Bits Bucket for April 9, 2011
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
May 2024 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
update from Clearwater, Fl. My friend is down there checking out the real estate market. Plenty of nice oceanfront (Oceanside of the bldg.) condos to be had for around 200k. Problems are as follows”
1. bldgs are only about 30% owner-occupied on average ( a BIG issue)
2. condo fees ALONE run $600-900 a month
3. real estate taxes are another $600-700 a month.
Conclusion: makes no sense to own one of these things, just rent if you are a seasonal person. My question is, who will ever buy these things the way the cost model is set up?????
I would imagine at some point the other “oweners” will just chuck the keys back to the bank/FDIC, then maybe some PE or hedge fund will come and and buy the whole thing in bulk and give it another go, albeit after “someone” (read taxpayers) has taken a bath….
“My question is, who will ever buy these things the way the cost model is set up?????”
I doubt the 30% vacancy rate will last forever; once prices finally bottom out, a market-clearing equilibrium will enable the condos to fill again with people who can afford to pay their mortgage AND their HOA.
Saw it happen in NorCal (where we were condo owners in the mid-1990s)…
Yup Professor Ill buy 5 at $1 each……maybe i can get $1500 a month rent and break even…that’s scary
“2. condo fees ALONE run $600-900 a month”
I’m curious, have these fees gone up much recently?
Are the fees being paid for the unoccupied 70%? If not, that’s another potential problem.
“2. condo fees ALONE run $600-900 a month.”
“3. real estate taxes are another $600-700 a month.”
Combining these two figures and we get a range of $1,200 to $1,600 a month for condo fees and taxes. This is either totally crazy or I need to get out more often.
There are mountains of condos at Clearwater beach. Here’s a related story:
‘For maybe the first time ever, sales of foreclosed homes in the Tampa Bay area have exceeded traditional sales. The picture grows worse if you add 1,098 short sales…”Until the banks are no longer the biggest players, conventional sales will decline more,” said Peter Murphy, president of Tampa’s Home Encounter, a full-service real estate firm. “There’s nothing to deter it. There is no way competition can stop that from happening.”
‘The dramatic rise in foreclosure sales this year raises the question, why didn’t they increase years ago, when the foreclosure crisis exploded?’
‘Mark Vitner, a senior economist with Wells Fargo, who closely follows Florida real estate, pointed to several reasons. First, while banks foreclosed on a lot of homes, they put relatively few of them on the market immediately. That’s because the economy was so weak, the legality of many foreclosures was questioned and selling homes at a loss would have hurt their then-fragile bottom lines.’
‘Now, “cash buyers have also shown up,” Vitner said, and “banks are in a healthier position to take the hits.”
‘He expects foreclosure sales to climb and prices to hit bottom between June and October. Homes in foreclosure and those in the shadow inventory — mortgages 90 days late and nearing foreclosure or homes already seized by a lender but not listed for sale — will flood the market in the next year.’
“He expects foreclosure sales to climb and prices to hit bottom between June and October.”
I love how so many people expect the end of a trend in just a few months. He realizes it took 3 years just to *start* selling them, knows there are 3 years of accumulation, and still thinks it’ll all be over in a few months.
I’m not expecting it to bottom out in my area for another 5 years minimum. We have 2 years before the ARM resets finish, 1 year of “holding on,” 1 year of foreclosure (I’m hoping this speed up from the 18-24 months it is now), and another year to sell the inventory!
The only thing keeping me sane is that I can see the prices starting to slide. That keeps me saving.
Not to mention if interest rates go up even a point or two in the next year, that’ll eff a lot more people as well, esp. those who are wanting to buy.
“……put relatively few on the market immediately. That’s because the economy was weak, the legality of many foreclosures was questioned, and selling homes at a loss would hurt their then fragile bottom lines”
So, we have the first confirmation that “Mark to Fantasy” accounting was part of the game plan.
Essentially, what this means is that if you are buying a house, you are going to pay for it twice. You bought it as a taxpayer, and you get to buy it again as a member of the “free market”.
Basically, the government has sided with the banks, real estate infestors, and current bagholders against everyone else. What a country. That cardboard box under the Interstate is looking better all the time.
Informative post Ben…Thanks…
Fannie Mae is the only one stupid enough to buy one of these condoze. They just don’t know how many were bought at insane prices by FBs on their behalf. They realize its probably a shitload.
I am a regular visitor to Clearwater Beach and points north and south, though I haven’t posted much of what’s been going on there for some time. The biggest problem with the beach is the bubble-mania that took over all the beach development.
Clearwater Beach was, since its inception, a place with lots of cheap mom and pop hotels/motels where families and students could find a place to spend a week or two on vacation. Almost ALL of the former hotel/motels were destroyed for new Condo Units and newer Chain hotels. There are a few remaining, most in disrepair, some being renovated.
The biggest projects built during the boom were the now mostly vacant “luxury” condos in the 400k to over a million dollars.
There are stretches with the lower priced 200k units, that were marketed for nearly 600k when the game got really going.
Many were bought by REALTORS in the 200k range when new and then marked up successively each year.
When the sales STOPPED dead, there were still existing projects coming out of the ground, and others where the former motels were torn down and the construction had not begun.
I know of at least a dozen vacant sites that were razed and are now vacant.
Several others have half, or less than half construction completed, adjacent to the completed ones where the vacancy is high. It’s a nice area, but access is very unfriendly on the weekends and during holidays because there isn’t enough parking, so you have long lines entering and exiting the beach.
They are supposed to be adding a new parking garage on one of the sites where some older motels were razed.
I like going to the beach for a swim, and like the water there, as I have been going there since about 1960. It’s in my blood now. But I still haven’t “bought” a place there. I think about it.
Then I ride over and think, do I really want to spend this kind of money for a tax and fee center? Not really. I can rent for a month if I feel I really need to “live on the beach”, but there’s still plenty of vacancies, so I am no longer so motivated.
It will change over time, but I don’t think it will be next month.
I have fond memories of Clearwater beach. I was there just a couple of days after Hugo passed through in 89 with a close friend and a girl who became and is still my wife. The waves were huge (for Florida) and we had a ton of fun in them. Just another 4-day pass from the Army.
‘The dramatic rise in foreclosure sales this year raises the question, why didn’t they increase years ago, when the foreclosure crisis exploded?’
I dunno…could it be COLLUSION?
WTF!
+1
‘That’s because the economy was so weak, the legality of many foreclosures was questioned and selling homes at a loss would have hurt their then-fragile bottom lines.’
Won’t it hurt their fragile bottoms even more now, since home prices have dropped by over fifty percent in so many locales? It seems like the best strategy would have been to sell early, back when prices had only fallen by a smidgen.
Ah, but many of these loans have since been refinanced into govt-backed loans, and are no longer on the banks’ books.
IMHO, that was the entire reason for the delay and the freakishly low interest rates — they were trying to get everyone out of the privately-held loans, and into the publicly guaranteed loans.
Nice, huh?
$200k is way too much for a condo, sorry.
Finally! I knew someone else had to be thinking the same thing. Forget the HOA, that list price is too high to begin with.
Big V
If you remember i was saying in that big mogambo voice:
TWO Hundred Thousand dollars is a LOT OF FREAKIN MONEY for a house!
FWIW, Clearwater Beach is kinda cool. Totally walkable / bike rideable, always lots of people around, nice beaches, tons of restaurants and bars… if I could afford a townhouse there I would do it.
I have a former student who was shot on the pier (lived), but, uh, well, you know, he was dealing drugs.
I once rented a condo on Clearwater Beach.And may buy one some day.I’ve watched this market closely for about 5 years.
It is NORMAL that most of the condos are not occupied. They are owned by someone from out of state who only comes for a part of the year. This is actually a GOOD thing since it cuts down on noise, pool use, etc.
A rule of thumb for property taxes is about 2-1/2 %. So taxes on a 200K condo would be about $5k per year, or $400 per month. High, but not as high as you say.
You’re right about condo fees being high.They don’t advertise these on the MLs at all. $500 a month is not unusual, and can go to almost $900 on even a 200K condo. However, the higher fees not only include cable but also your electricity bill–in a co-op for example.
Still, bottom line is that if you plan to rent a condo out and break even it is very difficult. The rent would barely cover the condo fees and taxes, let alone the mortgage. So, even if you paid NOTHING for the condo you’d see very little positive cash flow !
It seems to make much more sense to rent a condo rather than buy one if they’re not going to go up in value. However, moving a lot is no fun. And some day they WILL be going up in value again.I see some tiny signs that prices may be bottoming out, but I still think it’s too early to tell.
When I lived in Clearwater (’97-’02) my property taxes ran about 1.5% of the value of the house.
One needs to be careful with rules of thumb as property taxes vary greatly from state to state and market to market.
Did they get all the oil cleaned off the beach at Clearwater?
The oil never got that far North.
I would never own a condo, after owning one. No more HOA’s!
so much for the “it’s different/special here” crowd in MA….
From the Boston Glob….
Massachusetts faces a best case scenario of a “disappointingly slow’’ recovery, a radically changed view of the trajectory of a state economy that was once thought to be outpacing the nation’s, according to the assessment of economists from several local universities and the Federal Reserve Bank of Boston.
Tweet 1 person Tweeted thisSubmit to DiggdiggsdiggYahoo! Buzz ShareThis Related
Chart
Revised economic indicatorsThis bleaker assessment of economic conditions, released yesterday by the University of Massachusetts, follows recent revisions of employment data by the Labor Department showing the state did not add as many jobs emerging from the recession as first thought and was not at the forefront of the nation’s recovery.
