Housing Heaven Takes A Breather In Massachusetts
A pair of reports on smaller housing markets in Massachusetts. “Homes are sitting on the North Central Massachusetts market for longer than they have the past three years, local real-estate agents said. ‘We’ve had a very, very brisk market for several years and it just sort of plateaued a little, and now it’s coming back at a nice, normal comfortable pace,’ said Ellen Daly.”
“Realtors acknowledge, however, that the market had faded from its most robust seasons. Barry Cunningham, the North Central Massachusetts Association of Realtors’ president, said the plateau is to be expected. ‘The market has been hot for a number of years, but it’s making an adjustment right now,’ said Cunningham. ‘The market needed a breather.’”
“The median price of a single-family home in North Central Massachusetts has increased more than $30,000 during the past three years. The median price of all residential sales in Leominster so far this year has fallen nearly $20,000 compared to the same time period last year, according to the Warren Group ‘The prices aren’t so much coming down, it’s the sellers’ expectations coming down,’ (realtor) Rick Healey said.”
The South Coast Today. “The way the housing market is headed, with prices flat and lending rates up, bankruptcy lawyers might want to put on another pot of coffee, because company is coming. Maybe lots of it. Almost 30 percent of all of the adjustable-rate mortgages in this region will come up for adjustment this year or next, said (banker) Patrick J. Sullivan.”
“As it looks today, those mortgages will jump perhaps 2 percentage points, from about 4.5 percent to 6.2 percent or 6.5 percent, he said. For a $200,000 mortgage, that might mean about $4,000 a year in additional mortgage payments. ‘That 2 percent adjustment could kill. Four grand a year out of pocket, that’s a lot of money,’ he said.”
“Mr. Sullivan said that Bristol County has seen 263 foreclosures in the past two months, up 50 percent from six months ago. In New Bedford alone there were 64 foreclosures in the first quarter of 2006, a sharp increase, he said. At the same time, housing sales slumped badly starting last August as buyers hold back, become choosier or even start renting for a while.”
“Across America, warning flags are flying about the impending storm of foreclosures and bankruptcies, and the early signs are present in SouthCoast, bankers and lawyers say.”
“(Columnist) Richard Benson observed that for a decade Americans have been in ‘housing heaven,’ using their ever-more-valuable property as a magical ATM. Now consumer debt is up to $2 trillion, and people take out $600 billion in equity extraction each year. ‘Homeowners have basically received and spent in excess of $2 trillion that they never earned,’ he writes.”
“Roger Stanford, an attorney in New Bedford who handles some bankruptcies, said that there has been a definite upswing in cases following a lull caused by last October’s rewrite of the federal bankruptcy law. He said he is seeing the same pattern as in the last housing recession in the early 1990s: first-time homebuyers who stretched to the limit and now cannot manage an upward rate adjustment, and frequent refinancers who ‘pull the money out to pay credit cards down and the credit card goes back up again for whatever reason.’”
“Now that it is harder to declare bankruptcy, Mr. Sanford said, some homeowners see flattening prices and decide to ‘get the equity out by living three, five, six, nine months without making mortgage payments,’ then walking away from the house.”
Here is a Boston Globe article on home prices driving people out of that city. Here is the FDIC report on Massachusetts.
Ben - Have a look at this link - Boston-based Christian Science Monitor - usually a “good” newspaper - is pointing out the rental vacancy issue and the fact that the aggregate number of renters has fallen for the first time in U. S. History. The article concludes, incredulously, that housing prices “will continue” to go up. Oh, and it seems “different this time” because mortgage lenders have developed some secret formula to manage risk and make us all homeowners. Go figure…
http://www.csmonitor.com/2006/0418/p09s02-coop.html
Different this time, indeed. As in roughly twice as bad as the last major downturn.
The market needed a breather? Huh, what does that mean. Why not just admit that it went too high and that it will now need to come back down in order to make it affordable again for the average person.
This IS what I would call a “breather” my friend.
Here is a link to a thread at Grim’s NNJ housing bubble - about half way down Grim has a list of defaults that includes the original purchase
price and date and the current default amount. It is amazing how much
equity some have been extracting.
http://www.blogger.com/comment.g?blogID=15532093&postID=114504505287152626
Shocking numbers! Wow! Serves these reckless bastards right. The stupidity and/or brazen recklessness is stunning.
Someone call Homeowner_Ma — he/she will fix it.
Yeah - We only have a few more bulls on here to turn to the dark side.
