The Trend Of Unsupportable Housing Prices
The Boston Globe reports from Massachusetts. “The median price statewide for single-family homes last month tumbled 9 percent to $323,000 from $355,000 a year ago - the lowest level in August in seven years, real estate data provider Warren Group said yesterday. The biggest drops were on Cape Cod and the Islands and in Central Massachusetts. In Barnstable County, prices fell 18.8 percent, to a median $325,000 in August, from $400,000 in 2007.”
“And now the real estate market has Wall Street’s crisis hanging over it. While various measures are intended to ease pressure on struggling homeowners and lenders alike, some specialists question whether they will make any meaningful difference given the current market conditions and fears about the economy sinking into a recession.”
“Nicolas Retsinas, director of the Joint Center for Housing Studies at Harvard University, said if the crisis causes large-scale job losses, the housing market would be further damaged. ‘At this point, the housing market is in such bad shape I don’t think even Congress or the administration can pull a rabbit out of a hat and change the momentum,’ Retsinas said. ‘I don’t think any act of government is going to dramatically reverse the market.’”
The Daily News Tribune from Massachusetts. “In July, the number of sales was down 6.3 percent from the same time last year. By August, the decline had spiked to nearly 15 percent.”
“‘I think there are some communities that are doing fairly well, but on a whole for Massachusetts, I don’t see the median prices leveling off for another six months,’ said Tim Warren, CEO of The Warren Group. ‘On the downside, the thing that worries me most is just jobs. If we have a lot of layoffs or cuts in employment levels, that’s got to be bad for the real estate market.’”
The Seacoast Online. “George Reagan of New Hampshire Housing Finance Authority, said only 11 percent of all mortgages in New Hampshire are subprime, although they account for one-half to two-thirds of all foreclosures.”
“But economist Chuck Lawton said that doesn’t mean the Seacoast is immune to a fall from the precipice at which the United States stands. For instance, in the York area between 2000 and 2007, the median income increased from $50,000 to $61,000, or 19.7 percent. In that same period, housing rose from $244,000 to $330,000, a 78.4 percent increase.”
“‘How can that happen? How can there be such a disparity? That’s what everyone’s asking in Washington today: How did that happen?’ he said. ‘My hypothesis is that higher income people are losing their jobs and more expensive homes are being sold. It’s part of the same trend of unsupportable housing prices.’”
The Providence Journal from Rhode Island. “Ron Phipps, a former president of the Realtors’ association, said the challenges at this point are all the foreclosed properties that have flooded the market and the credit crunch. ‘When one in every four or five transactions is REO [real-estate owned, or foreclosed properties], that makes it particularly difficult,’ Phipps said.”
“Bargain-savvy buyers can’t help comparing prices of market properties with the distressed ones. And the sale of distressed properties - including foreclosures and short sales - ‘take forever to resolve,’ Phipps said.”
“Phipps said he strives to be honest when buyers ask him to ‘guarantee that the price won’t drop’ by admitting that it is a possibility. He said he tells buyers that although property may lose some value in the short term, ‘in the interim you’re going to be in the house you want.’”
“But for people who plan to stay in a house only for a year? ‘Maybe you ought to rent,’ Phipps said.”
WTNH from Connecticut. “Economic troubles are hitting closer to home as 15 houses go up for auction in New Haven today. They are just some of 200 properties that were up on the auction block today. A house on Orchard Street was sold at an auction Thursday for $45,000.”
“In 2006, the city recorded 65 foreclosures. And, by 2007, that stat had jumped to 183. Already this year, the number is at 172 foreclosures.”
“Most to the properties up for auction today were bank owned. The company running auction done in Connecticut…move to do the same thing in New Jersey.”
The Journal News from New York. “The economic meltdown seeping into the Lower Hudson Valley is draining the profit from the sale of Brendan Meyer’s home.”
“In 2006, the 25-year-old bought an apartment in Tarrytown for $155,000 and, after $20,000 in renovations, he planned to sell it for $240,000. But as panic-stricken banks tighten lending standards and buyers find it harder to get mortgages, Meyer said he’s had to drop the asking price considerably.”
“‘It looks like this is going to be about a $25,000 to $30,000 decrease in what I anticipated getting for it,’ said Meyer. ‘I’m a little frustrated.’”