The revised data show the state added just 28,000 jobs over the past year, compared to initial estimates of about 45,000, a pace more in line with the slow national recovery. While the revisions also showed that the state’s recession was not as deep as first thought, the weaker rebound makes the state more vulnerable to shocks weighing on the national recovery, the economists said.
Ya mean the spike in activity caused by the QEs and TARP is going to slow down? At least we’ve got a stock market that almost never notices bad news.
/sarcasm
How could the initial estimates possibly have been off by THAT MUCH? Don’t these things have to be signed by the boss before they’re sent out. Jimminy Cricket.
Wow this comes as a complete surprise. We are saved!
Government shutdown avoided, White House and Republicans reach deal.
Washington (AP)
Racing the clock, in a long day of trading offers, the White House and Speaker John Boehner reached agreement Friday night on a budget framework that would cap 2011 appropriations just under $1.050 trillion while cutting domestic and foreign aid by more than $40 billion from the rate of spending at the beginning of this Congress.
The deal — which was only sealed after Boehner presented the outline to a closed door Republican Conference — averts what would have been an unprecedented wartime shutdown of the government that had become a growing embarrassment for himself and President Barack Obama.
Only the warmup act, as the debt ceiling negotiations are soon to come.
Got popcorn?
“Got popcorn?”
Got cash?
Aaah, keeping the message on schedule, eh?
Got silver?
Yep. Hiyo-silver!
Don’t know what to do with it other than hold onto it, but it seems that the difficulty in doing anything with it, i.e. not just clicking a button to buy or sell, has helped me not fritter it away. Capital preservation any way possible…
All I really want is land and a source of water and more time with my family. Two growing seasons would be nice too.
I’ll pick some up in 2 years at $7-10.
Will probably pick up some gold at $350-500 as well.
Got short?
“I’ll pick some up in 2 years at $7-10.”
Quizás, Quizás, Quizás…
Yes, I do. My MM account is pulling a whopping 0.7% interest.
Cash is Crap.
Thank you, Ben Bernanke.
Zero interest rates really do make money nearly worthless.
What will we do when all confidence is gone?
“My MM account is pulling a whopping 0.7% interest.”
Hunker-down, show your displeasure by stopping your consumer spending, let those malls turn blue.
Bernanke is counting on the fools to move their safe money toward greater returns then…whack!…lost your money…thank you for playing. Next?
That’s my guess, too, rms. Unfortunately, it’s been a very painful position to be in these past couple of years.
the budget deal is only a another week, isn’t it? No need to change the undies yet.
HBB note of the day:
There is only one way to pronounce the name “Boehner”, and it ain’t the way they pronounce it on the radio.
Oh great, now I’ll have to spend the day searching my home for listening devises. I’ve been pronouncing his name “that way” all week.
Au - $1475.00 Ag - $40.93 Oil - $113.00 - Sweet!
U.S. Dollar…? Print baby, print!
I don’t think you realize that the Aussies successfully reinflated their bubble while the rest of the housing bubble collapsed.
Their’s is collapsing as we speak.
Anyone long AUD is gonna be in a world of pain.
What about China? Got any thoughts on the timing of their housing bubble collapse? (Yawn…)
Anyone who claims to understand that is lying.
They have confounded the best of my predictions.
If recession (or bubble burst?) is a way to cleanse malinvestment from the system. Then perhaps because China is so awash in cash that the amount of malinvestment needs to be beyond anything ever seen before it becomes an issue?
‘beyond anything ever seen’
IMO, China is already there. The amount of cash in any market is irrelevant if a mania is present. The prices go up because each participant expects a “greater fool” to buy from them. When this is no longer the case, there is a rush for the exits and it collapses. People that have money are no more willing to take a loss than those who are speculating on credit.
The thing to watch then, is inventory. It will spike as the collapse nears.
As I posted below: ‘what we seek is to stabilize rather than suppress or stamp down on property prices’
Yes, many want to ’stabilize’ bubble prices, not bring them down. But when there are no fundamentals to support the market, it must fall.
But when there are no fundamentals to support the market, it must fall.
I’m feeling “poetic”:
“TrueTulipBambooLie™”
Mr. Cole & Hwy are on journey today to Hemet, CA to help my lil’ bro review his taxes (then a provided dinner and x25 spins at the Indian roulette table). Eyes’ll keep a sharp look out for any RE “coming soon”!
indicatorssigns.(At least I won’t have to be concerned Jeep traveling knowing the TSA is still-on-the-job)
‘Fighting housing bubble needs subsidized homes’
Global Times April 07 2011 ‘People’s Daily Online (PO) talked to Huang Lan (Huang), deputy secretary-general of the China Real Estate Chamber of Commerce, and Wen Linfeng (Wen), deputy director of the Housing Industrialization Promotion Center at the Ministry of Housing and Urban-Rural Development’
‘PO: What kind of targets can convince the public that the government is sincere? What kind of price rise speed is feasible?’
‘Wen: Local governments have already released several policies linking property price controls with GDP or purchasing ability. I believe that each city should have its own criteria. It’s unreasonable to adopt the ratio of property price to income as a norm to evaluate the control target in bigger cities, such as Beijing and Shanghai, where the housing prices have already rocketing to unexpected highs.’
‘The ratio could reach 20 or 15 to 1. Let’s say, for instance, that the per capita disposable income of people in Beijing last year was around 30,000 yuan ($4,584) and the average property price was 20,000 yuan to 30,000 yuan per square meter. So the low- and middle-income families still could not afford an apartment even if the price falls by half.’
‘Consequently, we should enlarge the amount of government-subsided housing…’
‘Huang: The targets local administrations released are all soft ones, which are related to GDP growth and an increase in residents’ disposable income. Why did they not mention the hard targets? We need to rethink the harm that rigid regulations on property price might cause.’
‘The massive decline of housing prices before and after the previous financial crisis in Hong Kong left many people in debt. The property bubble in Japan also triggered an economic recession nationwide. It was not simply a matter of housing price controls, but also a complex issue concerning the fundamental economic structure.’
‘It’s actually not right to blame everything on property prices…’
‘PO: What other problems are there in the current property market?’
‘Wen: In some regions which were not very popular in the past, 90 percent of the capital has flowed to property purchasing for potential appreciation now, leaving many houses vacant.’
‘PO: What do you think is the most effective control measure? Wen: Property-purchasing limitations are the most effective means…The housing prices in cities where there are no home-buying restrictions is still ballooning, such as in areas around Beijing and some third and fourth-tier cities.’
‘We must maintain that houses are for living rather than for investment. Each family can own at most two apartments. Otherwise, the housing prices could not be cooled down.’
‘Huang:..The public is firmly convinced that property is the best investment, since they expect high inflation. Therefore, most people chose to invest their money in property.’
‘Fundamentally, the land price also plays a dominating role in the skyrocketing housing prices, which would decrease immediately if we could bear a thorough comprehension of land prices. It is, however, a double-edged sword.’
‘Do we need a stable and prosperous property market or a flat, slumped one? It is a choice. Anyway, what we seek is to stabilize rather than suppress or stamp down on property prices.’
Looks like China’s going to let it all Huang out.
China lies. We have been getting little stories here and there for probably two years about people who bought property for X, but now it’s only worth 1/2X. Of course the entire concept of home ownership doesn’t make any sense under a communist government, but hey, let’s just pretend a little while longer. It’s good for business.
“Never get involved in a land war in Asia”
The Princess Bride
“I don’t think you realize that the Aussies successfully reinflated their bubble while the rest of the housing bubble collapsed.”
Haven’t they become more dependent on exports of commodities to China? If China slows, how does Australia not take a big hit?
Bingo! And as the U.S. and Europe slows China will slow.
Follow the money:
1. The U.S. and Europe go crazy and borrow and spend like there is no tomorrow and they take this borrowed money and ship it off to China.
2. China goes crazy because there appears to be no end to the boatloads of money the U.S. and Europe are willing to trade in return for their junk so they spend money like crazy on infrastructure as they too believe there is no tomorrow.
3. Australia goes crazy because China is spending boatloads of money they got from the U.S. and Europe on raw materials from Australia to be shipped to China to be turned into finished goods to be shipped off to the U.S. and Europe in return for more boatloads of money.
And then the money flow slooows …
Good post, combo. Let’s hope you’re right.
No Fed Gov shut down this week.
*golf clap*
Actually, it would be interesting if the entire government REALLY shut down in order to see who stopped working worldwide?
Terrorists standing on the corner with signs saying: “will kill for food”; takin their weapons to pawn shops…
(((shakin my head)))
They didn’t have the balls to shut it down for a different of billions when the problem (that everyone knows) is really trillions.
It’s like complaining that your spouse undercooked your steak while the house is on fire.
Stock market relief rally next week on the federal budget agreement, especially given that the government did not end up fully shutting down, and there was at least an initial step towards reining in the federal deficit? (Seems like a much better situation than California’s, by comparison…)
Maybe I’m crazy, but I think this is a huge increase in the deficit, absolutely huge. Very slightly less huge an increase than suggested. Call it a reduction and move on.
A reduction in the ‘expected deficit,’ perhaps?
“Maybe I’m crazy, but I think this is a huge increase in the deficit, absolutely huge. Very slightly less huge an increase than suggested. Call it a reduction and move on.”