Speaking of the Dark Side, oil crossed $70/bbl today and the peak driving season has yet to start. The market is in contango. The suburban RE lifestyle is getting clobbered by Peak Oil– Driving 50 miles to work in a 50K SUV to service a 500K mortgage will soon be a thing of the past. Good riddance.
There are still bulls here? Wow.
Hey -
Wasn’t Homeowner_MA’s alter ego “celebfan1000″?
Whatever did happen to him/her?
maybe they are waiting for the “bloodbath/50% haircut” for MA that was being thrown about last year. still no evidence of that. there are no “bulls” or any other dissenting views left on this thread. it’s all about frugal tightwads gloating about how things all going to hell. (though not much evidence anywhere of that, either). i think celebfan just got bored with all the realtor/flipper/mortgage broker/ARM holder bashing. all very unoriginal.
I agree that there is far too much smug gloating here. I think people who could have benefited from Ben’s posts have taken one look at the comments and left.
Those who can’t take the gloating are still in denial. They have a few more stages of grief to go through before they can accept the sage advice of the posters here.
I agree.
I’m reminded of Andy Rooney comments on abortion:
“I’m pro life but unfortunately I like the people who disagree with me more than those who agree with me.”
I feel the same way about this blog.
I’ve tried to turn some people on to this site to educate themselves because I think the way many of the poster here think is a model of responsibility.
Then they see the shadenfruede and they get turned off.
Shame really… lots of you have good stuff to share at a time when Americans could really use some level advice from someone not trying to sell them something.
Good Rules
Make your point.
Stand your ground.
Play Fair.
Try a compliment those who disagree with you at the end of your rants.
Nice sentiment Euph. Lets not turn the sand box into the litter box!
I have seen one of you post smug comments (I wont name names - you know who you are).
It’s probably me crisp.
I’m as smug as they come. Get up everyday and try and figure out how to be a nicer person, tolerate people better, understand their point of view… that type of stuff.
Don’t always do so well, but I get back on the horse and keep riding to the destination.
Peace!
No biggie. For me this bubble has taken me from 1 1/2 years ago wondering what the hell is going on. All economic fundementals are out of whack to seeing the facts in the last few months and knowing we go into this situation by having a lot of people screw over a lot others. Most of them did it with bad intentions (see Glenngary Glenn Ross). I would rather wish bad on those who did the bad than to have them continue to take advantage of the sheeple. Yes , the sheeple should read what they sign and understand the MAJOR transactions they are about to enter; but that does not give these crooks the freedoom to rip people off. SO, yes I am anxious to see some bad happen to the “evil dooers”. Hey , even the bible says an eye for an eye, OR in this case an ARM for and ARM.
Who exactly, in your mind are the “evil doers”? Just curious.
“let them eat cake”….upside down cake!
But extremely on point, jackass!
BeaConst could fix the problem as well, at least in theory…
Here is how to get even more equity out. After you stay there 5 or 6 months without making any payments, don’t pay your taxes or insurance; then lease to another looser with a large deposit (at least 3 months rent), ‘dogs and pets ok’.Actually rent to 3 or 4 different people. Then no forwarding address. You can try hitting your house with ‘Jewish Lightning’, but if your insurance is still in force, the lender will get the money. The brillant minds on this blog probably can come up with more ideas!!
“The median price of all residential sales in Leominster so far this year has fallen nearly $20,000 compared to the same time period last year, according to the Warren Group ‘The prices aren’t so much coming down, it’s the sellers’ expectations coming down,’ (realtor) Rick Healey said.”
David Lereah has taught you well, young Jedi.
‘Rhode Island. ‘During the first quarter of this year, the number of foreclosure sale notices in The Providence Journal jumped nearly 50 percent, compared with the first quarter of last year.’
‘During January, February and March, there were 304 foreclosure sale notices, compared with 205 during the same three months last year. About half of the notices, 147, were for houses in Providence; another 136 were in Warwick, Cranston, East Providence, Johnston, North Providence and Pawtucket.’
‘Affluent communities were not exempt. Among the listings were five foreclosure sales in Barrington and three in East Greenwich.’
“‘Affluent communities were not exempt.”
Ran the bankruptcies in my small town. There were 13. Three were in the most exclusive areas in town, one worth $775k which for central NY is pretty steep. Median for this County is low $100s.
775 in central NY????? Is got to be a mansion……
Yes dear we’ve got former stockbrokers, CA screenwriters, a former Clinton speechwriter, a US ambassador, actresses, a Jackie O relative, and many other well to do living among the farmland up here. For many, their home is one of several they own. (I’m not one of them LOL.) They chose lakefront but sometimes chose estates with fantastic 180* views or other spreads w/privacy. You need to google Skaneatleles, NY. It makes our little town look downright humble!
