The Once-Soaring Market Has Fallen To Earth With A Thud
It’s Friday desk clearing time for this blogger. “Sharon and James Foster have had a home on the market for six months. Located in Sauk City, the Fosters chose to sell the property after deciding being landlords wasn’t for them. ‘The renters have not stayed as long as we had hoped, Sharon Foster said. We want to get secure with our finances, and we just don’t want to have the headaches anymore.
“Sharon said she wasn’t sure why the house wasn’t selling. ‘I don’t know if it’s because we haven’t finished the outside yet,’ she said, referring to the unfinished stoop in front of the house. ‘I really don’t know why it hasn’t sold. There’s a really cute layout.’”
“Diana Lauver tried to sell her Ivor Road house through traditional methods, but when those failed her, she decided to try something different. Lauver’s four-bedroom, 3.5-bath brick house will be given to the winner of an essay contest in July, she says.”
“The contest requires both an entry fee of $200 and an original essay about ‘how winning this house will change my life.’ ‘Since I’m a teacher, I thought, well, they should write an essay,’ Lauver said.”
“The decision to sell the house, which has 2.7 acres, a two-car garage and a pool, came after Hurricane Isabelle’s damage to the property forced Lauver to refinance her house.”
“‘FEMA stopped counting at 150 trees,’ she said. ‘I was left with holes the size of vehicles.’”
“Lauver also hired a contractor from Virginia Beach to fix the pool but claims the contractor took the money and did not complete the work. Lauver had to refinance her house to be able to pay to fix the damage, leaving her with a mortgage of $1,700 a month.”
“‘It’s just been a big struggle for me,’ she said.”
“Because no one’s biting, Rob Stark has added a feature to his listing — a $5,000 bonus for the buyer’s agent. ‘Once it’s there forever, then it’s just like any other house,’ said the homeowner, who owns a mortgage brokerage. ‘If you don’t hit the emotions, you’re not going to sell anything.’”
“But his case is an example of how buyer’s agent bonuses have had mixed success. Stark first offered the cash in mid-April and it expired in mid-May with little action.”
“His agent, Fran Mazer, remembers that the bonus didn’t boost attendance in an agents-only open house because few had clients looking in that price range and locale.”
“‘There was really nobody to talk to - maybe there were two or three people,’ said Mazer, associate broker in Woodbury. ‘They were like . . . ‘If I had a buyer, I’d bring them.’ That’s the problem.’”
“Northern Beaufort County’s once-soaring real estate market has fallen to Earth with a thud. ‘We’ve got some really good, strong listings that people should be calling about, and they’re not,’” said broker Pat Harvey Palmer. ‘They’re just not coming in.’”
“The main reason for the poor sales, Palmer said, is the greed sellers showed during previous years, taking advantage of a booming market and driving up the cost of real estate. ‘Our market has appreciated way too fast,’ she said. ‘We’re in a readjustment period.’”
“Palmer said she used to tell people they could expect 4 percent to 6 percent appreciation on a house during a two-year period. But when the market hit its high point from 2002 to 2005, sellers raised their prices, hoping to turn a quick 12 percent to 20 percent profit.”
“‘Two or three years ago, it was tops — you could buy a piece of property for $100,000 and might mark it up $50,000,’ said broker Bill Anderson. ‘But now, I think we priced ourselves out of the market.’”
“Last month, Doug Hardegree helped the McCalla Raymer LLC legal firm foreclose on 327 properties. Tuesday on the courthouse steps in Lawrenceville, there were only 97, he said.”
“It’s not that the tide of foreclosures has truly ebbed. A legal change forced lenders to file some paperwork differently before foreclosing. The change will push many of the June foreclosures into later months, he said.’
“‘Next month will be horrendous,’ Hardegree said. ‘And the month after that will be worse.’”
“The request from Rhodes Homes for Pravada, a master-planned community of 25,000 homes on 5,000 acres…also calls for a golf course, community and recreation centers, parks and other open space, plus retail development. Rhodes’ officials have previously stated that with approvals, the project could take as much as 30 to 50 years to fully develop.”
“John Gall, representing Rhodes Homes, said the developer has demonstrated to the Arizona Department of Water Resources an adequate water supply and negotiation for the utility approval continues.”
“‘I don’t know why we need this density,’ countered Golden Valley resident Verna Schwab. ‘Don’t you see the number of foreclosures? Don’t you see the number of vacant properties?’”
“Market analysis showed a sizable inventory of housing stock on Hilltop. Much of this is due to foreclosures.”
“Councilmember Lauren Walker said many such properties on Hilltop, which is in her district, have been purchased by investors who are using them as rental properties for the time being to generate revenue. ‘It is pretty disturbing to see that happening, she said.’”
“When potential clients heard that HomeSight, a community development corporation based in Seattle, required financial counseling, income verification or down payments as small as 2 percent, many opted for sub-prime lenders who did not require any of that.”
“‘We mitigate our risk by counseling, and not by pricing,’ said Executive Director Tony To. ‘Literally, overnight, we lost all our clients.’”
“To said a developer building condos cannot afford to sell them for under $250,000. In contrast, single-family homes on Hilltop are going from $130,000 to $200,000.”
“Collapse of the housing market, the state’s budget shortfall and a decline in overall spending are all reasons contributing to a gloomy year for this and many other cities in California.”
“City Manager Jack Lam has always called the city reserves ‘funds for a rainy day.’ Wouldn’t you know it, it’s raining.”
“A few years ago, when multiple bidders would show up at a real estate open house, the truly desperate resorted to writing love letters to the sellers. The letters dripped with compliments for the property and ended with a plea for mercy (and a signed contract).”
“Today’s real estate market, however, calls for a different kind of letter, less a fuzzy valentine and more like a cold splash of water. It’s what you write to accompany a bid that is so far below the listing price that it cries out for explanation.”
“Inspired by the success of a friend who used this tactic, I drafted a sample letter that buyers who fear overpaying might send to homeowners.”
