It Has Spread In A Very Big Way
The Boston Globe reports from Massachusetts. “The spring housing market is shaping up as one of Massachusetts’ slowest ever. Home sales fell steeply in May, completing a three-month run of declines during the prime selling season for real estate. The number of single-family home sales that closed last month was the least for that month since the real estate downturn in 1990, according to Warren Group.”
“Continued sales declines also knocked house prices down further: The January-May price decline - 8.6 percent - was the biggest since Warren Group began collecting the data in 1987. ‘The market is still generally pretty terrible,’ said Alan Pasnik, Warren Group’s data analyst.”
“Condominiums have, to some extent, resisted steep price drops. Sales of condos plunged 29.6 percent statewide and 25 percent in the Boston-area in May, but the median price was virtually flat compared with a year ago.”
“‘They’ll get their decline, too. It has to happen,’ Pasnik said.”
“Farther out, in Northeastern Massachusetts the market is tough. Trisha Collins McCarthy, president of the Newburyport Association of Realtors, said it is extremely difficult to close a sale.”
“There are 419 active listings in the six towns in her association, but only 56 properties were under agreement as of last Friday - about 13 percent of the total. ‘They’re struggling,’ she said.”
The Cape Cod Times from Massachusetts. “Foreclosures on Cape Cod reached their highest level in at least 14 years last month, with 54 completed, according to a review of records from the Barnstable County Registry of Deeds. In May 2007, there were 22 foreclosures in the region, according to registry records.”
“Through the first five months of 2007, 73 foreclosures were completed. As the housing collapse deepened, the Cape saw 272 foreclosures in 2007. Last month’s foreclosures bring the total for the year to 209.”
“Not only are more people facing foreclosure, but they are also letting their situations become more severe by the time they seek help said Pam Parker, a mortgage foreclosure counseling the Housing Assistance Corp. in Hyannis.”
“In the past, she estimated, she was able to help more than 60 percent of her clients save their homes; today that number is closer to 15 percent.”
“‘The folks we’re seeing come in, their property value has declined dramatically - there’s no equity - so trying to save the property is almost not possible,’ Parker said.”
The Providence Journal from Rhode Island. “The 2008 State of the Nation’s Housing report that Harvard University’s Joint Center for Housing Studies released today says mounting job losses during the first three months of this year are ‘raising the risks of even sharper price declines and higher delinquencies ahead.’”
“‘Those parts of the Northeast that are losing jobs are going to take longer to come out of this,’ said the center’s director, Nicolas P. Retsinas. ‘I don’t think there will be a quick recovery.’”
“In Rhode Island, about 1 in 41 mortgages, on average, were in foreclosure during the fourth quarter of last year, the seventh-highest in the nation, according to the report.”
“So far this year, Rhode Island has lost 7,900 payroll jobs and the ranks of its unemployed have swelled to 41,100 in what economists say is the worst recession since the early 1990s.”
“Among other findings in the report: •Rhode Island’s high foreclosure rate is being fueled by its large share of risky ’subprime’ mortgages, which particularly appealed to buyers of rental properties seeking to cash in on the housing boom. Now, as house prices have declined, many of those properties are worth less than what the borrowers paid for them - prompting some investors to simply walk away.”
“The share of investor-owned mortgages in the Providence metro area (which includes Fall River) climbed as high as 17.4 percent during the third quarter of last year - more than double the national average, according to the report.”
“In Rhode Island, it would take 15 months to sell all the single-family houses on the market during the first quarter of this year, up from 11 months a year earlier, according to an analysis of data from the Rhode Island Association of Realtors and Statewide MLS.”
“The supply of multifamily houses in the state during the first quarter was 19 months, and the supply of condos was 22 months, the data shows.”
The New York Times. “A high level of homeownership used to signal a high level of stability. But Staten Island’s similarity to the broader United States holds true when it comes to the housing crisis as well, and foreclosures are on the rise in the borough.”
“While its homeownership rate is double that of the city as a whole - some 70 percent, versus 35 percent, according to 2006 census figures, the most recent data available - it is roughly the same as that of the nation as a whole.”
“‘Initially, the impact of this was very, very heavily in minority neighborhoods,’ said William Carbine, an assistant commissioner for neighborhood preservation at New York City’s Department of Housing Preservation and Development. ‘But it has since spread in a very big way into Staten Island. By Staten Island, I mean all of Staten Island.’”
“Mary LaPointe bought her three-bedroom house in 2001. She paid about $250,000, and put no money down. She was making $40,000 a year as a waitress and had a blemished credit history. As the value of her house shot up a few years ago, she refinanced at least three times, pulling out cash while taking ever-larger mortgages.”
“She says she used the money to put her three children through private school and send one son to college. ‘This house worked for my kids,’ she said.”
“Last year, she lost her job and by the time she found another one she had fallen behind on her mortgage payments. Now she has a $400,000 mortgage, but her house is worth less than that.”
