‘Sellers Got Greedy Last Year, Buyers Are Greedy Now’
The Arizona numbers for March are out. “Metropolitan Phoenix’s resale housing market continued to slow in March. There were 7,265 existing homes sold in the Valley last month, a steep decline from the frenzied pace of March 2005 when buyers snapped up 10,035 resales. The price for a typical Valley resale home was $263,000 last month. The median is down only $2,000 from February.”
“Last year, sellers had the upper hand. Now, buyers have the leverage and, agents say, they are making sellers suffer. ‘Sellers got greedy last year,’ said (realtor) Diane Watson in Scottsdale said. ‘Buyers are greedy now. For buyers to bite right now, they need a really compelling reason,’ she said. ‘They’ve either got to move, or it’s a job situation. Other buyers, they just want to wait.’”
“Jay Butler noted that the first quarter of this year was the weakest since the first quarter of 2003. ‘Prices will start to come down in certain areas,’ he said. ‘Some of the older areas will hold prices better. We will see some decline.’”
“The Mesa resale housing market dropped from 1,125 sales a year ago to 830 sales in March. Butler said that while the trend toward normalcy continues, the overall direction of the local resale housing estate market would probably not become clearer until the second quarter.”
“Among causes for concern; interest-only and negative amortization loans accounted for 55 percent of sub-prime mortgages in Arizona in the first 11 months of 2005. That figure appears to have increased compared with the full-year figure for 2004, 42 percent.”
“Charles Ruscher, a lecturer at Eller College called the state figure horrendous. ‘When you have kind of a bubbled real estate market, you’re looking at probably inflated values. Even if the bubble doesn’t pop, if it starts to deflate, those people are going to be in a position that’s going to be impossible to repay the loan,’ Ruscher said. ‘If the real estate market stalls, slows down or starts to decline, then they’re stuck with an asset that isn’t worth as much as what they owe on it.’”
“Recorded sales in the city of Phoenix decreased from 2,835 sales to 2,300. The Scottsdale resale home market declined from 810 to 550 recorded sales. In Glendale, the resale home market decreased from 695 a year ago to 570 sales. The Sun City resale market fell from 215 to 150 sales; resale activity in Sun City West also fell from 95 to 65 sales.”
“The resale market in Gilbert decreased from 605 to 355 sales. For the city of Chandler, the resale market slowed from 680 to 510 recorded sales. The resale market in Tempe decreased from 230 to 190 sales. Avondale fell from 235 to 160 sales. El Mirage decreased from 120 to 60 sales. Goodyear declined from 225 to 95 sales. Surprise decreased from 450 sales to 285 sales.”
‘Sellers got greedy last year,’ said (realtor) Diane Watson in Scottsdale said. ‘Buyers are greedy now.’
This is rich coming from a realtor in ‘Snobs-dale.’
funny they are using the same word, “greedy”, to describe opposite concepts:
Sellers’ “greedy” = reckless
Buyers’ “greedy” = cautious
So any buyer who is unwilling to throw their life savings away on an overpriced flipper home is “greedy” now?
Stucco, I guess it’s because all the greedy buyers want more and more “instant equity” by offering a bit less on homes - haha
I think the concept is that any buyer or seller who isn’t willing to close at whatever price makes for the least work and fastest sale for the broker is “greedy.”
Wouldn’t you say that some of these buyers use to be sellers?
There’s alot of you on here who said you sold In 03′, 04′, 05′ and now are renting and put your extra cash In Money markets, CD’s ect.
I think it smart timing not greed, If your all this smart, why would you buy now if your reading (Ben’s blog).
I don’t think that the ones buying now are the smart ones, but rather the last of the stupid…unless they can nab something at about 50% of Summer 2005 prices. IMHO.
What is the only constant in each RE transaction?
The RE industrial complex.
It sounds like blame anyone but yourself.
It’s beyond “rich” - it’s downright offensive. Since when is it “greedy” to want good value for one’s housing dollar? Pot, kettle, black.
I have seen properties sit on the market for months in gilbert.Prices have gotten absurd over there.but as we all know it’s all about the payment these days.
