‘There Are Plenty Of Houses, Hold Out For A Bargain’
The Arizona Republic reports on the May numbers. “Stubborn home sellers holding out for big money are clogging metropolitan Phoenix’s housing market. Too many of these homeowners haven’t shaken off the hangover of last year’s home-buying binge. Market professionals say many owners continue to believe that the neighbor who sold for top dollar last year set the market price, not the other neighbor who cut thousands from the listing price before selling last week.”
“‘People are unrealistic about what their homes are worth,’ said (realtor) Brooke Castaneda. ‘A lot of sellers thought their homes would have these phantom profits. They’re not accepting that that isn’t the case anymore.’”
“The Valley’s housing market is unrecognizable from a year ago, when there were about 9,400 houses on the Arizona Regional MLS system in May. Now, the figure exceeds 43,000, a record.”
“Housing experts blame some of the longer selling time on overpriced houses, which linger on the market and push up inventory. That sends a message to buyers: There are plenty of houses. Keep shopping. Hold out for a bargain. With sellers not selling and buyers waiting, the market can falter. That’s not good news in metro Phoenix, where at least $1 of every $3 generated in the economy comes from housing.”
“Some owners have put their homes on the market simply to see how much they can get for them. Those sellers stick to their unrealistic sales prices because they don’t need to sell. Motivated sellers are beginning to drop their prices, in some cases by tens or hundreds of thousands of dollars.”
“But some sellers must stick to their prices even if they are too high because they tapped their home equity with credit lines, assuming last year’s big gains in appreciation would continue. Now, these owners must sell for a certain figure to pay off all the home’s debt. Some of them have contracts to buy new homes and are expecting to make a target amount on their existing home to keep their new mortgages affordable. They’re stuck in an equity trap.”
“‘They have to be more stubborn,’ said Joel Auernheimer an agent in Phoenix. ‘They have to sell it at market price plus $20,000 so they don’t have to bring cash to the closing.’”
“Buyers see listings climbing, houses lingering on the market and price being reduced and conclude that the signs are pointing to an eventual drop in prices. So they wait.”
“Agents say investors are dispassionate and realistic about setting prices. Typical homeowners may have a stronger connection. Those sellers use a different method to calculate value and can be insulted when a potential buyer disagrees. ‘It’s an emotional thing,’ said (realtor) Diane Watson. ‘It’s a matter of pride. They think their home is going to defy the law of supply and demand.’”
“Tricia Urata of Queen Creek and her husband are trying to sell their house, but they think they set the price too high based on an agent’s advice. The couple listed the house for $339,000 in March and signed a six-month contract with the agent.”
“Now, Tricia Urata says no serious buyers have looked at the house and the agent won’t cancel the contract or lower the price, which Tricia thinks should be about $289,900. She is worried that buyers will ignore the house during the crucial summer selling season and wonders if she and her husband will be able to move into the new home being built for them.”
“‘We are very unhappy with our own experience,’ she said. ‘I don’t think we’ll ever sign with a Realtor for more than 60 days, and we won’t sign with anyone who says we can’t cancel at any time.’”
Can someone fill me in on the agent not lowering the price deal. Do agents in Az have that ability? And what about FSBO while until the contract expires.
I would tell that agent that I was going to go to the Real Estate Board and the agents Broker if the agent doesn’t lower the price .
The complaint will have merit if the houses in the neighborhood have been selling for the lower price .In fact , I would try to get the listing cancelled by calling the board /realtors broker .
Does the realtor have a home in the same subdivision causing that realtor to have a conflict of interest position on that listing ?
If seller went FSBO while under listing contract and seller sold house , that realtor might be entitled to a commission if it sells within the listing contract period even if the seller sells it FBSO.
Something is wrong with this agent .
Too bad Tricia isn’t reading this blog.
Well, today, 6/10/06, Tricia Urata’s house in Queen Creek was reduced to $284,900. MLS #: 2488593
It still will not sell, but she got her reduction. I can not tell if Deborah Haas, the listing agent, owns any houses in the subdivision (nothing under her name, anyway), but she does have another listing of an identical model in the same subdivision. It was also reduced today to $279,000. MLS #: 2489594
deborah G haas owns prop in queens creek.
deborah L haas haas owns 7 props in phoenix
PHOENIX MLS (Maricopa+Pinal counties) - 49,048 for sale SFH!!!!!!
This is an increase of 4,500 home listings since May 10th or just 1 month ago.