“Dear Seller: I’m writing to let you know that I would like to make a bid on your property. Given that my offer is well below your asking price, I also feel I owe you an explanation.”
“First, consider the big picture. Nationwide, home prices in the first quarter of 2008 fell 14.1 percent compared with the same period a year earlier, according to the Standard & Poor’s/Case-Shiller U.S. National Home Price Index.”
“That’s the biggest decline in the 20-year history of the data. And just in case you’re wondering, during the housing downturn of the early 1990s, the decline was never worse than 2.8 percent.”
“Not only that, earlier this month, the National Association of Realtors pointed to the huge number of existing homes on the market. So buyers have options right now.”
“It will be tempting to view my low bid as an insult. Please don’t make that mistake. Your home is genuinely appealing, and I wouldn’t have written this note unless I was serious about buying it. Getting a firm offer in this market is an accomplishment. So congratulations!”
“Oh, and one more thing. You presumably need someplace to move. My guess is that you’ll find these same points compelling when it’s your turn to buy. You just might succeed in buying for a better price, too.”
“I look forward to hearing from you soon.”
“Yours Truly, The Realist”
Another great week folks! My thanks to those who support this blog. Check back over the next few days for news, your market observations and topics. I’ll have a running OTR post for what I see in California. Have a good weekend!
Have fun on your roadtrip, Ben. I’m surprised that you didn’t include Utah on your itinerary.
Potemkin Village Idiots, why not call it “Pravda” instead?
“The request from Rhodes Homes for Pravada, a master-planned community of 25,000 homes on 5,000 acres…also calls for a golf course, community and recreation centers, parks and other open space, plus retail development. Rhodes’ officials have previously stated that with approvals, the project could take as much as 30 to 50 years to fully develop.”
I was thinking “Prada” as in “a high priced luxury item that will impress your friends while you go into debt”
just a girlbear’s reflection…..
RE: I was thinking “Prada” as in “a high priced luxury item that will impress your friends while you go into debt”
I’d sure be finding other friends in a hurry if my self-worth was being measuring by the amount I spent on a stupid handbag-WTF?
Commie!
That’s just because you can’t afford the handbags on Bleecker.
Lick my bag.
Your place or mine?
Lick my bag.
————————————————
uhhhh….would that be the carry on or the one in the luggage compartment?
50 years to build, 50 years to pay off - awesome!
I smell a new gimmick for the grasping REIC: “Buy now for your unborn grandchildren - so they won’t have to struggle like you are”
I really doubt anyone is going to be struggling except the FB’s.
Those 18.5 million units are not going away anytime soon.
Maybe it’s just my elderly brain shrinking, but why on earth does ANY development have to be that big??
So you can fleece the government for 50 years, silly rabbit!
“Dear Seller: I’m writing to let you know that I would like to make a bid on your property. Given that my offer is well below your asking price, I also feel I owe you an explanation.”
What in hell is wrong with people! If you want to make an offer make an offer, low,low ball it, tell the seller take it or leave it. Enough of this I don’t want to ‘offend’ anyone crap. Screw um, grow the hell up, what a bunch of pantie wastes.
Really? Off hand I can think of a few people who would really get torqued off good by such a letter - much more so than a simple “take it or leave it”.
Deat HomeDebtors, Lenders and associated desperate sellers.
There is a new game in town.
I MIGHT be interested in a nice 3br 1 bath well maintained house without fraud, liens and all the reciepts and warranties of repairs that isn’t in ground zero for foreclosure or a major crime wave.
The NEW GAME is called…
“I HAVE CASH - What do you HAVE?”
No essay or contest entry is required . My RE attorney say No RE agents, flippers or unreasonable underwater dreamers WITH overpriced POS can play because they BITE.
Contact mikey at 1 800 Dial A Prayer…and LEAVE A MESSAGE
funny! ; )
Dear Seller,
In 200 words or less, please tell me why I should buy YOUR property and not one of the dozens of others nearby that are roughly the same size and price.
I called a woman yesterday on a FSBO (I was on a check-it-out roll) and asked her about her place. She told me, “I have several people looking at it, just so you know.”
I said, “That’s fine, I don’t want to get into a bidding war with anyone, I like to think about big decisions like that.”
She got quiet, then said, “If it hasn’t sold in a week or two, I’m going to hire a RE person and then the price goes up by 10k to pay for them.”
I replied, “Well, you know, it will sell for market price, no matter who sells it.”
She got real quiet and then said, “Well, come on out.”
I told her I might in a few weeks, or months…
People are greedy and stupid (me excluded, you, too, since you’re reading Ben’s blog).
So many sellers have no economic sense whatsoever.
When a store is trying to clear out last season’s merchandise, do they announce that prices will go UP if you don’t buy it soon? Let the clearance sales begin!
Not one but two foreclosures listed under $300,000 in my neighborhood today. Not buyin’ but I’m stoked.
This house would have gone for over $500,000 in 2005
3BR 2BA SFR
Listed for $269,000
Sale History & Tax Info Sale History
02/26/2008: $392,508 * ( the Bank)
05/15/2003: $380,000
11/25/1997: $155,000
Perfectly played.
200 words? That’s like effort, man!
Just state the right price.
Exactly, Why waste time writing a letter, even if you want to aggravate them.
Oh, and you need to charge THEM $200!
dozens of others nearby that are roughly the same size
“roughly?” the same size? Don’t you mean “identical” size? Yet another reason not to buy a cookie cutter McCrapShack…
The letter is ridiculous. Remeber the escalation clauses from 2005? I’d add a descalation clause, each day it takes to respond knock 1% off.
Just had 2 more houses on my street boarded up by the local city ESDA. That’s a total of 4 on my street within 2 blocks, plus 2 on auction. Just 12 months ago, there were tons of VERY POOR homeowners extracting “equity” and buying large trucks and other nice items. I warned so many of them to sit back and pay their fixed rate mortgages rather than refinance into one of the shark loans we’d get letters for every day.
As of today, I believe out of 30 homeowners I know on my street, there are only 2 who actually own their home free and clear (except for property taxes, of course).
