Re-Shattering The Notion That Home Prices Can’t Fall
The Associated Press reports on California. “Median home prices dropped 26.7 percent in May across Southern California’s six most populous counties compared with last year. DataQuick said it marked the steepest annual drop since the firm began keeping records in 1988. Median home prices fell to $370,000 in Los Angeles, Orange, San Diego, Riverside, San Bernardino and Ventura counties last month. It was the lowest median price reported since March 2004.”
“Sales volumes for the region were down nearly 15 percent from May 2007. Nearly 38 percent of all the homes sold in the region last month were in foreclosure at some point over the past 12 months.”
The Union Tribune. “Home prices continued to tumble in San Diego County last month, with the median of $380,000 reaching its lowest level since September 2003. San Diego’s median home price peaked in November 2005 at $517,500.”
“‘What horsepower this market can generate right now is mainly fueled by bargain shopping, especially by first-time buyers and investors in inland areas,’ said Andrew LePage, an analyst with DataQuick.”
“‘During the housing boom, we came to expect discounts on everything we buy except housing,’ LePage said. ‘Now we’ve re-shattered the notion that home prices can’t fall. The expectation is everybody is going to get a deal.’”
The Press Enterprise. “The spring activity usually expected in Southern California’s housing market was another disappointment last month. Shoppers looking for bargains helped push the region’s home sales higher in May compared to April, but it was still the fewest May home sales in the last 20 years.”
“A total of 16,917 homes closed escrow last month, up 1,300 from April but still 14.9 percent fewer than May 2007, DataQuick found.”
“In Riverside County, foreclosure-related sales accounted for 56.6 percent of all resale transactions.”
“The median home price fell to $290,000 in Riverside County and $250,250 in San Bernardino County. Both are down about 30 percent from where they were 12 months ago and also off about $130,000 from the peak median values hit in late 2006.”
The Ventura County Star. “There were 708 transactions for new and existing houses and condominiums in May, a 17.8 percent drop from 861 a year ago, DataQuick reported today. That was also a slight decline from 771 sales in April.”
“The median price fell 26.3 percent to $435,000 in May from $590,000 a year ago. In April, the median price was $445,000.”
“Sales remained especially slow in most higher-end markets, with jumbo mortgages comprising only a slightly higher percentage of all purchase loans in May than in April, said Andrew LePage, a DataQuick analyst, in a statement.”
The New York Times. “With sweeping canyon views, gated access and nearby homes owned by the likes of Britney Spears, Ed McMahon’s house above Beverly Hills looks like the symbol of a life well paid.”
“At 85, Mr. McMahon is in the twilight of a successful career, as a broadcast announcer, professional pitchman for brands like Alpo and Budweiser, and television host. His house is the one product he has not been able to sell.”
“In the two years the 7,000-square-foot property has been listed on the market, currently at $6.5 million, he has not received a single offer, he said. The recent publicity is turning that around. By the end of last week, there were two offers for the house, said his real estate agent, Alex Davis.”
“Earlier this year, he defaulted, he said, on a $4.8-million loan from a unit of Countrywide Financial Corporation. Mr. McMahon, who is more than $600,000 in arrears on the loan, refused to discuss any other details of that or any other debts.”
“But real estate agents in Beverly Hills say that an inability to sell in two years point at a too-high asking price. Originally $7.6 million in 2006, the price was lowered several times, to $5.7 million in January, then climbed to the current $6.5 million. (Mr. Davis said the increase was needed to cover Mr. McMahon’s debt.)”
“‘It’s not the market or Britney Spears,’ said Drew Mandile, an agent in Beverly Hills, who brought clients to see the house in 2006. ‘Two years means you’re a stubborn person and you refuse to face the reality of the value of the home.’”
“Mrs. McMahon offered another explanation. ‘Ed and I prayed that we wouldn’t sell it,’ she said, admitting that they don’t really want to move.”
“Mr. Davis, the real estate agent, said that there had been no urgency to sell until a few months ago, and that he had been selective in showing the property. One factor, he said, was the need to respect his clients’ privacy; but another, ‘for quite some time,’ was the need to avoid the paparazzi camped out outside the gate.”
“‘Everybody was following Britney Spears, and we thought a lot of people were trying to get into the community’ by posing as potential buyers, he said, adding that Ms. Spears’s home is now also for sale.”
From CNN.com. “When Shaun Yandell proposed to his long-time girlfriend on the doorstep of their new home in the sunny suburb of Elk Grove, California, four years ago, he never imagined things would get this bad. But they did, and it happened almost overnight.”
“Yandell’s marriage isn’t falling apart: his neighborhood is. ‘It is going to be heartbreak,’ Yandell told CNN. ‘But we are hanging on.’”
