The Housing Bubble

hello…..

we’re interrupting this broadcast to bring you breaking news from phoenix:

ZIP inventory passes 45k!

(45,350 give or take a few thousand)

Check out the bright red walls in the dining room. You will have to click on the ad for the pictures. Eery

Check the blood on this wall. LOL Grin

Pretense of more people’s future.
Wouldn’t that bright red wall enhance your daily dining experience.

http://www.craigslist.org/eby/rfs/159370860.html

$439000 - APPRAISED FOR $465,000 Instant Equity (vallejo / benicia / fairfield)
Reply to: hous-159370860@craigslist.org
Date: 2006-05-10, 10:19AM PDT

3Bd 2Ba home with 2 fireplaces, with 1,776 square feet of living space. Remolded bahrooms. Separate living, family & dining rooms. Fresh interior paint, crown molding & laminate floors. Lot size 6,534 built in 1981. Motivated seller may help out with some closing costs.
MLS# 20606470
Open house Saturday May 13, 2006 from 12:00 Noon to 2:00PM
1409 Klamath Drive
Suisin City, CA 94585

Agent
Mark Frazitta
Kappel & Kappel, Realtors
(707)344-4199

1409 Klamath Dr at Mammoth

Gotta love the “Boston/Fairfax Shed”….

http://washingtondc.craigslist.org/rfs/160018560.html

Somebody standing to lose a ton of pumped up equity.

http://www.craigslist.org/pen/rfs/158900464.html

16528 - ► Pre-FORECLOSURE Property: 30 Santa Felicia Ct. (4BD/3BA)◄ (burlingame)

——————————————————————————–
Reply to: see below
No contact info listed below? Let them know.
Date: 2006-05-08, 8:36PM PDT

30 Santa Felicia Ct., Hillsborough
Single-Family Residence (SFR/House)
4BD/3BA, 3,890 square feet, 0.91 acre lot size (39,814 SF)
Approximate Default (”Delinquent”) Amount: $16,528
Loan Amount: $557,000
Zillow.com estimate of value: $3,473,519
Trustee: East-West Investment Inc
Trustee Sale Number (TS#): A337239-CA
Trustee Phone Number: Please refer to free online report
Lender: Carmen Benavides
Lender Phone Number: Please refer to free online report
Loan Doc#: 000000184915

INSTRUCTIONS for Interested Parties:
Call the trustee and lender, referencing the trustee sale and loan numbers.
To learn how to obtain the phone numbers, please access the free online report.
Additional information about the property may be found at the office of
the San Mateo County Recorder.

Free Online Report: “The Truth About Foreclosures”

Broker

Santa Felicia Ct at Tobin Clerk Dr google map yahoo map

no — it’s NOT ok to contact this poster with services or other commercial interests

158900464

The Boston shed posting is hilarious. One of us bubbleheads. Read carefully to see his great style of sarcasm for the ridiculousness of the price for all housing.

Hey, Rainman18 - we are awaiting another appearance from Bubbles. Hope he will be showing up soon. Your eager audience that needs a great laugh.

From the Department of Commerce: “The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that total March exports of $114.7 billion and imports of $176.7 billion resulted in a goods and services deficit of $62.0 billion, $3.6 billion less than the $65.6 billion in February, revised. March exports were $2.1 billion more than February exports of $112.5 billion. March imports were $1.5 billion less than February imports of $178.2 billion.”

The good news is the USA trade imbalance blipped down. The bad news that this is an indicator that our dollar hegemony is ending. Our ability to consume more than we produce is being curtailed and perhaps a trend is beginning: some of the world’s poorest people will no longer be lending their savings to enable the world’s wealthiest people to buy their goods.

Heck, will all the capital we’ve transferred to them, their purchasing power will supplant, perhaps replace ours sooner than we imagine. But this is a down the road tangent of the potential unravelling. How inscrutable are the Chinese? And, how far down the road are they planning? It’s likely longer than we seem to be doing.

None the less, we invented the model. Recall all the loans that our largest banks made to third world countries to finance the export of our capital goods (weapons’ systems, resource extraction, massive engineering projects, etc). Recall how the defaults were socialized here at home (government bailouts of banks that were “too big to fail”) and foreclosed abroad (draconian fiscal and monetary restraints imposed on debtor nations.)

Is this a preview? I’m not too sanguine about more rosey scenarios.

So, I would love to know how much this poster expects a new GF to lose each month on three houses that look like mobiles home for a $900K+ mortgage? 310 posted “reduced” on CL for SFBay

http://www.craigslist.org/pen/rfs/160133515.html
$931500 - Tri-Plex in Mountain View. One unit w/ fireplace & private yard (mountain view)
Reply to: hous-160133515@craigslist.org
Date: 2006-05-12, 11:16AM PDT

1668 California Street. Mountain View, CA

The California Street Tri-Plex offers an investor a unique opportunity to acquire an extremely well-maintained property in one of the healthiest rental markets on the Mid-Peninsula. The subject property is a 3 unit Tri-Plex equipped with wall furnaces, wall to wall carpet, and large eat in kitchens. The property has one double car garage. There is an additional two car carport in the rear of the property, as well as plenty of street parking. One unit has a fireplace and a private yard on the back side of the property.

This property features an exceptional Mountain View location on California St. The California Street Tri-Plex was constructed in 1957 and consists of approximately 2,138 square feet situated on a 7,405 square foot lot. The property benefits from an attractive unit mix of (1) large 3bd/2bath owner’s unit and (2) 1bd/1bath units. These units do not share any common walls and offer the residents reduced noise as well as privacy.

The property has been owned and been maintained by its current owner for the last four years. This offering provides a buyer an incredible opportunity to get a strong asset in an even stronger rental market. This opportunity will not be available for long.

Please call Scott Kilpatrick at 650-868-0738 for more information or Monica at 650-494-8900 x429 for a complete Marketing package.

Regarding Phoenix,
Do I hear 46,000 - 46K
Do I hear 47K
48K
49K
50K - sold to the Greatest Fool for 50K - oops, now 51K, no money left,

Listening to Rush Limbaugh on the radio. He just said that Hillary is backing a $1B proposal to build tens of thousands of low income housing across the country with high speed internet to help them out. What a frickin’ joke.