“By the end of 2007, the median price for a single-family home on Staten Island had fallen $12,000 since its peak three years ago, according to the Furman Center for Real Estate and Urban Policy at New York University.”
“The median price for a single-family home in the borough rose to $427,000 at the peak of the housing market in 2005 from $224,000 in 1995, according to the Furman Center.”
“Wages, meanwhile, did not keep pace. According to the census, the median income for a household of four on Staten Island rose only $14,000 in the same period, to almost $62,300.”
“The North Shore of Staten Island, completed 113 foreclosure auctions in the first quarter, the second-highest number on a list of 56 areas in New York City, behind Jamaica, Queens, according to the housing department. The Mid-Island section was seventh, with the South Shore right behind it. Bedford-Stuyvesant in Brooklyn was No. 9.”
“‘One thing I found odd was the lack of sympathy people had for homeowners in this situation,’ said Diane J. Savino, a state senator who represents parts of Staten Island and Brooklyn. ‘People think, ‘I bought my house, and this would never happen to me.’ What people forget is that 20 years ago when you bought a house, they didn’t have subprime mortgages. The banking industry was a lot stricter.’”
Here’s where you got the public, Boston Globe and this fool Retsinas. I watched you tell everyone in the northeast everything is fine, buy houses, refi, etc. Now you’ve got FBs running around like cockroaches. It’s on you, cheerleaders - and guess what? It’s gonna get worse; oh, that’s right, even you guys are saying that now!
I’m kinda disappointed in the NYT. This article has people clearly in over their head (where did all the money go?). Yet the article gives the impression that refinancing these waitresses into fixed $400,000 loans is going to fix anything? Jeebus, these people are next years foreclosures and the Times is doing everyone a disservice to pretend otherwise.
Newspapers are fading fast, even the ones you’d think would last…
Advertising money is the blood that courses through their veins, and vampires can’t live long without regular transfusions.
I know you enjoy the problems newspapers are having, but I don’t. We need solid local/regional media or otherwise you get Canada, and cable TV. And it would help to have more than one paper per city.
You should see what passes for local TV news in Phoenix. Large parts of N AZ don’t have anything.
It’s not so much that I enjoy their demise, but they’ve outlived their usefulness, and have been replaced by the likes of you and others, that have no axe to grind and only want to reveal the truth about what has been going on.
The majority of newspapers in our country are largely a/p reporting, so what are we gonna miss out on, besides the editorial page?
How long will the Associated Press and their ilk last without newspapers to buy their product?
Much of the info pasted here comes from newspapers ect. Between corporate consolidation and loss of revenue we will soon loose our independent press. Without an independent press there is no such thing as democracy.
But without newspapers, even though they are in a decline, there still are many many people who do not utilize the internet for their newsources. At all.
We can’t cut them out, just like the rotary phone, some folks still have the old kind. Do we want to take them out of the loop?
I know of precious few people under 30 that read a newspaper, so what are they going be missing out on?
I think rotary phones are cut out almost everywhere.
I know of precious few people under 30 who have a clue about how the world works.
Maybe they should pick up a paper now and then. And, Mr. Lad, I don’t know where you get this AP line from … only small papers fill up on wire service stuff. Major metros still do the bulk of investigative pieces (later to be picked up and regurgitated by other media) and if they were to vanish, so would any small fear that power elites have of being exposed for their backroom deals. Sure, I love blogs and bloggers, and papers will often make use of their material, too, these days, but as a member of the hated MSM, I think we all need each other still if we’d like to preserve what’s left of the old republic.
I love to get my hands dirty reading the fishwraps, and thanks to your awful reporting i’ve had to read between the lines for years, to get the real story of what’s what.
You’re the ones that have made yourself redundant, because of ties to advertising and politicians, and now it’s time for you to go away.
Goodbye to all that…
My local paper–The Olympian–is cutting 17 jobs.
‘In response to an ailing economy and changing media markets.. the Newspaper association of America announced…that newspaper print ad sales fell a record 14% in the first three months of the year…the effects of the current national economic downturn–particularly in real estate, auto and employment advertising….”
And there you go.
RE: Boston Globe and this fool Retsinas
The Beantown Glob is infested with female real estate reporters suffering from what I call the “Marie Antoinette “what no bread-why don’t they eat cake” Syndrome”.
The Sunday Globe Magazine (home of the $1800 Gucci clutch purse and $400 jean crowd) is always throwing up their “envy the rich” articles, with hard-luck stories like-
“My house which I purchased in 1958 for $25k isn’t getting any action with it’s $1.2 million asking price. WTF-I’m entitled…where is my “greater fool”?
Article response…
May we (staging consultant hired by BG) suggest adding a $20k Bonzai garden. You will be sure to attract a buyer who can appreciate the “art and taste factor….”