When I moved to the town, my friends were aghast. Our house cost us under 1X our annual income. Our property taxes account for 2 weeks salary per annum. The crime rates in our town are a tiny bit higher, but after spending months and months at city council meetings, we’ve had great luck getting the cops to drive around watching the area rather than sitting and radaring speeders in the local speed trap.
Yes, I “overpaid” for the house we bought, but it was the house we’ve wanted for 15+ years. I’ve eyeballed it over the years, and it’s the best house in the area, and in great shape (previous owner was a handyman who really took care of things nicely).
I have a feeling, a very strong feeling, that we will end up nearly alone on the street as more homes get boarded up. I just picked up a nice ride-on lawnmower last week and am paying one of the neighborhood young adults (19 or so years) to drive around to the boarded up houses to mow their lawns. At least I don’t have to look at eye-sores, and the kid makes a decent $100 a week or so.
Sad, but this is why I moved into “the ghetto” as my friends (with 6X income loans) call it. We’re very satisfied. Can’t complain at all. Sad that the neighbors are disappearing at record’s pace, but maybe I’ll pick up a neighboring house or two when the bottom is overshot to rent it out. Considering that houses in the area are still renting for $1200 or so a month (3br/1.5ba), if I can nab a home for $100,000 cash, it’ll be a positive investment. Rental houses seem to disappear quickly as tenants from previous foreclosures don’t want to change schools.
If you have cash, and can hold onto it for a year or two, there will be investment property opportunities out there. Sit tight, and wait.
A.B. Dada, what area are talking about?
AB Daba
good post/excellent comments. my strategy also.
great comment,
nice that you pointed out the cash flow strategy, that 14% cap rate on a rental would be awesome.
here in AZ its almost a tsunami of REOs and the 4 neighbourhoods i’m looking at seem to have the same number in the pipeline, i.e notice been served and the courthouse auction is in a couple of months.
I mentioned that to a realtor in passing, and his reply was that this is the best situation to ‘BUY NOW’, them californians are heading back in to gobble up these ‘under priced’ properties… i was like.. huh.. have you seen the situation in Cali lately?
anyways, i’ts been hard to keep the emotions out of the way and wait out the purchase decision for this long.. but than i’ve always used the standard that if it has a viable cash-flow situation i’ll buy e’m up and ofcourse the thought of getting smacked by the 20 lbs trout keeps me in line.
Do you guys/gal think that its possible for the market to undershoot, i.e seeing greater than 16% cap rates on rentals? sorta like that story “if I only had a dime” during the depression.
got cash?
“got cash?”
The great deflationary period is just beginning. The inflationary period is on it’s way out. Too much money is wrapped up in housing, and if you can’t extract your equity it is disappearing into a black hole.
Cant resist. Yes since rents will probably start declining quite steeply soon with all the rental properties coming on the market.
Eventually it will undershoot probably by a good bit. But this is probably 2015 and half the price that cash flows out now.
What I’ve been doing as comparing anything I look at to what the rates are in Detroit right now.
6/2 are about 1,700
4/2 are about 1,200
Insane about of 3/2 and 4/2 for 1000-850.
So figure 850 is the highest you want to assume for cash flow on a 3/2 4/2 rental. for a 1,400 square foot house thats about 85k
So I think rentals would make sense between 60-85k
Better hood’s 100-150k but thats about it.
oh wow, ANOTHER effin essay contest for a house. how original. and effective?
yessireee, lemme just get right on the ‘ol Selectric, spending hours composing some pleading sob story or clever paragraphs, IN ADDITION to giving a fee of several hundred/thousand dollars, just for the slim chance that the seller might select ME as the lucky winner!
whats especially galling is after all yer work & financial contribution to this scheme, the seller is usually not even obligated to follow-thru with the plan if, for any reason at all, they do not like the outcome. THEN you have to wait how long for a refund?
sure, thats just how I’d like to spend my next 9 months; chasing some desperate seller to refund my money. these schemes are just too sketchy for my taste. (unless they run ‘em with a lower amount of entry fee that wouldnt be a budget killer if not returned, like say $50)
in my opinion, these sellers should be paying ME a fee just for considering their sale. I’ll be dammned if I will pay for some BS rigged contest for a house when there are others right down the street w/less hassle.
ok, rant off. for now
Most essays are written to say what the reader wants to hear. And if it’s a really important essay, drafted and edited by others. It’s a bad idea. I also find it shocking that many top schools still have essay requirements. Just another form of back door bigotry, in support of the “who lies the best wins” theory of life.
“I also find it shocking that many top schools still have essay requirements. Just another form of back door bigotry, in support of the “who lies the best wins” theory of life.”
It’s an interesting comment. I just completed a term as a admissions file reader for a university. I think most of us had pretty good BS detectors, and quite honestly, if someone could write well enough to fool us, they probably deserve to get in.
When I was applying, I knew it was all BS. What the hell did I know what I wanted to do? I was young and stupid so I wrote a buncha BS, and you know what? I did get into all the top schools.
You just had to be intelligent enough, and just “self-doubting” enough, and just “deferent-enough” to intellectual authority, and have some plausible things to say. I think I dashed off the thing in an afternoon, and tailored the essay into multiple versions for each school in not more than 20 minutes each.
Did they register it as hoo-ey? Almost certainly. How could any adult NOT register it as hoo-ey?
I’ve been on the other side too. It’s work to read it, and it’s painful. It’s like watching all the teens talk about how they will be the next intellectual jenius (with the less-common ‘j’ spelling) and you just sit there thinking, “Kid, you better make sure you don’t end up in retail somewhere.”
So whatever.
Hoo-ey or not, it keeps a whole buncha people (including you) employed, right?
I agree. No one is honest, nor should they be when confronted with such unreasonable requests.
People go to college to get a good job, get laid and party. Everyone knows this, so why ask? Everything else about their dreams, hopes and aspirations is just BS, and meaningless. If Lionel cant tell it is all BS, I question his BS detector.
