The Belief That Market Conditions Couldn’t Get Worse
The News & Observer reports from North Carolina. “Last week, American Homes 4 Rent, the large investor that has been gobbling up single-family homes in the Triangle and turning them into rentals, raised $705.9 million in an initial public offering of stock. If American Homes 4 Rent continues to acquire homes in the Triangle at its current pace, its success or failure will be closely watched in communities where it has been buying properties. Since December it has acquired more than 640 homes in Durham, Johnston and Wake counties, according to property records.”
“American Homes 4 Rent plans to use the proceeds from its IPO to rapidly expand its operations ‘even if the rental and housing markets are not as favorable as they have been in recent months.’ American Homes 4 Rent reported a net loss of $7.7 million in the first quarter on revenues of just $6.6 million. The company had leased just 9,882 of its homes as of June 30, an occupancy rate under 50 percent.”
“In its regulatory filings, the company reported that between July 1 and July 9 it acquired 512 homes, with about 38 percent of those being acquired in foreclosure auctions. In the Triangle, the bulk of the company’s inventory has not been foreclosures. It has even purchased a sizable number of new homes from builders.”
“There are strong signs that the initial enthusiasm among investors for the rent-to-buy model has cooled. Two other similar companies that went public before American Homes 4 Rent are trading below their offering prices, and American Homes 4 Rent’s IPO was far smaller than the $1.25 billion it hoped to raise when it filed in June. The company’s shares, which began trading last week at $16, closed Wednesday at $15.65.”
The Roanoke Times in Virginia. “Facing financial distress, the owner of a huge, nearly new mountaintop home outside Roanoke is planning to sell the property at far below its construction price, along with 900 acres of land, at an auction. It sits on 7 acres. Also available are 29 contiguous parcels, two with conventional homes and 27 undeveloped. Owner Mark Oliver, who has a background in construction and remodeling, bought the land in 2004. He spent $1.5 million to $1.8 million on the massive home, which was completed in 2009, said Sam Hardy, an associate broker Woltz & Associates, the company staging the auction. It is assessed for $807,000.”
“However, the minimum price to buy the home and the 7 acres is going to be $578,700 and, as long as that price is reached at the auction, the home will be sold, Hardy said. The owners at one time envisioned a community of luxury mountain homes. But only the large home, which was still occupied Monday, got built. ‘The downturn of the economy has reshaped the dreams and the future that the family had to develop this,’ said Jim Woltz of Woltz & Associates. ‘They’re needing to sell it for financial reasons.’”
The Washington Post on Maryland. “Between January and June, Maryland went from having one of the lowest foreclosure rates in the nation to the third highest as banks worked their way through a backlog of delinquent loans, created in part by the state’s long foreclosure process. Pamela Adegbuyi’s house in Fort Washington is not technically in foreclosure, but she recently received a letter from bank lawyers saying that legal action is pending. Home prices have gone up in her neighborhood, but not enough to help the Adegbuyis, who bought their house in 2005 for $583,000. In January, the county assessed it at $332,900, tax records show.”
“She and her husband began negotiating with her bank in 2008, after she was laid off from her workforce development job. That was the start of a five-year stint in paperwork purgatory that she said continues. The couple started to fall seriously behind on their mortgage after her husband was laid off in 2011. ‘We went from a two-income household to a one-income household to a zero-income household,’ she said. At last count, the Adegbuyis owed more than $680,000, with interest and penalties added. She has no idea now they will pay it off. ‘This house is never going to be worth what it was,’ she said.”
“Jessica Smith-Harper of Mid-Shore Pro Bono legal services, which serves five Eastern Shore counties, said she sees the foreclosure surge on a daily basis. Banks are also moving more quickly in some areas than others, she said. She cited an 1850s house in Caroline County with a stream underneath it whose owner hasn’t paid the mortgage in three years. ‘I’d be surprised if the foreclosure is done by the end of the year,’ Smith-Harper said. ‘But a million-dollar waterfront property on Kent Island? They are ramming that through.’”
