Sometimes The Truth Is Ugly
The Steamboat Pilot reports from Colorado. “The rate at which homes in Routt County are selling suggests that it could be a year or more before the residential construction industry mounts a meaningful comeback. As of Thursday, said Realtor Doug Labor, there were 2,123 properties of all types listed for sale on the MLS, and of those, 1,282 were residential properties. Of the total number of residential properties, 240 were new product. Although the number of contracts for home purchases has jumped a little this month, the absorption rate in February was just three-tenths of 1 percent. Ford has concluded that the time has come for professionals in the building trades to confront the reality that, ‘I’m going to have to change my business model or do something else.’”
The Greeley Tribune in Colorado. “Greeley was tops in the nation for foreclosures, then it wasn’t. It was the first- and second-fastest growing metropolitan statistical area for the first five years of the millennium. Then it topped U.S. small cities in job growth, then salary growth.”
“These lists are big deals in the economic development game, and they look good all stacked up together — especially when they deliver good news. How accurate can these lists really be? Maybe it depends on your source of information. Realty Trac reports Weld had 431 foreclosure filings in February; the Public Trustee’s office reports 240. Who will you believe?”
“Just last week, U.S. News and World Report reported that Greeley’s Metropolitan Statistical Area, which includes all of Weld County, had the fifth most ‘underwater housing market’ in the nation, according to Zillow. Uh, sorry. The Group Inc., a northern Colorado real estate big hitter, has a little something to say about that.”
“In a release issued this week, The Group stated that based on Federal Housing Finance Agency’s House Price Index, Greeley ranks 114th out of 299 metropolitan areas in terms of year-over-year appreciation. But these lists are only reliable so far as the information they’re reporting. What about the information they don’t report? And both agencies are guilty of spinning the information here.”
“The U.S. News report fails to show that Greeley’s MSA indeed is not really the fifth most underwater in the country. It’s just the fifth of all the cities they chose for their list, one from each state. What The Group fails to report is that over the last five years, according to the federal housing price index The Group uses, Greeley home values dropped the most in Colorado at 10.72 percent — and it was the only metropolitan statistical area statewide where homes overall lost value in that time.”
“Sometimes the truth is ugly, but it’s the truth.”
The Arizona Republic. “Between December 2005 and March 2007, Mario Bernadel and seven accomplices purchased nearly 40 properties in the Phoenix area. Bernadel and his cohorts submitted false mortgage-loan applications, used fake ’straw buyers,’ and directed the proceeds of their illegal scheme into bank accounts they controlled. Bernadel used his share of the money to support a lavish lifestyle, buying luxury vehicles and nights on the town at local nightclubs. Last week, the U.S. Attorney’s Office in Phoenix obtained a 17-year prison term for Bernadel, putting him out of business.”
“According to a study conducted at Arizona State University, the Phoenix area set a new record for foreclosures in 2009. In February 2010, Phoenix suffered foreclosures on 3,300 homes, and foreclosure-related activity represented 65 percent of sales last month.”
“The Obama administration disclosed plans Friday to add two key components to its homeowner-assistance program: mortgage help for borrowers who have lost their jobs and principal-balance reduction for those with unaffordable monthly payments. Aside from adding the recently unemployed, the revised program does not appear to widen what was a narrow eligibility window for the original program, according to the limited information federal officials provided Friday.”
“Tanya Wheeless, Arizona Bankers Association president and CEO, said Friday’s news sparked a feeling of deja vu. ‘This is a new program that’s making a big splash, but it’s not going to help a lot of Americans,’ Wheeless said. That’s partly because of the difficulty to qualify, she said, and because lenders are likely to reject the administration’s financial incentive of 10 cents to 21 cents on the dollar to lower principal balances.”
“BofA customer Harry Baker, 67, of Scottsdale, is deeply underwater on his home of 23 years after a poorly timed decision to refinance to an adjustable-rate loan, also called an ARM, and pay off all his other debts in 2006. Baker said it doesn’t matter to him whether the bank or the government initiates it - he just needs someone to help.”
“‘I got stuck with that ARM because I didn’t sell it, and then I couldn’t sell it,’ he said. ‘I had to go back to work. I’m hoping I can retire again at 70.’”
The Phoenix Business Journal in Arizona. “In 1989, Barron’s, a national financial magazine, predicted the end of a boom era in Phoenix, with the collapse of both the commercial and residential real estate markets. It noted that the bubble of speculative land brokerage was about to burst, and that financial institutions were in distress. It also discussed a decline in population growth and a stagnating economic base far too dependent on construction and housing.”