Yes dear we’ve got former stockbrokers, CA screenwriters, a former Clinton speechwriter, a US ambassador, actresses, a Jackie O relative, and many other well to do living among the farmland up here.
Now there’s a great group of producers who make a tangible contribution to the country’s GDP.
Again I say , why did the lender put people on loans they couldn’t afford? I find it hard to believe that these people did not know that the payments would go up .They enjoyed the teaser rate for a long time so why didn’t they take that opportunity to save . Get a extra job …. do something other than letting the house go .This is the classic case of people wanting to take the bus ride but not wanting to pay the fare.
>>Again I say , why did the lender put people on loans they couldn’t afford?
Why do you keep saying that? The lender doesn’t care. The loans will all be sold off and securitized.
Because its the duty of the underwriter to not put a person in over their heads .If the borrower was higer risk they should of put more money down. It’s up to the lender/underwriter and appraiser to protect people because they really do not know what they are doing .If the lender sells the loans to the secondary market it’s the duty to give low risk or give the true rating on the loans . If investors want to buy “F” loans ,that fine , but why would they unless they had a big down payment . It is my belief that alot of fraud has taken place because of the easy underwriting . A lot of people have retirement accounts invested in loans . In fact, some big banks could go under because of the easy money policies .
I can appreciate your bemusement. It’s all based on today’s bottom line and that means production. If a lender cannot originate loans he can sell on the secondary market it gets more and more difficult to keep the lights on and the phones ringing.
Similarly, those who buy the loans on the secondary market “need” (and I use that term loosely) a vehicle to put their money in that will earn them money (or appear to, at least).
Right now we all know that things will get worse. Realtors, mortgage bankers, loan officers et al are basically squeezing the bottle to get the last drips before the remnants evaporate.
For that reason many are in the “do whatever you can to get the deal done” mode.
Consider this:
A borrower calls you because they purchased their home 18 months ago, 0% down, still carries the credit card and auto loan debt they had when they originally purchased. The “value” of their home, according to the comps has increased and the borrower is finally realizing they are in deep doodoo because the minimum payments on their credit cards has gone up and their home has been re-assessed such that they now have a shortfall in their escrow account which pays for their taxes and insurance. Their mortgage payments have increased to overcome this shortfall.
They’re past the “I’ll figure something out” stage and are at their wit’s end because it’s the 12th of the month, they have not paid their mortgage payment, the grace period for payment is the 15th and, after that, they get charged a late fee. Even if they scrape together their mortgage payment they don’t know how they’re going to pay this month’s credit card bills. They borrowed the money to make their car payment.
You know this borrower is screwed…. royally. You check their credit and see all their credit cards are maxed out. They’ve got 2/3 credit card lates in the last 12 months together with a late auto loan payment. They’ve got a sizeable amount of medical collections because their medical insurance did not cover them for that visit to the emergency room they had to make the day after they closed on their mortgage.
You see that their once perfect credit has been lowered considerably because of all the things that have happened in the last 18 months.
More importantly you know that this person has picked up the phone for two things: help and hope. the don’t want a lecture on fiscal responsibility…. that’s for blog readers.
You know that, even though this person will probably face foreclosure one day, you have a loan you could get them approved for that will not SOLVE their problem long term but will at least alleviate some of the pain they are feeling.
It’s a loan that will allow them to consolidate all their debts into one mortgage payment and will give them four choices as to which payment they make. You explain to them that the minimum payment (the one they like the most because it’s less than 1/2 of what their existing payment is) does not pay off all the interest and it will result in the balance on their mortgage increasing over time but it will allow them to avoid foreclosure. You then tell them they can pay off the full interest by paying option “b” or, better still, pay principle and interest….. the choice is up to them.
You also tell them that, if they wanted a 30-year fixed rate loan, like what they have on their first mortgage, their payment would be more than what they are paying now even though they would be consolidating all the other debt they have AND get a payment that will never change. You reiterate that the first mortgage you presented is an adjustable rate that is a short-term solution. Yes it can save them money but it also has its’ downsides. You let them know that, personally, you would swallow the bitter pill, resign yourself to a higher fixed payment and bust your ass finding a way to make it work for you.
Additionally, you tell them that their situation is precarious (to say the least) and you question whether, at this time, homeownership is right for them. “I don’t want to sell my home” they tell you. “I just need some financial relief.”
You’ve heard this desparation time and time again, you give all the sage advice you can but you know that this person aint gonna act on it.
Which loan do you think that borrower is going to go for?