The Herald Mail in Maryland. “In July, almost 25 years to the day he and his wife bought their first house to fix up and flip for a profit, Tim Fields was back at that same property. But this time, with his house-flipping days long over and the recession having dismantled his small empire as one of Washington County’s top custom homebuilders, Fields was back for a different reason — to power wash the back porch. Quite an economic comedown for the man who was president of the Home Builders Association of Washington County from 2004 through 2007.”
“In July 1988, the young couple bought their first investment house. It grew so much that in 2005, Fields hired a professional to manage the business. ‘And, by 2007, I was semi-retired. I was 48 years old and making $100,000 a year. It was a good life. It was a good life,’ he said.”
“There was a time back about 2003, when a landowner in the county wanted a developer to pay as much as $25,000 for a 1-acre home lot, he said. ‘I remember the first time that I saw (the offer of) an acre for $25,000. I laughed out loud,’ said Fields, who noted he could remember thinking ‘that is ridiculous. Nobody is going to pay that.’”
“But soon, as mortgage lenders offered easy terms, the real estate and home building markets exploded. And, prices for home lots shot up fast. Large metropolitan builders were moving in, too, pushing lot prices higher faster. Suddenly, Fields said he was paying prices far higher than $25,000. ‘We paid as high as $132,900′ for a 1-acre home lot in about 2006, he said. ‘Anybody with 20-20 hindsight can look back and say now, ‘That was way too much. That was crazy.’”
“Credit began tightening, housing values plunged and millions of new homeowners, owing more that their homes were worth, faced foreclosure and bankruptcy. Nonetheless, Fields said his company’s best year probably was 2006. ‘We were still picking the fruits of ’05 because it takes a while for the (homebuilding) process to be completed,’ he said. Fields said he doesn’t remember how many houses Royal House built in 2006, but he doesn’t think it was more than 15 because people were wanting such large houses. ‘The number might not have been huge, but the size was probably huge because people just couldn’t spend enough money. It (boom market) just sort of all blossomed and expanded substantially.’”
“Looking back now, Fields said he thinks Royal House Construction’s downfall stemmed from the combined effect of its ongoing loan payments for lots it couldn’t sell and from Fields’ ‘bull-headed’ belief that market conditions just couldn’t get worse. Initially, however, even after the slowdown began, Fields said he was still buying extra lots at the high prices. ‘That was not a wise business decision,’ he said.”
“As market prices fell, Royal House began to reel from the pressure of having to make debt payments that were based on the prices it had paid. ‘Because we were fully leveraged on our inventory of lots, we were not in a position to lower the price — because we had to pay the lender off in full, before we could build somebody a house,’ Fields said.”
“As the market continued to decline, Fields said his remaining confidence was badly shaken when his lot lender ’started foreclosure action, after we could no longer make the debt service payments in full. Then, I got scared.’ By then, the market was so bad that even the lender was struggling to sell the lots it repossessed, Fields said. He said the one for which he had paid $132,900, is still unsold — even for the $35,000 the bank is asking now.”
“Finally, last year Royal House stopped doing business after selling all its equipment, and its 3,000-square-foot showroom and office near Clear Spring, he said. There is even the full circle of going back to the beginning, that now includes that first house, the one that the Fields bought 25 years ago on July 24, 1988, with plans to fix up and resell for a profit. On July 23 this year, Fields received a request from the home’s current owner for a quote to come power wash its back porch.”
“‘So there we were, 25 years later, out to wash that house, after I went to the mountaintop and down all through the valley,’ he said. ‘Twenty-five years later, we were back at the same house doing a $300 power wash.’”
“‘So there we were, 25 years later, out to wash that house, after I went to the mountaintop and down all through the valley,’ he said. ‘Twenty-five years later, we were back at the same house doing a $300 power wash.’”
