It’s A Dead Market
The Journal News reports from New York. “Second-quarter housing trends continued to track a dismal path in Westchester and Putnam counties, a function of tougher credit requirements, unemployment and other factors, a regional real estate group said yesterday. Sales of housing of all kinds fell by double-digit percentages in both counties, compared with the second quarter of last year. Inventories for most kinds of housing in Westchester were up sharply.”
“The market was overdue for a correction following a nearly 10-year run-up in pricing starting in 1996, the MLS said. Large layoffs on Wall Street, and reduced bonuses, ‘do not bode well for the market,’ the report said.”
“Harding Mason, president of the Westchester County Board of Realtors, said the local housing market is being ‘held hostage’ by economic issues. ‘All of the factors are hitting us at the same time, just like everybody else,’ he said.”
“John Occhipinti, a retired police officer who dreams of moving to the Caribbean, said he’s thinking of reducing his price on a four-bedroom, three-bath Tudor-style house he bought in Croton-on-Hudson 10 years ago. He listed it at $829,000 six weeks ago, a price he felt was fair, given the substantial improvements that he and his wife made on the property.”
“There have been a couple of showings but no offers yet, he said. Occhipinti said he thinks that by lowering the price below $800,000, he might get the property exposed to more prospective buyers. ‘The reactions are great’ when buyers come looking, said his wife, Trish Occhipinti. ‘That’s why we’re surprised. We don’t get that follow-up phone call.’”
“Shenaaz Khalfan wants to sell her three-bedroom house in the town of Ossining for $630,000 and join her husband, who has taken a job in Australia and bought a house there. She doesn’t know how long the family can pay for two properties.”
“‘It’s a dead market,’ she said. The house was first listed for $799,000 in September and has been lowered at least four times since then. Her broker warned her the initial listing price was too high, she said, but she remembered how hot the market was just three years ago.”
“‘Lousy, dinky little houses were moving so fast, but not anymore,’ she said. ‘They’re looking for bargains out there.’”
“The MLS said more sellers were being forced to enter the market sooner by family or employment considerations. ‘I think the buyers have great opportunities in this market,’ Mason said, ‘but that doesn’t mean that sellers are going to give their houses away.’”
The New York Times. “For several years, it seemed that prices for Manhattan office buildings would never stop climbing. But now, in perhaps the clearest demonstration so far of how commercial real estate values have deteriorated in the last year, 1372 Broadway, a 21-story brick building in the garment center that was one of the last to sell before the credit crisis, is under contract to change hands again at a loss of $41 million.”
“‘We haven’t seen sellers take back financing to this degree since the early 1990s,’ said Robert M. White Jr., the president of a New York research company.”
“In June, Risanamento, a real estate company in Milan that has struggled in recent months because of the credit turmoil, announced that it was putting the 14 floors of office space at 660 Madison Avenue on the block.”
“The Wall Street Journal reported in April that Luigi Zunino, the chief executive of Risanamento, is also trying to flip a 10,000-square-foot condominium at the Plaza Hotel even before he takes possession of it.”
“The General Motors Building…languished on the market for several months before being sold with three other buildings also owned by the embattled real estate investor Harry Macklowe for a total of $3.95 billion.”
“Some real estate specialists say the three buildings, which Mr. Macklowe bought as part of a portfolio, have declined in value by 20 percent or more. But Scott A. Singer, the executive VP of a real estate finance and brokerage company that represents a number of family-owned real estate companies in New York, said the sale of the Macklowe buildings was not a good benchmark for future sales.”
“‘It was a forced sale,’ he said.”
The Glouchester Daily Times from Massachsuetts. “A foreclosure auction of the last, unbuilt piece of Pond View Village - aimed at giving the chief lender a saleable title free of more than $1.5 million owed to contractors for the state and defaulting non-profit developer - was postponed yesterday almost before it began.”
“But the move has sparked new questions regarding the status of the developing agency, Cape Ann Housing Opportunity, that grew out of Wellspring House in 2002 as a means of creating more affordable housing in the region.”
“Auctioneer Paul Saperstein opened the advertised event only to announce the auction was being pushed back to Aug. 18. The only potential bidder represented at the heavily subsidized, two-thirds finished community housing development was the lead investor, the Massachusetts Housing Investment Corp.”
“Massachusetts Housing Investment Corp. CEO Joseph Flatley said the auction was postponed in the hope that a buyer other than his corporation would appear to bid on the property. ‘Our first choice is to be fully repaid,’ said Flatley, explaining the move to go to auction.”
“‘MHIC is owed a pile of money,’ said Fran Hogan, an attorney representing the investment corporation. She described the auction as a legal maneuver to remove the liens. ‘The auction wipes out everybody behind you (in line for repayment),’ Hogan said.”
“Massachusetts Housing Investment Corp. last year took over ownership of 33 unsold Pond View condominum units when the developer - Cape Ann Housing Opportunity - ran into a crumbling condo market and was unable to repay $8.57 million of $9.2 million in loans from the corporation’s big bank investment pool.”
“The auction would rub from the deed the claims of the general contractor, Worcester-based Cutler Associates, which is owed slightly more than $1 million, and those of a number of subcontractors who sued Culter and Cape Ann Housing Opportunity after it stopped paying Cutler in the project’s final days last year, when the glut of housing and the disappearance of easy credit brought a decade-long housing boom to an end across the region.”
“The ‘crown jewel’ of Pond View Village - as Christine Cousineau, Cape Ann Housing Opportunity’s former executive director, described the high rise - was to have included mostly market-priced units with views of the Annisquam River estuary. That portion of the project was designed to produce a back-end cash flow that the business plan depended on to pay off lenders and contractors and make the project whole.”
“Joining the Massachusetts Housing Investment Corp. team at the auction site was one subcontractor. Peter Grammas Jr., president of North Shore Construction, which installed the sewage system for the entire project and sued Cape Ann Housing Opportunity and Cutler for about $100,000.”
“Grammas said he was looking at the auction as the act of eliminating him from any chance of being paid.”
“‘I had to take out a second mortgage on my house,’ Grammas said, ‘but everybody (working for him, material suppliers and subcontractors) was paid. We got screwed.’”
