of parcels on the list, with taxes due on about 1,300 pieces of property in the county. Astoria President Tom McCormick noted it’s the first time in the local builder’s 13-year history that the company missed the deadline on property-tax payments.
“But it’s what happens in a credit crunch, when banks stop lending construction financing, McCormick said. ‘It’s very embarrassing,’ he said.”
“Astoria, which has eight actively selling neighborhoods in Las Vegas and five more under development, had secured agreements for construction funding from three lenders who have since decided they want out of residential real estate nationwide.”
In Business Las Vegas from Nevada. “In April the 1,794 home sales on the MLS were 30 percent higher than April 2007, the first meaningful month-over-month gain amid the housing slowdown. No one is expecting a boom, but there is a sense of hope in the real estate community that the bottom has been reached and the market is inching back up.”
“‘There have been reports that the bottom has been hit,’ said said Bob Hamrick, CEO of Coldwell Banker Premier Realty. ‘I can’t guarantee this, but we can certainly see it from here. It’s not with great velocity, but we are bouncing off it.’”
“So far, May hasn’t been as good as April, and Hamrick said the market may be at a ’sloppy bottom,’ where there are monthly variations.”
“Properties owned by banks and other lenders continue to account for more than half of the homes being sold every month.”
“High-end buyers aren’t willing to pay $900,000 for a noncustom home that is only selling for that price because of appreciation, said said Mark Stark, CEO of Prudential Americana Group.”
“‘The middle range is the getting hit the hardest,’ Stark said. ‘The homes $400,000 to $900,000 are getting crushed.’”
The Las Vegas Sun. “Everything seems fine out at Lake Las Vegas. Except for the developer who couldn’t pay the mortgage, the four-diamond hotel that just filed for bankruptcy court protection, and home foreclosure rates roughly the same as in the rest of the valley.”
“At the beginning of the year Atalon Group, a firm that specializes in turning around financially troubled companies, acquired Lake Las Vegas after its original developer, Transcontinental Corp., defaulted on a $540 million loan.”
“‘Everybody who was there is out,’ said an investor familiar with recent changes at the community around a man-made lake southeast of Las Vegas. ‘The people who were there from the beginning are just gone.’”
“Plans call for about 9,000 homes near the 320-acre lake. Today, 1,500 houses exist. Clark County recorder documents show that 142 of those residences - roughly one in 10 - have been foreclosed on or have been on the brink of foreclosure since January.”
“More than 400 houses and condos were sold in 2006 during the boom in residential construction. In 2007 that number dropped to 234. This year only 54 have been sold.”
“Donna Gold knows something about the roller-coaster ride that’s Las Vegas real estate. After moving from California to Las Vegas in 2000, Gold thought she had come to the land of milk and honey.”
“A year after moving here, Gold got a license to sell real estate just like she once had California before quitting the business about 1985.”
“Gold bought nine homes and two condominiums in Las Vegas and four homes out of state. She couldn’t believe her timing: When she started buying homes in 2001 and 2002, the median price of existing homes was $136,500. The price rose to $275,000 by 2005, and Gold’s wealth grew to $4.5 million, not counting the six figures she earned a year as a Realtor.”
“She planned to sell a couple of properties and cash out on the appreciation and keep the others as rentals to produce income. She wasn’t buying real estate as a flipper, she says.”
“‘I came here in the golden age and realized this is a perfect time to make money. I felt for the first time that God blessed us,’ Gold says. ‘I was trying to create a future.’”
“But the market changed and with it Gold’s fortunes. She sold one of her Las Vegas homes, but the change in the real estate market made it difficult for her to sell any other properties at the end of 2006 and beginning of 2007.”
“She was able to refinance out of six adjustable rate mortgages, but found herself burdened by two others she was talked into by her mortgage brokers with the mistaken belief she could easily refinance them as she had the others.”
“After being able to make all her mortgage payments in the past through the end of 2007, Gold says she has fallen about $22,000 short each month on mortgage payments and is as much as four months behind on some payments. She lost access to her line of credit even though she is still paying it down. She also has to deal with some of her tenants’ inability to pay rent.”
“The real estate market was hurting her income as a Realtor. Her once six-figure income fell to nothing because of no commissions in 2007. Gold said she worries about prospect of foreclosure, but has no plans to file for bankruptcy. She remains adamant that she will survive these tough times.”
