It’s Got To Be A Deal To Make A Deal
The Rocky Mountain News reports from Colorado. “From 1 to 6 p.m. Sunday, Custom home builder Darryl Wagner is listing three of his expensive homes in a Western Real Estate Auction. The auction will feature new homes priced from $375,000 to $3.2 million in Centennial, Castle Rock, Denver, Parker, Arvada and Golden. The average price of a home is around $1.5 million. At Sunday’s auction there will be undisclosed reserve prices, so the builder can reject low-ball offers.”
“Wagner said his reserve prices will be close to his net cost of building. ‘If someone offers me $500,000; I’ll just say no thanks,’ Wagner said.”
“‘In a strong housing market, we’re not so busy. In a down market, we’re really busy. We’re getting busier every month,’ said Rhett Winchell, head of that division for Kennedy Wilson. ‘If you thought you were going to sell 10 homes a month and you’re selling one home a month, the advantage of an auction is is you can sell all of your homes in one afternoon. Even though you get less than you expected, you can save an entire years worth of carrying costs.’”
“On July 20, for example, Kennedy Wilson auctioned 45 condominiums in Santa Fe. The units originally were listed from $189,000 to $310,605. Most sold from about $140,000 to $225,000, he said. Typically, Winchell said, the minimum price of a new home is 60 percent of the asking price. If a builder could get 90 percent of the asking price, he’d probably sell it outside of the auction, he said.”
The Aspen Daily News from Colorado. “Waning construction and a sluggish economy set off a round of layoffs in the local architectural sector recently, including one firm that slashed salaries by 10 percent. Speculative projects - houses and condominiums - have definitely slowed down, architects interviewed for this story agree.”‘
“‘A lot of our speculative home projects went away,’ said Jeffrey Halferty, who is technically a designer not an architect.”
“‘If you’re working for someone in the oil business in town, you’re probably doing just fine - and there are some of those in Aspen. Aspen is a rarefied place,’ added Harry Teague of Aspen-based Harry Teague Architects. ‘There are people here working in all different kinds of fields in the economy and to that extent we seem to ride out some of these waves. But this is a global economic issue, not just a national one. And I suspect we’re going to be affected.’”
The Arizona Daily Star. “The latest Arizona Blue Chip Economic Forecast shows drops in employment, retail sales, housing and population growth. And new figures from legislative budget analysts show that sales tax collections for June were less than $300 million. That is nearly 7 percent less than a year earlier.”
“Home permits during the first half of the year also slowed to 11,182, down from 24,783 during the same period last year. The report said Arizona’s employment and home building will not see a turnaround this year. Arizona lost 33,000 jobs overall in the past 12 months, with the most jobs lost in construction, at 33,100. At least 35,000 more construction jobs will be lost in 2008, the report predicted.”
“‘Forecasts made at the start of the year are in the shredder,’ said Associate Dean Lee McPheters of Arizona State University. McPheters said economy watchers ‘are debating just how bad the downturn will be and how long it will last.’”
The Arizona Daily. “Since the collapse of subprime lending, Arizona’s bloodied housing market has been leaning heavily on a makeshift crutch known as seller-funded down-payment assistance. A federal housing bill signed into law Wednesday will yank away that crutch on Oct. 1.”
“Customers in outlying communities such as Laveen, Maricopa, Surprise and the Hunt Highway corridor of northern Pinal County currently use down-payment assistance for nine out of every 10 sales, said Phoenix real-estate analyst Jim Belfiore.”
“‘Almost every builder out there is heavily marketing homes with down-payment assistance,’ he said. ‘The hardest-hit area of the market will be the starter-home market.’”
“Surprise resident Jesse Grob (said) it’s a shame first-time buyers will no longer be able to utilize seller-funded assistance programs as he did. ‘I’m a hardworking guy - I’m by no means poor,’ he said. ‘I made $70,000 last year, and I still had a hard time coming up with a down payment.’”
The Camp Verde Bugle from Arizona. “The market for homes in the Verde Valley, both new and old, continues to slip. Not only are sales of existing homes down from a year ago, but the average price has also continued to drop. The slump is valley wide.”
“The median price has fallen by $34,700 in the Cottonwood, Clarkdale and Cornville area to $200,800 and by $19,000 in Camp Verde to $217,000. One of the major factors driving the price of resale homes downward is bank repossession.”
