Waiting To See How Much Lower The Price Will Drop
Let’s start the desk clearing with some breaking news. “The crucial selling season for metropolitan Phoenix’s housing market got off to a less-than-resounding start last month as sales of existing homes plunged below last year’s levels, posting their worst May performance since 2003. There were 6,870 existing houses sold in the Valley in May, down 34 percent from the 10,425 resales in May 2005, Jay Butler said.”
The Patriot Ledger. “At least a dozen ‘for sale’ signs are now sitting on the front lawns of classic New England homes along Hingham’s Main Street. ‘I’ve been here for 27 years and I’ve never seen so many for sale signs,’ said Robert Emerson, who put his five-bedroom colonial up for sale about a year ago. Emerson said he has had to drop his asking price twice.”
“‘This is symbolic of the negative press you read about the housing bubble,’ Emerson said.”
“Marketing Bill Thayer’s house has been just as tough and delayed the 71-year-old’s plans to retire. Brokers tagged the red clapboard cape at $820,000 but the asking price has been reduced to about $770,000. Thayer said he knows that savvy buyers are waiting to see how much lower the price will drop. ‘I’d do the same thing,’ he said.”
“The market has changed and that your home many not fetch as much as it would have six months or one year ago. ‘People won’t overpay for houses in this market,’ said Jim Gillespie, president and CEO of Coldwell Banker Real Estate Corp. The worst decision a seller can make is to set the price too high to leave room for downward negotiation.”
“‘If a house is on the market for a long period of time it becomes stale,’ Gillespie said. ‘People start to think something is wrong with it.’”
From the Bay Area. “Construction projects in Mission Bay are adding thousands of condos to the market, at a volatile time for the economy. This mix of economic events is hammering developers. Concerned that home buyers won’t be able to afford higher mortgages, one Mission Bay developer reportedly dropped plans to build a 100-unit building.”
“Another company already building a development is waiting to set its prices. ‘There is a lot of inventory so people are trying to figure out how best to unload it,’ said Golden Gate University President Phil Friedman. Friedman also says condo prices could come down, or developers may convert them to commercial or rental property.”
“The following is a transcript from Bloomberg Radio’s interview with RE/MAX CEO Margaret Kelly: Host: What about yesterday’s new home sales number? MK: ‘Well when you look at new home sales, there were a lot of speculators. A lot of flippers coming into the market, people trying to get new homes. And so we knew that this year for new home sales, things would kind of go up, kind of go down. Overall though the new home sales are down 11%.’”
And from a Motley Fool. “There’s nothing funnier or more satisfying than watching the National Association of Realtors change its tune these days. The latest news release from this sunny-Jim industry group finally fesses up to its past fiction, but even when it admits the bubble’s going to pop, it can’t muster the courage to just come out and say it.”
“The cracks began to show in subsequent remarks from NAR ‘Chief Economist’ David Lereah. The head outfit that ridiculed the idea of a housing bubble for years is now crying for Ben Bernanke to bring it back. ‘But this is a time for the Fed to pause on rate hikes because we have some interest-sensitive housing markets that have become vulnerable,’ Lereah said.”
“The real problem here isn’t the NAR, of course. You have to expect these people to spin the facts for their industry. No, the real problem here is the uncritical press out there, which is all too happy to pepper every contrary indicator or bearish remark with an NAR official’s informed-sounding bubble denial. Never mind if what the NAR folks are saying doesnt seem to make sense (or contradicts what they said just a few months back).”
“It should have been completely obvious to anyone with a loan calculator and a glance at wage increases that those months of industry bubble denials were just wishful thinking.”
Each week seems to bring more housing bubble consensus than the last! My thanks to those who support this blog. Please check back this weekend for news, your market observations and topics.
It is wonderful now: sometimes I can’t tell whether the quoted text is from a news story or from postings on this blog.
Thanks a bazillion Ben.
Ben, are prices coming down in AZ, in the areas that you know?
We have been hearing about the added inventory all the while but every news story goes out of its way to tell us that prices are stable. Is this true? Or are you witnessing drops in markets near you?
My neighbor just got his house under contract after nearly 10 months and one failed closing. Last summer it went on the market for $245K. First contract was a realtor of all people. They actually had the check in hand (sale price: 245K) after closing when the title company called and told them to bring the check back because the buyer’s financing fell through. Nine months later it just went under contract for $225K. Tucson. I’m surprised they actually got this thing under contract. The buyers are from…where else…CA.
Check out Phoenix Craigslist and type in Reduced. There are over 500 ads.
I just learned by stepbrother and his wife are looking at homes in Queen Creek, AZ.
