Real Estate Is Cheap, But None Of Us Can Afford It
The Durango Herald reports from Colorado. “A year has passed, but the message at the 12th annual Real Estate Forecast on Wednesday night was almost identical to 2011: It’s a buyer’s market out there. And just like last year, brokers are saying the best values won’t be around much longer. Demand is starting to balance out and even outweigh supply in Durango, said Bob Allen, owner of Allen & Associates – a real estate appraisal, consultant and research firm. Prices have yet to reflect that trend: median home prices in the city crept up only a few thousand dollars since last year, hovering around $350,000.”
“Homes between $200,000 and $400,000 are the most in-demand, but brokers also have seen a ‘firming up’ of the $500,000 to $700,000 market over the last year, Wells Group broker Rick Lorenz said. Meanwhile, the supply of homes priced above $1 million has fallen from 10 years to four years since 2009. ‘We’re starting to see signs of a bottom,’ Allen said. But it’s important to remember that it is ‘all so very slow compared to what it was,’ he said.”
The Aspen Times in Colorado. “The good news in the midvalley real estate market is the incredible amount of sales that already have occurred in 2012. The bad news is that the furious pace has been spurred by foreclosures and short sales, according to real estate agents. Farther downvalley, Lynn Kirchner, of Amore Real Estate, said recovery won’t come before 2013 in the Carbondale area. The high number of transactions is the result of low prices, she said, and the prices are low because there are so many foreclosures by banks and short sales by owners trying to avoid foreclosure. ‘That’s the only reason’ for the activity, Kirchner said.”
“Lenders are beginning to understand that they have a lot of assets on their hands and another round of foreclosures looming, she said. So they adjusted prices lower on the homes they already held in foreclosure. Kirchner said prices in general have fallen 20 percent since last year and higher in some cases. Kirchner said she suspects prices will continue to drop through this summer because of new foreclosures and short sales. She is playing the role of counselor in many cases for homeowners who don’t want to sell but have so few options because of their financial predicaments.”
“In many cases, the homeowners have struggled to hold on to their houses since the recession started, but circumstances such as lost or reduced income make it an uphill fight. Lots of people are still coming to her and asking, ‘What the hell do I do?’ she said.”
From KTAR in Arizona. “Linda Klinker, a former commercial real estate appraiser, and her husband are out looking at homes in the north valley. In 1990-1991, Klinker saw the market make a similar turn around, ‘I kept telling everyone, ‘This is the next L.A., buy! Buy!’”
“At the house in north Phoenix, KIinker is adding up the wear and tear on the 4,000 square foot home. ‘The orange tree needs to be brought up and the pool has some cracks in the fence back here,’ Klinker says. She admits this is normal, ‘Everybody’s been struggling for the last couple of years, so I think we’re going to see more of that.’ The bank is asking for $300,000 in a short sale. Her realtor estimates it’s overpriced by several thousand dollars.”
“In most cases, however, buyers are not in the position to low ball the listing price. ‘If their idea of a deal is getting it under the asking price, my answer would be currently, don’t waste your time,’ warns local realtor Russell Shaw. ‘Almost everything is going above the asking price, because prices are still way below where they ought to be.’”
The Arizona Republic. “The National Fair Housing Alliance investigated nine metro areas, including metro Phoenix, to determine if foreclosure properties in Black and Latino neighborhoods were being maintained and marketed by lenders as well as foreclosures in predominately White neighborhoods. In the Valley, the housing group compared fewer than 200 foreclosure homes in Glendale and Maryvale. The investigation found 40 percent of the bank-owned homes in Maryvale, which it considered predominately Latino, had broken doors. Only 6 percent of the bank-owned houses that the group checked out in the neighborhood in Glendale, which it considered predominately a White community, had broken doors.”
“About 73 percent of the foreclosure homes in the west Phoenix community didn’t have ‘for sale’ signs. And 11 percent of those Glendale foreclosure home were missing those signs.”
“Metro Phoenix’s median existing-home price is currently $124,500, about $20,000 below the area’s median in 2002 and well below the $267,000 from the height of the boom in summer 2006. Martin Dace has been shopping for a house in the southeast Valley for nine months. He has been outbid by both investors and regular buyers on foreclosures and short sales. Now he’s considering buying a new home in Gilbert, near his job. Though the new home will cost $25,000 more than a short-sale house of the same size, he won’t have to worry about being outbid.”
“‘I am ready to buy and move in,’ he said. ‘I am tired of losing out on bidding wars. And new homes’ prices are bound to go up, too, at some point.’”
“The uptick in prices is enticing more buyers who have been waiting for the market’s bottom to purchase a home and now have likely missed it. ‘Phoenix-area home prices are climbing so quickly in some areas now, due to such low inventory, it’s hard to keep up,’ said Tom Ruff, real-estate analyst.”
My Fox Tampa on Arizona. “Paradise Valley may look like paradise, but like much of the country, folks here are struggling with homes worth only half — or less — of their original value. Recent data shows that 23 percent of Americans owe more on their mortgage than their home is actually worth, and in Arizona that number doubles, with nearly 50 percent of residents underwater on their homes.”