“‘I am going to come through this fine,’ Gold says. ‘I don’t blame anybody. I take responsibility, but I am going to forge on. I am going to dust myself off and keep going forward.’”
‘The old model is the hotel feeds the casino,’ Eadington explained. ‘The new model is the casino can’t do that, and so you generate business and condominiums.’
If this is so, the Vegas situation might be more dire than most realize. Tahoe in decline; who would have thunk it. Just a few years ago, all I saw were euphoric reports of gold in the streets.
‘Signs of the economic downturn are showing up in every Las Vegas Valley neighborhood, from shopping centers that are half empty to closed restaurants and drug stores. “Free Rent” banners even hang from some retail buildings.’
‘Terri Sturm, president of Las Vegas-based retail developer Territory, said she stopped buying land when it started ‘getting crazy,’ going to more than $1 million an acre. The last piece she bought, at Craig and Losee roads, was around $13 to $14 a square foot, or roughly $600,000 an acre.’
‘Nevada led the nation in monthly foreclosure activity once again, with Lyon County reporting the second-highest rate of foreclosure filings in the state for April, according to a national report.’
‘Foreclosure filings were reported on 7,276 Nevada properties. Washoe County accounted for 557 of the properties. Washoe’s number of properties listed in the report equate to a 12 percent decrease from March but also represents a 101 percent increase from the same period last year.’
“High-end buyers aren’t willing to pay $900,000 for a noncustom home that is only selling for that price because of appreciation, said said Mark Stark, CEO of Prudential Americana Group.”
Would somebody please translate the above into understandable English? I have no idea of what Mr. Stark is saying.
I think he’s saying that nobody wants to pay bubble prices anymore.
LMAO,
Ben you truly are the “Captain of Clarity”.
“High-end buyers aren’t morons, and they are not going to pay $900K because the house was never worth that except in the fetid fantasies of it’s putative owners.”
you mean fecund fantasies, don’t you
No, I meant “fetid” but I can see why a reporter might have to use “fecund”.
Without 20% per year expected appreciation, you would have to be a dumb ass to buy today.
No, this quote makes perfect sense. People who can actually afford a $900K house want an actual 900K house, not a generic crapbox $350K-$450K house that has doubled in price over the last 5 years.
Pretty much what Ben said.
“Comment by EndOfEmpire“
I like the pseudonym.
I’m tired of the world’s policeman gig.
The Las Vegas Sun. “Everything seems fine out at Lake Las Vegas. Except for the developer who couldn’t pay the mortgage, the four-diamond hotel that just filed for bankruptcy……………..
Ok…so my neighbor buys out in Lake Las Vegas. I’m at a party last Summer and he’s bragging (loudly) about his wise choice and telling all who would listen that they need to buy out there now….today.
Many guest at this party seemed impressed and interested.
My wife gives me “the look” and I don’t say a thing.
I heard yesterday through a neighbor that he’s no longer making the payments……………
The Glenwood (Colo.) Post Independent is yet another paper heavily dependent on RE ads for its revenue. For those of you who don’t know the area, this is about an hour (45 miles) downvalley from Aspen and heavily dependent on Aspen money, many many people commute up there to work.
Note that they put this at the END of the article:
“With the foreclosures on the rise, home sales have plummeted over the first quarter, down 32 percent in total property transactions countywide. March alone saw a 49 percent decrease in property transactions over March 2007.”
This is HUGE - everyone up there says they’re untouchable because Aspen can’t tank and they have more of a local economy. Looks like I may soon be vindicated to my friends there who have all told me they “don’t wanna talk about it” and I’m just being negative - I’m just trying to warn them, many who are totally dependent on tourism or housing. Maybe they’ll start noticing the barn door’s open when they see the horses running down the road. (I’ve always liked wild horses, anyway.)
Oh, and Telluride, just another Colorado ski town that thinks it, too, is different (from Ben’s article above):
“Property sales across the county are down some 32 percent for the first four months of the year. The decline follows a record-busting 2007 and years of nearly uninterrupted growth in the local real-estate market.”
