June 27, 2010

HBB On The Road To Maryland/DC/Virginia

This thread will be forwarded during my trip through Maryland, Virginia and DC for the purpose of communicating with local bloggers, posting observations and photos. Let’s call this the Shadow Inventory Tour. Pics will be posted on Picasa.

The Baltimore Business Journal in Maryland. “Barbara Hughes can breathe a little easier these days, but the shock of what she has been through will not so easily fade from her memory. Bank of America has agreed to reduce her monthly mortgage payments and allow her and her sister’s four children to stay in their Baltimore County home. Rick Davis, a housing counselor at the Eastside Community Development Corp. Davis was able to connect Hughes with an official at the bank who was willing to call off a planned foreclosure of her home. But like many of the homeowners he counsels, Davis feels under water these days. His ability to help others is far outweighed by the amount of need for his aid. For every Barbara Hughes he encounters, there are many more who either won’t seek help or just can’t be helped.”

“Joseph T. Landers III, executive vice president of the Greater Baltimore Board of Realtors said he is deeply concerned about the ’shadow inventory’ in Greater Baltimore’s housing market, those properties that are at risk of foreclosure or have been seized by banks but are being withheld from the market for a future date. When those properties start to come back onto the market, they will likely be resold for far less than previously. That means a home that sold two years ago for $400,000 might only fetch $200,000. That reduction means even more people will be under water, owing more on their mortgages than their properties are worth.”

“Maryland ranked as the 10th worst housing market in the nation for foreclosure events in May, according to RealtyTrac. There were 5,852 properties facing or in foreclosure in May, 65 percent more than in May 2009. What’s more, RealtyTrac researcher Daren Blomquist said that there could now be a second wave of foreclosures as the housing market shows signs of improvement. About 2,400 homes sold in Greater Baltimore in May, up nearly 26 percent from May 2009, according to Metropolitan Regional Information Systems Inc. of Rockville. As activity picks up, Blomquist said, banks are more inclined to foreclose on a property because they have a better chance of being able to resell it.”

“‘You’re definitely not out of the woods yet,’ Blomquist said.”

The Frederick News Post in Maryland. “Montgomery County had 467 foreclosures in May, and Washington County 163. The highest in Maryland in May was Prince George’s County with more than 1,700 foreclosures, followed by Baltimore city with 847. ‘The increase in foreclosures from last year will have the effect of lowering property values because the banks are interested in a quick sale and getting these foreclosure properties off of their books and are substantially discounting their foreclosure resale homes for sale,’ said Patrick F. McLister, a partner in the law firm of Salisbury & McLister.”

‘Without the tax credit, it remains to be seen whether the real estate market will now be able to absorb the number of foreclosure resales coming on the market without negatively affecting the typical non-foreclosure sellers during this prime selling season,’ McLister said.”

“Carlton Boujai, treasurer of the Maryland Association of Realtors and an agent with Exit Realty Prosperity Group in Frederick , said he sees some positive indicators, but is cautious. ‘Foreclosures are down, short sales are down, properties are spending less days on the market,’ Boujai said. ‘But economists are saying there could be another wave of foreclosures.’”

The Daily Press in Virginia. “Marshá Smith thinks she can afford a home priced at up to $150,000. ‘If I don’t qualify for how much I want, I’ll keep pursuing it, maybe getting rid of some debt that I have that will eliminate extra money that I’m spending out,’ the 36-year-old Hampton resident said. ‘But I’m not going to let it defer me from my dream.’”

“Only about 18 percent of the homes for sale in Hampton Roads fall below $150,000. In fact, nearly two-thirds of the homes currently listed for sale are priced at more than what the median household income in the region can comfortably afford. James V. Koch, economist and president emeritus of Old Dominion University, said those income and home price numbers mean that it’s a good time to think about buying. The percentage of median household income used to pay for a median resale home has fallen every year since 2006, according to the Old Dominion University’s Economic Forecasting Project. It’s estimated to drop to 23.2 percent in 2010, from the recent high of 33 percent in 2006.”

“‘The problem is people don’t have jobs or they’re scared,’ Koch said. ‘They’re reluctant to buy a house, or banks are reluctant to lend.’”

“Or they don’t qualify for a loan. ‘Underwriters and investors are looking harder at loans than ever in the past,’ said Robert Runnells, production manager of Old Point Mortgage. ‘They’re more restrictive. They’re just more guarded and, with all the foreclosures, rightly so. Consumers have to jump through more hoops than they used to. We see a lot of people now with a higher debt load and less assets than we’ve ever seen.’”

“Smith has always wanted a walk-in closet, and thinks it would be nice to have side-by-side Jacuzzi tub and shower. Her first home probably won’t have all that, but there’s hope, she said. She’s just ready have a home to call her own. ‘Paying rent each month is a waste,’ Smith said. ‘It’s just throwing your money anyway and never really owning anything for yourself.’”

The Star Exponent in Virginia. “Foreclosures and other distressed properties continue to comprise the largest share of real estate transactions in Culpeper County, and the market, though not stagnant, is weaker than last year. From January to April, 112 properties – 75 houses and 37 house lots – went into foreclosure. In the first four months of last year, that number was 187, according to an analysis of county tax records. Like in past years, many of this year’s foreclosed homes occurred in the newer housing developments around town.”

“Last year, Sam Aitken, director of a homelessness intervention group that has also provided housing counseling said he spoke with probably 1,000 local clients in some sort of housing distress. Their top concern? ‘That the banks won’t work with them,’ he said, noting that most of the foreclosed properties in Culpeper were mortgaged through national banks and not local ones. ‘The incomes are way down,’ said Aitken, who’s worked in housing intervention in Culpeper for 20-plus years.”

“Culpeper Realtor Beverly Herdman with Keller Williams Realty said the first quarter of the year resulted in a “more balanced” market, with 118 homes sold in Culpeper. Of those, 39 percent were traditional sales, 35 percent were foreclosures and 26 percent were short sales. ‘That is great news, but we are not out of the woods yet,’ said Herdman. ‘If you look at the total of foreclosures and short sales, distressed properties are still making up 61 percent of the market sales for the first quarter.’”

“The first quarter of 2009 saw 136 home sales in Culpeper County, she said, noting 18 percent were traditional sales, 71 percent were foreclosure and 11 percent short sales. Typically, once a home goes into foreclosure the bank is not interested in negotiating further. Now is a great time to sell, according to Herdman, saying the housing inventory in Culpeper is way down. ‘With a lack of inventory and the homebuyers’ tax credit through the end of April, it created quite a frenzy with multiple offers and homes being over bid,’ she said.”

“Now that the tax credit deadline has expired things have cooled down. ‘We have noticed that there has not been much of an urgency with multiple offers,’ Herdman said. ‘Buyers are still frustrated with the lack of inventory. Now is definitely a great time – we need more inventory on the market.’”

The Washington Examiner. “It will take nearly three years for the Washington area’s pent-up delinquent and foreclosed properties to clear, according to a recent report, casting a pall over the region’s housing market. The area’s 34.2 months of inventory is in line with the national average, said the report from Standard & Poor’s. Analysts have kept a close eye on the so-called “shadow” housing market, which is comprised of homes that are delinquent or in foreclosure but have not been put on the market.If banks or lenders release them too soon, home prices could crash; if they hold on to them too long, supply could dry up. ‘The longer the overhang … the longer it is until the market returns’ to a healthy level, said Diane Westerback, managing director of Global Surveillance Analytics for Standard & Poor’s.”

“‘It’s hard to say exactly how these things get liquidated,’ she said. ‘Inevitably they’re going to get spread out a bit.’”

“David Dowies, principal broker at Portfolio Realty, a real estate firm based in Northern Virginia, said he has seen the properties ’starting to trickle out’ back onto the market. Lots of clients want to sell, he said, but short sales and foreclosures that have pushed prices down have given some of them pause. ‘There’s just a lot of people on the sidelines — sellers — that have been holding back,’ he said.”

The Washington Post. “After the bank foreclosed on Fernando Palacios’s Gainesville home in March, he thought he was done with what he described as the most stressful financial situation of his life. The bank sold the home for far less than Palacios owed on it, as often happens with foreclosures. What Palacios did not see coming was the letter from his lender demanding that he pay the shortfall: $148,064.02.”

“‘I really thought I was through with this house,’ said Palacios, who fell behind on payments when the economy soured and his cleaning business stumbled.”