If they post here asking about it, tell em the truth but take it easy on them.
There aren’t bubble savvy.
What is their blog name?
Don’t know yet, but they should take a look here this week.
And what about the financial institutions that lent the money ?
Who’s the most on the hook ? Who is in real trouble ?
Weekly Bakersfield Inventory Update:
WOW!!!
Listings up 6.63% x 52weeks = 344.67%!!
Realtor.com puts Bakersfield at 4507 as of 6-9-06. In Otober it was 800. Wow what a jump. Plus I hear they are building new homes like gang busters. Also, noticed the featured homes on realtor.com have not changed in months. It appears Bakersfield is dead.
lancaster palmdale inventory has almost doubled in last 4 months
“The cracks began to show in subsequent remarks from NAR ‘Chief Economist’ David Lereah. The head outfit that ridiculed the idea of a housing bubble for years is now crying for Ben Bernanke to bring it back. ‘But this is a time for the Fed to pause on rate hikes because we have some interest-sensitive housing markets that have become vulnerable,’ Lereah said.”
Given Lereah’s repeated assertions that the housing market is strong and that rumors of a bubble are a fabrication, it seems rather inconsistent for him to now plead to Bernanke for a pause because some markets are vulnerable. Strong markets are generally not vulnerable, and vice versa.
The sheer hypocrisy of it all. The NAR still posts “anti-bubble” reports that claim, for many bubblicious regions, that interest rates would have to rise beyond ten percent and mass layoffs would have to occur for the region to see a mere 5% decline. So why is David L wailing about interest rates in the 5-6% range?
John — good point. Heaven forbid the media should consider catching him on such contradictory language.
Yes, but the more I think about it the more I think that Learh might have his wish come true..
“The crucial selling season for metropolitan Phoenix’s housing market got off to a less-than-resounding start last month as sales of existing homes plunged below last year’s levels, posting their worst May performance since 2003. There were 6,870 existing houses sold in the Valley in May, down 34 percent from the 10,425 resales in May 2005, Jay Butler said.”
My guess is that the reality of the current situation in Phoenix is far worse than this article suggests. Were there 48,000+ homes on the market in Spring 2003? To properly measure how weak the market is from the seller’s standpoint, one should look at the percentage of homes in inventory which sell each month, not the total number, as this provides much better indication of how long you would have to keep your home on the market under current supply and demand conditions if you wanted to sell it without slashing the price. My guess is that a far lower percentage rate of homes in current inventory are selling than at any point in the past decade.
Most everyone is shaking in their boots about rising interest rates. I think it is good for rates to rise and get the much needed froth out of the real estate market. Look forward to buying a place when prices are more reasonable.
‘Most everyone is shaking in their boots about rising interest rates.”
Not me. The higher interest rates go, the better off I am.
Of course, I pay my bills on time and have already cashed out.
Go, BB!
Careful what you wish for. Depending on where you put your money, higher interest rates leading to massive bankruptcies leading to bank closings could wipe out everything you had anyway. FDIC? You are putting your faith right back in the people who created this fiasco to begin with. It’s more like hoping foreigners will insure it, since we obviously have nothing but almost 10 trillion in debt as a nation. I’d be wary of anyone that much in the hole and going deeper by the minute insuring anything I own.
I did some research on this. The best place to hold assets is in a brokerage trading account as cash. Nobody can touch your cash there.
I just spoke today with Schwab about this regarding their Value Advantage fund. I was worried about the $100K limit on insurance. Here’s what the Schwab person sent to me as a pdf. I’m not sure if this is comforting or not…the $600M over all clients doesn’t sound like very much.
What is Excess SIPC account protection?
Through an agreement with Lloyd’s of London, Schwab
provides additional account protection that exceeds the SIPC limits. The additional protection is necessary and available only in the unlikely event that assets are not fully recovered when the SIPC’s protection limits have been reached.
What is the total amount of protection?
The combined total of SIPC basic account protection and
Schwab’s Excess Coverage is limited to $150 million per
customer, $1 million of which may be in cash. Schwab as a company is limited to a total of $600 million across all clients.
How much does Excess SIPC protection cost me?
This coverage is automatically extended to our clients at
no cost.
Where can I get more information?
An explanatory brochure is available upon request online
at http://www.SIPC.org.
uh oh forgot to close the bold tag.
did this work?
Ditto ! I’ve been sitting in cash since shortly after May 10th. Have at it, Ben ! All of a sudden the hedge funds that drove copper to $4 don’t look so smart ! Hmm… maybe the world isn’t risk free after all !
