June 25, 2008

What’s Going On Now Is Unprecedented

The Rocky Mountain News reports from Colorado. “Denver-area homes lost an average 4.7 percent of their value in the 12-month period that ended in April. Prospective home buyers are being cautious, said broker Diane P. Huttner. She said a large number of people are seeing negative reports in the media, and are reluctant to buy now, because they think prices are going to fall more.”

“Huttner said she recently sold two homes in which the sellers cut their prices. Many homes ‘just sitting around’ are priced too high, she said.”

The Denver Post from Colorado. “Independent real-estate analyst Gary Bauer said mortgage financing has remained tight, which has slowed closings. Boulder mortgage banker Lou Barnes said that tightness combined with a weakening economy made it premature to call a bottom.”

“‘Locally, we are closer to bottom than nationally, if only because our price peak passed in 2001,’ Barnes said. ‘Foreclosures here may soon stop rising, but the plague will be with us for another couple of years.’”

“Mortgage delinquencies rose again along the Front Range in the first three months of this year, a trend that could further delay a recovery in the housing market.”

“Cecil and Roberta Nevins of unincorporated Adams County, struggling with health problems, were somehow qualified for an adjustable-rate mortgage that consumed nearly 60 percent of their fixed income.”

“They managed to pay it, until the interest rate adjusted higher. ‘We can’t afford it with the payment on the mortgage going up every time you turn around,’ said Roberta Nevins.”

“Donald May, executive director of the Adams County Housing Authority, said rising mortgage payments combined with falling home values are leaving many borrowers desperate to find a way out. ‘We have not seen a lot of creativity on the lender side to take into consideration that the value of the home has dropped and to re-evaluate,’ May said.”

The Summit Daily News in Colorado. “Collapsing housing prices and mortgage-lending problems across the United States have temporarily stalled the development of a planned 6,000-acre, 577-housing-unit development in Spring Valley.”

James Lochhead, an attorney representing the company behind Spring Valley Ranch, attributed the delay to national housing and lending market.”

“‘The marketability of the project is dependent upon and affected by national market and financial conditions,’ he wrote. ‘The housing market at Spring Valley Ranch will be marketed nationally. As you are all aware, within the last year, the national housing and lending market has experienced extreme volatility, affecting the national economy.’”

The Aspen Times from Colorado. “Last week one of Aspen’s most prolific real estate agents, Rich Wagar, had to cut loose his nine associates, partly because of a local property market that is increasingly mirroring the national condition.”

“‘I think it was a surprise to everybody,’ Shael Johnson, one of the casualties of Wagar’s restructuring, told The Aspen Times.”

“Unsurprising, however, is that the local real estate market is underperforming when compared to the past few years. Call it a burst bubble, an industry recession, a slump, or simply a reflection of the national market, the real-estate landscape has proven that it is vulnerable, and businesses are having to adjust. Some real estate agents are being forced to take other jobs to make ends meet.”

“‘For someone who goes from $40 million in total sales volume to $10 million [in one year], that can be pretty traumatic,’ said Craig Morris, a name partner with Aspen realty firm Morris & Fyrwald. ‘It’s the first time in 10 years I’ve seen a number of people in the business really looking elsewhere to supplement their income.’”

“‘In the past, people could price their property at or above the market value, but they cannot now. There are many sellers that chose the price of their house on their own - and they typically have an inflated opinion of value - and their property sits on the market and doesn’t sell,’ he said.”

“The answer, Morris said, is quite simple: Lower the price. Morris noted that he has one property listed for $7.995 million that he considers about 15 percent above its market value.”

“‘If that property were to come down $1 million it would be very sellable,’ he said.”

The Daily Sentinel from Colorado. “According to the Colorado Legislative Council, the number of building permits issued in Mesa County fell 31.2 percent during the first four months of 2008 compared to the same period last year. The number of permits issued in Montrose County fell 57.2 percent during the same period.”

“The governor’s Office of State Planning and Budget estimates the building slowdown will be exacerbated by a decline in second home sales to non-Coloradans. ‘Fewer people will be able to travel to or buy second homes in Colorado,’ the report said.”

The East Valley Tribune from Arizona. “The Valley’s swelling number of foreclosures spurred a first-ever double-digit drop in average home prices in the past year. Prices fell an average of 13 percent from March 2007 to the same period this year, according to an Arizona State University study. That’s up from a 9.3 percent year-over-year decline registered in February.”

“‘What’s going on now is unprecedented,’ real estate professor Karl Guntermann said. In the last major housing downturn during the early 1990s, the most severe year-over-year decline on record was a 5 percent drop recorded in February 1990, the ASU report shows.”

“Easy money doled out through risky loans amplified the dramatic upswing in prices during the latest boom, Guntermann said. Prices shot up 76 percent from January 2004 to July 2006, with the annual rate of appreciation peaking in September 2005 at 44 percent.”

“‘The faster and higher they went up, the faster and farther they’ll fall,’ he said.”

“Every region of the Valley has been hit. The southeast Valley plummeted 13.8 percent from March 2007 to the same month this year. The southwest Valley experienced the harshest drop, at 22.9 percent.”

“‘In outlying areas, homes are getting crushed in terms of pricing,’ said John Vatistas, co-owner of Russ Lyon Sotheby’s International Realty.”

The Arizona Republic. “The financial storm brewing around Mortgages Ltd. has touched two key downtown Phoenix projects, a blow to ongoing efforts to reinvigorate the city’s heart. And it was unclear if other downtown projects could be next.”

“It’s unknown what developments are among the estimated 70 loans in the embattled Phoenix company’s $925 million loan portfolio.”

“Mortgages Ltd., the state’s largest private lender, filed for Chapter 11 bankruptcy Monday. On Tuesday, Judge Randolph Haines granted Mortgages Ltd.’s motion to convert the case to voluntary Chapter 11, but tabled a request…to appoint an independent trustee to take over the lender’s operations.”

“Mortgages Ltd. has made several changes to its business, prompted by the apparent suicide of Chairman and CEO Scott Coles on June 2. The company financed commercial real-estate projects for developers using money it raised through accredited investors to fund the loans.”

“Since Coles’ death, the company said it is no longer making loans or accepting new money from investors.”

MSNBC on Arizona. “In hard-hit neighborhoods, the glut of foreclosed homes has not only sent prices crumbling - the houses themselves are also falling down, according to a number of readers from around the country.”

“‘My neighborhood is filled with renters who could care less about the parks or the appearance of the homes,’ wrote Joe Brogdon, of Queen Creek, Ariz. ‘There is a smaller home near mine that has no windows and it is barricaded with plywood to prevent any more vandalism to the house. Many of the lawns are not being taken care of, which does not help the situation for resale or pride of ownership.’”

“In some communities with high foreclosure rates, lenders are having a tough time selling the properties they’ve taken over. The problem is apparently most severe in large developments that were under construction when the housing bubble burst.”

“‘There are well over 500 houses for sale in an area with approximately 5,000 homes,’ said Rick from New River, Ariz. ‘Most are spec homes for sale with sale prices dropped from $100,000 to $200,000. Banks can’t even find buyers at auctions.’”

“Some readers reported they were benefiting from foreclosure’s fallout - including dozens who said they were now able to afford a home in a buyer’s market.”

“‘I just moved here, and I picked up a nice house for half of what it sold for in 2005,’ wrote Doug, from Phoenix, Ariz. ‘Thanks, Arizona.’”

The Las Vegas Business Press from Nevada. “Southern Nevada’s commercial real estate market has softened somewhat as a result of the housing downturn and the resulting tightened credit availability for land-secured loans. There were 987 home foreclosures last month or the equivalent of 32 per day.”