“The Massachusetts Housing Investment Corp. has ‘been hurt, too,’ said Hogan.”
From The Day in Connecticut. “Revenues that cities and towns receive from real estate sales have plummeted in recent months, leaving red ink in some municipal budgets. New London, Montville and Norwich have seen the biggest drops in conveyance tax revenues in the past year. New London saw a 49 percent decline, Montville a 45 percent drop and Norwich a 35 percent dip in conveyance tax revenues from fiscal year 2006-07 to 2007-08.”
“Donald Goodrich, the New London finance director, spent the last few months trying to figure out how low the conveyance tax revenue would go. He started the year projecting $600,000, and revised it in March to $350,000. He soon realized ‘we’re not going to get there,’ and revised it in June to $325,000. The city ended the fiscal year with $320,793 in conveyance tax revenues.”
“Goodrich estimated $350,000 in revenues in the new budget year but admitted, if the trend continues, the city will fall way short of that total. ‘It’s the economy. It’s the housing market,’ he said.”
“Salem First Selectman Bob Ross remembers a dismal previous year. In the 2005-06 fiscal year, Salem received $78,736 in conveyance tax revenues. The next year, it dropped dramatically to $57,603, and last year rose to $66,760, still $12,000 short of the high two years ago.”
“‘We probably had a worse decline than most back in 2006-07,’ Ross said. ‘Things are hard everywhere. The problem is, like any other municipality, we have relied on this revenue, and at the end of the year, the state legislature had to break a promise to someone, either to the real estate industry or to the towns for not giving us anther tool for replacing it. If you’re a homeowner in my town, there’s a direct impact on your taxes if the conveyance tax goes away.’”
“‘We’re seeing fewer sales,’ said Groton Town Clerk Barbara Tarbox. ‘Most new subdivisions have been there for a few years, and there aren’t any new sales of condos.’”
‘The ‘crown jewel’ of Pond View Village - as Christine Cousineau, Cape Ann Housing Opportunity’s former executive director, described the high rise - was to have included mostly market-priced units’
I’ve been following this project for years, and now they can’t even auction the thing off. It shows how futile the Massachusetts approach to housing and the bubble has been. Instead of just accepting that there was an abnormal market and it’s gone, they piddle around pretending they are working on ‘affordable housing.’ Meanwhile the project sits idle and empty.
‘BOSTON — A Taunton woman committed suicide Tuesday hours before her mortgage company was scheduled to auction off her home, according to the Brockton Enterprise. Officials said that in a suicide note found next to her body, Balderrama told her husband and son to ‘take the insurance money and pay for the house.’
‘The police chief said that he was surprised when potential buyers showed up at the home, while Balderrama’s body was still inside, expecting an auction.’
‘Balderrama told her husband and son to ‘take the insurance money and pay for the house.’
It is sad when some resorts to suicide. I sincerely can not understand why a person would leave behind a family over stinks,bricks & mortar.
I thought insurers don’t pay in the event of suicide???? Either way, sad story.
Hope her policy pays off for suicide.
hate to bring it up but does life insurance payout for suicide?
I think with a typical life insurance, it will pay for suicide after she has been with them long enough (i.e. 2 years).
auger-inn,
Not an expert but I ‘believe’ the “suicide clause” is in effect for the first (2) years on most policies. Given this has already drawn attention in a very public way, I wouldn’t doubt the insurer will challange honoring the policy.
Never have so many people committed suicide by jumping into a building, rather than out of one…
The insurer won’t have much of a chance challenging the policy if it’s been in effect for more than 2 years.
Still, would the family still want to live there after she committed suicide there?
Perhaps they will merely start re-writing those policies to extend the clause. We may be heading into one of those era’s where either the husband or wife takes one for the team.
Guess I’d better go check what clause’s are in the wife’s policy.
“Comment by EmperorNorton_II
2008-07-23 09:25:44
“Never have so many people committed suicide by jumping into a building, rather than out of one…”
That’s brilliant.
In that documentary “Maxed Out” a number of the subjects commit suicide over credit card debt, sometimes not even that much: $9,000.
One of the ladies used her credit card to buy enough gas to drive her car off a bridge after her creditors threatened to tell her family and neighbours about her debts. Some people don’t take their debt seriously enough, but some take it too seriously.
Realtors (as well as friends who are from the area) here in Boston are STILL claiming that we’ve been and will be untouched by the bubble. I don’t get it.
A coworker friend of mine, bought a house 2 years at the absolute peak of the bubble. Wife wants new diggs, so that she can show them off at the salon, and buddy tried selling. He placed the house at about what he owed, and received 1 “low ball” offer that the realtwhore promptly turned down… Needless to say, house is not sold, he is still living there, and to top it off, 60% of his pay is going to pay for the thing, leaving him without cash at hand. This is in the south shore of Boston, where denial runs deep.
I am patiently waiting, as I see signs of stress and despair all around me, and I gloat about NOT having to mow the lawn, fix the faucet, or plow the snow…
“This is in the south shore of Boston, where denial runs deep.”
I know what you’re tallking about, pap! I talked to some friends on the south shore earlier in the summer. I had been a bit concerned about them as they were serial refinancers and he had been laid off from one very well paid position only to accept a lower paying one. (The original employer contracted to about 10% of its peak workforce size in the Boston area)
They added onto their colonial which was a bit dated when they bought it, knocked down walls, finished the basement, added an at home office, bought beautiful furniture and large screen tv’s.
Before the real expansion and its major improvements began, and he was between the 2 positions I asked if it might be a good time to get his MBA because his lack of having attained one was noted as a factor in his layoff. He looked at me and said there was no way he could afford to do that. He had the house and 4 kids to support. Since then with the lower paying position they went on the major house spending spree. It’s now one of the largest homes in their immediate neighborhood of 1950s homes. Most of the house has been torn down to studs and redone. I’m guessing that they’ve improved themselves beyond the range of that neighborhood. I don’t think anyone’s added the square footage they did.