Ahhhh yes… The boundless rewards of hubris and magical thinking. A lesson that many are doomed to re-learn yet again- some right here on this blog. http://www.sadtrombone.com/?play=true
In stereo, where available..
and a mountain of unrepayable debt….
“American Homes 4 Rent plans to use the proceeds from its IPO to rapidly expand its operations ‘even if the rental and housing markets aren’t as favorable as they have been in recent months’.”
Lol. If it don’t work then do more of it.
I love this blog.
Its a nice way of saying, “cap rates don’t pencil out at the absurdly high prices we paid.”
And it’s not going to get any better by throwing more rentals into the market.
Depend s on who you’re talking about.
‘It has even purchased a sizable number of new homes from builders’
Probably at over the asking price- Ballsy move! ‘Buy high and sell low! What we lose on individual units, we’ll make up in volume!’
It is all about the IPO. Now they can go paws up like pets.com.
As my dad used to say (referring to learning to play an instrument), “If you can’t play good, play loud”.
Or a variant that I have often heard:
American Homes 4 Rent
Just applied for a position there.
Commercial sector is dead right now,
and I thought what the h*ll. The building was nice enough but it looked like a ghost town inside. No receptionist even. A nice young gal took my in person resume’ and meet and greet.
No receptionist even.
I was under the impression they were extinct, replaced by a phone in the lobby and a sign instructing you to dial the extension of whoever you were going to visit. Bigger places might have a bored security guard watching the front door.
“No receptionist even.”
When I was a journeyman window cleaner I noticed that most successful companies always had an attractive receptionist, usually free coffee with a variety of flavored creams, and they kept their lobby windows spotless.
Through no fault of my own I know the guy who runs this company. He’s desperate to prove that he can make money doing something other than public storage, having failed at everything prior to hitting the jackpot with renting out space to people who are too stupid to know that their stuff is not worth anything. He’s always whining about the government, unless of course it’s helping him purchase multiple homes that we little people would never get a chance at buying.
Thank you for the insider info. I dunno, seems like making a living with public storage is as honorable as any other business.
I heard of someone who became a millionaire because he cornered the market on loading dock equipment. Ramps and dollies and rain shields and those pads around the opening so the truck doesn’t get wrecked when it backs up… stuff that people just don’t think about. Loading docks may not be glamourous but IMO it’s better bootstrapper money than swapping credit defaults on Wall Street.
Honestly, I don’t have a problem with it. I think it’s an idiotic business, but… (cue a fool and his money quote).
I used one once, and was very glad that it was available. Of course, the combined rent that I was paying for a place that would hold me, but couldn’t hold my stuff, plus the rent for the storage unit that could hold my stuff, was still WAY WAY below what I would have been paying for a place that provided both services.
still WAY WAY below what I would have been paying for a place that provided both services.
My ideal retirement home would be a very small ranch style place, one BR, 1-1/2 baths with an unheated 2 or 3 car garage to putter around in. Plus a very small yard. Have never seen anything like this for sale.
Leverage is great on the way up - brutal and destructive on the way down.
“‘So there we were, 25 years later, out to wash that house, after I went to the mountaintop and down all through the valley,’ he said. ‘Twenty-five years later, we were back at the same house doing a $300 power wash.’”
I wonder if he will put any of that $300 in savings.
The story about Tim Fields is pure vindication, thanks for posting that one.
Actually, I admire this guy for not being a crybaby and blaming everybody else for what he did. He even says he was treated fairly by the lender. Here’s the most interesting thing to me, and what is relevant today:
‘There was a time back about 2003, when a landowner in the county wanted a developer to pay as much as $25,000 for a 1-acre home lot, he said. ‘I remember the first time that I saw (the offer of) an acre for $25,000. I laughed out loud,’ said Fields, who noted he could remember thinking ‘that is ridiculous. Nobody is going to pay that.’