Responding to cash issues: I would try to avoid money markets with fannie and freddie paper. I think that ginnie is okay even though I try to avoid that too. My favorite is Fidelity Spartan Treasury Money Market. Vanguard has a TIPS (Treasury Inflation Protected Securities) fund that may be interesting for some.
For protection against a falling US dollar, there are funds like PSAFX (Prudent Bear Safe Harbor) which buy foreign bonds and currencies and hold bullion and maybe some mining shares. There are also international bond funds and there are Evergreen money markets denominated against other currencies.
Plus, how many new jobs were created in Phoenix last month compared to 2003. If the employment picture is stagnent and there are 500% more listings, where are the new home buyers going to come from. OK, retirees. So what kind of population growth did phoenix get last month. Bet the Chamber and the Newspapers have that info, but I can’t find that number.
Intel has been one of the major employment drivers in Phoenix in the past few years. Intel has stated publically that they are re-evaluating the company structure for efficiency. It doesn’t take a giant leap in logic to realize that means one of Phoenix’s largest suppliers of quality jobs has turned off the spigot.
Intel’s stock has been a disaster this year and they launched a price war against AMD in May and will continue it for their older processors. There are rumors that AMD will cut their prices by 50% soon.
Intel has very good new products next month but they have somewhat lost their monopoly status.
“‘This is symbolic of the negative press you read about the housing bubble,’
Yes…. It’s that damn liberal media again…[rolleyes]
Try this:
That’s what everyone here does whenever you post.
Seriously, the_lingus, aren’t there any political blogs out there? Because every time you post here, you sniff out a political issue that none of the rest of us would have ever suspected. Perhaps you should start your own blog, devoted to exposing the vast Republican conspiracy which is responsible for creating this housing bubble.
Don’t worry about leaving it on the market too long. Your real estate person will cancel and relist it so the the DOM clock resets to 0. Problem solved no sweat ok.
This is a curious statement becuase I just noticed such a thing today. My wife and I are anxious to buy though we are taking are time (i.e., not this year and maybe not next year). Anyway, there was a nice house we’d been following in the LA area just for the fun of it. Had they made it half price, we would have jumped on it.
Anyway, to my point. I just noticed today that the house, which had been on the market for about 90 days now says 1 day. Apparently they relisted it or something. How common is this and is it fair? I get why they do it of course.
I posted a while back about an apartment in our building — listed in March for $649K, reduced to $629K about three weeks later, down to $595K as of a couple of weeks ago and now, nothing on the MLS — despite the box of flyers still out on the front lawn. I’m waiting for it to be re-listed. I figure either the realtor talked this couple (who bought the place in 2001 for about $280K) into taking it off the market and putting it back on when things “pick up”, or the seller insisted he wouldn’t take less than $595K for it. Stay tuned!
BUT THEY AREN’T MAKING ANYMORE LAND IN SAN FRANCISCO. PRICES CAN’T FALL THERE. EVERYONE CAN AFFORD A $1M PIECE OF SHIT CONDO. ISN’T THAT WHAT WE WERE TOLD?
From the Bay Area. “Construction projects in Mission Bay are adding thousands of condos to the market, at a volatile time for the economy. This mix of economic events is hammering developers. Concerned that home buyers won’t be able to afford higher mortgages, one Mission Bay developer reportedly dropped plans to build a 100-unit building.”
“Another company already building a development is waiting to set its prices. ‘There is a lot of inventory so people are trying to figure out how best to unload it,’ said Golden Gate University President Phil Friedman. Friedman also says condo prices could come down
I hate this crap! For HOW many years now have we been hearing “There’s a shortage of developable land in the Bay Area! Prices won’t go down because there is a severe housing shortage!” Now, developers are pulling out because they can’t get $1M for a crappy 1BR condo in San Francisco. Cry me a river! (AND KEEP BUILDING HERE!!! We need more houses!)
SlashChick (in San Jose)
This is already ontop of how many building they have already put up and are in process of expanding… There is what 4-5 in past 2 or so years now…
Add all the little 15-20 new condos going up everyever in the city from Bay to Oceanside. … Even off Pine and Van Ness saw new Condos going up….
I hate the dumb ass’s that said “there is no more land to build on”
Freaking aye!
Gosh, did Japan go and increase its land eightfold? Otherwise, how the heck would the RE sector have decreased so decidedly back in the day?
San Francisco is so screwed.
I’ve been watching the Phoenix market over the last year or so and it seems that listing prices are a bit lower lately. Still too high, of course, but what would have been listed at $280 last year seems to be settling in around $260. One place that I might have been interested in was purchased for $143 in 03 and the asking price was $260. They might get that from someone, but it won’t be me.