WARNING!!! PHOENIX BUBBLE READY TO BURST WITH A BUNG!!! 50,000 MLS listing to be surpassed in June. Phoenix is GROUND ZERO of the bubble burst.
Damn it! I meant BANG not bUng (don’t even know what a bung is
Housing fortunes change
Eating canapes today
Cat food tomorrow
I miss the Haiku’s. Ben bring back the Weekend Haiku’s.
The number of ‘for sale’ signs in Chandler, AZ is astounding! Everyday I keep seeing more and more. AZ has the nations worst housing bubble imho…
Couldn’t agree more. It appears that my January prediction of 50K homes for sale in PHX this summer is coming true in spades. This place will be ground zero of the burst. Miami, Sac & San Diego not far behind.
The signs are pretty thick in SW Chandler as well. Along Ray Road from Kyrene to I-10 there are several signs hanging off the back walls of the subdivisions that have been there for months. A couple are hanging a little crooked lately–I think the neighborhood kids have been using them as targets, and at least one was taken out by the storm the other night. On weekends the balloons and signs at every intersection are starting to become a traffic hazard.
Who are the major builders there?
Kids in my neighborhood use them for their skate board ramps.
I live in Gilbert and their are for sale signs everywhere too. I did notice that my neighbor pulled their house off the market solely because nobody was looking at it. They told me the market had to many homes right now and they were going to wait for things to cool off. I guess the only question now in Phoenis is how will this bubble actually burst. Will it be low or will it be fast.
Yeah - its pretty crazy. I started using ziprealty’s interactive map search in the last couple of weeks. I knew there were a lot of for sale signs in my neighborhood area, but was shocked to find 89 homes for sale via ziprealty in my area alone (NE Mesa - Red Mountain area), basically one city block and a half.
“Now, Tricia Urata says no serious buyers have looked at the house and the agent won’t cancel the contract or lower the price, which Tricia thinks should be about $289,900.”
WTF! Sounds like this agent has a bunch of investment properties she doesn’t want to lose money on. No other reason would explain this one, because I’m sure she’s hurtin’ for commission.
IMO, the agent wants to keep the price high so she can unload her own RE investments first. What ever happened to maintaining a “Fiduciary Duty” to the client??
First tropical depression of the season formed in the carribean. A hurricane this early in the season could bring homes sales to a halt, in the gulf region. Expect demand to dry up even more, in Florida. (throw in even higher insurance rates and there will be an exodus out of Florida, the next few years). I’m already hearing a lot of stories of people leaving Florida because “It’s gotten to expensive to live here”.
OT–I swa this on a new listing–can somebody tell me what it means/implies?
“This is the sale of an assignable, existing contract!!Seller does not have ownership in property but reserves the right to sell their assignable contract!!! Wonderful 4br 2.5 ba home in sought after neighborhood!!! Gourmet kitchen with island, 9′ ceilings, breakfast room, family room with fireplaceand so much more….(call fevi avramidis for more info and to show!)”
http://tinyurl.com/l2rjp (Zip registration necessary to view link)
Sounds like the person has some sort of option / contract to buy the property and is looking to get out of it.
As for the specifics, I could comment. But in general, I get the impression that this person has been left holding the bag on something they can’t afford, and are looking for some sucker to pass it off to.
Subkommander Dred
So you’re allowed to “sell” your contract, I assume for the full price? So the buyer/seller (odd, no?) agreed to close with a seller for $X, and now can’t afford it and is trying to pawn off the contract? What kind of idiot would agree to take on somebody else’s mistake?
The seller of the assignment thinks he made a great deal with the seller of the house. Because it’s such a great deal (remains to be seen), rather than actually close on the house and flip it himself (which for various reasons he may not be able to or want to do), he’ll sell his option to buy the house to someone else and take a quick profit. That way he makes a quick buck and never has to actually purchase anything.
If he’s smart, he put a number of conditions in the sales contract that will allow him to back out of the sales agreement if he can’t find a buyer for his option.
Ya know, Trish - ya should have looked around and thought a little bit before you committed to a second house without seling the first one.
I have absolutely no mercy for people like this. They are the ones who kept this nonsense going. Bring on the bankruptcies.
There are soooo many “pending-contigent’s” in our area. IMO, most will expire and not happen.
What area?
Reno or Vegas?
I think there’s a wide perception housing will softly land and/or crash and then there will be great buying opportunities (money to be made) in ‘07 and ‘08. My belief is the unwinding of RE (asset inflation) will be a process that takes several years [see: Japan RE (1990-2006].