Some mortgage scumbags trying to use CL to continue toxic mortgages.

http://www.craigslist.org/nby/rfs/160081064.html

Cut your mortgage payment in HALF!
Reply to: get_your_home_loan@msn.com
Date: 2006-05-12, 9:00AM PDT

Cut your mortgage payment in HALF!

With our 1.25% loan you can cut your mortgage payment by half! A $500,000 loan at 7% interest for 30 years could cost you $3,326.00 a month. With a 1.25% interest rate that payment could be reduced as low as $1,666.00 That is a savings of $1,660.00 a month!

If you have a credit score of 680+ with $5K - $10K in the bank contact us today for fast and easy application approval!

Send us your phone number and we will have our broker contact you directly!

We can close on your loan within 15 business days! We handle a high level of loans but you will find no GRIDLOCK stress with us. WE ARE THE PROS!

*The loan origination fee will be waived for all applicants who send back the paperwork today!*

I am not making any political judgment directly on Rush or Hillary. Just stating that Rush said Hillary was backing a proposal to build hi-tech housing for low income. My opinion of the project, based on what I heard (which is obviously not complete) is that it will turn into a political morass and be an expensive boondoggle to taxpayers. The free market should be doing this. That is all for me.

Houses need an advantage now
As market slows, here are budget-conscious ways to spur sale
By Rachel Koning Beals
Last Update: 7:42 PM ET May 11, 2006

http://tinyurl.com/j7fd4

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Here are two pages of breezy commentary on sellers can cope with the fact that demand has fallen off the roof. Not included among the myriad suggestions: LOWER YOUR LIST PRICE!

Politics is a profession. Politics cannot be gamed from the outside. Politics is no place for amateurs. When elephants fight the grass gets trampled. Stay away from fixed games.

I have a request. Does someone have a link to a news story that showed the percentage of stated income loans? Now don’t quote me, but IIRC, it was from data from LoanPerformance that showed that more than 60% of loans in Southern California in the past year were stated income. I don’t think I have all the qualifiers correct (for instance, it could have been 60%+ of the ARMs, 60%+ of the I/Os, etc.).

I can’t find it through Google, Google News, through this blog’s search feature, or by Googling this blog.

I’m interested in this because, if true, it would be convincing evidence that lack of integrity and lack of fiduciary responsibility have driven the blow-off phase of this bubble.

Anyone have a pointer? Thanks in advance for any info.

here is my entire bucket of goodies. my sort of best of the housing bubble list of articles.

#1 National Real Estate Investors’ Conference at BWI this week drew about 500 people, and many of them hopped on a bus to Baltimore for a tour of potentially lucrative investments

#2 Historical Census of Housing Tables
Home Values

#3 Even in the county’s toughest neighborhoods, we couldn’t find cheap housing

#4 After a holiday slowdown, the Super Bowl each year marks the start of housing’s prime season.

#5 Average US House Prices Measured In Ounces Of Gold Or Silver

#6 Supply Hits High In Condo Craze

#7 If you want to buy my house, you have to feed the squirrels.

#8 In come the waves(from the economist)

#9 Housing bubble’s burst could cost 1 million jobs and cause a recession, experts say

#10 From Dutch history, a real estate lesson
By Russell Shorto

#11 Analysts eye Miami’s condo boom, raise a ‘more risk’ sign

#12 Attention, Speculators: Here’s a Lesson from Hong Kong’s Housing Bubble

#13 Rich House, Poor House
Financial guru Robert Kiyosaki has turned bearish on the boom he helped create

#14 Real estate: When booms go bust…
Home prices can and do go down. Here’s what declines have looked like in the past.

#15 Real estate clubs ride the housing boom

#16 Global credit ocean dries up

#17 Understand risks of ‘creative’ loans

#18 Renting versus buying

#19 Real Estate Rebound
After a long, painful slide, housing prices around the Bay Area — especially in certain zip codes — are finally heading back up
Jonathan Marshall, Chronicle Economics Editor
Sunday, April 9, 1995

#20 Pension funds play catch-up with high rise of real estate

#21 As real estate market cools, ‘buys’ return

#22 Selling Condos? “The DJ’s Got To Be Really Good”

#23 Looking For A Condo? Grab A Sleeping Bag

#24 buyers are sending flowery bios, pictures, and letters to sellers

#25 The Housing Bubble Made Me Quit My Job

#26 L.A. banks strongest in nation, report concludes(Sept 10, 1990)

#26 50-year mortgage debuts in California

#27 Pension funds play catch-up with high rise of real estate

#28 Do you like being broke? Keep renting

#29 High housing prices helped slow population growth last year

#30 America’s borrower-industrial complex

What do you do when you after 300 days your house still hasn’t sold? Drop the price? No way - you increase it by $60,000!! In other words, every day your house gains $200 in value.

http://www.ziprealty.com/buy_a_home/logged_in/search/home_detail.jsp?listing_num=DC5317799&page=1&property_type=CONDO&mls=mls_baltimore&cKey=32mvr29k&source=MRIS

own a home?

read it and weep:

http://biz.yahoo.com/weekend/remyth_1.html

News story on local Syracuse news station: the rash of fires in empty homes in the area

here ya go, don’t bother with the link. this is good

very, very good

” Real Estate
Unmaking the Myths
FORTUNE on CNNMoney.com
By Shawn Tully

Real estate survival guide: The sudden shift in the nation’s housing markets is exploding some long-held beliefs. Here’s the conventional wisdom you should ignore.

NEW YORK - The sudden shift in the nation’s housing markets is exploding some long-held beliefs. The first is that a scarcity of buildable land on the coasts keeps a cap on supply and prevents prices from falling.

But high prices inevitably work their magic, encouraging more people to sell existing homes and sparking new construction. Sure enough, prices are already tumbling in Boston, where a swarm of downtown condos is swelling the number of properties for sale and punishing the price of all housing.