Apparently though, he’s still doing a good job hitting his sales numbers, winning trips to Hawaii for the entire family. So for now all is well. I suppose as long as they are there for the long haul and his employer and he are both happy then really, all the rest doesn’t matter. I just hope nothing changes for them. And once again…..it’s all about the jobs.
it’s all about the jobs
I’ve been saying that regarding the Boston RE market for over two years now… SFH’s in good neighborhoods are still unaffordable, especially given the recent price inflation and rise in mortage rates. It will take severe job loss or some other economic dislocation to get prices significantly lower in the desirable ‘hoods.
For now, smart buyers in Mass are stuck in a holding pattern. For my family, we can continue to wait it out in our multi in the city or expand my parents’ house in the country with an in-law setup and do some rennovations/improvements. The latter option would help my parents immensely, given they are near retirement and the house needs work that they can’t really afford. As the house has been in the family for over 100 years, they would rather not sell it…
“New London saw a 49 percent decline, Montville a 45 percent drop and Norwich a 35 percent dip in conveyance tax revenues from fiscal year 2006-07 to 2007-08.”
Good on ya, New London. Where’s all the revenue from the developers to whom you handed over the homes of long time residents by eminent domain, taking the case all the way to the Supreme Court? Suck on it.
Well said.
Thanks! (Blows on fingernails, shines them on chest, then examines them with pride.)
I envy you, Palmy
my fingernails are worn down to the quick from pounding on my keyboard. what meds are you taking these days to allow such magnificent growth . . . ??! send me a sample, my good man.
Aquis
I’d like to recommend vitamin E / extra time in the sun for happy nails.
I need a recommendation for northern winters myself. That’s when I develop a severe case of manhands! LOL
And don’t forget to get enough protein in your diet. Before I became a reformed carb eater, I had brittle, cracked nails. Now 28 lbs. lighter (blood sugar down big time w/o meds) my nails are long and hard. Kind of the way I like ….
“Now 28 lbs. lighter”
Ooh. Congrats AW!
long and hard, kind of the way Olygal likes!
I recently saw a follow up piece on the Kelo case. All of the land that was acquired via eminent domain is sitting vacant. The houses have been demolished, but nothing else has been done. What happened there was an absolute travesty.
The council members that were behind the theft of that property should be made to tent on it until it is built out.
Sing Sing convict #630,000
“Shenaaz Khalfan wants to sell her three-bedroom house in the town of Ossining for $630,000 and join her husband, who has taken a job in Australia and bought a house there. She doesn’t know how long the family can pay for two properties.”
http://en.wikipedia.org/wiki/Sing_Sing
Ossining is a riverfront town, in most respects we’d consider it an overcrowded dump unless we grew up in the area where it is the norm.
Any jackass that does work in Gloucester deserves what they get. Always get cash up front in that loser village.
“John Occhipinti, a retired police officer who dreams of moving to the Caribbean, said he’s thinking of reducing his price on a four-bedroom, three-bath Tudor-style house he bought in Croton-on-Hudson 10 years ago. He listed it at $829,000 six weeks ago, a price he felt was fair, given the substantial improvements that he and his wife made on the property.”
SOB probably retired early too. It sickens me when ppl view prices that someone else in their exact same position (eg police officer or similar profession), but for owning a home during the bubble, could never afford as fair because they dream of moving to the carribean or some other such nonsense. These ppl have become so self centered, they lost all sense of reality. That is what first triggered my awareness of the bubble - ppl who could never have afforded the home they live in without a windfall who nevertheless insisted that current prices made sense and were reasonable somehow, and in fact expected to increase further, because . . . [INSERT ANY BS THAT DOESNT MAKE SENSE].
$800,000 is a lot of money. This guy is just looking for a greater fool to fund his Caribbean retirement. Maybe Buffalo instead?
Will 3rd tier cities on the way down (Buffalo-Detroit-Cleveland) attract the downtrodden more than other cities?
“Will 3rd tier cities on the way down (Buffalo-Detroit-Cleveland) attract the downtrodden more than other cities?”
The bubble was their best chance to move back to second tier status as people priced out of other markets looked for alternatives. That window has closed. They’ll have plenty of their own downtrodden, those that can’t escape. If there’s much movement of the downtrodden at all I’d expect it’d be to places that offer relatively greater opportunities, opportunities not typically found in third tier cities.
I think 3rd tier cities will have less population in 5 years unless they can attract high paying jobs somehow. I think they got a boost by the few smart ppl that cashed out at high prices and moved to a lower cost area to retire. As prices in more desirable cities drop, they will once again attract new residents who were previously priced out flowing in from the 3rd tier, and the outflow of ppl from desirable cities looking to cash out and move to a lower cost area will dry up as the disparity lessens.
One thing is for certain, which is that 2nd tier cities like Raleigh Durham have benefited greatly from the bubble. It is now bigger than Minneapolis. That growth doesn’t seem to be stopping either. One look at any city relocation site shows there’s a lot of young families wanting out of the Northeast and into Raleigh.
jetson_boy, you are dead on! I live on the outskirts of Chapel Hill and the whole place is lousing with refugees from the socialist states up north. Maybe the Daily KOS folks can convince MA, CN, NJ, NY to up the taxes more, much more on the rich so we can cash in down here. I remember my dad telling me on the farm where I grew up (NE NC) that son, the day will come when we can make more money on an acre of yankees than an acre of tobacco. Boy was he right. Come on in folks…the waters fine.
Outskirts of Chapel Hill
I’m familiar with that area. 15 years ago there was a big protest over a little soccer field just south outside the 54 loop because it was seen as letting loose the floodgates of sprawl. I don’t know if they ever built the soccer field, but the land is probably packed with luxury condoze now.
And Weaver Street is probably wall-to-wall Sbux too.
‘As prices in more desirable cities drop, they will once again attract new residents who were previously priced out flowing in from the 3rd tier, and the outflow of ppl from desirable cities looking to cash out and move to a lower cost area will dry up as the disparity lessens.”
That’s been what I ‘ve been expecting for Syracuse since I started reading this blog. And it has also been my plan for returning back to my home state.
“One look at any city relocation site shows there’s a lot of young families wanting out of the Northeast and into Raleigh.”
Jetsonboy, I was just reading a post on our local (Syracuse) economic development forum. He was giving the reasons why he just moved to NC and why he knew he did the right thing. He described himself as a young, well educated professional. He had just received his MBA and couldn’t find a single position to consider in this locale. He said 5 of his NY college friends had also relocated to NC.