“As home values decline, incomes fall and monthly housing costs increase, Farokh Hormozi, professor of economics at Pace University, expects more residents to depend on credit. But the current liquidity crisis on Wall Street could make loans and credit cards more expensive, he said.”
“‘No matter how wealthy you are, occasionally you get short of cash and you rely on credit cards and loans,’ Hormozi said.”
From Bloomberg. “The New York metropolitan area is forecast to lose 64,000 positions, or 13.5 percent, by the second quarter of 2010, according to Moody’s Economy.com. While financial services firms account for about 12 percent of New York City employment, they represent almost 30 percent of total wages and salaries, said Marisa Di Natale, the regional labor market specialist for Economy.com.”
“Bill Kokkosis, owner of the Majestic Delicatessen Cafe across the street from the New York headquarters of Lehman Brothers, said he was missing about half of his usual lunch customers Sept. 15, the day the firm announced its bankruptcy.”
“‘This definitely affects the whole area,’ Kokkosis said. ‘It looks like 9/11.’”
“Residential real estate in Manhattan, the U.S.’s most expensive urban market, may be among the hardest hit parts of New York’s economy, Di Natale said. The median apartment price in the area has risen an average of $54,375 a year since 1995, reaching a record $1.03 million in the second quarter.”
“Second-quarter Manhattan apartment sales dropped 22 percent, the most for any second quarter since 1998, and unsold inventory approached an eight-year high, two signs prices may be poised to fall, said New York-based real estate appraiser Jonathan Miller, president of Miller Samuel Inc.”
“‘I think it’s already happening,’ Miller said. ‘You’re removing high-income-producing individuals, at least temporarily, from the economy or from purchasing new homes.’”
From CNN Money. “‘Nobody wants to catch a falling knife,’ said Dean Baker, co-director of the Center for Economic and Policy Research. Home buyers are also facing a slowing overall economy that’s shedding 100,000 jobs a month. Layoffs are of course especially high in the financial sector.”
“‘I wouldn’t be buying a condo in Manhattan if I were an investment banker,’ said Baker. ‘And if I owned one, I might be thinking about selling it.’”
“Glenn Kelman, founder of the online brokerage house Redfin, says his buyers are seeing an average discount of 10.7% from a home’s listing price. ‘That’s enormous,’ he said.”
“Kelman says that some people are pulling out of deals. ‘Clients have expressed their reservations about continuing the process,’ in the wake of recent events, according to Redfin broker Febe Cude.”
“The nearly half-point interest rate jump turned off buyers like a switch, according to Steve Habetz, a mortgage broker in Connecticut. ‘Things quieted down almost immediately,’ he said.”
“Nicole Harkin, who is a financial analyst with the General Accounting Office, and her husband, Brent Lattin, who works for the Federal Reserve, were particularly concerned about interest rates as they house-hunted in the District of Columbia.”
“Last week’s turmoil convinced them to postpone their purchase indefinitely. ‘We didn’t want to waste a half million dollars,’ said Nicole. ‘I think home prices have to correct some more.’ Their plan now is to wait out that correction and buy later at what they hope will be a lower price.”
The Wall Street Journal. “Many investors have been tempted by the idea of buying foreclosed homes in bulk from banks, at a steep discount. But the experiences of a Washington, D.C.-based property investment firm, Redbrick Partners LLC, show it can be difficult to manage a large number of single-family rental homes scattered across a metropolitan area.”
“The firm in recent years bought hundreds of properties in working-class areas of East Coast cities including Baltimore, Philadelphia and Trenton, N.J. It hired local managers to handle rentals and maintenance.”
“Now Redbrick, formed in 2003, has concluded that it is too costly to manage those homes and is trying to sell most of them.”
“In Baltimore and Trenton, Redbrick said in a recent letter to investors in one of its funds, ‘we have not been able to generate positive cash flow from these assets through our internal property management organization and have also been unable to identify satisfactory third-party property managers.’”
“As of June 30, the value of a $100,000 limited-partnership investment in the second fund, including past distributions of cash to investors, had fallen to an estimated $56,099. For the third fund, the value fell to $45,633 as of June 30 from the original $100,000 of investment.”
“‘We’ve learned a lot of what works and what doesn’t work,’ says Tom Skinner, one of Redbrick’s managing partners. ‘In the future, we’ll do more of what works.