“Palacios said he was committed to staying in his house, which he bought in 2005. He sunk $20,000 into improving it and hoped to raise his children there. But his lender refused to modify his loan, he said. To avoid personal liability for the deficiency, Palacios is filing for bankruptcy protection, as many people do who are in similar situations, said Nancy Ryan, his bankruptcy attorney.”

“‘I am definitely seeing more people come through my door who walked away from houses a year or two ago and thought they were as free as the dead,’ Ryan said. ‘They’re stunned when they realize they’re not.’”

“Gretchen Somers said she and her husband understood the risks last year when they completed a “short sale,” a transaction that allowed them to sell their Manassas home for about $150,000 less than they owed on it. But they felt they had no other options. In hindsight, Somers said she and her husband should have just walked away from the house.”

“‘We took care of the house because we wanted it to sell,’ Somers said. ‘If they were going to come after us anyway, we shouldn’t have done them the favor of making sure it looked good and cutting the grass even after we moved out, We should have mailed them the key and said: ‘Here you go.’”




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155 Comments »

Comment by oxide
2010-06-23 04:32:38

I don’t have time to post much today. have we all decided where/when the big powwow is going to be tomorrow? Do I send Ben an email with suggestions? or does ben email me?

Comment by LehighValleyGuy
2010-06-23 08:58:32

I told Ben that we should all introduce ourselves by our real names, then make a game out of trying to guess each other’s screen id’s. What do y’all think?

Comment by oxide
2010-06-23 10:45:13

Not a bad idea, but we need to GET to said meeting spot first…

Comment by LehighValleyGuy
2010-06-23 14:56:48

Oxide, see below.

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Comment by Big V
2010-06-24 11:14:14

I think SD RE Bear has something set up. Check the forum. I think there is a meetup at Capitol Hill at 10 AM, then at Union Station at 6 PM, both on Friday.

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Comment by 2banana
2010-06-23 05:58:01

“‘The problem is people don’t have jobs or they’re scared,’ Koch said. ‘They’re reluctant to buy a house, or banks are reluctant to lend.’”

Ya think?

No job and you think people are going to run out and buy a house?

No job and you think a bank is going to lend money to them?

Comment by Cantankerous Intellectual Bomb-thrower
2010-06-23 06:31:40

“…they’re scared…”

This is a sign that lending markets are healing. A lending market wherein people fearlessly borrow hundreds of thousands of dollars which they, in all likelihood, will never be able to repay, in order to buy homes they cannot afford, is clearly sick, as a lack of fear can easily tempt households and their lenders into spectacular financial folly.

Fear is good, as it engenders reasoned financial decisions which are far more likely to mutually benefit borrower and lender than when large sums of money are loaned without fear of loss.

Comment by dc_renter
2010-06-23 08:24:53

love this post…finally some sanity.

Comment by Spokaneman
2010-06-25 10:53:28

I’ve purchased three houses in my life, and I can tell you that each one caused many sleepless nights before and after the purchase. I think the most expensive one I ever bought (and am still in) I had about less than a 2X mortgage to income ratio.

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Comment by CA renter
2010-06-28 10:24:10

Yes, great post, PB.

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Comment by Big V
2010-06-24 10:40:12

Yeah, this is a hangover from yesterday’s Bits Bucket, but fear is what prevents people from ruining their own lives. Case in point: The chick who is marrying the guy who divorced his original family and abandoned his pregnant girlfriend. Does this chick have NO FEAR? She is an FB too, “Pho’qued Bride”.

Comment by Cantankerous Intellectual Bomb-thrower
2010-06-25 08:09:35

I love pho (Vietnamese noodle soup). Can you recommend a good place to get some?

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Comment by Big V
2010-06-26 12:49:17

It’s been a while since I was in SD, but I recall a good Korean place on Adams Ave with fab pho. Don’t know about RB, though.

 
 
 
 
Comment by rusty
2010-06-23 09:52:04

Heck I HAVE a job and I am scared to buy these days.

Comment by SanFranciscoBayAreaGal
2010-06-24 08:59:37

Heck I have a substantial amount of money for a down payment and I’m petrified.

Comment by Cantankerous Intellectual Bomb-thrower
2010-06-25 08:10:40

Keep your powder dry (and diversified) until there is obviously no reason to be afraid.

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Comment by ProperBostonian
2010-06-23 10:06:06

And if it wasn’t for those small technicalities, it would be a good time to buy. Wonder what school he got his economics degree from: the “It’s Always a Good Time to Buy University”

Comment by Spokaneman
2010-06-25 10:54:59

They never exactly say whom its a good time for. Its always a good time for the realtor and 99.7% of the time for the seller. The buyer, not so much.

 
 
Comment by Pondering the Mess
2010-06-25 13:22:46

Sorry I haven’t been around much lately: I was laid off as part of a huge engineering RIF at work last week. Performance, naturally, didn’t matter.

Any serious interest I had in buying a house was swept away along with my job. What’s the point in signing up for a 30-year mortgage when you can work for a place for 10 years, be considered an excellent employee, and then be tossed out like last week’s trash along with well over 100+ other engineers when the company wants to make their bottom line look good for the next quarter?

Our jobs are all temporary, but our debts are eternal… and they wonder why the nation is hosed?!

As for Maryland, it’s a state full of staggering denial: 5x one’s income is still considered a “fair” price for a house, even one in a bad part of town. Sadly, it seems at this point that the market can remain insane for longer than many can stay employed, so we may as well enjoy renting…

Comment by Arizona Slim
2010-06-25 13:28:21

Any serious interest I had in buying a house was swept away along with my job. What’s the point in signing up for a 30-year mortgage when you can work for a place for 10 years, be considered an excellent employee, and then be tossed out like last week’s trash along with well over 100+ other engineers when the company wants to make their bottom line look good for the next quarter?

My sympathies, Pondering. Your story reminds me of my aunt, who was retired (from Diamond Shamrock) on five minutes’ notice.

Needless to say, her opinion of corporate America never recovered.

 
Comment by aqius
2010-06-25 15:04:41

“Our jobs are all temporary, but our debts are eternal… ”

well said, Pondering!

(and good luck in future employment)

 
Comment by B. Durbin
2010-06-27 15:16:56

Pondering, my sympathies.

A lot of recent studies have shown that unless it’s immediately critical to keep the company afloat, “layoffs” are a horrible thing to do to a company, and have a negative effect for long years afterwards.

Firstly, layoffs to “improve the bottom line” often get rid of the most productive and experienced employees. By getting rid of the senior employees, payroll goes down… but the mental capital is gone forever, and to the detriment of the company. The remaining employees have a huge hole to fill, and many don’t feel good about it due to point the second: When you have layoffs of loyal personnel, it destroys morale. It creates uncertainty and an unwillingness to sink work into a company that demonstrably does not appreciate it. So productivity goes down, which affects the bottom line, which leads to more layoffs…

This is also known as “The Circuit City Effect.” So… how many Circuit Citys have you seen recently?

Comment by Pondering the Mess
2010-06-28 16:01:18

Yeah… the problem is that those in charge would be happy to destroy everything if it made them some extra money now. They just don’t care - to them, Circuit City was a success since somebody made money from it as it died.

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Comment by CA renter
2010-06-28 10:27:24

Sorry to hear about the loss of your job, PTM. :(

This is exactly the problem with 30-year debts in a 5-year career world.

We are also trying to enjoy renting, maybe forever(???), for the same reason.

No job/wage stability = no housing stability. I wish they’d get the memo.

Comment by Pondering the Mess
2010-06-28 16:03:58

Thanks…

Yeah, anything that involves putting long-term trust in another person or an organization when they have the power and incentive to harm you is something I’m swearing off. What’s the point? Marriages last 7 years on average, and jobs (if you can find them) don’t even last that long. But again, your debts (child support, alimony, mortgages, etc.) are eternal. It’s a screwed up system that rewards players and crooks, but that’s what we’re stuck with. We can’t change the system, so we have to at best skirt by on the edge, following the “rules” when needed…

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Comment by 2banana
2010-06-23 06:03:11

The bank sold the home for far less than Palacios owed on it, as often happens with foreclosures. What Palacios did not see coming was the letter from his lender demanding that he pay the shortfall: $148,064.02.”