If you read his whole post you’d know it wasn’t just about lack of jobs. This area has a pretty severe fear of change that keeps the whole area stagnated. It’s nice to hear that attitude is not everywhere in this country.
Aladinsane, I dont’ know, but, YES, the bubble was our best opportunity here (Cleveland) to attract refugees from overpriced areas; for the most part, little advantage was taken of this, and so many jobs left. Priced out of Boston since 1996, we left there in 2000 and found a wonderful 1915 Craftsman colonial in Lakewood (see latest Old House Journal - best place to buy an old house in Midwest) for 160K; same house in near-in suburb of Boston with decent schools, if such a place and home even existed, was at least 4 to 5 times that back then - and prices doubled from there up to the peak! (My family was actually featured in a local TV news story in 2004 about whether we were part of a trend or not…2 minutes of fame down, 13 to go…and conclusion was “maybe - if we can create job growth”). All but three of our Boston friends who were non-natives have left for where they were from (3 others back to Cleveland) or have gone to Raleigh-Durham-Chapel-Hill or Charlotte. And being Cleveland-based, most of my business growth (architecture) is in NC, and now TN. (We will probably open a branch office in Raleigh area). Much of it industrial; housing is dead in the Triangle too per my clients down there. (And my tech-writer buddy in Durham had a team of 6 people hired to work under him - in PUNE, INDIA!) So there are problems in paradise too. We’ll have to leverage ALL of our assets here in non-bubble land - STILL very affordable; fresh water; surprisingly strong industrial base; Cleveland Clinic (building here and in Dubai - theyb bailed out of Florida) and lots of biotech spinoff; plus, downtown Cleveland actually has the strongest housing market in the region - the condos being built here are actually being sold to people who live in them; there is no glut in sight, and many are under construction. Downtown lifestyle for a fraction of the cost of Chicago.
But even a 60% drop from bubble prices in Places like Boston will still be unaffordable for most people. It always comes down to jobs; Cleveland-Buffalo (Detroit, my hometown, is hopeless) will mostly attract “prodigals” like us who are returning because it’s home, affordable, we have family here, want our kids to be near Grandparent; need to take care of our aging parents, etc. and we will be lucky to maintain a stable population, let alone growth, with the exception of new industries that take advantage of our medical and industrial knowledge base, including alternative energy. So, short-term pain, long-term gain. Blessings to all who make this such a great blog!
Got Water?
Marquis Dee
“Maybe Buffalo instead?”
That’s not how the story is supposed to end. The precedent has long been set that public employees ( especially cops and fireman ) are entitled to early and opulent pensions as seen in the movie “Club Paradise” w/ Robin Williams and “Running Scared” w/ Billy Crystal and Gregory Hines!
Who says “that stuff” only happens in the movies!?
The role of popular culture in this boom is indeed fascinating. The examples you cite merely freshened up the fantasy sold to help keep noses on grindstones.
The allure of retirement/second homes has always had to remain fluid in order to maintain demand.
In the latter industrial age it was the “street car suburb”, by the turn of the century it might have been a nearby lake community like Lake Geneva, WI for example. When the auto came along it was places like the Poconos. The airplane helped Arizona along. By the 1980s, something more exotic was needed to fuel the fantasy - the Carribean. Then came Costa Rica - what’s next? Asia, Africa, or space? Or do we just start over again with lavish residences near city centers?
At least “Running Scared” was a funny flick.
edgewaterjohn,
All examples someone born in Berwyn, IL would appreciate. I’ve often asked “Whatever happened to a simple cabin by the lake?” only to be meet by scorn and disbelief! Being Polish and all we had relatives up in Hibbing, MN where they had a rowboat, uninsulated cabin and hand-pump well. Ahhh.. now THAT’S livin’!
USA Today ran an article that in 2005, NAR estimates that upwards of 40% of home sales were “2nd homes”. It seems to follow reason that many of those sales were in mkts. now completely under water?
“USA Today ran an article that in 2005, NAR estimates that upwards of 40% of home sales were “2nd homes”.”
I recall that statistic well. It helped piece together my own personal forecast. I’m not sure if NAR knew exactly what this number meant to those who were/are paying attention and how they would interpret it. It screamed blood in the streets the first time I heard it.
DinOR,
Ever heard of Cedar Lake, IN?
It’s a great example of what happens to vacation home areas gone sour.
Located southeast of Chicago off US-41 in northwestern Indiana, it was at one time an appealing urban escape. We mapped it in 2000 - and I’m tellin’ ya - I never thought a place like that existed in the U.S.
Former lake homes turned into ramshackle full time housing. No zoning, no standards, houses as small as tool sheds with no real foundations or insulation. Cars on blocks, haphazard streets with no name and barely wide enough for a sedan - you name it. Occassionally we’d catch a glimpse of an old sidewalk or some old ornate concrete lawn decorations - probably from the 1920s - very sad.
edgewaterjohn,
Oh….NO! Sounds like Jeff ( you might be a redneck ) would be right at home there. You know, where the home is on wheels ( and the truck ain’t? )
I just remember Mother’s Day (2005) I told my wife I would take her any where she wanted to go and she decided on Detroit Lake in Oregon. We drove around a dumpy little lake looking at “vacation homes” and there was nothing under 400k! All of the older “shanties” lost their view of the lake and of course for “a really nice offer” everything was for sale.
Even though guys in Chicago may have been bond traders or what not, at least they could go to Lake Woebegone, WI and ‘pretend’ they were rednecks for the weekend?
DinOr
I still have a lot of relatives up near Hibbing and the Boundry Waters Canoe Area.
It maybe cold in the Winter but if the $hit hits the Fan, my brother keeps reminding me that he always keeps my trusty chainsaw and 308 Remington clean…and lightly oiled
How about Lynn, MA?
Apparently the town currently known for its hard living residents was once considered a nice, family summer vacation area in the late 19th/early 20th century.