Why should a kid that claims he had a crappy life, was pissed on as a minority, and wants to change the world be given priority over a more brilliant rich kid that wants to get laid.
The brightest are the brightest. Enough with the prejudice.
Everyone has crappy parts of their lives, and things they want to change. Some are better expressing that then others, but should it be a factor in considering who gets opportunities. Hell no!!!!!!!!!
We need to move to equality for all. Some of the ppl that claim to be the most open minded liberals are such offensive bigots.
“Hoo-ey or not, it keeps a whole buncha people (including you) employed, right?”
Pussycat, it wasn’t the employment so much as the tuition and insurance waiver. As an out of state rez, it saved me about 10K for the quarter. (So I might be biased toward the essays?)
Mostly I just looked for students who didn’t write about their damned soccer game, how they didn’t score the winning goal, yet they managed to learn an important life lesson. One even started the essay by explaining that his college advisor had implored him NOT to write about a soccer game, yet the bastard still did. And it was mind-numbingly dull. I’m happy I didn’t have a revolver within reach. However, every once in a blue moon I read something with humor or depth or insight that bumped a student up.
So….let me get this straight. Like the other essay contest, she collects $200/entry X minimum, 1700 entries = $360,000. She pays off her mortgage (the article didn’t say how much she owed), and then the poor schmuck who *won* the contest has the dubious *privilege* of now applying for a loan to by said property (which may fall through, yes?).
A lottery with a fee attached. No guarantees. And the entrants may not secure a mortgage. Yeah, that sounds like the way to go. It would be interesting to find out how close these folks get to the number of essays they say they need. I doubt they get anywhere close.
BayQT~
QT, the way I’ve seen these work . . . if you win the essay contest, you get the house for the entry fee - $200 in this case. There are only 3 winners in this situation, the FB who unloads the home, the mortgage holder who gets paid off, and the winner of the contest - all the other entrants are out $200.
It’s a lottery for sure and usually if there aren’t enuf entrants, everyone gets their cash back.
Not a bad gimmick imo, but I wonder why (as a seller) you care if someone writes an essay or not. Why discriminate against those who can’t read or write?? Just make it a d&%@ lottery with no skills required - you accomplish the same thing.
“the way I’ve seen these work ”
You mean “the way these are envisioned”. They don’t work and they are illegal raffles. I challenge anyone to show me even one case where it has successfully “worked” for a private individual.
A few years ago, there was a “Win This House!” contest in central Tucson. Or so said the sign outside a nondescript house on Glenn St. IIRC, the state of Arizona shut the contest down.
I’ll be you’ll have to treat this as income so you’ll be on the hook for taxes.
EXCELLENT summation, Mr Drysdale
btw, can I count on a generous donation this year from the 1st Beverly Hills Bank & Trust to support out left-handed pre-op tranny baseballl players? good odds we might go “all the way” this year with many returning participants able to play both pitcher and catcher.
just think of the lovely inscribed plaque w/picture hanging in your beautiful lobby, sure to elicit much public attn from customers. tax deductible of course.
@aquis:
Either one or both of your “SHIFT” keys have decided to intermittently work:
“the 1st Beverly Hills Bank & Trust to support…”
Don’t waste money on Tech Support yet …. there may yet be hope!
joshua tree
heh heh! yeah, mon, I and I dont play no favorites withthe upper and loser cases. just the head cases.
One small flaw in her otherwise excellent scheme: the winner will have to pay FEDERAL INCOME TAX on the value of the home because lottery/raffle winnings are taxable in this country.
“she collects $200/entry X minimum, 1700 entries = $360,000″
WTF? I think your abacus lost a bead.
No, I think her magic 8 ball has the 4 and 6 switched. All signs point to Yes! Reminds me of the Seinfeld episode with Puddy and his 8 ball jacket. A classic.
My bad. So I didn’t look at the numbers right. Don’t tell me you’ve never messed up replying while at work.
BayQT~
How winning this house will change my life
Dear Ms. Lauver,
I have been in Las Vegas for a few weeks. Due to a bad run of luck I’ve lost everything I own, but have managed to borrow $200 dollars which I am sending to you.
When I win the house-lottery I will need to come up with over $100,000 to pay the income taxes on my winnings. I’ll have to sell the house to get that money. Of course, there will be lots of cash left over from the sale after I pay taxes.
I then plan to find a small, affordable home for which I’ll pay cash, marry my girlfriend, go to night school while working hard at my trade, eventually have a child and settle down.
But, being a degenerate gambler, which is why I entered your lottery in the first place, I will first take the money back here to Las Vegas, lose it all, get stinking drunk, stagger onto LV Blvd and get killed.
Defaults on Prime Mortgages Spike
http://www.minyanville.com/articles/MER-C-citigroup-bank-of-america/index/a/17469
Ok i need to know. who has the PPT tied up in the basement of their rental? dow down over 350 oil rapidly approaching $140
it is going to be a long weekend on wall street
and i sure this type of market will make everyone want to go out and buy real estate
Ohhh, the Jedi are gonna feel this one!
-Hubie Farnsworth
A “disturbance” in the Force is an understatement. More like a trout slap.
Futurama vs. Monty Python?
I dont understand why the market waits to respond to numbers. We are f’ed really bad, and its getting worse. I dont need numbers to know what is going on all around me. Why do others?
Eyes wide open.
For some people news isn’t news until the news media says it’s news.
There’s something about the printed word that sanctifies observation and common sense.
I expect it will be worse come Monday.
As soon as Bernanke gets done cleaning his undies, there will be an emergency rate cut. Probably Monday before market open. Plan accordingly.
So $200bbl is a certainty then? Roger that. Shudda listened to GS.
Maybe he’s discovered he’s out of bullets just when the grizzly entered the bathroom. Hyperinflation or a stock market crash? Enjoy your weekend Mr. Bernanke.
What do you wanna bet that Dr. Bernanke will be headed back to Princeton as soon as the next prez is inaugurated? He’ll have announced his resignation beforehand.
It’s a foregone conclusion.