“Devastated by the subprime mortgage crisis, hundreds of homes have been foreclosed and thousands of residents have been forced to move, leaving in their wake a not-so-pleasant path of empty houses, unkempt lawns, vacant strip malls, graffiti-sprayed desolate sidewalks and even increased crime.”
“In Elk Grove, some homeowners not only cut their own grass but also trim the yards of vacant homes on their streets, hoping to deter gangs and criminals from moving in.”
“For Yandell, his wife and many other residents trying to stick it out, the white picket fence of an American dream has faded into a seemingly hopeless suburban nightmare. ‘The forecast is gloomy,’ he told CNN.”
“Arthur C. Nelson, director of Virginia Tech’s Metropolitan Institute, estimates that in 2025 there will be a surplus of 22 million large-lot homes that will not be left vacant in a suburban wasteland but instead occupied by lower classes who have been driven out of their once affordable inner-city apartments and houses.”
“The so-called McMansion, he said, will become the new multi-family home for the poor.”
“‘What is going to happen is lower and lower-middle income families squeezed out of downtown and glamorous suburban locations are going to be pushed economically into these McMansions at the suburban fringe,’ said Nelson. ‘There will probably be ten people living in one house.’”
“In Shaun Yandell’s neighborhood, this has already started to happen. Houses once filled with single families are now rented out by low-income tenants. Yandell speculates that they’re coming from nearby Sacramento, where the downtown is undergoing substantial gentrification, or perhaps from some other area where prices have gotten too high. He isn’t really sure.”
“But one thing Yandell is sure about is that he isn’t going to leave his sunny suburban neighborhood unless he has to, and if that happens, he says he would only want to move to another one just like it.”
“‘It’s the American dream, you know,’ he said. ‘The American dream.’”
The Appeal Democrat. “Every day Steve Nickless and his crew load up a trailer with mowers and weed trimmers and get to work on lawns. The homes they visit, though, are unoccupied. Nickless is hired to maintain hundreds of abandoned and foreclosed homes in the Central Valley.”
“Yuba County alone had 357 foreclosed homes and another 650 in pre-foreclosure stages for the first quarter of 2008, according to DQNews. Many of those foreclosures were in the Plumas Lake and Edgewater communities.”
“Mike Meyers, vice president of BV Home Services, said the company is contracted by banks for minimum upkeep and maintenance. Not all homes, though, are tended to.”
“‘This is unacceptable,’ said BV owner Vianey Santibanez, of the 2-foot-tall weeds and dry grass at two homes on Branding Iron Way.”
“‘Banks don’t turn on the water because the cost would be astronomical,’ he said referring to the number of homes that are bank-owned. ‘Some neighbors have asked if they could water the property, and I tell them go ahead because this is an allergy nightmare.’”
“Plumas Lake homeowner Sue Cason said she hasn’t seen this many foreclosures in one neighborhood. ‘We moved here because it was new,’ she said. ‘It hurts to see it.’”
“The position of Cason’s front door provides a direct view of other well-manicured yards in the neighborhood, but that is not the case right next door.”
“‘When I go to the mailbox, I shield my eyes,’ she said jokingly of 2-foot-tall dead weeds on the lawn adjoining her property.”
The Union. “Thousands of Nevada County properties bought at the height of the real estate boom could receive tax reductions this year, because some homes have plunged by as much as one-fourth of their value, according to the assessor’s office.”
“‘The market value of many homes has decreased. Our responsibility is to place the market value or assessed value on a property,’ said county assessor Dale Flippin.”
“Early last year and the previous year, the real estate market peaked and was followed by a prolonged slump. ‘That’s primarily who we are trying to target - the ones who got trapped in that peak market,’ Flippin said.”
“From 2000 to 2006, the real estate market in Nevada County boomed, with property tax revenue reaching highs of 14 percent, Flippin said. The prolonged housing slump has helped steer the nation to the brink of a recession. Reductions are temporary and will return to the original assessed value when home markets rise again.”
“‘We’ll now have to review these properties every year,’ Flippin said. ‘I don’t think we’ll come out of this quickly, but I do think we’ve reached bottom.’”
“In the two years the 7,000-square-foot property has been listed on the market, currently at $6.5 million, he has not received a single offer, he said. The recent publicity is turning that around. By the end of last week, there were two offers for the house, said his real estate agent, Alex Davis.”
There ya go…it was all just a marketing issue! Now if only a certain Congreswoman could get the same sympathy, we could stick to our illusion that it was only the little people who were stupid and greedy enough to become FBs.
Who cares if the lender forecloses on ‘ol Ed…he can probably live there many many months or even a years ’till the lender finds the property file on their desk….major backlog.