There’s also a beautiful town (Sharon Springs?) off route 20 on the way to Cooperstown, NY that you can tell was once an absolutely gorgeous resort town. Although there has been an attempt of resurgence, many of those old buildings are really crumbling now. I do leave those streets w/a feeing of supreme loss.
http://en.wikipedia.org/wiki/Sharon_Springs,_New_York
“According to an article published in The New York Times (26 August 2000), Sharon Springs lost its fashionable Social Register set to the horse-racing attractions of Saratoga Springs. Wealthy Jewish families of German origin, who were unwelcome at Saratoga due to the prevailing social bias of the time, filled the void and “made Sharon Springs a refuge of their own.” Eventually, these families moved on to other, more modern resorts, and the village began to fade economically. Other factors that exacerbated the village’s early 20th century decline were Prohibition (which reduced the need for the local hop harvest) and the opening of the New York State Thruway (which routed traffic away from the area).
As the cited New York Times article went on to explain, “After World War II, Sharon Springs got a second wind from the West German government, which paid medical care reparations to Holocaust survivors, holding that therapeutic spa vacations were a legitimate part of the medical package.” In the summer of 1946, one of the busboys at the Spanish Colonial Revival style Adler Hotel was Edward I. Koch, the future mayor of New York City.
Sharon Springs rebirth
The village of Sharon Springs, after drifting gently (and not so gently at times) into an almost collective state of hopelessly rundown oblivion in the late 1980’s, has enjoyed a resurgence of sorts in the last 15 years. Much of this has been attributed to both a stabilization of the architecturally significant remaining structures in the community (arson leveled many of the old abandoned hotels during the mid 20th Century) and an infusion of young, ambitious buyers from downstate New York looking for a cheaper means to start a living.
One of the watershed examples in the rebirth was the ground up restoration of The American Hotel which is prominently located on Main Street of the village. Purchased in a collapsing and abandoned condition in 1996 buyers Doug Plummer and Garth Roberts slowly began the rebuilding of this two-story structure into what became an award winning (for preservation) hotel and restaurant. Prior to The American Hotel, the former residents of New York City had operated a respected bakery on the edge of the village for two years.
Other structures in the same time period such as The Roseboro were acquired, stabilized, and made into a functioning source of commerce for the community. While never having been restored fully back to an operating hotel, the Roseboro Hotel did afford shop space and around the 2000 operated as a functioning hotel and banquet space.”
Lake Elsinore, located in the Inland Empire, was also a resort town about 70 years ago, with natural hot springs, and a castle built by Aimee Semple McPherson, the infamous evangelical leader who faked her own kidnapping in the 1920s in order to run off with her lover. These days, the town is pretty ramshackle, though I think some of the old decorative street lights around the lake remain. Remembrance of things past. Here’s a photo of Amy’s Castle:
http://members.dslextreme.com/users/brainstorm/aimee1.html
Ah…he could still retire and buy waterfront on Oneida Lake.
http://www.cnyhomes.com/Listing/Search/more_photos.cgi?mlnum=194627
$399k? well….umm….I hope he’s got some other retirement funds
“The MLS said more sellers were being forced to enter the market sooner by family or employment considerations. ‘I think the buyers have great opportunities in this market,’ Mason said, ‘but that doesn’t mean that sellers are going to give their houses away.’”
Ha Ha…Then let them ROT on the LOT
Wife and I are on the open house circuit. People who made big improvements five years ago are still asking top dollar. The truth is, those improvements are 5 years old.
The cracks in the paint are starting to show and quite frankly, granite countertops are run-of-the-mill these days. Show me something that matters, like a lower price.
There have been a couple of showings but no offers yet, he said. Occhipinti said he thinks that by lowering the price below $800,000, he might get the property exposed to more prospective buyers. ‘The reactions are great’ when buyers come looking, said his wife, Trish Occhipinti. ‘That’s why we’re surprised. We don’t get that follow-up phone call.’”
Price, price, price, that is the only thing makes those calls come.
‘The reactions are great’
________
John and Trish are not familiar with the concept of being polite? What are people going to say when touring the house? Actually, if I was not inclined to buy, I would say nicer things. If I wanted to buy, I would try to keep a poker face. Probably most of the visitors are Looky-loos.
I have this image of the two if them picking up the receiver of their phone and tapping it a little, like, “Is this thing working? What’s the problem? Hello?”
Probably a NYC cop. 20 years and out, with a tax free inflation-indexed pension inflated by being based on the last year’s salary.
That generation has bankrupted NY. To pay for all this, the police union agreed that the pay for new cops would be cut to $25K per year, recently increased to $35K.
It is those $35K cops that this SOB wants to pay $830K for a 1-2 hour commute to work.
Those city cops/firemen tend to be married to a school teacher who live in the same house with one of their parents because they can’t afford a house of their own…….
In the 1970’s?
no Dinor this is a present day thing
i see several where i live actaully that fit that mold to a tee
Drive 50 miles east to Suffolk County where the cops and teachers make 100K+ each and live in 650K McMansions and the teachers work with spoiled fart entitlement kids 9 months of the year and the cops sit on the side of the road with a porn magazine waiting to give somebody a ticket for going 50 in a 45 mph zone.
The disparity between LI and NYC borders on criminal.
ric,
I don’t have the grounds to challenge either of your statements but I ‘can’ speak to OR where public employment is on a par with hitting the lottery. We’ve had a similar “Under Vehicle Inspection” and newer hires won’t enjoy near the benefits older employees will be assured of receiving.
Dinor,
Ric is right on WRT the entitled state/county workers class on LI. Starting salary for teachers was about 60-70K IIRC. Work 20 years, your reward is your salary at retirement for life, NYS tax free. Although, like the NYC cops, etc they have started to eat their young and teachers starting now get nowhere near that deal.
Serious question for serious answer….
Whats it going to take to see the public employee feeding trough go bankrupt? Every state in the northeast is funding 100k+/yr cop/teacher/firefighter retirements. As everything is always in a state of flux, shouldn’t this trend hit a wall?
I’ve wondered about this question myself. I have a family member who is on public employee pension, she was a teacher in NJ. The pension is determined by an average of the last three years salary and the employee is given 66% of that. There are many teachers in NJ who are receiving pensions in upwards of $70,000 a year. This can’t continue indefinitely the only question is when it comes to a halt.
Can you say…Vallejo, California?
You beat me to it.
Vallejo is only the tip of the iceberg here in the golden state of CA.