If you think they’ll take the 30-year fixed you’ve obviously never been on this side of the phone. Granted, it’s the right thing to do but that’s not how human nature, for the most part, works.
Back to the industry participants: Again, we know this is the last hurrah. The person in the above example will almost certainly be foreclosed upon in the next 3-5 years, if not sooner. Let’s face it, they were screwed the day they decided to buy a home but you cannot undo what they did. In the meantime you know that, if you do not offer that hope and help there are plenty of other loan advisors out there who will because their livelihood depends on it. That person did not call to get a dose of reality. They called because their back is against a wall and they needed some answers. You gave them a choice which is something they didn’t know they had before they spoke to you.
Did you make the world a better place by getting them approved for that payoption loan even though you suggested the 30-year fixed? No. Is that borrower any less screwed than before the refi? Absolutely not. Did they get what was best for them? No. Did they get what they WANTED? Unfortunately, yes.
So you funded the loan, that’s one more origination for you, one more loan for your company to sell on the secondary market, one more place for an investor to park their money and earn some interest (again, for now).
In doing so the borrower has learned nothing. They didn’t want to. All you’ve done is delayed the inevitable pain and, sadly, that’s all they called for.
This will be allowed to continue until the investor notices his investments are not performing as well as they used to. He then cuts back on the number of risky loans he purchases because they make him less money. Liquidity in the credit markets dwindle and rates rise.
That’s when it’s time for your borrower to pay the piper the next time he calls.
Patience people. It’s the beginning of what we all foresaw.
A borrower calls you because they purchased their home 18 months ago, 0% down, still carries the credit card and auto loan debt they had when they originally purchased. The “value” of their home, according to the comps has increased
LOON-This analysis is total BS.
The posts on this blog have just about every market in the country goin’ right into the crapper.
The reason the comp’s have “increased” is because you got a crooked appraiser f*ckin’ with the numbers, so the deal can be done, and you can clip more outta another FB’er.
Don’t rationalize. These people are DOA-but’s let’s squeeze the last drop of blood out, right?
You mortgage guys reek.
loonofficer — A beautifully written and informative post.
What I want to know is just who is buying those mortgage-backed securities in the secondary market?
hd74man: “LOON-This analysis is total BS.
The posts on this blog have just about every market in the country goin’ right into the crapper.
The reason the comp’s have “increased” is because you got a crooked appraiser f*ckin’ with the numbers, so the deal can be done, and you can clip more outta another FB’er.”
1) Calm down.
2) A comp is a “comparable sale”. An appraiser cannot fabricate the sales price of a home that sold recently. The home sold for the price it sold for. If anything, blame the purchaser of that property. They’re the one responsible for the “increase in value”.
3) By all means vent but it’s more effective if you have at least a modicum of knowledge before you rattle of about something you obviously know nothing about.
4) Happy blogging.
A lot of investors in Asia have been flooding the US markets with liquidity. That’s what contributed, in no small part, to the loosening of the lending standards in the first place.
Prices in North Central Massachusetts seem very non-bubbly compared to Boston. In Fitchburg the median home price was $208,000 in 2005. But when you actually drive through some of these North Central MA towns you see what a rip-off a $208,000 home is. The region was a manufacturing center and has been hit very hard by outsourcing. Some of these towns are decaying in a literal sense. They have nothing going for them.
Maine has vast regions which are economically obsolete.
All the shoe and textile mills are gone. Paper mills gone. Lumber by-product industries gone. Sawmills shut down. Fishing/canning industry dead. Dairy farms sold off. Spud fields gone fallow.
All the little towns formerly supporting the above, are all dead and dying. Nobody left but the elderly and those who are too poor to get out.
A whole Yankee self-sufficient frugal way of life-shot…
Growth industry-Social welfare workers @ $19k per year.
Sure can’t buy @ $208k makin’ those beans.
Thanks NAFTA.
bankruptcy lawyers might want to put on another pot of coffee, because company is coming. Maybe lots of it.
LOL financial Armageddon doesn’t sound so bad when you put it that way
OT -
I wanted to share my “tale of three houses”… all three from this weekend.
1. A client of mine sold her $22,000,000 house (across the street from the Playboy mansion) for full asking price in just three weeks.
2. A friend of mine is having trouble selling his house for the $1.4M asking price. He is in a must-sell situation as he has already bought another house. It’s been on the market for over 4 months. the ONLY offer was from a guy who offered 1.2M…which my friend would have gladly accepted, but the buyer couldn’t get his loan. He only had $5K to put down and the bank said no way.
3. My sister is having trouble selling her $150K house in MN. Job transfer. she is trying to sell it for what she paid over 2 years ago.