The Glob hasn’t a clue….and doesn’t want one, so as not to compromise their big buck RE ad $$$.
You have correctly described the situation with this paper. When you read this newspaper it is all about fancy elites or useless people.
Indeed. By showcasing a tiny local elite the Glob seeks to magically create a functioning economy for the region.
I love New England, but if this how the regional revival is being done, we are toast. The first priority for our salvation is a further 50% cut in real housing prices.
RE: Indeed. By showcasing a tiny local elite the Glob seeks to magically create a functioning economy for the region.
You sum it all up in a sentence, Tulk!
It’s like you’re a piker if you’re not ponying up $10k for a pair of series ticket to watch the Red Sox.
It’s incredibly tiresome.
Yep, that’s what Boston has become. “The Town I Loved So Well” when I moved there in 1985 from Detroit had lost its’ soul by the time I moved to Cleveland (an underrated, affordable area in which to live) While we left mostly because we were hopelesly priced out of any housing appropriate for the family we had started (and prices DOUBLED AGAIN after we left in 2000!!!), there were many other factors; the Boston I loved no longer exists, and I watched it fade away. The Glob went from a great regional paper to a “myth factory” promoting an exorbitantly priced “New England” lifestyle, and shills for the FIRE economy. (At least the Herald had great headlines). Harvard Square went from a real place to a lifestyle center in historic clothing (one company ownss 90% of it). I knew the jig was up when I could no longer even TOUCH a Sox game (never missed opening day for first 7 years), we lost a majority of our independent neighborhood businesses, and all the families moved out of the ‘hood to be replaced by 3 to 4 young FIRE singles sharing the $1600+ rent - in JP! (Our old 2BR apt in Hyde Square was sold as a condo for $500K in 2002. No off-streer parking). The church we were married in, and where my daughter was baptized, is now condos too. So, yes, within 15 years, Boston went from: A place where I could afford to live, found great friends, started a business, met a wonderful woman (from Cleveland), and lived in a diverse neighborhood on the subway, to: ONE BIG COMMODIFIED REAL ESTATE SPECULATION FRENZY aided and abetted by the Glob and those who “got in” at the right time. I guess you could say that I left partly because I wanted to live a life where a house is a place to live, and not the focus of all life and every conversation. That 50% reduction will get things back in line, but that’s all HELOC history now. Beantown, I hardly knew ye! Marquis Dee
This is a great analysis.
Thanks hd!
Funny…I’ve been thinking the same about the Chicago Tribune as of late. If they’re not devoting 1/3 of the paper every day to advising reader blow big money on going green and buying $3 bananas at the local Trader Joes (because, gosh, it’s so “in” to waste you’re money there!), they are devoting 1/3 of the paper to instead talk about expensive fashions, style, etc. $1800 purses are hardly limited to Boston.
The remaining Tribune articles are nearly all AP (an organization with an biased agenda) or editorials masking as news.
It’s no wonder newspapers nationwide are losing readers. They’ve gone Oprah.
RE: They’ve gone Oprah.
LMAO…Now there’s a great refuge to go to gain an intellectual grasp on current realities.
We’re fooked.
… This article has people clearly in over their head (where did all the money go?). Yet …
In almost every one of the FB stories that I have read in numerous papers, the reporter never seemed to have wondered where the money went. My suspicion is that everything is entertainment for reporters these days, so they give a slant to their stories to make it appeal to emotions. Sadly, there is no compulsion to inform the readers.
” … so they give it a slant to their stories to make it appeal emotions.”
That’s what it’s all about. The saying is “Sex sells”; IMO the saying should expand to include all the emotions.
At the Peak, Roz Chast had a great cartoon in the New Yorker entitled “Real Estate Porn” using sexually loaded language to describe condos. Hilarious. So I think you are onto something…the Golden Calf analogy was getting old anyways.
Agreed. When the newspaper world relies heavily on the AP for “news”, what more can we expect? Local “journalists” who have a clue as to what it means to inform readers with non-biased, hard-core news?
One of the problems is that journaliosts and newspaper owners throughout the country seem to think the AP a news source. It isn’t. It’s a mouthpiece.
“She was making $40,000 a year as a waitress and had a blemished credit history. As the value of her house shot up a few years ago, she refinanced at least three times, pulling out cash while taking ever-larger mortgages. She says she used the money to put her three children through private school and send one son to college. ‘This house worked for my kids,’ she said.”
This isn’t a victim. This is someone who hosed the lender and made a score on behalf of her children — a single parent waitress with kids in private school! In what other time and place would that have been possible?
At least she didn’t blow in on a Hummer (or says she didn’t). At worse, she’ll be back where in any other era she always would have been.
This is true; you can’t repossess the education she bought her kids. While I can’t condone her actions, this is at least one of the better stories of “where the money went”.
‘This isn’t a victim.’
