The Nation’s Unprecedented Run-Up
The Chicago Tribune reports from Illinois. “For consumers, this is a push-pull moment: Bombarded with contradictory opinions and data about the housing market, it’s difficult to gauge if we’re ‘there’ yet — whether real estate’s free-fall is ending or whether it has a lot further to slide. ‘People who missed the train now are starting to see that the train has backed up and they may be looking at a golden opportunity,’ said Lynette Briggs, a housing counselor for the DuPage Homeownership Center in Wheaton, who said she was surprised by the high turnout, despite the recession, for her organization’s annual homebuyers fair in February.”
“But she cloaked that optimism in ‘ifs’ — the opportunity to buy a house now could, indeed, be golden if the buyer has a job, has good credit, has good savings and plans to stay in the house for a while.”
“‘If I’m spending, say, $180,000 for a house, maybe it’s still got $20,000 worth of wiggle room going down,’ Briggs said. ‘But you have to ask yourself if you could rent for the same amount and have the same quality of life over a period of years. There is an intangible value to home ownership.’”
From Chicago Business. “Not long after Frank Cho got married in 2004, he and his wife, Linda, bought a one-bedroom condo with a den in Lakeview. Two years later, they decided to have a child and prepared to put their condo on the market and buy a bigger home. They got a bad break when a new development sprang up next door, blocking what once was an unobstructed view to the west. Added to that were a declining real estate market and glut of condos in the city. Still, ‘back then, the market seemed better,’ Mr. Cho says.”
“They put their place on the market in January 2007 for $289,900. Months went by with a few nibbles but no takers. In March, his wife gave birth to their son. As their home got more crowded with a growing baby, they decided in August to try to put the condo up for rent, though they didn’t find a tenant right away. In the meantime, unable to buy till they sold their condo, they decided to rent a larger place for themselves in the suburbs. The family is now renting a two-bedroom condo in Wheeling.”
“Just recently, the Chos decided to allow their Chicago tenant to stay another year even though they would prefer to buy their own place as soon as possible. They instructed their real estate agent to take their condo off the listings for now. ‘I’m afraid this market is not going to pick up anytime soon,’ Mr. Cho says. ‘We’re really thankful we were able to find renters.’”
The Chicago Sun Times. “Home sales in Chicago plunged 37 percent in the first quarter from a year earlier, and prices fell 26.8 percent, the Illinois Association of Realtors said Friday. The median price fell 22.8 percent to $187,500 from $243,000.”
“‘There is no doubt that the burgeoning unemployment rates are dampening recovery in the housing market, but positive numbers in the month-to-month sales suggest that the second quarter may offer the promise of some modest gains in sales and some recovery of median prices,’ said Geoffrey Hewings, director of the University of Illinois Regional Economics Applications Lab.”
The Rockford Register Star from Illinois. “The real estate market is down. Why is my property value assessment up? Beverly Campion, Winnebago County supervisor of assessments, said her third-floor office should have a revolving door. ‘The place has been busy all day,’ she said. ‘We had to stop our voice mail because we were getting 40 messages on there above and beyond the calls that we were answering.’”
“Campion said strong housing sales in 2005, 2006 and 2007 contributed to equalization factors that brought assessments to a higher level. Poor housing sales in 2008 will be reflected in next year’s property-tax bill.”
“Jason Loomis, a 10-year Rockford resident living on 21st Street, called his property taxes a ‘rip-off.’ ‘Last year, my taxes went up $200, and this year it went up $180. It’s ridiculous. I have a house next door that’s foreclosed.’”
The Indystar from Indiana. “A federal tax credit is helping first-time buyers jump into the Central Indiana housing market, according to experts. ‘It was definitely a part of buying the house,’ said Jeff Milligan, 21, who recently moved into his first home.”
“Milligan, a construction worker who had lived in an apartment for two years, was waiting on the sidelines before deciding to buy his 2,000-square-foot home in Wanamaker. ‘It would have been hard to get into a house without the tax credit,’ he said. ‘It will allow me to make some improvements, including a security fence, once I get moved in.’”