“In fact, Barron’s pessimistic prognostication did not come to pass. For sure, the economy was sluggish for several years, but Phoenix forged ahead. Still, local economists, real estate brokers and economic developers warn that radical change is warranted during this severe recession. ‘Historically, the state and especially the greater Phoenix area have outperformed the nation in both expansion and recession periods,’ said John Lenio, economist for CB Richard Ellis’ economic incentives group in Phoenix. ‘This time is different. Arizona ranks last among all states for job retention at the present time. Unfortunately, this may be the new norm without some serious efforts to diversity our economic base.’”
“Chris Mackay, economic development director for the city of Chandler, agrees that this cycle is different. ‘We can’t live on construction. We can’t live on population growth. We’re at a crossroads and facing competition from other states,’ he said.”
The Reno Gazette Journal in Nevada. “As spring emerges, the region’s once-deafening construction industry remains muted. Come summer, the prospects for work, commercial or residential, could be downright chilly. ‘Compared to the last five or six years, it’s pretty thin out there,’ said Mike Cate, CEO of Pavers Plus. ‘Everyone’s just hunkered down.’”
“Cate has slashed staff by 60 percent and cut wages of those remaining. And he is not along among area contractors. A nationwide industry analysis found Nevada and its biggest cities to be among the worst for jobs lost. ‘Contractors I know say they’ve never seen it this bad in Reno,’ said Edwin Peaslee, a self-described ‘jack of all trades’ who’s been jobless for a year. ‘I’m scraping by,’ he said. ‘I can probably tighten my belt a bit more like everyone else. I’ve gotten rid of just about everything I own. I’m on food stamps, and I’m not proud of it.’”
“Mike Dillon, executive director of the home-construction sector’s Builders Association of Northern Nevada, said he sees early signs of renewed building, at least at the entry-level price range. ‘We still have the inventory issue with more foreclosures coming,’ he said. ‘Until that inventory is soaked up, we won’t be out of this.’”
“Meanwhile, contractors are learning to adapt to get by. Cate has expanded his attention to solar projects, saying, ‘That might help us along.’ ‘It’s very different now,’ he said. ‘We’re in a perfect storm, it seems. It’s just going to take time to get through.’”
“The government’s bold new plan to stem the foreclosure crisis aims to succeed where previous efforts have fallen flat. Locally, housing industry observers questioned the new plan to help foreclosure-threatened and out-of-work homeowners, but for different reasons. Ken Amundson, president of the Reno/Sparks Association of Realtors, said the plan would likely help homeowners who aren’t as severely upside-down with their mortgages as those in the hardest-hit states, notably Nevada.”
“‘It may help us less, seeing as how we rose in price so much and how far we’ve fallen,’ Amundson said of Reno-Sparks median home prices that have plummeted 50 percent since 2006 and are now at 2002 levels. But he added of Obama’s plan, ‘It could certainly help. It can’t hurt.’”
“‘I’m sure it could help some, but it will at best have a marginal effect,’ said Tom Cargill, economist at the University of Nevada, Reno.”
“Cargill questioned the government’s policy of pumping billions into the housing crisis even before Friday’s announced plan. ‘It’s a terrible waste of taxpayers’ money,’ he said. ‘It uses taxpayers’ money to support bad decisions made by people to buy houses they can’t afford.’”
From ABS CBN News. “Nowadays, signs in front of homes that read ‘Owned By Bank—For Sale’ and ‘Bankruptcy’ are a common view in Las Vegas area. Many homeowners are submerged—owing more than their home is worth. One kababayan who did not want to be identified told Balitang America that he came to the US illegally, but still believed that he could own a piece of the American Dream. It came true when he bought a house in North Las Vegas for his wife and two children, but then he lost it, as a result of the mortgage meltdown.”
“While one man was barely making it, a top realtor has had to learn to live without the excess she used to have. Bernadette Sanedrin once owned 14 houses and 3 high-rise condos. Her family took frequent overseas vacations. In a gamble against the economy, she ended up losing them all. Now all she owns is a $1.2 million house which is now worth $400,000.”
“‘I’ve accepted the fact that they’re gone. I’m still thankful that I learned from that and I know it’s coming back,’ Sanedrin said.”
‘Between December 2005 and March 2007, Mario Bernadel and seven accomplices purchased nearly 40 properties in the Phoenix area. Bernadel and his cohorts submitted false mortgage-loan applications, used fake ’straw buyers’
In 2006, I sat down with a few appraisers in AZ, and they would tell me of being pressured to ‘hit the numbers’, etc. I don’t think anyone can say exactly what amount of the run-up can be attributed to this, but the question is, why is the government trying to sustain valuations built on fraud? And we still have to deal with the overbuilding. Pretending that these facts don’t exist will only make things worse.
“why is the government trying to sustain valuations built on fraud?”
Because, essentially, most of the financial system as we know it is built on fraud.