“Sotheby’s realtor Frank Aazami says that this neighborhood has had multiple properties on the market for more than 1,000 days — some closer to 2,000 days — and many have been on the market since 2006. He’s seen numerous people lose not only their homes, but the cash they had in it as well. We spoke to several residents — one couple with a $4 million home that’s currently on the market for $2.4 million, and another with a $6 million home worth only $2 million in the current market.”
“These luxury homeowners are doing everything from short sales, selling for a fraction of the home’s worth, to making improvements to increase the home’s value or renting while they wait for the market to pick back up. Some have had to foreclose. Many are riding it out and hoping for the best.”
The Deseret News in Utah. “The Utah Housing Corp. announced new mortgage loan programs that would target new and former home purchasers looking to get back into the ownership ranks. Established in 1975, UHC is an independent public corporation of the state focusing on creating affordable housing solutions for Utah residents. Currently, there is no limit on how many loans the agency can take on through the programs, said said Deon Spilker, UHC director of mortgage banking. Eligible buyers could earn up to $81,000 per year and could purchase a property with a maximum value of $320,000.”
“An eligible borrower can obtain a second mortgage for up to 6 percent of a HomeAgain Loan or 4 percent of a Score Loan to use for the down payment and closing costs needed to purchase a property. ‘Homebuyers who have a (credit) score of 620 deserve a home,’ she said.”
“Joy Wicks of Cottonwood Heights would seem to fit the mold of the type of potential buyer the programs are seeking to help. She and her new husband recently married, each after selling homes from previous marriages. ‘We’re somewhat struggling financially,’ Wicks said. ‘We have the money to pay the monthly mortgage payments. But saving up the seven or eight thousand dollars to put down on a house has been the struggle.’”
The Lahontan Valley News in Nevada. “For many Nevadans, buying a home of their own will no longer be wishful thinking. Nevada Rural Housing Authority has launched the Home at Last™ Advantage program providing qualified first-time homebuyers and Veterans with a generous 4 percent down payment in the form of a grant. A family buying a $150,000 home will get a free $6,000 cash down payment at a competitive mortgage rate and save up to $2,000 a year in federal income tax.”
“‘With falling home prices and NRHA’s exciting financing program, this may be the best time ever for first-time homebuyers and Veterans to purchase a home,’ said Gary Longaker, NRHA executive director. ‘Without a doubt, these programs provide Nevada buyers with incredible savings opportunities and there really is no limit to the number of hard working Nevadans who can purchase their first home with this program.’”
Vegas Inc in Nevada. “Glenn Schaeffer, a top Nevada casino executive in the mid-2000s, has been sued over allegations he failed to disclose all of his assets in a bank short-sale request. Bank of Nevada filed suit against Schaeffer on March 23 in Clark County District Court alleging intentional misrepresentation, fraud and other counts. The bank’s lawsuit said that, in 2006, it loaned Schaeffer $1.373 million in a mortgage deal backed by a condominium at Turnberry Place.”
“The lawsuit said that although Schaeffer provided a financial statement for an entity in which he is a principal, Constellation Partners, as well as a personal financial statement, it later discovered some substantial omissions.”
”’Defendant, in fact, owned, and now owns, significant assets located in New Zealand and elsewhere which were not included in any of defendant’s financial statements, and which were not otherwise disclosed to plaintiff,’ the lawsuit says. ‘Such assets include residential real property located in New Zealand, valued in excess of $1.5 million, as well as an interest in a New Zealand company known as ‘Woollaston Estates Holdings,’ which in turn owns significant real and personal property assets valued in excess of $6.787 million.’”
The Las Vegas Business Press in Nevada. “Not surprisingly, chief economist Lawrence Yun of the National Association of Realtors gave a piece of financial advice that would benefit his industry at 2012 Las Vegas Perspective. ‘Sell high on gold and buy low on real estate,’ Yun told about 300 business and community leaders attending the event.”
“It’s great that the nation is experiencing the best housing affordability conditions in years, but that has not translated into a meaningful pickup in home sales. ‘What the heck? National home prices have been stable for the past two years, but if you ask people on Main Street in Kansas City or Houston or Chicago, they will say prices are falling. Why? That’s the message they receive every day,’ Yun said.”
“U.S. housing starts are the lowest since World War II, and housing production in Las Vegas has been under 5,000 a year for the last three years. New-home inventory is at its lowest level in years, and yet housing starts are dead. ‘Strange world,’ Yun said.”
“According to the Las Vegas Perspective, 73.6 percent of Southern Nevada residents think it’s a good time to buy a house. Fifty-seven percent said there will not be a better time to buy a house in the next 12 months, and 26.8 percent think housing prices will increase in the next 12 months, compared with 23.9 percent who see them decreasing. ‘Real estate is cheap, but none of us can afford it,’ said Jeremy Aguero, principal of business advisory firm Applied Analysis.”
“White neighborhoods. In the Valley, the housing group compared fewer than 200 foreclosure homes in Glendale and Maryvale”
Paaahhhhlease.
black and hispanic vs. white.