The Journal Gazette in Indiana. “Indiana lawmakers took time during the recent legislative session to tackle the continuing problem of home foreclosures. ‘Indiana’s high rate of foreclosures has adversely affected property values, and we risk letting home values drop even lower as the foreclosure crisis continues,’ said Sen. Karen Tallian, D-Portage, the author of the bill. ‘It is in the public’s best interest for the state to encourage homeowners and lenders to work out foreclosure alternatives.’”
The Des Moines Register from Iowa. “The recession that began in Iowa about eight months ago and in the nation 17 months ago started tugging at Pella Corp. three years ago, CEO Mel Haught says. The nation’s unprecedented run-up in the housing market led to an unprecedented fall.”
“Q. How does the housing market look as Pella Corp. moves into the building season? A. ‘We’re still looking for the bottom. How far down is it going to go yet, especially as it relates to new construction?…Consumers are just not sure what’s going on, and it’s impacting all segments. … We still think we’ve got a ways to go.’”
“Q. Have you seen a recession like this before? A. ‘You mean an old guy like me? It’s really hard to put into context because we’ve never been through anything like this before. We’ve had snippets of it. … but nothing short of the 1920s and ’30s. We had this big run-up in housing and now we’re having this big drop-off.’”
The Journal Sentinel from Wisconsin. “With the demand for downtown condos in the dumps, some developers are putting their unsold units up for rent while waiting for the market to rebound. So far, the additional rental units have not affected rents for downtown or east side upscale apartments, according to housing developer Robert Monnat.”
“Monnat, which develops both apartments and condos, cites two basic reasons: size and service. While downtown condos and upscale apartments often share similar features, such as granite countertops, underground parking and views of Lake Michigan, the rental units tend to be smaller than those that are sold, Monnat said. The typical new two-bedroom downtown apartment is around 1,200 square feet, compared with 1,500 to 1,600 square feet for a two-bedroom condo, he said.”
“Apartments can better offer services that many condo complexes don’t provide, Monnat said. That includes housekeeping tasks, such as watering the plants when the renter is out of town, as well as handling repairs when things go wrong. With condo rentals, the responsibility for those tasks might be a bit murkier, he said.”
“‘You rent a condo, and all of sudden your air conditioning doesn’t work,’ Monnat said. ‘Who’s your landlord?’”
The Columbus Dispatch in Ohio. “Charles and Mary Nitschke offered beer, wine and brie last night to their houseguests, hoping to get a nibble on a more-notable treat: their 1961 custom home in Worthington. The Nitschkes were trying to sell the house in an unusual way: through a cocktail party. Their real-estate agent, Sue Parrish, suggested the party as a way to stand out in a crowded housing market.”
“‘You have to think outside the box in real estate these days,’ said Parrish, who got the idea from a California real-estate agent at a Keller Williams conference in the winter. ‘It’s a unique way to market a unique home in a unique real-estate market.’”
“The asking price, $650,000, is in a particularly fragile range for sellers: The number of central Ohio homes that sold for $500,000 to $1 million dropped 28 percent last year from the previous year, according to the Columbus Board of Realtors. In Worthington, 19 homes have been listed for sale this year at more than $500,000 — including three on Plesenton Drive. Only one has sold, after being on the market for 246 days.”
“One guest…made an offer with his fiancee during the weekend, hoping to get ahead of any interest that the cocktail party might attract. ‘This event came to our attention,’ said the man, who asked not to be identified. ‘It was a very smart sales tactic. I knew, once people had a chance to see it, it would move pretty quickly.’”