What we’ve had, is not a housing bubble, but a FRAUD bubble, and that’s the hardest bubble to pop, it seems. And there are days when, God help me, it ALL looks like fraud:
New Housing Construction and Developers: Fraud
Housing Finance: Fraud
Liareayun: Fraud
Real estate only goes up: Fraud
MBS: Fraud
FED: Fraud
Bernanke: Fraud
Greenscum: Fraud
Banksters: Fraud
Turbo Tax Timmay: Fraud
Media: Fraud
Wall Street: Fraud
Gubmin bailouts: Fraud
Illegal labor and their progeny: Fraud
Chinese products (drywall,etc): Fraud
Health Care Bill: Fraud
9/11 aftermath: Faud
Feel free to add to the list.
“Sometimes The Truth Is Ugly”
Great title for this thread. And what entity is the biggest enabler of all the fraud? The goobermint. That’s why it is trying to sustain valuations based on fraud. When the fraud bubble pops, the goobermint will collapse, because that’s what it is built on.
Sheesh, you struck a nerve today.
The Mayan calendar has a burp in June 2012. Maybe Hillary gets the nod for Pres by the Dems???
Sometimes the ugly truth is hidden by pervasive, systemic fraud. It happened in the Soviet Union during the late-1980s, and it is happening in the U.S. currently.
” Feel free to add to the list.”
OK! Will do!
Baroke Obummer (Everything we propose will be put on C-Span for 3 days for all to see. No more secrecy!) campaign bald faced lies and (I was born in Mombasa, Kenya) election fraud.
Jesus. A birther on this blog of all places. Call us when the shuttle lands.
Forget about the birth certificate. Show us those educational records. Why do you suppose they’re locked down tighter than a tick? I mean, since he’s so brilliant and all, you’d think he’d want to display those puppies with pride.
“A birther on this blog of all places.”
Why not? We’re the “guys who saw it coming”, which makes us a bunch of nuts. We don’t believe the market’s coming back. We don’t believe “real estate only goes up”.
Personally, I like the CIA angle. Makes a lot of sense, especially when he’s extending professional courtesies to Gates and Interpol. And lose the MIB suits, fer chrissakes.
I want to see the edumacational records. What does that make me? A “Recorder”? LMAO!
Will Smith and Tommy Lee Jones just showed up at my door.
Seriously, though, at the height of Bush lock-step, I was calling my Senators and rep to blast ‘em about Iraq, etc. I was majorly pissed. I bugged them a lot. This lady I know who is also in the stuff biz got all wide-eyed and told me to be careful, they’ll kill me for the stuff I’m saying. I laughed her off. Then one day, as I’m on my way on I-75 to Sarasota, some big-arse silver Mercedes SUV with blacked out windows gets behind me and stays on my tail just a tad too close, switching lanes when I do. Man, paranoia strikes deep. SUV got off at the same exit, right behind me. Now I’m actually starting to shake, the lady’s words are coming back to haunt me. So I pull over at a gas station just to see what would happen. It whizzes on by. Meanwhile, I’m shaking and sweating.
Look…. to all the “Birthers”, seriously…. whatever argument you make which contains any modicum of validity is completely invalidated when you question Obama’s birthplace. Seriously…. stick to what is fact, as opposed to fiction and be civil and stop the screaming. You’re not the true Americans, we all are - all of our differing views make up America.
I have no idea why it seems implausible that a bi-racial person could not be born in Hawaii???? Unless of course the Birthers are questioning Hawaii’s just place in the Union. To the people who want to see the education certificates, seriously just listen to the guy. He’s the most educated and one of the most brilliant minds that this country could have. I definitely don’t agree with the whole let’s keep housing overvalued, however the whole system is now built on the high values. All they are doing is trying to keep the deflation at a controlled manner
Birthers and the like, remember, we’re supposed to be a beacon of light, not a beacon of fright!
Actually I’m kinda wondering about the educational records myself. Why is this such a bloomin’ secret for every one? I don’t know how it is for law, but in sci/eng, every single company wants a transcript along with the resume, to the point where I just bought a bunch of sealed transcripts. Thesis degrees require that you print three bound hard copies of the thesis (professor, sci library, main library) plus pay a fee to put the thesis in the online database for sale. Obama is not that old; this stuff should be available.
Didn’t Kerry get mostly C’s? (to be fair, they didn’t have grade inflation in the 60’s) At least he released that.
Which records do you people want to see? Why do you want to see them? If you see a college transcript that shows how many As, Bs and Cs he got, what will that tell you? Will it affect your decision on whether to vote for him when he runs again in 2012?
Hey Mighty Mike,
How come nobody at Columbia ever remembers him being there and nobody can produce a transcript? Is it because he was a “C” student? How did he get into Harvard as a “C” student? Affirmative action on steroids, or a recommend from someone in the Saudi royal family? Why would that happen?