How about gang infested dens of drugs and murder and houses are 1000 sqft piles of falling down rubble vs. places where the cops still try to maintain law and order and the houses are maintained at a level somewhere above 3rd world slum.
Calling Maryvale a pig sty would be an insult to pigs.
I checked out Maryvale a few months ago. I can’t say I was there long enough to know what it’s like, but I did see well kept houses with abandoned foreclosures next door. I thought this was interesting:
‘Only 6 percent of the bank-owned houses in Glendale had broken doors’
Like that’s some great accomplishment.
There were some newer neighborhoods built there, but no one wants to live there is they have kids because the schools are horrid. The vast majority of Maryvale is 1950s, tiny crap shacks. Mega gang territory.
I’ve heard that area referred to as Scaryvale.
Yeah. When there is a discussion as to which area of town is the worst for drugs, gangs and crime, it is usually between Gangy Slope and Scaryvale. (Sunny Slope and Maryvale).
Here is Maryvale. How much maintenance do you expect?
http://www.homefinder.com/AZ/Phoenix/84525530d_3529_W_Granada_Rd
1946. 864 sqft. List price $18,000.
http://www.homefinder.com/AZ/Phoenix/84896333d_3207_W_Cypress_St
1950 1320 sqft. List price $20,000
http://www.homefinder.com/AZ/Phoenix/84782928d_4010_W_Almeria_Rd
1946 1025 sqft List price $20,500
1059 SFRs for sale there. Fully 1/3rd below $50K. Half below $75K.
It is not a racial thing. It is an economic thing. Banks aren’t putting maintenance money into houses that they can’t sell for $50K.
Hey Darrell, thanks for throwing some facts into the story.
A few weeks back, I shared the story of a nearby house that had gone into foreclosure. It was recently put on the market for $58k with the real estate agent warning that it needed a lot of work. I posted the link here.
Any-hoo, house has been sold, and there’s a work crew over there now. Over the weekend, I spotted a pile of pavers that would work well with the recycled materials patio (for my potted plants) that I’m going to build in a side yard.
I asked the guys if they were throwing those pavers away. Nope, they’re going to reuse them.
Oh, well. I’ll just have to do my scavenging elsewhere.
I get the impression that this house is being worked on fast and furiously so it can get back on the market as a flip. But I don’t know that for a fact. I’ll keep you posted.
“It is not a racial thing. It is an economic thing. Banks aren’t putting maintenance money into houses that they can’t sell for $50K.”
Exactly! I read the article, and OK, minorities might make up a majority of these communities, but that doesn’t mean the banks give a fig what race you are. Money is the great equalizer. Take a poor white run-down neighborhood and the banks will show the same inattention.
My wife nailed the biggest difference between Maryvale and Glendale.
Glendale is a CITY. It includes some older areas like downtown, and many newer areas like around Cardinals and Coyotes stadiums in the west, and new developments to the north.
Maryvale is a NEIGHBORHOOD of the city of Phoenix. It has been landlocked for 50 years. Any new development has basically been redevelopment and in-fill.
They are comparing apples (city) to oranges (older, land locked neighborhood).
It is almost like they were more interested in making a point than really discovering the reality.
Why not normalize the data for, oh… let’s say, THE AGE of the houses. Take JUST the areas of Glendale that match the age and size characteristics of Maryvale instead of taking the entire city?
If Maryvale is a neighborhood, it’s a darn big neighborhood. South Glendale is indistinguishable from Maryvale to a country bumpkin like me.
Yep, it is a damn big neighborhood.
Sony Slope, Moon Valley, Pleasant Valley, Deer Valley, Biltmore, South Mountain, etc. etc. etc. All just neighborhoods within the very large city limits of the City of Phoenix.
And, yeah. Since South Glendale and Maryvale actually share a border and have overlapping school districts, they are pretty much indistinguishable (including racial makeup).
So, why did the study use all of Glendale instead of just South Glendale that looks like Maryvale. Oh, right. Because then it wouldn’t have been able to say it was a white neighborhood.
So, again, we’re back to it not being racial, but economic.
“In most cases, however, buyers are not in the position to low ball the listing price. ‘If their idea of a deal is getting it under the asking price, my answer would be currently, don’t waste your time,’ warns local realtor Russell Shaw. ‘Almost everything is going above the asking price, because prices are still way below where they ought to be.’”
F@*k you, Realtor.
I was going to paste the same quote and say “I know there are people out there saying this stuff, but is it necessary to continue torturing ourselves reading it”?
Russell Shaw is one of our big time TV advertisers. “I can sell your home in half the time of the average Realtor. I’m not bragging, I’m applying for a job.”
He used to be his own brokerage, but now he advertises as being a member of some other group.
Russell Shaw is one of our big time TV advertisers. “I can sell your home in half the time of the average Realtor. I’m not bragging, I’m applying for a job.”
Sounds like Marsee Wilhems down here in Tucson. She used to be all over the airwaves with the same schtick.
And, wouldn’t you know it, she was one of the listing agents on a house near here. Place had been on the market for years, and it had been with, oh, three or four agents.