‘But soon, as mortgage lenders offered easy terms, the real estate and home building markets exploded. And, prices for home lots shot up fast. Large metropolitan builders were moving in, too, pushing lot prices higher faster. Suddenly, Fields said he was paying prices far higher than $25,000. ‘We paid as high as $132,900′ for a 1-acre home lot in about 2006, he said. ‘Anybody with 20-20 hindsight can look back and say now, ‘That was way too much. That was crazy.’
So he went from ‘laughed out loud’ at 25k to snapping up the same lots at 133k in just a couple of years. There’s a lesson in there somewhere…
Oh, and how about a cherry on top:
‘He said the one for which he had paid $132,900, is still unsold — even for the $35,000 the bank is asking now.’
The notion that a building lot is even worth $25k is laughable.
Learned last night that a neighbor’s nice, but unremarkable place (3/2 manufactured home on 20 fenced acres with a couple of outbuildings and pipe corrals) just sold after two weeks on the market. He’d planned to retire in two years and figured it would take that long to sell it. Not only did it get “snapped up” by an all-cash buyer who wanted a weekend ranch to play on, they paid 30K over listing price ($265K) for it. Am told the buyers had 500K to spend, and decided this place was a “bargain”.
Annoying, as it appears the bubble has returned to the hills, but the alarming thing is that they also bought the next parcel over, an empty 20-acre meadow with perimeter fencing and a well, for $168K!
I want to go bite something….
I want to go bite something….
What did you figure they were worth, Allena?
Well, one could argue they were “worth” whatever they got someone to pay for them.
But in a rational market? The house on the first 20 acres probably was a fair deal at 225K. It’s really a nicely put-together horse property on a park-like grounds, and the “mobile” on it would probably cost at least that much new before all the infrastructure costs (another 100K, easily.) Another 5 acre property nearby, with a shared well, no trees, is on the market for 110K! (It should reasonably sell for about 25-30K, if that.)
Raw land up here is available for between $1500-3000 an acre if you look beyond the real estate ladies. But they’re selling rural property at semi-suburban prices, and every so often gullible city folks, used to city prices, fall for their schtick.
So he went from ‘laughed out loud’ at 25k to snapping up the same lots at 133k in just a couple of years. There’s a lesson in there somewhere…
I think the only lesson is that people are adaptable—we change our opinions constantly. And, of course, as a shark, he had to swim to breathe; and for a builder, that means buying a lot to build on even if it was ridiculously overpriced.
Oh, and how about a cherry on top:
‘He said the one for which he had paid $132,900, is still unsold — even for the $35,000 the bank is asking now.’
Ok, that is a pretty sweet cherry…
Mr Jones you have a nice site but you also have a vested interest in it, yes I bought a short sale home 2 years ago for 350k cash sat on it and with the recent uptick sold 6 weeks ago for 488k. The people who bought it also paid cash they are from Omaha and will retire in it.
Two cash buyers , I’m happy they are happy why should I report to this site all is bad out there it isn’t , the recovery is pretty good not excellent but getting better?
And we’re all bellydancers too……. Liar.
I can’t understand what you are writing.
Mr. Jones, you have goot site, but I make big money all is getting better not everyzing bad, no? I vill now leave room but you don’t, lazer cut you in half. Nice knowing you, Mr. Jones. Gootbye.
banks are cautious but lending again,folks are are buying and selling property and the auto business is picking out what is so hard to understand that’s all I’m reporting. Is everything great far from it, just looks like we are making a good comeback in spite of the present administration.
Hey Liar……
Housing demand is at 17 year lows in an environment of cheap lending and a sea of excess empty houses….
Now go put a suit on that pig kiddo.
Name calling is when a person can’t deal with it, come back with good solid arguments. For the record Housing Analyst what is your method for analyst of the housing market or do you just read blogs and follow the leader?
Come see us when you get out of grade school.
And then come here for a schooling you’ll never forget.