From Finance and Commerce. “Elliot Eisenberg, a senior economist with the National Association of Home Builders, told a gathering of the Builders Association of the Twin Cities in Brooklyn Park this week that things should start looking up for the industry within nine to 12 months. From an economic standpoint, Minnesota ‘has underperformed the nation as a whole in the last five, six, seven years,’ Eisenberg observed. When the recovery happens, the demand for new housing will be less than it is in other parts of the country, but ‘it will happen, no question,’ Eisenberg said.”
“State and local governments can play a role in housing’s recovery, Eisenberg said. Under a legislative proposal in Minnesota, the state would ‘monetize’ the $8,000 federal tax credit and homebuyers would be able to apply the money toward a down payment. Ten states have already done that, according to Eisenberg. The key is to get things moving quickly, he said.”
“Nationally, ‘we need an extra 100,000 houses being made now,’ Eisenberg said. ‘Instead of 1.5 million, we will take 1.4 million in two years. That’s OK. We are robbing Peter to pay Paul, because Paul needs it desperately.’”
From USA Today. “The crisis is redefining both the nature of the global financial system and expectations for the United States’ $14 trillion economy, the world’s largest. Historically, economies recover more slowly following financial crises than after garden-variety recessions, according to the International Monetary Fund. ‘We have to re-evaluate potential growth, given the fact that some of the housing (related) growth was not real and the output of the financial system was not real,’ says Harvard University’s Kenneth Rogoff, former chief economist at the IMF.”
“The U.S. economy’s shrunken horizons are a far cry from the halcyon days of 2000, when new Internet and wireless technologies appeared to promise dramatically improved growth. Then, surging productivity far beyond what Europe and Japan were experiencing contributed to a sense of limitless economic possibilities.”
“Now, as the U.S. digs out after twin housing and credit bubbles, significant economic energy is being drained by the crisis and its consequences. The de-leveraging — or debt repayment — process that is underway will be long-lived. As late as 2011 and beyond, corporations still will be confronted with the need to pay off or refinance massive amounts of debt issued during the leverage boom of 2005-07, according to UBS.”
“Across the economy, this reduced appetite for risk may take its toll. From consumers who binged on houses thinking values would only rise to financial institutions that gambled on hopelessly complicated products, investors badly underestimated risk in the pre-crisis years. ”
“Finally, human and financial resources are being reallocated across the economy. A nation that had too many investment bankers and mortgage brokers now must switch focus to other endeavors. Resources will stand idle while that process plays out, further constraining the economy’s potential. And eventually, the tax bill to pay for the enormous government borrowing used to battle the crisis will come due.”
“The IMF says ‘far-reaching changes in the shape and functioning of financial markets’ will be required to provide protection against a repeat crisis. ‘It will look substantially different. All types of securities markets will be a lot more regulated and less vibrant. … The trade-off will be fewer crises,’ said Menzie Chinn, associate director of the Robert M. LaFollette School of Public Affairs at the University of Wisconsin.”
“But not all the changes will necessarily hurt prospects for growth. Much of the fancy financial engineering of recent years, which produced difficult-to-fathom products such as collateralized debt obligations and credit default swaps, actually had little impact on productive investment in the bricks-and-mortar part of the economy.”
“In recent years, the value of derivatives — financial contracts whose price depends upon a second instrument — has soared. One of the defining features of the pre-crisis years, global derivatives, increased in value 303% the past five years. Likewise, U.S. commercial banks increased their derivatives holdings 81%, according to the Peterson Institute.”
“But in the same period, gross fixed-capital investment in the U.S. rose just 26.4% The vast majority of the financial innovation that gave rise to this crisis represented transactions between financial institutions, ostensibly aimed at reducing their risk, rather than productive investment in job-creating companies. ‘The explosion in financial products was interbank. … I’m not sure we’re going to miss it,’ said Adam Posen, a former Fed and European Central Bank consultant.”
‘A federal tax credit is helping first-time buyers jump into the Central Indiana housing market, according to experts. ‘It was definitely a part of buying the house,’ said Jeff Milligan, 21, who recently moved into his first home.’