My thought, as well. Jeeze, she got to get her kids schooled in private school and one son through college! While living in what was likely a decent house, as well. How would a waitress do that any other way?
And, do you know, with all that fancy schooling, maybe all her kids learned how to count and how to read various kinds of literature, such as, oh, maybe, financial contracts?
If so, maybe they won’t grow up to be greater fools. So then this was good for all of them. Except for not for the lender.
Boo fookin’ hoo for them. Hahahaha.
She sent ONE kid to college? It would suck to be one of the other two who didn’t get the free ride. Naturally it didn’t occur to her to send all three to public school and save the money (stash it in a 529, beyond the reach of bankruptcy court) for college for all three.
This lady’s story is a striking example of how creative financing was substituted in place of income growth.
Without the refis, the kids wouldn’t have gone to private school, or college, and the whole family would have done without many trinkets of a higher quality of life. They would have just muddled along, wearing discount clothing, driving old cars and eating spaghetti, at home, every day.
Which is pretty much what life was like in the 1970s.
“They would have just muddled along, wearing discount clothing, driving old cars and eating spaghetti, at home, every day.
Which is pretty much what life was like in the 1970s.”
Uhmm…. That’s how life is for us now (except the spaghetti, wife is great cook).
And we do not suffer. We are a happy family… renters.
Besides, we have a few quatloos put aside monthly growing somewhere in the stock market… waiting for 2016 (house, cash).
A country full of 85%’rs…
“In the past, she estimated, she was able to help more than 60 percent of her clients save their homes; today that number is closer to 15 percent.”
the savior machine is coming
will save all mortgages too
Speaking of the “savior machine”, Dave Ross of CBS Radio (national opinion segment I hear many mornings) began his usual snarky smart-alecky comments this morning talking about how Democratic Congresspersons want to “stop the speculators.”
Talking about oil; not housing.
He ran through a scenario where someone could have bought oil a year ago at $70/barrel, and by today - have doubled their money.
“So someone with a million, would now have $2 million and could have done this by using only 10% of their money, borrowing the rest and clearing $1.9 million.”
“These are not normal times with oil.”
(He then goes on to give anti-speculators a hard time, saying they are just trying to make money ["pensions and banks"] without explaining how recent Fed policies contributed to making oil such a desired asset)
Given this, I’d like Mr. Ross to explore, especially for urban coastal Californians, how this scenario was any different as it regards the mania in housing from 2003 to 2007.
And in many cases, how one didn’t have to use ANY of their own money clear six or seven figures.
IMO, they weren’t ’saving their homes’ but postponing the inevitable. Until the press openly accepts the fact we had an asset price mania, and it must correct, they will continue to be bewildered as to why things are sliding down-hill.
The Ministry of Truth says that the MSM can only report what will not spook investors. It’s an election year, and the REIC does not want you to forget where it spends its advertising dollars.
Here’s all the headlines you need to know:
There’s a war going on, J6P is going to be homeless, Imus is on the air, and Lindsay Lohan is dating a girl!What I’m failing to grasp is why there hasn’t to date been a nationwide appeal to those that hadn’t gotten over extended during the boom time coming from the banks?
“Were you among the millions of financially conservative Americans that only had a primary residence and left your equity be? Then have we got a deal for you! Here at XYZ Bank we understand the frustration of having to cut your flopper neighbor’s lawn while he’s in default and skipped town. Well how would you like to own that home for a fraction of what he paid?”
As long as the focus is on reshuffling deck chairs with the same lame participants I fear Ben is right. It’s just a matter of stalling the inevitable.
‘This house worked for my kids,’ she said.
Houses cannot ‘work’. They sit there and occasionally keep you from getting rained on. They need work done to them every few years. Houses cannot put your kids through school. Houses cannot buy you things. Essentially, as a single mom this woman expected her house to be her husband and make most of the money. Good luck with that.
Her house did work for her…it brought in over $100,000 in the 8 years she lived there. She used the money to help her kids get educated, apparently, and now she can move out to a rental unit (after a long period of non-payment of the mortgage). Not a bad plan, although a bit unethical.
She is better off for having ‘owned’ this home.
Now the bank/holders of the note are going to take it in the shorts, but they almost deserve it for giving a waitress a $400,000 note.
Obviously, the only way she would be helped by a fed bailout is if they bought the house for her, allowing her to begin the equity extraction process again.
True. She lived a 100k plus lifestyle on a 40k salary, and now just gets to walk away. That house clearly worked for her.
Add on top of that the politician saying: “‘One thing I found odd was the lack of sympathy people had for homeowners in this situation,’ said Diane J. Savino, a state senator who represents parts of Staten Island and Brooklyn. ‘People think, ‘I bought my house, and this would never happen to me.’ What people forget is that 20 years ago when you bought a house, they didn’t have subprime mortgages. The banking industry was a lot stricter.’”