“‘Finding the bottom is not going to be up to the retail market. It’s going to be up to the banks because they have so much inventory,’ says Rob Witt, an agent for Camp Verde Realty. ‘The deals we are seeing are bank deals and they are quite low. Added to that is people’s expectations are that the market is still going down.’”
“Audra Stadelman, sales manager for Coldwell Banker in Cottonwood, agrees. ‘We are having a hard time coming out of the slump because of all the foreclosures out there,’ she says. ‘They are only about 5 to 7 percent of our market, but it’s the 5 to 7 percent that is selling. It’s got to be a deal to make a deal.’”
“According to Witt, the market has an almost three-year supply of homes if houses continue to sell at the current rate.”
“How long the downturn will continue or how far prices will drop is anyone’s guess. ‘I say the fourth quarter of 2009,’ says Jerry Butterbrodt of Century 21 Sexton Realty. ‘We have enough foreclosures out there to sell for a year, then we will be back to a normal market. That’s my story and I’m sticking to it.’”
The Tooele Transcript from Utah. “Home sales are down across the state and nowhere is falling further than Tooele County. According to a new report by the Salt Lake Board of Realtors, home sales in Tooele County fell 36 percent in the second quarter of 2008 compared to the second quarter of 2007 - a larger drop than in Salt Lake, Davis, Weber and Utah counties. For the same period, median sales prices in Tooele County declined 6 percent to $183,300 - again the largest drop of the five counties.”
“Kelly Matthews, chief economist for Wells Fargo & Company in Salt Lake City, said Tooele County’s decrease in home sales may be partly caused by rising gas prices.”
“‘In a place like Tooele, gas prices are going to pose a problem in relation to someone buying a home, unless they plan to work in Tooele,’ he said. ‘People used to be willing to buy a home in Grantsville and commute to Salt Lake for work. However, the higher gas prices now are really affecting commuting costs, and people really don’t want to spend that much on gas now.’”
“Matthews also attributes the drop in home sales to tighter lending restrictions, which make it harder for potential buyers to qualify for a home loan. ‘People were getting loans who realistically couldn’t qualify under normal, traditional lending standards last year, and there were too many of those people out there who were receiving them,’ Matthews said. ‘We ended up with a big affordability problem.’”
“‘The solution to this would be home prices readjusting in relation to peoples’ incomes, and that’s a process we’re working through,’ he said. ‘That’s why we’re seeing home prices get marked down. We’ve made significant progress in getting through this housing problem, but there will always be people out there who would like to buy a house but are waiting to see the prices go down even further.’”
The Daily Herald from Utah. “A glut of unsold new homes along the Wasatch Front is starting to shrink as more homebuyers come out of the woodwork, according to a report released Thursday by Newreach. ut the number of new homes abandoned halfway through construction — particularly those priced above $350,000 — is also rising, said Todd Cook, Newreach’s executive VP of research.”
“‘As our research shows, builders are working their way through speculation inventory, which is good news; however, there are more new homes abandoned than we have seen before,’ Cook said. ‘This could keep the unsold home inventory in a flat state, although many of these abandoned homes are in higher-priced ranges, so we should continue to see a decline in unsold homes, specifically under the $300,000 price range.’”
“In the second quarter, there were about 150 abandoned new homes in the north Utah county area, mostly in the cities of Saratoga Springs and Eagle Mountain.”
“‘That number is rising — the reason is likely [that with] many of these homes that were started, the builder is not able to finish because of construction loan release requirements,’ said Jason Eldredge, Newreach’s executive VP of sales.”
“Lehi continues to lead the state for the third consecutive quarter with the greatest number of unsold homes, accounting for a whopping 233 units, followed by Saratoga Springs with 194 units and Eagle Mountain with 157 units, according to the Newreach report.”
“The number of unsold new homes and condominiums in Utah County fell to 951 unsold units in the second quarter from a year ago, and is down slightly from 987 units at the end of 2007.”
The Review Journal from Nevada. “Numbers from local agencies designed to attract new businesses to the Las Vegas Valley reported dips in the number of companies moving to the area, and recorded drops in the economic impact of corporate growth here.”
“‘When I look at the numbers, I’m not thrilled with them,’ said Somer Hollingsworth, CEO of the Nevada Development Authority. ‘But we ought to be happy to have even these numbers, because it’s a nightmare out there.’”