‘Indiana’s high rate of foreclosures has adversely affected property values, and we risk letting home values drop even lower as the foreclosure crisis continues,’ said Sen. Karen Tallian.’
Here’s a tip senator; how about not providing incentives for 21 year olds to buy houses?
Ben,
Be sure not to miss the NYT article about Boise for a future PNW post. It is 4 pages long, but worth the digging.
The money quote is on page 3 of that story: how a local bank president says there are 8 years worth of vacant lots prepared around here.
Something similar in Bozeman, MT. Local bank executive (retired) estimated several decades of developed lots in the Gallatin Valley… assuming no loss of population as the local economy collapses with the loss of real estate/construction jobs.
and in this case, a 21-yo construction worker. Oh yeah, Indy needs lots more construction! Not.
Just think, $400 designer purses & jeans marketed to jobless teenagers have become the gateway to 21 year olds “buying” McMansions. The “new” economy!
Well said, SD.
No doubt some of these very affluent young people wouldn’t be caught dead carrying a $400 purse.
Hermes, a French luxury goods company, was profiled yesterday in the Wall Street Journal. It’s unreal how the affluent still place so much emphasis on materialism. Sadly, I got a sick feeling while reading the article. I had visions of homeless people living in tent cities.
I guess quite a bit of Hermes’ revenue is based on handbag sales. And surprisingly business is quite good even during this very severe recession. Some folks are still fabulously rich.
One French woman profiled in the WSJ article has 18 Birken handbags that retail for around $7,000 each. Apparently a new white crocodile skin handbag has caught her fancy. I suppose the skin is from an albino crocodile which would indeed be very rare. This woman tells of her luxury goods’ envy on a daily basis.
I don’t know the price of the white crocodile handbag. There’s two lines of Hermes’ handbags with prices reaching $100,000.
For sure, one of Hermes’ super expensive handbags could buy one or two houses, or condos, since real estate is so depressed.
The other day I saw a bank-owned Lake Las Vegas condo selling for under $70,000.
Do get your order in for Hermes’ handbags soon. The waiting list could be several years.
“‘If I’m spending, say, $180,000 for a house, maybe it’s still got $20,000 worth of wiggle room going down,’ Briggs said. ‘But you have to ask yourself if you could rent for the same amount and have the same quality of life over a period of years. There is an intangible value to home ownership.’”
More sales pressure from the UHSP. Same quality of life “over a period of years” versus waiting maybe one or two years for a lower price on a home? Yes, there are plenty of intangible values of home ownership, but the huge financial reality is all too tangible….just ask the millions of FB’s the MSM has cheerleaded all the way.
We fell victim to this sales tactic in ‘92. Prices had fallen some, and had not come up, so Realtors would say, “Buy if you plan to stay for awhile, it’s better than renting, etc…) So, we bought. By the next year the house across the street came on the market for $100k less than we paid…and it was a better house. We saw this repeated for the next four years while we were underwater and unable to sell. What the Realtors should be saying (if they intend to perform their fiduciary duty of disclosure), is that you’ll be stuck underwater watching your new neighbors buy better houses for less money for years to come. Still want to buy?
No fiduciary duty to buyers.
Unless radon or mold disclosures and so forth.
Milkcrate, saw your comment on how they used to run cattle on the land that Riverbend in Ruskin now sits on. Are you in West Central Florida? Just curious. Always like to compare notes with fellow bloggers from the area.
Longtime Plant City and Lakeland resident.
Now in Cal.
Wow, what a change that must be from Fla. Appreciate the insight into Riverbend. I didn’t know about the cattle. Someone told me the Dickmans (old Ruskin family) owned that land and sold it to Lennar.
There is indeed a fiduciary duty if they’re acting as a dual agent, which most do because they want commission on both sides of the deal.
I would not trust any real estate agent that forecasted the housing market 4 years out.
Like me, you learned your lesson in one of the baby bubbles so that when the grand daddy came along, you were ready to do better this time around. There will be no “next time” for people caught in this one, so consider your 90s experience worth gold.