Housing demand is at 17 year lows in an environment of cheap lending and a sea of excess empty houses….
True.
Now imagine what housing demand will be like in an environment of less-cheap lending and even more excess empty houses.
That’s the future.
Doom,
What he’s saying is, “Please learn to punctuate your sentences so they make sense to other people.” YOU may know what you mean, but without commas, periods, capitalizations and question marks, your sentences run together and come out like gibberish.
Translation:
doom what he’s saying is please learn to punctuate your sentences so they make sense to other people you may know what you mean but without proper commas periods capitalizations and question marks your sentences run together and come out like gibberish.
Her word choice is a little iffy too. I think she meant “analysis” not “analyst” in one place, but that is just the easiest one to correct. Others are less clear.
In yesterday’s weekend discussion of “Underlying Fundamentals”, Prime_is_Contained offered this:
“any bets as to which regular is trolling us under the “doom” moniker? Seems a little too perfectly on-target to not be a regular…”
Translation:
doom what he’s saying is please learn to punctuate your sentences so they make sense to other people you may know what you mean but without proper commas periods capitalizations and question marks your sentences run together and come out like gibberish.
LOL! Awesome one, Allena!
“…looks like we are making a good comeback in spite of the present administration.”
Lemme guess: it’s the economic fundamentals, right?
If you can continuously repeat this you are all set up to become filthy rich.
But if you can’t continuously repeat this then you just may end up losing it all.
The success or failure isn’t totally dependent on what you do, it also depends on what the other guy does. If the other guy decides to show up with a suitcase full of cash then you are set. If he doesn’t then you are not.
Exactly. He got lucky and caught the bubble wave. The question is what will he do with his profit? Will he put it in the bank, or will he double down and buy more properties? Greed suggests the latter, which means that he will eventually lose it all, like Mr. Power Washer in first article.
And you’re gullible enough to believe him. Lolz
…..gullible enough to believe him.
It’s impossible to believe someone could have bought a short-sale house 2 years ago for 350K and sold it yesterday for 488K?
I can think of about 30% of America where that could have happened.
How is this so impossible to believe when half this blog is talking about and illustrating an echo-bubble?
“I can think of about 30% of America where that could have happened.”
Of course you can! Just like you believe your shanty in the slums of a third world country is actually worth something. We understand.
Of course you can! (imagine about 30% of America where home prices have risen sharply)
Yes we can!
Home Prices Climb in 87% of US Cities Amid Recovery
Bloomberg-Aug 9, 2013
The median price for an existing single-family home was $203,500 nationally in the second quarter, up 12 percent from a year earlier. That was …
Home prices rise for 16th straight month
Columbus Dispatch-Aug 6, 2013
U.S. home prices rose 1.9 percent in June from May; that was the 16th straight month-over-month increase. All told, U.S. home values …
Housing prices on the rise in Prince George’s, Prince William counties
Washington Post-1 hour ago
Prince George’s and Prince William counties were two of the hardest-hit areas in the D.C. metro region when the housing downturn struck.
Metro Detroit home sales prices rise nearly 50 percent in July
MLive.com-by David Muller-4 hours ago
DETROIT, MI - The median selling price for Metro Detroit homes in July jumped 47.4 percent to $129,000 according to the latest statistics from …
Home Prices Rise Steeply in West, Sunbelt
Wall Street Journal-Aug 9, 2013
Economists and housing analysts expect prices to continue rising. Many of the driving factors, such as tight supply, fewer foreclosures and …
Property bubble drives up prices, forcing families to flee the capital
The Guardian-Aug 10, 2013
Nestling in the shadow of the defunct 1930s leviathan that is Battersea power station, the 1,200 gleaming glass and metal apartments that …
Las Vegas home prices continue steady rise, surprising experts
VEGAS INC-Aug 8, 2013
The median price of a previously owned single-family home sold in Southern Nevada last month was $180,000, up 35 percent from $133,000 a …
MiamiHerald.com
County home prices continue to rise
Mail Tribune-8 hours ago
Figures compiled by the Southern Oregon Multiple Listing Service show the median price for existing homes sold between May 1 and July 31 …
Rising home prices now reaching poorer areas
Haaretz-14 hours ago
Rising home prices now reaching poorer areas. TheMarker-Yad2 survey shows biggest increases in Rehovot’s Kiryat Moshe and Haifa’s Hadar …
MiamiHerald.com
Dallas home prices rise 11.5% as part of national rebound
Dallas Business Journal-Aug 8, 2013
Dallas area home prices have increased 11.5 percent year-over-year in the second quarter, according to the National Association of Realtors.