Long story short: The exalted Marsee was not the agent who finally got the place sold. But she was the one with the falling-down “for sale” sign that caused me much mirth as I bicycled past it.
Yeah, Mr. Realtor, dry up your easy credit atmosphere and we’ll see what happens to your “way below where they ought to be” prices.
Many bank owned houses are going to sale at well above the asking price. Some foreclose four years later…..like the one described below!
My daughter and I looked at a house in Sacramento (S. Placer County) on Sunday. It foreclosed in 2008 on a $710,000 100% sub-prime 100% Countrywide loan. It just foreclosed again on a $375,000 Wells Fargo FHA loan (and it sold above the asking of $325,000 in 2008 BTW).
It is listed today at $229,000. We toured the house and then the Realtor told us she knew one offer had already been submitted for $250,000 and there was lots of traffic in the lockbox register and many more offers would be submitted. We passed, but not because it wasn’t a good deal at this price. 3100 SF at $70/SF is $217,000, plus $50,000 in permits, plus $60,000 for the lot, and reproduction cost is $327,000, before you add in any profit for the builder.
We did not put in a offer because of her personal budget comfort level. That is probably something the most recent occupant could learn.
“then the Realtor told us she knew one offer had already been submitted for $250,000″
Is there a law preventing a realtor from lying about this? Honestly curious.
Probably no law, but there may be ethics issues with the Board of Realtors. I would not use a Realtor I did not trust. And the information she supplied killed our interest anyway, so it did not serve her to interest.
“Prices are still way below what they ought to be.”
Give me a break, Realtor Shaw.
The Phoenix MLS inventory has dwindled, but regular sellers are just not a meaningful part of it. The listings are short sales, bank-owned, and flips of previous short sales and bank-owned. This distortion caused by the obvious fact that the vast majority of 2002-2009 purchases are underwater. And of course, refinancings of earlier purchases have made substantial numbers of earlier purchases underwater. Shaw himself adjusted his annoying radio and tv commercials in Phoenix to appeal to listing short sales over the past few years.
For whatever reason, plans for bulk sales, inertia related to robo-signing (although in AZ non-judicial trustee sales are the norm), or by design, the REO part of the inventory has really dwindled. But I just do not see how most of the foreclosures are over. I know a few examples of people who have not paid for over six months without a Trustee Sale Notice being issued, but I would only be guessing at how many will end up in that situation. If I had to, among the severely underwater, I would guess nearly all of them will end up in a short sale or trustee sale. It does not even seem to be slightly frowned upon in Arizona anymore.
Random thought, even though it will never happen. How about taxing imputed rental income on non paying FBs who live for free for many months or years.
Ben, I had to LOL at your very timely article title. People who have lived this fiasco the entire time (like my hubby) still confuse slightly cheaper w/affordable or priced in a way that will not come back and bite them in the arse. Yes, my husband is the sole bread winner in any real sense. Any say I have over it is only by virtue of marriage and his realizing I’m better w/his money than he is. So most might argue he should have veto power over any major decisions.
Yet he seems to already have forgotten that his bonus was significantly lower this year. He was still receiving rave kudoes for his part, but sales were down and so…. He doesn’t seem to acknowledge that his industry is under attack from many angles and there is significant risk money might not flow for next 20 years like it has. He seems to have already forgotten that my income is sporadic and not guraranteed as it once was. He seems to have forgotten that his pay deductions (insurance and other items) have gone up significantly every year. He sees a home that he wants and every other bit of info that should be in his head goes to white noise. He argues that this home is just what we want and if we don’t act quickly it will be gone. Well, he’s probably right that it will be gone. But why should we be house poor trying to beat out someone else being stupid?
I don’t mean to pick on hubby. From what I’ve witnessed around me, he is the everyman. I think many of us (I was once a professional buyer) have figured out a way to keep emotions out of it in a way that is not the norm. Plus let’s face it. Only the most disciplined seem to be able to survive this interminible wait for the return to a reality based market.
It’s nuts. The NAR is going around telling us that house prices are at four generation lows. Let’s take a 25-30 YO house in Phoenix; why do they need to use 4% down payment (or less) loans to sell a house that someone put 20% down on when it was new? The exact same house!
If prices are so low, why are there these zero down deals?
‘Joy Wicks once owned a home, but then she divorced, and could no longer afford it. Now, with record low interest rates and plenty of affordable homes on the market, Wicks want to buy a home in Sandy with her new husband, but finding the money for a down payment is a barrier.’
‘We would always hear about these no-down payment options, but they’re for first time homebuyers only. You almost felt kind of penalized for having owned before,’ said Wicks.’
‘Governor Gary Herbert says the program will hopefully spur the housing market in a sustainable way. ‘The sub-prime mortgage problem was where we got people into homes that they could not afford,” said Herbert. “This is not that program. This is a program where you’ve got to qualify to make the payments.’
Note to the Gov; those subprime borrowers “qualified” too. This lady is your example?