I think Tellyride’s gonna hurt even more than Aspen, as it’s much more remote and hard to get to. I have friends there who bought at the peak, paid 1.4 mil for a nice townhouse. Insane, nice views, though. And downvalley from there is Montrose and a variety of small towns in various directions (Ridgway, Norwood, Rico, Cortez-somewhat) that are almost totally dependent on Telluride for their lunch.
So long, Western Slope. Maybe I can afford to move back over there someday, if I want to.
I’ve been told Telluride’s name is a bastadarization of “To hell you ride”.
Fitting, accurate or not.
Yeah, supposedly. My dad was a railroad buff and he knew the history and said it was true, so it must be true. LOL
There are others who say it was named after the element tellurium.
Tellus is the earth (terra) as a kind of person. Thus, the inhabitants of Earth are Tellurians.
Thanks, I wasn’t sure exactly where this was. Aspen has never been immune, despite what the locals think. These resort towns may very well fall even harder than towns that have ordinary economies. Look at Sedona. And Tahoe.
You know, what really irritates me is the attitudes in these towns that they are totally special and live in a separate universe from the rest of us commoners. I’v spent lots of time in Aspen and Telluride both, taught in Aspen for the community college and used to hang out in Tellyride and climb and bike. Welcome to reality - we’re all humans sharing the same resources on a small planet.
(Oh, BTW, am looking into private RR cars, now there’s the way to go, if you have lots of money (start at 150k and go up to the mils). You just hook onto Amtrak and go wherever you want. May just buy one of those and forego the house thingy… anyone wanna invest??? - LOL.)
We get this free magazine here called Mountain Living, or something like that. Looking through it, I can see these outrageous prices have become commonplace all over the west, even in very remote places. If there is skiing, houses are detatched from wages. And when I read the story’s, it sounds like nobody has much of a job anyway. Making sleds, etc.
Here’s one for you, been on the market for a year, be sure to take the virtual tour…
http://tinyurl.com/6yvdgl
That is actually a beautiful house from the exterior. The interior design leaves a lot to be desired.
Yeah, except they put it on the edge of a beautiful canyon and all the hikers have to look at it. I mean, this is so nice it should be a national park. It used to be my daily walk and now it’s like there’s this house up there spying on everyone. It’s called Mill Creek Canyon, here’s a link:
http://protophoto.com/subject.html?subject_id=460
I think the interior is awesome. It looks like that 20MM place in Tucson that will never sell.
Ben, next time you’re in the grocery, leaf though something called “Western Interiors”. Nothing but page after page of houses like this. You just wonder where all this money has come from. I sure as hell don’t have it.
Good god, just looking at that brings on my typical response: “…but think of the dusting….!”
Not to mention lighting up the night skies. It almost never fails that any of that those types of new houses, built on the edge of a cliff, has outside lights galore. Didn’t they build out here to get away from all of that? Ever stop and think about the rest of us? Obviously not, they’re just monuments to colossal-sized egos.
Shoe, the guy that built that is Bob Norman’s son, if you know him, long-time local family. Bob is an oldtimer (in his 80s) who developed the Moab airport and also the Potash Plant. Bob’s quite a guy, bought the land a long long time ago, his son developed it. Bob was just shaking his head last time I talked to him…check out Navajo Ridge dot com for more. Nice place. His son built it for his private residence, I’m wondering if he’s having problems, as a number of the lots aren’t yet sold. I dunno.
395K for a lot. And they call that affordable.
That place is an eyesore, IMO. I can’t stand “builder beige”. And where are the trees? That land should sell for $50 per acre.
Yeah- I’m still looking north of Steamboat Springs. Thanks to Ben & Lost in Utah I regained my bubble head and am sitting tight. Agent friend of mine up there still chuckles at my mentality spouting the same thing they said about san diego: no more land, pay more for a desireable area, blah, blah, blah. But with the front range taking SUCH a bath, all those folks who bought 2d homes in these resort towns are feeling the squeeze. Additionally, when you look at the ARM resets that will stretch out over the next 2-3 years you know that even more pain is waiting impatiently in the wings tapping it’s toes. . .
You are a wise man, you sure don’t want to have to hire yourself someday for BK services…
are you finding that you can put more people into chapter 7 now because of their being unemployed for a time?