One thing about the real estate market is that a small amount of properties currently active in a market can have a huge effect on the amount of total homes available. By raising the prices on a few homes you can create a lot of wealth for everyone in that market with a home. By lowering the down payment requirements the lending industry really has really inflated prices. I’m not sure that will ever go back to 20% again.
Ben,
Another common version of Snobs-dale is Snoots-dale. And the nickname more than fits.
Boy, are they going down along with all of their stupid Hummers.
Or, perhaps “Snotsdale.”
You have to listen closely and enunciate clearly when in the stead of other company, as it even sounds like the original.
Sellers got greedy last year,” she said. “Buyers are greedy now. Buyers need to recognize it is a healthy market. They can’t sit on the sideline waiting for it to fall apart. It’s not going to happen.”
Okay-the person with the crystal ball has spoken-throw away the cash
Sellers got greedy last year,” she said. “Buyers are greedy now. Buyers need to recognize it is a healthy market. They can’t sit on the sideline waiting for it to fall apart. It’s not going to happen.”
Wait …. ok, I had to get back up off of the florr where I was ROTFFLMFAO!
Thanks Ben, this was just the bit of absurdity I needed. Do they have even the slightest clue about what they speak?
Buys (flippers excluded) have been robbed silly. Now it’s time to get ready for some revenge. Buyer bashing is not going to help you, Diane!
Great! Now just find me an article like this about S. Cal.!
Seven months.
“Other buyers, they just want to wait”
No sh*t Sherlock. Last one in gets to pay the AC bill.
Sellers are *still* the greedy ones. They’re all asking prices 30% - 100% above intrinsic value. When prices fall 30%, *then* we can talk about buyers being greedy. Until then, it’s way too early…
If prices fall 30%, we’re still well above historical market trends for most of the country. I’d argue that if prices fall more than 50% in areas like S. Cal (e.g. smart friend bought a 3/2 condo for 150K in 2002 - sold for 375K in 2005 - 50% = 187.5K = “reasonable growth based on historic trends”) and buyers were still lowballing sellers, then yes, this “buyers are greedy” rubbish would hold some weight.
The lending industry has basically made it possible for anyone to get a loan. In order to grow the business they had to let more folks in the game.Grow the economy buy creating more long term debt, oh great.
and AZ hae net inflow of retirees , illegals
NE will really get clobbered
You know everyone makes such a fuss over “owning” a house where you owe more than it is worth:
— “Ruscher said. ‘If the real estate market stalls, slows down or starts to decline, then they’re stuck with an asset that isn’t worth as much as what they owe on it.’” —
This happened to me in Saratoga, CA in the ‘94 crash and it wasn’t the end of the world. I had a good strong income and just kept living my life. I did put off renovating the house at that time even though it was a mess.
But why would anyone willingly make this mistake, unless they simply did not understand the basics of net-worth preservation?
Right, but if you happen to be living in it and the market caves in that’s one thing. And don’t get me wrong, it could work out miserably if you are forced to move, lose your job, get sick, divorced… you get the picture.
BUT, buying at a time when the market is set to, in all likelihood, cave in like never before, amounts to willingly putting yourself in this precarious position!
Saratoga;…Good Point….I does not matter if you don’t want to sell and you can afford the payment….You likely road out the downturn and did quite well in the end….
I didn’t actually buy the house at the inflated price in 1989. My SO had bought it then, later in 1990 I bought half then later in 1998 the second half. So there were extenuating circumstances. He definitely overpaid in 1989.
Actually I didn’t buy the house at the inflated price (in 1989). My SO (before I met him), bought the house then. In 1991 I bought half, then in 1998 I bought the other half. In 1991 there was pressure on me to buy something because I had SOLD a house (in Belmont, CA) in 1989 and only had 2 years to roll over the gain (old tax rules). That tax law made people do things that might look kind of weird if you don’t remember the old tax laws. In my case it worked out OK because I bought my two halves when the market was lower or going up.
I couldn’t get this comment to post on the previous thread so I’ll try here.
Regarding the “appalling callousness” crap:
The target of our derision, callousness and general disgust should be directed at the government and organized real estate (NAR). Renters have every right to be pissed off. Homeowners (fat asses reclining on their barcoloungers), collect their middle class welfare check (mortgage interest deduction), and smugly contemplate $500,000 tax free gains (sale of their Fed-inflated overpriced houses).