If you cut things that make a difference in terms of the economy and don’t touch other things that could really make a difference in terms of the deficit (bloated military/security, tax cuts for the rich, e.g.), why couldn’t deficits go up?
George Soros Says The US Should Take On More Debt And Not Be Obsessed With Budget Cuts
Direct link to video:
http://www.youtube.com/watch?v=z_ajJmAF2aU
Hah! What does that moron know about international finance?
George Soros, like most other fantastically wealthy people, will say what’s good for George Soros.
The stock market will probably “go big” next week, but it’s pure nonsense. With $113 per barrel, and rising, oil prices, this economy is getting hammered. I’m seeing it with my own two eyes. People are still buying the fuel, but not spending elsewhere. I’m one of them, though I’m doing my part to starve these pigmen of their black gold profits.
Before this latest spike, but after the spike of 2008, I had cut my fuel consumption by more than 50%, just by changing my lifestyle, and eliminating trips that were not necessary. Since this latest run-up, I have cut my consumption by at least half, again, so I am using 75% less fuel than I did in 2008, perhaps even 80% less. But, it comes with a cost as I no longer patronize the small businesses out in the country where I would stop on my way to do outdoorsy things, etc. They’re all dying on the vine.
Inflation=buy equities
That’s the equation people are betting on…
I note that there is an ever-present temptation for the non-incumbent party to bargain in bad faith in order to create public doubt about the incumbent party’s leadership abilities. Don’t get caught up in the shock and awe of Congressional budget Kabuki without recognizing the purpose of the game.
Analysis: Budget Battle Tests Obama’s Leadership
by The Associated Press
WASHINGTON April 9, 2011, 05:59 am ET
President Barack Obama promised to change Washington’s ways. Yet he is as caught up in them as ever.
It was just at the start of this week that Obama launched his re-election bid with a sunny video of real people talking about their hopes and needs. It was the very image of life outside Washington politics.
By week’s end, Obama was mired in budget negotiations, canceling trips and scrambling to hold off a government shutdown that would surely erode the public’s faith in his leadership.
That’s the messy business of governing. And this is how it is going to be this time around for incumbent Obama.
Beyond the vision for economic competitiveness he wants to talk about, Obama is seeking a second term while having to engage in the gritty, frustrating process of governing a deeply divided government. He got bogged down in legislative tactics in his first two years, even when he won fights like health care, and is now trying to avoid all that.
Then came this test of leadership. The White House says Obama ultimately got the compromise he wanted — a bill of spending cuts that he supported without having to gut his priorities or swallow policy changes he could not accept. When it all finally came together, the administration offered it up as an example of cooperation under the highest stress.
But it was an exhausting process that left people wondering why the government was somehow on the brink of debacle.
This is change?
…
President Obama did not promise to change anybody’s ways. He is only responsible for his own ways. Why do Republicans constantly make false claims about things that were supposedly “promised” by Democrats?
Everyone knows that governing in the United States is a process of compromise. No one can promise anything. All they can do is try.
Obama has changed the office of President by refraining from lying to us all about weapons of mass destruction. He has changed the office by not ordering illegal warantless wiretapping (and using it against his political opponents). He has changed the office by not arguing that torture is OK.
There has been a HUGE change, guys. Huge.
Bush lied as an excuse to go to war in Iraq. At least he felt like he needed to lie to get into some military misadventure.
Obama is not only buying into his inherited gameplan, he’s expanding it. And he doesn’t feel obligated to even lie about it.
Mark my word, we are going to pay dearly for this one of these days. An overextended, battalion or regimental sized force is going to get stuck somewhere in bad weather, with no/inadequate air support, and no way of GTFOOD……
Wiki: “Ch’ongch’on River The Gauntlet”.
Or if you know any 2nd Infantry Division veterans who were in Korea in November 1950, see if they will even talk about it……
I’m a little surprised we haven’t had anything like that happen in Iraq. We talk a lot of smack toward Iran, and it would be easy for them to surprise and cut off a group near the border when we weren’t expecting it. Sure, it’s an act of war, but if they think we’re on the way anyway…
If the Taliban were smart, they’d find some base that is fairly close to a village, where they could gather a sizable force together without being detected, then either attack a unit on patrol right before bad weather sets in, or attack a base about 0300 in the morning on the previously mentioned bad weather day.
The trick is to get as close as possible to the “Coalition Unit” ASAP, to make it a lot trickier to use precision guided munitions. In fact, if someone panics, “unfriendly fire” can cause as many casualties as you do.
And for all those Fox Newsters who think I’m giving secrets away, I’m just a dumbazz wrench turner who reads military history. I’m not giving away anything that anyone with half a brain “couldn’t see it coming”.
OTOH, maybe the reason this hasn’t happened yet, is because, in reality, the “Taliban” are actually a few hundred Afghan-equivalents of the “Saturday Gun Show” crowd. In which case, why are we still over there, since we aren’t “hunting Bin Ladin” anymore?
Lets just offer every military age male in Afghanistan a couple thousand dollars to “surrender”, have them swear on a stack of Korans they will never do it again, we declare victory, and go home?
Hell, lets be generous and pay them with gold; but then we’d run the risk of our guys switching sides.
I note that insurgent / terror groups do this to a different degree in war zones. They create chaos, show that the ruling group cannot keep the peace / deliver a livable standard of living, and hope the people will then accept them as rulers who can deliver peace and stability.
It’s fantastically cynical and amoral, but effective.
It’s a difference of degree, not kind, with what goes on here.
Just goes to show that here, it’s more about power games than the guffaw-inducing “public service”.
Guess nobody could have seen this coming? Quite ominously, 1990 was only the beginning year of the early-1990s recession (7/90 - 3/91, according to the NBER).
COMMERCIAL REAL ESTATE
APRIL 7, 2011
Malls Face Surge in Vacancies
Fallout From Boom and Downturn, Change in Habits, Hit Local Shopping Areas
By KRIS HUDSON And MIGUEL BUSTILLO
Even as the economy picks up steam, many of the nation’s malls and shopping centers are suffering a hangover due to changing consumer habits and the fallout from a massive building boom.
Mall vacancies hit their highest level in at least 11 years in the first quarter, new figures from real-estate research company Reis Inc. showed. In the top 80 U.S. markets, the average vacancy rate was 9.1%, up from 8.7%.
The outlook is especially bad for strip malls and other neighborhood shopping centers. Their vacancy rate is expected to top 11.1% later this year, up from 10.9%, Reis predicts. That would be the highest level since 1990.
In 2005, the mall-vacancy rate hit a low of 5.1%. For strip centers the boom-time low vacancy rate was 6.7% that same year.
…
“Even as the economy picks up steam, ”
Yep keep them sales coming!! Just like a friend here stopped paying on his mortgage but went out and purchased a new car. Back servicing debt while failing to honor prior contract. A one time purchase and now he’s out of the consumption game going forward, but what the hell why should he be denied his wants. When retirement comes around with little or no money saved his victimization will play well for all the do-gooders society has created.
“Back servicing debt while failing to honor prior contract.”
Anything that can’t go on forever, won’t.
No, it only has to go on long enough to stash away your own pile. The mantra of every CEO since 1981.
Dang, how do you keep your mouth shut? I wouldn’t have a friend like that for long…
From the front…
Just spoke with someone who is looking at some retail in some pretty hard hit areas. The retailers are doing pretty well. Everytime someone walks away from their mortgage, they gain several hundred if not thousands of free cash flow each month. They are spending it.
Lots of unemployed are renters…those walking away who have jobs are suppliers of cash back into the retail markets.
I’ll bet that the increase in vacancies is focused on specific locations with the highest housing vacancies…
Yes, good point, Rental Watch.
We are actually seeing what appears to be strengthening in our local commercial RE market. Some stores that have been vacant for YEARS are now being outfitted for new tenants. We are very happy to see this part of the “recovery.”
As many of us mentioned even before the “financial crisis” ever hit, the best thing that could happen to our economy would be for everyone to quickly walk away from their mortgage. Let the banks foreclose, let the lenders take their losses, and we can begin anew. The trillions of dollars and years that have been spent since 2008 have been totally wasted.
Maybe I’m getting old, but the last time I was at the mall, I didn’t see anything I wanted, let alone needed.
$150 ugly shoes and 20 zillion girls and women’s stores and fashions stocked for the under 30 aren’t persuading me to part with my money.
One electronics store and one music store and both overpriced.
And obnoxious teenagers everywhere.
Ditto. How many variations on skinny jeans and unmatched tops can there BE? Being “under 30″ isn’t going to cut it. You need to be “over 5′8″ and under 130″ to wear this stuff.
Even Talbot’s has gone upscale casual. What the heck am I going to do with a $56 bright sweater top and $84 matching capri pants? I can’t wear it to work, and it’s too nice to wear out in the yard. I guess I’m supposed be attending parties in these clothes?
“What the heck am I going to do with a $56 bright sweater top and $84 matching capri pants? ”
You wear them to the mall, when you go shopping, of course.
There is a reason they don’t market clothes to me. I have stopped growing and I don’t care about fashion. By the time I am done with my clothes, even the homeless wouldn’t wear them. Any retailer that tried to market clothes that appeal to me would be out of business.
Up soon: Out of the political frying pan and into the fire.