Why do you think Alan Meltzer didn’t accept it, and now keeps sniping at Bernanke from within the safety of CMU’s “academic freedom”?
I vote for Nouriel Roubini become the next Fed chairman.
Agreed.
And right now, the best was to double your money is to fold it in
half and put it in your pocket. Bleeve the Quakers get credit for that one.
Plus, what happens when George W. bombs Iran on his way out of the oval office, and the Chinese get really, really sore, Olympics notwithstanding.
No, it is not a good time for a RE foreclosure tour.
Those drivers headed to the unemployment line as well.
Free snacks in the Hummer back seats or not.
Where is Sauk City? I wish you would remember to mention the state where these lesser known places are located. A few sentences further down, perhaps concerning the same location, you mention someone in hiring a contractor in Virginia Beach, so do both these stories take place in Virginia? Sometimes there is nothing later mentioned that identifies the state.
Wisconsin. I wish they had published the YOY medaian price.
Oooooh! OOooooOOOOH!!!!! Lookit this!
Yay! Yay! Yayayayayayyyy!
Front page of today’s Olympian:
“Home Sales Down 32% from 2007″
http://www.theolympian.com
I guess it’s NOT different here! HAHAHAHAHAHA!
I’ll race ya!
So far, of all major regions, ours (Chicago) seem to be tracking most closely with the PNW/Seattle. We were both late to the party but this spring has brought ~30% sales declines.
Let’s see where it goes from here.
‘Let’s see where it goes from here.’
Yes, let’s! If you got the popcorn, I sure got the schadenfreude and the loud snarky laughter. I also have the OMB (Olympia Master Builder’s) directory. I wonder if I should start calling and sweetly offering commiseration?
HAHAHAHAHA!
Oh, gosh, I gotta calm down here. I’m gonna bust a forehead vein with the joy, and I don’t want that.
I’ll match your OMB directory with my Arizona Builders Alliance directory.
Truthfully, I have prospected in the construction industry, and lemme tell you, I wish I could have gift-wrapped a clue and sent it to some of those people. I mean, they were so dumb that I couldn’t believe that they were in business, let alone running one.
Chicago is f’ing toast. About 6000 condos are coming online this year in downtown itself. At the current sales rate, thats 75 months of supply.
75 months? Woo hoo!
In West Ridge (corner of W. Morse and N. Oakley), there is a condo conversion we’ve been watching. I believe it has about 22 units, but I’ve never sat outside and counted.
Nothing in that building has sold. So, I was perusing RealtyTrac because I like to gloat, and there it was, in all its glory: Preforeclosure. RealtyTrac was nice enough to provide a photo, too, which made confirmation much easier. I told my husband months ago that MoFo would be going to auction.
The amount owed is $3,500,000. Avenue One Realty has a sign outside and the units started at $220,000 for a “kick-in your windows” garden unit, up to $279,900 for a 2/2/Den.
There are many stalled projects around here. And while Chicago is busy basking in all her “Olympic-ness” and “Obama-ness”, and twirling like a Deadhead on acid, the city’s real estate is in the toilet.
And all of us Chicagoans on this blog know exactly what is happening. All the PTB are being told that the market is crumbling and they are all sitting there, on their high horses, with their index fingers in their ears, eyes closed and singing, “Lalalalallalalalala….I can’t HEAR you….lalalalalalla….”
I know exactly where this is.
You will be able to pick up these babies for less than $150K after the bust.
They went real freakin’ crazy out there. There is no demand for these beasts.
I’ll go one better. They may turn BACK into rental apartments as some of the condo conversions have already done.
BayQT~
Oh, come on, edge, didn’t you see that the spire is “30%” sold already? And the Olympics are coming? And the Cubs AND Sox are in first place?
We’re gonna be the center of the universe!
Last year I had to sit through interminable meetings whilst Thurston co. was doing it’s Buildable Lands Analysis and hear assHOOOOOLE builders and developers bitch and moan about not getting to build in aquifer recharge areas and stream channels, on and on with the whining and boo-hooing, because those little restrictions mean that ‘affordable’ housing just wasn’t possible anymore, nope. Better that some downslope kids end up drinking their neighbor’s pee, because hey, the builders just HAD to build wherever they could.
And now look! Hey, I wonder if it’ll go like this: inventory builds up. And up. And UP. And then prices start to fall, and fall, and…
Hey! Affordable housing becomes a reality! Everyone’s happy, right? Right?
HAHAHAHAHAHAHA!
Oh, heavens, what a great start to the weekend.
Oly!!!
Made a risotto verde yesterday.
Harold: Dude, where’s my risotto?
Kumar: Where’s his risotto, dude?
You taunt me, sir, with descriptions of food, right when I am starving as a bear. Seriously, I am about to start chewing on my desk.
Hey, where’s my flask? Don’t tell me I forgot my flask!!
We really need those transporter beams or whatever.
I’d pop by with an ice-cold martini and some piping hot risotto.
WaaaaAAAAAHHHHHHH
I’m surprised sales are not down 70% to 80% everywhere. If someone has to move for some reason, I can understand the reason for getting involved in this mess….but if sales are only down 30% to 40%, it simply tells me there are a lot of financially unaware people out there.
Sales are off about 40% in Portland, too. A public company, Great Wolf Lodge, just built a big waterpark/hotel south of you. It’s my short-of-the-week on paper anyway.
Oh, yes. That. Thing. ‘Great Wolf Lodge.’…Umm hum.
Again I ask the cold, unkind Universe: WHERE is my FLASK?!
I have the breviary flask with the sweet juice of the Gods filled to the rim…well not now…let me saunter on over to the barrel…okay now it is filled once again to the rim. Always wondered why “My flasketh overfloweth” was trumped by “My cupeth overfloweth”.
Shut UP! Lordy!
Oh, wait, no; it’s okay–do go on, kind cleric. I found my flask and all is right in the world. I forgot for a minute, kinda got high-strung there. It’s natural with me.