Quality of life as defined by what?
The ability to paint your walls purple comes with the added strings of spending uncountable more hours commuting to a crummy job even when talking about a mere $20,000 difference.
Quality of life for me and my fellow bloggers means going to sleep each night not worrying about being on the wrong side of the housing death spiral.
Well said, cereal. Today I told my cuz Sherry (house on market 5 months, no offers, only 2 lookers) that she must discuss with her agent whether a price reduction might help. (She can’t stay, is paying mtg by selling contents at flea mkts.) I think she will stay above the price curve too long and actually lose the house, even though her current asking price is twice the mtg principal. “Death spiral” is a good term for it.
AZ:
YOU lend your money to people and your cuz wont listen to you..
Slap her upside her head and tell her You wouldn’t loan a potential buyer of her house unless she lowers the price 25%…..yesterday!
Then the house offer should be $160K. Problem solved.
(Until it drops to $120K and you’re screaming that $160K was suppose to be the bottom. Any the Realtor has left town and realize you have no one else to blame except the person who signed the dotted line. It was my secret twin who stole my identity! It wasn’t me!)
“Home sales in Chicago plunged 37 percent in the first quarter from a year earlier, and prices fell 26.8 percent, the Illinois Association of Realtors said Friday. The median price fell 22.8 percent to $187,500 from $243,000.”
We’re hearing the opposite inside the beltway. One of the big wigs at Long & Foster was on the radio this morning telling everyone how his clients who bought last October got better deals than will ever be available again. People buying now are wishing they had bought just a few months ago, as they get caught up in bidding wars. If they don’t buy soon, they’ll be priced out forever.
Some people haven’t learned a damn thing. He even had the nerve to claim buying was as cheap as renting now.
At some point, after enough “bottoms” have come and gone the sheeple will wise up.
Housing will still correct itself but the talking heads will have lost all credibility.
Yes, but remember that there is a lot of fairly steady money in this area and for that reason, the banks are not putting lending standards where they should be yet. It will take us longer, but it will come. I got a little lost last weekend coming back from a nature sanctuary in Chevy Chase. There were an awful lot of for sale signs. I bet as recently as last spring those houses were “snatched up” before they even were officially on the market. A disconnect between wishing prices and offering prices at the high end is a good sign for the closer in suburbs.
Some crashes are fast. Others take time.
bink,
Same thing here in San Diego. Sales are way up, YOY. Lots of lookers and buyers, with multiple bids on houses across all price ranges, except for the most expensive places (I know “everybody wants to live here” but are there really that many people who can afford $1MM+++ houses?).
Frustrating beyond belief.
I suspect the reason that people are buying real estate now, is that like me, they expect inflation to take off next year. With double digit inflation brought on by congress “printing money” it won’t be long before the government inflates their way out of the bubble. Once we reached the point in my location where the total cost of ownership was less then rent, I bought, and my son bought. Rents will increase with inflation and we can pay off these properties with funny money (inflated dollars) Yes, folks, it is the 70’s again, only worse. Isabel.
Inflation won’t drive up home prices unless we have wage inflation. Wage deflation (which we are currently experiencing) pressing against rising commodity prices will only make houses less affordable.
Given the current labor market and that forecast over the next 5 years, do you really think we will experience wage inflation? Not likely.