Philly.com (blog)
US home prices rise 12.2 percent in May, most in 6 years and sign of …
Fox News-by John Stossel-Jul 30, 2013
WASHINGTON – U.S. home prices jumped 12.2 percent in May compared with a year ago, the biggest annual gain since March 2006.
York County housing prices on the rise
York Daily Record-by Sean Adkins-Aug 9, 2013
Between January and July, the median sale price for a local home climbed 3 percent from $140,000 last year to $144,000 in 2013, according to …
Home prices rise nearly 12 percent from a year ago
OregonLive.com-Aug 6, 2013
On a monthly basis, U.S. home prices rose 1.9 percent in June from May, the 16th straight month-over-month increase. All told, U.S. home …
Local housing prices on the rise
York Daily Record-by Sean Adkins-Aug 9, 2013
Between January and July, the median sale price for a local home climbed 3 percent from $140,000 last year to $144,000 in 2013, according to …
MSN NZ News
Pioneer Valley home sales, median price, both increase in July
MassLive.com-3 hours ago
In this Tuesday, July 9, 2013, file photo, a zero net energy home is listed for sale in New Paltz, N.Y. Private data provider CoreLogic issues its …
Newsday
Home Prices Jumped 12.2% in May
New York Times-Jul 30, 2013
Home values are rising as more people are bidding on a relatively tight supply of houses for sale. One concern is that rising mortgage rates …
Home prices pick up steam in most areas
Pueblo Chieftain-Aug 8, 2013
WASHINGTON, D.C. — Median home prices continued to rise in the majority of metropolitan areas in the second quarter, with the national …
For my generation, an affordable home seems an impossible dream
The Guardian-Aug 11, 2013
How many of us are really cheering at the rise of house prices? Scrolling through property website Zoopla is my low-level self-harm – fork …
MyNorthwest.com
King County median home price up 15 percent over year ago
The Seattle Times-Aug 6, 2013
The median price of single-family homes sold in King County last month jumped to $434,000, up 15 percent from a year ago and up 1.5 percent …
NO area housing prices steadily rising
The Advocate-Aug 8, 2013
Bolstered by job growth and action from buyers hoping to take advantage of low interest rates, the seven-parish metro area’s housing market …
Charlotte home prices rise nearly 8% in June
Charlotte Observer-Aug 6, 2013
Charlotte-area home prices rose 7.8 percent in June from a year ago, the largest gain in nearly a year and a half, a report released Tuesday …
you believe your shanty in the slums of a third world country is actually worth something
So does this dude (and his agent) I guess. You should email them and set them straight.
http://www.propertyinbrasil.com/Brazil-Property/Duplex-Penthouse-Property-in-Copacabana-for-Sale/RIO-RA2008/
We know how gullible you are. No need to demonstrate it with more spam.
And you’re gullible enough to believe him. Lolz
Hypothetically it could be true. Or he might just be BS’ing.
Colorado (btw I lived in Genesee my brother in Highlands Ranch several years ago). No matter what anyone tells you on a blog or internet site you never know who they are and that goes for me to.
Please do any research on the recent RE market, it is not doom and gloom, many people have sold their homes some broke even, some lost a little equity, some made money.