“Another 5,117 homes were undergoing the foreclosure process in May, which is 20 percent more than 12 months ago. Meanwhile, Las Vegas building permit activity dipped 38 percent for the first five months of 2008 versus the same period last year. There was only $59 million in commercial construction through May, 80 percent less than in 2007.

“Southern Nevada’s office market had a 13.4 percent first-quarter office vacancy rate, 2.5 percent more than a year ago, and higher than the 2001 recession peak vacancies, Colliers International Las Vegas reports.”

“‘There is no doubt that the Las Vegas office market is struggling through the current sluggish economy,’ Colliers’ managing partner Michael Mixer said. ‘In 2007, office employment in the Las Vegas area decreased by 4,000 jobs.’”

The Review Journal from Nevada. “Henderson-based Slade Development filed for bankruptcy protection Friday on Vantage Lofts, a $160 million condominium complex at Gibson Road and Horizon Ridge Parkway.”

“Construction was halted in February and the sales office was closed after more than $17 million in mechanics’ liens were filed by subcontractors who hadn’t been paid for their work on the project. Slade listed debts of about $72 million and assets of about $45 million.”

“‘I’ve been in this town for 50 years, and we’ve never had a responsibility to subs that we couldn’t meet, so this is new,’ Slade Development Chairman Stacy Slade said.”

“More than 20 buyers remain under contract, he said. Prices for the urban-style lofts ranged from $450,000 to $1.6 million, or about $450 a square foot. ‘The lack of sales in the market, because of the downturn, it’s no surprise, especially in the condo market,’ Slade said. ‘It’s been a real battle.’”

“U.S. home prices, led by sharp declines in Las Vegas and Miami, tumbled in April at the fastest rate since a widely followed index was begun in 2000, with all 20 metropolitan areas surveyed posting annual declines for the first time.”

“Las Vegas and Miami both continue to post the largest declines, falling 26.8 percent and 26.7 percent, respectively.”

“Las Vegas-based Home Builders Research reported a median price of $225,000 for 2,606 existing-home sales in May, a decline of $53,000, or 19.1 percent, from the same month a year ago. It’s down $65,000, or 22.5 percent, from the peak median in October 2006.”

“‘In our opinion, the unknown factor that can affect the resale prices during the upcoming months is the short sales,’ Home Builders Research President Dennis Smith said.”

“About one-fourth of available home listings in Las Vegas are short sales, offered at less than the mortgage owed, which means they must be approved by the bank before closing escrow.”

“‘And by now, most have heard the stories about how long that can take,’ Smith said.”

The Reno Gazette Journal from Nevada. “The Washoe County housing market showed signs of life from April to May, spurred by sales of new single-family residences and condominiums. Despite the increase in sales of new single-family residences, home sales still were down 1.2 percent overall as sales of existing single-family homes dropped 4.2 percent from April to May.”

“Sales of new and existing single-family residences remain significantly down from last year, reporting a 48.8 percent decrease. The median sales price for new and existing homes also was down 8.3 percent from last year’s price of $327,000.”

“The boost in new property sales is likely the result of ongoing efforts by builders to offer strong incentives to home buyers, said Wayne Capurro, president of the Reno/Sparks Association of Realtors. But although the sales of new properties are encouraging, sustaining those numbers will be difficult if the existing home market does not bounce back.”

“‘Prices have gotten too low, and I just don’t see how they can build these new houses and sell them without losing money, especially with the higher cost of fuel and everything else,’ Capurro said. ‘The existing home market has to improve first.’”

“Short sales and bank-owned properties also remain an issue. Such properties account for 40 percent of inventory in the market but two-thirds of all sales, which should push down median sales prices for two to three more months as they go through the system, Capurro said.”

“‘I believe that we’re kind of bouncing along the bottom,’ Capurro said. ‘Even with the uptick in unemployment and interest rates, it’s still a relatively good environment for buyers. The affordability of homes hasn’t been better than it is right now in approximately five years.’”




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141 Comments »

Comment by Ben Jones
2008-06-25 07:07:02

‘There was only $59 million in commercial construction through May, 80 percent less than in 2007.’

Oh dear, and wasn’t it the commercial work that was going to pull Vegas through the residential slump? And the Reno article proves that builders will undercut the existing market at any cost (or loss).

BTW, these downtown Phoenix pipe dreams never made any sense, and now that executives are offing themselves, maybe the Republic can see that. As the RE professor points out, this is already the biggest bust in the states history.

Here’s one more for LV slumlord:

‘With gasoline prices on the rise and the U.S. dollar declining internationally, Strip hotels are slashing prices to lure budget-minded customers. Leading into the Fourth of July weekend, properties from the high-end Wynn Las Vegas to the financially precarious Tropicana 21/2 miles south are tinkering with room rates.’

‘We monitor it day-by-day,” said Planet Hollywood Resort co-owner Robert Earl, whose property has increased rates. “There are some incredible prices that have come out in the market, and they have shocked us because some of them go through the Saturday.’

‘Average daily room rates along the Strip are projected to be down 18 percent for the Fourth of July holiday weekend, according to a weekly report by gaming analysts at the financial firm JP Morgan. Average daily room rates are projected to drop 13 percent along the Strip for the week beginning June 29 and ending July 5, according to the report.’

Happy 4th of July, UFB!

Comment by aladinsane
2008-06-25 07:15:45

We stayed at a casino hotel in the Vegas area for $24.95 (a $75-125 room usually) and woke up the next morning and there was a note under the door offering us a 2nd night for $15.95…

It reeked of desperation~

Comment by arizonadude
2008-06-25 07:32:53

How long ago was this? that is pretty cheap for a room.

Comment by aladinsane
2008-06-25 07:46:24

2 months ago…

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Comment by sagesse
2008-06-25 07:48:05

Tropicana, Stratosphere, Sahara, Orleans (3*) are between $28 and $38
Luxor, Paris, Mirage, MGM, Planet Hollywood, Treasure Island, Monte Carlo are between $66 and $ 90.
Trump and Wynn 189/199.

That’s beginning of July.

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Comment by iftheshoefits
2008-06-25 07:58:10

Pretty typical for the low end casinos, been this way for decades. They expect to make their money off of the other activities. Not as much in Las Vegas as in the smaller towns like Mesquite, but we avoid Vegas at all costs anyway. I wouldn’t want to stay cheap there becase I wouldn’t feel safe. Mesquite is now a regular stopover for us when we travel to So CA even though we never spend a dime in the casinos.

Comment by Lost In Utah
2008-06-25 08:01:57

Morning, Shoe. I know a number of people from W. Colorado who are like you and stay in Mesquite on their way to points west - and never gamble. It’s a regular stop because you avoid Vegas and it’s cheap.

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Comment by iftheshoefits
2008-06-25 08:17:59

Morning, Lost! Putting aside for a moment that none of these towns should really justify more than a couple hundred inhabitants in a sane world, Mesquite is not a bad little place, at this point in its evolution. Virgin River Casino is where we stay, it’s clean, mostly families staying there. $17.95 during the week.

We will stop down in the casino to grab a Starbucks and watch the seniors line dancing to the country band off in the side room. Can’t relate to the whole thing, but I gotta admit they’re kinda cute.

Can’t understand where they’re getting the water for all the condo and SFH development going on north of town, though. Or the buyers, for that matter.

 
Comment by Steadykat
2008-06-25 09:34:53

The newer SoUtahans go to Mesquite, it’s forty minutes away, to get their booze (it’s cheaper in NV than the State run stores in Utah) and to gamble.