By then he might be back to work…he actually was very actively working until he broke his neck not long ago. No one retires in Los Angeles anymore. I have many clients in their late 70’s still actively working…too expensive to retire and keep the lifestyle.
Maybe Ed has a plan “B”…let that encumbered house go…and buy Britney’s house down the street or other foreclosure for cheap???
OWP
I’ve mentioned this before; in the summer of 2006, I ran into a couple that had just bought a house in Nevada County, CA. The day before I had posted a Union article on the weakness in the market there. I asked them about it and the guy says, ‘Oh yeah, it’s a buyers market.’
Well, technically, it is a buyer’s market, and will continue to be so for the next 5 or so years.
Of course, patience will be richly rewarded, as it always has.
“…patience will be richly rewarded,…”
Spending a few years of one’s life throwing away money on rent looks better by the day.
At the very least, it will be extraordinarily peaceful and calm.
There will be financial rewards too.
Even in San beranrdino County, where I rent, it is still $1,500/mo cheaper to rent the house I live in than it is to buy it. It’s a no-brainer. Down 34%? How about another 20% and then they might awaken the buyer in me from my long several winter’s slumber.
I’ve never understood the whole “throwing money away” part of renting. It’s just cost of doing business. You pay to put a roof over your head.
How hard is this simple concept?
It’s flippin’ extraordinary to have to repeat it day after day after flippin’ day.
Don’t I know it, and double. I still have to listen to that silliness from a relative of mine who worked in real estate. Even though she now is unemployed, she still parrots the NAR mantra, and refuses to listen to anything anyone might say in response. A royal pain to be around.
It’s because people can’t do the “complicated” math involved with carrying a mortgage… The taxes, insurance and p/i thing just throws a big monkey wrench in their works. Much easier to just look at the rent check being written as money you won’t see again. Don’t forget, they’re all “writing off” the interest!
“But real estate agents in Beverly Hills say that an inability to sell in two years point at a too-high asking price. Originally $7.6 million in 2006, the price was lowered several times, to $5.7 million in January, then climbed to the current $6.5 million. (Mr. Davis said the increase was needed to cover Mr. McMahon’s debt.)”
It’s like the old joke of the farmer at the farmer’s market selling an orange for $1 Million Dollars.
“Who’s going to pay you a million dollars for that orange,” a shopper asked.
“I don’t know,” replied the farmer, “but if I sell it I can retire!”
Yeah and maybe his paperclip can become a house in Saskatchewan!
I’d rather have the paperclip.
–
“It was the lowest median price reported since March 2004.”
We got few more years to give back. First major stop — December 2000. Next — 1995 in real terms, at the minimum. Let us keep moving in the reverse gear.
Jas
Of course, none of this is deflationary ’cause the commodities are inflating.
And just like housing, commodities always go up…
until they don’t. ( I plan on making money in both directions.)
Shhhhhhh … don’t tell anyone.
“We got few more years to give back. First major stop — December 2000. Next — 1995 in real terms, at the minimum. Let us keep moving in the reverse gear.”
How long until this is realized by the masses? At what year’s prices do the masses finally realize that bubble-era prices are never coming back and finally start walking away in large(r) numbers?
“county assessor Dale Flippin.”
Priceless. What an appropriate bubble name.
Flippin was flippin’ flippin’? You CAN”T make this stuff up!
Flippin’ A!
Honestly, I think the gods are laughing…
Yeah, that one really struck me, he must be from Utah.
BTW, I’ve noticed that you have been infected by the “flippin’” virus. Do you say “fetch” as well?
I was lucky enough to get out of Utahr and Idahole before that caught on in the late 80s.
Yeah. Flippin today, Kock yesterday (although I think Flippin has been on here before). Waiting for Heywood Blajome to show up in tomorrow’s post.
My good friend Buzz Clic of RCR fame says that’s the name he would always use to register in hotels on the continent.
Very funny.
That’s funny - whenever I’ve been on the “continent” they ask for my passport.
Apparently when touring with the band the dives they stay in only ask for cash.
This is some beautiful stuff in downtown San Diego…
MLS# 080042962
1642 7th #319
Price: $199,000 to $219,000
Beds/Baths: 1 / 1
Square Feet: 841 sf
Sales History
Date Price Held Return Annual
10/19/2004 $363,979 n/a - -
From the description:
Bay and balboa park views in downtown’s cortez hill neighborhood. Built brand new in 2004, this large 841 sq ft condo also has a 90 sq ft patio, granite counters, crown moldings, recessed lighting, and stainless steel appliances. Located on the third floor for maximum views, privacy, and security, and just around the corner from the brand new, “tweet street” park. Walk to everything downtown has to offer. - - although this is a short sale, the appliances are included.
WTF? Appliances included? I guess now the assumptions for short sales is the place will be stripped.