“The new housing recovery law gives a glint of hope to homeowners facing foreclosure, but local business leaders doubt it will help many Southern Nevadans. Michele Johnson, CEO of the Consumer Credit Counseling Service, said Thursday she doubts the federal law will help much here.”
“Lenders with second-home loans would be wiped out and probably won’t agree to the FHA loan arrangements if they don’t also hold the first mortgage on a home, she said.”
“‘How many second-mortgage lenders are going to be willing to eat the balance (on their loan)?’ she said. ‘Probably 70 percent of the homeowners we’re seeing have a second mortgage with a different financial institution (than the first mortgage lender). Most of the (second-home loans) were for down payment on the house.’”
“Wells Fargo Bank, one of the biggest home lenders in Nevada, is analyzing geographic areas and may approve the FHA refinancing and loan reductions in distressed areas, possibly including parts of Clark County, said Kirk Clausen, regional president of Wells Fargo Bank.”
“‘It could include some forgiveness on some mortgage loans that might be underwater,’ Clausen said. ‘It’s probably too early to commit on any across the board loan forgiveness (of amounts exceeding 90 percent of appraised value).’”
Las Vegas Now from Nevada. “Bank-owned foreclosures dot the valley. The buyers are lined up ready take it over. But realtor Cynthia Glickman says there is just one problem. ‘The people in those departments really didn’t understand what was going on.’”
“Glickman has buyers to turn these troubled homes around. But the banks and mortgage lenders grind things to a halt and put the whole sale in jeopardy. She says they don’t have the knowledge or man power to handle the crisis.”
“‘Literally out of his mouth, you know, finally after asking enough questions — ‘really, yeah, ya, we pretty much don’t know what we’re doing,’ said Glickman.”
“It’s the same problem for Signature One Mortgage rep Jeff Kauffman. He secures the money for the buyer — and is shocked at how banks could be so ill-prepared for the deal. ‘Then we’re waiting and we’re waiting. And they’ll say it’ll be over by Friday. Friday comes around — and it’s not there,’ said Kauffman.”
“This is all happening when home prices are down nearly 30-percent compared to a year ago. That’s the worst drop in the country. ‘Sometimes common sense doesn’t apply to them,’ said Kauffman.”
“Glickman says they won’t accept the reality that the home price bubble has burst. ‘They’re shooting themselves in the foot because they don’t understand the decline in the market and what’s happening,’ she said.”
“The I-Team spoke over the phone with a few banks today. They didn’t really have an answer for why these foreclosure sales take longer and are more complicated.”
“Wells Fargo did say they are having to take over more properties as foreclosures continue to rise. They’re not dragging their feet on purpose. Wells Fargo said it wants to sell these homes as soon as it can. But there are so many foreclosures, they literally cannot keep up.”
KVVU Las Vegas from Nevada. “The Valley is full of for sale signs, for those who are selling, the news is not good. The Case-Schiller Housing Index shows home prices fell by the steepest rate ever in May, and Las Vegas is down 28.4 percent. ‘That could very well be true,’ said Patty Kelly, president of the Greater Las Vegas Association of Realtors.”
“She said two out of three homes are being sold after foreclosure, bringing down median sales prices. Kelly said that makes it a great market for buyers.”
“‘It’s a buyer’s market for sure. I moved here from Jersey. I’m going to rent first but seriously look hard in this area,’ said resident Bert Potts.”
The Las Vegas Sun from Nevada. “Chris Adams was excited to be one of the first occupants of a midrise condominium complex along Centennial Parkway in North Las Vegas. It made the perfect bachelor pad, with its modern architecture, apple red exterior and view of the mountains.”
“Eighteen months later, he’s getting pretty tired of still being one of the first occupants of the place. In the three-building complex, totaling 75 units, Adams has only seven neighbors.”
“The other units sit vacant in varying degrees of completion. It’s spooky at night, the darkness of the desert enclosing on the nearly empty buildings. There’s little noise or movement.”
“The pool is empty and the clubhouse remains locked, keeping a fitness center and a community room off limits. In front of the complex, the address appears to have been hastily spray-painted on a slab of rock. Above it, a billboard depicts a good-looking couple embracing, enjoying carefree living.”
“‘I can tell you that they don’t live here,’ Adams says, because he really does know everyone in the neighborhood.”
“In January 2007, he plunked down $20,000 cash for his $218,000 condo. Then he noticed the plumbers weren’t coming to finish work on neighboring units in his building. Soon the electricians stopped returning. When all the workers were gone, he started to worry.”