A second myth is that today’s big homebuilders learned their lesson in past downturns and now launch projects only when they have firm buyers lined up. But housing starts are still running at near-record levels of some two million units a year.

Go to CNNMoney.com to see which markets are hot and which are not.

Big builders, notably D.R. Horton and Pulte Homes, are starting 20 percent to 30 percent of their units on spec, without signing up buyers in advance. Risky move.

A third tenet holds that home values never drop in areas where employment is rising. But today some of the hardest-hit regions rank among the strongest job machines, notably Northern Virginia and San Diego. The reason: Young buyers filling those jobs can’t afford the houses for sale. (See a gallery of markets that are due for a fall, and ones that will hold up.)

The current boom has spawned one new myth of its own: Hot markets will glide to a soft landing. The National Association of Realtors and the National Association of Home Builders argue that housing is simply returning to “balance” and that prices across the country will resume “normal” increases of 4 percent to 6 percent this year and next.

“It’s a good sign to see home sales holding close to the level of a strong rebound in the month before,” said David Lereah, the NAR’s chief economist, in a statement accompanying the latest data. “This is additional evidence that we’re experiencing a soft landing.”

But the housing bulls are relying on wishful thinking. The total inventory of homes for sale, new and existing, stands at a staggering 3.8 million units, 70 percent higher than in 1999. The modest price increases they are predicting would make today’s houses more unaffordable, adding to the already huge supply of unsold units and forcing an even more severe adjustment in the future. ”

there’s more in the clip, but you get the picture

John and cereal: interesting stuff; thanks.

Hi! Can anyone give me some bubble or non-bubble facts on Albuquerque, NM? I have a friend planning to move there and housing is well within her price range, but she is willing to hold off if you think the market correction will be large. (I.e. 15% or more decreases.)

Thank so much!

Denver metro MLS listings of single family homes plus condos topped 30,000 this week for the first time.

I’ve been tracking the numbers for close to a year. Last June they were about 25,000.

“$529000 - investment house in great community!! $2000 income. perfect 1031!!!!”

http://washingtondc.craigslist.org/rfs/159801482.html

Let’s make a few optimistic assumptions…
$529,000 price tag
20% down
30y fixed of $424,000 @ 6.0% = $2542/mo
renter paying $2000/mo

So even before taxes, maintenance, etc., you’re losing $542/mo.

Since when was that a great investment?

1 in 4 Mortgages have “problems”
http://www.dispatch.com/emailme/emailme.php?story=dispatch/2006/05/11/20060511-C1-03.html

Dominion defaults vary by lender
Government auditors found problems with 1 in 4 mortgages
Thursday, May 11, 2006
Geoff Dutton and Doug Haddix
THE COLUMBUS DISPATCH
TODAY’S COVERAGE
Dominion defaults vary by lender
Government auditors found problems with 1 in 4 mortgages
Graphic: Defaults by Dominion partners
Builder says it will stay course
FROM THE ARCHIVE
Brokered Dreams
A Dispatch investigative report

All three lenders have given mortgages to hundreds of Dominion Homes customers.
All three are bound by the same federal guidelines for writing government-insured loans.
But Dominion customers have succeeded or failed at dramatically different rates, depending on which lending partner underwrote their mortgage, according to a Dispatch analysis of Federal Housing Administration loan data.
The U.S. Department of Housing and Urban Development, which administers the FHA loan program, cited Dominion on April 26 for 49 violations of lending standards. HUD found a problem with more than one of every four of the 151 Dominionoriginated loans it pulled at random.
Problems included overstating the buyers’ income, enticing them with improper incentives and failing to verify their employment.
Dominion’s customers default on FHA loans more than twice as often as other FHA borrowers, plaguing some subdivisions with foreclosures and tapping the government insurance fund to bail out Dominion’s lenders.
HUD, which criticized Dominion for similarly sloppy FHA lending in two previous audits, gave the Dublin-based builder 60 days to respond. After that, HUD will decide whether to take further action, which could include a fine, expulsion from the FHA program or a requirement that Dominion cover any losses on improper loans.
And for the first time, HUD said it will seek answers from Dominion’s lending partners. Dominion processes mortgage applications for its customers, and lenders approve or reject them.
The loans flagged in the audit involved three of Dominion’s partners: Colony Mortgage, Huntington National Bank and National City Mortgage. National City has stopped accepting Dominion loans, and Colony Mortgage’s business with the builder has dropped sharply after tightening lending requirements.
A total of 1.9 percent of Dominion buyers with Huntington loans fell more than three months behind on their mortgage payment within the first two years. That’s a far better rate than the 6.2 percent who defaulted on all FHA loans statewide during the two-year period through March 31, according to a Dispatch analysis of Neighborhood Watch, a national database of FHA loans.
The default rate was 16.1 percent for Dominion customers with loans from National City Mortgage, based in Miamisburg, near Dayton.
Colony Mortgage had the highest rate: 22.3 percent.
FHA tracks loans that default within the first two years because they indicate poor screening of borrowers, not just job losses and fluctuations in the economy.
Different default rates among lending partners reflect varying business practices, said William G. Cornely, Dominion’s chief financial officer.
Some lenders seek a high volume of loans, which include higher-risk borrowers, he said, while others focus on quality loans to lower-risk customers.
As a mortgage broker, Dominion regularly submits loan applications to various lenders, he said. Dominion does not bundle and route higher-risk borrowers to particular lenders.
“We’re going to find the best economic deal for the customer,” Cornely said.
However, the president of Colony Mortgage characterized the Dominion customers sent his way as “marginal” buyers.
“We watched this all along, saying it’s a very small number with a lot of defaults,” said David Dillen, president of the Cleveland-area mortgage company. In 2005, I said, ‘Enough is enough.’ ”
At that point, Colony tightened its lending standards and added financial counseling for customers.
“You have to remember, they (Dominion) were putting these loans together; we weren’t,” Dillen said. “We were just underwriting them.”
Business with Dominion has dropped significantly since Colony’s tougher standards took effect. Colony handled 245 Dominion mortgages in 2004 but only 109 in 2005 and 16 so far this year, Dillen said.
He attributed the high default rate among Dominion customers to the company’s “aggressiveness to sell houses” and programs permitted by HUD such as down-payment assistance to buyers without savings.
National City Mortgage severed its relationship with Dominion in 2004, partly because of high defaults, said Jack Konyk, a senior vice president of National City Bank.
It’s fairly common for HUD to contact lenders when questions arise about mortgages originated by another party, such as Dominion Homes, he said.
“We’ll chat with them and answer their questions,” Konyk said. “They need to put the whole picture together.”
Although lenders use the same automated underwriting system to process FHA loans, the process relies on the careful monitoring and judgment of lenders. There’s not a lot of day-to-day oversight by HUD.
“That’s exactly why HUD comes in and does audits of all of us,” said James Baron, a Huntington executive vice president and director of home lending.
Dominion officials acknowledge that brokering mortgages hasn’t been the company’s strong suit. So, Dominion is turning over control of lending to Wells Fargo in a new venture called Centennial Mortgage.
Dominion’s customer defaults haven’t always topped the state’s rate. In March 2003, Dominion’s default rate of 4.4 percent fell just below the state average