WT Economist,
Just… NY? In typical fashion rather than concede their benefit package was totally over the top, they throw the “new guys” under the bus. Oh btw this is why aircraft mechanics today make a dollar an hour more than HS drop-outs at Oil Can Henry’s. Only they don’t get those really cool hats!
DinOR, this is exactly what happened (and continues) with the UAW. Ever wonder what the average age of a UAW member is…almost geriatric. There is genration warfare going on there because the fully vested older guys who scammed the system don’t give a S**t about the younger ones. Threw them under a japanese bus!
diogenes,
And I’m sick about it. Even though I have a private practice, neither of my daughters have expressed ANY interest in taking over. I’m committed to bringing up a young guy or gal to help me transition to retirement rather than “auction” it off to an already established firm that is simply “buying revenue”.
That and it helps keep you young! So, salary+commission for a few years then 60/40, 50/50, 40/60, 70/30 until I’m completely phased out. Why does this always have to be so adversarial?
“the fully vested older guys who scammed the system don’t give a S**t about the younger ones.”
This reminds me of an older friend I was speaking to who is living off the interest of a multimillion dollar inheritance.
They received a stimulus check. I was speechless. When they saw that that information left me a little surprised they told me, oh, there was a cap on income but not investments. We don’t have much earned income.
?????????
I don’t think the fact that her younger family members will endure more hardships so that they enjoy this money even crossed their minds.
“There is genration warfare going on” and “I don’t think the fact that her younger family members will endure more hardships so that they enjoy this money even crossed their minds.”
There is a book called Generation Debt that looks at all the financial pressures put on twenty-somethings. One of the things in it I found chilling was an AARP survey that essentially asked (I’m paraphrasing) ‘do you care if your retirement bankrupts the system’. Overwhelmingly the respondents did not care and were happy to take public money borrowed from future generations even if they had enough of their own private pension. Maybe this is what happens when people are grouped by age (in school, in the office, in the retirement community) rather than by family unit where people have to depend on one another intra-generationally. Although, I don’t really want to live with my parents or my in-laws on a farm, but still it’s a thought.
THis all speaks to my aggravation when I hear someone say they live on a “fixed income.” If their “fixed income” is huge I’m supposed to feel sorry for them? It’s a bit different if they say the live on SS, now that would be tough.
the best people were the ones bragging that their 200k house was now worth 600k.
i asked one at the height of the bubble “would you pay 600k for your house today?”
blank stare…you could just see the wheels working in their head and coming to the conclusion…”holy shit…maybe i shouldn’t have got that HELOC to buy those two beemers”.
That is what first triggered my awareness of the bubble - ppl who could never have afforded the home they live in without a windfall. . .
Yup! And when discussions goes to real estate, I have pulled this one out many times. I have one friend who has a verrrrrry nice house - bought way pre-bubble - who flat out admits there’s “…no way in hell…” she and her husband could afford to buy it now. And they both make good scratch! She gets it. Unfortunately, so many do not.
” I have one friend who has a verrrrrry nice house - bought way pre-bubble - who flat out admits there’s “…no way in hell…” she and her husband could afford to buy it now.”
Give it time. She may even be able to buy two of them.
Know some (sensible) people who bought pre-bubble who are very concerned that the so-called equity they have in their property will disqualify them from financial aid for their kid goes off to college in a year.
On their (reasonable but not spectacular) income will be hard to come up with tuition $$.
Does anyone know if this is true? Will they have to HELOC or load their child up with student loan debt?
whyoung,
What state are they from? A 529 Plan would not count against them and… ( I hope Dave Ramsey isn’t lurking ) but they ‘could’ HELOC it out, fund the College Savings Plan ( take their deduction ) AND write off the int. on the 2nd.
This is a fairly standard practice. The other… thing is that you can go to “the Grands” and say: “Look what we’re doing for little Billy!” ( and hopefully inspire them to make matching contributions? )
Flame me now!
they are from NYC and and have a co-op that appraised for more than FOUR times what they paid for 10 years ago.
Not nearly enough savings (for college or retirement, not the best planning on their part, i agree) and limited $ from the “bank” of grandpa
They have a “working/middle class” income for NYC, not that they should be the object of sympathy from most perspectives…
But will their “equity” handicap their kids eligibility for aid?
whyoung,
This whole process starts with the FAFSA Form. ( The younger posters here will be MUCH more familiar with this ) You can now direct them to fill it out on-line and they can get a good idea where they stand. Again I’m an OR not a NY but anything held in a 529 should *not count against them as their student goes to qualify for aid etc.
That IS… after all, the idea behind a 529!
That is what first triggered my awareness of the bubble - ppl who could never have afforded the home they live in without a windfall. . .
________
exactly the same with me. it’s such a simple concept, why don’t people get that!!! It’s not like P/E ratios or opportunity cost, just basic common sense. I have never had any say “good point” on that one though (no one in the real world).
Oh whoops, I accidentally posted about this all the way at the bottom.
Anyway, Caribbean retirement really set me off.
‘I think the buyers have great opportunities in this market,’ Mason said, ‘but that doesn’t mean that sellers are going to give their houses away.’
Soon to be replaced by, ’sellers just don’t get it. The market has corrected. They have to be realistic, or I’ll starve. But correctly priced houses will sell.’
‘I think the buyers have great opportunities in this market,’ Mason said, ‘but that doesn’t mean that sellers are going to give their houses away.’
Sure it does.
Roidy
From the bits bucket, Fannie is refusing to sell a Flint house that sold in 2005 for $110,000 for less than $6,900. The realtor recommends cutting the price to $5,000.
‘But that doesn’t mean that sellers are going to give their houses away.’
When places like Flint start going after owners for the cost of maintaining the properties, that is exactly what is going to happen.
New York City renovated hundreds of thousands of housing units in “in-rem” properties (taken by the city after being abandoned) in the 1980s and early 1990s. In New York City, buildings with hundreds of thousands of housing units were in fact given away, along with vacant land. Abandoned.
Mason said, ‘but that doesn’t mean that sellers are going to give their houses away.’
I have come to believe that these RE ‘experts’ slip this in like some subliminal message and think/hope the masses will fall for it some how.