‘We’re somewhat struggling financially,’ Wicks said’
“…why do they need to use 4% down payment (or less) loans to sell a house that someone put 20% down on when it was new? The exact same house!
If prices are so low, why are there these zero down deals?”
Ask RAL.
Don’t sweat it. We’ve made a decision to nix any plans for doing anything in VT or NY. Property taxes are atrocious already, thus we’d have to leave eventually anyways. Secondly, we’ve got a scout/partner out looking for a piece of dirt and I’m gonna build. GC’s are crushing the resale housing price structure and I can build for GC cost and pocket the profit.
Isn’t it interesting that I’m forced to add additional inventory???? The Housing Crime Syndicate is so fawkin’ clueless it is stunning.
It sounds like public unions and the insane property taxes that go along with them are more to blame.
Isn’t it interesting that I’m forced to add additional inventory???? The Housing Crime Syndicate is so fawkin’ clueless it is stunning.
WGAF banana. Your union squealin’ is old, lame and busted.
WGAF?
who gives a f?@#
Funny how liberals don’t actually want to LIVE and PAY TAXES in socialist paradises…
Don’t sweat it. We’ve made a decision to nix any plans for doing anything in VT or NY. Property taxes are atrocious already, thus we’d have to leave eventually anyways.
Banana,
Speaking for the majority of the blog, Are these more buzzwords and catchphrases from Rush Limbard or do you have a point to make?
I think his point is…..”squeal…squeal like a pig!”
Only the most disciplined seem to be able to survive this interminible wait for the return to a reality based market.
I’m starting to question whether the disciplined will ever see any reward for their behavior. The non-disciplined are seen as too big to fail, and if/when they go down anyway it appears the disciplined will get taken down with them.
Those thoughts definitely are part of the equation, Carl Morris. Still, as RAL pointed out we don’t happen to be in a location where it makes sense to set down permanent roots.
RAL, it is the unions. $10k in just school taxes alone is way too much. We won’t be counting pennies in our old age to ensure others that are already getting a full mouth of free dental crowns and low cost healthcare my working husband has to pay for while they end up getting $40k+ a year more than us in retirement…yeah, cuz we’ll be getting $0k! It’s just doesn’t pencil out. I love and appreciate their work but I refuse to eat dog food for them. It’s as simple as that.
Carrie…. Honestly I don’t know why taxes are so high. It could be the schools, it could be anything but that isn’t the point. The point is that I’m not able to change it to suit my requirements, therefore we are going to bail.
NY has the government spending level of a highly industrialized place, the industry having long since been driven out. What is the alternative destination?
That’s right. It left decades ago leaving infrastructure two sizes too large to support what is left. And there ain’t much left anymore.
Delaware.
As you know, I have mostly opted out in place. RE taxes are really irrelevant on the water. They will catch up to my sort eventually, but not until they fry the main dish. Nothing wrong with trying Delaware, and good luck to you.
Carrie Ann: I’m in the same boat as you. Had it not been for my experience writing loans at a credit union 20 some years ago, my husband may have talked me into co-signing some exotic loan for an over-priced condo years ago. But I kept telling him, “We cannot afford to buy a house! We don’t have a down payment!” Now that we have saved up some money, he’s chomping at the bit! He can’t stand paying rent and not getting a tax deduction for any of it. It’s embarrassing to be married to a wannabe knife catcher…
It’s embarrassing to be married to a wannabe knife catcher…
It just goes to show the power of marketing and peer pressure/groupthink.
Please read my analysis of what has to happen for the “deduction” to be real money below. Then make him read it. Then make him recalculate your taxes for the year subbing in what they would be with the costs for a house he wanted to buy recently. Then remind him that the goal isn’t to pay less in taxes; it is to have more money left over after you pay for taxes and shelter (taking into account that you might pay more for more desireable shelter).
Math is the cure.
Really? Really?
The first rule about selling in real estate today should be “Always work with a buyer who is serious - it may be your only one for a long time.”
For rule #2 - see rule #1.
“In most cases, however, buyers are not in the position to low ball the listing price. ‘If their idea of a deal is getting it under the asking price, my answer would be currently, don’t waste your time,’ warns local realtor Russell Shaw. ‘Almost everything is going above the asking price, because prices are still way below where they ought to be.’”
For many millions in America, homes should come in a box, with a Gov’t utilities connection team ready for final connections to a successful assemblage. [complete on time & get a $1500.00 Ikea gift certificate]
This is going to become a cottage industry for the next 20 years.
Walk away? Short Sale? Foreclosure? Nope - someone is going to come after every dime in assets.
Bankruptcy? You better disclose everything. Everything. And if you try to hide one thing we are coming after everything else.
Forensic accounting and bankruptcy law would be excellent majors in college right now.
Vegas Inc in Nevada. “Glenn Schaeffer, a top Nevada casino executive in the mid-2000s, has been sued over allegations he failed to disclose all of his assets in a bank short-sale request. Bank of Nevada filed suit against Schaeffer on March 23 in Clark County District Court alleging intentional misrepresentation, fraud and other counts. The bank’s lawsuit said that, in 2006, it loaned Schaeffer $1.373 million in a mortgage deal backed by a condominium at Turnberry Place.”