I dont understand why ppl like Diane insist on speaking about subjects they dont understand. These ppl willingly overpaid with the hope to screw someone else down the line and/or HELOCed there way into a lifestyle they didn’t deserve, destroying our economy in the process. I think it shows a lot of sympathy that so many have restrained themselves from beating the hell out of them.
no kidding! sorry for them? I’d like to run them over with my car
Save the gas use your trout.
Yeah, tx. Plus the fools would make unattractive dents in your hood, unless you were to carefully feed them under your wheels in such a manner as to avoid their hard bits connecting with your unblemished metal. They’d wiggle, I bet, making that outcome unpredictable.
I agree–use the trout.
Olympiagal - There’s just something about the mental picture formed from the phrase “carefully feed them under your wheels” that tickles me. It reminds me of a similar suggestion from the BBC series ‘Blackadder’, about a man being made to walk over an unexpectedly sharp floor grate while wearing a VERY heavy hat.
“Not a bad plan, although a bit unethical.”
I doubt it was “a plan” at all but just another person who took what lenders gave them.
Had she sold at some point and broken even or made money….would her “plan” have been “unethical”?
Nope, she had no plan; she saw an opportunity and took it. Those that idiotically proved someone with her the capacity to borrow more where she was clearly at high risk, were the one’ with shaky (business) ethics, no?
ALMOST deserve it !?!?!?
When the banks threw out their due diligence in lending….scuttling tried and true practices that had worked for generations…..and started giving $400,000 house loans to waitresses we all knew the gig was up.
No, the banks and the financial sector deserve every bit of the asss reaming that they are about to receive. Its time for the Pigmen to take their medicine…
Because of the huge Credit Contraction that is strangling the “noveau riche” in this country, Cash is quickly becoming King once again.
On the other hand, the banks are toast.
..
No, the banks and the financial sector deserve every bit of the asss reaming that they are about to receive. Its time for the Pigmen to take their medicine
Ummm… poetic justice aside, the “banks and financial sector” are *never* the ones who have to clean up the mess they made or pay for their own mistakes. Taxpayers and responsible working class people will have to do that, as they always have throughout history.
Want proof? If “cash is king” again, why are my Ameri-pesos being rapidly devalued against other world currencies and core commodites across the board? Checked the cost of gas, heating oil, copper, milk, cereal, or eggs lately?
The elite/powerful are teflon –nothing sticks to them.
The Arizona Slim Ranch has worked for me. Once. Happened a couple of years ago when a dollar bill blew into the front yard.
And that, people, was the only time I’ve ever made money in real estate.
Prepare your seminar series!
Hahahaha! Funny!
This reminds me…
Hey - all you economists (closet and otherwise) out there!
http://en.wikipedia.org/wiki/Efficient_markets_hypothesis
I found a nearly perfect $20 bill on “the ground” (snow) on a traverse while exiting a sidecountry gate at Kirkwood a little more than year ago.
Then, just before dark at nearly 9 pm one night last week, I found another dilapidated one on the side of a fire road while on my bike on the north side of Mt. Tam.
Needless to say, there was no one around in either case.
*****
Exercise - good for your health and good for your finances!
maybe it was Db Coopers lost money? that blew South
Dude, where’s my economy?
“The 2008 State of the Nation’s Housing report that Harvard University’s Joint Center for Housing Studies released today says mounting job losses during the first three months of this year are ‘raising the risks of even sharper price declines and higher delinquencies ahead.’”
B-b-b-but Larry Yun, Ben Bernanke and Mother Merrill sez that we’re all set for a ‘leveling off’ and stronger economy for the second half of ‘08. That just started this week…woo hoo! The bottom was here, two days ago! I can feel the economy improving already.
One week to 3Q 08! They better disengage fast and retreat to their fallback positions (Spring ‘09) before they really look stoopid.
Round and round and round we go. Where she stops nobody knows.
‘Now, as house prices have declined, many of those properties are worth less than what the borrowers paid for them - prompting some investors to simply walk away.’
‘The share of investor-owned mortgages in the Providence metro area (which includes Fall River) climbed as high as 17.4 percent during the third quarter of last year - more than double the national average, according to the report.’
Long time readers will remember I posted a bunch on the condo specuvestor problem in RI in 2005-06, but the press sorta stopped reporting on it. (What did I do?)
This was all quite predictable, as what does Harvard expect these people to do? Sit there and run a negative cash flow on a condo they don’t live in for 20 years? It’s just not logical. And notice the speculation climbed into 2007; Nice work Harvard!
Add to that the fact most condo projects these days limit the number of units that can be rented. There is oversupply in many cities (i.e., IMO there are not enough ppl that will want them as their primary residence to keep them full even at historic prices once we adjust). Since you cant expect to be able to rent them out, one would expect that they would have to sell at levels when this is all done that is much cheaper than renting. The excess would have to be sold to ppl looking for a pied-a-terre, which only works at much lower prices.
most condo projects these days limit the number of units that can be rented ??