“The complex went into foreclosure. Now another developer plans to purchase the project. But they might not be. Blue Marble Development wants to convert the unsold units into apartments.”
“Adams shudders to think how apartments will affect the value of his condo. He certainly never intended to be surrounded by apartments when he agreed to make $1,300 monthly mortgage payments.”
“The buildings are targets for vandals. A half-dozen shattered windows have been boarded up, giving the complex that low-rent feel. ‘It could have been a nice place to live,’ he says, walking past a small playground that gets little use. ‘It would be like taking your kid to a junkyard to play.’”
“If the developer wants to turn the other units in his building from condos into apartments, Adams wants to be bought out. If that doesn’t work, he’s at least hoping they put some water in the pool.”
The Lahontan Valley News from Nevada. “You can’t blame Jolie and Dan Anderson for feeling a little worried. Their real estate firm, The Realty House Anderson & Associates, sells new houses in Fernley’s Donner Trails Estates subdivision for developer JKB/Paramount Homes Nevada.”
“Business at the large development on the east side of town has been strong enough for the builder to introduce new floor plans and begin work on new model homes. But the couple has noticed that some of the other developments in town have become mighty quiet.”
“‘You go out there, and there’s weeds growing all around those homes,’ Jolie Anderson said. ‘It’s scary.’”
“R&K Homes of Reno has four active subdivisions in Fernley. However, most of the current activity is not visible from the street. ‘We sold seven or eight homes last month, and we just had some dramatic price reductions,’ said Shana Rudd, a Realtor who is in charge of sales for the four developments.”
“Even so, there are more than 30 completed homes available in the four neighborhoods, including model homes, she said.”
“Since the beginning of the year, Linda Lawton, owner of L.L. Realty, has sold 42 new and resale homes, with sale prices down as low as $129,000. ‘The people who have existing homes have lost a lot of equity,’ Lawton said, ‘but it (the price drop) has drawn in the buyers.’”
“In the past, a majority of homebuyers came from Reno to take advantage of Fernley’s lower housing costs. ‘We used to say, ‘Drive a little, save a lot,’ said Dan Anderson. ‘But with $4-a-gallon gas, guess what? The savings aren’t as big as they were.’”
architects
work 60 hours
earn their money- they are a group I pity for the next 5 years
I have a nephew that just changed his major from architecture to I.S. –UCLA.
In my experience the architects don’t do much, but rely on the design engineers and field construction personnel to keep their fat out of the fire. The architects usually don’t have actual field expertice and don’t understand structures either. Actually, there is usually a significant disconnect between all parties involved. But it’s the competent construction workers that I feel for. They are the ones that make it all come together and do the real work. And they never get paid much even in the best of times. Now they’re just screwed.
It’s situations like this that gave rise to communism, where the ordinary man got tired of being constantly exploited. Unfortunately, communism as a “cure” is worse than the “disease”. But I am increasingly finding that I dispise the neo-conservative (read robber barrons) version of capitalism just as much as communism. We have become our enemy.
What’s worse, the competent carpenters you speak of have been mercilessly screwed by the use of illegal, incompetent, and shoddy labor. It used to be that houses were built by master carpenters. Instead, you’ve got substandard cracker boxes built by low wage scabs working for 1/3 of the pay. You get what you pay for, and many “homeowners” will find this out for years to come. The Toll Bros. of the world are the biggest offenders. The whole sham was orchestrated by the PTB. Nothing but a huge money grab by the wealthy elitists at the expense of the average American citizen. Sickening, truly sickening.
Ah, but Bantering Bear, you used the word “scabs”. Scabs is a term made by unionists, and unionism is like bed buddies with communism, in many people’s minds.
Just sayin, case you get smothered in flames.
funny…last year when they were debating the immigration bill, I had a little exchange with Mark Krikorian at that CIS tank, asking if Bush and his guys weren’t trying to keep that white-hot SW economy going with the cheap labor. Krikorian thought that was only secondary, that it was a big moral issue with GW.
Whatever, but I can see I was right about the connection between the immigration and the economy. But what came first, the cheap labor or the demand? The thing just fed on itself.
Now the CIS people are saying illegal immigrants are leaving due to enforcement, and downplay the disappearance of jobs for them.
I agree Bear…
I remember when members of this blog were called ‘flat-earthers’ for believing that housing prices would fall.