Yes- Chapter 7s are WAY up. I think up 42% YOY. No longer just poor people though. Many, many upper income debtors who got caught in some derivative of the housing fiasco. Mtg. brokers, appraisers, landscapers, painters, etc. Some incomes dropped to near zero b/c housing. LOTS of high end autos being dumped.
“Donna Gold knows something about the roller-coaster ride that’s Las Vegas real estate. After moving from California to Las Vegas in 2000, Gold thought she had come to the land of milk and honey.”
I can’t believe no one has pointed out how a fool and her gold are soon parted.
The prices paid were in fool’s gold. Someday, someone is going to ask for an assay…
“She planned to sell a couple of properties and cash out on the appreciation and keep the others as rentals to produce income. She wasn’t buying real estate as a flipper, she says.”
“‘I came here in the golden age and realized this is a perfect time to make money. I felt for the first time that God blessed us,’ Gold says. ‘I was trying to create a future.’”
The first sentence has what to me is an obvious contradiction. If you “plan to sell a couple properties and cash out on the appreciation” you are a flipper. No doubt about it.
The second sentence is another case of someone who has “been blessed by god” and yet has no understanding of the criminal enterprise she was a part of and all the people who are going to end up getting screwed because she just wanted to “provide for her family” or some such BS.
The RE bubble was successfuly because of hundreds of thousands of people who could be counted on not to question their “success” and whose expense that success came from.
Lower house prices can make you happy
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/26/ccom126.xml&CMP=ILC-mostviewedbox
Wow.
What a revelation. We should start a religion around it. Oh wait! we already have.
Just spent a few snow filled days on the western slope of Colorado (I think it’s snowing today). The western slope is on steriods still, so much new construction still going on, armies of mexican workers fill the streets, filling the public transportation system to the hilt. The secondary towns to the resorts (Minturn and Red Cliff for Vail, Glenwood, Basalt, Carbondale for Aspen, etc.) have the feel of a gold rush as well. Prices are rediculous in these small towns, what sells for $500,000 would go for $40,000 in most other rural states. Prices for EVERYTHING are much higher up there and distances driven are huge. When the Clownifornians and New Yorkers stop paying $1000 sq.ft. for the stuff they’re slapping up (and my feeling is that is occurring as we speak), the whole house of cards up there is going to collapse big time. Same can be said for Boulder, as it tries to digest 600 new condo units priced from $750 to $1000 sq. ft. Get the popcorn.
Yeah, I can’t even stand to go over there any more - it reminds me of a stirred up ant nest.
Was out at the Crystal Geyser (near Green River, Utah) the other day and a woman from Grand Lake (CO) was there, just soaking up the sun. She looked grim, said they still had several feet of snow on the ground up there - this is where the headwaters of the Colorado River originate, and it’s at flood stage right now (Cataract Canyon’s running 63000 cfs!!!). Lots and lots of snow, and COLD - anyone not used to that will be wishing they’d bought…where?? hmmm…Florida??? Arizona??? Lost Wages??? BWAHAHAHA…whoops, sorry. Forgot to turn the schadenfruede meter off.
The west is spectacular, but most of the land can’t produce much of anything. This whole western real estate rush (I’m talking about everything, from SD to LV to Phoenix to the Western Slopes to Boise) is built on abundant, cheap fossil energy. Turn that off, and except for the few irrigated spots, who will want to live, or be able to prosper here? Just a small percentage of the present inhabitants, and those temporarily here mining and drilling to support the voracious coastal energy appetites.
I do think we’re on our way to selling, and leaving for (literally) greener pastures. Before the majority of people figure this all out, and the land prices in our Torrey and similar areas head downward in a major way.
Geez, you’d think I was hearing John Wesley Powell talk - he said this from the very start, as he was exploring out here in the 1880s. Wallace Stegner, too.
Hey Shoe, email me when you have a price: info@yellowcatbooks dot com
Might be interested.
I sure will, Lost, when the time comes. The idea of selling to a seasoned HBB’er, though… you know we’re all looking for greater fools, and this blog ain’t so much the place for that
OTOH, it’s a small, simple 900 sq.ft. place, it’s probably worth lots less than what your Moab place sold for.
Hey, 900 is what I need. And I’d pay extra to an HBBer.
Or, you could put a really really high number on it and I could then lowball. That way we’d both feel like we got a deal.