And it actually includes the moldings and the lighting fixtures…wow…
Yea… but they said nothing about the toilets.
Seriously, it says something when they have to advertise more than “move in condition.”
Got Popcorn?
Neil
“I guess now the assumptions for short sales is the place will be stripped.”
With short sales, I would think most are intact and as described. The borrower is still trying to get out relatively whole. With foreclosures, all bets are off. The wording may be been included because buyers aren’t making this distinction with sales of different types of distressed properties.
A house in my neighborhood was foreclosed on recently. The former owners actually removed the 20 year old Kenmore appliances before leaving. That had to be out of spite.
Here’s one guy who’s still Flippin houses…
“‘The market value of many homes has decreased. Our responsibility is to place the market value or assessed value on a property,’ said county assessor Dale Flippin.”
“‘It’s the American dream, you know,’ he said. ‘The American dream.’”
Drop the “d” in dream and I think you’ve got it!
SNORT. LOL.
Beer all over the flippin’ keyboard.
AVERT EYES when tipping liquid and/or solids while reading HBB!
Smiles,
Leigh
And be sure that you don’t have to answer the call of nature.
LOL.
Here’s another; drop the “d” and add a “c”
“Southern California, where the American Dream came too true”
Lawrence Ferlinghetti
–
“Both are down about 30 percent from where they were 12 months ago and also off about $130,000 from the peak median values hit in late 2006.”
Once you are down more than 30% you put a sign Welcome to Foreclosureville!
Jas
“The median home price fell to $290,000 in Riverside County and $250,250 in San Bernardino County. Both are down about 30 percent from where they were 12 months ago and also off about $130,000 from the peak median values hit in late 2006.”
Riverside will continue its descent to a smooth landing near $120K; thanks for flying Subprime Air!
“But one thing Yandell is sure about is that he isn’t going to leave his sunny suburban neighborhood unless he has to, and if that happens, he says he would only want to move to another one just like it.”
“‘It’s the American dream, you know,’ he said. ‘The American dream.’”
+++++++++++++++++++++++++++++++++++=
Another Real Men of Genius moment brought to you by Yandell, the delusional, patriotic beer for men who succumb to anything that is repeated more than once on any communication medium. This guy makes Suzanne look like a research scientist.
Lol.
“‘What horsepower this market can generate right now is mainly fueled by bargain shopping, especially by first-time buyers and investors in inland areas,’ said Andrew LePage, an analyst with DataQuick.”
It looks more to me like the force of gravity at work than any horses.
“The number of home sales inched up last month compared with April, as bargain hunters sought out good bank-owned deals. But overall, demand remains soft. The 2,979 sales last month represented a 12 percent decline from the same month last year.
Moreover, sales volume last month was lower than any May since 1995, when San Diego County was considerable smaller in terms of population and employment.
Foreclosure sales continue to cast a widening shadow over the housing market. Sales of bank-owned homes made up 36 percent of all sales last month. That compares with just 8 percent a year ago and 0.2 percent during the peak of the housing boom.”
As much as I hate to seem like a gloomster, all the evidence presented here suggests that weakening demand and falling prices will continue for the foreseeable future. A falling rate of sales against a glut of foreclosures coming back on to the market can hardly be taken as a sign that a bottom is at hand.
Falling market values also increase the incentive for owners to walk rather than paying off a mortgage which far exceeds the market value of their home. More foreclosures and downward pressure on prices is the result.
May was bit better than April - shouldn’t give the agents too much hope. For many reasons, spring is still the choice time to buy, even in a bust. Let’s see what that inventory looks like in Aug.-Sept.
PB, I share your optimism without the slightest reservation.
“weakening demand and falling prices”
The dreaded fourth quadrant of the supply/demand curve.
Fleet Enema’s leaking…
“Home prices continued to tumble in San Diego County last month, with the median of $380,000 reaching its lowest level since September 2003. San Diego’s median home price peaked in November 2005 at $517,500.”
So the duck and goose lady tells me that my duck will gradually gain its independence as it matures. I guess that means I can keep it in my yard and it won’t constantly freak out over being alone. I want to buy clothes for it. Is that wrong? I feel that I am doing my part to reverse the FB damage.
duck duck, goose the market (early 2005 housing flashback)
If you plan to set it free, you may be doing harm by coddling it. It needs to adapt to the wild particularly if it was a “pet”.
If not, then there’s a whole world of literature out there.
This duck can never be set free; it’s too much of a wussy. Now I’m just worried because I saw online that ducks can live to be 20 years old. That means I’ll have her ’till I’m 52. I’m still hemming and hawing on whether or not to keep her. I just know it must have been FB who bought this thing to begin with, then walked away once they realized it would require a commitment. Of course, if I give her to the Humane Society, then they won’t allow any renters to adopt her, and they will probably kill her before any real, stable homeowners get around to wanting a duck. I guess I’m really the best bet for this bird.