I think the buyers have great opportunities in this market,’ Mason said..
Who besides buyers has great opportunities when most private sellers have their heads stuck where the sun don’t shine?
Banks and their REOs.
“‘Lousy, dinky little houses were moving so fast, but not anymore,’ she said. ‘They’re looking for bargains out there.’”
I couldnt help but laugh at the bitter, nasty comment from this RE person describing a house that 5 years ago would have been a ” charming, first time buyer, cottage, fixer upper, loads of potential, yadda yadda … ” .
true character shows itself in times of adversity. anyone can be all jolly & happy with glee in good times but the RE industry has shown itself to be anything BUT professional with neverending nasty crude comments when things dont go their way.
hell, I’ve seen ditch diggers with more grace & fortitude than these lazy, spoiled, snotty asshats !!
“Harding Mason, president of the Westchester County Board of Realtors, said the local housing market is being ‘held hostage’ by economic issues. ‘All of the factors are hitting us at the same time, just like everybody else,’ he said.”
Typical delusional asswipe realtard talk. Hey DoughHead, what about years 01-06 when buyers were held hostage to spiraling prices? Oh thats right, you were “earning” enormous profits so it was best to stay mum. Do I hear whining now? We both know how to fix this now go get to work.
exeter,
That can’t be said enough. It would be more accurate to say that it’s been the economy that’s been “held hostage” to the housing market! Ever since we NAR-Tailored our Tax Code to ensure all consumption was “housing-based” consumption…we pretty much sealed our fate.
So in RealtyWorld: No Commission = Bad Economy ( regardless of what other sectors may be doing )
Actually, it does make sense that sellers don’t want to just “give their house away.” Think about this situation:
Not everyone is underwater. I’d say that MOST people who bought in very recent years, or refinanced in very recent years, are probably underwater. What is the max that could be, 30% of the market?
If some of the other 70% of the market were not underwater, but possibly lost enough to come to about $0 equity, then they’ve got some choices:
1. “Give their house away” — this means walking away at closing with $0 in hand, or even writing a check.
2. Wait. If they get to the point of missing payments, they can sock the payments away in the bank until foreclosure, and that could mean 6-12 months of their mortgage payments going in the bank. Let’s say it’s $2000 a month, which means $24,000 will be in the bank. When they’re foreclosed, the bank may offer $5,000 if they move out without damaging property. That’s $29,000 in the bank.
So they can either do (1) and “give their house away” or do (2) and walk away with $29,000 or whatever figure.
Makes sense to not give the house away. $29,000 goes a LONG way to repairing one’s credit very quickly.
A.B.,
Although what you say makes perfect sense logically, my opinion is that the demographic of which you speak is fundamentally unable to take that $2,000 and actually “put it in the bank”. If they don’t pay the mortgage, they will just take that money and buy stuff they don’t need until there’s not a dime left at the end of the month.
They’re fundamentally irresponsible financially. If they weren’t, they wouldn’t be in the situation they’re in.
Ah, but you are speaking of responsible people here Ben, I don’t believe many of these people are capable of seeing that kind of windfall and not spending it.
“Shenaaz Khalfan wants to sell her three-bedroom house in the town of Ossining for $630,000 and join her husband, who has taken a job in Australia and bought a house there. She doesn’t know how long the family can pay for two properties.”
Once again, another couple who made a very simple, but very stupid mistake: Don’t buy a second house until you sell the FIRST one…
Once again, another couple who made a very simple, but very stupid mistake: Don’t buy a second house until you sell the FIRST one…
I’ve never done this, because my first house was always cash positive. Always.
People need to realize this when their jobs are not secured or they’re young. If you might have the chance to move, don’t buy a home unless you can rent it for at least the break-even point.
I’ve moved often in life, but always made sure that my current home is rentable. For people to do a twofer without really being able to get clear on their first home is a death trap.
This is good news, though, because it will only help to bring prices down more. Woohoo!
A.B,
“I” appreciate your sense of discipline but let’s face facts, anyone moving down under isn’t worried about whether they have a default to a U.S-based lender. In the Navy we called this “going Ned Kelly”.
I’ve halfway thought about moving to Australia. My Wife has relatives there. But it sounds like a similar situation as it is in the US: The job centers are heavily overprices, hence negating income and savings as well as buying power.
“As game as Ned Kelly”
(Australian Jesse James)
i have to admit some level of frustration on the prices here in nyc
i have done everything i can to be responsible
saving as much as i can
working a 2nd job
sparkling credit with no debt at all
and now my savings gets basically no return at all and the prices for anything decent are still sky high
patience is the key
then this should make your day mgnyc…not
http://www.prudentbear.com/index.php/BearsLairHome
And the Dems and the Pres. are going to [attempt to] bail out your irresponsible neighbors and their idiot lenders this week. Makes you feel great for saving, don’t it? At least inflation has not hit 1970’s levels. Not yet, at least.
Personally, I’d like to see Congressional approval ratings come down further so they’re equal to the 15-year fixed mortgage rate.
Tango,
Where’s the latest video update from your neck o’ the woods? Already out? Let us know!
Not yet. It will be in September, 2 years from when I made the original. And I will let you know. Thanks!
If it’s any comfort interest rates will rise to cover the risk involved in lending money and earn back some of the huge losses incurred with sloppy lending. I expect 10% interest rates regardless of what the Fed does.
So does that mean 15% CDs might be coming back? That would be all right.
“So does that mean 15% CDs might be coming back? That would be all right.”
15% CDs may be accompanied by a S&P500 P/E of something much less than ten. If that were the case (and I’m expecting it will be) then stocks will be the place for money rather than CDs, IMO.
This Debt Driven Capital Clown ride Eronomy with it’s inflation will continue until you start seeing at least a minmum of 7-8 % CD’s hitting the market.
Tell me about it! Some people still think it’s different here, I guess. But the Times and other outlets have discovered things aren’t so hot downtown, so I think maybe we see some real movement over the winter. Looking a little better now that I’m out in Queens, but still a way to go.