Over the last couple of years there has been a tremendous amount of hill-leveling just south of the area and next to the I-15. Most of the lots (commercial) are now sitting empty with for sale or for lease signs. The few that are occupied seem to be with businesses that are not destined for longevity (home construction trade supply depots, RV sales or Ford truck dealerships).

There are a lot of for sale signs and empty lots around the area. Just north of the CasaBlanca (1/4 mile) is a development where work was stopped about six months ago. Some homes are finished and have people living in them. Others are sitting unfinished (8-10 on one street alone).

If you haven’t tried the Catherine’s restaurant located in the CasaBlanca Casino you may want to give it a try the next time you’re in Mesquite. It’s expensive but quite good.

 
Comment by goedeck
2008-06-25 09:59:26

Talk about energy prices pinching business, I wonder how Wendover is doing now. Their main mark (SLC) is 100 miles away.

 
Comment by iftheshoefits
2008-06-25 11:20:37

Steadykat,

What amazed me was the amount of suburban infrastructure (wide boulevards, water, electric) in that whole area north of town! The brand new Walmart, other shopping centers, etc. Just more bubble detritus, I’m sure, in anticipation of wide scale development.

 
 
 
Comment by jetson_boy
2008-06-25 08:22:15

I’ve been to Vegas around 4 times since 2001. In 2001, they were practically giving the rooms away. I flew down for $45, stayed at Circus Circus for $13, had their all-you-can-eat buffet for $6.

I went back in 2003. Circus Circus was $99 and booked solid. We stayed in the Stratosphere which is sort of a half-crappy joint for $70 or so. The Buffet at Circus Circus was up to around $15

In 2004, I looked at all of the ‘fancy’ casinos. The Luxor, NY,NY, the Bellagio, and some of the others were really expensive. I can’t remember exactly how much, but it was between $160-$400 a night. The Buffet at the Luxor was $20. I stayed in a Best Western.

The last time I went, I also stayed in a hotel versus a casino. There were tons of business conventions and all the casinos were booked. Ironically, there were lots of Real Estate expos.

Now that the economy is in the crapper and all those RE expos have dried up, I wonder if you can get a steal at the nicer casinos now?

Comment by mikey
2008-06-25 10:56:30

“‘My neighborhood is filled with renters who could care less about the parks or the appearance of the homes,’ wrote Joe Brogdon, of Queen Creek, Ariz. ‘There is a smaller home near mine that has no windows and it is barricaded with plywood to prevent any more vandalism to the house. Many of the lawns are not being taken care of, which does not help the situation for resale or pride of ownership

The NEW REIC “Pride of Ownership”, is being defined as Bankruptcy, Foreclosure or just Slip Sliding Away in a beater U Haul at 3 A.M.:)

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Comment by spacepest
2008-06-25 14:26:19

Hmm, I’ve found that alot of the room rates in Vegas have to do more with season. Summer is actually the slow season, because alot of tourists don’t want to go there when its hot as hell outside and most businesses don’t want to book and attend conventions for the same reason. Most of the tourists who do show up over the summer are families with children on summer vacation in tow, and they don’t spend alot of money or really gamble.

Room rates are always at their lowest over the summer, then start to rise back up mid fall through early spring, when the weather is cooler. This is also the time most conventions are booked and held. Yeah, I’m sure the economy is going to help bring the room rates down in Vegas but its mostly a seasonal thing when it comes to cheap rooms.

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Comment by BanteringBear
2008-06-25 10:35:20

“…the Reno article proves that builders will undercut the existing market at any cost (or loss).”

The Reno market is an absolute bloodbath right now. And I think the current situation is healthy considering what’s to come.

From the article:

“Short sales and bank-owned properties also remain an issue. Such properties account for 40 percent of inventory in the market but two-thirds of all sales, which should push down median sales prices for two to three more months as they go through the system, Capurro said.”

This is the kind of boneheaded statement that irks me to no end. This guy assumes that foreclosures are just going to cease in the next few months, never mind the fact that they are actually accelerating right now. These people and their statements should never be given the light of day.

 
 
Comment by ragerunner
2008-06-25 07:08:48

“‘I just moved here, and I picked up a nice house for half of what it sold for in 2005,’ wrote Doug, from Phoenix, Ariz. ‘Thanks, Arizona.’”

I wonder if he will still say that in 2 to 3 years? Or will be be saying, people are buying housing for X amount lease than what I paid for mine in ‘08.

Comment by Neddie
2008-06-25 09:12:37

half of what it sold for in 2005 is still probably at least 100% more than it would of sold for in 2001

 
 
Comment by aladinsane
2008-06-25 07:12:17

Dude, where’s my income?

“‘For someone who goes from $40 million in total sales volume to $10 million [in one year], that can be pretty traumatic,’ said Craig Morris, a name partner with Aspen realty firm Morris & Fyrwald. ‘It’s the first time in 10 years I’ve seen a number of people in the business really looking elsewhere to supplement their income.’”

Comment by Ben Jones
2008-06-25 07:18:57

I’m sure the Aspen UHS will have no problem finding work in the areas diverse economy. Of course, they might have to rent in Silt and learn how to clean toilets.

Comment by aladinsane
2008-06-25 07:27:25

Would you like fries with that?

Please pull up and pay at the first window…

 
Comment by Lost In Utah
2008-06-25 08:18:49

LOL! Silt happens! They actually tried to change their name back in the late 80s. That didn’t fly, so they printed thousands of bumper stickers that said, “Silt Happens.” You still occasionally see one.

Most of western Colorado is very very tourist dependent and has been for years, minus the oilpatch. Not much else going on there. This is gonna hurt big time.

Comment by combotechie
2008-06-25 10:52:49

Prospective Silt bumperstickers:

Silt flows downhill.
I’m up to my eyeballs in Silt.
No Silt, Sherlock.
I know my Silt.
You don’t know Silt.
I’m too busy shoveling Silt.

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Comment by Lost In Utah
2008-06-25 11:22:44

lol!!

 
 
 
Comment by Blano
2008-06-25 08:29:08

They could always hang out in El Jebel like I did, aka Edge of Hell.

Comment by Lost In Utah
2008-06-25 08:35:24

Blano, you won’t believe El Jebel (Edge of Hell) now!!! It’s expensive, highend, and, well, it’s still different. And where did they get that name???

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Comment by Blano
2008-06-25 08:52:52

You can’t be serious!! I recall it being a hole in the wall of a pit good for renting and not much else.

If I ever make it back to that area, I have a feeling I’m not gonna like what I see.

 
Comment by hip in zilker
2008-06-25 10:15:54

where did they get that name???

El Jebel means “the mountain” in Arabic. Which still doesn’t say where they got it.

A lot of Arabic place names in US came from Lebanese / Syrian immigrants (mainly Christian, mainly went into trade) in the mid - late nineteenth century.

 
Comment by Lost In Utah
2008-06-25 10:21:07

Only immigrants here were old tobacco chewing cowboys - LOL

It does have a few mountains around it, though. I always thought maybe it was settled by some Shriner type dude wearing one of those silly hats while riding a little souped up go cart.

Who knows…

 
Comment by BanteringBear
2008-06-25 10:40:42

Hi Lost. Are you related to Roger Miller?

 
Comment by Lost In Utah
2008-06-25 11:27:23

ROTFLMAO!!!!

We’re married - he’s king of the road and I’m queen of the backroad.

I actually think he was a crackup, but no relation. He was a genius, though, so maybe we’re related in that way. :)

RIP, do-wacka-do.

(And thanks for watching my videos)

 
Comment by hip in zilker
2008-06-25 12:27:01

Perhaps El Jebel got its name from a passing Lebanese / Syrian peddler selling chewing tobacco and fezes.

A lot of Lebanese / Syrian immigrants started out as peddlers in rural areas all over, and eventually owned stores.