A guy I went to college with has a forensic accounting firm. They go after big fish who are trying to hide assets. I think he learned forensics mostly on the job, working for someone else.
Not sure how one becomes a BK lawyer. I doubt one would “major” in that at law school.
I was at the Burbank Airport in late 2006 getting my shoes shined and the guy in the seat next to me was on the phone talking to a friend. He had put a Las Vegas Turnberry Condo under contract for $875,000 a month earlier and just flipped it to another future FB for $1,025,00!
He was getting his friend to go in on another one in the next tower for $1,250,000. The would pool their money together and split the profits! Now I see what happened to people like him.
I already knew the market was turning in 2006 thanks to Ben and just shook my head when he walked away in his shiny shoes. The market in Sacramento first started softening in late winter of 2005.
It has been 7 years since that happened.
I remember reading in Business Weekly in 2006 that the housing market would not recover until 2016. A decade seemed like such a long time! Now it seems the only thing we will get back to in 2016 is 1999!
So right now, I’m building 12,000sq ft of structure. 900CY of 4500psi concrete, structural steel(big stuff like 24″ deep beams, 14″ steel columns, 2′ base slab, 4″ concrete roof deck, fully adhered Firestone roof, architectural sandwich panel perimeter walls backed up by 12″ CMU, transluscent architectural panels,interior partitions 4″ (not nominal) steel studs, 5/8″ gyp board, other interior partitions are top shelf ground faced CMU’s(both sides),etc.
Retail cost to the customer on their dirt? $166/sq ft. Brandy new. That’s right.
And here’s a photo of it.
http://picpaste.com/ed5df448abc9ed0f6dfa8eddd27cd409.JPG
Nice work!
Nice… Bigger pic, please??
I’m intrigued; sounds like some elements of similarity to what I fantasize about building one day…
WTF are you going to do with 12k squares of concrete and steel????
Mail me at goonsqaud@hushmail.me if you want some details.
Wow RAL, is this a home? Survivalist? Or energy efficient? Why a 2 foot slab?
Is that a turret on the top?
“A family buying a $150,000 home will get a free $6,000 cash down payment at a competitive mortgage rate and save up to $2,000 a year in federal income tax.”
OK, lets take a look at what this means. $150K house less the $6K is $144K for the mortgage. If the interest portion of the mortgage is 5% of $144K (should be a little less, but working with round numbers here) then that is $7200. If this family’s marginal tax rate is 28%, then their possible deduction for mortgage interest is $2016. So, I’m guessing that this is the calculation they are referring to. $2016 is pretty close to $2000.
Now, we go a little deeper. This is a “family.” The standard deduction for married filing jointly is $11,600. They have to have $11,600 of itemized deductions before the mortgage interest deduction saves them the full $2000. They have to have $4400 of other itemized deductions before they save a cent from the mortgage interest deduction. What is the state income tax rate in Nevada? What are the property taxes like? But I don’t want to stop the fun. Lets assume they have enough other itemized deductions so that they will get all the savings from the mortgage interest deduction at 28%.
But what sort of income do they have? These people who can’t save up enough for their downpayment. For married filing jointly, the 28% marginal rate is effective from $139,350 to $212,300 of taxable income (line 43). The 25% rate is from $100K up to $139,350. Line 43 is where you subtract out your exemptions (another $7400 for our family/couple, it would be more if they had one or more kids).
So here we have it. A $6000 grant for a couple making at least $165,550 ($11,600 + $7400 + 139,350 + 7200) so the poor babies can afford that $150,000 in Nevada. Any less income (or lower itemized deductions) and they don’t save that $2000. The article said “up to” so I can’t really call the newspaper a liar. But seriously, folks, does anyone think that anyone in the program will save anything like $2000? Half? A quarter? To talk about tax savings in that context is so irresponsible as to be…lets call it being an honarary liar. Not quite a real liar, but the liars would admire you for your creativity.
Economic policy has to be rationalized some how. Tax savings is a better-sounding incentive than say, knife catching. At least they don’t have to pay it back like the poor idiots here in California. That’s a rude awakening!
“They have to have $4400 of other itemized deductions before they save a cent from the mortgage interest deduction”
Exactly. I had to walk my 24 y/o daughter through this exact math. Their itemized deductions last year would have been like $3K. Even if they buy a $100K house at 5%, they will still just be taking the standard.
My daughter lives in Nevada (Sparks, outside Reno). No state income tax. They make up for it with sales tax and high tourist taxes (hotel room, rental car, etc.) So, pretty much their only itemized deductions are sales tax and vehicle taxes.
She had a baby in Feb. She was all like, “At least the medical costs will lower our taxes”. Ummmm No. First you would have to subtract the amount that is less than 7% of your income, THEN it would have to be more than like $8K before it pushes you above standard deduction. So, unless their medical bills are like $15K, forget it for taxes.
Now, what WILL help on the taxes is the extra exemption and the per child tax credit.