Coldwell pushes price cuts: Brokers told to pressure house sellers
By Scott Van Voorhis
Thursday, May 11, 2006 - Updated: 08:28 AM EST

The Bay State’s biggest real estate agency has one message for its brokers: sell, sell, sell.
Coldwell Banker Residential Brokerage, which controls a network of 3,800 agents across the state, wants brokers to lower prices to match current demand in an aggressive push to spark languid home sales.
Coldwell has begun routinely meeting with sellers whose homes haven’t sold after a month or so, said Mark Lippolt, a top Coldwell Banker executive. Among the items on the agenda: price reductions.

This and other moves by Coldwell, a national firm which controls nearly 20 percent of the state’s home sales market, are being watched closely by both competitors and other industry watchers.
Given the company’s size, the push could help reduce a huge backlog of unsold homes, though some executives also fret it could develop into a sell-at-any-price mentality.
“Having a big leader, a very big player lead the charge will get a lot more people on board,” said economist Nicholas Perna.
Among Coldwell’s new tactics: urging brokers to take a more realistic stance on prices with home sellers, asking them to only use comparable sales from the last three months.
Meanwhile, the real estate giant is now rejecting listings from some would-be home sellers if their price expectations are too high for an emerging “buyers’ ” market, said Lippolt.
The moves come as Coldwell’s publicly traded parent company, NRT, reports a 13 percent slide in first quarter sales in New England, California, Florida andother previous hot spots. NRT owns a number of franchises, including Coldwell.
But some executives, while largely welcoming Coldwell Banker’s new approach, say the emphasis on more realistic pricing holds both promise and peril for a market in transition.
“I think it helps loosen the roadblock of unsold properties if it is done in a responsible manner,” said Sue Hawkes, managing director of The Collaborative Cos., which helps market high-end residential real estate projects. “If it’s done in a wholesale crash and burn (manner), I don’t think it benefits anyone.”

Ever want to own an 8-unit condo building in lovely SE DC? Only $2mil…

http://washingtondc.craigslist.org/rfs/159935929.html

The picture seems a little…off.

Merrill Makes Pinprick in Housing Bubble Hysteria: Joe Mysak
May 10 (Bloomberg) — States and localities are going to raise cigarette taxes, sell more assets like toll roads, make gambling legal where it’s not already, and rely more on revenue and special assessment debt as the housing boom goes bust, and property taxes dwindle.
These are a few of the more likely conclusions to the nation’s 13-year real-estate boom, according to a new Merrill Lynch & Co. report on the housing bubble’s implications for the municipal bond market.
The 40-page report by Kurt van Kuller is a nice antidote to the inevitable hysteria surrounding the end of the bull market in real estate. Anyone who has visited a bookstore or magazine stand lately has seen the usual crop of alarmist titles and headlines screaming about how we are all going to go broke.
Hysterics make good storytellers and lousy forecasters.
“The unprecedented surge of inflation-adjusted housing prices is unsustainable,” writes analyst van Kuller. “Whether the national housing markets are due for a crash is another question. Unlike stock prices, house prices tend to resist rapid downdrafts.”
What are we really in for? Slow deflation, says van Kuller, along with some regional busts.
Price Appreciation
This report is stuffed with useful charts and tables that illustrate the housing boom. One of the more interesting charts compares the 10 states (van Kuller also adds the District of Columbia to the list of states) that had the most house-price appreciation from 2000 to 2005 with the 10 states that showed the least price appreciation.
The District of Columbia ranks first. Prices have more than doubled there over the five-year period. California, Hawaii, Florida, Nevada, Maryland, Rhode Island, Arizona, New Jersey, Virginia and New York follow. This, presumably, is where to look for housing prices to fall.
The 10 states with the least price appreciation are Tennessee, Iowa, Kansas, Kentucky, Mississippi, Texas, Missouri, Nebraska, Ohio and Indiana. The market in those states is far from depressed — prices have gone up more than 20 percent in all of them. Nobody expects a real estate bust to grip those states.
Then analyst van Kuller considers the 30 metropolitan statistical areas that have shown the biggest price increases in 2005. Phoenix prices rose almost 40 percent last year, but the city, he says, didn’t show up in the top ranks previously.
`Fits and Starts’
“This underscores the somewhat rolling, transient nature of this housing boom,” writes van Kuller. “Prices seem to leap in fits and starts in some areas.”
Perhaps more disconcerting is the table listing the top metropolitan statistical areas with the highest price appreciation in the five years ended Dec. 31, 2005.
Only one of the top 30 isn’t in California or Florida. Madera, California, incidentally, leads the way, with a 143.72 percent increase during the period. The only place outside of California or Florida to crack the top 30 is Washington- Arlington-Alexandria, the nation’s capital and environs.
The big picture about the housing “bubble” is that there is no big picture. There are hundreds of little ones, and they’re all different. Not everyone is going to be affected in the same way or to the same extent.
Property Tax Dependency
What kinds of bonds would be most vulnerable to a swoon in housing prices? School districts are the most dependent upon property taxes. Before you go weeding all school district bonds out of your holdings, though, consider that not all school districts rely on localities in the same way. In Nevada, for example, schools rely upon local property taxes for 61 percent of their revenue; in North Carolina, that figure is 25.2 percent.
In addition, 25 states have credit enhancement programs for school districts, with the states either promising to appropriate money to make up shortfalls in debt service, or offering to intercept state aid to make debt service payments. And of course not all school districts in a state either qualify or avail themselves of such programs. The municipal market is full of peculiarities and exceptions.
We are on steadier ground if we think about the housing bubble in terms of what it may mean for property taxes, says van Kuller, and even here, the story is peppered with “ifs.”
If house prices decline, some municipalities may adjust property taxes downward. If they raise tax rates to offset valuation declines, we might see a lot more taxpayer revolts. Likewise, we may see municipalities look to diversify their revenue with higher cigarette taxes, sales of public assets like toll roads, and liberalization of gambling laws.
Finally, we can probably look for the muni market’s inherent weirdness to increase. This notably occurred in California after the passage of the Proposition 13 cap on property tax increases, approved by the voters in 1978. Municipalities will concoct dozens of new ways to borrow money not secured by property taxes, almost none of which will be easily comprehensible by the public. The housing bubble’s future isn’t hysterical. It’s messy.