 
Comment by hip in zilker
2008-06-25 12:28:30

Sorry, fezzes, not fezes.

 
Comment by NotInMontana
2008-06-25 14:23:16

Egad. last time I went to Las Vegas to play was with a cheapo junket and we stayed at the Slots-o-Fun motel and casino. They had this fountain that rained watered-down magaritas.

At least it was on the Strip! :O

 
 
 
 
Comment by arizonadude
2008-06-25 07:30:56

Mcdonalds has signs here in the valley offering 10.00/hr if you can flip a burger.I notice a lot of bartendars hurting around here.People are not going out as much right now.

I talked with my brother who lives in wyoming and he said things are gooding pretty good up there.Evidently illegals are finding their way up there for energy jobs. The amount of coal shiped out of there on rails is mind boggleing.

Comment by aladinsane
2008-06-25 07:41:36

You’d be hard pressed to find a non Latino working @ a fast food joint in the city of angles, I wonder how long before whites clamor for the position?

Comment by Arizona Slim
2008-06-25 09:35:14

Wait a minute. Wasn’t fast food one of those jobs that whites just wouldn’t do?

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Comment by Red Baron
2008-06-25 10:57:33

That’s right, why can’t I find people to work hard picking vegetables or cleaning toilets for $6 per hour with no benefits? Americans are so lazy these days.

Keep the popcorn popping,

Red Baron

 
Comment by EmperorNorton_II
2008-06-25 11:29:47

It’s 2 cultures riding an escalator at the same time, one going up and one going down, and they are meeting @ the halfway point presently.

 
 
 
Comment by crash1
2008-06-25 11:34:56

An ad in a local Wyoming newspaper is offering $25/hour for working on a “fracking” crew. $50/week bonus if you have a drivers license. Fracking is where you pump hydraulic fluids into a rock formation to fracture the rock-allowing natural gas to flow.

 
Comment by Left LA / Moved to Chicago
2008-06-25 11:58:45

I worked as a dishwasher, bus boy, and waiter from 16-22. Bartenders, I thought, were always a bit overcompensated compared- and we had to give them a portion of our tips. If they open a beer, they expect a dollar - minimum. So a $7 beer + $1. It gets a bit ridiculous.

 
 
Comment by NoSingleOne
2008-06-25 08:27:19

There are a lot of people who are hurting economically, but the usual “free market” solution is tax giveaways (R), free health care (D), and numerous entitlement programs (both). No discussion however of stanching the flow of outsourced jobs.

Comment by potential buyer
2008-06-25 09:50:47

Not sure how one relates to the other. You can still have a job and not be able to afford health care. Good health should not be for the elite only, should it?

Comment by Arizona Slim
2008-06-25 10:15:06

Or, for that matter, health insurance. That isn’t exactly a bargain either.

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Comment by NoSingleOne
2008-06-25 10:22:54

“Free” health care is posited as a solution for America’s decreasing of corporate competitiveness. This is supposed to magically happen without raising taxes. We need a rational tax policy before we can have nationalization of the health care industry.

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Comment by Red Baron
2008-06-25 11:06:41

Bingo. Offshoring is creating two massive long-term problems for the US.

The first problem is that R&D is now increasingly conducted offshore, which means the US will eventually lose its competitive edge. Chinese, Indians, and others will realize, “Why should I work hard making money for some US company when I can start a company and make all the money myself?”

The second problem is that entry-level jobs in many fields are migrating offshore, which means there will be fewer opportunities for US residents to get in on the ground floor in many industries.

Keep the popcorn popping,

Red Baron

 
 
 
Comment by Tim
2008-06-25 07:13:04

“Denver-area homes lost an average 4.7 percent of their value in the 12-month period that ended in April.”

A mere drop in the bucket, but it just started here and ppl are steaming. I got in trouble yesterday by a young associate. She bragged last year how much her home had gone up in value and she was living the high life. I was talking to my secretary yesterday about what I thought the next 24 months would bring as she even noticed the number of new deals dropped about 80% and I am doing 500% more restructurings. Housing came up. The associate, whose office is next door to my secretary’s later came into my office and asked me to not talk negatively outside of her office about the economy. I bit my tongue as I have been reported before for speaking the truth, rather than being politically correct. She isnt in my group thank God. We get these crazies from top schools going on and on about politics and other things they dont understand, who also think they have the nerve to chill work related speech in the hallways because it doesnt fit into their view as to how the world should be. I didnt btch when she was bragging how much her house went up in value, and when she was talking about all the new clothes and other crap she was buying. I wish I could do all the hiring.

Comment by Ben Jones
2008-06-25 07:16:56

It’s not a drop in the bucket when you consider prices have been falling in Denver for 3 years plus.

Comment by Tim
2008-06-25 07:23:17

In certain outlying areas. The nicer intown areas where I have been looking - Park Hill, Washington Park, Hilltop, Country Club, Lodo, Cherry Creek, the Highlands (not the Ranch), etc. have all been going up substantially since I moved here 4 years ago. Didnt start declining until just this year.

Comment by In Colorado
2008-06-25 07:47:25

The market on the Front Range is very fractured, but most burbs and other places, like Longmont and Ft. Collins have been seeing slow but steady declines. In my neighborhood there are few houses for sale, and even fewer sell. New construction is pretty much at a standstill. Commercial has also ground to a halt. McWhinney has quietly cancelled his next expansion in Centerra.

“Boulder mortgage banker Lou Barnes said that tightness combined with a weakening economy made it premature to call a bottom”

I would say that the economy here has been weak since 2001. Denver is a branch office town, and there never has been a lot of good jobs. In the late 90’s we did have the telecom boom, but when that went pop thousands lost their jobs. Sun Microsystems campus in Broomfield is a ghost town, even though they bought out Storage Tech. Its always been hard to get a good job here.

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Comment by AdamCO
2008-06-25 07:49:55

How much can land in a treeless desert really be worth?

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Comment by Lost In Utah
2008-06-25 08:05:31

If you’re talking about Denver, it’s actually plains and had many nice riverbottom trees from where the Platte flooded each year. I’ve seen photos of it taken many years ago before it was a city and it actually was really pretty. Not any more.

 
Comment by DinOR
2008-06-25 08:05:42

AdamCO,

Glad you asked. It’s something I keep coming back to.

Let’s pretend for a moment that not (1) of the homes listed in PHX/LV etc. are in foreclosure. Not ONE! Every last specuvestor was every bit as qualified as the ficitious person they portrayed on the mortgage application! All payments are current, HOA’s are up to date and fully funded, common areas are being meticulously maintained and even the clubhouse is fully stocked!

Well… they’re still freaking EMPTY!

If you’re like me you’ve gotten more than a little tired of hearing about “it’s all these foreclosures that are gumming up the works”. Current or not, they’re unoccupied. Kind of the way land in the middle of desert was MEANT to be!

 
Comment by iftheshoefits
2008-06-25 08:31:22

Adam, the short answer is, depends on whether there’s developable water, and water rights to be had.

Torrey is having its annual water crisis. Everyone knew it because the water pressure’s been way down for a couple weeks. But they did nothing until some homes lost all water. There’s some humongous leaks that they haven’t bothered to fix. They don’t monitor flows or read residential meters so they don’t know what’s going on until the leaks get out of hand. And they don’t have the equipment to detect the leaks, so we wait while they try to borrow a leak detector.

No restrictions here, water is $11.50/month. In a freakin’ desert. So last night the 80yo mayor drives around in a fire truck for a couple hours with a bull horn, yelling “No outside watering! No outside watering!” Water was to be turned off completely overnight, but it didn’t seem to happen. This is in a resort town, just 10 days before the peak weekend where water demand surges at least 4-5X, I would guess. I’m not making any of this up. It’s just bizarre.