‘The first Redbrick fund has produced annual returns of about 20% a year for investors…But the second and third funds have suffered heavy losses, according to letters recently sent to the investors. Redbrick was formed in 2003 by Jonas Lee, a former Web site entrepreneur, and Mr. Skinner, a former McKinsey & Co. consultant. They drafted in as a partner William Wheaton, an economics professor at the Massachusetts Institute of Technology’
Ha ha. Redbrick was just a housing bubble dotcom thing. And the media said they were geniuses. Have fun plunging those toilets boys!
‘The first Redbrick fund has produced annual returns of about 20% a year for investors…But the second and third funds have suffered heavy losses, according to letters recently sent to the investors.’
Isn’t the resemblence of that outcome amazingly similar to the outcome of a Ponzi scheme?
I’ve actually had several… people rec. Redbrick to me. Typically NAR/REIC-types thrusting it in my face as evidence that RE Ponzi’s can and DO work! LOL!
Ben, I just have to believe the ahem, ‘challanges’ they are confronting is only further evidence that there is no scale on which this bus. model can work. If you get a chance visit the website and look at their staff, VERY impressive.
Their website doesn’t impress me in the slightest. I mean, come on. The thing uses frames, for pity’s sake. And don’t get me started on frames. Just don’t.
I shied away from developing frames-based sites when they were popular, and oh, and I glad. They turned out to be a nightmare in more ways than one.
Yep. Frames were “amateur hour” even at the height of their popularity. I’m ashamed to admit I did develop two that way, but I’m happy to say they are both gone.
No, no, silly - Ponzi scams ARE our eCONomy now!
Ante up for King Henry Paulson, cuz there’s more where that came from!
LOL! Yes, yes of course. How silly of me. Well, ’somebody’ was bound to try it and I’ve got to tell you it’s hard to get through the week w/o being approached by an investment firm that wants to have access to your book of clients or employ you as a ‘hired gun’ to raise assets for them to plunder.
Sounds dot-comish enough for me? Youthful energy mixed in with a biz plan so outrageous no one else ever thought of it before, work newbies to death and become ridiculously wealthy w/o really trying!
dinOR
I hear ya on the sales leeches trying to bloodsuck you w/their BS plans.
anticipated similar agressive salesmen when I started my video arcade down in Tampa back in early 90’s … so I had business cards printed with JUST my name & biz address. no title. when the sales people came a’callin (and they did) I just acted the fool & told em I’d pass along their brochures to the “owner” as I went back to building a mortal kombat cabinet conversion.
(if you ask my ex, I wasnt just “playing” a fool … heh heh. then again I was the only one in Tampa to see home video game consoles coming as an industry breaker & liquidated my bidness early to clear a $10k profit. everyone else rode the denial elevator down into bankruptcy . . . with the exception of Tampa Lanes, which has bowling as the main bread ‘n butter. case in point, when was the last time you saw a video arcade in a mall!?)
alright, dont mean to carry on, just agreein with you about the need to examine sales offers with extreme caution. especially cold callers. after all, there is a REASON why the cold call sales have to use that method; their product is not in high demand or its a scam. like meat sales out of a pickup. or the stereo speaker shysters in white vans pestering you on Dale Mabry screaming out of a window. Lordy !
“The firm in recent years bought hundreds of properties in working-class areas of East Coast cities including Baltimore, Philadelphia and Trenton, N.J. It hired local managers to handle rentals and maintenance.”
“Now Redbrick, formed in 2003, has concluded that it is too costly to manage those homes and is trying to sell most of them.”
That’s exactly why SFH rentals have always been and always will be a mom and pop business. Corporations can’t compete against the free and untaxed labor that the small landlords put in. It makes the return too low for them.
yogurt,
Correct. I wish I had a nickel for every time someone approached me on setting up what they described as “The Walmart of Rentals”! Mum and Pop are only too willing to ‘donate’ their free time as any appreciation will ultimately be their’s.
A handyman/contractor won’t be benefitting from that. He’ll take cash ( up front ) thanks.
For some reason, Redbrick reminds me of a guy I knew who had a little business paper in Grand Junction, Colorado. He sensed opportunity and started a development firm there, just as the bubble was starting. He knew less about construction than he had about journalism, a real slimeball, treated his staff bad (had a friend there).
Named his company so it would sound Christian. Marketing that appealed to the apple pie types, cheap cheesy homes crammed together. He’s now hurting and I’ll break that bottle of champaign on his helm just before the ship goes under.