Designer’s high-concept condos may be too hip for Hub
By Kimberly Blanton, Globe Staff | May 9, 2006
Philippe Starck, the international design superstar who once fashioned a baby bottle resembling a perfume dispenser for Target, has struck gold by selling condominiums in Manhattan and Miami Beach. His ”Downtown” project in the former headquarters of JP Morgan on Wall Street, featuring a bowling alley, 24-seat screening room, and rooftop reflecting pool, sold more than half its 326 units within three weeks of hitting the market in 2004. In Miami Beach, all 289 condos at his sleek, ultramodern Icon South Beach tower, which opened that same year, sold out during construction.

But so far, Boston isn’t buying what Starck is selling.
Marketing began almost a year ago, but buyers have agreed to purchase just six of the 26 condos Starck is designing at a former police station in the South End, said Stephen Chung, design principal for Urbanica Inc., the Boston development firm that is collaborating with Starck’s London firm, Yoo Ltd. Agents in Boston’s clubby real estate community who have spoken with the developer and sales agents said even those six agreements are not firm commitments.
Lackluster sales can result from several factors, including rising mortgage rates, construction delays, and high prices. But real estate specialists and prospective buyers say Starck’s design may be too edgy for buttoned-down Boston.
Starck’s ”New York aesthetic” is a ‘’sophisticated design,” said Kevin Ahearn, president of Otis & Ahearn, a Boston real estate firm. ”It’s going to take a little bit of time for buyers to understand it.”
Photo Gallery Take a look at his designs and vote
Is he, or is he not, too hip for Boston?
Buyers ”have that extra hoop to jump through, which was that you really loved the Philippe Starck design,” said Alan Markesich, a program director for Jammin’ 94.5 and Kiss 108 radio and South End resident who considered buying a unit in the project but changed his mind. ”I’m just not one of those people,” he said.
Boston ”is not New York, it’s not Miami,” said Tony Longo, founder of condodomain.com, a website that lists luxury Boston condos for sale. ”It’s a more conservative town.”
A smiling plastic yard gnome greets visitors to the model unit for Starck’s project, dubbed YooD4 because the building served as the Area D-4 police station from 1932 to 2002. Gilt-framed mirrors in the dining room flash the words ‘’sexy” in pink lights and ‘’star” in blue. Walls are not always flat: A rectangle recessed into one wall is painted daffodil yellow for an otherworldly effect.
YooD4 is uncompromising Starck, down to the minimalist bathroom faucets he designed. The major feature of the building is a four-story Winter Garden, reminiscent of the internal courtyard in the Isabella Stewart Gardner Museum in Boston.
Starck designed two interior options for buyers:
The ”Nature” option has bamboo floors, teak kitchen cabinets, and raised porcelain sinks in the bathroom. Marble tile is now de rigueur in luxury bathrooms, but Starck did it bigger and bolder, selecting one-foot-square Cervaiole marble from Tuscany.
The less expensive ”Urban” option is white on white: white oak floors, white laminate cabinets, white ceramic tiles, and white walls.
Urbanica has not begun to market the project aggressively, so ”why get stressed” about sales, asked Chung. He is confident prospective buyers, even those with Boston sensibilities, will find the finished product appealing. He said that while Starck’s hotel interiors are ”exaggerated and ramped up,” the designer prefers ”quiet” interiors for his condos. Indeed, Starck rejected the idea of putting glowing neon sheep on YooD4’s ”green” roof, Chung said. ”He said, ‘Are you guys crazy?’ ”
Chung also said the slower housing market is responsible for lagging sales, with fewer speculators quickly buying and flipping condos for profits. In the current market, homebuyers ”are going to live there,” he said, and ”they bring tape measures. The market and the people are so different.”
But real estate agents said that because the project was initially overpriced, it also missed out on the sizzling 2005 condo market. Developers typically raise prices as a project attracts interest during construction and builds sales momentum. But some of YooD4’s asking prices have been lowered since last summer: The highest-priced unit, 22, is currently on the market for $1.71 million, down from $1.77 million in July, according to downtown real estate listings. The price of the two-bedroom Unit 13 was cut $200,000, to $1.1 million.
Chung said price reductions were also achieved by converting interiors from Nature to Urban. Unit 14, initially designated as a Nature unit, was priced at $1.27 million but sold as Urban for $1.1 million.
Agents contrast YooD4’s sales to the strong sales at Atelier | 505 across the street, where luminaries like Natalie Jacobson rushed to buy the luxury condos, which sold out before the project was completed. Prices at Atelier ranged up to $3.3 million.
”We’re hitting our limit as far as the full-service, super-high-end luxury market the South End market can bear,” said Dan LaBarre, a Keller Williams Realty agent. Atelier ”has covered that niche.”
Another theory is that Starck was overexposed in Boston by heavy 2005 marketing of his other local project, Parris Landing in the Charlestown Navy Yard. Of 367 units at Parris Landing, 310 sold in 18 months, said the broker, Boston-based Otis & Ahearn. Parris Landing was Starck Lite: Starck provided an optional design package for condo interiors, but his primary contribution was to common areas, where he included sculptures such as the lobby’s oversized rubber duck.
Markesich, the prospective buyer, liked the idea of moving to a contemporary condo a stone’s throw from his penthouse brownstone. But he soon learned that Starck left no room for him to select finishes, and he found the oversized marble ”generic in a high-end way.”
Chung said he and the sales teams are amenable to negotiating over the details. ”Maybe people didn’t want to pay for all that Starck finish,” he said. ”We said, ‘We’ll take it out. It’ll make it more attractive in terms of price.’ “

Condo project downtown turns into apartments
One expert says the trend is changing to more affordable housing in the heart of Des Moines.