What do these things mean, if anything? Maybe the $22M house sale reminds us that the luxury market is still selling, keeping median prices higher for now. But the middle market (yes, 1.4M is middle market in LA) is definitely starting to suffer. This house would have sold a year ago for AT LEAST 1.4M. Now the owners will sell for anything over 1.1M, and they may not even get that. And the last story reminds me that all of us will know loved ones and friends who are really going to be the ones hurt by this impending implosion (along with speculators,etc). My sister isn’t a speculator. she’s a hardworking single mother who bought a house 2 years ago for the long term with a traditional 30-year fixed, but hey, shit happens.
Perhaps the lesson is: If you’re gonna sell your house, you need to price it at $22M.
And make sure there are a lot of gorgeous women displaying themselves next door.
I’ll pay $22 million to live in a shoebox across from the Playboy mansion. Location, location, location!!!!
Heh, I’ll second that. Now to find the 22 million
Yeah, 22 mil and a good pair of binoculars!
>binoculars
Forget the binoculars:
*ding-dong*
“Yeah, hi, I’m your new neighbor from across the street, and I just stopped by to ‘borrow’ a cup of sug-hey, I see you have a party going on, mind if I stay a bit?”
“Is that a 10 gallon hat or are you just enjoying the party?”
On a more serious note:
Who has $22million? Any word on who actually
bought the house? What the heck does he/she
do for a living? Ex golden parachuted CEO?
You don’t need $22 million. Get yourself a no doc, 103% financed neg am loan. With the $$$ you’ll “save” maybe you can date some of Hef’s table scraps?
It may mean the rich are getting richer at the expense of the little guy. The mega rich make tens of millions when a company is sold for an unjustifiably high price. Everyone else gets screwed, The workers lose their jobs in the inevitable susbsequent downsizing and the common man sees his sahres held through mutual funds evaporate in value. But the mega rich have already sucked the company dry and are looking for their next victim.
I reecently read about a guy who sold the Yankee Candle Company for half a billion in 1998. Can you really sell that many scented candles to justify that kind of price?
The following is excerpted from the article I read and made me want to puke:
“Once a low-key summer resort, Nantucket is rapidly turning into their private preserve, joining the ranks of other enclaves like Palm Beach, Aspen, the Hamptons and Sun Valley. Now that the hyper-rich have achieved a critical mass, property values have zoomed so high that the less-well-off are being forced to leave and the island is becoming nature’s ultimate gated community.
“It’s a castle with a moat around it,” said Michael J. Kittredge, a 53-year-old entrepreneur who realized a fortune when he sold his Yankee Candle Company seven years ago for about $500 million. He was relaxing in the living room of his 10,000-square-foot house, which has a basement movie theater and a 2,000-bottle wine cellar. A separate residence a quarter-mile away houses staff members and a gym.
“Successful people want to be with other successful people,” Mr. Kittredge said. “Birds of a feather,” he added. “On Nantucket you don’t feel bad because you want a nice bottle of wine. If you order a $300 bottle in a restaurant, the guy at the next table is ordering a $400 bottle.”
I remember in the early 80s going over on the Nantucket ferry on a whim, walking to one of the inns with my back pack on my back and fitting right in.
Just a few years ago, a friend from Yarmouth used to take us over in his 40 footer. It was like we were sleeping in the dog house. Just the other side of the docks there were dancing/dinner parties on the yachts. We were so out of place it was hilarious!
Even funnier were our slip neighbor idiots that were so new to boating that when we woke up in the morning their boat was literally hanging by its cleats. (They tied it up at high tide and forgot to leave enough length for the tide going down.) OT but thought the comic relief might be welcome.
Well good for Michael J. Kittredge, he’s living proof of the American Dream:
“Christmas 1969. Sixteen year old Mike Kittredge, too broke to buy his mother a present, melted some crayons to make her a candle. A neighbor saw it and convinced Mike to sell the candle to her. With that small stake, he bought enough wax to make two candles - one for his mom, and another to sell. That was the birth of Yankee Candle.
From that candle, the Company has grown to encompass more than 300 Yankee Candle retail stores, a wholesale network with approximately 15,000 store locations, direct mail catalogs, an e-commerce site, yankeecandle.com, and international distributors.”
Why do some people resent the most productive members of society? Don’t resent Kittredge, instead work hard towards following a similar path.
I wish your sister luck, Trojan Horse. These will be scary times ahead for too many of us.
Off this partic. topic about Mass- but OMG- had to share- this is RICH I tell you! What a load of bullcrap!
http://www.twincities.com/mld/pioneerpress/news/local/14347809.htm
We deconstructed this a couple of days ago already, but it remains hilarious. For instance:
‘The first rule of real estate is, “Location, location, location.”