POLITICS
APRIL 9, 2011
Debt Ceiling Looms as Next Big Battle
Worries Mount That Divisive Struggle Over Current Budget Will Make It Tougher to Reach Agreement on Borrowing Limit
By DAMIAN PALETTA
The brawl in Washington over how to fund the government through September has served as a dry run for looming fights with higher stakes, particularly the debate over whether to raise the limit on how much the government can borrow.
The divisive fight has raised concerns among lawmakers and government officials that Democrats and Republicans in Congress will find it even harder to decide whether to increase the federal debt ceiling above $14.294 trillion in the next few weeks. And after that, they will have to turn to crafting a government budget for 2012 and eventually to tackling the long-term federal deficit.
“It’s taken us some time to get acquainted with each other and to work our way through this, because understand that this process that we’re in is likely to be repeated a number of times this year,” House Speaker John Boehner (R., Ohio) said, referring to talks over the current budget.
The stakes are higher in the next round, shifting from worries about closing national parks to concerns the U.S. government could default on its debt, triggering another financial crisis.
“It’s one thing to play brinksmanship on a government shutdown, which can be fixed in a minute without many long-term consequences,” said Lee Sachs, a former counselor to Treasury Secretary Timothy Geithner. “It’s another thing to do it with the debt ceiling, where the impact of failure would be catastrophic for years, if not decades.”
…
Florida lawmakers passed a bill that will require both my wife and I to contribute 6% to our retirement fund. This, combined with our rumored district cuts (2%), increased health contribution and furloughs (10 days), is about a 10 percent poof! to my families finances.
So, which state should I move to? I have no problem being poor, but I refuse to do it in Florida.
Said, “Caleefornia is the place you ought to be,” so he loaded up the truck and he moved to Beverlee –
Hills that is… swimming pools, movie stars.
This same thing is going to happen in California, too (IMHO).
Sorry to hear about your pay/benefit cuts, Muggy. I hope you are prepared enough to deal with them.
This is why I’m a deflationist. While there IS a currency risk, all the local working stiffs are seeing, or will be seeing, cuts. It is ugly.
But aren’t the income tax rates in FL part of the reason people live there? Won’t you pay more than 6% in income taxes taxes if you move elsewhere? At least this is money that is (theoretically) yours in your retirement.
Property taxes are pretty high in FL, no?
“So, which state should I move to? I have no problem being poor, but I refuse to do it in Florida.”
Florida used to be a great state to be poor in, from my own experience. Not so sure that’s true anymore, this summer looks to be interesting, what with the cost of energy rising dramatically.
Try the Carolinas.
Try the Carolinas ??
Along with everyone else…
“So, which state should I move to? I have no problem being poor”
If you want to be poor, it looks like Mississippi is the best place to be.
America’s wealthiest (and poorest) states
In Mississippi, the average household earned a median of just $35,693 per year in 2008 and 2009, 45% less than New Hampshire households and the lowest income of any state.
Not surprisingly, it also had the highest poverty rate, with one in five households living under the poverty line.
http://money.cnn.com/2010/09/16/news/economy/Americas_wealthiest_states/index.htm - 82k -
If you don’t mind being poor then find a rich state to be poor in. Same rule goes for countries.
If you are poor in a rich state (or country) then you get to glom onto the leavings of your rich neighbors. If you live in a poor state there are no leavings to glom onto.
Also applies to neighborhoods. We live in one where we relative paupers bump elbows with multi-millionaires. We don’t try to hit them up for money, but if one of our kids ends up marrying into one of those families, I probably won’t complain to long or loudly…
If I were a can collector I would go to rich neighborhoods to collect cans.
The pickings would be easier because the rich would leave more cans than the poor and there would be few poor people around to give me competition.
“but if one of our kids ends up marrying into one of those families, I probably won’t complain to long or loudly…”
Depends on the family. I’ve been priviledged to be allowed some details and some of my friends I feel live in a guilded cage, the likes that make me shudder.
“the rich would leave more cans than the poor” Cans? Cans? We drink champagne out of golden goblets, pleb.
“there would be few poor people around to give me competition” That’s what neighborhood security forces and gates are for. Go away.
“if one of our kids ends up marrying into one of those families” Now who’s being naive? That’s not how we keep in in the family.
“If you don’t mind being poor” Like we have a choice.
Enjoy your cake.
Sincerely,
Reginald T. Moneybags
“if one of our kids ends up marrying into one of those families”
I grew up in a town full of those families. Michael Skakel was from one of those families. Martha Moxley sat right behind me in typing class in 10th grade, well she did up until Oct. 30th anyway. I ended up knowing her older brother John Moxley pretty well. The Moxley family will always regret moving into one of those neighborhoods with those families.
I like the way you think Mr. Bubble.
Excellent.
- Montgomery Burns
“Depends on the family.”
Understatement of the year. The exceedingly poor character of the majority of the upper crust in this country is absolutely nauseating and despicable.
“…some of my friends I feel live in a guilded cage…”
We know that type, too. Guess I have walked the planet for quite a while already…
“Florida lawmakers passed a bill that will require both my wife and I to contribute 6% to our retirement fund. This, combined with our rumored district cuts (2%), increased health contribution and furloughs (10 days), is about a 10 percent poof! to my families finances.”
Ever see that commercial where the inspired teacher leaps from the walkway to click his heels in satisfaction?
Climate was a big consideration for me. If I am going to be poor, I don’t want to have to spend an arm and a leg on heating and cooling. The Pacific Northwest is mild. Washington has no state income tax. Oregon has no sales tax. If you live in Vancouver, WA, you can take advantage of both.
I don’t know what opportunities look like for school teachers in Washington. The state legislature is going through its round of budget cutting, which includes education. The government is dominated by Democrats, so the Republicans don’t get the blame. There have been a number of initiatives to limit taxes and sales taxes have dropped due to the economy, so revenues are constrained.
Cooling a place from 115 degrees to 75 degrees, a 40 degree difference, should be less expensive than heating a place from 25 degrees to 75 degrees. Hence, Tampa, where it may get to 95 degrees in summer, should be cheaper on energy consumption than, say, Yakima. Tempe should be cheap on energy compared to Yakima too…
Perhaps I should have been more specific. I do not consider Yakima to be particularly mild. West of the Cascades is much milder than Yakima.
Part of the equation is also individual tolerance to heat and cold and personal preference. I know from experience that our heating and cooling expenses are lower in Washington than elsewhere. And we have lived in Phoenix, Jacksonville, New Jersey. Under some conditions, my husband would run the heat in the morning and the AC in the afternoon. Crazy, I know. But I can’t stop him.
I don’t like Florida - too flat, too buggy, too humid. When we left Jacksonville, it was 86 degrees with 90% humidity at 10 PM. No thanks.
I will have to stand the high humidity. While suffering from it, I will remember that I was terrified of the winters much further north, not because of auto accidents, but because of unintended days off from work from being snowed in or from not being able to get past the three inch thick ice on the roads. I don’t get paid days off except for six holidays per year. A weekday at home is over $600 in opportunity costs.
Sounds to me like you worry way too much about money for a guy making that much. I know you’ve got family obligations in the back of your mind, but that’s sad that you can’t enjoy a snow day.
I don’t get any paid time off. However, I am fortunate that I can work from home. So it takes a combination of power outage and snow for me to have to take time off. And if I have to take some unexpected down time, I can make it up later.
I understand where you are coming from. Still, there are not that many days per year that are at risk. Probably no more than are at risk in Tampa from hurricanes. Even Phoenix and Houston got snow this year. Dallas gets terrible ice storms. In the snowiest cities, they are equipped to cope with it.
With your criteria, you are pretty limited in where you can work - southern CA, FL. That is a different kind of risk.
By this logic, shouldn’t Obama rightly get the credit for averting a shut down?
Sarah Palin wants Barack Obama to get government shutdown blame
‘Obama’s petulant obstruction = shutdown,’ Sarah Palin tweeted.
| AP Photo Close
By ANDY BARR | 4/8/11 10:16 AM EDT
Sarah Palin wants to see the federal government shut down — as long as Barack Obama gets blamed for it.
…
He should get all the credit for anything. The guy is a super-hero. Capable of commercializing cherry-blossoms in a single bound.
Strawman caricature of a serious point I was trying to make (or at least as serious one as I can muster before dawn…)…
or…
Sarah Palin wants our troops to be paid and thinks Obama is a domestic terrorist.
Don’t let these folks take up space in your head rent-free.
I’m stocking up on popcorn for the Palin vs. Trump battle 2012 primary. Both are appealing to the same set of teabaggers and birthers. Better yet, let’s have a third-party tea party on a combined Palin-Trump ticket.
Why do people still write articles about Sarah Palin? She is a twerp! Who cares about her stupid tweets? They are twerp tweets.
If she wasn’t a threat, nobody would pay attention. A bit of an oversimplification of course…she isn’t actually the threat, it’s the votes she represents.
“Why do people still write articles about Sarah Palin?”
So we can watch the “my politics or the highway” crowd lose their minds and assign labels like twerp.
What, are you nuts? Sarah Palin is not, nor has ever been, a serious candidate. She is being used for entertainment purposes only. I am having a very hard time wrapping my mind around the fact that some people are not able to see this very obvious truth.
Now you why this country is in big trouble.
Yep. It’s scary.
It’s unbelievable that anyone would actually consider Palin for any kind of office, but these voters are real.
“my politics or the highway”
Republicans?
BINGO!