I made the mistake of selling my house 7 years ago and not buying a replacement, as I wanted to concentrate on my business. I almost bought a house that today would sell for 5 times the salesprice in 1999. Who do I blame? ME. I will happily take advantage of the “system” as others have done when and if the opportunity arises.
Yes, I am pissed. I pay a shitload of taxes (over $50,000/year), have over $250,000 in savings, drive a piece of crap 96 chevy sedan, rent, and have worked my ass off over the last 7 years, while some bozo that did nothing other than “own” can walk with $500K tax free. Arrrrrggghhh.
Callous? You betcha. Appalled? Shove it.
Fred Hooper,
No need to worry. By the time the real estate bust is over, prices will be back to 1997 levels. You’ll be able to buy your old house back with current dollars.
funny how 1997-98 prices in many cases, even in the relatively unbubbly midwest here, seem about right in terms of what a house should cost given current average incomes! and hasn’t real wage growth been about nil since about 1998?
Get ready for the painful cries from the AZ desert. Ditto for all of CA and FL. Also the rest of the eastern seaboard and the PNW. The higher the ARM reset, the higher the pain. “But, but - Mr. Banker, I thought that a 1% increase meant only a 1% increase in my payment. I can’t afford the doubling of it, and now can’t refi for the 6th time.”
No one could be this dumb — could they?
“But, but - Mr. Banker, I thought that a 1% increase meant only a 1% increase in my payment.”
Absolutely. I’ve seen articles with those kinds of quotes many times in the past few months, here and in other places.
What’s happening out in abq these days? Have you got to take a balloon ride yet?
Pardon my ignorance but can someone explain to me how this works.
My question:
Increasing the interest rate by a one percent increases someone’s payment by how much? I don’t get it.
Fish;….a 1% increase on a 4% arm is a 25% increase in your payment….
in reality, at least have of these people have 1.0-2.5% teaser rates. thus, their payments will likely triple when the teaser period ends
I meant, “at least half” have teaser rates. sorry
ugh, and I meant “the interest on their payments” will triple– not the payments themselves. typing faster than thinking…
Ahh, I get it now. Thank you!
Here is a good excell program the shows the realities of purchasing an ARM
http://www.vertex42.com/ExcelTemplates/arm-calculator.html
Just look at how the interest rates effects those morgage payments. Mahahahaha
Depends on the starting interest rate. If you jump from 6% to 7%, your monthly mortgage increases by 11%. If you jump from 2% to 3%, the mortgage increases by 14%.
On a floating rate note, the increase in interest rates results in that much additional interest on the remaining principal of the debt per year. So if you were paying 4.5% and your rate adjusts to 5.5% on a $200,000 note your interest payments would increase by about $2,000/yr ($165/mo). Keep in mind that the payments on a 4.5% note would begin at about $12,000/yr ($1,000/mo). The size of the increase in payments depends on how late in the mortgage the rates adjust (earlier=bigger change in amount of the payment and how large the increase is relative to the rate it is changing from (% change in rates). A 1% interest rate shift will have a much larger impact on a starting rate of 3-5% than on a starting rate of 10-12%.
Here’s an ARM payment calculator:
http://www.vertex42.com/ExcelTemplates/arm-calculator.html
Excellent concise explanation, thank you!
You guys know there alot of Californian’s on this site and you keep using these low numbers 150k 200k 300k, here we would like to see more the same explination with numbers like 400k 500k 600k 700k 800k so at least I know how deep sh@T some of these folks are in.
Plus I want to buy some day and atleast I have some Idea what I’m In for at these numbers!!!
Thanks!
“LAUGH” There There Mike D OC you have to understand most sensible folks in other parts of the country have a hard time wrapping their minds around the sheer insanity of California home prices. I was a born here I’m in the real estate business, hell i’m a broker and I have a helluva time wrapping my mind around it.
Mike D OC,
I am right there with you. I looked at that calculator and did the math on a reset. A 700K mortgage at 4.5% would run you almost 3600 per month (all figures exclude taxes and maintenance). When the loan resets, it would jump to nearly 4700 and continue to rise by more than a thousand per month everytime it adjusts…according to the calculator.