I have been watching too. The prices have gone down slightly, but not enough. I can’t believe how many homes are listed at around the $200/sf. They are nothing special either. In Michigan you can easilyl build or buy a home for just over $100/sf and it is made of brick not stucco. I am looking for a 40% haircut or more before I buy here.
I think 40% is a safe assumption. I bought my first house in Phoenix in 2000 for $75 a square foot and sold it five years later for twice that. Incredible…and scary. That is not supposed to happen in a sound market. Real estate was flat in Phoenix and Tucson up until about January of ‘05. That’s when I noticed unusual sales starting to take place in my former neighborhood and current neighborhood. Looking back it’s now obvious that it was the speculators who all of a sudden showed up. I’m telling you, it was just plain weird. A few months earlier, say October of ‘04, and houses would be put on the market and just sort of grind towards a sale. Then ‘05 rolls around and it was like someone lit a fuse. Then, as suddenly as it all started, the inferno burned out.
I’d look for prices to come back to about $100/sq foot before I even started kicking any tires. I absolutely would not start looking above that. These desert cities are way overbuilt and I think both are the most vulnerable of all bubble cities.
Welcome to the Grand Canyon state. Summers suck but the winters are awesome. I originated from Chicago and will never miss the winters there!
Thanks for the advice!
Amazing but true that even with a huge housing glut prices are still holding strong.
Amazing but true: Anything that cannot go on forever will stop, and that includes high housing prices in the face of a growing glut.
Please let me know when the prices get back to at least the Jan/Feb. of 2005 range.
This is a multi-year slide.
I can happily not buy for 2 years to save 200K+.
200K in savings from wages would take 10 years.
100K salary 20% savings = 10 years
That is a smoking deal.
Can you last that long before your I/O resets?
They already are at that level in east central Florida.
i’d email this article to our local real estate reporter,but i don’t think he can read.
You’d be surprised at how many of them can’t write either. Ever get an email from a broker ? Some of them can’t spell and grammar is a foreign concept.
But they aren’t making any more land in SF? Prices ALWAYS and only go up? What is the matter here?
From the Bay Area. “Construction projects in Mission Bay are adding thousands of condos to the market, at a volatile time for the economy. This mix of economic events is hammering developers. Concerned that home buyers won’t be able to afford higher mortgages, one Mission Bay developer reportedly dropped plans to build a 100-unit building.”
“Another company already building a development is waiting to set its prices. ‘There is a lot of inventory so people are trying to figure out how best to unload it,’ said Golden Gate University President Phil Friedman. Friedman also says condo prices could come down, or developers may convert them to commercial or rental property.”
From the full article:
But this is a time for the Fed to pause on rate hikes because we have some interest-sensitive housing markets that have become vulnerable,” Lereah said.
Allow me to translate:
* Interest-sensitive housing markets = “Bubbles”
* Vulnerable = “Ready to pop”
* Lereah = Liar-for-Realtors (TM)
GREAT ARTICLE! Is this something that is the trend as people get stuck with higher debt? This speaks loads about how desperate people are.
http://www.edmunds.com/advice/specialreports/articles/115584/article.html
I have to admit that article amused me. Every time I think people can’t possibly get any scuzzier, they prove me wrong.
I guess I could torch my Prius and Honda Element. Think anyone would believe that? They’re paid for. LOL
Torching a Prius will confuse the living sh** out of arson investigators.
Nah, GM is the only company that destroys hybrid/electric cars. Read up on what they did with their EV1. They sued lease holders to get them back then destroyed the cars. Is it any wonder Toyota is eating their market share for breakfast?
And GM has a lot of debt related not just to cars but also real estate. GM stock and bonds are just pieces of junk.
What is the flip side of that, “Pimp My Ho(me)?”
Tragi-comic. I hope the idea of a “rotisserie program” doesn’t spread to speculators who are underwater on their condos.
Eventually it would. I heard some reports of torched homes here around Bay Area - either “for sale”, or “just bought and in the process of remodeling”.
That is the best answer I have ever heard to the question of “What should I do with my gas-guzzling SUV, now that I can no longer afford to drive it or to make payments on my underwater note?” (TORCH IT!)
I predict the incidence of “torching”will decline due to the high price of gasoline.
LOL Robin! Good one.