Uh…wasn’t it the Rethugnican power play that threatened to choke off the troops’ lifeline? Or did I somehow miss the Democratic wing of the Tea Party’s open cheerleading from the bleacher seats for a government shutdown?
Propaganda and lies will only get ya so far…
Power Play
GOP Military Maneuvers Puts Squeeze on Senate Dems
By Chris Stirewalt
Published April 08, 2011| FoxNews.com
House Republicans to Senate Dems: Ten Hut!
“You’ve got troops in the military serving in Afghanistan and Iraq whose wives are going to be wondering why we didn’t get paid this month.”
– Rep. Bill Young, R-Fla., chairman of the Defense subcommittee of the House Appropriations Committee talking to reporters
The pressure is on Senate Democrats to come up with a bill to keep the government open and provide full-year funding to the Pentagon.
Amid concerns that even a temporary government shutdown could cause an interruption in pay for soldiers, sailors, airmen and marines, House Republicans approved a one-week emergency spending package that funds the Pentagon for the remaining 25 weeks of the fiscal year and cuts $12 billion from the projected $1.65 trillion deficit.
…
“…the Democratic wing of the Tea Party…”
It just occurred to me…perhaps there IS no Democratic wing of the Tea Party!?
Republicans only want cuts to the spending that would actually help the rank-and-file American. They say they’re all about reducing the deficit, but they’re not. They just want to redistribute the spending so it benefits the rich and powerful and no one else.
Military spending is just another word for oil subsidy.
“Military spending is just another word for oil subsidy.”
You may want to let the Progressive Round Table currently occupying the White House in on your little secret. They seem to be expanding on the expensive game of Risk started by Bush who is also a progressive.
Also, if we really went to war for oil, where is our oil? I think we deserve some oil.
The price of gas in the United States does not represent the actual market value of that commodity. Chevron and Exxon are heavily subsidized by the US military, which protects its ships and operations at our expense. If Chevron and Exxon had to pay their own security bills, then the price you pay to fill up your Suburban would be much, much higher than it is.
“Bush who is also a progressive”
Rewrite history much?
Nick lives in a bubble filled with stupid gas.
At least inflation is under control…(just a little tongue-in-cheek there, having nearly run out of Ben’s bucks last night to buy dinner at a restaurant…).
APRIL 8, 2011, 4:02 P.M. ET
Treasurys Post Weekly Loss; Easy Fed Policy Fuels Inflation Fear
By Min Zeng
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)–Treasurys fell Friday as worries grew that the Federal Reserve may lose control in taming an inflation threat in the future.
The losses were moderate as some investors sold U.S. stocks and parked cash in safe-haven Treasurys amid the budget impasse that is pushing the U.S. federal government closer to a shutdown by the end of the day.
In late afternoon trading, the benchmark 10-year note was 7/32 lower to yield 3.583%. Bond prices and yields move in opposite directions.
The 10-year note’s price posted a third weekly decline and its yield rose from 3.446% a week ago.
The yield earlier Friday hit 3.619%, the highest level since mid-February. Many investors were worried that the Fed could fail to tame an inflation threat in the future by maintaining easy monetary policy for too long. Rising price pressure erodes bonds’ fixed returns over time while denting U.S. consumers’ purchasing power on goods and services.
Many central banks, including the European Central Bank, have started raising interest rates as the continued climb in crude-oil prices added to price pressures. While several Fed officials have called for tightening monetary policy, Fed Chairman Ben Bernanke still held the view that the rise in commodity prices is transitory and that the economy still needs monetary stimulus to shrink the elevated unemployment rate.
“The Fed’s stubborn stances on these transitory price pressures on commodities are being questioned and the Fed’s credibility is too as its European counterpart takes steps to address its single mandate of price stability,” said Martin Mitchell, head government bond trader at Stifel Nicolaus & Co. in Baltimore.
“To his credit, Bernanke did say that the Fed will need to act if his assumptions prove faulty; the question being how long will it take to make that determination,” said Mitchell.
A closely monitored gauge of long-term inflation expectations in the Treasury Inflation-Protected Securities market Friday hit the highest level since August 2006 as crude-oil prices traded above $112 a barrel.
…
People on FB are angry this morning that Congressmen are getting paid and not the soldiers. It reminded me of our discussions that the avg Joe wouldn’t get angry until their own particular livelihood was actually threatened. It’s probably only a temporary shut-down but the bee’s nest is buzzing like someone hit it w/a baseball bat. If this goes on too long, perhaps they’ll start injesting more facts about how we got here in the first place and the anger will grow. These are soccer Moms not anarchists so the momentum is to do nothing and go back to Friday night margarita soirees as soon as possible. Not like that’s a bad thing. It’s just that it kind of irks me that all that’s happened in the last five years is not at all on their radar and they only wake up when their families’ food is threatened.
It does bug me to no end that the men and women we ask to put their life on the line in the name of providing us w/security are not considered essential personnel.
Bringing them back home would give them the opportunity to find employment in the private sector.
What employment?
Oh, you mean the government would have a hard time keeping up the lie, and might start to feel even more pressure to stop the offshoring, which would make the corporatists mad? uh.oh.
I can see 2 possibilities. Returning troops are favored in the hiring process and those who have not served have an even harder time finding work. Returning troops are not favored in the hiring process and we have a bunch of angry folks who have been trained to make war and have a lot of time on their hands.
This might be worth the cost of printing it and carefully reading it (for those who are not rich enough to hire a tax consultant, at least).
Cover Story April 7, 2011, 5:00PM EST text size: TT
How to Pay No Taxes
Eleven shelters, dodges, and rolls—all perfectly legal—used by America’s wealthiest people
http://images.businessweek.com/mz/11/16/600/1116_mz_45taxes.jpg
April 11, 2011
How To Pay No Taxes
For the well-off, this could be the best tax day since the early 1930s: Top tax rates on ordinary income, dividends, estates, and gifts will remain at or near historically low levels for at least the next two years. That’s thanks in part to legislation passed in December 2010 by the 111th Congress and signed by President Barack Obama.
“This is clearly far and away the most generous tax situation that’s existed,” says Gregory D. Singer, a national managing director of the wealth management group at AllianceBernstein (AB) in New York. “It’s a once-in-a-lifetime opportunity.”
…
Poor, poor oppressed rich people who pay those onerous taxes. How will they ever survive, Jane Eyre?
Those criminal $10/hr janitors need to stop oppressing rich people. It’s outrageous I declare!
I’m glad to finally see an article in the MSM that points out that the rich are paying the lowest taxes they’ve ever paid in modern American history.
Something to think about when were being preached to about the need to ‘get real’ and ‘tighten our belts’. We wouldn’t run these deficits if the rich paid their fair historic share.
And yes, they’d still be rich, so don’t have a panic attack, all you defenders of the plutocracy.
Amen, alpha.
Buy now, before higher mortgage interest rates AND home prices price you out forever!
Bloomberg
Treasury 10-Year Notes Slide for Longest This Year on Inflation
April 09, 2011, 12:27 AM EDT
By Daniel Kruger
April 9 (Bloomberg) — Treasury notes fell for a third week, the longest slump for benchmark 10-year securities this year, as traders bet inflation will accelerate, oil reached $113 a barrel and gold climbed to a record.
An inflation gauge used by the Federal Reserve reached the highest level in a month as minutes of the central bank’s last meeting showed policy makers differed over whether to begin removing record stimulus. Data next week is forecast to show the consumer price index rose in March. The Treasury will sell $66 billion of notes and bonds next week.
“The Fed’s acknowledging increasing inflation expectations,” said Priya Misra, head of U.S. rates strategy at Bank of America Merrill Lynch in New York, one of the 20 primary dealers that trade with the central bank. “That’s putting more pressure on yields. Momentum is going to be for higher rates.”
…
What happens when this hypothetical “tipping point” is reached (shudder)?
Bloomberg
Fisher Says Fed Near ‘Tipping Point,’ Must Normalize Policy
April 08, 2011, 1:33 PM EDT
By Vivien Lou Chen
(Updates with Lockhart’s comments in sixth paragraph.)
April 8 (Bloomberg) — Federal Reserve Bank of Dallas President Richard Fisher said the central bank faces a “significant” risk of providing record stimulus for too long and should weigh curtailing its $600 billion bond-purchase plan.
“We at the Fed are near a tipping point,” the 62-year-old regional bank chief said in a speech today in Dallas. “Just as we pressed on in doing our duty through extraordinary, exigent measures, we must now discipline ourselves to just as persistently normalize our operations in a timely way.”
…
“We at the Fed are near a tipping point,”
Tip, please, tip. Right over the cliff.
Precisely.
People need to eat first not buy houses.
Tip hard enough and you get a total housing collapse. Then they can monetize the debt of the GSE’s but that still doesn’t reinflate the boom. If anything, it just sets the baseline a lot lower.
There’s a precise and exact reason Japanese land prices fell as much as they did. (Note: talking about land prices not stock prices — those are driven by a different set of dynamics.)
“…land prices not stock prices — those are driven by a different set of dynamics…”
Do our economic leaders in DC understand that difference in dynamics? All the evidence I can see sows serious doubts in my mind.
“…land prices not stock prices - those are driven by a different set of dynamics …”
But both these dynamics are driven by the flow of money. If the money flow stops then the price hikes stop.
Washington D.C. is driven by - what? - government spending money on itself? The money for government spending on itself comes from either taxes or borrowing - or both.