Absolutely. You can see people right here on this blog bitching that prices haven’t dropped in LA or Orange County. They will not wait and will be the next generation of FB’s - the buyers of the Nasdaq at 2900 in late 2000 if you will. The real winners will be the folks who hold out for 5-15 years.
People on this blog are a lot smarter than the average home buyer. Most people don’t have a clue.
Back to basics. To buy a $400,000 home with zero down (to keep it less complicated), how much change in payment is it for a 1% change in interest rates?
I do have a 20-year-old HP 12-C and can do the calculation, but I know many of you on this blog can do a back-of-the-envelope calculation much faster.
Also curious as to when we were exactly 1% lower in rates. Late 2004, I’m guessing?
ok, $400,000, 6% interest for 30 years; $2398.20. $400K, 7% interest for 30 years: $2,661.21, a difference of $263.01. Caveat emptor; my HP12C is 20 years old too!
Thanks!!
I agree it seems a lot of people on this blog are itching to buy homes. The fall could happen quickly or could happen slowly. The best approach is probably to let go of any attachment to buying soon, and simply watch and see how things unfold.
Personally, some of my desire to buy a home is actually psychological residue from watching the bubble expand. Before prices went up so much, I was happy renting and saving. After seeing how it is possible for housing to (temporarily) become unaffordable, part of me feels willing to jump in early on the decline just to secure a place in the food chain in case the run-up ever starts again. I have to keep reminding myself not to be influenced by fear. (the same sort of fear that drove so many FBs to take out interest-only neg-as$ voodoo loans).
The mania is so pervasive that the bears are also fixated on homes.
I would prefer to own but won’t overpay.
One of my major motivations was likely quite common. I lived in an apartment complex where increases were regularly every 6 months. Justified by “market rents.” I hated that lack of control and predictability.
What percent of a premium is worth the peace of mind? I think it’s very different for each of us.
trying to catch a falling knife can be dangerous to your financial health, whether you’re buying real estate or stocks.
Though I agree with your thought, waiting 5-15 years seems ridiculous for a lot of people. I sold in 04 and want (”need”) to buy next summer. Dang, I’ll be 47 in October (2 kids, 11 & 7). If I waited 15 years to try and time the bottom I would be 62! As many folks on this blog have stated, I hope this bubble colapse happens sooner than later, but a lot of us don’t have the luxury or desire to wait a real long time for the “perfect” buying opportunity. I think plenty of people will start buying when they see some real reductions and will help drive comps down. The bottom is difficult to predict.
I agree that this will mimic Japan. But even there, the first years of the crash had the most significant fall in prices.
Yes but there was no money made buying at those prices for a long long time so caveat emptor if that is your goal when purchasing.
From a national perspective, we’re near/at the top now (house prices). Like that feeling one has on a roller coaster when you climb, climb, climb … and then there’s a quiet pause … just before the fall.
This is interesting… how much is this housing bubble like the one in Japan? It sounds like the interest rates were as low in Japan (and still continue to be low), but does anyone know if lending standards and credit were as loose? Now that does NOT sound like Japan, but I wasn’t there. Were they doing as much building in Japan… were as many new condos and starts coming onto the market? Did Japan increase interest rates as abruptly?
I think suicide loans, interest hikes, and the rush of starts coming up, can make a serious decline in prices happen sooner than a few years. Like next year. At least I hope so.
I’m a housing bear, but let’s be clear. The Japan bust was and still is influenced by demographics. Greying of the population.
Agreed and the same thing is beginning to occur in the US. We have an aging Baby Boomer population that will be starting to sell their house and downsize for retirment. Unfortunately for them, the Gen Xers don’t have the assets and/or income to support their asking prices. Hence a lack of demand will further deflate the market.
That’s a good point. Japan’s “greying of the population” is a variable. But, there are several other variables between Japan and US housing booms that are similar.
Asked my Japanese wife if she thought credit standards were lowered before the Japanese Bubble like they are now here. She said, “I don’t think so.” If that’s the case, it seems bubbles can present themselves with or without ludicrously loose credit standards.
Looks like this is a buyer who bought a house and is trying to sell it to someone else before it closes escrow .During the real estate boom this assignment of contract was done by a bunch of flippers on pre-construction contracts . I also noticed alot of real estate agents were making money on these double escrows .
Also I have researched some sales in which the realtor got the seller to list at a lower price .After that the realtor would have a realtor friend come in and purchase the property and than double escrow the property at a higher price before it closed escrow to another buyer . On one property that I researched the listing realtors did this to a 81 year old lady .