Vindication is sweet.
http://ap.google.com/article/ALeqM5gVKofKbtJ2gCh_9py0AYsipjglpAD929LAM80
Nothing to see folks, move along… No ressesion, no depression, just solid facts.
From the FED to America- “Don’t fret little lady, we’ll fix your wagon.”
Its about damm time !! I would lay them all off and start over…
I can understand people calling us loony, or crazy. But I resent being called flat-earthers. I don’t think flat-earthers is an english word.
Well I’m sure Cynthia Glickman IS swarmed by bottom feeders eager to cash in on Vegas’ woes. All she needs is an enticing entry point. An entry point where she can make a sale.
Not so easy for the bank! They are accountable ( now ) to other parties so they can’t just jump through hoops, let properties go for a song and make all of Ms. Glickman’s fantasies come true? As we’ve noted in the past ( she was ‘probably’ part of the problem to begin with )
But I’m sure NAR has no such provision that would prevent a Realtor (TM) from getting commissions on the same property multiple times. Just as NAMB had no qualms whatsoever about MB’s getting paid on multiple loans on the same property from the same owner. Just good business, right?
on HIVtv a realtard used another realtard to buy a house
wow , that’s tardy
Her web site:
http://www.soldbyglickman.com/agents.html
Know tell me, isn’t that the photo of the prefect Realtor - all teeth and splash and fine dining. I’m sure it’s a service thing, and she just isn’t getting serviced by the boys at the bank.
That is called a coven….
Cynthia Glickman
“Helping You to Create & Build Wealth”
Now I finally get ‘it’ Realtards are in business to help people “Create & Build Wealth”. It has nothing to do with selling homes for commission, it’s all about helping. I feel so much better now.
Create = instant equity
Build = equity via appreciation
I like Ron Botts the best — he looks like someone out of “Grand Theft Auto - Vice City”
“Surprise resident Jesse Grob (said) it’s a shame first-time buyers will no longer be able to utilize seller-funded assistance programs as he did. ‘I’m a hardworking guy - I’m by no means poor,’ he said. ‘I made $70,000 last year, and I still had a hard time coming up with a down payment.’”
Because he was too busy spending it left and right?
That was my thought too.
I did, and they I didn’t. It’s human nature ( for Americans anyway ) to almost always state their ‘best’ year as if it were an avg. year. I know it’s wrong, but I’m used to it. Believe it or not depending on where the person is in their “consumption cycle” there’s ways these dollars could be spoken for for before Jesse even made them?
Dent tells us that consumption peaks ( for most ) around age 47. I’d love to know where he finds that data unless of course he doesn’t count college age kids, weddings and grandchildren in the mix? Your points though are well taken. Anyone that consistently makes 70k and needs ‘credit’ to buy a pack of gum has issues.
Watch the video but promise me not to get angry, OK.
http://www.alternet.org/blogs/video/93043/mayer%3A_justice_department_lawyer_says_lunatics_running_the_country/
Why get mad over political drivil!
From the original post:
If the developer wants to turn the other units in his building from condos into apartments, Adams wants to be bought out.
I can’t help thinking that a lot of other buyers of condos will be expressing the same desire. Sounds like a growing area of real estate law.
They have no choice…These units are not financeable on a individual basis…No lender will loan on them with a 95% vacancy rate…Furthermore, no lender will loan on them (today) without 70% of the units being owner occupied…The developer (or foreclosed bank) has no choice but to convert to rental and then secure what ever long term financing they can…
Ben!!!!
Thank you soo much for the information. I moved to Henderson, NV at the fist of this year, currently renting and waiting and will continiue to wait.
Could anyone help me, for the long term, with determining who to conect with in regards to forclosed homes. How can I get the inside track on learning who the decision makers are for the realestate in the Las Vegas area, I like the location that I am in now, the Green Valley area, I am close to the airport and in a decent part of town.
Thank you in advance for advice provided!
Follow the local paper…At least in Cali, lender is required to advertize in the local paper…
Gonna have to aggree with Glickman here:
——————-
“The people in those departments really didn’t understand what was going on….Glickman has buyers to turn these troubled homes around. But the banks and mortgage lenders grind things to a halt and put the whole sale in jeopardy.”