The second rule of real estate is less well known: “Do unto others as you would have them do unto you.’
The third rule of real estate is even less well known: “Don’t buy stuff you can’t afford.”
Great article, I’ll play a violin for the sellers tonight.
Screw the whole bunch! Revenge of the squirrel feeders!
“The baby-boomer generation is also in the midst of its peak earning years and their children are entering the market for the first time as well, he added”.
The Baby Bomers were born 1046-1964, meaning they are 42 to 60 years old in 2006. See the population pyramid at http://tinyurl.com/e9wet
It may be that if someone can hang onto their job into their 50’s, these would be the peak earning years. However, these days, by the time you are in your young 50’s, at least in non-union jobs, there’s an excellent chance you’ve been fired. There are lots of 50 year olds who have gone from climbing corporate ladders to the ones at Home Depot.
I think the peak earning years for boomers is a bit overstated. Besides, it’s not just what the boomers do - it’s also the buying power of the plankton at the bottom of the food chain, i.e., your echo boomers. And most aren’t making anywhere near the money to jump into the housing game.
Exactly.
Also, does “peak earning years” really translate into “peak homebuying years”? I would think most people buy houses when they begin to form families (somewhere between 25 and 35 years old). That would mean peak homebuying years for the boomers were approx 1971 through 1999.
Those days are behind us. Now it’s time for the non-union, no benefit, no Social Security, no defined-benefit pension plan, no job security workers to buy houses. Sounds like we have to allocate more of our (lower wage) income toward saving for our new reduced lifestyle (and I AM ***NOT*** bashing boomers — they did what any of us would have done). Doesn’t portend higher home prices in my book.
“Homeowners have basically received and spent in excess of $2 trillion that they never earned”
Money for nothing, and your chicks for free. Time for the Alka Seltzer?
Sweet Jesus. I just Zillow’d my old house in San Diego that I sold for 400K back in 1989. $1.35 MILLION. Someone please clean up the mess that is under my chair.
The place was about 1100 square feet on a good day. It was at least 35 years old. It had no air conditioning and only a floor heater which nearly set the house on fire a couple of times. It had two tiny bedrooms and one VERY tiny bathroom.
I am simply stunned.
The people or I should say sheople will be STUNNED when they cannot get out on this free fall………..
I have a relative who went on zillow and looked up everyone she knew. I have been hearing daily reports of people’s house values. Ah retirement = too much free time.
Ummmm, why are you stunned.
That’s only about 7.5% a year.
Arrgh. I get a weekly email newsletter from local realtors for the Hampton Roads (Southeastern Virginia (Norfolk/Virginia Beach and nearby cities)).
Todays email says this:
March sales are not quite up to the 2005 level, with 1716 residential homes sold March 2006 compared to 1772 in
March 2005. But, the good news is, there is a strong 12% increase in the average sales price compared to a year
ago.
Another indication of the busy spring market is the comparison of the February and March sales. Sales in March
more than doubled from the February with 1716 sales in March vs. 842 sales in February of this year. As well as,
a decrease in DOM from 57 days in February to 45 days in March.
Statistics are based on information from REIN. They are deemed reliable, but not guaranteed.
(REIN is the MLS for our region)
The wierd thing about this is so far, MelissaData.com isn’t in agreement with what they said. HousingTracker shows double the inventory over the last 6 months.
Once that Ford plant near Hampton Roads closes I’m sure that there will be quite few more houses for sale..
I’ve tried to turn some people on to this site to educate themselves because I think the way many of the poster here think is a model of responsibility.
Then they see the shadenfruede and they get turned off.
Good riddance to them, then. A board comprised of 100% “Model of Responsibility” posters would be dull, no? And considering the sheer greed and stupidity that inflated this Mother of All Bubbles, a heavy dose of schadenfreude doesn’t go amiss.
AMEN
Ben’s Blog: Love it or Leave it!
Exactly.
What goes around, comes around. People who have been “models of responsibility” have had to endure several years of arrogant bluster and boasting from every last Dick and Jane who thought they were a financial genius for getting a mortgage, then rubbed it in still as they extracted “equity” to buy all sorts of ostentatious crap.
So, the heck with them. A little humble pie is in order.
Then they see the shadenfruede and they get turned off.
Wow, those are some seriously sensitive people. Screw them. This is the internet, not a Jane Austen novel.
Betamax,
You gave me a great belly laugh! Good job!
Bellylaugh out of me too Betamax!