IMHO the whole “Contitutional expert” thing about Obummer is totally bogus, I doubt without a dozen teleprompters and some serious adult supervision that he could tell you anything about the Constitution except that he and Pelosi are working on a better one.
Why would anyone consider voting for this phony again? To prolong a total disaster?
Ahhh come on cobaltblue. I hope you were joking on this and only wanting to stir the pot.
Well maybe Obama did have bad grades…as did Edison and Einstein. All it proves is that testing is not all it’s cracked up to be.
I just spent a lot of time in academia, and then had to release my grades to every HR manager who probably didn’t know to pronounce the classes. The idea of locking down a transcript is foreign to me.
Even better, where are the old college chums, the past girlfriends, collegiate pranks, stuff like that?
crickets.
How about the 57 states of the union ???
Ok, pismo, I’ll bite- name the extra 7 states for us, please.
I love when he said, “my Muslim faith”. I can’t imagine in 1,000 years saying by accident if it weren’t true.
FWIW: Einstein was a very good student, and also showed a talent for playing the violin at a young age.
The myth that Einstein did poorly in school is a lie concocted by parents of stupid children to give them hope.
The 57 “states” were the 57 states and territories that are allowed to vote in Presidential primaries, but not the general election. Puerto Rico, Virgin Islands, Guam, Samoa, Northern Marianas, Washington DC, and…one more… dang…
Nice troll, cobaltblue…
For what it’s worth, those still trying to claim Obama wasn’t born in Hawaii are retards. I’ll spell it out: R-E-T-A-R-D-S.
1. Real Estate only goes up in value.
2. The President’s paternal grandmother is a liar.
3. Phillip Berg is a retarded Republican
4. The Nordyke twins” birth certificates are fakes.
5. “African” is a race.
6. Even if the birthers are proved right, there will be tranquility and sunshine across the fruited plain.
http://www.wnd.com/index.php?fa=PAGE.view&pageId=78931
Name-calling doesn’t cut it.
I’m no birther, but we should never shout down those who question what we are told to believe. Sometimes, they are right.
Throw the Prez, senate, FDIC and congress in there and I think you pretty much got everyone on my list…..
Yes Palmetto, struck a nerve indeed.
Accounting standards: fraud
That’s a good one, Al. The fraudulent accounting is one of the major points that enables the agony to continue.
Some More:
Daddy Warbucks Paulson: Fraud
Fannie & Freddie: Fraud
Biggest educational fraud, the so-called Texas Miracle in Education that was the model for No Child Left Behind.
FDA Fraud and shills in the Health Insurance business that pose as social workers when they are really employees of the Insurance Company . Fraud with “Expert Opinions ‘,in that they are hired guns for the Industry touting their opinion .
Marketing fraud such as TV shows that present expert opinions
that are really cheerleader for product pushing .
Professional real estate fraud in advising customers of future value of real estate based on real estate myths and investment myths .
Cash-back fraud on real estate ,double escrowing ,and fraud with misrepresentation on other offers ,and incentive fraud .
How about numerous tax fraud schemes .
Because the amount of revenue derived is very often based on the value of the property. This was reason #1 for why the government was more than willing to keep the party going.
Bumper revenues w/o raising taxes, you see?
Engorged budgets from those bumper revenues, and if these revenues don’t come back, actual budget cuts will have to be made.
How much do you attribute to the public pressure? The constant din is why isn’t the government helping homeowners and the programs don’t help enough people. I’m not naive - The banks want to make bank. The government wants the economy to party on, but the public is whining incessantly about needing a hand out.
To even think that Obama matters is to put attention/energy where it serves absolutely no purpose. No matter which puppet is made to act the lead it will not change the plot. As long as we put any faith in our government and the people who in our name further special interests we may just as well quit here, stay home, watch Jerry and have some mind altering substances until our gig is up.
I don’t follow your reply as it relates to what I asked or to anything else, for that matter.
Wasn’t talking to you.
“…why is the government trying to sustain valuations built on fraud?”
Fear of the alternative?
“You can’t handle the truth!”
Jack Nicholson in A Few Good Men.
It’s true, too. Most people really can’t handle the truth. They’d mess themselves. Easier to believe myths.
Well, most people can’t handle the truth. Look at what happened to Jimmy Carter when he told the truth.
Well, most people can’t handle the truth. Look at what happened to Jimmy Carter when he told the truth.
Would that be:
“I have lust in my heart”
or
“For 444 days, I could not figure out a way to get the American hostages out of Tehran?”
or
“An islamic takeover of Iran will be of no consequence?”
Pretend and Extend.
It’s the new (old) paradigm.
because the banks balance sheets depend upon this fraud.
if the frauds were to unwind every bank, half the pension plans and REITs and most of the mutual funds would s&*t themselves overnight.
Why do you think they eliminated Mark to Market.