——————–
I’m trying to buy a short sale — conventional loan, 20% down, and the bank has been floating on it for the past month. Funny though - while waiting, home prices have dropped enough where this short sale will soon be on-par with other conventional sales. So if the bank doesn’t hurry up, we’ll just break our option period, and buy something else. It’s fun to be in the driver’s seat!
short sales are the scam of the century- bank language in contracts is silly, not committing to price etc……..are they even to be considered contracts
I have to believe that a big part of the reason banks are being cautious is that they’ve already been burned once by realtors, appraisers and MB’s working in concert.
If they open the flood gates ( again, attracting the wrong crowd of speculators ) you’ll see the same Realtwhore’s (TM) “wet dream” on the other end! “I’ll take it off your hands for____ and do you a favor…” and then turn right around and flip it at a profit. ( Or so they think ) Previously they preyed on starry-eyed wannabe flippers and now they’re looking to exploit the bank’s sense of urgency.
I’m sure there are legions of realtors out there that are now hoping the correction is every bit as painful as the most bearish among us has predicted. Sure it’s not as ’sexy’ as equity skimming McMansions but Hey! ( I’m back in the game! )
Short sales with lenders are like trying to get a building permit with city municipalities…Many layers of approval to finally get to the finish line…Its best to know this going in so you can make an appropriate offer and have the patience to wait…
“In the second quarter, there were about 150 abandoned new homes in the north Utah county area, mostly in the cities of Saratoga Springs and Eagle Mountain.”
I grew up in southern Utarr, as I have many times mentioned fondly, or, maybe not that fondly, and I just was back there visitin’ my mommy last month. Now, as you drive along I-5 south of SLC you will see plenty of subdivisions, about 15 trillion clean, jammed-together Subdivisions of the Saints, and to rest your eyes you might try to focus them somewhere else but on the endless rows of McMansions. You will think, ‘I’m going to look at a distant, unsullied mountain range, at some of Utarr’s great natural beauty’. But then you will spy, on the distant, unsullied mountain foot, just north of Utarr Lake, a little white scabrous looking patch. Wayyyyy out there in the wilderness. Squint all you want, it’s so far away from everything else you can’t tell what it is, except you will now know what that white scab is, because I’ll tell you–that’s Eagle Mountain/Saratoga Springs. About a zillion miles from ANYTHING. When Sweet Baby Jeebus holds the Second Coming He’s going to have to walk a ways to gather up those particular righteous souls, assuming there’s anyone still living there and it’s not a ghost town. He’ll be parched by the time He gets there.
I cannot even begin to imagine how higher fuel prices are affecting that remote scab. Wait, yes, I CAN imagine. And look at me laugh!
What are you smokeing? I-5 doesn’t run anywhere near Salt Lake.
But that’s ok. You’ve got creative cred points here, I’ll hand it to you.
I-5, I-15, what’s the diff. I’ve been up and down both those a few times myself.
“What are you smokeing? I-5 doesn’t run anywhere near Salt Lake.”
She left out a 1, you added an e. Hers is an entertaining post pertaining to housing. Yours is something only a spelling nazi could appreciate. Advantage Oly.
Amen Bear!
I’ve been contemplating the reality of the 2.5X-3X “rule” for buying a home. I think the range breaks down on the edges of the bell curve.
For example, someone earning just $25k a year should probably not purchase a $75k home. Because the earnings are so slim, the regular costs of living eat into the net remainder, which means less goes to savings to prepare for darker days.
But someone earning $500k per year likely shouldn’t get a 30 year loan on a $1.5m home. Earning that amount may be limited to a few positions in any industry, and losing one’s job may mean having a hard time to find a replacement position with similar pay.
What do people think is the best portion of the bell curve of incomes/buy prices that keeps the 2.5X-3X income/buy price consistent? Maybe $40k-$160k for homes worth $120k-$480k?
I don’t think the problem today is just the size of incomes, but their instability. If you make $25k year after year after year, and live within your means, you should have no problem buying a $75k home with a 30-year mortgage. If, however, you make $500k this year, $200k next year, $700k the year after, and $75k in year four, and then get laid off indefinitely in year 5, buying anything over time stops making sense.
Unless you were wise enough to sock it all away.
But even if you really sock it away, those savings are finite–and the question becomes, how do you want to distribute that amount over time? Minimally, as a cushion for your basic needs? Or with a big chunk going to a mortgage taken out when you were flush? I still can’t help concluding that with a fluctuating income, renting is almost always a safer bet, and more and more people today have wildly fluctuating incomes.