 
Comment by Lost In Utah
2008-06-25 08:37:54

“So last night the 80yo mayor drives around in a fire truck for a couple hours with a bull horn, yelling “No outside watering! No outside watering!”

ROTFLMAO!!! Sounds like some of the stories I’ve heard about Bluff.

 
Comment by iftheshoefits
2008-06-25 09:00:17

We were joking that if we had a bullhorn we should follow the fire truck in our own vehicle yelling “Bring out your dead! Bring out your dead!”. The whole thing feels pre-enlightenment to me.

 
Comment by Lost In Utah
2008-06-25 09:16:12

“pre-enlightenment”

Definition: small-town government in Utah :)

 
Comment by EmperorNorton_II
2008-06-25 09:45:59

“So last night the 80yo mayor drives around in a fire truck for a couple hours with a bull horn, yelling “No outside watering! No outside watering!”
____________________________________________________

So imagine the mayor of the city of angles riding a firetruck, begging around 10 million people to not water their lawns and wash down their driveways?

 
Comment by In Colorado
2008-06-25 10:06:09

So imagine the mayor of the city of angles riding a firetruck, begging around 10 million people to not water their lawns and wash down their driveways?

He would have to broadcast in 70 different languages.

Que dijo?

 
Comment by potential buyer
2008-06-25 10:34:00

‘but i’m not dead yet’ Spamalot

 
Comment by In Colorado
2008-06-25 12:12:52

How much can land in a treeless desert really be worth?

I hear you. Out of staters think that Colorado is wall to wall forests. When they visit the front range they always ask “where are the trees”. At that moment I point up at the mountains.

 
 
Comment by pb_2_au
2008-06-25 10:41:04

In the areas you mention, asking prices have been steady (but I think actual sale prices are softening). Many scrape/pop & flip small fry builders plus steady growth of townhome/condos. unable to ply their trade in the exurbs anymore have been lured into the close in areas. So inventory ramping… but sales are way down, and we know where this goes eventually. Especially since the number of high priced homes where you’re talking are in no way supported by the demographics around here.

It will be slow but the wishing 1/2 million(+) dollar 3/2 renovated bungalows will IMO be 300k once the dust settles. The income engine simply don’t exist for the youngish population to afford much more.

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Comment by Bad Chile
2008-06-25 08:50:52

Correct - according to Case-Shiller, Denver is at April 2004 levels. That is over four years of YOY drops.

Comment by Tim
2008-06-25 09:01:55

I think they are using metropolitan statistical area numbers, and some other cities are experiencing the same (i.e., suburban areas declining, and desirable neighborhoods intown taking longer to crack). As stated by In Colorado and others it’s a fractured market. In Denver there were tech suburban campuses built when tech was big out here that just died. Others have expressed some frustration that the numbers look like there are bigger declines in some cities than they are seeing in specific neighborhoods they have an interest in. I have no doubt it will turn though.

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Comment by In Colorado
2008-06-25 09:58:37

In Denver there were tech suburban campuses built when tech was big out here that just died.

I would love to see what the actual breakdown in tenants in the Denver Tech Center actually is. I’ll bet anything the Real Estate and Financial business is far more representative than actual tech biz.

 
 
 
 
Comment by Blano
2008-06-25 07:20:43

No offense, but can’t you just tell her to go put a sock in it, or would your position be endangered in some way?? This punk broad needs to be put in her place.

 
Comment by Ceylon Tea
2008-06-26 06:48:45

Dude, are you a lawyer?

 
 
Comment by aladinsane
2008-06-25 07:25:32

“Mortgages Ltd. has made several changes to its business, prompted by the
apparent suicide of Chairman and CEO Scott Coles on June 2. The company financed commercial real-estate projects for developers using money it raised through accredited investors to fund the loans.”

“It’s unknown what developments are among the estimated 70 loans in the embattled Phoenix company’s $925 million loan portfolio.”
________________________________________________________________

Which Phoenix banks are on the hook for $925 Million?

They’ll be joining Scott soon…

 
Comment by hwy50ina49dodge
2008-06-25 07:33:31

“Some real estate agents are being forced to take other jobs to make ends meet.”

In Aspen, let’s see…”I now import “Sasha” cucumbers from Argentina and marinate them in “Barcelona” Bull semen, I then add a little Ms. Dash organic salt seasoning, and carefully place them upon my “clients” eye sockets for 45 minutes. I really like my new “part-time” “organic cosmetic” facial beautification assistant-in-training apprenticeship job, but… I’m going to keep my NAR annual fees paid because I’ve heard rumors that some “new clients” from Dubai & Saudi Arabia will be flying in over the next few months. Isn’t it just terrible what’s happening to those poor folks in Sudan?

;-)

Comment by Lost In Utah
2008-06-25 08:14:30

LOL!! You joke, but I know a woman there who is probably about 25 and does facials and is making enough to have bought a $500k house near Aspen…wait…never mind, probably got her loan from the strawberry picker’s mortgage company…

 
Comment by Blano
2008-06-25 08:38:38

LOL don’t forget the candle shop!!!

Comment by wolfgirl
2008-06-25 08:53:53

Or the pagan stores

Comment by Lost In Utah
2008-06-25 08:59:50

Hey, you dissin’ my tribe??? :)

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Comment by Faster Pussycat, Sell Sell
2008-06-25 09:47:39

Only the ones that sell the “new age” ornaments.

Embrace the Earth Mother. Dance to the vibrations of the universe, my child. We are all stardust, stardust.

Now, I will sell you this overpriced crap. :-D

 
Comment by EmperorNorton_II
2008-06-25 09:52:33

If I never saw another Kokopelli doodad, i’d be ok with that.

 
Comment by wolfgirl
2008-06-25 10:00:17

I’m pagan. It’s just that the stores around here are high priced crap. And located in flea markets, open only a few hours on the weekend.

 
Comment by In Colorado
2008-06-25 10:02:10

LOL! As some of you know, I have a black belt in Tae Kwon Do. Due to being an old geezer (and the arthritic knees that come with being an old geezer), I have been looking for a “kinder, gentler” martial art to practice. So I looked into Tai Chi, and contacted the Sifu at a local school. Anyway this guy (a westerner) starts spewing all this new age mumbo jumbo about drawing energy from the earth, etc. I thanked him for his time.

 
Comment by Lost In Utah
2008-06-25 10:12:30

My religion is Freedom-from-Religion.

I used to teach a class called “How to Tell the Difference Between Religion and Science” to a private high school. This was after I heard someone was going into the geology class and teaching about crystal power and such. The geology teacher was bummed, but the school had a guest teacher policy and he had no choice. So I would follow it up with my class. The kids found the whole thing very entertaining, they weren’t stupid.

 
Comment by Faster Pussycat, Sell Sell
2008-06-25 10:14:35

One of the more entertaining moments in my life was at a San Francisco farmers’ market.

A middle-aged woman was patiently holding her chakra over all the vegetables.

I really really really wanted to ask her what was going to happen. Would it vibrate? Would it burst out into song? But no, the chakra simply lay there dangling. Apparently, the asparagus did not “speak” to her but the kiwi fruits did.

The asparagus definitely spoke to me, and we cooked a delicious omelette with it. :-D

 
Comment by Arizona Slim
2008-06-25 10:17:33

Ahhhh. This blog’s really turning into something nice. Now it’s a place for satirizing the New Age. Good on all of you!

 
Comment by Lost In Utah
2008-06-25 10:28:25

“If I never saw another Kokopelli doodad, i’d be ok with that.”