Buyer greed? Hah!
The artificial demand this mania generated has given homeowners a sense that they would always have the upper hand. The absolute truth is that no one has to buy, but someone will always have to sell. Karma’s gonna be a b!tch, since a lot of people that thought they “had to buy” will soon have to sell — when there will be no one to sell to.
‘Buyers are greedy now. For buyers to bite right now, they need a really compelling reason,’ she said. ‘They’ve either got to move, or it’s a job situation. ‘
How can this be greed. I thought we were just returning to a normal market and in a normal market buyers needed a compelling reason to buy or sell and buy a bigger house. The job situation has always been a defining segment of the equation when considering to buy or sell a house.
The use of the word ‘greed’ here means….if they don’t buy I’m going to starve and I won’t be able to make my house(s) payment..
The fisherman are finding that the fish have now become greedy, and have stopped biting.
LOL ,you got it .
Give a man a fish and he eats for one day, sell a man a house in todays market and he eats Top Ramen forever….
or something like that…I flunked Bible Camp
>I thought we were just returning to a normal market and
>in a normal market buyers needed a compelling reason to
>buy or sell and buy a bigger house.
“I love that house…plus the schools.”
LOL — quoted by the b*tch in the Century21 commercial.
Well those buyers waiting it out better hurry and buy now before they are completely priced out and theres no one left who can afford a home…
There only thing really justifying a lot of these high prices was the fact that some investor was willing to pay that much for a home. Yeah you bought a house 5 years ago for 100K, now you can sell it for 250K but only because some yah-hoo thought that house was going to be worth 350K next year. Now it looks like those homes wont increase much and possibly decline in value over the next few years so the only willing buyers are those who are planning to live there.
“There only thing really justifying a lot of these high prices was the fact that some investor was willing to pay that much for a home.”
And the only reason many investors were willing to pay that much was that some lender provided the opportunity to do so with no skin in the game (100%+ financing with other peoples’ money).
You are so right Getstucco about how the lenders helped the flippers/investors create this false price market .
OT, but another bond market selloff is in the making today:
http://tinyurl.com/4plu7
Some air is leaving these bubbly balloons today…
http://tinyurl.com/o7skt
Where’s the PPT?
i guess orange county, ca buyers greedier than arizona buyers. arizona sales down 27.6% per numbers above. orange county existing home sales through the MLS are down about 34% :
March 2006 sales: 2,766 sold / -33.99%
March 2005 sales: 4,190 sold
Average (mean prices) are still going up some though. go figure.
My guess is that you’ll have to wait until September to see any price decreases in LA and the OC reflected YOY price decreases. 4 more months.
Not much to “go figure.” Central tendencies in home prices are determined only by those homes which are sold during that time period. So if only the higher-end homes are selling, the reported median goes up! It’s not like we get a perfect distribution of every type of house selling every time period. Be nice to break it down by square foot, at least that’s a proxy for the type of home that’s selling.
Sellers in our area are both greedy and delusional. There’s a townhouse 3 doors down from ours that just went on the market last week. There are several already for sale in the immediate vicinity for ~$650-700K and they’re overpriced at that (rent is approx 50% of what the mortgage would be at that price). But these guys have real balls — they listed their unit at just under $900K! In an environment where inventory is up more than 400% YOY.
Sounds like one of the girls that I play golf with. She has now given up on the FSBO and dropped her price 10K. Still no sale. I hope she rides the market down. All she talked about was how much her house had gone up. The houses in her neighborhood sell in a few days “they just don’t take the signs down right away” Sure OK. Cave Creek inventory went from 230 to 470 in about two months. No problem in this area Ha
Phoenix area inventory on ziprealty passed 40,000 just a week ago. Almost 42,000 today.
Holy Cow! Thats over 200 houses a day! Look out Phoenix!
I say: “Phoenix condos for everyone and their mother!”
I’m still predicting 45K by April 30, 50K by June 4.
Around that time, it will be getting a little late for new buyers to be getting their kids into a new school system, etc. Is that the end of the soft and sweet, wise and wonderful oooh, our mystical, magical Spring Selling Season? Things should be very, errrr, “interesting” by then.