THE SHRUB CAVES!
http://news.yahoo.com/s/ap/20080723/ap_on_go_pr_wh/congress_housing
I fully understand, Ive watched these ammature realestate speculators buy housing at inflated prices, hoping to turn a profit. The sad fact is the realators that got in on the begining of this scam made out great, the people who bought within their means are fine, the ones left holding the bag are these ammature investers which bought over thier heads hoping to turn a profit. I know a few contractors, and they really dont need to double their money on every house. People who saved their money to buy a nice house, or at least put a down a large down payment, are not as reckless as the people who took part in this (flip this house) mentality. The market will recover when the bailout programs are dropped, and prices fall and get realistic again, only then will finacialy responsible people enter this market and buy up the surplus at FAIR market value.
California has a very serious problem (one of many) funding all the retirement entitlements for police, firemen and state employees from different departments. One California city has already filed for bankruptcy because it just couldn’t afford all the police pensions and health insurance payments. It’s no secret that California doesn’t know where to turn next to solve it’s budget mess and some of the quoted pension payments the retirees were collecting, are not just ridiculous, they border on financial insanity.
Times have changed. Not just in California but in the US as a whole. Watch these fiscal problems grow not only in California but in all the other big cities and watch as the bankruptcy filings start to appear. Only a total idiot (living in California or these other major cities) thinks everything will turn out fine. The retirement and pension levels a joke and I don’t buy into the, “Put their lives on the line every day,” b.s either. While working they get very well paid for doing the job. Chances of getting killed or injured as a fireman or police officer (who are engaged 50% of the time collecting “hidden taxes” by traffic fines, etc.) are less than if thery were employed in many other occupations which pay far less and have no generous pensions and health care. If a fireman or police officer thinks the risk doesn’t equal the pay……get another job because I don’t fall for the, “Life dedicated to public service,” crap either. They do very nicely financially while working.
If anyone wants to see what’s going to happen eventually to the pensions and healthcare of the police and fire departments and other Federal and State employees, take a look at the big 3 auto makers.
I’m all for paying truly injured police or fireman (or their survivors) generous benefits.
However, I agree with Mike, that the notion that “they put their lives on the line every day” allows ALL workers extraordinary benefits is nonsense. Construction workers, electricians, airline, truckers and many, many others “put their lives” on the line in some fashion as well in the course of their jobs. They don’t get any special treatment though they certainly “serve the public” don’t they?
Everyone makes employment decisions involving financial risk and reward everyday. That some jobs have a higher element of physical risk is part of the overall consideration of every employment question. Until there is a dearth of applicants for police or fire jobs (or other physically risky jobs) the total pay should be commensurate with the relative willingness of enough people to do the work.
Police and fire professionals would be stupid NOT to milk the emotion that surrounds the occasional deaths in their midst. However, that doesn’t mean the public has to buy THEIR sole solution (higher wages for all) to meet the need to provide for legitimate injury or tragic death.
Well put, and I can’t for the life of me find a TV drama about electricians on the air. (Although in the 1930s Jimmy Stewart was in some flick that featured the dangers of working on high tension lines - anyone remember that one?)
Seriously though, the mystification/romantization of the lives of first responders in the popular conscience serves the pols well. The pols prove this each time they hide behind the first responders whenever talk of budget cuts begins.
There is a show on now called Tower Dogs, a reality show about power line folks climbing those big towers .
Son of a gun, no kidding?
What about a drama called “Bubble Trouble” about a team of economists who try to identify, target and deflate burgeoning asset bubbles.With enough camera pans and fast edits, it could be exciting!
ABC, HBO, PBS, are you listening? Gold, people. Pure gold. Oooh, that could be the first episode: Gold! With a sinister blogging Gold Bug played by Christopher Walken. Come ON!!
The New York State Legsilature has unanimously passed a bill preventing local governments in the state from negotiationg any reductions in retiree health care benefits in the next 18 months. Asking the retirees who got the sweet deals to pay something is the only way younger workers can hit back at them, since pensions are guaranteed by the state constitution and a host of other federal and state rules.
After the Governor signs, expect the coming fiscal crisis to be addressed by layoffs of current public employees, wage and benefit cuts for current and future public employees, service cuts and higher taxes. There will be “no choice.” Did I mention that retirement income is exempt from state and local income taxes in NY (NYC has a local income tax in lieu of high property taxes) after 65 for private sector workers but at any age for public sector workers?
The average age of a NYS legislator is probably 65. They’ve run up massive debts, in addition to increasing pension entitlements every year, while de-funding the infrastructure. The people they care about are gradually leaving the state. They want to leave nothing behind.
All are re-elected. It is almost impossible to get on the ballot to challenge them, they way they’ve got the system rigged. And the only turnover is when they retire mid-term, so they can appoint their successors in a special election most people don’t even hear about, where turn out consists of a small number of people in on the deal.
I know whereof I speak. And there are similar generational issues at the federal level and in the private sector.
And then they think they can turn around and sell their houses to the impovershed people who will follow them for five or ten times their falling salaries!
Well, some kind of reckoning is coming, that’s for sure. Buying property into a market brudened with such massive obligations means one will be helping to pay for it - like it or not.
My two cents - this issue seriously handicaps the Northeast, Midwest, and CA in the recovery. The Sunbelt has the advantage here. That said, will taxes and entitlement obligations up north trump the effects of high gas prices, water shortages, etc. that in turn handicap the Sunbelt in the minds of future buyers? Which will exert a greater influence?
Between taxes and projected fuel oil prices going through the roof in Mn and and Wi WE Energies 36% increases within the last year, I’m surprised that I haven’t heard a lot more fixed income people and retirees in the upper midwest singing “Sell them if you’ve gottum and head down South”
…before the last tourist leaves and the 1st Snowflake arrives
“John Occhipinti, a retired police officer who dreams of moving to the Caribbean, said he’s thinking of reducing his price on a four-bedroom, three-bath Tudor-style house he bought in Croton-on-Hudson 10 years ago. He listed it at $829,000 six weeks ago, a price he felt was fair, given the substantial improvements that he and his wife made on the property.”
Yes, fixing up a house and living in it for 10 years certainly does entitle you to have your Caribbean retirement funded by the next generation of homebuyers. You deserve a break, John. Have a kit kat. Have all my future savings. Anything else I can do for you?
Save for your own retirement!!!!!
” have a kit kat” heh heh, I like that one.
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