Hey, you dissin’ my tribe?? :)

Oh man, I HATE that little bast@rd. I can’t tell you how much I HATE that little bast@rd. And then when friends come from other faraway places (like the United States), they always want to buy a Kokopelli. It has something to do with how much I hate him. It keeps me motivated, though, if I screw up and get REALLY poor (I’m already poor), I might have to work in some gift shop in Moab selling Kokopellis.

/rant

 
Comment by combotechie
2008-06-25 11:05:00

“The asparagus definitely spoke to me …”

Beans will too if biologically processed.

 
Comment by Lost In Utah
2008-06-25 12:14:28

So will pigweed. :)

 
 
 
 
 
Comment by Red Baron
2008-06-25 07:45:25

“‘I believe that we’re kind of bouncing along the bottom,’ Capurro said. ‘Even with the uptick in unemployment and interest rates, it’s still a relatively good environment for buyers. The affordability of homes hasn’t been better than it is right now in approximately five years.’”

YOU FOOL! The Realtors (TM) have been spouting the same bullshit for almost two years. It is always a great time to buy or sell a home when you are making 5% to 6% on the transaction price for doing almost no work.

All I can say is that the affordability of homes is going to get a whole lot better in the next four years as the whole world realizes that US consumers are out of money–they can’t earn more, they can’t borrow more, and they can’t save less because they are already saving nothing. In many areas, Realtors (TM) will be literally BEGGING people to buy homes at monthly costs below the monthly costs of renting equivalent homes.

Keep the popcorn popping,

Red Baron

Comment by Lost In Utah
2008-06-25 08:39:09

Hey Red, just wanna let you know I heeded your advice and got a job. Now what else was on that list??? :)

Comment by Red Baron
2008-06-25 09:07:14

Here is the list–everyone should put it on their refrigerator

1. Get and keep a job.
2. Rent so you can be mobile for your job.
3. Save or invest at least 25% of your after-tax pay.
4. Eliminate debt unless you could pay it off if you lost your job.

Again, I apologize to those who have already read this list, but it is important, and it deserves to be repeated.

Keep the popcorn popping,

Red Baron

Comment by michael
2008-06-25 09:19:27

1. got a great job.
2. sold condo, moving to rental July 10.
3. saving more than half.
4. mortgage on NY rental property that is way way cash flow positive.

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Comment by CarrieAnn
2008-06-25 09:39:48

“mortgage on NY rental property that is way way cash flow positive”

I think there’s a few of you out there.

 
Comment by Red Baron
2008-06-25 10:45:29

Good job.

Keep the popcorn popping,

Red Baron

 
 
Comment by Bill in Carolina
2008-06-25 09:55:43

1. No job, retired.
2. Retired, mobility not a priority.
3. Saving nothing, but barely tapping retirement funds.
4. No mortgage, no debt.

However, we realize #2 could become a priority if one of us were to become disabled. It would be very hard to sell this house right now. But with no mortgage, we could go as low as we needed to.

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Comment by wolfgirl
2008-06-25 10:13:25

Much our situation. A few years from retirement with only a couple of years left to pay on the house. We live within current walking/bicycling distance of Walmart, two other grcery stores, two drug stores, a thrift store, and a Family Dollar.

 
 
Comment by wolfgirl
2008-06-25 10:09:48

I keep journals with my thoughts and important information. Your list made the cut.

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Comment by Red Baron
2008-06-25 10:51:31

I am honored.

Keep the popcorn popping,

Red Baron

 
Comment by wolfgirl
2008-06-25 11:50:45

I’ve learned a lot here. It helped us decide that staying where we are is overall better than moving. In our 20’s we rented and moved a lot. Husband was in radio then.But we didn’t want to have the kids changing schools a lot, so we came back to his hometown and settled down. it’s been pretty good for us.

 
 
 
 
Comment by betamax
2008-06-25 09:14:15

‘I believe that we’re kind of bouncing along the bottom,’ Capurro said.

Wait till he finds out they’re still in the shallow end of the pool.

Comment by SDGreg
2008-06-25 09:31:59

“‘I believe that we’re kind of bouncing along the bottom,’ Capurro said.”

When do we see his bottom bouncing on a cayenne-tipped JT?

 
 
 
Comment by hwy50ina49dodge
2008-06-25 07:50:02

“…The affordability of homes hasn’t been better than it is right now in approximately five years.’”

Hey Wayne, there is this book you might be interested in, something tells me you’ve might never have heard of it:

http://www.amazon.com/True-Believer-Thoughts-Nature-Movements/dp/0060916125

 
Comment by Lost In Utah
2008-06-25 08:09:58

This is a blog by a guy in W. Colorado and he seems to have a pretty astute eye, I should invite him to read Ben’s blog.

mikefolkerth dot com (no www)

This is the prime season for tourism and it was noticeably down everywhere we went. From the Oregon coast through the Redwoods National Park and continuing through the Mother Lode country of California, to Lake Tahoe, Carson City and back across Utah to Colorado, you could see and feel the stress of tourist oriented businesses.

We could get a room anywhere even late in the evening without reservations. The room rates were reasonable due to the competition for the few tourists. The restaurants were never crowded nor were the parks. The gift shops were nearly vacant and had sale signs hanging in most windows.

Gas in California averaged $4.75 per gallon. California is in big trouble. In some of my past writing I have talked about the economics of living in a high cost area when things turn down. It gets real ugly real quick.

California has massive state debt that I don’t believe will ever be in the black again. The growth necessary to bring tax revenues up to a point of balancing the budget is most probably mathematically impossible.

We came over a pass in Northern California along the Trinity River (which is knock dead gorgeous) and saw some 20 forest fires that had just started from lightening. We leaned on the news that there are some 400 wildfires burning in the state!

We stayed in Carson City and were told that the Casino business was very slow. If the highway traffic was any indication, it will probably remain that way.

Fuel at $4.75 per gallon is a show stopper and we saw few license plates that were from outside the different regions. In other words we saw Oregon plates in Northern California, California plates in Western Nevada, but no Ohio or Michigan plates in the far West. Travel is being limited.

…The gift and antique shops were real tell-tale signs of the recession. We walked through several large shops on major routes where we were the only people in the shop the entire time we were there.

I believe that what we saw is the tip of the iceberg and like the airlines, tourism and gift related businesses will continue to suffer. These areas of nonessential commerce represent things we want but don’t need.

Comment by EmperorNorton_II
2008-06-25 11:03:09

If it wasn’t for foreigner visitors taking advantage of the lowly greenback, it’d be mighty slow around these parts…

 
Comment by iftheshoefits
2008-06-25 11:31:10

We keep asking in town, and they keep saying that business is doing OK, but I’m not quite believing them. It’s definitely much quieter, both on Main Street and off. 2nd homes getting less use than normal. And the ATV din is down noticeably, as I somewhat hopefully predicted here a few months ago.

The percentage of Priuses seen cruising through town is really amazing, though. All my other comments notwithstanding, Torrey has a distinct appeal for a particular Salt Lake demographic.

Comment by Lost In Utah
2008-06-25 11:44:17

I was down in Moab a few days ago and it was very quiet. This is when all the Euros come visit, when it’s nice and hot, all the Japanese, also. No traffic at all. I spent a few days there the first weekend in June and it was crazy.

Comment by iftheshoefits
2008-06-25 11:51:43

Read your article in the Zephyr that you linked below. I think that Moab is the canary in the coal mine for Torrey as far as how long the real estate insanity will last. It’s not different here, but prices are amazingly resilient. I think a lot of it has to do with the fact that there’s very little private land and/or water to be had.