I think many realtors and sellers are still believing/hoping that the “spring buying season” will save them … that this is just a temporary blip. I personally know of some who believe this. It will be interesting to see the fear/desperation rise as the “spring buying season” doesn’t materialize … and things will get progressively worse from there.
AZ; how is Tucson inventory ???
Tucson up over 100% Try this web site. It gets updated about every week or so.
http://www.benengebreth.org/housingtracker/location/Arizona/Phoenix/
Oh my Gosh AZ….From 7,000 in August to over 21,000+ today….Its a meltdown….
Zip Reality has the Phoenix area at over 42K. Can someone give us the link?
AZ;…Yeah but, Tucson is much smaller than Phoenix….21,000+ in Tucson seems to be overwhelming….How many people in the Tucson metro..??
How ’bout this…new listings in the Prescott area flirts with 90-100 per day for the last several days. Yesterday, “price changes” outpaced new listings for a while…about 65 of them.
Ok…population for this area is about 150,000….maybe 200,000 counting all rural areas
Hey, Ben, how bad is it about up there where you are???
It’s going to be a mess like none other statewide.
It’s not just Phx or Tucson.
The Tucson location list also includes Green Valley and Nogales. That’s a heck of a lot of territory seeing that Nogales is an hour’s drive south of Tucson and Green Valley is in between.
Its all over , its like a disease that hit everywhere .
Catherine,
You know the tune ‘Wipeout’?
Median price dropped $2k for the month. 36 to 48 months to go at that rate and housing might be back to normal.
I’m not sure what normal is anymore, is there such a beast?
Oh, this is indeed RICH! Realtors are now attempting to play both sides of the fence by proclaiming “It’s a buyer’s market!” Whatever it is that we are in, it’s not a buyer’s market. In order for me to consider any area of the country a “buyer’s market” we would need to see home prices revert to their “pre-bubble” price, then add in normal appreciation of inflation plus 1 or 2 points and then we would actually need to see a discount from that final figure. Anything else is just catching a falling knife! It’s funny, now that denying the presence of a buuble would look down right silly that lenders are just now starting to speak more openly about how much the financing of a home has changed in the last 5 or so years. The frustrating part is that we’re getting all of these “acknowledgements” after they have become obvious to even the most uninformed among us.
So true, Realtors have been denying for years that a bubble existed — their next strategic move will be to do a quick about-face and say, “Well, the bubble has finally popped. Glad we got that behind us. Now is a great time to buy!”
Not too much difference between RE and cigarette industries huh? Cancer? What cancer?… oh yeah, cancer.
Bubble? What bubble?… oh yeah, bubble.
Sorry;..This is part of a post on the previous blog….
“Mr. Linsley says home builders keep discounting unsold houses in the neighborhood, sometimes axing as much as $100,000 off the original asking price. He says he can’t afford to go that low.
Eye Toll Ya So……
Sellers greedy last year, buyers geedy this year?
What happens to all the renters on this blog if and when they buy homes? Do they then start cheering for upward price movement. Is buying a home like being bitten by a vampire, i.e., it turns you into one of them?
I for one already own a home and for the sake of our young teenage children, hope that there’s an end to stupidly high prices. Also, if the value of our home goes down and we want to move, won’t the new home be less expensive?
I guess it gets complicated when you start factoring in the leverage you get with just a small downpayment, coupled with appreciation. But instrinsically, what is so great about high home values for existing homeowners?
Not a vampire — when I buy a home, my only wish is the the home’s value to track actual inflation. This bubble has been unhealthy to say the least.
Bingo. It’s just like gasoline or turnips. Lower prices means you get more for your money, and your standard of living goes up. Higher prices means that your salary is worth less, your savings are worth less and you need to find some kind of inflatin hedge just to keep even.
You would think that with new technology, engineered materials and all the cheap labor available house prices should be going down.
You answered the question and shot down your argument… high prices for existing homeowners are good for them… while other “prices” remain the same (salaries included) means that any equity based on high prices is very valuable. By any measure, high home prices are not good for anyone else and negated by existing homeowners with HELOCs.