(wait…something’s wrong with that picture…)
What is up with the weather. We’re still wearing longjohns in Flagstaff. 6 inches of snow in the past week.
Ben, Colo. got snow, too. And it’s usually in the 80s or 90s here in SE Utah and has set record lows every day for the past week. Is in the high 60s today.
The tourists are all freezing, but it’s supposed to get nice after they all leave.
“‘It’s brand new. It’s got the warranty,’ she said. ‘It’s really a no-brainer.’”
Really shocking how many dipshits have hung themselves on these “no-brainer”s.
I am now convinced that “no-brainer” = take the buttsniff without a brain to the poor house.
Got insurance on the solvency of the warranty provider?
When will people remember that counter parties matter. I’m starting to think that counterparty riskis what is really going to kill the hedge funds. Even more than the leverage.
Some builder warranties are protected by third party insurance.. some aren’t. The smart buyer would insist on it.
I love the language that’s emerging as the Ponzi Scheme goes belly up. Game of Hot Potato. Gamble. Musical Chairs. All of it “Unexpected” by the final participants. Blah. Blah. Blah.
I’m sorry, but when I sold in 2004 it was obvious something was seriously amiss with the RE market. And I’m no financial genius, trust me. But after the dot com blow out, it was plain to see.
But Lisa, you should’ve been wearing your rose-colored glasses! you missed out!
/sarcasm
“But Lisa, you should’ve been wearing your rose-colored glasses! you missed out!
/sarcasm”
My bank balance says otherwise -);
“Scott Cole..developer for the 158-unit Cole Sedona Preserve condominium project..successfully requested a 24-month extension for his development..”
“Mr. Cole said one major obstacle is he cannot get loan financing to do the project unless he can pre-sell up to 50 percent of their projects. The local condo market was good when he began the Preserves project more than two years ago, but he is not so excited about today’s market.”
The following article appeared the same day in sedona.biz:
http://www.sedona.biz/sedonacity1608.htm
As they say in the red rocks, “welcome to paradise.”
Yeah, the local paper and the REIC went on and on about these ‘affordable’ units for years, and now it’s dead in the water. If you can’t finance these, it means they can’t be sold. (Who would want to live in Uptown anyway?)
IMO, the problem in Sedona is a lack of leadership and domination by the timeshare big boys. Could have been a nice town, but they blew it.
Ever hear Greg Brown sing “Boomtown” ??
Here come the artists with their intense faces,
with their need for money and quiet spaces.
They leave New York, they leave L.A..
Here they are - who knows how long they’ll stay -
[chorus:]
It’s a Boomtown
got another Boomtown
and it’ll boom
just as long as boom has room.
Here come the tourists with their blank stares,
with their fanny packs - they are penny millionaires.
Something interesting happened here long time ago.
Now where people used to live their lives the restless
come and go.
[repeat chorus]
Nice to meet you, nice to see you
in a sheepskin coat made in Korea.
Welcome to the new age, the new century.
Welcome to a town with no real reason to be.
[repeat chorus]
The rich build sensitive houses and pass their staff around.
For the rest of us, it’s trailers on the outskirts of town.
We carry them their coffee, wash their shiny cars,
hear all about how lucky we are
to be living in a …
[repeat chorus]
The guy from California moves in and relaxes.
The natives have to move - they cannot pay the taxes.
Santa Fe has had it. Sedona has, too.
Maybe you’ll be lucky - maybe your town will be the new…
[repeat chorus]
No, I haven’t ever heard that. But it describes it to a T.
Great lyrics, that does nail it. The only difference in each town is the scale of the phenomenon.
The line about “building sensitive homes” hits really close to home for me. Not because we’re doing it (although admittedly, we were tempted), but that’s what solar is all about in these places. $15-$30K of PV to absolve the guilt over building a 2nd home in the middle of nowhere. The home sits unoccupied 48-50 weeks a year with the heating/cooling running the whole time. There’s something wrong with this picture.
I’m still quite bullish on solar, there’s just much better ways for it to be used. We’ve got to go elsewhere to help make it happen.
Shoe, how much would a household of two cost these days to go PV on the roof for as much of their elec. as possible (w/ or w/o heat)?