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Comment by Lost In Utah
2008-06-25 12:21:03

Absolutely. Grand County’s something like 98% federal. But the scene there’s slowing, I would think Torrey would be slowing even more cause of its lesser size/fewer amenities/greater distance. Not much on the market there, though, not like Moab.

Hey, Shoe, I saw mention somewhere of a writer who now lives in Wyoming and once lived in Torrey, apparently he wrote a book about it, know anything?

 
Comment by iftheshoefits
2008-06-25 12:50:59

I don’t. If anyone would know it would be the folks at the Robbers Roost bookstore. I figured that you already knew about them and probably sold some of your publications that way. If you don’t, you should make contact, it’s the perfect type of outlet for your material.

Was that Zephyr arictle documentary, story-telling, or something in-between? Whatever it is, it’s great writing and made for enjoyable (though bittersweet) reading, about the Great Western Land Grab.

 
Comment by Lost In Utah
2008-06-25 13:07:08

Thanks, it was true fiction. Radium was Moab, Johnsons Up On Top was Johnny’s Up In The Rocks, etc.

Moab just begs to be charicaturized (whatever that means, maybe it’s kind of like pasturized or something). :)

 
 
 
 
 
Comment by Lost In Utah
2008-06-25 08:11:28

“the development of a planned 6,000-acre, 577-housing-unit development in Spring Valley.”

If anyone’s wondering where this is, it’s on a plateau not far from Glenwood Springs, Colorado, about 40 miles from Aspen.

 
Comment by michael
2008-06-25 08:20:24

OT - I was reading the article related to the BoA/CFC bailout plan and got this snippet…

“The mortgage aid plan would let the Federal Housing Administration back $300 billion in new, cheaper home loans for an estimated 400,000 distressed borrowers who otherwise would be considered too financially risky to qualify for government-insured, fixed-rate loans.”

…that’s 750k a piece? or is my math wrong? WTF?

Comment by Thud
2008-06-25 11:45:43

More fun with numbers. As to the $750k each, well there should be some overhead costs, commissions and so forth to administer these programs that would reduce the $750k apiece.
So if overhead is $18B of the $300B-6%, that could hire 180,000 $100k-a-year worker bees for a year. This would require each worker be required to administer slightly over two mortgages during said year.
Who-hoo! WTF! is right.

Comment by Mole Man
2008-06-25 13:12:51

That is for a fund that is used to insure loans that banks are taking the biggest hit on. We’ve been through this before. Most of the renewed loans, which are only a tiny fraction of recent loans, are likely to be paid off. That means this fund, which is only something like a quarter what has been spent on Iraq so far, is likely never to be spent. I don’t like it either, but the near total lack of cogent rationality on the part of bailout callers isn’t helping.

 
 
 
Comment by Lost In Utah
2008-06-25 08:32:08

Intelligent, savvy, smart, and good-looking HBB friends, I have a question for you.

The humble people of Moab, Utah, have been fighting a big high-end development for years. It’s called Cloudrock and is on a big mesa above town that can be seen for miles, will really impact the way the area looks. It’s an out of town developer, of course, and he’s well-known for being a snake (OK, sorry snakes, don’t mean to malign you, he’s actually worse). It’s an Aspen kinda thing.

It has now finally started advertising and building will be commencing soon.

Everyone in town is bummed (well, almost everyone, not the RE pigs), but I tell my friends there not to worry, it won’t happen. It may get started, but it just won’t take off because of the economy. They of course haven’t read Ben’s blog so they think I’m smokin’ some of that pigweed that grows down by the river.

The question: am I gonna have to pay out all the bets I’m making on this not happening? Are there enough richyriches left that might prove me wrong? (Somehow I think this is a rhetorical Q, but just need reassurance, I guess…)

Comment by DinOR
2008-06-25 09:05:09

Lost,

It’s been my experience that projects get built not so much because they were economically viable but more that a lender was willing to lend. With the credit spigot nearly turned off completely I can’t see how this guy will find bridge financing.

I suppose it’s possible he has ’some’ of his own money to get started but little more. Celebrities ARE celebrities b/c they are dialed in to what’s trendy. Ever since George Clooney backed out of Los Ramblos in LV they’ve toned down their hunger for ever more fashionable diggs. In the end this was all just a “trend” anyway.

Comment by bink
2008-06-25 10:01:03

A few months ago I would’ve agreed with you. But now I’m seeing a number of previously abandoned developments start to kick up some dirt in the DC area. These places had posted signs that said “opening spring 2007″ that slowly fell down and decayed. Within the last month they’ve put in trailers and pushed the dirt around. Some fools have to be paying for all of this.

 
 
Comment by EmperorNorton_II
2008-06-25 09:50:42

Lost…

I’ve seen the development you speak of, and hopefully it gets nipped in the bud. Failure is our friend in this case.

Comment by Lost In Utah
2008-06-25 10:16:58

Lad, you might enjoy a story I wrote about it in a Moab rag, all with illusion to various Moab places/businesses.

http://tinyurl.com/3qd378

Comment by EmperorNorton_II
2008-06-25 12:44:56

Nice tale!

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Comment by potential buyer
2008-06-25 10:53:13

But to pay off your gamblin’ debts, you can sell some of that pigweed.

 
Comment by mikey
2008-06-25 12:10:40

Lost, give them all IOUs if you lose. Sometimes it’s more fun to owe FOOLS money than cheat them out of it.

Oh..and have a really FAST horse saddled and reaqdy to go :)

Comment by Lost In Utah
2008-06-25 12:31:17

Another Bus Hatch the riverman story. He loaned a guy he worked with (before he started his rafting biz) $15, the guy was a big ironworker. Bus finally figured he wasn’t going to pay him back, so confronted him and the guy said never, so Bus hit him and they got into a big fight. Bus lost. Never got the money.

After that, he told everyone he’d never die broke, no matter what, cause that guy owed him $15.

 
 
Comment by lavi d
2008-06-25 12:23:56

…am I gonna have to pay out all the bets I’m making on this not happening?

Watch and see what gets built. I assume model homes will get built first. If the models go up, watch and see what kind of traffic there is.

That should tell you all you need to know about the health of the project.

For reference:
Coyote Springs

Comment by sagesse
2008-06-25 15:47:42

Great photos. Must say, have driven extensively through the vast spaces of the south west, and enjoyed it. But this location is truely …remote?? (I-80 through Northern NV is the most boring road already).

 
 
Comment by sagesse
2008-06-25 15:22:12

There was this ‘developer’ from AZ who played games with ranchers in a town just south of Heber City, UT (can’t remember the name). He had huge plans for another ski resort, just a year ago. There was something about incorporating, which irked locals, but my brain gets numb when it comes to the topic of incorporation and who is for or against etc.
Anyways, seems like these plans did not fly & have not heard of this since. Just imagine, another ski resort, as if we needed one. In any case, there was opposition re getting the required land, but even if he had, I laughed at the whole thing, given the current economic situation.
Seems your Moab guys try the same old - same old ‘retire here’ theme. No chance. Let them go bancrupt.

I should change my screen name, as I am no longer in the midst of sagebrush country. Never inferred that I am wise.

 
 
Comment by Jennifer St. Clair
2008-06-25 09:08:23

S&P CASE-SHILLER HOME PRICE INDEX
Percentage change in home prices in April 2008 compared to a year earlier.
Atlanta -7.5%
Boston -6.4%
Charlotte -0.1%
Chicago -9.3%
Cleveland -6.8%
Dallas -3.4%
Denver -4.7%
Detroit -18.0%
Las Vegas -26.8%
Los Angeles -23.1%
Miami -26.7%
Minneapolis -15.5%
New York -8.4%
Phoenix -25.0%
Portland -4.7%
San Diego -22.4%
San Francisco -22.1%
Seattle -4.9%
Tampa -20.4%
Washington -14.8%
20-city Composite -15.3%

 
Comment by sohonyc
Comment by Arizona Slim
2008-06-25 09:51:45

Key graf from the story:

American Express’s affluent customers help shelter the company from problems of borrowers with the riskiest credit histories, Chenault said June 4.