A couple of years ago, my friend and I went on a 4WD trip in the Cleaveland National Forest outside Murrieta, CA. We stopped at a turn out to enjoy the veiw out toward the ocean when I decided to walk to the edge of the turn-out we parked at. I glanced down the steep incline and spotted a Range Rover about 80 feet down the embankment. We climbed down the slope to make sure no one was in the vechicle. To my suprise, the keys were in the ignition and no personal belongings were in the car. We reported it to the police and had to drive them to the location. The vehicle had been reported stolen just two days prior. Given the good condition the vehicle was in (a lot of brush slowed the descent on the way down) I could tell it wasn’t a joy ride. I’ll bet the owners were disappointed when their $80K SUV was recovered so quickly and was still driveable.
Concerned that home buyers won’t be able to afford higher mortgages, one Mission Bay developer reportedly dropped plans to build a 100-unit building.
Really? Ah, come on - of course they will be able to afford it! (wink wink)
I was stating on the blog several months ago that we would start seeing people use arson to try and escape the mortgages. I was saying it in a joking way. But I was very serious. Didn’t picture it on cars, but then in this crazy world, anything is possible. Might have to check on who has insurance coverage on themselves too.
There is a proper order to things, cars first, then houses. It wouldn’t surprise me to see desperate people burn down whole neighborhoods to try and hide their tracks. It won’t work though because the insurance company will just rebuild, not pay off that insane 800k mortgage for them. It will probably happen anyway though because people who don’t read the terms of their mortgage won’t bother to read their insurance policies either. This is going to get so ugly.
“…because the insurance company will just rebuild, not pay off that insane 800k mortgage for them.”
Probably a lot of truth in that. Works that way with diamonds, which always are waaaay overvalued when insured. Since building costs will decline in most bust areas, it would make sense to rebuid and, intentionally or not, hold the insured FB’s feet to the fire.
Don’t even have to rebuild for them. Just give them the current market value of the home in cash.
Correct. They just fund reconstruction cost. My [old] $560K house’s insurance was for $170K of reconstruction. I called them before and asked if that was a mistake, and it was not.
My two cents: We’ll start to see some significant price drops in August/September (with the numbers not reported until September/October). I’m basing this prediction on three factors: (1) demand will further decline because the prime selling season will be over, as anyone hoping to buy in time to get the kids into the new school at the start of the year will need to get the contract signed by the end of July to realistically get the escrow closed and have time to move before the new school year; (2) we should see a significant number of locations with y/o/y decreases reported for July or August (since last July seems to have been the peak), which will get reported by at least some of the MSM and those y/o/y losses will scare a lot of people and thus end the showdown between buyers and sellers, with the sellers blinking first; and (3) supply will continue to grow, as more people want to cash out (longtime owners), cut their losses (people who bought in the last two years), or fear their coming loan re-set (people who bought in the last 1-5 years). Anyhow, it’s merely my prediction, which I know is probably wrong, but at least it makes a lot more sense to me than the BS from NAR, Harvard’s JCHS, and the rest of the RE industry morons. Anyone have any different thoughts on the timing of this?
I agree with you. I think what may drive it most is your category of the long-time owners — the updside-down recent buyers — the equity-rich owners who see $$$ disappearing. These long-term owners have lots of equity and won’t mind “giving up” a few hundred thousand. They will be more concerned that the market may stall or tank for 5 years when they will need to sell.
Example: I happily sold an elderly relative’s house in Riverside County in May this year for $35K under the comps (the $35K was composed of $5K underpriced list, $20K in upgrades/ improvements, and $10K in cash to the seller) because the relative, who is 86 yrs old, can’t wait out a 5 year slump. She will need the cash sometime in the next 5 years and selling the house a year or two or three years from now would most likely net a much smaller gain, and take a lot longer to sell.
I priced my own house in Saratoga, CA at $150K less than comps because I wanted to sell right away, and I had plenty of equity. It wasn’t real money I was “giving up”. But it was real money that I put into the bank!
oops, that should have read “NOT the upside-down recent buyers”. Sorry if this was confusing.
What is your take on the near-term future of the “upside-down recent buyers”?
I don’t know anything about this this time around. Most of the people I know have lots of equity. But many of those same people don’t have stable jobs, mainly because they are now middle-aged and living in Silicon Valley. The few people I know that don’t have much equity have their own businesses and are doing OK, at least they are unlikely to be fired or laid off.
I had upside-down equity in 1994 but it didn’t matter since our income stream was very high. And interest rates were also really high. We weren’t happy about the situation but we didn’t have to do anything other than keep slaving away at our miserable all-consuming hi-tech jobs.