What happens to all the renters on this blog if and when they buy homes? Do they then start cheering for upward price movement. Is buying a home like being bitten by a vampire, i.e., it turns you into one of them?
I own a home in Sunnyvale, CA. Free and clear (no mortgage–paid it off). And I’m building a home in Central Florida on a 20-acre lot I purchased.
I would love it if house prices fell. My house is to live in. It’s not an “investment” or an ATM machine. I think that if housing goes up more than wages or inflation, it’s bad for the economy. And these crazy mortgages and HELOCs enourage spending, not saving.
I don’t care what my Sunnyvale house is “worth.” I’ll never sell it.
I bought my land in Florida last year. The previous owner bought it in 1989. I paid LESS for it than he did. (He bought it without knowing the legal and technical problems of the land–which I was able to clear up with just a little legal expense.) He bought it as an “investment” and lost his shirt! I’m simply going to put a winter home on it, and I won’t care what it’s “worth.” In fact, a bubble “burst” now will reduce my construction costs–a good thing for me.
We’re not vultures. We’re patriotic Americans who know the value of hard work, a dollar, and saving.
Well stated Robert….
Agreed. I’ve never thought of real estate as some sort of high-yield investment. When the husband and I buy, it’s going to be someplace that we intend to live in for a while, and a historically typical rate of appreciation is fine by us. We’re not greedy, we just want a place we can wholeheartedly call “home”, and we can’t afford to blow our nest-egg on an overpriced, soon-to-be-depreciating asset.
High home prices in my area screw the home owner. We are marked to the market for property taxes. My taxes have doubled in the last 5 years and are scheduled to go up 30% this year based on last years assessment.
Hoz….Thats why the tax payers in California REVOLTED in 1979 (Prop.13)…Every time the City,County,State needed a new pork barrel funding they just raised the taxes….Priced many people out of their homes for what the tax payers saw as “FOOLISH” spending…Now, they have to come directly to the voters for funding….
Higher taxes! NOT!!
Mission Viejo, CA inventory growing fast
It makes sense to me that South Orange County would catch what San Diego’s got first before the rest of SoCal catches it
—–
Apr 04> (688 Listings) per ZipRealty
Apr 06> (704)
Apr 10> (730)
Apr 11> (741)
Apr 12> (752)
—-
August 01,2005 - (414)
Jan 2006 (484)
—–
Inventory was at 800 in August 2004 when live-in speculators started to get very nervous. I expect we’ll burn right through that number.
full quote from article:
“Sellers got greedy last year,” she said. “Buyers are greedy now. Buyers need to recognize it is a healthy market. They can’t sit on the sideline waiting for it to fall apart. It’s not going to happen.”
If enough buyers sit on the sideline waiting for it to fall apart, then that’s precisely what will happen.
This twit sounds like that other realtor who claimed that lowball offers weren’t “appropriate.” Both are trying to browbeat readers into catching a falling knife, but - unlike that shrewish wife in the commercial - they won’t be successful.
Buyers are either finally recognizing that the market is far from healthy, or they’re simply priced out, and individual reluctance is increasingly manifesting itself as a collective boycott.
Those realtors sound indignant but are actually afraid, because they see a future without sales and it scares the crap out of them.
I think the most disgusting part of that commercial is when the wife challengingly says to her husband (as he suffers w/misgiving in taking the buy plunge), “What?”, and then, briefly, gives him a look of disgust like “What the hell is wrong w/you?”.
I’m don’t advocate domestic violence, but at that time I felt an urge to deliver a right cross to said woman for being such an insensitive, demanding b*tch.
and she pecks at him after the “what” line. and they both look really sweaty too.
at least he gets a big garage. he’ll need it to get away from whatshername
I know! Criminy… the market is DEFINED by the BUYER not the seller. If buyers want to buy… there will be a market. If there are no buyers who want to buy there is not market. Market is indicative of demand… not supply.
LA County assessors map. They’ve updated today on who is delinquent on property taxes due last Monday.
http://assessormap.co.la.ca.us/mapping/menu.asp
One multi-family property I had considered is at
1202 S Sycamore, ID # 5084-029-019
is delinquent. If you click on the 2005 taxes you’ll see
that by not paying $7609.39 on time, there is a penalty of $770.93
10% for being as little as one day late.