File under the “there is no free lunch” file…

To avoid personal liability for the deficiency, Palacios is filing for bankruptcy protection,

Yep - but you just can’t “walk away” from a house that you don’t want to pay for anymore. A bankruptcy judge will decide what you should/should not pay for and what to do with all of your other assets…

Again - File under the “there is no free lunch” file…

Comment by Cantankerous Intellectual Bomb-thrower
2010-06-23 06:23:05

This notion that there are free lunches for those who walk away from their mortgages is rapidly coming into question.

Last night, while providing adult supervision at a Boy Scout Camp, one of the boys who knows me asked if he could borrow $1. I handed him one; then he smiled and asked if he had to repay it. I said he did not.

Then I went on to explain that even grown ups who borrow money from banks to buy houses don’t have to repay the money; you always have a choice of whether or not to repay money you borrowed, and to suffer the consequences if you don’t.

He shot me one of those funny smiles 12-year-olds put on when they don’t know whether or not to believe what an adult is telling them…

Comment by 2banana
2010-06-23 09:14:18

And then tell him to go find a left handed smoke shifter :-)

Comment by Cantankerous Intellectual Bomb-thrower
2010-06-23 10:43:29

Anyone up for a snipe hunt? ;-)

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Comment by SanFranciscoBayAreaGal
2010-06-24 09:02:38

I’ll bring the gunney sack and flashlight :)

 
 
 
Comment by Big V
2010-06-24 10:47:59

You MEANIE!

 
 
Comment by DennisN
2010-06-23 07:27:57

The best part of that story….

Carlos Cortez and his wife managed to escape that fate after their second lender came after them for $70,000 when their short sale was completed on his Manassas Park townhouse in 2008.

Cortez knew that was a possibility, but he went through with the sale because his real estate agent said the lender was engaging in scare tactics.

James Scruggs, an attorney at Legal Services of Northern Virginia, said the lender appears to have backed off after Cortez argued that that the loan officer falsely qualified him and his wife for a home-equity line by fabricating key details about their finances.

You would trust a real estate agent about whether a lender would pursue you? :lol:

Comment by sfbubblebuyer
2010-06-23 09:13:28

You would trust a real estate agent?

Removed excess verbiage for you. :D

 
Comment by Sean
2010-06-23 09:17:38

People need to realize that RE agents just buy and sell your house. They are NOT your mortgage broker, tax advisor, contractor or accountant. Too many of them over reach their boundaries and need to be called out.

Comment by Arizona Slim
2010-06-23 10:05:51

They are NOT your mortgage broker, tax advisor, contractor or accountant. Too many of them over reach their boundaries and need to be called out.

Nor are they your friends.

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Comment by oxide
2010-06-23 11:33:20

As many many Hispanic buyers have discovered.

 
 
Comment by CA renter
2010-06-28 10:29:22

Comment by Sean
2010-06-23 09:17:38
People need to realize that RE agents just buy and sell your house. They are NOT your mortgage broker, tax advisor, contractor or accountant. Too many of them over reach their boundaries and need to be called out.

———————

Very true!

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Comment by Cantankerous Intellectual Bomb-thrower
2010-06-23 06:15:43

“Joseph T. Landers III, executive vice president of the Greater Baltimore Board of Realtors said he is deeply concerned about the ’shadow inventory’ in Greater Baltimore’s housing market, those properties that are at risk of foreclosure or have been seized by banks but are being withheld from the market for a future date. When those properties start to come back onto the market, they will likely be resold for far less than previously. That means a home that sold two years ago for $400,000 might only fetch $200,000. That reduction means even more people will be under water, owing more on their mortgages than their properties are worth.”

That scenario seems quite plausible for housing bubble “ground zero” areas like San Diego, San Francisco, Los Angeles, Las Vegas, Miami, and … Baltimore(?!)…

Comment by jsocal
2010-06-23 09:14:45

Los Angeles - unh unh
housing prices are up here don’t you know?
its all good

 
Comment by sfbubblebuyer
2010-06-23 09:18:59

Oh yah. We’ve already seen it. When spring hit this year and there was a slight ‘uptick’ in housing prices, a bunch of people dropped their houses on the market and sold them very quickly in our neighborhood. With the stimulus/credits/etc gone, I expect these people to quickly realize they bought the bounce and watch sadly as properties that didn’t hit the market fast enough to catch the bounce malinger for months dropping the listing price.

It’s obvious that there were people just itching to get their houses on the market piling up the last year or two, and this spring’s uptick was just what they were waiting for.

Comment by Big V
2010-06-24 10:59:15

I know. House prices in the CA metro areas went up 1% subsequent to the tax credits. This spurred a 10% increase in asking prices. Can anyone say LEVERAGED EXPECTATIONS?

 
 
Comment by shelby
2010-06-23 10:38:42

Oh no not Baltimore /NoVA/DC !!

There was no bubble here!!!

We have ALL the jobs now don’t forget!

Yep, with the 8 K money gone - we’ll see who has to REALLY sell come Aug/Sept

Warning to all LoCo & PWC sellers - prepare for the super-lowballs to come or get out of the Market!

Comment by Ben Jones
2010-06-25 05:21:12

When I got Frederick MD, I stopped and asked a UHS if there was one area that had more foreclosures than another. She said, no, they’re all over the place. Frederick is a nice little town, but they certainly had a bubble out there.

Comment by Cantankerous Intellectual Bomb-thrower
2010-06-25 08:11:51

“She said, no, they’re all over the place.”

Did a rim shot follow that remark?

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Comment by Cantankerous Intellectual Bomb-thrower
2010-06-23 06:39:21

“‘We took care of the house because we wanted it to sell,’ Somers said. ‘If they were going to come after us anyway, we shouldn’t have done them the favor of making sure it looked good and cutting the grass even after we moved out, We should have mailed them the key and said: ‘Here you go.’”

They stiffed the bank for $150,000, and her greatest regret was that they bothered to clean up the home and mow the grass before they left.

That is exactly what I mean by an unhealthy lack of fear!

Comment by ProperBostonian
2010-06-23 09:32:11

“That is exactly what I mean by an unhealthy lack of fear!”

More like an unhealthy lack of morals.

Comment by Cantankerous Intellectual Bomb-thrower
2010-06-23 10:45:27

Morals are so Twentieth Century. The new law is screw the bank, or the bank will screw you. And if you don’t deal with banks, they will screw you just the same by extracting free bailout insurance from the monetary base.

Comment by ProperBostonian
2010-06-23 17:54:41

That’s what I like about you PB, you’re such an optimist.

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Comment by Cantankerous Intellectual Bomb-thrower
2010-06-23 19:17:00

Sorry — I really didn’t intend to overly sugar coat my post!

 
 
 
 
 
Comment by Bill in Carolina
2010-06-23 06:48:16

Just used www dot homes dot com/Sold-Homes-Prices/ to check our old ‘hood in Annapolis and was shocked to see nearby houses essentially like ours going for an average 25% MORE than what we sold for in 2002. Looking closely, our old house is among them and it’s selling price in February 2010 was 31% higher than what we sold for.

Housing bust? Apparently not in that area.

Comment by scdave
2010-06-23 08:58:39

Housing bust? Apparently not in that area ??

Which prompts the question why not ?? Its deferent there ?? I know nothing of this area but if I were to make a bet I would bet that it is influenced heavily with government jobs or contracts…

Comment by oxide
2010-06-23 11:35:08

Naval Academy…

Comment by Arizona Slim
2010-06-23 11:39:43

I wasn’t aware that the Naval Academy paid that well.

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Comment by Big V
2010-06-24 11:07:11

That just means your old area hasn’t reverted all the way back to 2002 prices yet.

 
 
Comment by Alpha
2010-06-23 07:12:14

“Just used www dot homes dot com/Sold-Homes-Prices/ to check our old ‘hood in Annapolis and was shocked to see nearby houses essentially like ours going for an average 25% MORE than what we sold for in 2002. Looking closely, our old house is among them and it’s selling price in February 2010 was 31% higher than what we sold for.

Housing bust? Apparently not in that area.”

You’re forgetting that the prices may have been 50% above what you sold it for the last time it sold, and now 31% higher than what you sold it for means someone could be underwater.

Comment by Will
2010-06-24 14:55:48

Also that was 8 years ago. Works out to less than 3/2% per year, surely not enough to cover theinterest and taxes.