I can’t see people giving up a nice summer vacation to be looking for houses. July 4 will be the very end of any leftover quality buyers, and then the bleeding will begin. If they plan on moving for start of school year, they buy in June, plan on a 60 day escrow, and move around Labor Day. Any house still on the market after July 4, that has been listed for over 60 days is toast.
And then the ARM resists, and we have panic. I predict months, not years.
Another datapoint could be when the property tax assessments arrive.
In ventura county, ca, I see homes bought late 2005/early 2006 still show old tax assessment. Based on the sale prize and 2005 valuation the taxes are likely to double! ouch!
In my neighborhood two condos bought in mid 2005 are in tax default. my guess is that owers did not estimate the tax and have no money or equity left to pay the tax.
is there any end to listing the pure stupidity of these people?
For most, people will turn into buyers only when their present home sells.
>Anyone have any different thoughts on the timing of this
I’m still betting on November for significant YOY decreases to be reported for LA.
My kids start school in Aug..Around the 20th or so. The begining of July is a more realisitic time frame. Thyat gives you a chance to deal with anything that might hold up the closing AND the kids a few weeks to get a feel for the new house.
That said priced will tank when the sellers realize prime selling season is over…And with that clueless bunch, it might be when the grass starts to go dormant.
WaitingIntheOC - good post and observations. The FBer, have to sell folks, are what will really drive this down in the bubble areas. They will be praying for that magical genie to fly out of their A$$ and save them from the FORECLOSURE monster.
Of course, when the genie doesn’t appear (This isn’t Aladdin), then they will be gunning for Gary “It’s in the Bag” Watts. He will be going into hiding, with his buddy Dave Lierah. Then the MB and realtwhores will be asking for police protection. WHat entertainment.
No no no… they’ll be blaming the Fed all the way into the ground. Pleasant thought though… what you said.
So far, no major dropoffs in the Merrimack Valley area of MA, where they had all that flooding on Mother’s Day weekend. May sales in 2006 were just about equal to 2005 May sales in the North Andover/Andover towns and the Methuen/Haverhill locals. The paired areas are on par with each other with Andover/North Andover being affluent and Methuen/Haverhill being middle income. Prices have headed down and days on market have gone up but not considerably. Suprisingly, sales volume have been about the same. One house in Andover that I was tracking was listed for $450k and sold for $410K. This is the town where our fearless leader and his daddy went to prep-school. Also, Jay Leno is from here, but he only went to the high school, like me. We also have the other part of the equation, which is the City of Lawrence, a immigrant mill city, that now is almost entirely made up of the good people from the Dominican Republic. This is a good area to track the housing bubble because we have the whole spectrum here. Lawrence is hurting and hemoraging badly. The 3-4 families in Lawrence had one of the highest appreciation rates in the state. They went from $125,000 for a 3-family to an average of $375,000 from 2001 to 2005. There are now more of them on the market then you can shake a stick at. The next couple of months should really be a good indicator of where things are heading. I’ll do posts on this at the end of each month. As you would expect, the decreasing value percentages get higher as you go from affluent to lower income.
Interesting read. The new format tends to bury good info like this.
Around January in New Tampa, Tampa. You could see this huge sign advertising Luxury Condos starting at $140.000. About a week ago I noticed there was a new sign that said Luxury Condos starting at $100.000.
I must say, I’m so pleased to see this happen. I love America, and I’m afraid for my children - but this is the first big wave of the Tsunami which will destroy our currency . . . and hopefully with it our power to pave, poison and kill other humans on our planet.
Liberal psycho-babble? Read history, it goes in cycles and the writing is on the wall for our empire. I hope we transform and rise from the ashes stronger and wiser, but meanwhile - hold your children close, grow a garden and make friends with your neighbors!
History goes in cycles and the cycles are totally predictable when we don’t change and yes the writing is on the wall, another empire bites the dust.
You have to admit, it is strange that the folks we elect say absolutely nothing, and I mean nothing, about how things are looking gloomy (besides one party saying the other party is terrible). I haven’t heard a one say anything other than things are booming, foreigners have an appetite for our debt (absolutely asinine), it couldn’t be grander. If they are speaking for the people, and obviously there are more than a handful of people thinking things aren’t so grand, what is going on? Yes, it’s a rhetorical question. They want the power as long as possible, and in a democracy, telling it like it is won’t get you there, let alone keep you there. Keep the game going…..
Okay, despite what you might think, this is not the doom and gloom blog. We’re just discussing housing, not mankind. Enough people think we are crackpots just because we here on this blog think that RE sector will go into a downturn soon.
Nothing exists in a vacuum dear.