I don’t know how you can possibly have negative cash flow on foreclosed properties these days, I’m seeing cash flow positive or at least neutral deals all over, you just have to look, then again I don’t pay a property manager.
Well it sure helps to be 100% rented out at all times but in locals like AZ where every other house is for rent good luck !
“In 2006, the 25-year-old bought an apartment in Tarrytown for $155,000 and, after $20,000 in renovations, he planned to sell it for $240,000. But as panic-stricken banks tighten lending standards and buyers find it harder to get mortgages, Meyer said he’s had to drop the asking price considerably.”
“‘It looks like this is going to be about a $25,000 to $30,000 decrease in what I anticipated getting for it,’ said Meyer. ‘I’m a little frustrated.’”
BWAHAHAHAHA!
There is no way the guy is selling for above what he bought it for. Welcome to the party, pal!
I think we all feel a little frustrated about the decreasing size of his expected, but undeserved, windfall.
You’re so right. Why, I almost started crying with pity. But then I changed my mind and laughed immoderately instead.
Olygal
very uncouth. and I bet you place yer elbows on the dining table too.
why I keep coming back here I dont know? wait, yes I do. because it’s FUN!
I picture you as meg ryan in that book movie with tom hanks. (youve got mail)?
yer a pip. dont ever change. ever.
NY NJ and CT debt-slaves will, of course, never again see the $$$ levels reached in 2007 for their “properties” in their lifetimes.
Wonder how many will walk vs try for a handout.
A lot of proud people in the NY metro.
sure they will- when NASD gets to 5,000
Are you referring to the NASDAQ? Last I checked, NASD referred to the National Association of Securities Dealers.
Or rather it did. It’s now FINRA ( but basically the same org. )
Wake and bake up and smell the coffee…
“Nicolas Retsinas, director of the Joint Center for Housing Studies at Harvard University, said if the crisis causes large-scale job losses, the housing market would be further damaged. ‘At this point, the housing market is in such bad shape I don’t think even Congress or the administration can pull a rabbit out of a hat and change the momentum,’ Retsinas said. ‘I don’t think any act of government is going to dramatically reverse the market.’”
Wasn’t this the same guy that not too long ago was walking on the other side of the road?
“Nicolas Retsinas, director of the Joint Center for Housing Studies at Harvard University…”
IIRC, in late 2006, these were the clowns who said they saw no bubbles in US housing.
It only took a couple years and a global financial meltdown, but it appears they’ve changed their tune.
I remain unconvinced that if Wall St investment banks fail and we have a “recession” (as if we aren’t having one now) that it will be the end of human existence. The cost of borrowing will go up, a lot of obscenely wealthy people will become middle class again, and foreigners won’t prop up our economy with their sovereign funds and savings.
We will be like a crack addict going through withdrawal. It will be painful, it won’t be pretty, but we’ll be better off in the end. The only bailouts I support are for small straightforward lenders, not multi-billion conglomerate gamblers.
Done the wake and bake a few times. Seeing tomorrow is Saturday…
Is it me, or does it seem like every talking head out there now gets it that there was a massive housing bubble.
The denial appears to be over.
Now how long it takes to translate to a bottom is the question.
The average FB must know they’ve got to either lower the price or just walk away.
Gonna be a rough winter for the RE machine.
Yeah, but on the street I think a lot of people around me (in MD) still think their home or neighborhood is different. It’s an odd thing - on one hand they’ll admit to problems with the economy and their stock market investments, but they can’t translate that to their own home value.
Maryland is perhaps the last stand of the Bubble. So many clueless people down here. They’ll admit that every town has a Bubble, but “not here” - of course not! And they still cling to the delusion that Maryland is incredibly rich, which somehow supports everyone buying houses at 5 to 10 times their income, even though that makes no sense at all.
I hope this place gets hit HARD and the days of “affordable $350,000 starter homes” for a state that with a median household income of about $60,000 are over.
If you eliminate the DC suburbs, just how rich is Maryland?
Not very. Seems to be a pretty middle class state. Except in places like Baltimore, a place for which the term “hellhole” was invented.
I’m in MD just outside of Baltimore and I’ve lived in Baltimore as well. Baltimore has nice areas and rough areas, just like every city.