 
 
Comment by jones
2008-06-25 09:37:24

Renting not a good option:

I sat down and did an in-depth review of my 2 properties — home I live in (50% equity) and underwater beach property (-100k). Taking into account all costs, deductions, small seasonal rental income, etc. It is slightly cheaper for me to own these 2 properties than rent the house next door. I was hoping it was not the case. I wanted to dump them both and rent for 4 years, when we may move for kids’ schools.

The numbers don’t work. Sigh.

Comment by sfbubblebuyer
2008-06-25 10:44:13

Don’t forget to account for what they’ll sell for in 4 years. Which will likely be less than what they’ll sell for right now.

Comment by jones
2008-06-25 11:04:21

If Case-Schiller, etc. is predicting a trough in 2010-2012. I think the prices could be the same or maybe a bit higher.

 
 
 
Comment by SDGreg
2008-06-25 09:41:59

“‘Prices have gotten too low, and I just don’t see how they can build these new houses and sell them without losing money, especially with the higher cost of fuel and everything else,’ Capurro said. ‘The existing home market has to improve first.’”

Prices have not gotten “too low”. If they can’t build without losing money, they shouldn’t build.

“Short sales and bank-owned properties also remain an issue. Such properties account for 40 percent of inventory in the market but two-thirds of all sales, which should push down median sales prices for two to three more months as they go through the system, Capurro said.”

That should read two or three years, not months.

“‘I believe that we’re kind of bouncing along the bottom,’ Capurro said. ‘Even with the uptick in unemployment and interest rates, it’s still a relatively good environment for buyers. The affordability of homes hasn’t been better than it is right now in approximately five years.’”

It’s always a good time to buy just before one loses a job. These three paragraphs have earned Capurro at least three cayenne-tipped JT treatments.

Comment by Tim
2008-06-25 09:59:50

“‘Prices have gotten too low, and I just don’t see how they can build these new houses and sell them without losing money, especially with the higher cost of fuel and everything else,’ Capurro said. ‘The existing home market has to improve first.’”

No. You just have to negotiate better on the land, labor and materials, and trim your fat. If you overpaid, I cant help you.

 
Comment by Thud
2008-06-25 11:54:25

“‘Prices have gotten too low, and I just don’t see how they can build these new houses and sell them without losing money, especially with the higher cost of fuel and everything else,’ Capurro said. ‘The existing home market has to improve first.’”
Yes, that comment jumped out at me, too. Like some useless Realwhore has the first clue about construction costs–not!

 
 
Comment by taxmeupthebooty
2008-06-25 09:45:37

AZ Lenader or others
how do you find a private lender in your area ?
I’m n Northern Virginia

tia

 
Comment by Mormon_Tea
2008-06-25 10:07:36

“Last week one of Aspen’s most prolific real estate agents, Rich Wagar, had to cut loose his nine associates, partly because of a local property market that is increasingly mirroring the national condition.”

“‘I think it was a surprise to everybody,’ Shael Johnson, one of the casualties of Wagar’s restructuring, told The Aspen Times.”

Well then, it will REALLY come as a total shock,
a complete surprise, and head-scratcher, to the REALTY crowd, when the public migrates over to the broker-less internet when, as, and IF, they ever want to transact real estate business in the future.

Why should anyone, anywhere, EVER, pay huge commissions to idiots who are as clueless as a barnacle about their supposed “profession”?

You can trade $250,000 worth of IBM for twenty bucks.( Or less) The day is coming when the public will relegate the high commission RE crowd to the junkpile of bad ideas whose time has come and GONE.

Comment by taxmeupthebooty
2008-06-25 10:16:49

I agree
I made deals w/o realwhores before the net - now it should be even easier
sold my car in 2 hours w craigslist- get the price right and bang, it’s done

 
Comment by Arizona Slim
2008-06-25 10:21:49

Some news from the VC front. Being one who despises the phoniness at business networking meetings and doesn’t get much worthwhile response from advertising, I take to the phones in order to find clients.

Today, I’ve been prospecting companies funded by venture capital companies. On the lists I’m using, I’m finding quite a few in the health care, pharmaceutical, IT, and social media spheres. But online real estate ventures like Redfin? Not seeing ‘em.

So, Mormon Tea, you may be on to a good business idea, and it’s one that the VCs aren’t being crushed with.

 
 
Comment by adge
2008-06-25 10:21:40

I understand Americans love suburban living. But the Spring Valley development goes beyond suburban sprawl to being just wasteful. A mere 577 housing units on 6000 acres of land.

What’s the need to space houses 2500 ft apart?

Comment by redmondjp
2008-06-25 13:55:44

I visited friends in a rural residential development of this type in central Washington state, about a 30-minute drive west of Yakima. Down this gravel road through what seemed to be the edge of civilization, then all of a sudden, a nice, wide paved entry up the side of a hill to a security gate (non-staffed) with a digital entry pad. Enter code, get through the gate (and you can’t see a single house yet at this point–just tumbleweed), and then we got LOST inside–it was another 2-3 MILES from the gate to their house! Each house had either 2.5 or 5 acres and they were 1/4-1-2 mile apart (many lots still bare). Each place has its own well & septic.

We rarely visit them anymore since they are so far out of town that it takes too long to stop there and then get back to the freeway (we travel through Yakima to visit relatives a few times a year).

 
 
Comment by Former FB
2008-06-25 10:22:34

“Locally, we are closer to bottom than nationally, if only because our price peak passed in 2001,” Barnes said. “Foreclosures here may soon stop rising, but the plague will be with us for another couple of years.”

Counter-intuitive as it might seem, I suspect that this happy bit of information might actually imply Denver being farther from the bottom than everyone else rather than closer, depending on how bad things get. The list that’s been posted a few times in the last couple of days showed that Denver is right in there with almost everybody else at ~2004 pricing. What happens if everybody goes to 1998 pricing? If Denver stays with them, that will be a much bigger step down for them than it is for everyone else.

It’s a stretch, I know, but still…

Comment by Ceylon Tea
2008-06-26 07:51:24

If you believe Kunstler (I do) then Denver is totally in the poo poo over the longer term. Without oil, the mountains make you eat your own. Anything beyond the simple journey will be undoable.

I guess the WY coal might help to keep houses warm (thankfully the rail is still there) but there ain’t gonna be much driving in 30 years.

 
 
Comment by Jack Jones
2008-06-25 11:06:59

Been around the block a few times. Stockbroker, restaurant owner, real estate agent, stuff like that. Observing current amazement (who could have guessed this would happen?) in financial and real estate circles with bemusement. It’s been obvious for the past several years what was coming, just not to what extent.

Here’s my take. House prices will revert to the mean. What a concept! You will buy a house at about 3 times your yearly income, with about 20% down. If you make $45,000 you will save $9,000, buy a $135,000 house to live in, not to make money on. You say there aren’t any such houses? Stick around a few years.

I think Japan is somewhere around 17 consecutive years of falling home prices.

Comment by Dave of the North
2008-06-25 11:29:18

Maybe they meant 6000 houses on 577 acres of land?

Comment by Dave of the North
2008-06-25 11:30:57

Comment meant to reply to adge’s comment at 10:21:40

 
 
Comment by Lost In Utah
2008-06-25 11:33:19

Jack, welcome to Ben’s Blog. You have just very succinctly stated its basic premise and raison d’etre.

 
 
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