Let’s get to what Americans really care about…Paris Hilton!
http://tinyurl.com/gj5ly
puh-leez. The only talent Paris has is what I cannot post here. But it’s in the bootlegged videos. I love to hate self-indulgent celebrities who are so out of touch with reality!
My hope is to find a well desinged, small (ie easy to heat) house with a woodlot out back and room for serious gardening. I do not love gardening, but I am really concerned about the effects of a currency collapse.
I guess it is a sign of the times that the liberals are the new survivalists.
and hug the al quaida you psycho liberal idiot
bottomfeeder,
Nobody was name-calling in this stream of posts. People have different ideas and opinions. It’s not necessarily true that one way is good/right and the other bad/wrong. We each bring different experiences, perspectives and knowledge to this forum.
IMO, we should all be able to read about political topics without becoming upset, especially when the posters are not trying to be offensive. Let’s all try to debate the TOPICS and not the posters, personally.
Just MHO.
Susan - as you say, Rome lasted for just about as long as we have been around…
The decay of our society used to be more at the fringes; it is becoming more widespread.
Our problem is not external - even though politicians would like you to believe it is. It is the dumbing down of the majority of our population - the laziness and attitudes that pervade all corners of our society. We are fat, lazy and spoiled and this bubble and what will happen when it full out bursts are all just symptoms of an overall bigger problem with our citizens.
-Ed
You make a good point about education. My Grandad had no education, but he was a very good man. He raised two kids and a wife while attempting to farm some cotton off some crap land. They didn’t have two cents to rub together most of the time. Mom and Aunt wore the same shoes for three years, etc. It was right after the Depression. Grandad didn’t go to school past the third grade but his mind was sharp as a tack. He knew a good deal from a bad one, a liar from an honest man, and his word was as good as gold. Back then my grandad was more the norm. Today…well…we know what society is like today. The United States is more “educated” today than ever before yet the level of stupidity is at an all time high. People just don’t think and because of that, they are going to get their a$$ handed to them. The problem is that they might become a stampeding herd when the going gets tough and that day might not be far off. Good grief, does anyone these days know what adversity really is?
Just because your granddad did not have a ton of formal education does not mean he was stupid like most of these sheople. Back then, it was harder to get educated but there was a bigtime work ethic. Now, kids are spoiled, cynical, have access to education, but many are too lazy to take advantage of it. They are shown celebrities and sports stars who made it quick and have tremendous cash. They think they can do the same and their stupid parents have given them everything they wanted. Boy, are they in for a rude awakening when the rug gets pulled out from under them.
I would hire and older person with an “old school” work ethic over one of these “gifted” children anyday - ANY DAY!!!
And I have to say that Depression-era people might be a little overly cautious, but there is a REASON why post WWII the US was doing so well. I really believe those people drove gthe good times. They saved, had a good work ethic, and, in general - integrity.
In the wealthy area west of where I live, there is a high school where every student who learned to drive has a car, given to them by parents. There are employers desperate for hiring help, yet the teens turn down the jobs. They don’t “need” money. They are the spoiled children. Makes me happy to be humble and 47 years old. The pay is great as an older experienced consultant. The younger ones mostly do not have a clue (sigh).
been awhile.
#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
#26B 50-year mortgage hits the market
#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
I am also compiling some great “there is a there, but not here” quotes.
‘I think there are some areas where you see some softening, but Tallahassee is strategically poised to grow.’”
John Law — thanks — missed these. I have a nice porcini mushroom sauce for the squirrels, to add to last week’s recipes. Ahhh, such difficult choices: grill, broil, roast?
Don’t know if this was posted…from Lansner’s blog, OC Register.
O.C. housing “vulnerable,” Berkeley prof says
Respected real estate scholar Ken Rosen of UC Berkeley told a Costa Mesa dinner crowd on Thursday night that the O.C. housing market is “vulnerable” to a strong decline in sales.
Addressing an awards banquet sponsored by UC Irvine’s new real estate school, Rosen noted that local job growth — key to any housing market — remains postive, but below the pace of recent years. However, Rosen expressed concerns about the health of O.C.’s mortgage business, a key employer.
National headwinds are also buffetting real estate — trade deficits, high energy costs and other inflationary pressures plus rising interest rates. That will only add to O.C.’s home affordability challenges, Rosen says.
It adds up to a scenario where O.C. home prices could fall. Any drop, though, Rosen said wouldl be “modest, not a bubble.”
Just how does Rosen know that the drop will be “modest, not a bubble?” And isn’t he mixing his metaphors? Does a dropped bubble bounce or pop?
Here’s another one…
O.C. home price at record heights
If May’s home-buying patterns stay on course, DataQuick’s latest sneak peak says The O.C. will have a new monthly record median sales price at $630,000. The old mark was $628,000 in April.