Hey, I know, I can keep her for a month, then sell her for a quick profit. That would be … (drum roll) … FLIPPING THE BIRD.
Big V, call Best Friends in Kanab, Utah. bestfriends dot com
They have a duck tribe she can join.
I went to their website this morning, but I am all conflicted now. It’s like finding a human baby. At first, you’re all like “Crap. How am I gonna get rid of this crying, needy, poopy, long-living animal?” Then, after a while, you start to feel a little guilty about it. I still might give her away though, but probably not to the lady that e-mailed me from craigslist and told me she has ducks brooding right now. She’s probably the person who bred this out-of-place thing to begin with. Imagine breeding ducks, just knowing they will probably be abandoned, then posing as a “duck rescuer” and recapturing your own merchandise so that you can breed it and sell more. Duck repo.
This one is for you Big V
[DD - Donald Duck voice]
[BS - background singers]
[EP - Elvis voice]
Went to a party the other night
All the ladies were treating me right
Moving my feet to the disco beat
How in the world could I keep my seat
All of a sudden I began to change
I was on the dance floor acting strange
Flapping my arms I began to cluck
Look at me..
I’m the disco duck
[DD:] Ah, get down, mama
I’ve got to have me a woman, ha, ha, ha, ha, ha
[BS:] Disco, disco duck
[DD:] Got to have me a woman
[BS:] Disco, disco duck
[DD:] Oh, get down, mama
[BS:] Try your luck, don’t be a cluck, disco
[DD:] Disco
[BS:] Disco
[DD:] Disco
[BS:] Disco
[DD+BS] Disco
[BS:] Disco, disco duck
[DD:] All right
[BS:] Disco, disco duck
[DD:] Ah, get down mama,
Oh mama, shake your tail feather, ha, ha, ha, ha, ha
When the music stopped I returned to my seat
But there’s no stoppin’ a duck and his beat
So I got back up to try my luck
Why look
[DD:] Everybody’s doin’ the
[DD+BS] Disco, disco duck
[DD+BS] Disco, disco duck
[BS:] Try your luck
[DD:] Wave to me
[BS:] Don’t be a cluck
[DD:] Disco
[BS:] Disco
[DD:] Disco
[BS:] Disco
[DD+BS] Disco
[BS:] Disco, disco duck
[DD:] My, oh my
[BS:] Disco, disco duck
[DD:] Ah, get down mama, ha, ha, ha, ha
[BS:] Try your luck, don’t be a cluck
[DD:] Disco
[BS:] Disco
[DD:] Disco
[BS:] Disco
[DD+BS] Disco
[BS:] Disco, disco duck
[BS:] Disco
[BS:] Disco, disco duck
[BS:] Try your luck, don’t be a cluck
[EP:] Thank you duck
[BS:] Disco
[EP:] For gettin’ down
[BS:] Disco disco disco
[EP:] Thank you so very much
[BS:] Disco duck
[DD:] You’re welcome
[BS:] Disco Disco Duck
[BS:] Try your luck, don’t be a cluck
Disco, disco, disco
I was reminded by this threadlette that my daughters have asked me to recommend to TPTB that they loved the roast DUCK at the last company Christmas party.
Thanks Big V for the reminder!
LOL. Reminds me of a story from a Criminal Law course I took years back. Some Pacific Island immigrants responded to a for sale ad for a lamb. They purchased it then, promptly and in front of the owner, killed the animal. The owner was horrified and sued them. What he was selling as a pet, they were buying for food.
Remember the Michael Moore movie where the rabbit breeder had a hand painted sign outside that read FOR PET OR FOOD.
We had ducks as a child that were given to us on Easter. We created a pen for them out of chicken wire. The neighborhood dogs got them all within a few weeks.
“…The neighborhood dogs got them all within a few weeks.”
Think: Wall Street
PS, but with computers…only faster!
Just out of curiosity.. what’s that duck’s name? If you haven’t decided, we could do a weekend topic.
Peking Duck.
I was thinking maybe an egg-related name. I read a story about a duck named Quiche. I thought that was cute. But if I don’t keep it, then I shouldn’t name it. I don’t know whether or not I’m going to keep it. I have to give it a couple weeks, I think.
i’m no good at picking names, so i just wait till a pet destroys something and name it after that.. like Pants.. Begonia.. Carpet.
We once had a cat with really bad breath so my mom named the cat Halitosis.
I had a cat my husband named Boo-Boo. When he was a kitten he used to fall asleep with his head in the food bowl and wake up eating. Biggest damn cat you ever saw. I told my husband that’s no Boo-Boo that’s a Beast and the name stuck. He named the other one Beaver.