So we’re not just outside of DC but everyone still clings to the “we’re all rich” mentality, just like Montgomery County. It’s so strange. Houses in my neighborhood (a very good neighborhood with excellent schools) are 2.5 -3 times what they were 8 years ago, but no one thinks that is odd.
I can’t wait for things to hit here …
I’m with you. Maryland is so over-priced, it would be laughable if it weren’t so tragic.
The problem , as I see it, is that the financial gangrene has already set in.
New Yorkers have been brainwashed for 150 years to think that for some reason, they are supposed to control events and markets.
The sudden weekend disembowlments of former Wall Street titans shows how quickly empires can vanish with thousands of jobs. If all the brightest minds in NYC, Boston, and Washington can come up with is zero-value subprime McCrapshak paper, then don’t THEY deserve to fail? Most people don’t need what NYC markets have to offer.
NYC & Financial Industry = Detroit & Auto Industry
gold
McCrapshak paper,
Why shouldn’t NYC area start turning into another Detroit? Where a 3 story walkup goes for $19,000. Just imagine to debt-slaves that would produce in Scarsdale, Park Slope, Short Hills, Greenwich, Easthampton.
NYC is very similar to Detroit.
They both prospered selling inferior products for a while. Despite heavy advertizing and gov’t handouts they still had inferior products. Nobody needs the conspiracy, fraud, and manipulation Wall Street is trying to sell. Does it make any sense to think that without HELOC loans up the ying-yang, almost NOBODY could have afforded the lifestyle they “enjoyed” in the Northeast corridor? Well then, just how many “Wealth Managers” does Joe Sixpack need now? I’d say NONE!! NYC financial jobs? Used to be!!
Now those jobs are goin’, boyz, and they ain’t comin’ back.
I don’t think most of my fellow Americans understand just how deep the dislike and mistrust is of our country amongst our peers currently.
The uncanny superpowers of our Masters Of The Universe are fading quickly…
I agree aladinsane. In fact I think the Russians are going to do whatever it takes to make us crumble just like we did them……
Got popcorn- Komrade?
comes around goes around
I have been in Asia for five years. I don’t use credit. Rents can easily reach 5-10k USD per month and that is cash, one year paid in advance.
I watched Bush the other day on CNN telling people they couldn’t get a loan for a car if the economy collapsed.
BS. Save the money, buy the car.
What is this fixation with needing to “borrow”? Borrowing was originally tied to farming etc. and future production, wasn’t it? Not consumer borrowing.
Okay, I say it once again unto you:
Huh?
Olympiagal, I’ve been in Seattle all week. Great weather you western Washingtonians have been having! I’m staying in Wallingford, and my real estate explorations so far have told me that prices have a much longer way to fall locally.
NYC has seen this before (early 90’s). I remember looking out at office buildings from work in lower Manhattan and seeing many floors completely vacant. I got a real good deal on a rental back then. Also then, a friend made is first in a series of really bad real estate decisions. He could have bought a large 1BR condo on the UES with a great southern view for about 200K. Instead, he ended up buying an overpriced house in Queens in 2006. At that point, he had just given up waiting out the bubble. Given this, it seemed at the time that this was a great indicator that we had peaked.
I look forward to a cheap home in Queens now.
While not looking forward to the short and medium term fiscal pain (and definately NOT nostalgic for the crime and grime of the 1980’s), in the long run, this will be good for New York City in the same way the early 90’s was.
It will drive out the “wanna be” New Yorkers and leave more room for the quirky individalistic vitality that drew many of us here.
Being a true New Yorker is a test of character far beyond the contents of your wallet.
One thing that didn’t happen after 9/11, but did happen in the early 1990s, is that the NY area didn’t get cheap enough for the middle class to buy homes, and entreprenuers to start new businesses and new types of businesses. That could happen now.
Absent another crack epidemic, I don’t think NYC goes down the tubes. Some of the lesser suburbs might, however, and they’ll fight like hell to drag us down with them.
*sigh*
How is living with a sea of humanity on a tiny island and surrounding area a test of your character? Most NYCers live in more material comfort than is available to most of the world and even some parts of this country.
New York City does have a style, but it appears to this outsider, that most “quirky individualists” in NYC have very similar thought patterns and ways of life. I have a sterotype mental image of New Yorkers (yes, I know that makes me subhuman) that isn’t so positive. I often wonder if they would survive in anything other than the most urbanized and refined environments.