Agreed.
We are actually completely in agreement even though we may not be stating it the same way.
I stated the same argument about a year ago. Everyone agreed so we stopped talking about it.
What’s the point of “arguing” if everyone agrees?
A.B Dada,
Agreed, it’s a lot harder to fill a 500k hole than a 25k one? I’m not in the business of telling people ‘how’ to spend their money but you’d hope at some level common sense would enter into the picture?
Trad. fin. planning would tend to indicate that as one gets closer to retirement that their DTI would tend to taper off. In spite of the fact that it worked well in this country for 200 years, of late everyone’s decided it no longer applies to them? Or ‘anyone’ for that matter.
In places like the BA where you DO have a lot of HCE’s people didn’t think twice about dropping 1/1.5 mil on a home. True their disposable income dwarfs Mr. 30k-milli but as a Chicagoan myself I’ve seen a lot of successful people still living in working-class neighborhoods. Probably not so much any more.
One reason convention biz might be slow in LV:
‘Thanks to an economic kick in the shins from increased manufacturing costs and decreased consumer spending, folks flogging footwear this week at the World Shoe Association Show say it’s unlikely the 35,000 or so people who typically attend the semiannual event made the trip this time.’
‘Customers owe money to their suppliers. They don’t want to run into them,’ said Neal Marks of Hazan Shoes Inc., maker of affordable, stylized dress shoes sold in stores such as Mastroianni Fashion in the Las Vegas Valley.’
When I was in retail (owned 3 stores and growing), we sold shoes. We always owed money to our suppliers, but it was part of the “secret” of buying an selling shoes. They were the only suppliers we shorted every season.
When we went to conventions, we were not the only ones behind 60-90 days. Most were. Another secret: the strong deal with the secret NET90 terms (called being late for 1%), the weak avoid the conventions where they can book deals saving 20-30% off the wholesale price.
Idiots.
Of all topics covered on this blog, we rarely see architecture covered. Glad to see the lofty and I’m better than you attitude of architects being brought down a notch or two.
“The Aspen Daily News from Colorado. “Waning construction and a sluggish economy set off a round of layoffs in the local architectural sector recently, including one firm that slashed salaries by 10 percent. Speculative projects - houses and condominiums - have definitely slowed down, architects interviewed for this story agree.”‘
“‘A lot of our speculative home projects went away,’ said Jeffrey Halferty, who is technically a designer not an architect.”
I think the residential architecture industry will suffer just as much as Realtors, Mortgage Brokers and Bankerz among others in this collapse.
Cinch
Was at one of my favorite local watering holes on Wednesday eve. A local architect was also there, and he said that his practice was perking right along.
He added that numerous colleagues have asked him if he was aware of what was going on in the economy. His reply to them (and to us): “Yes, I know. But I have my own economy.”
“Sright, Slim! Make your OWN economy!
“‘A lot of our speculative home projects went away,’ said Jeffrey Halferty, who is technically a designer not an architect.”
“technically”? It’s no little technicality! It means he doesn’t have an Engineering degree and isn’t a licensed PE.
“Finding the bottom is not going to be up to the retail market. It’s going to be up to the banks because they have so much inventory,’ says Rob Witt, an agent for Camp Verde Realty. ‘The deals we are seeing are bank deals and they are quite low. Added to that is people’s expectations are that the market is still going down.”
“Audra Stadelman, sales manager for Coldwell Banker in Cottonwood, agrees. ‘We are having a hard time coming out of the slump because of all the foreclosures out there,’ she says. ‘They are only about 5 to 7 percent of our market, but it’s the 5 to 7 percent that is selling. It’s got to be a deal to make a deal.”
“According to Witt, the market has an almost three-year supply of homes if houses continue to sell at the current rate.”
“How long the downturn will continue or how far prices will drop is anyone’s guess. ‘I say the fourth quarter of 2009,’ says Jerry Butterbrodt of Century 21 Sexton Realty. ‘We have enough foreclosures out there to sell for a year, then we will be back to a normal market. That’s my story and I’m sticking to it.”
Oh phooey! These witch doctors were pumping the “better buy before prices rise more” line back a few years ago. I was there to hear it. These are nothing but sales people to the core plain and simple. In hindsight, for these knobs to sound like the paragon of common sense is off putting to say the least.
Apologies if this has been posted before. Thought it was an interesting read. Thanks.