Qualifying is harder now unless you have a lot down as it should be, overseas people with money don’t care about Ben Jones blog or anybody else, they still see America as a out and out bargain.
The couple who bought my investment home paid $488k and the value should increase to about high 600’s (2015).
We are all investors in life, you buy something you die somebody sells it.
Watch very closely for a deal in your location, you may make money right under your nose?
‘overseas people…still see America as a out and out bargain’
A bargain, compared to what? Where they live? Because a house in El Salvador might be cheap compared to Flagstaff, but that doesn’t mean that comparison will ultimately determine prices in El Salvador. It’s more likely that the incomes of people in El Salvador will determine that in the long run, no matter how many houses I buy there.
The couple who bought my investment home paid $488k and the value should increase to about high 600’s (2015).
What kind of fool were you, doom, to give up an easy 200K??? You should have held for a few more years!
Colorado luck has nothing to do with it.The home I purchased had a value of 578k it went to short sale I paid 350k and waited.
Greed would be if I put it on the market for over the original value, I listed it under market, got a fair return and the buyer saw that $488k was also a good buy for them. You are right greed is a killer in business, turn profit quickly and move on waiting for the big get is death in most cases of investing
You didn’t “purchase” anything. You’re a liar and likely a realtor.
Doom,
Try this:
Colorado,
Luck has nothing to do with it. The home I purchased had a “value” of 578K. I bought it for 350K at short sale — and waited.
Greed would have been if I’d put it on the market for over the original value. Instead, I listed it under-market and got a fair return. The buyer felt that 488K was also a good buy for them.
You are right; greed is a killer in business. Turn a profit quickly and move on. Waiting for the Big Get is death in most cases.
LOLZ….. it just gets more apparent.
The original use of the term house flipper described a group of people who would buy houses and flip them amongst themselves and then finally sell at an inflated price to an unsuspecting mark. That is what I suspect is going on now when I see these crazy increases in prices.
“…why should I report to this site all is bad…”
Why should you be visiting or “reporting” to this site at all? What is your point? Who are you trying to convince- yourself or a bunch of anonymous strangers? Why? What is your agenda?
Getting liars to report the truth is like getting us truthful folks to lie.
It appears doom is a liar and probably a realtor.
“…Why should you be visiting or “reporting” to this site at all? What is your point?”
…Sociopathic R.E. Shill internet sockpuppet touting damage control propaganda in vain!
No agenda,in spite of a do nothing administration I see hope for us because we still have the dollar the standard of the world until somebody has a better currency we will make a slow but steady recovery.
Don’t be upset with me just hope these folks are thrown out in 2016 and we get smaller gov ‘t and a return to fiscal policy that helps us all. We are Americans in this together, if current policies continue and 2016 turns into another debacle ie Clinton gets in then we need to move to a remote part of the world and pack it in, I’m banking on we survive this because I still believe in our system.
You should go out and buy 20 or 30 more houses.
I am sure you do believe in ‘our system’- where else can someone, with a second grade reading level, make $138,000?
‘CHARLESTON, W.Va. — An auction of the former West Virginia Housing Development Fund building at 814 Virginia St. E. in Charleston was suspended when no one bid Thursday morning. Bidding for the 31,000-square-foot building started at $445,000. The four-story building, equipped with office furniture, was appraised at $1.1 million.’
‘ Jay Goldman, of Goldman Associates, is facilitating the auction and said he remains optimistic about the property’s future. He said he wonders if some of the people he gave building tours to but who didn’t show up for the auction now wish they would have attended.’
“I think the minimum bid is a giveaway,” he said. “I don’t know of any building of this quality in downtown Charleston that has all the furniture in move-in condition that you could get for $15 per square foot.”
I’m not sure why this would be a shocker….. A 20+ year old building just isn’t worth a whole lot of money….. High rise or single level.
Is it different if the 20+ year old building is a house? (Asked while sitting in our half of a rental duplex with a current Zestimate™ north of $500K.)