I’m sitting in cash because i think the market is worth closer to 5000 then 10000
’m sitting in cash because i think the market is worth closer to 5000 then 10000
I’m sitting on cash too. And if I sit on it long enough, it’s bound to hatch.
Me too.
Hey, Arizonans, looks like there’s gonna be a big ranch up for sale 25 miles north of the border!! Any takers? (Deep sarcasm off)
http://www.azstarnet.com/news/local/border/article_bfac06dd-7495-5750-9ed2-d590c7bc913c.html
But those killers are doing jobs that American killers just won’t do!
“If Krentz’s killing was caused by an illegal immigrant or a drug smuggler, U.S. Border Patrol spokesman Omar Candelaria said, it would be a first for the area, to his recollection.
“We haven’t seen any instances of illegal immigrants or drug smugglers attacking U.S. citizens,” Candelaria said.”
Is this guy for real? I could show him instances of illegal immigrants attacking US citizens right here in Florida. Right up the road from me.
“Cargill questioned the government’s policy of pumping billions into the housing crisis even before Friday’s announced plan. ‘It’s a terrible waste of taxpayers’ money,’ he said. ‘It uses taxpayers’ money to support bad decisions made by people to buy houses they can’t afford.’”
Despite the fact it’s a waste of money, can’t straighten the situation out, will cause even more problems, the D.C. circus will continue putting on their show. They will also create more ‘unintended’ side shows along the way.
Well, the housing by-products of government policy have been covered here in depth. But IMO the biggest mistake is not pushing the labor force toward sustainable jobs. For instance, the guy in Reno working on solar stuff. What’s wrong with that?
“For instance, the guy in Reno working on solar stuff. What’s wrong with that”?
Not a thing, sounds like he’s smart enough to realize he has to add/ change course a little to stay a float. Same thing any business has to do over the course of time.
The only thing certain about a business is change. If a business man does not like change he/she will like being obsolete even less.
I agree with Ben that money should of been directed to new sustainable enterprises rather than the prop up of the
fake housing values with all the bail outs .
I don’t think they tried to prop up the values in Florida in 1926
after that real estate speculation crash . It was more like to bad you lose your money . In the case of Florida it took decades to even get back to those bubble prices from that mania .
I think living in a bail out economy ,that has no bearing on deserving or not ,has created gaming and all sorts of unintended consequences .If damage control creates more damage and funds are allocated in a manner that isn’t constructive ,than it’s pointless ,along with the moral hazard of it .
If there was Pension fund lost because of misrepresentation of securities ,than insurance and /or restitution ,or civil and criminal lawsuit would of been the standing law way of remedy.
People also have to get with the program. Whining about how it used to be doesn’t put food on your table, or $ in your retirement savings. The same people that are whining about the government butting into housing and health care, want the government to create replacement jobs for them. Jobs with the same pay and benefits at least, but requiring nothing on their part - not learning new skills or figuring out a career that might be long term instead of making a quick killing. I think it’s going to be a new job market. You have to be able to adapt, pick up new skills and/or move to get the better jobs. No more living the so-called good life on a factory job.
“The same people that are whining about the government butting into housing and health care, want the government to create replacement jobs for them.”
Where do you get your info for that? IMO, it’s usually the opposite; the people that want free jobs or whatever are usually the people that want the free everything else, and the people that want minimal government generally aren’t looking for handouts.
“But IMO the biggest mistake is not pushing the labor force toward sustainable jobs.”
*Ahem* stimulus package?
Had me going for a second. I was wondering why in the heck an agri-chemical behemoth would be weighing in on the housing bubble unless they were angry about getting crowded out of government subsidies. I wanted to tell them, “No worries, there’s unlimited printing press power from the fed.”
Now I get it - It’s Thomas Cargill, a professor at UNR.
“I’ve accepted the fact that they’re gone. I’m still thankful that I learned from that and I know it’s coming back,” Sanedrin said.
“It’s coming back” you read and hear that a lot, most of the people I’ve talked to about the coming back housing market are a bit/very delusional. They seem to think sometime soon the brakes will hold and in the next year or so it’s off to the races again.
Shows just how many people have little or no grasp of how inflated this market was, along with what caused it. Of course when the PTB do nothing but cause more distortions, the man on the streets head will be spinning soon.
Even though it’s early in the game, I’m starting to understand why GD I was called a “depression”. It wasn’t because of the dramatic leaps and falls of the self-absorbed stock market, that’s an overly simplistic explanantion for the history texts. It was because delveraging is a meat grinder and like a lot of things in nature it comes in waves, it pulsates, it is anything but a straight line.
Not many really notice that on the way up, but on the way down it can be maddening.
I like your explanation and would comment that IMO, the situation we’re in now is like a giant cruise ship (that “even God couldn’t sink”) is about to strike an iceberg, and even though the ‘berg has already been sighted, it’s too late to avoid it.