Without heat, the small sensible houses that we do go for about $12-15K, including installation. Super-energy conscious folks can get down a bit under $10K, but a laptop and internet modem running 12-16 hours a day start becoming a significant portion of the energy budget.
Way remote off-grid costs more obviously because of the hassle.
Currently there’s $2000 in Fed tax credits, but that might go away for a spell since it currently expires at the end of this year, and politics is trumping energy policy at the moment, of course. The State of UT kicks in another $2000 in credits.
OK, if I end up getting a house before you move, I’m giving you a call. Seriously.
There’s a good solar guy out in Castle Valley. His name is Robert Soldat, don’t know what his company name is.
OK, thanks.
Lost: Welcome to a town with no real reason to be
bought the song 99¢
No doubt the timeshare hustle has been going on in Sedona for many years. When my late wife and I first came through Sedona many years ago (when Sedona was a better place to live IMO) we were approached by a local handing out cards to tourists for a free nights stay if you attended a timeshare meeting. We passed. Of course Sedona has always had many people with deep pockets who live there part-time, and along with them you have the tourists who rent local guest houses/homes/etc. and being there on vacation they like to party a little (or a lot). The recent moves to restrict the short term rentals in Sedona was a move by some locals who want to keep their little place of paradise in the red rocks quiet and to themselves, and to keep everyone else out of their neighborhoods and in the high priced motel/hotel accommodations.
Hey Everyone…..sorry if this is a repeat……..
Bushvilles: Middle-Class Hoovervilles for the 21st Century
by David Neiwert
http://www.alternet.org/blogs/peek/86153/
In California, homeless middle-class women are banding together and sleeping in their cars in parking lots.
Harvey now works part time for $8 an hour, and she draws Social Security to help make ends meet. But she still cannot afford an apartment, and so every night she pulls into a gated parking lot to sleep in her car, along with other women who find themselves in a similar predicament.
There are 12 parking lots across Santa Barbara that have been set up to accommodate the growing middle-class homelessness. These lots are believed to be part of the first program of its kind in the United States, according to organizers.
The lots open at 7 p.m. and close at 7 a.m. and are run by New Beginnings Counseling Center, a homeless outreach organization.
It is illegal for people in California to sleep in their cars on streets. New Beginnings worked with the city to allow the parking lots as a safe place for the homeless to sleep in their vehicles without being harassed by people on the streets or ticketed by police.
Well, we all know that California is usually several steps ahead of the rest of the country in fashions — cultural, economic, and otherwise. I fully expect we’ll be seeing similar programs cropping up wherever the Big Shitpile is hitting the fan, compliments of the economic stewardship of George W. Bush & Co.
Can’t afford a home? Well, you can take up residence in your car in a parking lot at night, just like these fine middle-class housewives do.
These transient homes for the once-prosperous deserve their own name, too. I propose we call them Bushvilles.
You all remember Hoovervilles from your history books, don’t you?
They were products of an eerily similar economic policy: favor the wealthy, soak the poor, and screw the middle, then let God sort it out:
A Hooverville was the popular name for a shanty town, examples of which were found in many United States communities during the Great Depression of the 1930s. The name Hooverville has also been used to describe the Tent Cities commonly found in America.
The word “Hooverville” derives from the name of the President of the United States at the beginning of the Depression, Herbert Hoover. They used Hoover’s name because they were frustrated and disappointed with his involvement in the relief effort for the Depression. In addition to financial troubles during the Depression, a drought in the Mississippi Valley forced farmers to auction their land for taxes and reside in Hoovervilles.
These settlements were often formed in horrible neighborhoods or desolate areas and consisted of dozens or hundreds of shacks and tents that were temporary residences of those left unemployed and homeless by the Depression. People slept in anything from open piano crates to the ground. Authorities did not officially recognize these Hoovervilles and occasionally removed the occupants for technically trespassing on private lands, but they were frequently tolerated out of necessity.
There’s certainly no shortage of parking lots these days. And no shortage of the newly homeless. In a world in which economic failure is just a matter of survival of the fittest, the two obviously go together well — though I do wonder what happens when the occupants can no longer afford the gas to drive their cars, either. Most likely those parking-lot slots will become semi-permanent homes, and the lots themselves little cities.
Bushvilles. Has a certain ring, doesn’t it?