This post was response to Nikki . Sorry I didn’t press the right button .
Hey, Ben. Here’s one for you. I’m putting it here near the top of this thread so people see it. A riot!
http://www.stocklemon.com/06_06_06.html
If I were the judge who gets to send this Frank Fradella guy to prison, I would legally change his name to Fink Fraudella as part of his sentence. And he gets to change it back only after he repays every cent shareholder’s money he stole.
In the slammer his name will be further changed to Fiona Fraudella.
Hopefully it will happen here in LA soon to these idiots here! 4 Houses have sold within a few months of listing in my development for in the mid-sixes. These people have to be nuts who bought these homes! The prices are about the same as last year which is good, but they are still trying to push the envelope. We just signed our lease for another year. Our rent went up $100 to $2500/mo. A lot cheaper than buying and a much smaller increase than what will happen to these morons when their loans reset!!! I figure we will really start seeing some fireworks this fall and into the winter. It’s going to be fun to watch!
The house is ONLY worth what someone is willing and able to pay at the particular time when the sale is taking place. No more, no less. Unless there are still some stupid GF many of these floppers/or liberated equity folks will need to bring money to the table or hold onto that white elephant.
“But some sellers must stick to their prices even if they are too high because they tapped their home equity with credit lines, assuming last year’s big gains in appreciation would continue. Now, these owners must sell for a certain figure to pay off all the home’s debt. Some of them have contracts to buy new homes and are expecting to make a target amount on their existing home to keep their new mortgages affordable. They’re stuck in an equity trap.”
“‘They have to be more stubborn,’ said Joel Auernheimer an agent in Phoenix. ‘They have to sell it at market price plus $20,000 so they don’t have to bring cash to the closing.’”
“Buyers see listings climbing, houses lingering on the market and price being reduced and conclude that the signs are pointing to an eventual drop in prices. So they wait.”
Hey, you gave me your email months ago and I lost it. Can I have it again? Wanted to visit w/you off line.
Did you guys see this article from The Motley Fool? Fabulous!
http://tinyurl.com/hw922
Agree - FABBO.
Also fabulous, though in a more subtle way, is the link that RealtyTrac put on Yahoo’s front page this morning inviting people to search foreclosures in thier area! That front page link cost them BIG BUCKS, so you know what thier top management is betting on now, don’t you? To see it, scroll down to the Marketplace pane. It’s the third link in that pane.
http://www.realtytrac.com/pub/landing/optimized_c.asp?a=b
Good article .
$339K to $289K, around a 50K (20%) haircut. NICE. KEEP IT GOING.
Anyone with great actual flopper stories, please post them. They are good for the soul to read. The bigger the drop, the better. Like this person who may have bought for
A quote fromthe above article:
“Who moved my bubble?
So, yeah, the NAR is full of it and will spin the numbers any way it can to keep up the pleasant fiction that all is well. But 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.
Allow me to translate:
* Interest-sensitive housing markets = “Bubbles”
* Vulnerable = “Ready to pop”
A more honest version of what I think he really means to say is: “Come on, Bennie! We need that cheap money! How else are we going to keep skinning 6% off all those marks out there? It’s not like they can really afford these prices without the easy credit and ARM gimmicks!”
And lest you think I’m being too harsh, that the NAR is a group that cares about things like homes and families, take a close look at the terms it uses to describe the current situation: “For most of the nation, this means future home price gains will be much closer to the normal returns we expect from housing,” said NAR President Thomas M. Stevens, who hails from one of the country’s most ridiculously bloated markets, Vienna, Va.
Price gains. Returns. These are people who want us all to believe in housing as an investment, and they just happen to take a cut on the deals. Of course, housing, over the long run, is not a good investment, except for a very savvy few. It’s a roof over your head that tends to keep pace with inflation, but not in a straight line. But if you can’t afford your place because you made a bad deal based on reports of the never-ending happy housing story, that cozy home could be a personal finance time-bomb waiting to explode.”
$339K to $289K, around a 50K (20%) haircut. NICE. KEEP IT GOING.
Anyone with great actual flopper stories, please post them. They are good for the soul to read. The bigger the drop, the better. Like this person who may have bought for $339 and would sell for $289K, or yesterdays FL swampland from $800K to $450K. Great haircut.
This is a great quote from the FOOL article.
I hope all those people out there who leveraged themselves up to their eyeballs with risky loans to get into the market are going to be greatly comforted by the “long-term affordability” their homes may offer the buyers of the future.