By JASON CLAYWORTH
REGISTER STAFF WRITER

May 9, 2006

A planned $21 million Des Moines condominium project now deemed “economically infeasible” is a sign that downtown’s housing boom has shifted from high-end to more affordable, a national expert said Monday.

“The market has moderated somewhat on the demand side, and in some markets you have a lot of units coming on line,” said Bernard Markstein, an economist with the National Association of Home Builders in Washington, D.C. “What you get is a temporary imbalance of supply and demand.”

More than 500 apartments or condos will be added to Des Moines’ downtown real estate market within the next year. Some will sell for less than $90,000; others will fetch more than $1 million.

While real estate agents and developers say sales remain strong across the board, city leaders acknowledge that some of the higher-priced condos have not sold as quickly as expected.

“From what I’m hearing … the higher-price units are moving slower than the lower-priced ones,” said City Councilwoman Christine Hensley, who represents much of downtown. “When they’re priced at about $135,000 to $150,000, they’re going like hot cakes.”

Minneapolis developer George Sherman on Monday got council approval to change his planned $21 million, 80-unit condo development, known as Metro Lofts, into a 105-unit apartment building. The apartment plan, at the same location, Second and Vine streets, will allow Sherman to apply for federal tax credits to complete the project.

Increased construction costs made the condo project too expensive for the Des Moines market, said Jackie Nickolaus, a spokeswoman for Sherman. “We didn’t feel we could push sales prices any higher,” Nickolaus said.

The Metro Lofts was proposed as the second phase of the Waterstreet Brownstones/Vine Street Lofts project, which added 34 condos and 109 apartments near Second and Court avenues in 2004. Many of the condos in the first phase sold for about $300,000.

City officials last year agreed to give Sherman $1.5 million. The council on Monday agreed to continue with the same level of assistance for the apartment building.

Federal tax credits would require that 60 percent of the apartments be rented at reduced rates for low- and moderate-income families. A single person, for example, must make less than $28,560 to qualify; a family of three, $36,720.

Sherman will apply for the credits this year. Construction could start in spring 2008, more than two years later than the condo project was projected to begin. If Sherman does not receive the tax credits, he will apply for another program that would designate the entire apartment building as reduced-rent units.

Nickolaus noted that costs, such as underground parking, have more than doubled in the two years since the Waterstreet Brownstones was completed, which makes the tax credits essential. The apartment building would feature 95 underground spaces.

Nickolaus emphasized that her group believes the downtown market remains strong.

“Personally, I don’t think the market is flooded,” Nickolaus said. “I’m very bullish about downtown housing. The question is how long it will take to absorb” the influx.

Real estate agent B.J. Knapp is selling condos at the Mulberry Lofts in the former Harger-Blish Building at 112 11th St., and in the Equitable Building, 604 Locust St.

As of Monday, 32 of the 48 Mulberry Lofts condos had been sold. The first tenants will move in next month. Ten of the 54 units in the Equitable Bilding site are sold. They won’t be ready until late this year.

The Mulberry Lofts cost $85,900 to $340,000, while the condos at the Equitable site sell for anywhere from $500,000 to $2 million.

“I’ve sold a lot of them with blueprints or by walking them through the vacant buildings,” Knapp said. “They haven’t even seen the finished product. It’s wild.”

Barbara Kirk, president of the Downtown Neighborhood Association, said the change in Sherman’s plans will allow more young and working-class people to afford to live downtown and provide a good mix with the higher-end condos.

“I think we need both,” Kirk said.

This blogsite deals a lot with the condo market so I will give some insights into the SCal Condo scene. Do a lot of driving all over LA and OC and have noticed a lot of newly built or being built condo projects( or apartments). Drove down figueroa st from dwtn LA and saw at least three major condo complexes being built, near the USC Campus. Saw a large 4-5 story condo/apt? complex 2/3’s completed which is easily visible off the 5 fwy near Disneyland. Lots of projects going up all along Jamboree south and north of the 405 fwy. Apts and condos going up just west of LA DWTN near westlake district. And this blogsite mentioned all the condos going uo in DWTN Long beach. Looks like Market forces are responding to the need for affordable housing units in SCal near the densely-populated coastal communities(not all Condos are affordable but usualy they are a lower-cost alternative to the SFH). And sprouting all over the LA Basin are thousands of small-scale condo/townhouse/apt units launched by individual or small-bit developers/filppers/prperty owners. Not to mention conversions. These are mostly in poor or old downzoned areas of a neighborhood which have been completely turned into development free-for-all zones. Such areas would be The old gentrified area of huntington Beach, wilmore district, wrigley and the westside of Long Beach, Hawthorne, Much of south-central LA, Van nuys, ect,

Funny that even the trolls are scared to show up here any more. They have gone back to guarding their bridges. LOL.