Talk to me my child. Burp. The flask is your friend. What is it saying to you? More importantly, what are you saying to it? Is it warm? Do you have a nice leather cover for it? Do you carry it in one of those sissy fanny packs? Don’t tell me you have a fanny pack. Are you a native american? Whenever I played cowboys and indians as a young child, I was always more drawn to the indians. Something about them, sort of like Chekhov, that you can’t quite put your finger on, but rises to the sublime if you watch attentively.
You’re fairly astonishing.
The guy offering a $5,000 bonus to the buyers agent (realtor) might be on to some thing. Nothing like greed to motivate a realtor. For an extra $5,000, the realtor would probably push his/her demetia affected 95 year old grandmother into buying the property. As a side-bar, does anyone have an explanation as to why these realtors are getting 6% commission when prices have risen so quickly? I’ve always thought that 2% would be a fair commission (pre-boom) but 6% now that prices have doubled. When this mess is over (around 2012 to 2015) new laws should be en-acted to control these predators.
The agent doesn’t get the entire 6% unless they are also the broker.
they still brew the Olympia beer? i used to drink that. wonder if it was the downstream pee that gave it its distinctive taste? Happy D day, OG.
OG
Oly Gold?
I remember their slogan: “It’s the Water, and a Lot More.” I think the Olympia brewery is kaput, though.
Long gone, run by Miller for a while, now I think it’s torn down. OlyGirl will know.
Wasn’t that Rainier? The Rainier bldg is still there (but Rainier is no longer in biz), off to the right at about exit 104-ish.
It’s the Water — OLY Beer.
Building is still there, attempts to sell it, but haven’t heard if it has sold.
You can still buy Oly and Rainier Beer.
Love these oil prices, diving economy, and crashing house prices. 8 years of reckless, unregulated GOP rule comes to a crashing end. Like there was any doubt this was going to happen?
Must be time to vote McCain! LOL
Yeah, right!
I voted for the Democrats in 2006 because Pelosi said they’d do something about high gas prices (about $2.90 then), and all they’ve done since the Democrats took over congress is climb by another 50%
Why did Nancy Pelosi lie to me? Maybe if we all vote for Obama gas will hit $6 this time next year. I hear he’s planning to write a sternly worded letter to OPEC!
—————–
In a press release dated April 24, 2006, Pelosi said, “Democrats have a commonsense plan to help bring down skyrocketing gas prices by cracking down on price gouging, rolling back the billions of dollars in taxpayer subsidies, tax breaks and royalty relief given to big oil and gas companies, and increasing production of alternative fuels.” The letter cited policies put in place during the GOP control of Congress that the Speaker claimed had raised prices on American consumers to benefit oil companies.”
http://www.house.gov/pelosi/press/releases/April06/Rubberstamp.html
“John Gall, representing Rhodes Homes, said the developer has demonstrated to the Arizona Department of Water Resources an adequate water supply and negotiation for the utility approval continues.”
Uh, having been the principal engineer and run a land development firm in Arizona, I can confidently call BS on this. Arizona ran into serious problems with their future water supply long ago, but as long as the impact fees keep rolling in, they will be content to compound the depletion of their aquifers. If you think it’s bad in Arizona now, wait 15 years.
I’m in Kingman, Mojave co. right now. These guys are out of their minds if they think 20k more houses can be absorbed. These people at the gas pump are dyin. Next stop. Lake Havasu City.
You’re driving, Ben?
I thought you’d be flying with your one-city-a-day tour.
Enjoy the drive!
Yeah, I just got in. Have I got some stories for you guys, like the dried crickets with chili powder and the popcicles with worms in em and almost running out of gas in those mountains.. More tomorrow in the HBB OTR thread.
Cool. You should tell us what the gas prices are along the way as well!
Watch out for the rattlesnakes! Or, if it should HAPPEN to rain (fat chance)…. the march of the tarantulas and scorpions onto the highway seeking higher ground.
That’s nothing. The same builder has another 305,000 homes approved for the Kingman area, besides “pravada”. And he has two subdivisions approved in White Hills also. All have golf courses, one has 3 golf courses.
http://www.kingmandailyminer.com/main.asp?SectionID=13&SubSectionID=18&ArticleID=14232
And there are dozens of other builders building away as we speak, thousands of houses, dozens of subdivisions. We already have hundreds of vacant houses. One of the newest approved subdivisions has houses starting at 999,000 on 8000 ft lots just above downtown Kingman. Many of the others are 300,000-500,000 houses on lots as small as 6000-7000ft. No one seems to have a clue that most of the houses during our big “boom” were sold to out of state speculators. If one more person tells me “millions” of rich baby boomers are moving here, I’m going to scream.
Here is the LVRJ article on Rhodes approval. http://www.lvrj.com/opinion/19521464.html . One of the comments on the article, by a local, repeats what I keep hearing from everyone.
“It’s a natural. Kingman is a logical place to live for people who work in Phoenix or Vegas (or even Kingman, as it will grow and support its residents). I see most writers seem to belittle the project. Well, then get out of the way because the train is coming right up your track. ”
Las Vegas is 105 miles from the Kingman city limits and I think Phoenix is about 180. Doesn’t sound logical to me, but believe me I’m in the minority.
It’s “common knowledge” around here that we are going to soon be the 3rd biggest metropolitan area in Arizona. I was told by a local realtor on a forum that I should have done my research before I moved here and realized what a utopia this area is to retirees and if I don’t want to live in a big city I should move to Seligman.
shari
Last year I saw a story on cnbc about some huge development in an area called Golden Valley. I believe it was in northwest az and supposed to be a exurb of lv. Did they ever start building anything there?
Anyone know what happened to Bear Sterns? (bsc) I can’t find info using that ticker.
It pops up when I try it. Sure you didn’t type it in wrong?
I stand corrected. I get a ticker, but it appears to be inactive, and I can’t get info. Good catch.
I believe the buyout by JPM is complete. BSC no longer exists as an entity.