 
 
Comment by swguy
2010-06-23 08:40:02

Latest housing trends show extreme weakness in sales, despite a all time low in mortage rates.
It is very evident the foreclosures and unemployment rate is the pressing problem, I see lots of talking heads and no problem solvers?

Comment by scdave
2010-06-23 09:01:23

housing trends show extreme weakness in sales ??

New housing sales were down 30% + in May breaking records back to 1960…The West was down over 50%…

Comment by sfbubblebuyer
2010-06-23 09:32:55

Have we gotten down to ‘replacement’ levels yet? I wonder how many houses are destroyed a year?

 
Comment by Cantankerous Intellectual Bomb-thrower
2010-06-23 09:35:20

Luckily building is virtually at a stand still out here as well; otherwise, we would be seeing more homes added to the shadow inventory pyre.

Comment by CincyDad
2010-06-23 10:29:24

Unfortunately, Building continues at a fair clip where I live, both residential and commercial.

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Comment by Cantankerous Intellectual Bomb-thrower
2010-06-23 19:43:02

It’s all good, as today’s overbuilding is tomorrow’s affordable housing!

 
Comment by Spokaneman
2010-06-25 11:09:30

They are building some new homes in the latest development in my areasubdivision. The homes are listed in the mid $400s (at the top end for Spokane), while the exact same homes (two of them) bought a year or two ago are listed at $399K after the buyer finished the yard, fence, sprinklers, and draped the places. That’s gotta hurt.

 
Comment by B. Durbin
2010-06-27 15:27:10

I cannot imagine what jobs in Spokane would support a $400K home. And yes, I did live there for a bit.

 
 
 
 
 
Comment by Dman
2010-06-23 08:45:52

“Smith has always wanted a walk-in closet, and thinks it would be nice to have side-by-side Jacuzzi tub and shower. Her first home probably won’t have all that, but there’s hope, she said. She’s just ready have a home to call her own. ‘Paying rent each month is a waste,’ Smith said. ‘It’s just throwing your money anyway and never really owning anything for yourself.’”

There is just too much stupid in this paragraph for me to digest in one morning. PLEASE somebody give her a loan so she can quickly learn what it’s like to be underwater, and I don’t mean submerging in a jacuzzi.

Comment by Sean
2010-06-23 09:24:35

Ugh…..People who say that are embarrassed to rent, because it somehow shows you don’t own a house and aren’t a real American.

Tell her even if she “bought” a house she would still be renting - because that is what mortgage payments are - a rent check to the bank. She doesn’t “own” the house until her principle is zero. It still cracks me up when people talk about how much stuff they “own”.

Comment by holytrainwreck
2010-06-23 10:30:22

People are engineered by society to feel that by NOT owning a home they are:

(a) not responsible - like having bad credit

(b) not progressed toward maturity

(c) “lowlife” or suspected part of the criminal element

(d) or combinations and permutations of the above.

 
Comment by Doug in Boone, NC
2010-06-23 13:36:39

Even if her principle is zero, she still doesn’t “own” the house. If she thinks she does, she should stop paying her property taxes, and then see who “owns” the house.

Comment by Molly
2010-06-24 09:16:38

I’ve been spending most late afternoons this week painting outside and now I feel like something the cat coughed up. Even without a mortgage, I’m still owned by this house.

Any homeowner who says she’d rather do home improvement projects than watch tv and drink beer and eat Doritos is a liar or a fool.

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Comment by edgewaterjohn
2010-06-24 10:54:30

No kidding! Totally agree!

 
Comment by B. Durbin
2010-06-27 15:35:53

To be fair, some people actually like that sort of thing.

I didn’t feel stupid to be a renter back when I could have only afforded a fraction of the space at the same price as my nice apartment. (Our PITI is roughly equivalent to what we’d have for rent.)

I *did* feel a bit stupid to have to duck down every time I wanted a shower. What is up with builders putting shower heads at a height of five and a half feet? I mean, seriously, why do they think that’s acceptable?

 
 
 
Comment by SanFranciscoBayAreaGal
2010-06-24 09:17:48

She would also be paying a rent check to taxes (city, county, state)

 
 
Comment by ProperBostonian
2010-06-23 09:55:25

After reading this article, I wonder how many mortgage brokers added this dim bulb to their sucker list.

Comment by SanFranciscoBayAreaGal
2010-06-24 09:20:43

“dim bulb”

I like the description “the light is on but no one is home.”

 
 
 
Comment by NYCResident
2010-06-23 09:02:17

I understand if people lose their jobs or overtime income and fall behind on their bills, then lose their homes to foreclosure. I understand that the bubble caused some people lose sight of the fact that they couldn’t afford a mortgage they were signing, because they feared if they didn’t buy, homes would only become more unaffordable and they might never be able to own a home. But I do not understand people signing mortgages they couldn’t afford to buy homes as a way of making income. Committing to making payments you cannot afford, not for a roof over your head, but as a source of income? That behavior is irrational, delusional, and encourages moral hazard. I’m concerned a lot of the buying in 2005 and 2006 fall into this last category. It’s too bad that the banks cannot differentiate among debtors based on their motivations when signing their mortgages.

Comment by Big V
2010-06-24 11:12:37

Their motivations don’t matter if they can’t actually afford the payments. No amount of “motivation” will prevent a loss on a loan made to a person who cannot pay and collateralized by property that’s not worth it.

Comment by NYCResident
2010-06-25 11:15:55

Big V, if I were the lender, and were foolish enough to lend to someone buying a second, third or fourth home, I would foreclose. If I were a lender on a principal residence, where the owner’s income had been somewhat, but not completely affected by the Great Recession, I would seriously look at restructuring the loan, keeping in mind the current resale value of the collateral. I fully realize my opinions and distinctions don’t matter. I also know, from your comment that you would show no mercy on distressed homeowners, whatever their unfortunate circumstances.

Comment by Big V
2010-06-25 14:40:57

Distressed “homeowners” can move into a rental, where they, of course, will be expected to pay rent. Just as I am expected to pay rent. If I stop paying my rent, you wanna know what will happen to me? I will be on the street selling my asci, that’s what.

If you give the debtor a workout, they will probably just end up walking away sometime down the road after the FMV of the house drops yet another 20%. Risk of default is way too high. Or, even worse, you get them calling you back demanding yet another workout. The lender loses the least money by foreclosing as soon as possible and selling the house.

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Comment by Ben Jones
2010-06-23 11:24:06

So 2 missed flights and lost luggage later, I’ve landed in downtown Baltimore. My camera is in the bag, so I’ve got nothing to do for a bit. Too bad too, cuz I see lots of townhouses for sale within walking distance.

First person to meet me for a beer gets a free t-shirt. I’ll check back frequently and anyone can email me at thehousingbubble@gmail.com

Comment by JLR
2010-06-23 11:40:26

go to Pratt Street Ale house - it’s great and right there downtown. Sorry I can’t get down there today :(

Comment by Ben Jones
2010-06-23 12:20:11

OK, that sounds good. I’m staying a block away from Pratt.

Comment by LehighValleyGuy
2010-06-23 13:16:30

I could prob. meet you there 7:30-8:00p-ish tonight. Would that be good? I’m also free tomorrow evening if that’s better for others.

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Comment by Ben Jones
2010-06-23 13:19:12

That would be good. I don’t know if I’ll be in Baltimore tomorrow or not. I could; It depends on what others want to do.

 
Comment by LehighValleyGuy
2010-06-23 14:45:30

OK, hearing no objections, I will see you then.

 
Comment by arizonadude
2010-06-23 15:00:40

ben,
Is the fire up in flaggsatff threatening your home?

 
Comment by Ben Jones
2010-06-23 18:43:32

Last that I heard, no. It’s fire season, so this happens every year, seems like.

 
 
 
 
 
Comment by Ben Jones
2010-06-23 19:56:28

This area is swamped with ‘luxury apartments’ that I bet were designed as condos. This one caught my eye:

http://www.ar-cityliving.com/redwood/

There are several, like the Marlboro Classic. I couldn’t find any direct reference to a conversion back to rentals, but there was this from Oct 2006:

‘A downturn in Baltimore’s residential real estate market has cast doubt on the fate of two prominent downtown condominium projects. In June, ARC Wheeler LLC proposed building a 59-story condominium tower at 414 Light St., complete with a hotel, spa and retail space. Months later, UrbanAmerica LP and Doracon LLC announced similar plans for a 50-story skyscraper at 300 E. Pratt St.’