After the first month or two, I just started ignoring the “sour grapes” and apparent glee at the propect of human suffering. There are some interesting insights if you skip over the bs.
From Safehaven.com ..I assume an excerpt from Mishs’ blog. A funny read anyway..Gotta love some of those quotes. ” If people would stop panicking this thing would turn around. Now is a great time to buy ”
http://safehaven.com/article-4989.htm
” If people would stop panicking this thing would turn around. Now is a great time to buy ”
NOW IS A GREAT TIME TO LIE!
Ha Ha Great, Jim Cramer just came on Jay Leno and the first words out of his mouth were that housing was going down and he feels bad for people that are in it.
He is a big hearder of the sheeple. good times…
I believe that banking institutions are more dangerous to our liberties than standing armies . . . If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] . . . will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered . . . The issuing power should be taken from the banks and restored to the people, to whom it properly belongs. Thomas Jefferson
Letter to the Secretary of the Treasury Albert Gallatin (1802) ; later published in The Debate Over The Recharter Of The Bank Bill (1809)
Yup. Pennies on the dollar for your homes. The game continues and very few catch on as the centuries pass. Old Jimmy knows the game, he’s scum, but knows the game. I’m sure that he will be well stocked in real estate at the bottom of this thing.
I didn’t hear that he thought this was anything more than the “normal” cycling.
I like when these realestate folks use words like “market needed a breather” and “market is making an adjustment right now”. These folks should start making adjustments in their lives by look for other jobs, and quit living off misinformed/uneducated buyers. Oh well, go for it. These buyers deserve to go broke.
“Pennies on the dollar for your homes. ”
From your mouth to God’s ears. I need to have prices correct by 30% or more or I wil be houseless for the rest of my life me thinks.
simmsays…
http://www.AmericanInventorSpot.com
AmericanInventorSpot.com
This is just an appetizer for what is to come, folks.
We all know, and knew, what we were in, and what was happening.
But when push came to shove, some of us acted, and some of of didn’t act.
Buying a home right now, or in the last couple of years, was basically a suicidal act.
I ain’t laughing at those who did.
Oh wait…
YES, I F’ING AM!
IN THE WORDS OF THE GREAT PHILOSOPHER, CARLOS MENCIA…
“DEH DE DEH!”
“IF YOU BOUGHT A HOME YOU COULDN’T AFFORD, WITH SOMEONE TELLING YOU YOU COULD, EVEN THOUGH YOU KNEW YOU COULDN’T, YOU GOTTA BE…”
…”DE DEH DE”…”
You won’t get any apologies out of me, ever.
My reality will not be distorted by your adhererence to what might get sold as ‘good taste’ or ’social standards’.
If YOU bought a house in THE LAST TWO YEARS and YOU are having trouble making YOUR payments and YOU listened to people who have a VESTED INTEREST IN SELLING YOU SOMETHING so THEY CAN GET RICH while YOU end up SUFFERING…
You just gotta be…
“De Deh De!”
No guilt.
No shame.
Intelligence beats emotionalism.
And paper covers ROCK.
Yeah, I’ll buy your house.
FOR A DOLLAR.
I dunno. I am not turned off. I bought my first house this past December in a suburb 35 miles NW of Boston and I can’t say I regret it one bit. It has been one of the best decisions I have ever made in my life. I am also quite conservative and had a diversified portfolio (less any real estate holdings) which allowed me to put 20% down and get a 30yr mortgage just before the rates started rising significantly.
This website was actually quite helpful in that I was aware of market weakness and knew how to negotiate. I don’t post here very often any more, but I do read occasionally. I am not going to make any predicitions on the future direction of the housing market. I can tell you that I see a slowing market, however, I would be hard pressed to call it a ‘market crash’. Anything of quality in my town sells quite easily for a very high price. The over-priced junk sits. Go figure.
“I would be hard pressed to call it a ‘market crash’.”
To that, I would add — yet. It will.
Rob, sounds like you made a good decesion as far as your loan terms. This blog has a few people like”Auction” who really need a little perspective. The greed that he so vehemently rallies against on the sell side he covets on the buy side. And to his credit, he admits it and doesn’t care! His parents would be proud…
35 miles NW of Boston. Are you sure you’re not in NH?
Westford, MA???
Hey Rob-Come back and crow in a couple years when your 20% is gone and you’re $100k underwater.
Beantown and it’s suburbs are ranked #1 in the country to take the pipe relative to current values goin’ down the crapper.
You bought at the top.
It’s gonna be long f*ckin’ road down the mountain.