P.S. Built thirty years ago…sprinkler system was recently uprooted due to major problems.
I wasn’t specific enough. There is no difference in the rate of depreciation between a a multi story and single level structure.
What agency of the federal government will be in charge of keeping housing prices inflated at bubble-era levels after Fannie Mae and Freddie Mac are resolved?
Look I’m sure Ben wants to discuss his topic of the day it got sideways, I will leave you all with this.
The economy is still very fragile we all know that
I do very little investing good or bad times I saw a opportunity with this short sale.
Will I now go out and buy more homes doubt it very much. I did well in my small investment and will wait when interest rates in banks CD’s (late 2014) go up and put my profit in long term this time.
Hope people wake up and try a all new administration next time around.
Folks on this site have a right to vent because what happen the last few years was criminal and nobody answered for it. I do believe we will be back and strong we just have to wait till these people in office get booted.
Thanks for your seething $hitpot of wisdom Gandhi. Here’s a penny for your thoughts.
You don’t have a penny to your name pal?
Here’s a nickel $hitHouse Poet….. go feed your family.
I don’t know what “the market” will do in the future. After all, it’s a “market” subject to many external influences.
The part of the article talking about house lot pricing resonates with me because it is one of those huge externalities, in the form of land use planning and its companion “horseman” of building standards. I learned years ago in my real estate sales courses about what ownership consisted of, a “bundle of legal rights”. This is another way of saying one can’t really own land, that it all really belongs to the state, just as people complain about foreign countries like Mexico, saying you can’t really own real estate in Baja. So, here we have only a “bundle of legal rights”, and that bundle can be reduced by the actions of politicians. 100 years ago you could buy land and divy it up any way you wanted and build whatever you wanted on it, but now with every year that passes, zoning further restricts what you can do and so we see the $200K one acre lot and local restrictions on house size and type. Gone are the days when you could pick up a few acres of rural land for <$5K, build a foundation and the first floor decking, tarpaper the decking and live in the basement while you saved money for a few years to build the rest of the house. An enterprising journeyman tradesman could end up with a paid off house in less than 10 years, but the shrunken size of that “bundle” precludes this in most places now.
The typical American home has always been, due to cheap construction, an essentially temporary structure, but that was OK when cheap could be had for cheap. Now, due to externalities, cheap has become very expensive and people are impoverished by debt while living in places that would disintegrate in a few years without incessant maintenance. Why does the public tolerate this state of affairs? If they knew the real truth would they support such a system? Without being hornswoggled I doubt they would. In such a state of affairs the question of “Cui Bono?” is highly pertinent.
“Gone are the days when you could pick up a few acres of rural land for <$5K”
Snap out of that delusion. $500/acre is available in all 48 states.
Gone are the days when you could pick up a few acres of rural land for <$5K, build a foundation and the first floor decking, tarpaper the decking and live in the basement while you saved money for a few years to build the rest of the house.
That is very much like my dad’s project house which started in 1954. He paid about $300 for 3 acres of land 2 miles south of town. We moved into the basement in 1958 with a partly finished shell on top & finished it out with home-equity loans as the property became more valuable. Dad ‘cheated’ by scrounging some used or re-purposed materials like floor beams and a huge picture window rejected by a local school project. The last thing we did to it before we moved out was laying the oak parquet flooring in the living room. I did that myself, walked across it only once, got in the family station wagon, and we left town for good in 1963. House sold for $14,000. It was torn down in 2004 to make room for a Walmart Supercenter.
The experience was invaluable for me. What I learned helping with that house has saved me $1000’s over the decades since. At the time I would have preferred living in rented quarters in town, but that wasn’t up to me.
All housing is temporary except for things like natural caves.
I’m surprised none of these people ever thought to put some of their money aside. Why did they have to gamble it all?
$500/acre?
But in BFE with no water or utility access.
In ALL 48 states $hitHouse Poet.