‘The proposals met with cheers from city real estate observers, who want to see the long-vacant properties near the Inner Harbor finally put to good use. But that was before the city’s real estate market faltered, with home sales down more than 30 percent since last September.’

‘The same people who at first cheered ARC Wheeler’s and UrbanAmerica’s plans now question whether the projects even stand a chance. Two city condominium projects have already fallen through this year. Developers of downtown’s Redwood building scrapped condominiums in favor of a hotel project, according to Delta Associates, a Virginia-based research firm. A condominium- conversion of The Halstead apartments in Charles Village was also halted due to slow sales.’

“Clearly, the condo market nationally - has softened, and adding major projects with new units anytime soon in my opinion would not be all that brilliant,” said Tom Bozzuto, chief executive of The Bozzuto Group, a Greenbelt-based development company.’

http://findarticles.com/p/articles/mi_qn4183/is_20061023/ai_n16798693/

Comment by scdave
2010-06-24 07:16:17

Interesting how the “Urban Living” build it and they will come fell flat on its face…Never have quite figured out “who” was the target group for this product…Initially I thought it would be the youngsters looking for the action but they typically do not have the resources to buy these high priced units….Makes me then think that they were looking for the more financial flush 45-55 year old in
mid-life crisis wanting to re-live their youth…

Comment by oxide
2010-06-24 07:36:51

Oh no, they were definitely looking for the urban youngsters. At least that’s what the ads said. You think they were looking for people who could pay 30 YEARS of loans? Hell no. Builders just wanted to unload the units onto the mortgage-bearing banks. Even if the pretty young things could only afford it for a year.

Reminds of the article i found a few weeks ago, how the young folks were welcome if they lived in one-bedroom apartments (or bought one-bedroom condos), but if the youngsters wanted a kid and a yard and a dog, SFH were out of reach, not to mention commuting or health care or college for junior. And we wonder why the kids don’t “grow up.” Maybe because, in the traditional sense, they can’t afford to?

Comment by edgewaterjohn
2010-06-24 11:14:33

The marketing of urban America is just plain fascinating. During the boom the REIC managed to hitch on to some salient social trends with a level of effectiveness that is begrudgingly worthy of some admiration.

The result is that now you have aging singles living in places that will not sell for their bubble prices and which have horrific carrying costs. Many will likely either shack up or walk away at some point as I really get the impression that many of those in their early twenties today don’t want any part of that scene. The young one will make their very own “scene” somewhere else (cheaper) - maybe even in the forelorn inner ring suburbs? Who knows?

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Comment by awaiting wipeout
2010-06-24 14:25:48

I’ve been to a few Congress For New Urbanism meetings at USC. The you go green, take the train, and live urban, while we go SUV’s & burbs, was my opinion. It was interesting, that’s for sure. Lots of students, young broke professionals, firms with an agenda (follow the $). Oh, and no one carpooled. Snotty, hip, and righteous. Certainly not my flavor.

 
Comment by Arizona Slim
2010-06-24 15:03:32

Oh, and no one carpooled.

I’ve often noticed the same thing about bicycle clubs. Matter of fact, I used to belong to one of those here in Tucson. For many years, I was among but a few people who rode to the monthly meetings.

 
Comment by awaiting wipeout
2010-06-24 16:15:36

Az Slim-
I really don’t do well with the do as we say, not as we do, BS artists in the world. Evidently, you and I don’t preach what we aren’t willing to do. (I have a wonderful, but overweight girlfriend that tell me about weight control and exercise. I tread daily, weigh 95 lbs, and she’s obese. Go figure.)

 
 
 
Comment by NYCResident
2010-06-25 11:33:58

scdave, I am a member of the target group who has owned in NYC for the past 21 years. I owned first on an Urban Renewal block, a former slum clearance area. When I traded homes, I moved, not far away to a luxury building that replaced a knocked down single room occupancy hotel formerly for the down an out. You know what, scdave? My neighborhood has improved DRAMATICALLY over those 21 years. I used to walk ten blocks to get to a single bank branch. Five blocks for a drug store. And there was only one nearby grocery store worth shopping in. Now, I have a choice of five banks within three blocks. There are four great options for food shopping, including a mom & pop gourmet grocery and a Whole Foods. In a few months, a Trader Joe’s will be 20 blocks away, but only one train stop. I enjoy living without the need or cost of a car. I own a gorgeous, small home that was at one time was highly affordable, because I bought in a derelict neighborhood on the upswing. Will the neighborhood suffer some back tracking? Will crime rise? No doubt that will happen. But my urban living near mass transit, near two beautiful parks, near everything I need in life, and a short commute to all the entertainment options of NYC suits me into my retirement years. Ya know what? If gasoline prices spike dramatically higher in our collective future, more people will be crowding into urban environments to live without the need of a car.

 
 
Comment by JoJo
2010-06-27 10:59:22

I used to park in that building. It originally was a parking garage, then they built luxury condos on top of it.

It was billed as luxurious living, but all I saw was young residents from the nearby hospital packing in at 4-5 to an apartment. It’s on a busy street which leads into 395, and a few blocks away is the drug and crime infested neighborhood featured on the HBO miniseries “The Corner”.

I’ll stay in the county, thank you very much.

 
 
Comment by wittbelle
2010-06-23 22:41:40

Ben, you are killin’ me with your Picasa comments. Lovin’ the squatter kitty at the Fort Knox house. LOL ! Those are some window coverings, huh? Hey, is that an indoor pool on pic #175? Swanky!

Comment by Natalie
2010-06-24 12:48:10

Where can one find these photos?

Comment by Ben Jones
2010-06-24 17:39:03

At the Picasa link at the top of the post

 
 
Comment by ProperBostonian
2010-06-24 13:20:04

What number is the squatter kitty?

Comment by Arizona Slim
2010-06-24 14:00:43

#198

 
 
Comment by Ben Jones
2010-06-24 17:42:06

That cat was funny. He/she watched me approach like I was a ghost. That company was serious about securing the house! The door looks like it belongs on a bank vault.

Comment by DennisN
2010-06-24 23:58:52

Are those “armored window shutters” common in FL? Do normal people purchase a set in anticipation of annual hurricane season?

Black cats are cool. I adopted a black female cat a few months ago and named her “Condoleezza”.

 
 
Comment by oxide
2010-06-25 05:14:24

I like the houses where the doors are wide open and the windows are missing altogether. Ben labels those as “not secured.”

 
 
Comment by saywhat?
2010-06-24 12:48:03

I haven’t posted for a long time but still keep up with the HBB. We live in NW Bexar County (San Antonio Metro) in a nice area that went crazy in 2005. One house on our street built in 2008 is in foreclosure and inhabited by several extended family members of the builder.
Across the street, a builder wannabe, borrowing $325K, erected a hideous McMansion in 2005 - it never sold so he and his wife moved in around 2007. They previously lived in a house appraised by BCAD for $90K.
He managed an apt. complex for a year or so but lost that job a couple of months ago. He spends his days holed up in the house with occasional forays of drunkenly navigating down the driveway to his mailbox wearing only boxer shorts (not a pretty sight for a man that age and physique). I would feel pity except I remember my anger back in 2005 watching beautiful mature trees hauled off, listening to incessant jackhammering, and knowing that the place was not going to sell. All so unnecessary. I remember posting indignantly about the situation back in 2006, 2007. So that’s where it is now. I see a another foreclosure in the works.
Anyway, a question. Does the IRS still forgive deficiency judgments/shortfalls? It seems that it was “forgiving” there for a while.

Comment by San Diego RE Bear
2010-06-25 12:12:24

Yes, on debt used to purchase a primary home. (So if they refinanced several times and pulled money out for crap, they may be on the hook for some taxes. Unless they are insolvent. So the truly broke will owe no tax either.)

 
 
Comment by saywhat?
2010-06-24 12:50:31

Whoops, I should have posted in the Bits Bucket. I apologize.

 
Comment by Ben Jones
2010-06-24 13:01:37

There are some recently posted pictures of houses in Baltimore and in Frederick, MD on the Picasa site. I’m looking forward to meeting some of you folks.

Comment by aNYCdj
2010-06-24 16:05:09

#204 a diamond store surrounded by empty storefronts and you still have to pay the parking meter out front.