There’s going to be a lot of that. Epecially inSoCal
Does anyone in Tucson follow the Realtors’ monthly Sales Statistics reports?
Previously, they’ve been freely available in the media section on the Realtors’ web site, but this month, the media section has switched to Password-only. Don’t the Realtors want us to see the statistics any more?
http://www.tucsonrealtors.org/
Match 2006 Tucson statistics can be found, here:
http://www.tucsonrealtors.org/documents/stats/stat0306.pdf
Inventory in Miami is amusing.
Condo sales for January and February were 765 and 774, respectively. Current inventory stands at 14,000. Even if the traditional spring uptick occurs, that’s more than 12 months of inventory. (We’ll just ignore the 10,000+ condos under construction.)
Homes are little better. Sales for January and February were 580 and 603, respectively. Current inventory stands at 6,580. Even assuming a return to last year’s sales of 1,000 per month, you’ve got 6 months of inventory. The reality is probably much, much worse.
OT…sorry…
Looked at a lot to develop 6 months ago…asking 700K offered 620K…was rejected…Lot sold 700K..Buyer now Seller put on the market today 1.5 mil….
Oh Yes my friends, Greed is alive & well in Silicon Valley….
I was most amused to see a small mini-mall consisting of a chinese take-out and a travel agency on a corner lot at a busy intersection razed. Signs went up offering to build 3 homes on this postage stamp sized lot across from a middle school, it’s been a few months now and no takers. A cheese factory next to 101 and 280 interchange was torn out and signs for KB home sprouted and yet several months later still no construction. An odd shaped lot with a scenic view of a drainage ditch and a mobile home park is under construction, at 1st activity was busy but now the crew is much smaller and progress on these eyesores has slowed to a snails pace. At an expensive townhouse complex at communications hill the “For sale” signs were so numerous on the strip of lawn out front that the HOA outlawed them. Plenty of signs of slowing in San Jose and lots of people caught with their pants down instead of making a quick buck.
scdave, just curious, what was the zoning on the lot?
Arroyo;…It was an approved 4 lot PUD….No arch. or Eng. plans but had approval…Put 4 Units on a small lot…10 pounds in a 5 pound bag…
I don’t feel bad for any of these people. My friend at work (bought the house in Goodyear, AZ.) is so screwed on this deal, and I can’t help but laugh. Not because I am callous or unfeeling, but because when I told him to sell it, the market was tanking, he LAUGHED at ME! Like, you silly girl, you don’t know what you are talking about. With that condescending attitude, tsk tsk, don’t you know anything about real estate? He actually wanted to bet me it would maybe correct 5%. But because AZ is growing exponentially, he will only MAKE money. Genius. And then……he lost his renter. Uh oh. It does feel good to be vindicated.
>>But because AZ is growing exponentially
test
I love this quote:
Butler noted that the first quarter of this year was the weakest since the first quarter of 2003. But he also said the key months, and the better indicators of where the market is heading this year, will be May, June and July.
Since the January numbers sucked, it’s February that’ll tell the tale. Oh wait, they sucked, too. Then it’s the early spring numbers from March that tell the tale. Hmmm. they suck, too — down more than 28%. Well, then it’s the May, June, and July figures. That’s the REAL indicator of market conditions.
What a joke! Does anyone believe this claptrap?
In June and July this place (Phoenix) turns into a 24/7 pizza oven.
Sellers need a major miracle over the next 6 weeks or… HELLO REALITY!
Mike,
Have you noticed the increasingly desparate tone of the ads in the newspapers and on craigslist for South FLA. I’ve seen asking prices that when compared to this past summer seem like fantastic deals. These are all over SFLA from Westin, Lighthouse Point, Coral Springs, Parkland, Wellington ….. Although it doenst seem to be reflected in the reported figures for median price yet. There must be a 6 months or so delay for the change in the market to be reflected in the figures. Im thinking the very high end homes $650k to $1M+ are being discounted greatly now and attracting the high end buyers thus driving up the median. As soon as the middle and lower income buyers jump back in as the homes now $400-500 drop back down to $250-$350 then well see the median in a free fall. Also the newest craze is no obligation Auctions with round robin bidding.