But seriously, folks, does anyone think that anyone in the program will save anything like $2000? Half? A quarter? To talk about tax savings in that context is so irresponsible as to be…lets call it being an honarary liar. Not quite a real liar, but the liars would admire you for your creativity.
Back when I was a nail-pounder and picture-shooter for Habitat Tucson, I was pretty familiar with their application requirements. One of the hard-and-fast rules was that homeowner applicants had to have $1,000 saved up for a down payment, and, yes, the Habitat people checked.
We had a friend, a high-ranking finance guy for a major corporation, who believed that no one should ever pay off their mortgage because of the interest deduction and tax savings. He refused to see that not even having a mortgage payment would put him farther ahead financially, even though his tax bill would be higher. It was like we spoke totally different languages. We didn’t understand his position, and vice versa.
Yeah. Like I said above. The idea is to have more money left over after you pay your taxes and housing costs. Paying a little less in taxes and vastly increasing your housing costs is, well, it is for speculators and people who don’t like math. The numbers don’t lie.
Nevada does not have state income tax.
–Recent data shows that 23 percent of Americans owe more on their mortgage than their home is actually worth–
Interesting how close that is to the normal 20% down payment.
What does one have to do with the other? 23% of Americans are underwater by some amount. You used to have to be able to put 20% down to get a loan? I don’t see the connection of the two percentages.
Me neither.
Maybe he’s confusing “23% of Americans are underwater” with “Americans are 23% underwater.” It’s a very different situation.
Short sales by owners trying to avoid foreclosure In Colorado? Prices are low because there are so many foreclosures? How can this be? So the Stanley Johnson comercial was aired in Colorado after all. At least none of these people who had not been paying their mortgage in Colorado went shopping on Black Friday.
“The Aspen Times in Colorado. “The good news in the midvalley real estate market is the incredible amount of sales that already have occurred in 2012. The bad news is that the furious pace has been spurred by foreclosures and short sales, according to real estate agents. Farther downvalley, Lynn Kirchner, of Amore Real Estate, said recovery won’t come before 2013 in the Carbondale area. The high number of transactions is the result of low prices, she said, and the prices are low because there are so many foreclosures by banks and short sales by owners trying to avoid foreclosure. ‘That’s the only reason’ for the activity, Kirchner said.”
Aspen is a strange, weird surreal place. A playground for the rich as opposed to overextended middle class types. Stanley Johnson doesn’t live in in Aspen (Oprah has a house there, IIRC). He lives in Broomfield or Highlands Ranch.
I’m guessing that the average short seller in Vail is probably someone who lost a 1%er income. Anyone less well off probably commutes from Glenwood Springs.
‘Real estate is cheap, but none of us can afford it,’
WTF?
In a sane world, this statement would logically lead to the conclusion that real estate is destined to become still cheaper.
“cheap”
That word doesn’t mean what they think it means
“affordable housing solutions for Utah residents” = can borrow enough to put the household on the path to future financial ruin…
“…due to such low inventory,…”
One has to wonder how the market would behave were it not for collusive inventory manipulation to prop up prices.
‘With falling home prices and NRHA’s exciting financing program, this may be the best time ever for first-time homebuyers and Veterans to purchase a home,’
What if prices keep falling?
‘Such assets include residential real property located in New Zealand, valued in excess of $1.5 million, as well as an interest in a New Zealand company known as ‘Woollaston Estates Holdings,’ which in turn owns significant real and personal property assets valued in excess of $6.787 million.’
Ya gotta love these international high rollers…
I used to own Circus Circus stock and Glenn was admired by many of the shareholders in being competent in his job and a honest guy as the CEO stunk!
Amazing to see how much this guy has fallen.
“‘Sell high on gold and buy low on real estate,’ Yun told about 300 business and community leaders attending the event.”
Yun must fantasize that there are a lot of aladinsane type gold hoarders out there waiting for the right moment to convert their physical into housing investments.
I am from southwestern CO. my little bump-in-the rd town is at the foot
of Mesa Verde Natn’l Park.
When The Durango Herald starts doing free advertising for the Realaturds it means that 1) all the properties will be overpriced again (as if that will ever changed)
2) all the wealthy TEXANS, or CALIFORNIANS will rush right over and experience their fantasy of living in the country. A few years later, they try to sell the POS’s and go back home.
(living hand to mouth in the mountains makes great tv movies, but, really sucks actually doing it.)
Never trust anything doing with realturds/property from Durango.
maybe it’s just a regional thing not trusting the Durango Hearld, or people from the Eastern Slope (Denver area) or I’m just grumpy towards urbinites.
Yeah, see this in the DH article:
‘On the buyer’s side, investors and second-home buyers are returning to the market, but not at the levels seen in 2005, Lorenz said. Among people who are buying homes as an investment, many are doing so because other investment options aren’t generating much return, said Christine Serwe, a broker with the Wells Group.’
‘Data show the profile of buyers coming from other states has changed since 2005. The number of buyers from California has dwindled, while the flow of Texas buyers has increased dramatically, making up 11 percent of all buyers in 2011, up from 3 percent in 2005.’