Flippin the bird….well done.
Hey, is this a great audience here tonight, or what?
(It’s better, I’m sure, than f#cking a duck. Or dorking a stork)
Such fowl language.
I want to buy clothes for it. Is that wrong?
Definitely. Wrong wrong wrong.
I mean, where would you start? Wing tips?
Dude. Ducks are for eating. What you are doing is sick.
So, this duck walks into a bar……………
http://www.duckwalksintoabar.com/
VaTech’s Nelson makes a very interesting argument. There are indeed many urban geographers who feel that eventually the poor will be pushed to the fringes of our metropolitan areas. Heck, as pointed out here - it’s already well underway in some areas.
Current trends in commodity prices really add weight to his theory. In an era of cheap gas the main argument behind the poor’s relocation was simply that suburban/exurban areas were far from the highest paying jobs and preferred entertainment and would become undesirable locations due to commuting times and lack of nearby jobs. These gas prices, however, raise the stakes considerably. Life in such places wouldn’t just be undesirable - it would be pretty near impossible.
While it is far far too early to say for sure, it is looking more and more like some suburbs might have a very bleak future. Just another reason to use extra care when snapping up all those sweet REO deals.
Even with a bike, which is the main mode of transport around here for the working poor, you’re pretty much limited to a 10 mile radius. The Burbs better have a really good bus system.
It’s ironic that many suburban locations screamed and protested against light rail or other forms of mass transit coming into their “elite” locations. I wonder how these geniuses feel now?
Shopping carts only good for about a quarter mile….then the wheels fall off.
Hey BF:
In Fresno, Target and other retailers have outfitted shopping carts so their wheels electronically lock and immobilize said cart within say 100 yards of the front door. Course, unemployment in this oasis is in double digits. So carts can be a Lexus to the disenfranchised. Tent cities beneath underpasses are growing.
I wish some of the traffic cops (sworn peace officers whom I appreciate but try to limit my contact with) would be re-assigned to Border “Patrol.”
I digress.
This has happened in Toronto already: the ‘inner suburbs’ are low-cost, so recent immigrants and the working poor move to them, renting cheap basement apartments. The isolation and the need for a car are major problems — particularly for the really recent arrivals who don’t speak English well or at all.
But these are communities built in the 50’s and 60’s, with some transit and sidewalks. It’s still possible to work in a factory on the other side of town and to get there by bus.
“The isolation and the need for a car are major problems…”
Isolation and immobility…what a combination…for breeding crime and blight. Reminds one of the conditions found in suburban Paris. Sure, there aren’t as many high rises in U.S. suburbs - but secluded subdivisions with only one or two entrances and located off the beaten path might prove effective incubators of similar problems.
Was trapezoided in the city of angles over the weekend and it dawned on more than ever, that it’s a place whose time has come and gone…
See Lisbon: 1755
I had an business idea a while back.. probably not my original invention since there’s nothing new under the sun, but since I have no interest in it i’ll share it.
Condo-commute-buses.. a privately funded car-pool bus for people who live in some out-of-the-way neighborhood. You buy a seat (a condo share) for a portion of the total cost of the bus.
If a bus costs.. $50K (?), 25 seats works out to $2,000 per seat.
With a 30 mile commute one way, at 30mpg and gas at $4.50 a gallon, $2,000 in spent in 222 days, so the individual’s investment pays itself off in 222 days as far as gasoline… less than one (250 working days) year.
Bus fuel, insurance, maintanance, etc costs are split 25 ways so it’s probably cost effective. As for parking the bus, maybe the bus can go pick other people up after the commute and charge them a fare.. havent thought about a driver.. might be a shared task if anyone wants to get the Class A endorsement.
i don’t know if there’s any profit in bus-ownership.. havent really worked the numbers.. but it might be a practical solution for commuters in some circumstances.
In poor countries everyone with a vehicle is in business as a bus/taxi. When unemployment rises enough such that governments discover that the cost of providing unemployment benefits exceeds the benefits of regulation, the black market expands, and people are free to find their own means of income generation, one of which will be informal transportation services.
I was thinking more legitimate and proactive.. formalized.. even upscale, within the limits of a bus. Conceptually, it’s like custom building and selling condos, but these are on wheels.
Some person buys a bus, outfits it with all the gizmos, necessities and conveniences.. toilet, wet bar, AC. Install quality passenger amenities .. comfortable seats.. USB and power plugs.. satellite TV.. whatever commuters might like to have on a short bus ride. Build for the target market.
Once sold, a “condo” owner could lease their seat to someone else, leave it vacant, use or sell it, much like real estate condos.