–
To quote Mark Twain, “There is no distinctively native American criminal class except Congress.”
Bush is hardly a genius, but far from alone in blame. Greenspanvilles is much more appropriate.
“There is no distinctively native American criminal class except Congress.”
err..Bush is not a member of Congress.
In keeping with Twain’s theme, may i suggest Pelosiville.. or Byrdville.. or even Cheneyville.
Dubyavilles
Should have saved yesterday’s comment I added to “local market observation” for today’s AZ post.
In summary, was driving through a neighborhood about 7 miles south of where I live. We turn a corner, and BAMMMM, we’re on a short street with just about every house for sale, many with “foreclosure” signs on them.
Came home and did some digging. The street has 15 houses. 7 changed hands since start of 2004. 4 bank owned and one scheduled for trustee sale in June. Several more are trying to sell. Seriously, 2/3rds of the houses for sale, half of those by lenders.
Peak 2 years ago was $210K. One already MLS listed for $129K.
“we’re on a short street with just about every house for sale”
Short Sale Street
i’m seeing similar.. it’ll be time to buy soon.
The only thing that holds me back is the $1,000 less I’ll pay for every day i wait..
…the transfer tax turned into a mint for town government, more than quadrupling over the past 15 years. In 1991, Telluride took in $952,000 in transfer taxes. In 2007, it grossed $972,000 in a single month.”
..incase anyone was wondering if local governments are as culpable as any other entity, passing out permits and variances like candy .. rezoning ag land, etc.
There’s a medical term that describes unrestrained cell growth..
I’m very familiar with the Tempe condo craze; I occasionally baby-sit for someone living next to the University Square project and just down the street is the Mosaic project. Both were dreamt up at the peak of the bubble, the land bought and numerous small businesses and rentals leveled; both projects are dusty and weed filled eyesores today. There are few “pre-sales” and no financing for them.
The Tempe planning commission in March held a public meeting for another condo tower between them and my friend and I went to voice our opposition. It turns out this project too has no financing in place, and get this: A fast food drive-thru and the Salvation Army chapel for the homeless refused to sell to the developers so the towers were redesigned around them! Of course the plans were approved by the developers’ lackeys on the planning commission.
One more dusty lot for Tempe and it’s butt-kissing Mayor Hallman.
I remember when Mosaic was “from $500K”. Then “from mid-400K”. Now “from 300Ks”. Based on rent equivilant, $100K is likely a fair price.
I felt for the first time that God blessed us,’ Gold says.
I wonder how her feelings towards god are now?
But the market changed and with it Gold’s fortunes.
This is why I never bought, invested or flipped real estate in Vegas. I worked at hotel, made very good money, but the job security was not very good. Majority of my coworkers called me a fool for not getting in while the market is still good, buy now before you are priced out of the market forever and blah blah blah… Like I was going spend $300,000 of my hard earned money on 3 bed 2 bath $hitbox out in the middle of no where! In reality most of those homes weren’t worth more than $100,000 if that.
“‘I am going to come through this fine,’ Gold says.
BAHAHAHAHAHAHAHAHA!
Thanks Donna I needed a good laugh!
“Tempe Mayor Hugh Hallman, who holds an economics degree, expressed exasperation at the idea that some delays could jeopardize the larger vision for a denser, more cosmopolitan community.”
“‘The real story is: My God! - people are still investing hundreds of millions of dollars in Tempe,’ Hallman said.”
“Some city-approved projects won’t ever happen, Hallman acknowledged, but only because some ‘bottom-feeders’ structured unrealistic transactions that unfairly tarnish the reputation of other projects.”
Mayor Hallman, There is a finite amount of clueless individuals in the market prepared to pay 500k to 1.5M for a high-rise condo and the $300 to $1000 per month HOA dues that go along with them. If Las Vegas, San Diego, and Miami can not attract buyers for the same type of project, what makes you think Tempe can? These projects may have a chance if the prices are reduced 70% to 80%.
Did not see one mention of the prices range of these condo’s in the article.
I’m conviced many of these local gubmint officials are complete morons when it comes to developers, because it seems they can’t drop their panties fast enough to accomodate the builders. Unfortunately, as they are dropping their own panties, they’re pulling ours down at the same time.