I am not sure thats enforceable in a condo complex (at least in Cali)…It may be in a co-op ?? Anyway, one reason you would want to limit the amount of rentals is because it has a direct impact on the financability of a unit…Lenders “do not” like to loan in complexes with a high (30%) rate of rentals…
I know why they do it, but in Atlanta, you usually have to get approval from the HOA rent, and there is a max on the number of units that can be rented at any given time, at least in the new projects. It is enforceable as it is built into the condo docs given to ppl before they buy which are in existence from the beginning.
Very enforceable in CA, just put the restriction in the CC&Rs or the Condo Plan. Those restrictions are on the property’s title, therefore everyone is noticed and bound by those provisions.
I know here in SB there is a large condo unit (El Escorial) right next to East Beach that limits the total number of rentals (so some owners can rent out their units up to a certain total number then everyone else is SOL) and prohibits rentals for periods
Sitting up there in that nice stone office at Harvard making predictions about the housing market. I guess they don’t teach Mass Psychology at Harvard.
Blogs have to dig out the truth.
Local newspapers unfortunately are bought and paid for by their advertisers these days.
1997 prices in 2010………
“I guess they don’t teach Mass Psychology at Harvard.”
They do teach basic finance. Considering who funds the “Harvard University’s Joint Center for Housing Studies” (RE companies) - “he who pays the piper calls the tune”.
It Has Spread In A Very Big Way
Home Acquired Intelligence Deficiency Syndrome (H.A.I.D.S.)
LOL! (one of your best ever, alad)
Around here, we have a particularly virulent strain:
M.H.A.I.D.S.
“Marin Home Acquired Intelligence Deficiency Syndrome”
“‘One thing I found odd was the lack of sympathy people had for homeowners in this situation,’ said Diane J. Savino, a state senator who represents parts of Staten Island and Brooklyn.”
What kind of monster wouldnt have sympathy for those that willingly overpaid for things they couldnt afford with the hope to screw those further down the line, or lived lifestyles well beyond their means by continuously HELOCing at the expense of the American economy? Since when is the I dont care who I have to f-up as long as I get mine, get rich or die trying, attititude, one that we should aspire to, and feel bad about if it doesnt work out for others?
Tell it! : )
AND THE PEOPLE ALL SAID, “AMEN”!
“The spring housing market is shaping up as one of Massachusetts’ slowest ever.
I’m reporting from the south of Boston:
MA is toast. The decline apparently started in 2004-05, well before other metro housing markets started deteriorating. Downhill slide is still on. What I have seen is that the condos aren’t moving at all, so when the article says that the condo prices haven’t declined much, it means nothing. In the place where we rented, a friend had bought a unit in 2006 for 170K. In 2007 another unit sold for 148K. Our unit is being offered for 135K now. Wife thought it is good deal, I’m saying wait for the price to go below 100K.
Some people are purchasing foreclosed single family houses here and there. A few good properties that I tracked never sold (went off the market) or were sold way below the asking price. This is in Quincy-Braintree area.
NeilT,
Back when we were still debating whether or not this ‘might’ actually BE a bubble, Mass was one of the bright spots. Well educated, affluent and… utterly stalled. Many of us kept pointing to your market as a sign of things to come, but did they listen?
As we’re finding with PHX, SD and LV, the peak came much sooner than any of us imagined. In other words, 2005 was a good year to be SELLING! ( not building or buying )
The Boston market, this year, has seemed weird. I expected far more for sale signs in February and March. Far fewer (it seemed) compared to the last two years.
In the last month, May and June, signs are sprouting. They’re not littering the area but they’re back out in numbers. A house nearby was on they market for months in 07 but, in October or so, went off the market. It now has just reappeared. Why it wasn’t on the market sooner is a mystery but its still overpriced and likely to sit as it did before.
I expected a much gloomier spring around here as nothing moved….for some reason it seems to have simply shifted into summer. Weird.
Most people are simply pulling their house off the market instead of lowering the price. When people can’t get what they want pricewise, they simply remain stubborn and pull the house out of the market.
Mass. has a constricted set of building and zoning laws; so the inventory here remains relatively low compared to Florida or California. There’s excess inventory, certainly, but not as bad as CA or FL…
Condos aren’t moving at-all… a lot of the foreclosures are of developer owned properties such as multi-family houses in the middle of the granite countertop conversion. Once those are bought at a steep discount and converted to rentals, then people will think about
In Malden, MA in 2006 the cheapest 2 bed 700+ sqft condo was going for $209,000 in MLS. Right now there are sub-$120K units on there, and non-bank owned properties are trying to compete at around $180K… Either they’re too proud to take the loss or literally can’t because their equity would be negative.