Some job related demographic research might reveal a few good exurb sales prospects..
“There are indeed many urban geographers who feel that eventually the poor will be pushed to the fringes of our metropolitan areas. Heck, as pointed out here - it’s already well underway in some areas.”
Didn’t this happen after the early 90’s downturn with lower income residents of Los Angeles being resettled to the Antelope Valley? By the late 90’s, weren’t the police referring to the Antelope Valley Freeway as the “sewer from L.A.”?
“‘What is going to happen is lower and lower-middle income families squeezed out of downtown and glamorous suburban locations are going to be pushed economically into these McMansions at the suburban fringe,’ said Nelson. ‘There will probably be ten people living in one house.’”
I seem to recall various posters on this BB predicting that very scenario several years ago, complete with chickens.
‘Two years means you’re a stubborn person and you refuse to face the reality of the value of the home.’”
Could one of you guys translate this one so it’s funnier?
To me it should be the new theme song.
You old stubborn cow, face the music and lower your precious price.
Your song sucks. It doesn’t even scan.
Take it away, folks, take it away.
His mean old house, he’s really juicin’ it.
What do you do take me fo’ you gonna bruise it.
Bring down dat price before you get screw’d in it.
There that’s betta.
Faster, I want your photo on my desk before tuesday!
Let’s retry that one:
Thank you, thank you. I’ll be here all week.
PS :- I saw your pic (and others) but all the name to face associations vanished.
Sounds like a job for NYCityDJ.
Please don’t. TIA.
That will turn into a song about how only the chicky-poo’s get jobs, etc. We want no part of that.
Originally $7.6 million in 2006, the price was lowered several times, to $5.7 million in January, then climbed to the current $6.5 million. (Mr. Davis said the increase was needed to cover Mr. McMahon’s debt.)”
When I eventually move to purchase a house, I for one will be falling all over myself to insist that the FB seller’s debts be included in the price of the house. I mean, how could I live with myself if I didn’t cover some poor victim’s HELOC(s)?
“‘What is going to happen is lower and lower-middle income families squeezed out of downtown and glamorous suburban locations are going to be pushed economically into these McMansions at the suburban fringe,’ said Nelson. ‘There will probably be ten people living in one house.’”
I think we have the housing density problem solved. Does this mean SFH will forever be known as the acronym for Severely F#cked Housing from this point forward? Now if we could only get 5 people for every car…
Huh…McMansions as boarding houses. Or as dormitories for virtual-only college students. Or as rehab/AA centers for suburban and urbanites.
Antioch California. Find it on a map. It’s where the underclass of San Francisco and Oakland are moving. Black ministers in San Francisco have even spoken out about the exodus.
Longtime lurker here.
Something screwy started happening in the data starting last month, specifically in the year-over-year sales volume. For example
december 2007 -45%
January 2008 -45%
February 2008 -39%
March 2008 -41%
April 2008 -19%
May 2008 -15%
Looks almost as if things are starting to mellow out. Which we know is nonsense.
I smell a rat. Could it be because foreclosures get factored into these reports as sales? I’ve read that a bank repo gets counted as a sale, which really distorts true market demand. If that’s true, then the only way to get to a better reading of true homebuyer demand is to strip out the foreclosure activity.
May 2007 total homes sold: 19,874 Non-Foreclosure homes: 18,781
May 2008 total homes sold: 16,917 Non-Foreclosure homes: 10,489
Total sales volume dropped 15%. Non-foreclosure volume dropped 44%
That’s more like it.
Hey AZman,
Where did you get those nonforeclosure numbers? I like them.
Big V -
Big fan of yours, btw
I got the data from DQNews itself. Starting last month, they began to include the foreclosure stats in their monthly reports.
http://www.dqnews.com/News/California/Southern-CA/RRSCA080616.aspx
“Of all the Southland homes that resold in May, 37.4 percent had been foreclosed on at some point in the prior 12 months, compared with a revised 36.2 percent in April and 5.5 percent one year ago. ”
The math was the easy part.
Am I correct in how I read this: that a foreclosed hourse is counted as a sale? If so, then isn’t this also likely to be true:
1. Housing sales volume was much worse a few months ago. Today it’s 44% AFTER stripping out foreclosures. In January it was 45% BEFORE the foreclosures
2. Housing figures will start to improve. As foreclosures pick up, so will the reported sales volume. By Wintertime, sales volume could actually look positive if foreclosures accelerate.
3. Knifecatchers ahoy! The false readings will give the appearance of a housing market turnaround. This in turn will sucker in some buyers.
4. Sellers will be confused. Housing sales volume data will look high, but nobody is buying their home. This will delay the days of reckoning.
after the Northridge Quake i had to take different routes into LA, as the 10 was lying on top of La Cienega… anyway, i was amazed at some of the nice architecture that was ceded to the poor as people fled to the burbs. maybe it’s time to head back down that way?