Yes, I do expect wage inflation to take off. A much bigger portion of our economy is current federal and state workers and retirees than it ever was in the 1970’s. These are the prime democratic voting base and and if the dems have any hope of hanging on in the next two elections they must placate these people. This is why they are printing money. It is their way out of the bubble. Watch and see. It won’t work to fix the economy because you can’t print money with nothing to back it up. Real estate will hold value in real dollars as will gold, guns and a few other things. Granted, there are many markets where the median prices still are not in line with the incomes or the cost of rentals but where I live real estate now is selling for almost exactly what it did in 90’s adjusted by the annual rate of inflation. Of course I live in a state which does not have huge unfunded pension liabilities down the road. We also have a 4 billion state budget surplus. If I lived in California, Arizona, Nevada, Florida, New England or any of the rust belt states, I would not be buying now either. They are clearly not at the bottom yet and places that have no stable job base to support workers have always been dangerous places to buy. Another prediction here. I know some people who are getting close to retirement age in California. Watch for California to at least try and pass a law that keeps their state workers from collecting all or most of their pension if they move out of California. They need to find some way to hold these people hostage in California because the entire state is close to bankruptcy. Isabel
Sales are up because prices are down, and interest rates are down even further.
You can now buy in my old San Jose townhouse development for the same price as you could in 2000, and it’s a much nicer neighborhood now, than it was then.
After an investigation by New York Attorney General, Andrew Cuomo into Fannie Mae and Freddie Mac Appraisal practices, the agencies (with the Office of Federal Housing Enterprise Oversight (OFHEO)) agreed adopt new changes to how appraisals are processed in the mortgage industry in exchange for an end to the investigation. The centerpiece of the agreement is the HVCC, which contains many positive and common sense initiatives to help clean up the industry, but also contains significant negative changes to the how brokers and agents are able to work with appraisers and how appraisers are able to operate, hurting consumers, mortgage brokers, agents, and appraisers.
So I guess brokers won’t be able to “hit that number I need to make this loan work” that’s very sad
Funny how they think it’s “negative” when agents can’t force the appraisers to fraudulently pump up the numbers.
Boy, it will really hurt consumers if they can’t overpay for an overpriced home.
“Monnat, which develops both apartments and condos, cites two basic reasons: size and service. While downtown condos and upscale apartments often share similar features, such as granite countertops, underground parking and views of Lake Michigan, the rental units tend to be smaller than those that are sold, Monnat said. The typical new two-bedroom downtown apartment is around 1,200 square feet, compared with 1,500 to 1,600 square feet for a two-bedroom condo, he said
Those sparkling views of granite countertops, dank dingy underground parking lots and of the cold dark Dead Sea, listed for $350k and up, just aren’t being snapped up like you guys anticipated…Huh..huh ?
D’oh…way to go Homer, surprised that nobody wants to pay that kind of money for an East Side…mugging !
Hey, that $350K condo in a nice area in DC would have been for a one bedroom or even a studio - 600 up to maybe 800 square feet.
Yeah…you’d be lucky to buy a deluxe garbage can w/lid on the side alley at 22nd & “Eye” Street for that !!
investors badly underestimated risk in the pre-crisis years No, investors were oblivious to risk and lost their minds. Now they must lose their money.
Yeah, and pulling taxpayers down with them.
Somebody show me where The Framers made borrowing an inalienable right.
“‘We have to re-evaluate potential growth, given the fact that some of the housing (related) growth was not real and the output of the financial system was not real,’ says Harvard University’s Kenneth Rogoff, former chief economist at the IMF.”
Shouldn’t the effort currently underway to respike the punch bowl and restore irrational exuberance summarily take care of this problem?
“The asking price, $650,000, is in a particularly fragile range for sellers: The number of central Ohio homes that sold for $500,000 to $1 million dropped 28 percent last year from the previous year, according to the Columbus Board of Realtors. In Worthington, 19 homes have been listed for sale this year at more than $500,000 — including three on Plesenton Drive. Only one has sold, after being on the market for 246 days.”
Are the GSE conforming loan limits sufficiently high for Central Ohio to provide a taxpayer-guaranteed loan on a $650,000 house?
Or is it that only rich Californians and other residents of higher-priced coastal markets qualify for humongo-jumbo loans with federal taxpayer provided guarantees implicitly funded by residents of Central Ohio? How is this policy politically defensible?
It’s OK, us “coastals” are bailing out the automakers, right?
We pay more to defend the Buckeye state.