 
Comment by Hwy50ina49Dodge
2010-06-24 17:11:01

Picture #150 in FL would be worth $525,000 in Encinitas CA, ask me how I know,,, ;-)

Comment by Ol'Bubba
2010-06-26 14:20:38

So Hwy-
How is it that you know that the FL house in picture #150 would be worth $525k in Encinitas, CA?

 
 
 
Comment by Ben Jones
2010-06-24 18:06:27

‘Stately brick single-family homes and condominiums line the streets of Port Warwick. But despite the well-kept look of the mixed-use development, Port Warwick is taking the biggest hit in home values compared to any neighborhood in Newport News with at least 50 homes. Compared to last year, Port Warwick homes and condominiums lost 13.4 percent of their value for the re-assessment that goes into effect on July 1. The neighborhood plummeted nearly three times as fast as the average price drop in Newport News.’

‘Chuck Young, the city’s assessor, said real estate values increased at a steady clip since he began work here in 1981. Then the boom years of the mid-2000s arrived, with assessments going up more than 15 percent for three years in a row. Now, the crash. ‘I have never seen anything like it,’ Young said.’

‘Tom Sullivan, president of the Virginia Peninsula Association of Realtors, said the pattern he sees is that higher-priced neighborhoods are seeing steeper price drops than lower-priced areas and starter homes, with the exception of the southeast community. He said in the southeast, which saw values decline by more than 10 percent, too many dilapidated homes are dragging down prices.’

‘So, what happened in Port Warwick? Sullivan said Port Warwick developed at the height of the boom. Since it was one of the first mixed-use developments in Newport News, people were excited about buying there. ‘People were standing in line for those homes,’ Sullivan said.’

‘Resident Patrice Stein said she purchased a ‘live-above’ — a townhouse above retail space — in Port Warwick in 2003. She said she’s lucky because she purchased shortly after the development began and before the run-up in prices. ‘The prices went up so steeply in those last couple of years,’ said Stein, referring to the 2005-07 time period. ‘Some people might have got caught in that.’

‘She said overall Port Warwick is a ‘wonderful’ neighborhood and she believes the prices will come back.’

http://articles.dailypress.com/2010-06-23/news/dp-nws-neighborhood-assessments-20100623_1_home-values-homes-and-condominiums-higher-priced-neighborhoods

 
Comment by Dan21541
2010-06-24 18:17:01

Swing through my area in Western MD and check out all the distressed sales of vacation properties at Deep Creek Lake.

Here’s a sample: http://dansdeepcreekblog.blogspot.com/2010/06/distressed-sales-few-and-far-between.html

Comment by Sagesse
2010-06-24 19:17:59

Vacation properties, from a quarter to over a million in Maryland. Can one peek into Camp David from there? I would like to know how many vacation properties exist nationwide, and how the “rentals by owner” are shaping up this season.

Comment by oxide
2010-06-25 05:16:13

And even worse, these vacation properties are sold to the same pool of “rich” that are supposedly living in the McMansion and the jacuzzi and the pergraniteel. If your normal house is so damn beautiful, what do you need the vacation McMansion for?

Oh, I forgot. Bragging rights.

Comment by pismoclam
2010-06-25 17:46:33

Swamp land near DisneyWorld. Subdivision of 42 houses. Price range of $1.5mil to $8 mil. Being built by Disney Corp. Deep Pockets anyone?

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Comment by Dan21541
2010-06-28 18:50:39

Here’s another agent-owned rental with great reported income, but he’s selling at a loss relative to 2006 price. What gives?

http://dansdeepcreekblog.blogspot.com/2010/06/shocking-deep-creek-price-change-today.html

 
 
Comment by Arizona Slim
2010-06-25 07:58:46

OMG, Deep Creek? That’s one of my favorite places on the planet! (And give my regards to Swallow Falls, would you?)

 
 
Comment by Ben Jones
2010-06-24 18:25:11

‘Selma Jager has sold real estate for 38 years and has the trophies and plaques to prove it. But it’s hardly a trophy moment in Prince George’s County, Md., which borders Washington, D.C. Jager says most of her listings have been sitting on the market for months. ‘I’m calling it a declining market,’ Jager says. ‘The prices from the sellers’ point of view are going down, dwindling, declining. And the buyers feel that the prices are too high. And that’s the problem.’

‘In the Maryland suburbs, Jager gives an NPR reporter a tour of homes she’s trying to sell. One is a brick house on a quiet block that’s been on the market for nearly 280 days. The price of this house started at $349,000. Then, the sellers dropped it by $20,000. The price may move lower still. That’s because the house is competing with many houses that banks now own and are trying to unload at rock-bottom prices.’

‘Jager says at least two of her nine listings have been on the market for more than one year. So, to stay upbeat, she throws anniversary parties. ‘At our weekly sales meeting, I bring in cake and ice cream just like you’d celebrate an anniversary,’ Jager says. ‘Unfortunately, it’s not a happy celebration, though, because that means I’ve had the house on the market for longer than a year.’

http://www.npr.org/templates/story/story.php?storyId=128017397

 
Comment by Michael Fink
2010-06-24 19:31:26

Just a free tip for everyone..

If you haven’t read “The Big Short” you should run out and buy/read it. It’s a wonderful book; you’re blood will BOIL at the stupidity of the “Masters” during this crisis (and more interesting, during the run-up!).

It’s keeping me very entertained as I sit stranded in CLT. :)

Comment by Ben Jones
2010-06-24 19:35:10

Here’s another tip. That author’s a tool of wall street. For instance, he doesn’t think anyone responsible should go to jail. Ask him.

Comment by Michael Fink
2010-06-25 01:38:50

Ben,

Have you read the book? I’m not sure what his views on jail are, but there’s no way that someone who’s a tool of WS would write something like this. It’s the most unflattering thing I’ve ever read (including posts on this site) about what actually happened. These people were just IDIOTS and had absolutely no idea what they were doing (and, I’m sure, still don’t).

I understand your take on it; but I also think that despite a view on jail (which I’m fuzzy on myself, I’m not sure that there were really laws violated (at least in high finance; at the street level there were defiantely laws broken!) that would result in jail time for the creeps at GS) it’s still a good read. My jaw just hung open during much of the book; I cannot believe how corrupt/stupid these folks are, it’s FAR worse than even I imagined.

Comment by GrizzlyBear
2010-06-25 04:43:46

“It’s the most unflattering thing I’ve ever read (including posts on this site) about what actually happened. These people were just IDIOTS and had absolutely no idea what they were doing (and, I’m sure, still don’t).”

If you believe they didn’t know what they were doing, you’ve got a hole in your head. Ben’s right- the guy’s an insider.

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Comment by Ben Jones
2010-06-25 05:05:53

I knew something was up with this guy when he got interviewed on npr (twice in one week) and went on and on about how terrible the things they did were, then when asked if anyone should be prosecuted, immediately did an about face and said it would be ‘counter-productive.’ I don’t even know what why he should be the one to decide such things, but it smells to me. He was all over the big media outlets simultaneously, as the guy who outs the establishment and then covers for them at the same time.

It’s sort of like the congressional show hearings, where Greenspan and the CEOs are ‘grilled’ and then they get in their limos and drive off. What a joke!

This is what passes for justice in the ‘third estate’. Media outlets like NPR and the Daily Show crusade for ‘truth’ and then use the pulpit to let all us little people know that no crimes were committed, no inquiry is necessary. So they feign indignation and carry water for the big boys.

 
Comment by exeter
2010-06-25 06:54:41

Hell BJ….. a substantial percentage of contributors to this blog carry water for the big boys.

 
 
Comment by Cantankerous Intellectual Bomb-thrower
2010-06-25 08:14:22

“…there’s no way that someone who’s a tool of WS would write something like this.

These people were just IDIOTS and had absolutely no idea what they were doing (and, I’m sure, still don’t).”

There is no law against STOOPID.

Smart people doing stupid-seeming things to fleece others is quite another matter entirely.

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Comment by Snacky
2010-06-24 19:46:16

“Smith has always wanted a walk-in closet, and thinks it would be nice to have side-by-side Jacuzzi tub and shower. Her first home probably won’t have all that, but there’s hope, she said. She’s just ready have a home to call her own. ‘Paying rent each month is a waste,’ Smith said. ‘It’s just throwing your money anyway and never really owning anything for yourself.’”