More tasty bear meat

http://www.theglobeandmail.com/servlet/story/LAC.20060511.RSHILLER11/TPStory/Business

this is sad - from newsday today:

http://tinyurl.com/lzcfo

A frail old widow’s toxic-mortgage saga

May 12, 2006

If you want to understand just how toxic a home mortgage can get, consider this real-life, ongoing saga…

For LV_landlord; more inventory for you to pick up, increasing your hyper-appreciation.

http://lasvegas.craigslist.org/rfs/160475052.html

MUST SELL THIS WEEKEND - THREE HOMES

4524 Victoria Garden, Ann Road and Decatur, follow the signs.
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254 Domani Drive, Eastern and Windmill, follow the signs.
Open for viewing Saturday, May 13, 10-5, Sunday, May 14, 10-4.
Owner will sell to best offer by 5:00 p.m. Sunday.For information contact Adrianna 460-1845,or Michelle 300-2189
GREAT OPPORTUNITY—–MAKE OFFER

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May 14, 2006
Real estate’s ‘buyers market’ comes to town
By Jenny Blum

The buyer’s market has officially hit Ridgefield.
Local Realtors describe the market as “normalizing” and “softening,” but no matter how it’s phrased, the fact of the matter is there are now 233 houses on the market. Last May there were 149 houses for sale in town.
“Times are slowing up - it is going into a buyer’s market,” First Selectman Rudy Marconi said at the annual town budget meeting on May 1. “Real estate, there is no doubt, is slowing up. It is not going to change tomorrow.”
Mr. Marconi said he expected the real estate slowdown to last for as long as a decade. “There’s probably an eight- to 10-year cycle,” he said. “We’re in year three of that cycle.”
Board of Finance Chair Marty Heiser agreed. “Housing prices aren’t going up what they used to be, and it’s taking longer to sell a house,” he said.
Realtors have various interpretations of what is going on, but they uniformly acknowledge that there is plenty of “inventory” in every price range, partly because 2005 was a disappointing year.
“2005 was not a great year,” said Jack McAuley of Keller Willliams Real Estate. “There were 380 single-family closings - the lowest number in the previous 10 years. We had been used to the 400s. 2004 was a great year. Closings dropped 21% between 2004 and 2005. 2004 was the best year since 1999.”
Prudential Realtor Laura Fried said she saw the market forces at work now as simple economics, partly stemming from a glut of houses left over from 2005. “It’s supply and demand,” she said. “For buyers, it’s probably the best opportunity they’ve had in a long time. In 2005 we had a good early spring, and then it stopped.”
“I was a CPA for 17 years before this - I’m a numbers gal,” she said. “The way I see it, 2005 was a question mark year for buyers. They heard a lot about bursting bubbles and economic downturns, and they sat on the sidelines to see what would happen. The inventory built. Now there’s a classic economic situation of supply and demand - that creates a downward pressure on prices. There’s a softening, but not a crash.”
“The biggest problem is inventory accumulation,” she said. “There are all those houses from 2005 and then the new houses coming on for the spring of 2006. If we can get the buyers back, I think it will correct itself.”
Ms. Fried said this year “the spring market has been disappointing,” but she said she didn’t think this reflected the general economy. “The job reports are better,” she said. “Although interest rates have gone up, they’re still historically low.”
Coldwell Banker manager Patrick Fink said he felt some buyers were scared off by media reports of a “bubble” in the Northeast housing market, which he said was an unfounded fear. “The bubble is an invention of the media,” he said.
Mr. McAuley studies real estate trends, and he is a columnist for The Press. He said he has been carefully tracking the market recently, and he is not alarmed.
“The market if you look at where we are in terms of historical comparison, we’re in pretty good shape,” he said. “The number of deals being done is less. That’s my sense. There’s inventory in every price range. Rates are still low, though, that’s one thing. And the average price in town is still going up.”
Mr. McAuley speculated that one problem with today’s market is that sellers have not caught up with the market trend, and they set their prices with too-high expectations.
“Sellers typically are behind the herd instinct, particularly people who don’t have to move,” he said. “People are too late to the party. If you bought your house in 2003 and sold it in 2005, you’d make money probably. If you bought your house in 2004 and tried to sell it now, you’d probably be underwater.”
He stressed that prices are still up, they are just not flying up at double-digit rates.
“The average closing price in April 2006 was $973,000,” he said. “The average closing price in 2005 was $806,000.”
He said sellers expect the prices to keep rising, and buyers expect to cash in on the “buyer’s market,” and the result is frequently a “standoff” over as little as a $10,000 difference.
“You see a lot more expireds right now,” he said. “If they don’t sell it, they take it back off the market. You have sellers trying to cash in. I tell all my sellers that the buyers are who establish the price. What I’m seeing now is there’s too much of a stare-down here. Last year and the year before, buyers felt they had to make concessions. Now buyers are playing more hardball. Deals are falling apart. There will definitely be an adjustment here.”
Mr. McAuley said houses at the top of the market are affected by the inventory buildup, but not more than the rest of the market. In the first four months of this year, six houses in town sold for more than $2 million, compared with one house over $2 million in the same period last year, he said.
But there are 24 houses on the market right now over $2 million, he said. There are 117 houses over $1 million.
Mr. McAuley said he thinks real estate agents are partially to blame if they overprice a house in order to convince the seller to list with them. “When you first put the house on the market, there’s a new launch feeling - if it isn’t priced right, you blow the launch,” he said. “That’s a mistake people make. When you talk about the $2 million segment, it’s not getting worse more than the others.”
Mr. McAuley said some new homes become tainted if they don’t sell.
“There’s a sense that there’s something wrong if the new construction sits,” he said. “Or the builder took a risk in the location or the lot. They bounce from Realtor to Realtor.”
Despite the slowdown, no one seems to expect to see massive price slashing in Ridgefield real estate. And most Realtors seem optimistic that the slowdown will be only temporary - far less than the decade Mr. Marconi mentioned.
“I think it’s going to be slow for a while,” Ms. Fried said, sounding philosophical. “Until we see a normal inventory, there’s going to be a pressure on prices.”
“No one feels they’re going to have a fire sale,” Mr. McAuley said.

A flood problem in New England. What effect on prices? 44N.H. Floods Force 100 People From Homes 7 minutes ago

WAKEFIELD, N.H. - Torrential rain washed out roads and forced about 100 people from their homes early Sunday.

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Some areas of central New Hampshire had seen 7 inches of rain by early Sunday and forecasters said as many as 5 more inches might come during the day.