Ask yourself: Is the flow of tax revenues to Washington D.C. going to increase or are they going to decrease?
How about borrowed money? Is the rate of borrowed money flowing to Washington D.C. going to increase or is it going to decrease?
Yes? Then party on!
No? Then tighten your seat belts.
Maybe then DC prices will come back to normal, to where a $175K cottage in the sticks is the normal price, not the fixer-upper bank sale price.
The CB thugs are jawboning. They won’t raise rates nor will they remove “stimulus” until they’re confident they’ve blown enough air under prices to grossly high levels.
They are Liars and Criminals no different than Realtors.
“We at the Fed are near a tipping point,” the 62-year-old regional bank chief said in a speech today in Dallas.
Blah, blah, blah.
To anybody going long on the USD (Savers, future savvy speculators, etc.) I offer the following advice. Look beyond the hood ornament and you will see a giant waterfall ahead. Pay no mind to the daily minutiae. Get yourself something tangible with low, or if possible zero, carrying costs. Certain real estate can fill this objective as can PM’s. Something that can’t be created out of thin air.
If you’re stuck in the ‘fishball’ with no way out then try to get to the center where it’s relatively safe. If you have some mobility I would suggest you distance yourself post haste.
This advice is worth exactly the price paid.
FWIW
“To anybody going long on the USD (Savers, future savvy speculators, etc.) I offer the following advice. Look beyond the hood ornament and you will see a giant waterfall ahead. Pay no mind to the daily minutiae. Get yourself something tangible with low, or if possible zero, carrying costs. Certain real estate can fill this objective as can PM’s. Something that can’t be created out of thin air.”
Sorry, but I’m not playing right into Bernanke’s hand. That’s exactly what he wants people to do. What are you, a banker? Until wages increase in rapid fashion, there is no reason to part with cash which so few people have. I know you’re proud of buying MT land, but not everyone wants to catch a falling anvil.
“Until wages increase in rapid fashion, there is no reason to part with cash which so few people have.”
Say it again…
and again.
and again.
and again.
The ONLY threat to people sitting on cash is if our currency depreciates against other currencies, and foreigners come here to buy up all our assets (already happening).
If you own hard assets, you get to ride the wave of foreign purchases up. OTOH, if these foreign buyers never materialize because they are already “all in,” or because of a slowdown in their own economy, or if the dollar doesn’t depreciate enough against their currency, then sitting on cash is the right thing to do.
No matter what position one takes, we are all taking extremely high risks, and we have the Fed to thank for our dillema.
“What are you, a banker?”
Uhh, no.
“I know you’re proud of buying MT land, but not everyone wants to catch a falling anvil.”
If you think I’m thumping my chest you’re wrong, I am merely trying to shake up people’s thought processes. My current advice may seem wild to some (you apparently) as my housing bubble advice did to others many years ago, despite the overwhelming group think happening at the time. My friends and co-workers know how that worked out.
My post was directed at those who possess critical thinking skills. An ability to question why we do what we do.
My post wasn’t directed at you, GBear.
Apparently, it’s you who is lacking critical thinking skills. The fact is, your advice to people to play right into Bernanke’s hand, buying up land and houses at inflated prices is foolish. It’s better to stick the cash under the mattress right now, as the rate of decline in real property prices dwarfs the rate of decline in purchasing power of the dollar insofar as those hard assets are concerned. Sure, food and energy are up, but that only eats into the amount of money people are able to pay for shelter, so shelter will continue to fall in price. If wages start increasing rapidly, then your plan may have some merit. Until then, not so much.
Realtors Are Liars
what?
He said:
R E A L T O R S A R E L I A R S.
I forgot what I said. Please remind me.
And I am not sure, but I think I read somewhere that Realtors also yell at puppies.
So Jethro… you look at any more shacks lately? Anything on the radar?
Plenty of houses on the radar but they are all either vacant and not for sale or have people living in them who don`t seem to be in a hurry to leave. Probably because they have been living there free for three years and nobody is asking them to leave.
The only other possibility is the Fannie Mae house that the honest Realtor told me I was second in line, that is supposed to close on the 21st of this month. Everything else in a decent neighborhood is still overpriced, but dropping.
The Real Story:
Sure, everyone knows the headline when they woke up this morning was something about the government shutdown being averted and how this is great news, blah,blah. That is the big story. Or is it? I believe there is another story to tell.
I have a theory that those who are really in control of the giant manipulation that is “the Recovery” were forced to divulge the true dire consequences of a shudown as pertaining to the adverse effect of which would ruin the “scripted nature” of the orchestrated fake recovery. There are only a select few who are enlightend by the grand-plan orhcestrators (Soros et al.?) as to the true state of affairs and the precarious nature of how bad things REALLY are. I suspect that during the final few hours of closed-door negotiations last night, the real story was reluctantly revealed to important members of our government to sway the decision-making process. In other words, they had to let more people know the truth. The significance of such an event is huge because it is a common fact that the more people allowed in on a secret (corrupt scam, in this case), the greater the likelihood of the secret getting out. So, what appears outwardly to be a “victory” for the system actually was a huge leap forward in the name of the truth and justice we all deserve as reality emerges from the fog that is propaganda and lies.
You just don’t get something for nothing. Last night the “Banksters” paid a hefty bill from their stack of lies.
‘So, what appears outwardly to be a “victory” for the system actually was a huge leap forward in the name of the truth and justice we all deserve as reality emerges from the fog that is propaganda and lies.’
Your optimism is impressive!
* I forgot to mention that the actual significance of this event might or might not be apparent. Results may vary inside your head. Consult your physician before believing any of my theories. Avoid interaction with other prescription-strength conspiratory thoughts. Possible side effects include nausea, headache, and loud flautulence during presidential speeches. Tax, tag, and titling fees not included.
LOL!
I’ll take it one giant leap forward-
It was another massive “public relations” effort staged by the Fed that included both parties, the media and millions of stupid people nattering about “profligate government spending”, “abortions”, etc.
They managed to drive the deficit spending even higher and that is precisely what the Fed wants. In order to force paper dollars on the rest of the world(to maintain US and dollar dominance) they have to get them from somewhere so they must get those dollars domestically. Back stop everyone in the US with cheap credit(its still cheap), heap tax credits and cuts on US multinational corporations(Federal Reserve proxies) under the condition they use those dollars outside the US. Of course these massive tax credits tilt the balance sheet further into the red. This is precisely why nobody ever discusses the revenue side of the balance sheet and pander to the dumbest of dumb by yammering about ‘government’ spending.
There’s a paper war going on. That’s my theory and I’m standing by it.
The Fed still had to let more men in on their dirty secrets to make it happen. The cat is going to get out of the bag.
More FOIAs on the way? Or how about a tell-all Fed audit?
Look what excreter’s hate messages brought about….
Real estate agent killed on the job in West Des Moines
Quite sad, really — 27 years old, winsome, trying to make a living in a tough economy…Des Moines is not a place I associate in my mind with a high risk of homicide, either.
ABC5 News Staff Reports
Realtor Ashley Okland Dies of Gunshot Wounds
Posted: Apr 08, 2011 1:32 PM PDT Updated: Apr 08, 2011 8:59 PM PDT
West Des Moines police say 27-year-old realtor Ashley Okland died this evening from two gunshot wounds. Okland was shot in a relatively new, quiet neighborhood.
…
At 27, I wonder if she was a homeowner. I really have an issue with renters “coaching” those spending $100,’000’s of $1,000’s.
From watching that news segment, I think it was someone she knew. (i.e.loud arguing heard.)
Oy. Excuse me. 100’s of $1,000’s. I have a sleep deficit and need coffee.
X-boyfriend, perhaps?
Holy Toledo!
Published: 4/8/2011
Ohio, Michigan home prices dive in February
BLADE STAFF AND NEWS SERVICES
Ohio and Michigan home prices declined significantly in February, pushed downward by large numbers of sales of properties in foreclosure and other distressed situations, according to a price index compiled by a California real estate data firm.
In Ohio, home sales that included distressed property sales resulted in prices down 8.2 percent compared to the same month a year ago, said CoreLogic Inc., of Santa Ana, Calif. In Michigan, prices fell 11.1 percent. Nationally, prices declined 6.7 percent for all homes.
In metro Toledo, home prices decreased 11.9 percent in February when distressed and other sales were included.
…
Des Moines is not the same place since big business replaced $25 (in the 1980’s) an hour Americans with $12 (now) an hour illegal aliens in the meat packing industry. Parents were hardworking and relatively law abiding, children not so much.
Link on Iowa gangs: http://www.alipac.us/modules.php?name=News&file=article&sid=688
Also people should google a New York Times article on conditions in a kosher meat packing plant in Iowa.
Another busy day, so I hope everyone enjoys their weekend. I have to run.
Yeah, that was caused by exeter. I’m so sure.
Dead realtors don’t lie.
Poor butterball. Always hiding.
A home we’ve considered “settling for” (dry MLS for months) has fallen through escrow again (2nd buyer). Has anyone seen this before? We assume it’s a weak buyer again, or there is an inspection caveat. Any feedback?
(Nice home, good neighborhood, small- all pool backyard. The garage has a flat roof, which is bad for rain, we’ve been told. Other than that, nice.)
The realtor who has put some offers in for us told me yesterday that 1 in 4 that are financed falls through. We were discussing a house that we are the backup on that is supposed to close on the 21st of this month. I don`t know where she gets that number so take it however you want.