If you are attracted by the NYC way of life, that’s great. Many people prefer urban areas for good reasons. I’m sure I could actually survive NYC if forced. But I know it wouldn’t be good for my soul. Give me open space, stars, and mountains any day.
VTG, I live in a country that has had civil war for the last 30 years, but the people are beyond lovely. 4 generations under one roof, and a lot of happiness. Not too much Armani though. Would love to host some NYers over here! They’ll have to eat with their hands though!
QinQueens–We rent in Forest Hills and resisted the temptation to
buy when mortgage money ran in the streets. I still see two bed, two bath prewars at asking prices upwards of $500K, with similar units in the Gardens higher than that. Things don’t seem to selling, but prices are not coming down (that I can tell). Do you have a gut sense of when
Queens prices will be affordable, as they used to be before the
bubble? Thanks for any thoughts.
How ironic! My friend bought his house just outside the gardens.
As far as when, I don’t know. The other half has been restless for some time now.
I have finally seen a house or two in our price range on the outskirts of Kew Gardens (one of the neighborhoods we’re considering, along with Forrest Hills, Astoria and Sunnyside). I don’t want to bite yet.
From looking at the patterns in other places such as CA, I see this may play out as something like a wave. For example, it seems that the drops started in earnest in the inland empire. Then area by area it got closer to the coast.
I think we may have two inland areas. The first is already in place, SE Queens. The next has just started, Manhattan. Oh boy, when these two waves hit in the middle, it will be a once in a lifetime buying opportunity. I’m guessing they’ll meet somewhere between Jackson Heights and Forrest Hills.
BTW, Jackson Heights is in my second tier of neighborhoods we’re considering. The mass transportation look pretty good there.
Jackson Heights is lovely, esp. the older buildings that were built as co-ops. There is a great book on their history: “Jackson Heights, a garden in the city: The history of America’s first garden and cooperative apartment community” by Daniel Karatzas
Difficult parking is something to be very aware of there.
The Ditmars end of Astoria and parts of Forest Hills also have a great advantage, to me anyway, of being able to get on the Grand Central Parkway quickly to get out of town on the weekends.
For me it’s the best of both worlds - reasonable subway commute to work in midtown and easy “escape” when needed on the weekends.
Jackson Heights is nice especially the “original” co-ops.
There is a great book about them: Jackson Heights, a garden in the city: The history of America’s first garden and cooperative apartment community by Daniel Karatzas.
Parking there is difficult though.
The Ditmars end of Astoria and parts of Forest Hills have the (in my opinion) advantage of quick access to the Grand Central Parkway for esay getting out of town on the weekends.
Best of both worlds: an easy weekday subway commute and easy “get aways” on the weekend.
Who would have ever thought the Rapture would happen @ a deli?
“Bill Kokkosis, owner of the Majestic Delicatessen Cafe across the street from the New York headquarters of Lehman Brothers, said he was missing about half of his usual lunch customers Sept. 15, the day the firm announced its bankruptcy.”
He should call the Treasury. They might throw him a couple of billion. If he doesn’t pay it back, the government will have rights to 80% of his pastrami.
LOL!! hey, lad, it was the opposite of the Rapture, whatever you would call that - the Rupture?
The one where you get hauled off to hell?
Remember that “Rapture-ready-to-wear” clothing store that went out of business a few months ago?
Only in the NAR world would continuing, consistent declines in prices mean “stabilization”. From the Daily News article:
“The numbers tell us we’re running, in terms of prices, between 8 (percent) and 10 percent off last year’s prices,” said Susan Renfrew, president of the Massachusetts Association of Realtors. “That has been pretty consistent for about five months now. That would suggest there has been some stabilization there.”
Yeah, stabilizing at a linear rate of decline, rather than exponential.
In the early 90’s bust in southern California, house prices in many areas just went down 2% or 3% for quarter after quarter…. for many YEARS.
EHS numbers for August are out.
The NAR news release, as far as I could see, had no MOM pricing information (only YOY) but based on last month’s release the national median has dropped about $9k (4.5%) and the West’s median has dropped over $20K (8%).
Those are quite significant monthly moves.