Welcome to my world. The planners in my office are the biggest butt-kissing morons ever. They’re constantly “bending” the rules for developers, but they refer to property owners that contest re-zonings and variances as “them bastards”. It’s a standing joke in the office.
“Everybody wants to move to Vegas,” Gold says. “I believe in this market. It is not going away. It has started to turn around and this is the place to be.”
Everyone wants to live in Las Vegas…Everyone wants to live in Florida…Everyone wants to live in Phoenix…Everyone wants to live in Seattle…Everyone wants to live in LA…Everyone wants to live in Atlanta…
.. this is the place to be.”
There are 30,000 foreclosed homes sitting empty in Vegas. If squatting or looting is your thing, it’s the place to be.
Thanks for the bit of Greg Brown, Lost in Utah. I’m also a Greg Brown fan. He’s going to be in Portsmouth NH soon.
Whoa, now… Looks like they only sold 750 of ‘em (or did they start before 2006? No data here), so that puts 1 in 5 in foreclosure or preforeclosure out of the sold units, and half were never sold at all.
If they were all sold, going by the 2007 “vintage” mortgage data versus previous, you may have 1 in 5 OR WORSE depending on which months you take in foreclosure (last 12 mo, last 24 mo, etc).
Am I wrong?
test, 1.2.3
Yessss, Ben
We’re putting in a new toy for you guys and gotta work out the bugs.
test moderation
adasd
testing moderation
Americans drove 4.3 percent less this March than last March.
http://www.cnn.com/2008/US/05/26/gas.driving/index.html
Any petrol that Americans can possibly manage to conserve will be gobbled right up by China and India. Outright shortages are coming soon… keepeth thy tank full.
Although price certainly influences how much people drive, I doubt there will be any gasoline shortage.. unless refineries lower gasoline output do to the usual reasons.
From what i’ve read recently, crude oil supply has little relationship to the current price of oil. Price is being driven by the futures market which is overflowing with investor money looking for a place to hide..
Some people estimate that if supply/demand was the only influence, oil would be near $55 a barrel.
Hmm. Well, I wouldn’t trust the oil companies, so seasonal price manipulation is a possibility. However, more fundamentally, even Cheney (when he was at Halliburton (officially)) is on record as stating the world will pass Hubble’s peak before 2010 (see http://www.peakoil.net/Publications/Cheney_PeakOil_FCD.pdf) and that supply shortfalls will likely become permanent at that time. So, all due respect, whomever is estimating a $55 a barrel price, experts with power seem to disagree (and have the fundamentals behind them). Thus, $55 seems like a wishing price to me. Of course, some kind of machinations (e.g., U.S. arm-twisting or suicidal release of the Strategic Oil Reserve) may drive it down that low in the short term, but what we have is an oscillating, rising trend on price. Sad to say, we squandered a powerful resource. Oil won’t ever be truly cheap again.
IAT
Peak Oil theory is no doubt one of the things influencing the rise in prices.. speculation feeds on fear, apprehension, gloom, doom and anything unknown..
But as far an actual supply shortage, i’ll take a line from a wiki page:
The IEA’s March 2008 Oil Market report showed global supply to be 87.5 mb/d, compared to 84.3 mb/d in July 2007, a 3.8% increase on that interval.
http://en.wikipedia.org/wiki/Peak_oil
So, a near 4% increase in supply over the last 9 months results in an increased price (?!) of what.. 40% or so?
What could account for a price near $130/bbl? Has demand increased something like 50% over that same period? No, it hasn’t.
So, something don’t exactly jive.. I blame it on speculation. It’s a bubble in the making.
That would be Hubbert’s Peak, named after the Shell Oil geophysicist. Hubble is a telescope….
The world is now at the point where demand is just beginning to outstrip supply. Petrol shortages are already being reported in China, India and parts of Africa.
At the current pace of consumption growth, the world would need to bring online the equivalent of 3 new Saudi Arabias by 2020 to meet demand.
The era of cheap oil is over.
May 23 (Bloomberg) — California home prices tumbled 32 percent in April from a year earlier as “distressed” properties and a lack of financing cut demand, the state realtors group said.
http://finance.yahoo.com/expert/article/richricher/5766
Robert Kyosaki, How the Rich get Richer.
How to make a profit in the cooling real estate economy…