In the 70’s and 80’s, there were a lot of Texans buying second homes in Colorado. I knew several that lost their a@@ when that fell apart.
I am from southwestern CO. my little bump-in-the rd town is at the foot
of Mesa Verde Natn’l Park.
When The Durango Herald starts doing free advertising for the Realaturds it means that 1) all the properties will be overpriced again (as if that will ever changed)
2) all the wealthy TEXANS, or CALIFORNIANS will rush right over and experience their fantasy of living in the country. A few years later, they try to sell the POS’s and go back home.
(living hand to mouth in the mountains makes great tv movies, but, really sucks actually doing it.)
Never trust anything doing with realturds/property from Durango.
maybe it’s just a regional thing not trusting the Durango Hearld, or people from the Eastern Slope (Denver area) or I’m just grumpy towards urbinites.
Careful now. The last time on this blog that I referenced limp wristed, volvo driving, sneaker wearing fools from urban areas driving up prices and crowding natives out of the VT and upstate NY housing market, which was about 2005, I was attacked for being “provincial” by a guy going by the name of LouMinatti.
Now that you brought it up though, back then I forecasted that these pukes would sell within 5 years after they experienced a few hard VT winters. Where are all the new listings in NY and VT? That’s right…. tourist/limpwrist/snob enclaves. And now, since property taxes to insane levels, nobody can sustain the costs of living there on a long term basis.
You wanted, you got it. EAT IT. The losses are yours. Every last penny of it.
Last couple of times I was in VT, it seemed as if the hills were alive with…
…”for sale” signs.
And, yes, the allusion to the Von Trappes is deliberate. My VT relatives live near their family lodge resort.
What a lot of the wannabes overlook is the relative remoteness of the Four Corners area. Unlike Vail it isn’t a two hour drive from Denver. More like an all day drive.
This Bear has legs. This bear has legs.
Did anyone listen to my advise yesterday?
Probably not.
It’s not too late to get into an inverse short stock and hang on for the ride.
“We’re starting to see signs of a bottom”
This has to be the most worn phrase of the decline.
It’s bottoms all the way down.
Just because you see a tramp stamp doesn’t mean you’re about to see the bottom.
I’m a long-time lurker but wanted to uncloak long enough to tip my hat to the memory of OlympiaGal. Heard a radio story about goeyducks on “Marketplace” and immediately thought of her.
Yup.
Seconded.
Unforegtable.
Unforgettable
Yes, well, I’m hopeless without a spell check.
If there are 130 million 159 thousand housing units in the U.S. and only 11 Million US Mortgages are underwater, why was there such a huge deal when Romney said….
“don’t try to stop the foreclosure process. Let it run its course and hit the bottom,”
Unless the shadow inventory and 11 million underwater numbers are not correct.
———————————————————————————-In 2009, the US Census Bureau reports all housing units totalling in at 130 million 159 thousand.
Source: http://www.census.gov/compendia/statab/cats/construction_housing/housing_units_and_characteristics.html
———————————————————————————
CoreLogic: 11 Million US Mortgages Now Underwater
Mar 8, 2011 … CoreLogic: 11 Million US Mortgages Now Underwater.
——————————————————————————-
“As to what to do for the housing industry specifically and are there things that you can do to encourage housing: One is, don’t try to stop the foreclosure process. Let it run its course and hit the bottom,” Romney said.
Ben,
“Texans loosing their a@@s over 2nd homes in CO” Priceless.
Realtors are Liars
Lou Minatti sounds like a fancy cheese served with a side of fish eggs.
a very tourist/limp wrist/ snob type cheese. I am sure he is now very confused because he is upside down and inside out w/ his “INVESTMENT.”
In Colorado
“the 4 corners area an all day drive from Denver”
only during the summer and before or after the afternoon rains. My town was isolated during the winter, the snow closed down both passes. Lizardhead and Wolf Creek. I live in So CA these days, I tell my neighbors about my background they think I make stuff up.
I raise my cup to OllyGal . I miss her comments and her opinions.
If anyone really believes we live in completely free society and even worse comletely “free market” they live in fantasy world. On one hand many things are “regulated” on the other many things are not. Who cdecides what is or what is not? Just lets look at example of realestate.We in Canada are witnessing an enormous bubble denied by many especially those who are buying at any price either for their own use or worse for specultion. It is typical reaction where one can not imagine or believe things will go south. They will not just go they will drop at the speed Titanic sank 100 years ago. And it is a RE Titanic still steaming toward it’s iceberg that is waiting for sure and we who are frankly sick and tired of this insanity can’t wait till it happens. Even if we own a house “worth” 3 times the price 3 year ago. No one benefits from this but speculators and most likely banks and gov’t. Now since we as so called democracies regulate so many things why do we not regulate the speculation part of RE. This is no investment that benefits society, this is robbery at mildest.Someone commented calling Chinese “investment” in Vancouver no good for us, is rasist. Why should we not say no to this exploitation of out people by monied Chinese no good. Why are we catering to even those foreigners who undermine out economy by their ill-designed speculation. We must stop this for no one benefits who shoud but those who should not even in a purely “free” market.