OK Olympiagal, an example of fraud:
http://biz.yahoo.com/ap/080924/financial_meltdown_investigation.html
No, tea, I was saying ‘huh?’ to taxmeupthebootay. I almost always produce a puzzled ‘huh?’ in response to taxme posts. There was this one time when I decided he was posting a recipe for tuna and pea casserole, but it turns out he was not, that he was actually commenting upon the federal deficit or something. Plus, when I tried to make it, it was a nasty casserole.
But thanks for the lovely article, tea. I always love to read those.
“But economist Chuck Lawton said that doesn’t mean the Seacoast is immune to a fall from the precipice at which the United States stands. For instance, in the York area between 2000 and 2007, the median income increased from $50,000 to $61,000, or 19.7 percent. In that same period, housing rose from $244,000 to $330,000, a 78.4 percent increase.”
This rate of increase of both median income and housing is very similar for Madison/Dane county, but agents are being quoted in the paper saying “there was no bubble here!”
BS!
Methinks we’re about to see what happens when “all real estate is local” meets the all new global credit market.
Madboy, I’d also bet that much of that median income rise was due to RE-related industries. I was reviewing some financial files last winter, and was stunned at how many realtor types had massive income increases, from, say, 55K, to 400K in one year. (Don’t worry. I’m sure they were responsible and saved much of it for a rainy day.)
Lionel,
Good point, and just look at how much “job creation” ( post 9/11 ) was RE related. Oh well, “any port in a storm” eh?
Whoops, I guess Wisconsin is finding out it’s not so different here….
http://www.madison.com/tct/opinion/editstaging/306160
Wow, 38 months inventory of $300k - $400k condoze? Those are Chicago prices (not that they make sense here too) - Madison is a nice town, but really?
RE: realtor types had massive income increases,
Realtor are pikers…the people who cleaned up $$$ were the mortgage broker’s.
And as someone who saw it all up close for 23 years, there’s been a pile of money lent on a hella lot of worn out shit housing.
“‘We’ve learned a lot of what works and what doesn’t work,’ says Tom Skinner, one of Redbrick’s managing partners. ‘In the future, we’ll do more of what works.
Buying up, rehab foreclosure properties is a bubble that will burst. The SFR market is overstocked so to speak and will be for years.
The idea that people can buy up these bargins and rent them out until the next up wave in RE is a main stream media hoax hoisted upon the bubble investors by the financial media.
But… but.. bu the Hedge Funds are descending on Cali like a Swarm of Locusts!
I think Robin Camacho in LV ( bottom caller of note ) attempted that same ploy earlier in the week. Hey, whatever works right?
Rehabbing a foreclosed property can take years. I know someone who had that very experience. Needless to say, she’s not jumping on any current foreclosure “opportunities.”
Oh that is so true. And the damage needn’t even be malicious. Neglect alone can be very expensive and time consuming. I’d say you have to pick your fights -very- carefully and even then there’s no guarantees!
That’s exactly what this gal was dealing with. Neglect. As in, many years of it.
We have a wonderful gentleman here in the Salem, OR area that loves to re-hab older historic buildings. One was spared the wrecking ball by days. He has a succesful bus. and this for him is simply his passion. He’s aware it’s not a path to wealth.
Me? I love refurbishing old guitars. Never made a dime at it though and most people tell me it would be cheaper to simply buy a new one? Put that under ‘hobby’.
DiNor - do you have your own collection of vintage gear or do it for others?
cereal,
Well, nearly everything “I” have is ‘vintage’ but it hardly needs to fetch a fancy price on Ebay for it to gleam in my eye. If it’s remotely salvageable I’ll find a home for it.
I’m actually a pretty big Vox guy which are about as popular as betamax? I’m not by any means a ‘luthier’ but I enjoy working on amps and stuff almost as much as I do playing them.
Half the senators I’m calling have their lines busy and/or put you straight to voice mail, when I do get through they say they’re getting a ton of calls, keep up the good work.
“‘No matter how wealthy you are, occasionally you get short of cash and you rely on credit cards and loans,’ Hormozi said.”
I’m sure that Bill Gates and Warren Buffet get cash advances on their CC’s because of cash flow problems.
“Occasionally”, frickin “Occasionally”?
The past two decades were the best any human beings* have ever had it in the history of mankind - if they had to resort to carrying debt to “survive” the hyper-consumer era - they need to go away… for good.
*average ‘merikun consumer
Remember when being wealthy implied financial independence? That your wealth generated a steady healthy cash flow so you didn’t have to work?