I think there is still the hope that the market in PHX area gets back to it’s roots which is being a low cost area to retire to. Right now you can buy a 4 bedroom 1800 sqft house for around $100K cash. Medical facilities are plentiful in the area and there are still plenty of recreational and entertainment opportunities for an active senior. Will prices soar ? Probably not , but sales for the well priced home should be brisk.
This is a subject of great debate, in AZ as well as other parts of the west:
‘Barron’s pessimistic prognostication did not come to pass. For sure, the economy was sluggish for several years, but Phoenix forged ahead. Still, local economists, real estate brokers and economic developers warn that radical change is warranted during this severe recession’
IMO, our biggest asset is plentiful land. That should translate into cheap RE and growth. Prices are way down in Phoenix. But some of these houses were a part of the drive-til-you-qualify thing, which means their future is questionable. If the retail disappears, who wants to live 20 miles from a store, etc?
Retirees do like the weather. Cheap land and some economic diversification, together, could turn things around. I hope AZ hasn’t seen the end of 50 years of population growth, and the only way we’ll find out is to get back to our strengths.
“IMO, our biggest asset is plentiful land.”
Water, not so much.
There is water, but you have to drill for it. Cities fight over above ground watersheds all over the west. A bunch of that is for electrical generation, IIRC.
Our populations aren’t that great, truthfully. There are probably more people in one or two suburbs of PHX than the rest of the state put together. We don’t have a lot of agriculture, so if we manage it, there should be enough water. Vegas is different matter.
I guess, when you consider that a huge underground reservoir exists beneath Death Valley, a similar resource is probably available in AZ.
I had a land use guy explain it to me once. The water is sorta deep, and it takes more population to justify tapping it, which we don’t really have. So we rely on surface water.
Like gold. Doesn’t make sense to mine deep when it’s not that valuable. And if memory serves, the oil shale in Colorado is dormant right now because of lower oil prices.
I’ve always felt AZ would be a huge solar generating state.
I know a guy that sells water filtration systems and I’ve run into a few well drilling firms.. To hear them tell the story, Phoenix sits on a lake of underground water. Is it true?? Dunno
I do know that our lakes are full for the first time in a long time plus the Government codes require water retention basins for all new buildings and many other residential areas.
My FIL has 10 acres in Dewey and the Bureau of Land Management has told him that he has to have these water retention basins on his property and to be honest, its a freaking desert, like why would they bother? I guess it all adds up to more ground water.
Of course when oil goes to $200 bucks a brl it may be hard to get back and visit the kids and grand kids.
No question the Phoenix area will attract many. The answer is just as you put it homes that young families can really afford and make a decent living to put up roots and stay.
The well off areas of North Scottsdale and Paradise Valley should be left to people who are very, very comfortable in life and not to the wannabe folks who really never could afford such a lifestyle.
This scenario must play out in all the country, you can’t afford the Lifestyles of the Rich and Famous (if you knew what kinda of life they have) maybe you should be happy with a roof over your head and your bills paid which many rich people don’t have, this should be the motto of everyone in the future.
I wouldn’t bet the farm on the “snow-birds will come” plan for economic growth. Alot of that depends on the ability of retirees to sell their houses and use the profit to move to the sun belt, and we all know what happened to that financial strategy.
AZ attracts a lot of snowbirds from the mid-west. But does anyone know how AZ fared with the health care bill? Because our esteemed (ahem) Senator Bill Nelson (not to be confused with BEN Nelson) cut a deal with the dems to back healthcare, provided seniors in Fla are allowed to keep their Medicare Avantage plans, which I understand is verboten in other states.
This sort of thing would give Fla an advantage in attracting those seniors looking for a place in the sun. It’s all according to whether you like that dry heat or the humidititty. And cheap health care.
Those sprecial deals for Nebraska and Florida were taken out.
The only future for AZ that I can see does involve lots of Baby Boomers moving from the Midwest when they retire. One problem, as Dman mentions, is the price that they will be able to get for their houses up North. Another problem is the fact that many of these now-retiring Boomers will have little savings and, therefore, not much income beyond Social Security. This means that it is crucial, and probably inevitable, that AZ return to being a state with cheap houses and condos, which is what was for decades bfore this bubble got started 7 or 8 years ago.
If AZ becomes more like Florida, with many jobs in tourism (restaurants, hotels, golf courses, etc.) and services provided to the elderly (nursing homes, etc.) and retail, the typical family income will probably not keep pace with inflation over the coming decades. That is just another reason that house prices will have to continue to decline for a few more years and then stagnate for years afterwards.
They are still in there !!!