But I hear you.
re: Calif jumbo, the 729k doesn’t begin to cover the upsidedownmanship of communities ranging 600 miles long from coastal La Jolla to San Francisco and beyond.
Everything and I mean Everything in its path will get crushed by the weight of these super jumbo non-Obama-helpable properties going into distress in the coming ALT A meltdown.
And what does that do to a little 3+2 in Van Nuys you ask?
Guess they’ll shoot porn in nicer houses.
LOL!
coming ALT A meltdown
You might want to check current LIBOR rates before making comments like that.
He wants his $500,000 TAX FREE Retirement money…..
otherwise he would price it at $400K and it would sell today…bet he has less then $75 K in the house.
That story about the Chos, who are having trouble selling their one-bedroom condo now that they’ve started a family, perfectly illustrates something I’ve seen time and again in this bubble– a complete lack of foresight. The one-bedroom was “perfect” for young childless professionals… but then within two years they decided to change their circumstances and the place was no longer perfect.
Have these people never heard of contingency planning? If there’s ANY chance that you’ll need more space in a few years, BUY for that. Or rent, so you can change. The house we’ve bought is a four-bedroom even though we’ve got one kid… because we’re hoping to have more. It would be silly to buy a two-bedroom place and have to move in a few years.
Prior to this craziness, the average was seven years in one home. If you can’t think that far ahead, you have no business buying a home.
I agree with you completely and think that this whole “starter house” nonsense is going to collapse and not come back for a very long time for most of the population. Buying when you can only afford a place that will last you for one to three years only makes sense when the appreciation is going to be large enough not to be eaten up by transaction costs.
And all this crud about people who own houses having so much more wealth than renters? That was because people used to buy when they were young and poor and STAY in that place. As your salary increased, your housing expenses stayed almost the same and you became wealthier. Where did anyone get the misguided notion it was some mystical magical property of the house itself?
I agree with the nonsense about ownership being a sure path to weath.
Did it never occur to the NAR that it isn’t a case of ownership being a sure path to wealth; but rather that wealth enabled one to be an owner in the face of all the expenses of ownership?
As your salary increased, your housing expenses stayed almost the same and you became wealthier.
1++
I have been raising 2 kids in a 1 bedroom apartment. I’m finally moving up to a 2 bedroom place now that my oldest will soon be 4. Seriously, since when do babies & toddlers need that much space?
We have a 4-year-old and 1-year-old in a two bedroom apt. THe only problem is that the kids play stuff (way too many toys) ends up all over the living space. It would be nice to have a contained play room, but that is largely our fault–my wife is addicted to garage sales.
“The real estate market is down. Why is my property value assessment up?”
OK, so I’ll grant that the decline in the dollar amount of assessments might lag by a year or two. But it’s positively obscene what some properties are being assessed at for tax purposes. I’m watching my old homestead that we sold in 2005 at the peak. The assessment hasn’t dropped much from that time. It’s such a double edged sword for the owners. They were so pleased when it assessed above what they paid, yet the taxes gotta hurt, especially if you can’t sell for assessment value.
“Nationally, ‘we need an extra 100,000 houses being made now,’ Eisenberg said.”
We do?
“Nationally, ‘we need an extra 100,000 houses being made now,’ Eisenberg said. ‘Instead of 1.5 million, we will take 1.4 million in two years. That’s OK. We are robbing Peter to pay Paul, because Paul needs it desperately.’””
– can someone translate this for me? I guess I don’t speak Moron as fluently as I thought I did.
Families of 10 million or illegals about to get amnesty.
Aren’t there already like 19.1 million vacant homes nationally? But I guess given the extant stock of vacant homes, what’s another 0.1 million (= 100,000 homes)?
Oh boy — I just realized from my vernacular that I have like morphed into a true blooded Southern Californian. Maybe I will change my blog handle to Valley Boy in celebration…
I think you might mean 1.9 million (rather than 19 million), but Valley Boys don’t know the word “extant” — stick with “Professor” even though I liked “Get Stucco”
Where do you get your statistical information? Mine came from the US Department of the Census, via Bloomberg news service.