Why they can return $700 billion to tax payers , so they will spend and move up the economy , instead of donating that money to guys who already robbed us… maybe some of us will even think to use that money in our downpayment to buy a house in 20011…
For a moment, I thought you were referring to the year 2011.
While various measures are intended to ease pressure on struggling homeowners and lenders alike, some specialists question whether they will make any meaningful difference given the current market conditions and fears about the economy sinking into a recession.”
Current market conditions? Like the fact the vast majority of buyers don’t actually qualify to pay wildly inflated housing costs?
Here’s Johnnnnnny…
Redrum Partners LLC
“Many investors have been tempted by the idea of buying foreclosed homes in bulk from banks, at a steep discount. But the experiences of a Washington, D.C.-based property investment firm, Redbrick Partners LLC, show it can be difficult to manage a large number of single-family rental homes scattered across a metropolitan area.”
“The firm in recent years bought hundreds of properties in working-class areas of East Coast cities including Baltimore, Philadelphia and Trenton, N.J. It hired local managers to handle rentals and maintenance.”
“Now Redbrick, formed in 2003, has concluded that it is too costly to manage those homes and is trying to sell most of them.”
US home sales much worse than expected (Financial Times)
By James Politi in Washington
Published: September 24 2008 17:09 | Last updated: September 24 2008 17:09
New data on Wednesday showed that existing home sales dropped by 2.2 per cent in August, which was much worse than expected and highlighted the continuing downturn in the US housing market.
The median existing home price fell 9.5 per cent to $203,100, the sharpest drop on record.
Tsk, tsk, only August too. Seasonality is about to kick in now - the schools are back in and not too mcuh moving in the northern states between October 1 and March 31.
Can we assume (at this point in time) that none of what is happening in the real estate market will matter if we don’t save our economy?
http://www.fedupusa.org/
PLEASE look at the video/videos and email to ALL.
Thanks guys!!!
Bush to address nation on FINANCIAL CRISIS (TODAY @ 6PM PST)
By Sue Chang
SAN FRANCISCO (MarketWatch) — President Bush is scheduled to give a nationally televised address on the financial crisis Wednesday night, the White House announced. Treasury Secretary Henry Paulson also has agreed to accept limits on pay packages for executives whose firms benefit from a proposed $700 billion bailout of the financial industry, the Associated Press reported. End of Story
“In 2006, the 25-year-old bought an apartment in Tarrytown for $155,000 and, after $20,000 in renovations, he planned to sell it for $240,000. But as panic-stricken banks tighten lending standards and buyers find it harder to get mortgages, Meyer said he’s had to drop the asking price considerably.”
Why would anyone be that dumb to buy a property for $240K when it’s value is $175K with renovations?
I sincerely hope people like this get fried..and fried well. People like Meyers are a dime-a-dozen…and to think I’m going to be bailing out sc(m like him, sickens me to no end.
I’m watching the House Finacial Services hearings right now and I just have to say, Barney Frank has GOT to be one of the Biggest. Embarrassments. Ever. He’s barely coherent. And, I might add, a completely repulsive toad. Thank God there’s little chance of me every having to be downwind of him. If I was from another country watching the hearings and saw this clown at the head of financial anything having to do with US gov, I’d kill myself laughing.
I can’t even stand it. Watching these dickbags go back and forth is painful.
What’s up with this website’s posting system? half the time nothing goes through…it’s getting old.
“In 2006, the 25-year-old bought an apartment in Tarrytown for $155,000 and, after $20,000 in renovations, he planned to sell it for $240,000. But as panic-stricken banks tighten lending standards and buyers find it harder to get mortgages, Meyer said he’s had to drop the asking price considerably.”
Are people really that dumb to pay that much more for a house that has only $20K worth of renovations? People like Meyer should fry.
They will. Oil of hubris.
To re-cap a July ,2007 story regarding the arrest of a 70 year old Grandmother named Betty Perry for not watering her lawn .
Well actually the law went to give her a ticket
for not watering her lawn and she tried to go into her house and the law
went after her causing her to trip and get all bloody . She spent time in jail but they ended up releasing her and she ended up paying 100 bucks .
So how much punishment do you think the Wall Street lender pigs and the liar loan borrowers and their helper should get for what damage and destruction they caused . Oh , I forgot they get rewarded ,the law only goes after grandma’s for not watering their lawn .