If AZ becomes more like Florida, with many jobs in tourism (restaurants, hotels, golf courses, etc.) and services provided to the elderly (nursing homes, etc.) and retail, the typical family income will probably not keep pace with inflation over the coming decades. That is just another reason that house prices will have to continue to decline for a few more years and then stagnate for years afterwards.
Already happening here. Especially the part about lagging family income.
Yep, pismo, they’re still there. And those Medicare Advantage plans are advertising here in Fla like there’s no tomorrow.
I always liked Ariz, ,but I haven’t been there in years to witness
the overbuilding . I guess I don’t mind dry heat . But anyway, years ago Ariz. was always viewed as a great retirement destination with the cheaper housing .
But ,also what is going to happen when many people can’t retire as early as they thought . I don’t understand why they would be building for baby boomers from 2000 to 2007 anyway in that the first set of baby boomers didn’t turn 65 until recently .Isn’t that building way to far ahead of time for the actual event of the demand picking up ? I know during the boom you had flipper selling to flipper on the notion that the end user would be a rich baby boomer ,but that was a marketing myth .Actually, I guess
some boomers were buying second homes with the plan to retire in them in 5 to 7 years . Just everything about the boom was putting the cart before the horse and getting people to buy and borrowing from future demand .
“It’s coming back”
The second coming of the Housing Market, when all the good little FBs will be raptured up to HELOC heaven, living large once again on their born-again equity, praising and celebrating the name of the lord thy god, MEW.
From the original post:
“Chris Mackay, economic development director for the city of Chandler, agrees that this cycle is different. ‘We can’t live on construction. We can’t live on population growth. We’re at a crossroads and facing competition from other states,’ he said.”
Guess what, Chris, many of those other states are formidable competitors. Take, for example, Texas. Has one of the most diversified economies in the world. A long tradition of entrepreneurship. And a higher education system that’s one of the nation’s best.
I could go on, naming many other states, but you get the idea.
Yep its a great state, but they have that thing called humidity that makes their summers inhospitable. At least we have some mountains in AZ and those beautiful sunsets.
I have never been to Greeley, but I did have a college classmate from there, who said — this was in the 1990s –that the entire town reeked badly from nearby cattle feedlots. Maybe the cows will be buying.
Monfort moved the feedlots futher away, so its not so bad anymore. Of course that was the least of Greeley’s problems. They have a high proportion of hispanics and a gang problem. Plus a lack of quality employers, especially since HP closed its Greeley campus some years ago. They do have a college in town, which I suspect has helped keep the city from shriveling up.
“BofA customer Harry Baker, 67, of Scottsdale, is deeply underwater on his home of 23 years after a poorly timed decision to refinance to an adjustable-rate loan, also called an ARM, and pay off all his other debts in 2006. Baker said it doesn’t matter to him whether the bank or the government initiates it - he just needs someone to help.”
Seems Harry doesn’t give himself enough credit - pun intended. He couldn’t have timed it better to tap all the equity out of the house, pay off all the bills, give the house back to the bank. He is crying victim, but deep down inside he knows he made a brilliant move.
If he acutally changed his behaviour and stayed out of all the debts but his house, he will enjoy his retirement after he finds a cheap place to rent for the rest of his days. Heckuva job Harry!!
Yep, Harry is a WINNER!!!!
How does a business plan based on luxury homes for the masses look against the backdrop of an epic housing bust, high unemployment, broke households and tight lending standards?
Stupid is as stupid rates.
The Ratings Game
March 29, 2010, 11:43 a.m. EDT
Ticonderoga starts Toll Brothers at neutral
Land, luxury focus mean builder more reliant on housing recovery: analyst
By John Spence, MarketWatch
BOSTON (MarketWatch) — Toll Brothers Inc.’s large land position and high-end focus in the home-building business means the company is more reliant on a rebound in the housing market, said one analyst Monday who initiated coverage of the stock with a neutral rating.
“Toll has a strong luxury franchise with a strong balance sheet. Unfortunately, as fortresses tend to do, it constrains inhabitants as much as it keeps outside forces away,” said Stephen East at Ticonderoga Securities in a research note.
“We believe Toll also has a structural problem driven by excess land, debt expense and a high-touch, fixed-cost business. Combine that with an intractable luxury focus and we believe Toll becomes much more market dependent than the typical builder,” the analyst wrote. “Consequently, given our more muted view of the housing market this year, we see little to get excited about with this equity expecting it to underperform the builder group in 2010 just as it did in 2009.”
Toll (TOL 20.95, -0.31, -1.46%) , the Horsham, Pa.-based builder, is a favorite pick among analysts who admire its solid balance sheet, brand and experienced management team. Yet the stock trailed rivals badly last year. Toll shares lost 12.2% in 2009, while the SPDR S&P Homebuilders ETF (XHB 16.95, -0.01, -0.06%) turned in a gain of 27.7%, according to FactSet Research. The trend is continuing so far in 2010. Through March 26, Toll shares were up 10.1%, compared with a 21.9% increase for larger-cap builders, according to J.P. Morgan.