Someone wrote here that a deal fell through over a small amount of money so they must have been “buying on fumes”. As far as “Has anyone seen this before?” I see contingent turn to back on market all the time.
“The realtor who has put some offers in for us told me yesterday that 1 in 4 that are financed falls through….I don`t know where she gets that number”
Wasn’t it in the Yahoo article from about two days ago?
“Wasn’t it in the Yahoo article from about two days ago?”
Could have been, I had a rough week so I don`t know. But this is from Homepath today.
1252 WATERWAY COVE DR
WELLINGTON, FL 33414 BACK ON MARKET
List price:
$159,900
9765 KAMENA CIR
BOYNTON BEACH, FL 33436 PRICE REDUCED
List price:
$104,900
11157 MANDARIN ST
BOCA RATON, FL 33428 BACK ON MARKET
List price:
$174,900
5969 LINCOLN CIR W
LAKE WORTH, FL 33463 BACK ON MARKET
List price:
$95,400
Jeff
Thanks for this insight. We really were lead to most buyers were FHA 3.5% financing with low FICO scores, and with all the allowances, it was a sure thing. I appreciate your feedback. This house was a “contingent” status deal, which could mean a lot of things.
Awaiting,
We’ve been seeing a lot of BOMs here, too.
From what I’ve been hearing, getting financing is very tough these days (which is a GOOD thing!). Let’s hope that this trend continues, and that the govt doesn’t meddle and mess things up again with some hare-brained “stimulus” nonsense, again.
I’ve seen it a couple of times around here (Tempe AZ). A house I was interested in went pending about a week after I looked at it (I had decided at that point that I didn’t want it so hadn’t made an offer). A couple of weeks later it was back on the market–the buyer flaked out. Two other places, same story (on one of them when it was re-listed the listing read something like “back on market—buyer walked—REAL buyers please bring all offers,” which sounded a little desperate around the edges).
The lending landscape has changed. I’m in escrow on a 4/2 block ranch in Tempe. Very solid little place, 1800sf for $114,600, PITI on a 15 year fixed is $850/month, which is $500 less than my current rent on a place that isn’t as nice, so I figured it was time. My loan was approved, but even with an 800+ fico and 20% down they put me through a tea strainer, going so far as to ask the source of a $5000 deposit last November to the account I had identified as the source of my down payment (a friend had repaid a loan, but I had already answered so many questions and provided such volumes of documentation that for a rash moment I felt like telling them it came from a little drug dealing business I run on the side).
Just curious - what is the vacancy rate in that neighborhood on that $114,000 house. Is the house for you as occupant or will you rent it out? How many houses there are in foreclosure?
I like the area around Dobson and Warner in Chandler merely because I like the LA Fitness gym there (five lane indoor lap pool, I think it’s a metric pool - 25 meters, but I digress). You can get a 3/2, 1388 square foot for $85,000 in that neighborhood.
I also like parts of Tempe, but I’d be expecting to have some lower rung neighbors at the $115,000 price. Qual is $46,000 on one household income or two $23,000 household incomes. Construction worker and department store saleswoman couple. No college education, qualifies as neighbors. Read (Bud-drinking types).
Nice to see Phoenix area house prices below the 1990 levels of California where I bought a brand new one. But car prices have not gone down along with them. So it would be awkward parking a BMW 5 series, probably a $55,000 car, in the driveway of a house I could buy with cash for $85,000. Maybe a Hyunday Genesis? I have to spend my money on something eventually. Need to enjoy my financial independence and I’m not much into travelling except for work-related - overseas travel does not interest me one second unless it’s to Hawaii.
The sweet thing on that $85,000 house is the annnual property taxes are about slightly above $1,000 (2011 assessed). My municipal bond annual interest is $6,000, so it makes it all the better. Would be nice to have such relatively low expenses and still have more money in precious metals than the house is worth.
http://www.zillow.com/homedetails/2409-N-Longmore-St-Chandler-AZ-85224/8198460_zpid/#
That place isn’t worth $85k.
That place is a dump, and on the kind of street where your neighbors might be Mexican drug cartel members.
No, it’s for me, and the vacancy rate there is pretty low. It’s in the quadrant bounded by Price, Southern, and the US 60, and is right next to Banner Desert and Mesa Community College. It’s a small cul-de-sac at the end of Evergreen. The price is low because it needs some work–neighborhood comps for similar places in “move-in” shape run around $125-140. Structurally it’s extremely sound, new roof, etc., but the interior was last updated during the Carter administration and there are no appliances, so between that and some repair work (a chunk of the block wall in the back needs to be rebuilt) I’ll probably throw another $10K at it. When I was doing my inspection I met one of the neighbors walking his dog—he said he’s lived there since the early 70s, and it was very quiet and stable (but I already knew that–I have a friend who’s been in that neighborhood for years). The neighborhood I’m in now is very similar (McClintock and Southern), and is a mix of college students, older types (guy next door to me is a prof at ASU and has lived here for years), and younger couples with children. Most neighborhoods in Tempe tend to be that way. I specifically tried to avoid north Tempe (north of Rio Salado), which is kind of a pit, and stuff on the west side and immediately around ASU. Values go up as you go south, but then it gets into all that stick-built stucco HOA subdivison stuff that doesn’t interest me much, though I’ll admit some of those houses are quite nice inside.
I use LA Fitness at Mill and Southern–they also have a decent pool.
$125 to $140 a foot is way inflated for that area. When the move-in-ready houses are selling for $75 a foot, that’s more like it. One of the main attractions of the greater Phoenix area was always the cheap land and low housing prices. Don’t compare today’s prices to bubble highs, but rather their historic lows, to gauge what kind of buy you are getting. .
A property description on the MLS by a Realturd started out with… “I thought I had this thing sold.” Young and dumb?
And besides, it’s not a “thing”, it’s a “home.” /snark
Robin-LOL
Evidently, that Realturd didn’t understand the concept of communications.
talon,
Thank you, too. I could not believe what crap your lender put you through w/ a 20% down, and an excellent 800+ FICO. You would have been treated better as an FHA 3.5% down, no skin in the game buyer. How insane.
I am happy for you, and the best of happiness and health in your new home.
We’re cash (been priced out until now to re-enter in So Ca, but still think the market is too high) and this house is $225/sf. $425K for a $276K 1994 price tag. We like the house a lot, but the yard is all pool. Decisions…Decisions. We’re paying multiple rents.
How are you paying multiple rents?
How tempted are you by that house (love it, so-so, really settling), Awaiting? It would be so exciting if you finally found the right house!
talon
Thank you. I posted a reply to your post, but I am waiting to see if it shows up….
If not, check tomorrow’s HBB.
The price of food in Virginia is at least 30% higher than out west. Does anyone have any ideas on why that may be? One possibility is that the west benefits from excess food being shipped in from Mexico at low prices. I’d like to know if there are other possible reasons that anyone on here knows about.
Are you in Northern Virginia, Richmond, Southeastern Va or somewhere else in the state?
I’m in Southeastern and food prices have been going up pretty rapidly recently. We’re also getting more stores (and demand for stores) that sell higher priced foods.
It really doesn’t have anything to with Mexico. Shipping is just as easy to the east cost as the west. Physical cost are slightly higher, but not significantly.
What it DOES have to with is the difference in the distribution structures, i.e. the middlemen, who can raise costs from shipping to buying and selling. Essentially, all up and down the prodution line.
Price of food in Virginia is a lot lower than it is in Chicagoland. That’s for sure.
I’m guessing around DC?
Like everything else, that’s where the money is. Gotta make the profit where you can, those $12/hour schlubs eating spaghetti and ketchup out here in BFE aren’t going to be able to pay the freight.
No, I’m not in a high-cost area. The price of food is disproportionately high. Don’t see how it could be higher in Chicago. The prices here are almost high enough to induce dieting.
Good morning Hbb,
I would appreciate any advice from the brilliant minds here at Hbb. Thank you all in advance.
Here is the update on the building we bought in October 2010 at the County tax sale. We have put in a new kitchen, updated 2 bathrooms, constructed 2 new offices, and replaced the old hot water tank. I contact the local utility and joined with their a smart watt energy program where they paid 70 percent of the cost and have replaced approximately 80 lights fixtures with new fixtures and bulbs. We have painted the entire building and replaced the carpeting in the offices. We have installed new fire extinguishers, hardwired smoke detectors, as well as new light fixtures on the outside of the building. I have installed a new adt alarm system and a video recording system in the inside of the building. The cost of these renovations has been in the range of about 55K. All paid for cash
Now here is the interesting part. I contacted the title insurance company to get the title to the property. This is the same company that handled all the foreclosure documents for the county. They informed me yesterday that the mortgage lender is litigating with the county and hence they could not issue me a title. The county has yet to inform me about this matter. The county filed the deed in my name as of Dec 22 2010.
What are my legal options? Can the county void the sale to me and give the building back to the mortgage holder? Any help about what to do is really appreciated. Thank you
This is very confusing. They should be able to issue you the title, whether there is litigation or not. There is no way that a judge will reverse title on real estate that was bought and paid for. If someone has a claim, then someone else will be on the hook to pay them for it.
But the fact that they will not issue you the title, even though you have a DEED is very disturbing.