It’s now JPM. I had a few shares and they got converted to JPM (lost money…) I should have sold when my $$ doubled.. It wasn’t that much, but still the thought…
A nice polite letter along with a realistic offer is a good negotiating tactic. Remember that seller emotions are important. And, you do want the seller to react rationally to the offer (e.g., jump for joy). If the seller’s only other source of information is the NAR, they may turn down the offer and a buyer will have to go through the same nonsense with somebody else.
At the moment, I dislike the game so much I refuse to play. But, if I were making reasonable offers on overpriced houses, I certainly would try to help the seller see reason.
This is a buncha hoo-ey.
If they want to accept the offer, they should. Or else, not. One shouldn’t waste one’s time. It’s just a house.
Long Island
have to disagree w/you on yer comment
if someone willingly turns the screws with a greedy & heartfelt “fuk you - pay me every last cent you have & more” on the way up, I’m not going to easily forget & forgive that with a ” thank you sir, may I have another .. ?!” on the way down.
With a baseball bat to knock some sense into them!
OT: A friend is wanting out of a time share in Palm Springs CA. She told me today if I wanted it just to transfer the title in my name and that’s that. I have a circumstance that has me going there every two to three weeks, 600 mile round trip. Usually I rent a hotel and stay the night. Anyone in the time share business/owner any advice would be greatly appreciated. ie. if I trust this person would title search be needed? When I use is it would have be in one week blocks even if I stay only one night.
Thanks
Friends don’t let friends buy time shares.
Friends don’t let friends buy time shares.
But this one is strictly a title transfer fee and the annual maintenance fees of about $550. If I’m there every 20 days or so how could that be bad?
Time shares are a bad gimmick. There is a reason your “friend” is giving it away. I wouldn’t take a time share, even if someon paid me. The maintenance/management fees are the long term killer.
“The maintenance/management fees are the long term killer.”
Yep. That’s it, right there. I signed up for one several years ago in Alexandria, VA…smack in the middle of Old Town. I had been making regular trips to DC from CA. Once I returned home (and came to my senses), sat down and ran the numbers without a bunch of noise in my ear, I cancelled within 3 days. (whew!)
What did NOT pencil out was the monthly maintenance costs. Plus, with further research I learned if you had to have one, buying it new at one of those seminar thingies is not the way to go. But back to your situation…..you need to ask yourself a few questions before you tell your *friend* yes.
1) do I really need this?
2) wouldn’t it be ok just to rent a hotel room for the times I’ll will be there?
3) do I want to have yet another encumbrance each month?
4) what happens if/when I want to sell?
5) how long will the 600 mile round trip circumstance last?
I’m sure there are more questions, but these are a start. After you answer these honestly, I think I know what you answer will be. You must already have some doubt if you are here asking your blogmates.
BayQT~
My folks had time shares they bought in the 70s. I think there’s a pretty hefty annual maintenance fee, and then you pay for the 2 weeks that you use. It comes out to a little less than a hotel, but only if you use the place the alotted 2 weeks a year. Plus you have to schedule far in advance. Your situation may be different, but you should have your friend provide you the number of the time share company adminstrator so you can find out the restrictions governing your particular time share.
Just get a hotel. Or a fancy rental if that’s your thing.
Who cares if it’s a little more expensive? You can get it whenever the heck you want with no outlay.
Timeshares are totally moronic.
Better yet — rent a room in shared housing. I would love an absent roommate!
She. ain’t. no. friend.
Thanks for the replies. Certainly things to consider. I was under the impression they were all the rage. Go figure.
“I was under the impression they were all the rage.”
Victim of marketing. Repeat after me: “It’s not my fault. It’s not my fault. It’s not….”
I live in the area. There are tons of rentals and smaller hotels/motels. Timeshare won’t really work for you because you won’t be able to use it all the time.
“Sharon said she wasn’t sure why the house wasn’t selling. ‘I don’t know if it’s because we haven’t finished the outside yet,’ she said, referring to the unfinished stoop in front of the house. ‘I really don’t know why it hasn’t sold. There’s a really cute layout.’”
Don’t know why? Because you’re asking too much for it, dummy.
We did some house touring this spring, and our used house saleslady said during every tour: “this is a really nice house,…. (schools, view, fireplace, etc…)…, I don’t know why it hasn’t sold.”
After about a dozen of these comments, I said rather pointedly: “I know exactly why this house hasn’t sold, the asking price is too high!” From the look on her face, you would have thought I just spray painted 666 on the church alter.
If it was just a matter of price, you wouldn’t need a Realtor, right? So it can’t be price. It just needs better staging, a new kitchen, some landscaping, better advertising, and of course a good realtor to make it sell.
I like to go to open houses and laugh when the realtor tells me the price.
My wife and I make a game of trying to guess how overpriced a place is gonna be. It’s truly ridiculous in some cases.
Not sure if this should go here or elsewhere, but New York city’s chief crane supervisor has been arrested and charged with selling licenses to operate cranes. A crane used to build condos collapsed last week killing 2, crippling a third. In March, a crane collapsed, killing seven and taking down a building.
http://cityroom.blogs.nytimes.com/2008/06/06/citys-top-crane-inspector-is-arrested/index.html?hp
Further proof that the condo market is crashing in NYC?
Impossible! Those condos are to die for!
I like to go to open houses and laugh when the realtor tells me the price.
My wife and I make a game of trying to guess how overpriced a place is gonna be. It’s truly ridiculous in some cases.
—————————————————————————–
My wife and I play this game also - especially here in the OC where people are just now starting to suspect that Gary (15% it’s in the bag) Watts was full of sh$t on his economic outlook newsletter.
One of the favorite tactics the RE agents like to use is to show a bar graph chart for the period of 1997 thru 2005 (ever increasing upward growth in the bars!). I take the same graph and plot out the sales activity from 2005 and extrapolate this forward to 2012 (downward plunge). This usually has the desirted effect of causing the RE agent to lose their voice.
DAMMIT i so almost bought a bunch o SKF last nite and then did something else much less lucrative instead…
Ditto.