Boohoo. She’s right though. Rent is a complete waste of money when you can live in a 3800 square foot house that cost $25,000.00 or so in a decent neighborhood. $6.60 per foot ain’t a bad price, even if the half the house needs to be redone. No jacuzzi tub though, although I suppose I could put one in with what I would have spent on rent or a mortgage for a month. No walk in closet, either. What a bummer. What ever will I do without my walk in closet? Oh, wait. I have a whole floor of my house I don’t have a use for. I’ll just put the clothes up there. Smith just needs to move to Michigan (or any other random Midwestern state) and get some handymanly skills to fix up a big, giant, crappy house.

Comment by Dman
2010-06-25 10:27:31

I live in Michigan and I don’t know of any house you can get in a decent neighborhood for $25,000. Maybe your definition of decent is different from mine, but even in the older Detroit suburbs houses in that price range are generally post-war (World War II, that is) mass manufactured shacks, or post-war (World War I) brown brick triple deckers in Detroit.
As a renter I don’t think I’m throwing my money away at all. In fact, I’m feeling pretty smug about the fact that I won’t be one of those people who finds out that they owe more than their house is worth. I hope the same can be said of you.

 
 
Comment by Cantankerous Intellectual Bomb-thrower
2010-06-25 00:21:22

“Pics will be posted on Picasa.”

Just took the photo tour (what is up so far). It is a bit staggering — makes you wonder a lot over exactly who owns all those abandoned homes and why they think they will somehow come out ahead by letting them crumble into dust rather than selling them to end users.

Comment by expat_dan
2010-06-25 23:13:33

Those pictures of crapped-out houses remind me of the “Life without People” special, on the History Channel. (I watched the DVD here in the Middle East).

I saw the same scenes in my neighborhood (and others) in far west Houston in the 1980’s after the oil bust.

So much for the myth that housing is an asset. It’s a liability in ever respect (maintenance, loan, lifestyle anchor) and that Nature doesn’t like houses too much either — except as a refuge for critters and vines.

 
 
Comment by Ben Jones
2010-06-25 07:35:00

OK. I’m in DC and still trying to get an audience with some people in Congress. I’ll let you know how it goes.

Comment by Arizona Slim
2010-06-25 08:00:19

Go get ‘em, Ben!

 
Comment by oxide
2010-06-25 10:14:34

And please let US know “where to go!”

Comment by Ben Jones
2010-06-25 10:15:48

Email me at thehousingbubble@gmail.com if you haven’t received any info.

 
 
 
Comment by Ben Jones
2010-06-25 10:44:24

I’ve got some DC pics up. I’m working on more.

 
Comment by Spokaneman
2010-06-25 10:49:19

The Pictures on Picasa say it all. Depressing. Ya wonder how the country will ever pull out of this mess.

Comment by Hwy50ina49Dodge
2010-06-26 08:32:41

Well, Mr. Cole’s observation was the “work ahead,…expect delays”…being the protective dad I am, I did not discourse the time constraints involved if the road sign and been allowed to expand upon the LONG-TERM Sit-U-Ation:

“Bridges out, tunnels collapsed, massive landslides…” :-)

 
 
Comment by swguy
2010-06-25 11:02:48

Inventory vs home resales ( short sales,lender owned don’t count) it says it all, forget any meaniful recovery for many a year?

 
Comment by va beyatch in norfolk
2010-06-25 11:11:22

leaving norfolk for dc, see you all this eve! sd card full of podcasts, should be nice enough day for travel.

 
Comment by Ben Jones
2010-06-26 07:21:47

‘Virginia’s economy is slowly bouncing back from the recession and at a slightly better pace than the national economy. But headwinds in the form of tight credit, lingering unemployment, home foreclosures and depressed consumer spending are dampening recovery here and across the nation, one of the state’s top economists said Friday.’

“Coming out of a deep recession, you’d think we’d have 3.5 to 4 percent growth in real GDP (gross domestic product). Our projection that is that we’ll see 2.9 percent in 2010 and 3.2 percent in 2011,” Chris Chmura said during an annual economic forecast done in conjunction with the nonprofit Thomas Jefferson Institute for Public Policy in Springfield. However, despite such constraints, she’s not expecting a double dip recession.’

‘Chmura noted that lower housing values continue to dampen the rebound. “Five years ago, people were refinancing their homes, taking the equity out and spending money. Now houses aren’t worth as much, and they can’t take the equity out. So they feel poor, and they’re not spending as much,” she said.’

http://www.virginiabusiness.com/index.php/news/article/economic-recovery-continues-to-be-moderate-economist-says/235652/

‘Researchers, social activists, and government officials in Prince William County, Virginia, have had nearly three years to assess the economic, political, and social ramifications of a law passed by county supervisors there requiring police to check the immigration status of detainees. Some argue that mass migration, business closures, public-image setbacks, and decreased school enrollment tell the story. Others say the economic meltdown and real estate crash make it tough to determine the law’s real impact on the community.’

‘The PWC law was passed in July 2007, before the housing crash. Soon after, immigrants began leaving the community, moving to other parts of Virginia, Maryland, and elsewhere in the U.S. Some went back to their native countries, said Debra Lattanzi Shutika, an English professor at George Mason University.’

‘Jason Grant, PWC’s communications director, said it’s hard to quantify the real impact because of the economic climate at the time. The construction industry, a major employment sector, lost nearly 4,000 jobs from June 2006 to January 2008. The housing market took a dive, and the foreclosure crisis was spreading. “The timing makes it almost impossible to say what was the economic impact,” said Grant, who worked in the county’s economic development office at the time. “The economy obviously had an effect on those businesses.”

‘In one Latino neighborhood, more than 150 foreclosures dotted the streets. “It was clear talking to people, in some cases, the ordinances were the last straw,” Shutika said. “People were more likely to abandon their homes in foreclosure.”

http://www.portfolio.com/business-news/2010/06/02/prince-william-county-in-virginia-has-immigration-law-similar-to-arizona-allowing-analysis-of-impact

I’ll be driving down to Woodbridge in the next couple of hours. Check back for photos

Comment by Hwy50ina49Dodge
2010-06-26 09:31:21

‘In one Latino neighborhood, more than 150 foreclosures dotted the streets. “It was clear talking to people, in some cases, the ordinances were the last straw,” Shutika said. “People were more likely to abandon their homes in foreclosure.”

Well, I guess we’ll soon see what is going to cause the most financial damage to AZ:

Homes & Loans Debacle… or… fleeing illegal workers

 
Comment by oxide
2010-06-26 10:51:19

Hey Ben, I tried to call but didn’t get you. I’ll try again later this afternoon… I heard that Woodbrige is another ground zero for foreclosures. Plus you’ll probably see all the McMansions you can handle, right from Route 95..

Comment by Ben Jones
2010-06-26 12:10:19

I’ve got some Woodbridge pics up and hope to get more.

Comment by DennisN
2010-06-26 13:40:49

Photo 241 looks like a place wherer Boo Ridley would live.

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Comment by scdave
2010-06-27 07:17:34

Very nice work Ben…All these pictures put a face on the print that we read all the time…Pic’s 248-251…The Potomac Club…My goodness…I am not quite sure I have ever seen a development that large…

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Comment by Ben Jones
2010-06-27 08:04:03

It’s sort of like what people say about the Grand Canyon; you can hardly make your eyes focus on the depth of it. I hope the photo captures that.

One thing about the Woodbridge market. There were a great deal more houses that were obviously abandoned and not foreclosed than I’ve seen in other places. I called the lady who is probably the top REO broker there and asked about what parts of town were more affected than others. She said it was across the board, noting that the townhouses were hard hit as a sector. But I spent almost 3 hours driving all over Woodbridge and saw fewer visible signs of bank activity than even Texas. I suppose this can be chalked up to fear of vandalism and the notion that racially based predatory lending was prevalent there.

On the way back, I saw a ton of new condo towers in Arlington too.

 
Comment by aNYCdj
2010-06-27 13:12:06

Ben,

I really have to disagree with you on this…I don’t think race had much to do with this. Now if you used the term “severely stupid” that would apply pretty evenly.. Lots of people in certain areas were more stupid then others, so they aimed their scams at them.

———————————
notion that racially based predatory lending was prevalent there.

 
 
 
 
 
Comment by Malfunction Junction
2010-06-26 09:41:43

“That means a home that sold two years ago for $400,000 might only fetch $200,000. That reduction means even more people will be under water, owing more on their mortgages than their properties are worth.”