Of course, May also looks to be the 7th straight month where home sales won’t match the previous year’s sales pace. That’s the fourth longest losing streak since 1988. For the 22 business days ended May 19 vs. the same period in 2005:
Median price Change vs. ‘05 Volume Change vs. ‘05
Resale houses $700,000 7.7% 2,109 -30.2%
Resale condos $470,000 9.3% 1,101 -26.1%
New residences* $697,500 -2.3% 425 13.3%
All homes $630,000 7.1% 3,635 -25.6%
* Includes single-family homes, condos and converted apartments
Do you post at Lansner’s blog?
If so, what handle?
I picked up a hardcopy of Falls Church News Press. http://www.fcnp.com It reports that a realtor disclosed that houses in FC City are selling 10% below the current assessment!
This is huge news and worthy of a blog entry. My estimate is that the current assement reflects early 2005 prices before the blow-off. Although FC City might have more aggressive valuations than Fairfax County.
I have already noted this at some condos in Tysons that I am tracking (375k peak July 2005, 300k assessment, 275k recent sale)
p.s This is suburban DC in Virginia.
Good to see proof that “NoVa is not immune to the bubble, Virginia.”
‘‘I’ve been here for 27 years and I’ve never seen so many for sale signs,’’ said Robert Emerson, who put his five-bedroom colonial up for sale about a year ago. Emerson said he has had to drop his asking price twice. He is optimistic, however, that a buyer will come along soon.
‘‘This is symbolic of the negative press you read about the housing bubble,’’ Emerson said.
What negative press? Everything we’ve read in the MSM for the last four years has been rah rah crap from the Nar et al. Oh, they must mean the bubble blogs, oh yeah, it’s all Ben’s fault. The reason you can’t sell your overpriced house is Ben Bernanke, or Ben’s Blog, or anything and everyone else except the damn price gougers and racketeers. Well, the turkey is coming home to roost so enjoy it. All the existing homeowners who are trying to sell “beautiful” houses to all the beautiful people who have to pay a pretty penny for the priviledge of funding their retirement and paying exhorbitant property taxes and insurance to boot. Sure, sign me up for a lifetime of servitude so that you can move on down to easy street. I tell you I just get to hating these self-serving buggers sometimes.
It has come to this: RE must go up, because we’re “blog-locked”.
I don’t know where these beautiful houses are, I’ve been looking locally and generally the people who are selling now are the ones who didn’t take care of the structure, esp. the woodwork. And the guy quoted here has been in the same place for 27 years; do these homesteaders realize how bad their long-inhabited homes look to a discriminating buyer’s eye? Apparently not. (To say nothing of what some places smell like after all that time… the residents won’t notice that old-cheese-and-cat odor, but the rest of the world will!)
You mean like these “beautiful homes”
http://tinyurl.com/kjk6t
I’m telling ya. Been saying this all along. The next big wave of stories will be the FB’s who are afraid to torch their “home” trying to get out via construction litigation. I saw a LOT of that in San Diego in the late 1980s, not that a lot of it was not justified. This whole thing just reeks from builder, to end user.
Here’s a great bit from the link Mort posted:
“We are not taking new listings without a $498 non-refundable administration fee unless the listing is priced 5% under the market.”
Or maybe these “beautiful homes”?
http://tinyurl.com/nurb3
Oh yes! Exactly what I was say. It’s not a question of if but when.
In O.C., commercial building booms
http://tinyurl.com/mnjka
Gotta have Applebees and Olive Gardens to feed all those stupid sheaople….
OT: Sometime next week how about a thread titled: “Post the lamest excuses you find for RE sales slowing here.”
Rick Chezik, an agent with Exit Realty in Medford said: “I think the gas crisis — even though it’s not generally called that — is affecting the market,”
David Lereah, the National Association of Realtors’ chief economist, said in recent statement, “This is a time for the Fed to pause on rate hikes because we have some interest-sensitive housing markets that have become vulnerable.”
I should have posted this in weekend topics but it ended up in the bit bucket and now here. I’ll try to get it right next time.
I guess realtors don’t trot out Harry Liu’s article on his expectations that rates will rise to 9% to prop up the US dollar.
Hard to say what happens to the dollar at this point but BB is in a very tight spot.
this guy has some interesting timelines, but he is late to the sales table…..
http://safehaven.com/article-5328.htm
Yeah i thought the same thing. If he’s trying to sell now he’s blown it.He might still have huge profits but he’s gonna mish a lot of gravy.