Still need to wait. Those ‘hoods have run up to stupid prices as well. Plus, those areas were not great places to live in the last recession (90’s) They’ve gotten better, but I’m not sure they’re past the “tipping point”, and could very easily tip back. Plus, FC activity is terrifyingly high there. Time will tell…
the problem with the old houses in that area is they have been divided and subdivided to add as many rental units as possible. The owners have typically owned them for at least 20 years so they pay property tax equal to 1 months rent for 1 unit and the next 11 months rent go into their pockets. They would be fools to sell with prop 13 supporting their lifestyle.
Those old buildings will forever be low class housing.
“Median home prices fell to $370,000 in Los Angeles, Orange, San Diego, Riverside, San Bernardino and Ventura counties last month. ”
So, SoCal’s median has now fallen to only $70,000 above Humboldt county. Unbelievable. The two areas were about $250,000 different in 2005. It just shows how stubborn the North Coast mentality is. Well, I guess it means all these retirees from San Diego that move up here to find cheap housing won’t be playing that game anymore. At this rate, Humboldt county will become more expensive than San Diego in a few months.
What’s the job situation around Arcata? Supposedly sucks in San Diego at the moment.
Always a job in Arcata if you like growing dope. Other than that, there isn’t anything. Actually, that is one of the reasons why I believe this area will remain one of the state’s most expensive: most of the homes are owned by a relative few landlords who rent them out to deadbeats growing weed. The rest of the people here are actively chanting that “real estate can never go down.” What has already happened in the rest of California has only emboldened this crowd more: they see prices falling in the rest of the state, but not here, so they have the faulty belief that this place won’t see any price declines.
I might also mention that the high today was a whopping 53 degrees on the North Coast and no sunshine and a stiff breeze. Sounds like paradise to me! However, old fogies seem to love this kind of weather.
If interest rates change significantly to the upside that will all change…
“There is science, logic, reason; there is thought verified by experience. And then there is California.”
Edward Abbey
And then there are trans-American flights back to the other coast going, “Whoa, did I really have that conversation in SF?”
Subprime crisis transforms American suburbs to wastelands of crime, poverty
http://www.cnn.com/2008/TECH/06/16/suburb.city/index.html
“Arthur C. Nelson, director of Virginia Tech’s Metropolitan Institute, estimates that in 2025 there will be a surplus of 22 million large-lot homes that will not be left vacant in a suburban wasteland but instead occupied by lower classes who have been driven out of their once affordable inner-city apartments and houses.”
“The so-called McMansion, he said, will become the new multi-family home for the poor.”
Ah yes, the pundits on this board who think they will thrive in the rural areas the next 8 years have to think again!
As I recall, this proposition was discussed on this board two years ago.
In reality, it can’t happen that way. Suburbia is only viable when the cost of travel is low: having a car is synonymous with the suburban lifestyle. If you must get into your car to shop, take the kids to playdates, go to work, or run errands the cost of the car must be minimal.
Either telecommuting becomes acceptable, or cheap sources of fuel must be found. If not, the distributed nature of American society is doomed.
The bedroom communities can’t and won’t support a population of the “lower classes.” Mr. Nelson is engaging in blatant speculation.
What if the new suburbanites are able to grow their own food? Could suburbs return to their rural roots, “updated” for the new residents (conditional on their being knowledgeable enough about farming or at least gardening to make it work).
IAT
Not with the zero line lots the builders have put up in the last few years. You don’t have enough yard to plant anything.
“…Mr. Nelson is engaging in blatant speculation”
Probably comes from a Texas Oil Family with Kin working on Wall Street.
“‘When I go to the mailbox, I shield my eyes,’ she said jokingly of 2-foot-tall dead weeds on the lawn adjoining her property.”
I’m always irked by the poor choices of homeowners, developers, etc. Attractive landscapes don”t have to be high maintenance, or require a lot of water. Grass is way overrated.
synthetic grass has come a long way, just like fake wood flooring.
I know houses in Bonney Lake are having a hard time selling, and they’ve had to lower their prices a lot. A lot of houses with fairly good lot sizes and square foot houses are having to lower their prices quite significantly. However, houses in the north sound haven’t dropped much. The closer you get to the city the more expensive it gets.
Speaking of lot sales, here in Pullman, WA I just received an email from a realtor we low-balled a few months back telling me that the developer he represents will be raising lot prices across the board on July 1. So I’d better buy now.
Let’s see, 105 lots on the market (not including builders trying to dump holdings) and 5 closings since January. Two more subdivisions coming on line later this summer. Oh Boy! I’d better buy that lot now before the price goes up!