Right now there are sub-$120K units on there, and non-bank owned properties are trying to compete at around $180K… Either they’re too proud to take the loss or literally can’t because their equity would be negative
This has to be why Mass SFH prices have stalled. I’ve seen price reductions of maybe 3%, while the properties sit for months. The decent housing in my area (Southeastern Mass) is still way unaffordable… $200+/sqft seems to be the norm. Anything with acreage is going for significantly more.
I’ve got time to wait… The economy is weakening: Interest rates are rising. Unemployment is increasing. Foreclosures are mounting. Inflation is rampant. All putting pressure on house prices. Come 2010-2011, if sellers still aren’t realistic, I’ll buy a REO or build new. Banks and builders will drive the market here, not underwater private sellers.
Greenspan admits we are on the brink of recession, but not one caused by low interests for too long and subprime (things he could be blamed for). Rather, it’s just an international thingy.
What a piece of human waste.
http://biz.yahoo.com/rb/080624/safrica_greenspan.html
Why is Greenspan even still relevant? He should ride off into the sunset and write a book or something. I’m tired of his whining.
One lie makes you larger
Another lie is good for us all
And the ones that Greenspan told us
Don’t do anything at all
Go ask Alan
When his tales grow tall
And if you go chasing returns
And you know you’re going to fall
Tell them an obfuscating octogenarian has given you the call
Recall Alan?
When we were all enthralled
When the men on the Fed board
Get up and tell you where to go
And you just had some kind of mushroom
And your mind is moving slow
Go ask Alan
I think he’ll know
When logic and proportion
Have fallen sleepy dead
And the white knight is talking backwards
And the red ink symbolizes dread
Remember what the ex-director said
Heed the Fed
Heed the Fed
http://www.youtube.com/watch?v=hwWzbD_9Nfo
I really liked the Jefferson Airplane lyrics to White Rabbit posted by aladinsane. I would suggest a minor change.
Original: And you just had some kind of mushroom
Change: And you just had some kind of Kool-Aid.
lad, to this old hippy, that was great!
“People think, ‘I bought my house, and this would never happen to me.’ What people forget is that 20 years ago when you bought a house, they didn’t have subprime mortgages.”
So we’re supposed to feel sorry for these people because they took these mortgages because they were “there”, and of course they couldn’t have figured out for themselves these loans were a raw deal? It’s amazing how politicians talk about grown men and women like they’re children who can’t possibly be expected to manage their finances.
No wonder congress thinks it’s okay to just pass this unconstitutional federal Wiretapping Bill, how can the American public defend its most basic rights when it isn’t capable of balancing the simplest financial affairs?
“No wonder congress thinks it’s okay to just pass this unconstitutional federal Wiretapping Bill, how can the American public defend its most basic rights when it isn’t capable of balancing the simplest financial affairs?”
Bingo!
Much of the American public now is reliant upon the gubmint to SUPPLY its freedoms, and understanding of events.
An emerging nation of ENTITLEMENT babies.
Born as drones, to die as drones, programmed to support the hive.
Raise your children to be predators, then. Not the most moral solution, but a solution nonetheless.
My children are being raised with nothing, while 40% of income goes into savings… I don’t dare let them think they have anything coming to them they will not have to work for.
Now that’s a scary wrinkle. Just imagine had the loan re-sets been pushed out until 2010-2012? Had the I/O portion of the loan been 5 or even 10 years we’d still be “rock n’ roll” for some time to come.
So it may not have been a matter of rates being so low for so long but more that ( as many here predicted ) the “free-ride” ended after only a period of as little as 2 years?
Additionally, that statement that we didn’t have subprime loans 20 years ago isn’t really true. They’ve always been with us, just in the past they weren’t as easy to get. Further I/O loans aren’t exactly new either. They date back to the 1920’s. Finally with containment failing and the spread to Alt-A and Prime her statement is pretty much moot altogether.
I agree.
All of this exotic stuff has been around forever. It’s just that the attitude used to be, “You would be crazy to avail yourself of that kind of financing for your home”. I remember when people used to think it was risky to get an ARM instead of a fixed rate.
How times have changed. I read comments in the press from some people that bemoan the fact that the only loans people can get now are regular fixed rate or ARM’s with a significant down payment and a decent credit score……that’s the way it used to be, and the way it should be from now on…..that is, if you want a stable financial system……
Credit Collapse is imminent.
If you don’t understand what “Katie, bar the door” means, no problem.
If you don’t understand what “Batten down the hatches” means, no problem.
If you can live for years and raise your family “underwater”, no problem.
The problems will surface each and every day as the over-leveraged and under-capitalized fight the future.
Entitlement nation, meet insolvency.
Insolvency, meet entitlement nation.
A useful measure may be the small multi-family market. In 1999 in Boston that market went hyperspeculative right before condos and single family homes started a relentless increase. You could not buy a multifamily and rent out all the units and still have positive net income unless you put down 50% and then you got a return on income less than the rate of inflation.