The state Office of Emergency Management said about 100 people were evacuated from their homes in Wakefield because of concern over the Union Village and Semens dams.

“There are a lot roads closed everywhere and parking lots and basements flooded,” Emergency Management spokesman Jim Van Dongen said.

Officials reported a railroad culvert and embankment washed out in Milton, with train tracks suspended in mid air. And the local emergency management office in Hooksett said the town essentially was closed because so many roads were flooded.

In Maine, dozens of roadways were flooded in southern part of the state and shelters were set up in Kennebunk and Ogunquit.

Massachusetts Gov. Mitt Romney declared a state of emergency on Sunday, activating the National Guard and various state services to help communities respond to the storm.

Boston had picked up 4.35 inches of rain in 24 hours. Farther north, Newburyport collected 5.83 inches over the same period, according to the National Weather Service.

http://www.detnews.com/apps/pbcs.dll/article?AID=/20060513/METRO/605130343/1012/BIZ

Unruly lawns crop up as foreclosures grow
Suburbs face mess as more people abandon their homes
Joel Kurth / The Detroit News

Redford Township Supervisor R. Miles Handy, left, and building inspector Michael Williams have been cracking down on overgrown lawns since the township passed the ordinance.

The American dream is in tatters for record numbers of southeast Michigan homeowners, leaving the dreaded dandelion and annoyed neighbors in its wake.
Spring is barely here, but a winter of soaring home foreclosures has left thousands of abandoned, weed-choked lawns in neighborhoods from Downriver to West Bloomfield and St. Clair Shores.
“It’s everywhere. People are just walking away — absolutely walking away — from their properties,” said D. Wayne O’Neal, city manager of Eastpointe.
“People are complaining about how many houses all around them are vacant and full of long grass. … I don’t know where this is going, but I’m afraid it’s going to get worse.”
Seemingly trivial, unruly yards not only ignite neighborhood tempers, but also they’re an early sign of serious blight, said R. Miles Handy II, supervisor of Redford Township. Left unmanaged, weedy yards soon can harbor abandoned cars or ramshackle garages and drag down nearby property values, he said.
And, like the dandelions ubiquitous this time of year, the problem is all over.
Home foreclosures in Michigan doubled in just two years. Wayne County leads the nation, with nearly 4,000 in some stage of default — on pace to break last year’s record of 9,000. Statewide, the tally is 9,338, up from 4,085 in 2004, according to analysis from Foreclosure.com of Boca Raton, Fla.
In Eastpointe, 225 homes are foreclosed, and city crews are mowing about 100 lawns a week where grass exceeds the statutory 6-inch limit. In Ferndale last week, half of the 11 houses that the city billed $1,000 or more to thwack long lawns were foreclosures, said City Manager Thomas Barwin.
It’s a trend that reverberates from working-class cities to some of Metro Detroit’s priciest ZIP codes. In West Bloomfield, where the city’s 8-inch limit takes effect Monday, it’s not unusual to mow lawns on vacant $500,000 homes, said Mike Killian, the township’s code enforcement officer.
“People lose their jobs, their homes, move on and leave us with the mess,” Killian said.
Rules and penalties vary by community — grass height, for example, can’t top 8 inches in Clawson, 9 in Wixom and 12 in Shelby Township. Fines range from $75 civil infractions to $100 misdemeanors and can climb to $250 and sometimes $1,000 if cities hire companies to tackle lawns.
“If there’s any trend, it’s lawns we have to mow because of foreclosures,” said Michael G. Bartholomew, building official for Sterling Heights, which prohibits grass higher than 6 inches, and has 242 homes in default or amid bankruptcy proceedings.
“In general, the banks that own these homes don’t even respond. It’s not high on their agenda, but it’s high on our agenda.”
Every day in Redford, building inspector Michael Williams warns about 25 homeowners in violation of the township’s 6-inch rules.
Fueled by foreclosures, the township last year cited nearly 1,000 residents.
Walking through calf-high dandelions, Williams looked at the house’s “For Sale, Zero Down” sign and shook his head.
“Look at this,” he said. “It’s not fair to the neighbors. Who wants to live next to this?”
You can reach Joel Kurth at (313) 222-2610 or jkurth@detnews.com.

Anyone have any insight/thoughts on the new CME Housing Hedge Funds?

Totally OT, but hysterically funny — this BBC interview with the wrong man about music downloads. For best effect, read the text first, then watch the linked video.

Whoops — here’s the link.

http://tinyurl.com/re3a4

Responding to the question about Albuquerque.
I am not totally down on new mexico, but after a number of years, the cold winters, constant wind/dust storms, high altitude, poor schools, high crime rate, and blaring sun took their toll on my opinion.
We just moved from there because after the crazy californians came, our home went up 30% in one year, and we cashed out.
Yes, it is still considered cheap, but it is a place that truely has some problems.
It is one of the last places in the whole nation to be developed, and there is a reason for this.
Tell your friend, if he/she has her heart set on moving there, that I do think the prices will be coming down.
Lots of people move there, and find it’s not exactly what they expected. Also, the job market is just terrrible. Well paying jobs are few, and far between.
On a better note, I am a nurse and did work at a good hospital there called Presbyterian, if the altitude gets to your friend, and causes problems, he/she will have a good place to go.

I just moved to Albuquerque from CA. I am finding it to be much more family friendly and affordable than the Bay area. The surrounding scenery is gorgeous. The NE side of town is the best to live in. There are jobs, but salaries are higher in CA. Housing prices have been holding their own so far. Air is a little dry. More people have been coming, than I am aware of leaving. Met many folks that came from CA that do like it here. It is a matter of opinion. Climate is much more mild than much of the US

From a Washington Post article on the $800,000,000 it’s costing for Fannie Mae to pay all of the accountants and lawyers it needs to redo all its books.
The Fannie Mae mess is so huge, it may be the biggest single source of new jobs in the District of Columbia this year.

Some of that $400 million will no doubt trickle down to do some good. It’s putting gas in the tank, food on the table and BMWs in the driveways of the Deloitte & Touche partners, for example.

So it’s not just O.C. that relies on the mortgage business for employment. Maybe it really isn’t different here.