LOL. Well, I almost bought a bunch of UYG last night; so I saved a ton of money today. Unfortunately, I am already way long (and longer after today, I bought UYG near the bottom today), so I am feeling some big time pain as I watch this unwind.
Oh well, at least I didn’t borrow 500K to buy something worth 200K. Life could be much worse!
Life could be much worse!
Batten down the hatches
Rice, here! Get your rice here!
Careful now, you may be killed in the stampede…
“Rice, here! Get your rice here!”
Ever read Clavell’s King Rat? Kernels of rice are currency, and King Rat, a corporal who understands human greed and weakness enjoys freshly cooked scrambled eggs while others starve. It’s a gritty prison camp novel, mid sixties IIRC.
From the original post:
“[T]he Fosters chose to sell the property after deciding being landlords wasn’t for them.”
Well, I’m going to go way-far out on a creaking limb and say that we’re going to hear many, many, MANY more stories like this one. It will be the latest chapter in a story that goes like this:
1. Investor buys house, oh, in 2005 or 2006, and expects that the double-digit rates of appreciation will just roll on forever.
2. Investor starts to realize that double-digit rates of appreciation are an anomaly. So s/he puts the house up for sale.
3. It doesn’t sell.
4. S/he decides to rent the house until the market improves. In this scenario, the word “improves” means when those fabled double-digit rates of appreciation return.
5. S/he learns that landlording’s much harder work than anticipated.
In Portland I’ve seen 2 multi-families (which are, arguably, the most coveted) owned by Californians go on the market since 2006 because they were too far away to care for them. Both were at good prices (to allow the owners to get out ASAP) but unfortunately I didn’t have the cash at the time. In time, in time…..
“…because they were too far away to care for them.”
I don’t know about that part. Good property managers is the key. I’m in CA and my townhouse (bought in 1999) is in Newport News, VA. Perhaps I’ve just been really lucky, but they do a wonderful job.
There’re definitely other reasons why they are on the market. If people buy out of state, they should also research prop mgmt companies. In my case, it only costs 10% of the rent per month, and well worth it to me. WELL worth it.
BayQT~
I agree with you and I hope to do the same back in the Midwest in my old neighborhood.
I’m merely relaying what I was told as to why the owners were selling. But I will say that you have to be psychologically prepared and be able to take some risk and I don’t think most people have that in them.
They hear that it’s a good time to invest in real estate and that Portland is cheap relative to CA and they sign. Bad idea. Then when they can’t see the property everyday and the market changes, they freak, cuz cash flow wasn’t in their vocabulary.
Some people have the attitude that if they are not able to drive by it everyday, it’s too risky.
Ok. I see what you are saying. And you’re probably right about taking care of rental property. In fact, by the time I bought the VA property, I had already previously owned property in the Bay Area and had been a landlord on 2 of them. Even though I lived close by, it was stressful…so you’re right…it’s not for everyone.
And here’s a funny secret. My ex-husband wasn’t up for it either. We wound up playing good cop-bad cop when there was an issue with the tenant. Guess who had to be the bad cop? Ugh! Not a roll I volunteered for. There’s more to the story…all a little funny now…but I won’t bore you with the details.
Let’s just say that the experience made me stronger. LOL!
BayQT~
Quick story. In the “neighborhood” in which I would like to buy back in the Midwest, I found a multi-family owned by Fannie Mae. It was a vacant 4-plex, but looked like it was in GREAT shape, with a garage for each unit. They wanted $199K, then 1 month later they wanted $179K. I thought, I should offer $115k and see what happens. “They’ll never take that” my brain told me.
Long story longer, someone bought it for…..$116K. Dammit!
Flip side is, I don’t have a property mgmt firm set up back there. Still, opportunity was present, and is, omnipresent in this market…
My new fave quote o’ the week:
“‘Next month will be horrendous,’ Hardegree said. ‘And the month after that will be worse.’”
Ben! Ben Jones!
I think a separate thread is in order here, Ben. You could call it ‘The Perilous Travels of Ben’, or else ‘Ben’s Journey of Incredulous Snarky Merriment’; or something like that.
Also, have you barfed out your car window yet?
Details, man!
Has anyone looked at rentals on craigslist recently? I’m blown away by how many there are and how high the rents are here in Silicon Valley. It doesn’t take a genius to figure out that these are FBs hoping to delay foreclosure by renting and asking astronomical prices. I saw a 3 bedroom in Santa Cruz for close to $4k !!!! (Not on the beach, mind you).
Yeah well, good luck with that.
Another @$$ reaming in downtown San Diego. The g(l)orious details below…
MLS# 086021535
702 Ash St #404
Beds/Baths: 2 / 2
Square Feet: 1,120 sf
PPSF: $232
Sales History
Date Price Held Return Annual
06/03/2008 $240,000 1y 6m -66% -51%
11/20/2006 $710,000 2y 41% 18%
11/05/2004 $505,000 n/a - -
Note: they still overpayed by about $80K…good luck trying to get that rent check of $2K
So far the fed needs to:
lower oil prices while pissing off the middle east
lower commodities even with high oil prices
put a floor on housing prices that are still at record highs
stop foreclosures currently in the process
bailout the banks that are just stupid
save the greedy home builders
keep down inflation or at least lie more
save jobs from evaporating
raise the value of the dollar
reduce the national deficit
protect wall street from further decline
all without increasing global warming
Any magic bullet here? I think a good accountant could make this all happen in an hour or so.
“The decision to sell the house, which has 2.7 acres, a two-car garage and a pool, came after Hurricane Isabelle’s damage to the property forced Lauver to refinance her house.”
Hurricane Isabel was in 2003, FIVE FRICKIN’ YEARS AGO! Has she not rebuilt yet?
Perhaps it’ll show up one day as I think I already posted but I don’t see it.
Vallejo, Calif. files for bankruptcy:
http://money.cnn.com/2008/05/23/news/economy/vallejo_california.ap/index.htm
Also see the accompanying video.
By the way thanks, CA HBBers, for letting me know I coulda made $122K as a cop in Vallejo. Over $100K to shoot stuff? Where do I sign up?