That is the moment, as I recall, that investment and underwriting fundamentals went out the window.
Now I am living in Western Mass, in a weak, low quality rental market (poor people and loads of college students) and the multifamily offerings are still way expensive. They are sitting on the market for a year, then withdrawn. This tells me that we have years to go before sanity is restored. next year will make ten years of madness?
Maybe sellers’ psychology has them fixated on price points and paper gains, and that they will wait until cumulative 50% inflation reprices the properties correctly without lowering the ‘price’.
I’ve never been one to look at my real estate investments (always bought in a DOWN market that is at a plateau of sorts) as one that needs to cover my entire cost of carrying. My primary desire was to try to make at least 8-10% on my investment, with the knowledge that monetary inflation would eat away at some of my return.
I only once mortgaged an investment property, and I bought it at the market bottom (very lucky, cheapest a condo ever went for in those buildings within 12 years). My rent was calculated as interest + insurance + association + taxes + 8% of the gross cost of the place. Because my principal was covered by me (as built in equity), I didn’t have to pass on the principal cost to the renter, so I had very competitive rents. This let me be choosier about my tenants, too.
When I bought the unit (15 years ago or so) for $47k (bubbled up to worth $219k but I didn’t want to sell it because it is a useful location for me), the rent in the place was about $480 compared to other landlords who were trying to cover their entire mortgages (sometimes the mortgage alone was over $550 a month for them). As my association + taxes + insurance went up, I raised rents to compensate, but I still made 8% on my initial investment, ignoring equity gains from housing price increases. The mortgage was paid in 6 years, by me, and I feel very strongly about keeping my rent in line with what I believe my return should be. I bought a second unit in the same condo a year later for $6k more but it was significantly larger.
Today, 15 years later, the units are probably worth $95k - $100k in that area (medium income is about $39k). I still consider them as bought for $47k and $53k, and base my rental prices on that, still making 8-10% on my money, versus other landlords who charge MORE but are actually losing out because of what they pay for the units, and their tenants who need assistance constantly with repairs, etc.
For me, as long as I feel the unit will be stable in value, I don’t push the principal portion on my tenants, as I put it in myself, building equity + 8-10%. Easy enough to handle in a flat market.
Lately, though, I’ve found NOTHING worth buying. Too much competition in the rental market (from FBs and from old landlords such as myself). I keep watching, though, and have a nice spreadsheet I created that lets me track rents versus prices + carrying costs. In one area of Chicago that I like a LOT, it is very close to being worthwhile to buy, but I’d like to wait till prices plateau a bit. 2010 would be perfect.
Forget about multi-family. That’s what I own so far, but my next purchases will be SFRs (single family residences), because they actually make more money now, and involve less hassle and bureaucracy (rent control, inspectors).
Providence RI was undergoing an impressive urban renewal for a number of years. It’s too bad this downturn might wind up reversing that. The area around Brown U was always overpriced but had some great examples of New England architecture.
I grew up there - no one every moves back
ben dover
81-9 senate to make you pay 300 billion
-you may want to participate
Big V reporting from the Silicon Valley trenches:
Our admin keeps talking about the housing debacle. She says she doesn’t trust unrealtoRs or mortgage brokers, that banks are “a bunch of idiots”, and that she doesn’t feel sorry for FBs. She is going to buy a house off her admin’s salary later, when the market has bottomed. She’s not even talking to me about it. She’s talking to this engineering manager-type guy. I swear she didn’t get this from me. It’s all hers!
The coworker that walked away from a deal put in an offer, it was counteroffered and they came to a price: 5% below asking. He knows how bad housing is here but it’s a nice place. He told me that sellers are desperate these days. This is north of Boston in a good school district with public transportation available. I kind of think that he’s hoping that the bank appraisal is lower than his offer.
If it does go through, he’ll be one of those low-number stats buying in the Boston area.
I really liked Jefferson Airplane’s the White Rabbit lyrics posted by aladinsane. I would suggest one minor change to enhance this.
Original: And you just had some kind of mushroom.
Change to: And you just had some kind of Kool-Aid.
Staten Island: median income of 62k with median house price 427k. Let’s do the math. That is a price income ratio of 6.9. Bwah ha ha ha ha ha. Frickin morons. The lenders and the borrowers are all idiots. Staten Island was traditionally a working class island, stigmatized as it was by its proximity to New Jersey, the ferry ride to Manhattan, and the garbage dumps for which it is famous. I would guess that working class neighborhoods should have price-income ratios closer to 2.8. Bwah ha ha ha!
So the median price on Staten Island should drop to around $150k. My math is fine. I am anticipating a drop in nominal wages as well as factoring in high inventories, foreclosures, rising prices, and higher unemployment.
Give it back to the Dutch or the Indian, I say.
Burn, baby, burn.