Housing Starts & Permits Fall
U.S. Housing Starts Fall 7.8% in March to 1.96 Million Rate
April 18 (Bloomberg) — Builders started work last month on the smallest number of new houses in a year, as rising mortgage rates and record inventories of unsold homes discouraged new projects.
Housing starts declined 7.8 percent in March to an annual rate of 1.96 million, from 2.126 million in February, the Commerce Department said today in Washington. Building permits, a sign of future construction, fell 5.5 percent to an annual rate of 2.059 million from 2.179 million.
Builders are breaking ground on fewer projects after new home sales declined in three of the last four months, falling in February by the most in nine years. Construction companies such as KB Home report fewer orders as increased borrowing costs and higher prices put new homes out of the reach of more Americans.
“It’s clear that the housing market is cooling,” Joel Naroff, president of Naroff Economic Advisors, in Holland, Pennsylvania, said before the report. “There are areas of the country where we are going to see pretty sharp declines in construction and in housing prices.”
I read somewhere over the weekend (NYT?) that an annual start rate below 2M was going to shake Wall Street. Look out below !
Wow, thats pretty steep decline in housing starts, annualiized its practically half?
Simmssays…
Wackiest Products for Your Dog
http://www.AmericanInventorSpot.com
‘Homeowners have basically received and spent in excess of $2 trillion that they never earned,’ he writes.”
Received? Ha. Gotta love that antiseptic word. As in: Look, Buffy, I just received 75K in equity and bought this cool new Hummer and a bunch of other shit. Home ATM! Hoo-ah!
This was a pretty nice racket, as rackets go. It had the advantage of being run with the blessings of our major institutions (financial, political, media, educational, religious). Why we all know: after the stock bubble burst, no other economic engine could have provided as much luxe.
As the bottom falls out, lots of folks are going to freak. Their vanity has been polished to a spitshine and their stupidity flattered no end. They’ve been had. Soon, handcuffed to debt, they are going to see just how badly. Permanent debt servitude: there’s no key.
Expect a social-psychological shitstorm. We could be on the edge of a turning point in history when tired, cozy narratives get kicked once in the ass and again in the nuts for good measure. Needless to say, it’s not always good things that follow such disillusionment; cf. 30s-era Europe. When I-Got-Mine turns into I-Lost-Mine, the rage may be translated into a politics equal to its bile.
Great post.
‘We’ve had a very, very brisk market for several years and it just sort of plateaued a little, and now it’s coming back at a nice, normal comfortable pace,’ said Ellen Daly.”
This is an outrage. If this misuse continues, we as a nation will have a generation of children growing up thinking a “plateau” drops off at a 45 degree angle!
pvtom,
I don’t worry about it too much. I bought my house primarily to live in it. My quality of life has increased dramatically. My dog has a yard now and I have more privacy than ever. Yes, I do have to take care of it and it costs money and takes time, but I am also a big DIY-er and I am enjoying the experience. My personal assets are now split between housing, stocks, and cash. I am a big fan of diversification and not a big fan of market timing - no matter what market we are discussing. How the hell do any of us really know what is going to happen?
As for some of the characters on this board and the logic they use, I take the advice of my HBS negotiation professor, “You can negotiate with about 80% of the the world, but quite frankly 20% are social misfits and it is fruitless to try to reason with them.” That still cracks me up.
highsierraguy,
Yeah WS looks really disturbed. DOW up 83pts.
‘Homeowners have basically received and spent in excess of $2 trillion that they never earned,’ he writes.”
Doesnt’ seem to matter a wit to the local burghers with their spoiled, smug, self-assured, arrogant sense of superiority…
Pride goeth before a fall….
-and it’s gonna be a doozy-LMAO…
Had dinner the other night with Boston area family friends.
A couple of mid twenties young fellows were talking about holding off a buy decision: condo prices too high, condo fees way too high taxes too high. Expenses several times rent potential.
No apparent chance of any more appreciation.
Too expensive too much risk.
I told them last bottom took years to climb out of……….
I told them last bottom took years to climb out of……….
A decade to be exact.
As others have mentioned earlier, If there is some smugness on this blog I think it’s partially deserved.
This blog has told the truth while the main stream media and gov. painted a rosey economic scenario.
Last year, the opinions expressed on this blog were about as well received as Witches were in Salem.
Recently, the main stream media seems more enlightened and are just now dropping nervous hints about the “cooling” housing market. Opinions on this board now probably seem more rational to the general public.
3 - 6 months from now some of the big time posters here will probably been seen as Economic Nostradamuses. Older blog quotes will be referenced in hindsight as “early warnings that were ignored” in many of the ongoing Newsweek and Times bubble/economic disaster series.