This is exactly the scenario my sister found in Northern Va last year. Even then we were very hesitant about buying a three year old house for half its original price. The big justification for not waiting longer to buy was that there was absolutely nothing for rent in the area for less than $1500 a month. I figured prices would fall another 20% but waiting another two years would have cost her another 40k in rent. Another factor was they are a dual income couple both working in the mental health profession doing a booming business dealing with crazy people so there is no end in sight for their line of work.

 
Comment by Ben Jones
2010-06-27 08:24:13

‘The Washington area’s budding housing market is facing a cutoff of federal aid that threatens to put the brakes on its recent momentum. Houses are being snapped up about twice as quickly as last spring, and mortgage rates are at record lows. But new-home sales plummeted 33 percent last month to the lowest level on record,and existing-home sales were slightly down from April — signs that the market could slow once the federal home buyers’ tax credit expires. ‘I hope it helped out a lot, but I also hope you don’t have whiplash,’ added David Dowies, principal broker at Portfolio Realty in Northern Virginia.

‘The credit likely “pulled sales forward” that would have occurred later in the year, said Andy Bauer, regional economist with the Baltimore branch of the Richmond Federal Reserve. But as federal aid winds down, so, too, could the hot market. It is “pretty simple to conclude” that the momentum the market has seen is unlikely to be sustained once the tax credit wears off, said Anirban Basu, president and chief executive officer of Sage Policy Group, an economic consulting firm in Baltimore.’

‘Nevertheless, more homeowners who had been in good standing are finding themselves unable to pay their mortgages. The inventory of foreclosed or delinquent properties in the area that have not been put on the market would take nearly three years to clear, according to Standard & Poor’s. “Having that sort of shadow hanging over the market … is not going to be [conducive] to a healthy market [returning],” said Diane Westerback, managing director of Global Surveillance Analytics for S&P.’

Read more at the Washington Examiner: http://www.washingtonexaminer.com/local/Housing-market-braces-for-cutoff-of-federal-aid-97199159.html#ixzz0s4EfLThv

 
Comment by Ben Jones
2010-06-27 08:33:56

‘Auctioneer Matt Hurley sold 99 acres of fields near Leitersburg to housing developers for $1.45 million four years ago. A few weeks ago, the highest bid Hurley could coax for the same undeveloped land was $320,000. The bid was rejected by AMK Partners LLC, the local investors who bought the former dairy farm in June 2006.’

‘Ronald D. Koontz and George E. Manger Jr., two of the three investors in AMK, declined after the auction to talk about the plunge in market value. But Koontz said he faulted growth controls by the Washington County Commissioners, along with the ongoing recession. “The national economy has been one thing, but Washington County has imposed things like impact fees that started our economy down before the national economy made things worse,” Koontz said. “I know the commissioners tried to cut back (fees) and how it’s spurred new homes, but very few,” Koontz said.’

‘Those were the good old days,” Hurley said, recalling the auction that sunny, hot Wednesday, June 7, 2006. But in the months before this particular auction in the fields off Little Antietam Road, Hurley had started to sense a change in the economy. During most of 2005, he said, property auctions were hot and prices were golden. “From January to October, I had 100 real estate auctions and every one sold,” Hurley said. “I would have 15 and 20 bidders at every auction. It was crazy, absolutely insane.”

‘Then, suddenly, the market missed a beat. “In October, I had four properties not sell,” Hurley said. “I thought, ‘What am I doing wrong?’ And I started to find out, it wasn’t that I was doing something wrong. It was that the market started to change.”

‘What does this say about the current economy to an auctioneer who measures it in 30-day bites, one auction at a time? “Man, I hate to be negative,” Hurley replied. “But I don’t see it improving. I did see a little bit of boost when the (federal homebuyers’) tax credit was about to end. I did see some activity directed to that.’

“But man, I don’t see a whole lot changing right now. We’re in this for a long time. We’re not going to be back to ’05 prices in a year or two. I’m no expert, but I think we’ve got a long haul ahead of us.”

http://www.herald-mail.com/?cmd=displaystory&story_id=248009&format=html

 
Comment by Ben Jones
2010-06-27 08:40:15

‘If you’ve been looking to buy a condo in the Washington area, you know there are deals to be had. But look carefully before you leap, say real estate agents and some buyers. A multitude of rules could block your way. Borrowers need to have stronger credit and less debt than in the go-go years, even though interest rates are near record lows. And some people are finding that although they may qualify for financing, the building they have fallen in love with does not.’

‘The Federal Housing Administration tightened loan guidelines in the past two years on borrowers and on buildings. Fannie and Freddie, have similar “condo review” rules for loans they will buy. “Getting financing is the biggest problem with the condo market right now,” said Fred Bowers, vice president of Intercoastal Mortgage Co. in Fairfax. “The big ‘trip’ factor has to do with the owner-occupancy concentration” in the building, or limits on how many owners must live there rather than rent out.’

‘It’s very, very difficult now getting a mortgage in the older buildings” in the District, Murphy said. “A lot of investors who were flippers in the old market got caught when prices were down and had to either give up their deposit or go to settlement and rent them out.” Now investors can’t sell through FHA until other investors get rid of their units. Owners who live in the building can’t sell through FHA until the investors sell. “It’s very circular,” mortgage lender Bowers said.’

‘Fernando Ferrufino of Redfin said demand exploded for District condos before the federal tax credit expired, but “the difference between April 30 and May 1 was like night and day.” The result: “very, very sluggish in new contracts in May.”

‘Market watchers report a divide in demand — and in the potential for price increases — between properties outside the Beltway and inside, those near subways and those not. In Prince George’s County, would-be condo owners have switched to single-family houses because the prices dropped dramatically, said Michael Cerrito of Cerrito Realty in Upper Marlboro, outgoing chairman of the Prince George’s County Association of Realtors.’

http://www.washingtonpost.com/wp-dyn/content/article/2010/06/25/AR2010062500198.html

Comment by Sean
2010-06-27 15:32:05

Another problem with this area are HOA fees. We’ve seen a few townhomes/condos that we liked, good neighborhood, etc….but some want $200-$350 a month in HOA fees!! So I’m gonna mortgage out over 300 crackers, plus pay 4-9K in taxes PLUS $350 a month in HOA fees? No thank you.

Comment by EndOfEmpire
2010-06-27 23:53:11

Wow, here in Hawaii we would kill for $350/mo in HOA fees.

 
 
 
Comment by Va Beyatch in Norfolk
2010-06-27 16:31:10

Friday night’s get together was fun! Left Norfolk around 2pm, and arrived on Capitol Hill for dinner right before 6pm. It’s picturesque walking to dinner with the top of the Capitol Building visible down the street.

It was great meeting everyone! Awesome hearing the stories, and seeing that other people are in the similar situations.

On the way home I thought heavily about the people I had met, and how the one thing that HBB’ers seem to share is critical thinking.

Comment by NoVa Sideliner
2010-06-28 13:23:43

Ah yes, out of touch I have been lately. Sorry I missed all of you a few days ago. I had no chance to get there, what with family, work, and all that… (Hence my silent lurking lately, barely time to even read, much less post.)

Tidbit from WTOP I spotted today: “Southern Delaware real estate market stabilizes”. That’s the beachy part of Delaware.

Oh my. People are DUMPING houses at “below market value”! Imagine. And as one UHS says, “there are properties that are still actually selling for less than market value, and it drives the rest of the community crazy”. Yeah, well.

They also say that if you can afford ANYTHING, you need to BUY NOW! The deals are awesome! Oh yeah, the cheerleading still goes on, even as the spiral continues downward.

 
 
Comment by Xpovos
2010-06-28 18:59:28

Been away for a bit, but what a time to come back! I’m sorry I missed you, but I probably wouldn’t have been able to come anyway. Medical complications around new daughter’s birth prohibit socializing.

Awesome photos. I think I recognized some of the Woodbridge properties. I’m still here, and it’s been a very interesting thing to watch particularly with the home buyer tax credit. Absolute frenzy, and last summer to fall it was particularly impressive watching some absolute junk houses, like these, get reformed and sold for low-mid 200s to first time buyers aching for some free government money.

I think we might see some more this year, but the stimulus is gone for good.

A co-worker of mine owns one of those ‘canyon’ townhomes. Fortunately he bought it way off peak. Those who bought at peak? I don’t want to think about it.

 
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