I am sorry about the mistake what I meant to write was title insurance cannot be issued. This is the same company that claims that the proper procedures were followed on behalf of the county. The county attorney spoke to us in Dec 2010 and mentioned that the mortgage holder decided not to follow the foreclosure on their end. The sale took place on Oct 22. The county attorney delayed filling the deed until Dec 22 to resolve this issue and then they recorded the deed.
The county attorney didn’t record the deed until TWO MONTHS after the sale? Wow. That is not normal, is it? That would freak me out. Well, I certainly hope that the lender is not allowed to come back now and suddenly slap their lein back on your property. I don’t think they would be allowed to do that, would they?
I am not sure and before I approach the County attorney I wanted to get the wise opinions of Hbb. Thanks for your help
“……title insurance cannot be issued……”
Nobody wants to “insure” the title…….maybe because the title insurance companies have heard about MERS?
I would be high-tailing it to a good attorney.
+1
X2
Man, another roller coaster 24 hours. Yesterday I learned of paycuts, today my LL tells me we’re cool to stay at the same price. I can’t believe it. That’s a serious freakin’ relief.
Congrats on the rent…condolences on the pay cut.
Seems unusual, as the approach to budget crunches at the firm level is typically limited to a choice between layoffs and furloughs.
Of course, a furlough is just a pay reduction with commensurate reduction in hours at work, but typically the same expected output…
Muggy,
Sorry to hear about your pay/benefit cuts. Not much you can do about it right now, unfortunately. Good thing you are renting, instead of being a “homeowner” with fixed costs.
That’s one of the reasons we’re still renting — there’s a good chace we’ll be seeing a ~25-35% cut going forward, and I’m worried about fixing our costs WRT housing. As a renter, you can always move or downsize to something cheaper. That flexibility is invaluable, IMHO.
Glad to hear your LL isn’t going to hike your rent. They shouldn’t be raising rents right now, anyway. With commodity prices going up (food and energy, in particular), and healthcare costs going up, there is LESS money left over for housing.
I would like to dedicate this rewrite to all the victims who have cut off their toes while cutting the lawn or fallen ill and lost their job or grown a third ear right on their forehead which caused a job loss and rendered them unable to make a mortgage payment for the last 3 years.
Born Free
Rent free, as free as the wind blows
As free as the grass grows
Don`t pay and follow your heart
Live free, and beauty surrounds you
The world still astounds you
Each time you buy a new car
Stay free, where no walls divide you
You’re free as a roaring tide
So there’s no need to hide
Rent free, and life is worth living
But only worth living
Cause you’re rent free
Rent free would be great if you don’t have to pay! $920 tax free income would cover one of the places I rent. Muni bond and savings bond interest/income does cover it. But the other rent is about $920 too!
Jeff Saturday mention empty houses in a previous post so this is in reply to him and worth noting generally speaking;
I’m starting to see more evidence to substantiate that the shadow inventory is much larger than we though. I’m including defaults and delinquencies where the debtors are still in the house. Just for $hits a giggles, we heard from two different couples today. Neither have made a mortgage payment “in months”. The bank is not making any moves in either case.Wifey and I were out riding around on the first rain free mild day of the year and saw quite a few empty houses without for sale signs around here.
We are interested in 5 different places in 3 states and every single one of them either;
A) The debtor defaulted and is still living in the house
B) The place is empty and the bank has not made any effort to sell the house
Can anyone speak to what’s going on with this banks and what their gig is?
“I’m including defaults and delinquencies where the debtors are still in the house.”
That part is a bit hard to assess, along with the part of vacant houses where the owners (e.g. banks) ‘pay someone’ to live there (say through deeply discounted rent) in order to make it appear to be owner-occupied.
We have a few housese in our neighborhood that have already been foreclosed on 1-3 years ago, and are still sitting there empty. This is in a fairly strong area, and a small-ish neighborhood. I’d hate to see what it looks like in some of the rougher areas.
What’s the difference between “preowned” and used?
philly dot com
Vacation-home sales continue to fall
April 08, 2011|By Alan J. Heavens, Inquirer Real Estate Writer
Second-home sales made up about 40 percent of the preowned-homes market…
Sales of vacation homes in the United States plunged in 2010 to about half the record number reached in the real estate boom years of 2005 and 2006, research by the National Association of Realtors shows.
Last year, such sales fell to 543,000, down 1.8 percent from 553,000 in 2009, the data show. Sales of primary homes declined as well, down 5.6 percent in 2010 to 3.81 million, from 4.04 million the previous year, the Realtors association reported.
During the housing boom, vacation-home sales peaked at 1.07 million in 2006, up from the 1.02 million sold in 2005. During this period, sales of primary homes stood at 5.02 million in 2005 and 4.82 million in 2006, the Realtors association data show.
Damn weather keeps mussin’ up my housing recovery!
Home sales in eastern Connecticut at lowest level in nine years
By Lee Howard
Publication: The Day
Published 04/09/2011 12:00 AM
Updated 04/09/2011 02:22 AM
The last time the region’s real-estate prices were lower than this, it was 2002.
Median single-family home prices in New London and Windham counties hit their lowest level in nine years during the first quarter of this year, according to new figures released Friday by the Norwich-based Eastern Connecticut Association of Realtors.
The median single-family price of a home sold in the region dropped to $182,000 in the first three months of this year compared with the same period last year. That’s down nearly 13 percent from the 2010 first-quarter median of $209,000.
“There were a lot more sales in the low end compared to last year,” said John Bolduc, chief executive of the Realtors association. “Short sales and foreclosures had the effect of dragging the median and average (sales price) down.”
The down market hurt Windham County - which recorded a 13 percent drop in single-family home prices - worse than New London County. New London County homes saw a price drop from $225,000 to $205,000 - or 8.9 percent.
In 2002, the last time home prices in the first quarter dropped lower than they did this year, the median was $163,000. In 2003, the first-quarter median was $185,000.
Bolduc attributed the lower prices this year to a lack of consumer confidence and a harsh winter.
“In January and February, nobody went anywhere,” he said.
…
Pent-up demand? TRY PENT-UP FEAR!
Home sales plunge 6.5%
Weather, weak consumer confidence take toll
By JAMES MOSHER
The Bulletin
Posted Apr 08, 2011 @ 11:33 PM
Last update Apr 08, 2011 @ 11:36 PM
REGION —
Home sales in the largest segment of the Eastern Connecticut market fell 6.5 percent in the first three months of the year as harsh winter weather and weak consumer confidence took their toll.
The number of single-family homes sold in New London and Windham counties fell to 501 in the first quarter compared with 536 in the year-earlier period, the Eastern Connecticut Association of Realtors reported Friday. The median price in single-family home sales fell 13 percent to $182,000 from $209,000, the Norwich-based association said.
Sales of cheaper accommodations soared, with mobile home sales growing 54 percent, to 20 from 13, in the quarter and foreclosure properties readily available. Sales of “high-end” homes were considerably lower, association CEO John Bolduc said.
“The biggest part was the harsh weather,” he said. “In January and February, nobody was going out and buying houses. Also, the uncertainty over the state budget is hurting consumer confidence.”
The second quarter, which runs from April through June, is traditionally the strongest home sales period of the year. Second-quarter statistics may be even stronger this year because of “pent-up demand,” Bolduc said.
…
Home prices are quite affordable now in many cities — below 2000 levels, in fact!
Metro Detroit home prices among most depressed in U.S.
8:58 AM, Mar. 29, 2011
BY GRETA GUEST
DETROIT FREE PRESS BUSINESS WRITER
Metro Detroit home prices remain the most depressed in America, according to data released this morning.
The S&P/Case-Shiller Home Prices Indices through January indicated a 3.1% drop compared to January 2010 in the nation’s 20 largest cities.
In metro Detroit, the drop was more substantial – an 8.1% decline in home prices in the past year through January. Prices fell by 1.7% from December to January, according to the data.
Atlanta joined Cleveland, Detroit and Las Vegas as markets where home prices are now below their January 2000 levels. In metro Detroit, the decline is 34% from its 2000 level while the other cities home prices are less than 1% below their 2000 levels.
“Keeping with the trends set in late 2010, January brings us weakening home prices with no real hope in sight for the future,” said David M. Blitzer, chairman of the index committee at Standard & Poor’s.
…
Cry me a river…at what point did expensive loan ownership become an entitlement?
Proposed federal rules would drive many out of market for home loans
By Kenneth R. Harney, Friday, April 8, 2:27 PM
You may have seen reports that the federal government is proposing new mortgage finance rules under which only home buyers who can afford a minimum 20 percent down payment on a conventional loan would get a shot at the best available interest rates and terms.
That is correct, and it’s deeply sobering news for large numbers of first-time and moderate-income buyers who can’t come up with that much cash or afford to pay higher rates.
But some of the requirements that federal agencies and the Obama administration are proposing in the same plan have gotten much less attention, yet could prove just as troublesome to consumers:
Strict mandatory debt-to-income limits. Under the proposal, to get the best mortgage rates, you would need to spend no more than 28 percent of your gross monthly income on housing-related expenses, and you couldn’t have total monthly household debt that exceeds 36 percent of your income.
There would be no flexibility to go beyond those ceilings, unlike in today’s marketplace, in which Fannie Mae and Freddie Mac consider debt-to-income ratios along with other factors through their electronic underwriting systems. Freddie Mac, for example, has an overall debt-ratio limit of 45 percent of an applicant’s stable monthly income.
…
LOL!
It’s taken them this long to read the HBB and use the standards we’ve been suggesting all along?!