Some observations: The house across the street from me has been on the market since November or so. I haven’t seen ANY visitors — though I’m sure that’s just because we’re out and about and missing all the agents beating down the door on the weekends
I’m seeing the same condo conversions for sale on craigslist for weeks and weeks promising “hurry … these will sell out at any minute.” But they never seem to. Also, one apartment-to-condo conversion complex called Legacy Place in Palm Beach Gardens, FL looks to be cutting prices by several thousand dollars. One beds were listing for $229,900 in early March. Price in website ads then dropped to $211,900 … and is now $205,900.
Meanwhile, my tracking of inventory in my zip code is showing ongoing, massive increases. When I started this exercise in June 2005, there were 150 properties with at least 2 beds and 2 baths on the market in 33458 for between $100,000 and $500,000. Today? 540. That’s a 260% increase in less than a year.
No question condos are going to tank as they did before.
I purchased one in ‘97 for $55k and it was built by the seller for $85k in ‘81. You probalbly noticed the ad 2 or so weeks ago for $25k off the new homes in the Canyon. Lennar is offerring $5k off this week. Gee Thanks. I too noticed this increase in condo inventory, yet the conversions keep coming. Although theres been talk of a few being pulled in PBC. Sales in my neighborhood of almost 400 single family homes have slowed. Approx 20 for sale now, many FSBO. The last 4 sales are all over the place in price range from $340-$420. The two in the $340s had no pools and needed some work. Now the 2 that sold in the $400s may have been on the lake, have to check this, and also could have been in contract before Wilma. Even so thats a $80k difference and cant beleive these 2 low sales, the lowest in over a year, arent going to be calculated into future appraisals. The last sale was asking about $389 they got $340 according to BCPA.net
Greedy Buyers? What for not paying whatever greedy sellers demand? Darn those greedy buyers!
Well the bottom line is prices in Phx metro are not even close to normal. Off the chart listings aren’t pulling down prices much. 2007-2008 when the ARM adjustments hit in full force we’ll hopefully see prices drop.
In my area. ( S. Fl) the # of homes has gone up 11% in ONE MONTH and 100% in SIX months!!! Forget EVERYTHING else- simple economics 101 says more supply = lower prices. As I have said over and over, wait until June when the resets start to kick in and the “season” is over.
Goodbye housebuying season, hello hurricane season!
Bigdaddy,
been her over 15 years and as far as im concerned season is over right after Easter/Passover. Oh Passover is tonight and Easter this weekend. It may take longer than you think as I beleive the high end homes with the huge discounts are attracting attention and are selling thus keeping the median up. The sellers in the middle class homes will hold out for a long time. Those that bought at the top with an ARM will tap themselves out with Credit Card debt and Equity lines. Theyll wait for the Sheriff to show up to get them out. The others bought years ago and are trying to get top dollar. It will be a while before they realize prices have come down, those that must sell at the lower prices will do so and still make a nice profit and have a decent payment for their next home. Those that dont will simply put their FSBO signs back in the garage.
High end is crazy too. I am renting in Seven Isles in Fort lauderdale, very Swank ‘hood, waterfront properties. on our street of 38 houses, 9 are for sale one specuvestor owns three of them! none have sold in the six months I have lived there. It is simply a matter of who blinks first and has to unload at the first lowball offer. One set of neighbours are getting divorced and will need to sell soon, that is when comps will start tumbling
SOFLA renter,
It could be the high end $1M+ probably where your renting are now being discounted so much that its attracting the very wealthy buyers. They believe they are getting a sweet deal. That is why comps are up and for the next several months as this unfolds the median will be stable if not increase. I wonder if sales data by price ranges are available. Then the discounts on the middle class homes $300-500 along with the reduced condos kicks in. That is when the free fall will begin.
Of course one of the effects ofthe change of the capital gains tax is that nobody really “needs” to buy, even if they’ve sold their old house. Buyers can definitely outwait some motivated sellers.
Hello
ABQ is great. Not the same bubble here. CA still sucks. Glad to be out of there. Haven’t done the balloon, but will shortly.