Home-builder stocks rose late last week on news that government programs and big banks would modify mortgages to help troubled borrowers.
“The caveat to our pessimism is an accelerating housing market, of which we believe Toll would benefit inordinately,” said Ticonderoga’s East. “However, at this price level, we see a slower-than-peers upward trajectory as the likely story, thus we initiate coverage with a neutral rating.”
…
Are the U.S. headline stock market indexes climbing a wall of worry to higher levels, or is it more about climbing with dollar declines?
From Bloomberg:
World Currencies
CURRENCY VALUE CHANGE % CHANGE TIME
EUR-USD 1.3462 0.0052 0.3874% 14:08
GBP-USD 1.4971 0.0074 0.4944% 14:08
USD-CHF 1.0635 -0.0017 -0.1578% 14:09
USD-SEK 7.2670 0.0071 0.0982% 14:09
USD-DKK 5.5282 -0.0214 -0.3851% 14:08
USD-NOK 5.9766 -0.0680 -1.1242% 14:09
USD-CZK 18.8730 -0.1050 -0.5533% 14:08
USD-SKK 22.3790 -0.0860 -0.3826% 14:08
USD-PLN 2.8836 -0.0232 -0.7981% 14:08
USD-HUF 197.0220 -0.7925 -0.4006% 14:08
USD-RUB 29.5260 -0.0953 -0.3217% 12:59
USD-TRY 1.5291 -0.0094 -0.6110% 14:08
USD-ILS 3.7069 -0.0296 -0.7922% 13:54
USD-KES 77.4500 0.1000 0.1293% 10:40
USD-ZAR 7.4080 -0.0229 -0.3082% 14:09
USD-MAD 8.3082 -0.0161 -0.1934% 14:09
Here is the latest scam!
“11.5 REPORT – CLEAR ACT – SUPPORTING CARBON LIMITS AND ENERGY FOR AMERICA’S RENEWAL
BACKGROUND: In December 2009, Senator Cantwell introduced the CLEAR Act which would cap the emissions of greenhouse gases in 2012 by requiring oil, coal and natural gas companies to purchase monthly permits that would allow them to sell their fuels. Seventy-five percent of the money from the permits would be returned to the public every month in the form of a dividend check and the remainder would go towards renewable energy studies and conservation programs.
RECOMMENDATION: It is recommended by the City Manager’s Office that the Council support, by motion, the CLEAR Act and authorize the Mayor to send a letter of support to our members of Congress.”
“3. Under this proposal, consumers will receive an annual rebate check for about $1100. Once the additional cost of the fuel is deducted it is estimated that the consumer will still be ahead by at least $100 per year.
They actually seem to believe that the producers will not raise the rates to cover all of the costs of the action proposed.
Oh well, dreamers fly high in California.
Cap and Trade = A giant circle-jerk, with out “helpers” in the enviro-socialist lobby skimming off money every step of the way.
If you want to cut carbon fuel usage, tax it. And quit screwing around with cap and trade. Everyone knows that it will just create a gigantic worldwide bureaucracy, that will morph into another means for lobbyists and government to play favorites.
Yeah, it will be great when we throw trillions down the cap and trade rathole, and find out 20-30 years from now that global temps are going up no matter what we do.
+1
“As spring emerges, the region’s once-deafening construction industry remains muted.”
Of course, out-of-work construction workers could always retrain themselves and become printing-press operators. I heard that fiat money- printing is a growth industry!
Actually, the printing industry’s getting a lot smaller. Something about communication moving away from print and toward digital media.
Very interesting post. I enjoyed the content and look forward to more posts in the future.
Elephant in the Living Room.
There’s not much chatter about life-size solutions for those well-meaning folks, like me, who had excellent credit, a good job yet trying to avert disaster and ruined credit after their home could not sell in this market. I applied and got strung along for over 14 months with the hope of a permanent loan modification, only for nothing to ever work out. No “Obama” bailout money ever reached me and my mortgage company drove me nearly insane with it’s endless and repeating list of documents. I got a loan in 4 days to buy the house, but no resolve after 14 months for a modest modification??? I was so desperate that I had to use my credit card to hire an attorney to become my negotiator in an attempt to get attention and resolve only for my house to quickly get scooped up for a sacrifice price. And since there’s no guarantee, I’ll probably get sued for the difference, whether I’m forced into bankruptcy or not. Makes me sick how many folks are enjoying snapping up deals and finding it fun and exciting. Single Mom, spotless career/work history, once perfect credit score, 2 kids, homeless. Oh, and now that I can’t pursue my plan to move away, I can’t even afford to live in my own town because the investors have driven the rents through the roof! Nice going.