Record number of homes vacant
By KATHLEEN M. HOWLEY
Bloomberg News
Published: April 28, 2009
A record 19.1 million homes stood unoccupied in the first quarter, and the U.S. homeownership rate fell as the recession sapped demand for real estate.
The number of vacant homes, including foreclosures, those for sale and vacation properties, rose from 18.6 million in 2008, the U.S. Census Bureau says in a report released Monday. The percentage of resident-owned households fell for a third quarter to 67.3 percent.
The percentage of all U.S. homes empty and for sale fell to 2.7 percent in the first quarter. It hit an all-time high of 2.9 percent in the first and fourth quarters of 2008, the Census Bureau says.
The inventory of homes on the market averaged 3.7 million in each of 2009’s first three months, according to the National Association of Realtors. The monthly average was 4.2 million in 2008.
There were 130.4 million homes in the United States in the first quarter, the Census Bureau says. In addition to the 2.1 million empty properties for sale, the report counted 4.2 million vacant homes for rent and 4.9 million seasonal properties that only are used part of the year.
I was recalling a 2-million figure which I just found again (mortgagereports.com, in a 2007 piece) — your source certainly looks more reliable.
Underwater Brits stuck living together after breakup
http://news.bbc.co.uk/2/hi/business/8039744.stm
Dude, don’t buy a house with someone you’re only dating. Even a one-year lease is nasty.
He seems like a pretty decent chap.
So what’s her stinkin’ problem
(/justkidding)
Acting married while dating? Married is married. Not is not.
“… actually I’m not that happy.” Next time shack up in a rental. Then you just leave when you want.
Idiots.
Roidy
“Finally, human and financial resources are being reallocated across the economy. A nation that had too many investment bankers and mortgage brokers now must switch focus to other endeavors. Resources will stand idle while that process plays out, further constraining the economy’s potential. And eventually, the tax bill to pay for the enormous government borrowing used to battle the crisis will come due.”
“The IMF says ‘far-reaching changes in the shape and functioning of financial markets’ will be required to provide protection against a repeat crisis. ‘It will look substantially different. All types of securities markets will be a lot more regulated and less vibrant. … The trade-off will be fewer crises,’ said Menzie Chinn, associate director of the Robert M. LaFollette School of Public Affairs at the University of Wisconsin.”
While big name economists at or formerly with the IMF are grappling with reality, the top leadership on Obama’s team and at the Fed appear to still live in denial land.
It’s apparent that this is going to be a very long recession.
Buckle up.
“When the recovery happens, the demand for new housing will be less than it is in other parts of the country, but ‘it will happen, no question,’ Eisenberg said.”
Hooray, hooray, the recession is over! (/scarcasm off)
http://www.voxeu.org/index.php?q=node/2785
“‘People who missed the train now are starting to see that the train has backed up and they may be looking at a golden opportunity,’ said Lynette Briggs, a housing counselor for the DuPage Homeownership Center in Wheaton, who said she was surprised by the high turnout, despite the recession, for her organization’s annual homebuyers fair in February.”
Look at that train wreck over yonder! I see a great opportunity in purchasing crushed train cars…
I think the train might have backed over some toes and fingers and even some people’s wallets have been crushed on the rails. The train backing up analogy really does not work at all because who would believe hypters who threatened everyone by the prospect of missing the train when everyone who jumped aboard lost everything and now you have an opportunity to do it all over again? How does one buy a house when one just lost his ass?
“In the meantime, unable to buy till they sold their condo, they decided to rent a larger place for themselves in the suburbs.”
So what’s the problem here? Are we supposed to feel sorry for the Chos, or what?
‘The explosion in financial products was interbank. … I’m not sure we’re going to miss it,’ said Adam Posen, a former Fed and European Central Bank consultant.”
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Amen!