What is everyone’s thought about Central Florida, such as Tampa and Orlando? This area had some of the greatest increases in price. Don’t you think these areas will challenge Phx and Calif for top spot in price reductions, or are the geniouses here right in saying Florida is too desireable to experience big price drops?
Yes. Florida is different!
Why? Why do you think Florida is different?
I’m sure that comment is meant as sarcasm. Every single bubble area in the country has some agent saying “But prices in ____ will never go down because we have good weather/waterfront property/Baby Boombers retiring here/blah, blah, blah” In my opinion (as a south FL resident in Palm Beach County) FL is one of the worst over-inflated bubble markets and will suffer one of the worst downturns as a result. Inventory for sale in my neck of the woods is up almost 300% in the past year, for example, and sales in April were down 40%+ YOY. Price growth is slowing rapidly. Next up: actual declines.
Those Disney World employees who earn $100K a year are going to keep those prices propped up! Not to mention the foreigners and baby boomers who need a second or third home in Orlando and/or Tampa!
All 12 Disney employees who make a 100K. Remember if baby boomers are going to save the market by buying homes then most of then will need to sell their home in order to do it. Who is going to buy that house? Oh I forgot baby boomers are set for retirement and can purchase as many houses as they want. The genreation with highest divorce rate in history, creators of major budget deficits, and who mainstream drug addiction are now all of sudden financial stable. Yeah right!!!! I know a lot of baby boomers and they all wish they could retire, but need to keep working in order to amke end meet. Thats until they get sick.
Everybody talks about baby boomers buying homes. What about a few years from now when baby boomers all start DYING! That will add a ton of homes to the market and the only people around to buy will be low paid workers with no cash. I expect prices to stay low for a long, long time. A return to when equity in a home referred to the principal you paid down…not an expectation of irrational appreciation.
Realtors NEED people to lower prices so they can eat, live, and feed families. This is a GOOD development for us, in my opinion realtors need to be MORE aggressive in recommending price cuts. In due time this will happen…
There is an interesting blog written by a “real estate investor” (I called him a speculator) named “Seattle Eric” at this url http://seattlerei.blogspot.com/
I’ve made a few comments on his blog directly to him about his lack of skills as a developer, as his miscalculations are many. He is a complete rookie. His post this morning takes the cake. He is quitting his great job at the end of the month to go to real estate full time! Here is the post, and if anyone cares to comment to him (or yank his chain), I’d love to see it. I can’t get through to him. lol ….solvingadream
Here is the post.
quote
“I consider myself to have had two careers in my adult life. The first, lasting 10 years, and launching in 1988 while still in college, was as a tour guide and cruise director for Princess Tours. I have always loved travel, and life on the road for a young single guy in his 20s was appealing. Summers I spent in the Canadian Rockies (Jasper, Banff, Lake Louise), while the other seasons found me on a cruise ship (Caribbean, Europe, Panama Canal), or backpacking through Latin America (all of Central America, Chile, Argentina, and my all time favorite - Brazil).”
“Then, I met the woman whom I would eventually marry. I realized that my constant travelling wouldn’t help build and nourish a relationship. So, I took a scary step and started looking for something local and stable. I finally found a little startup company that only had 5 employees at the time. The client service experience gained in my first career helped in landing me the job that launched my second career in 1998. This little bitty startup, called Avenue A Media, grew up, and helped launch the digital advertising revolution. It’s now a billion dollar public company called aQuantive, and I’m a director of technical operations in the web media side of its agency division, Avenue A/Razorfish.”
“Now, 8.5 years later, I’m ready to make the scary move to the third stage of my professional life. I’m leaving the company at the end of the month in order to pursue real estate full time. Not only will this give me more time to focus on our investment activities, but I also have gotten my real estate salesperson license, and will be able to list our investment properties, saving 3% on each transaction. The brokerage I’m hanging my license with is very investor friendly, and has no qualms with agents listing their own properties (as long as the broker’s hard costs are met).”
“My last day at Avenue A will be on June 30. It’s been a fantastic experience, and I’ve found that the decision to cut ties was emotional. I’ve grown with this company from its infancy as a startup, through its early years as a envelope pushing innovator, through the celebration of going public, through the layoffs that followed the popping of the Internet bubble, through the rebuilding period and finally through the company’s current role as market leader. Wow.”
“I didn’t make this decision lightly. However, as you can tell from the enthusiasm with which I’ve been blogging, it’s something I’m very passionate about, and I’ve not felt that in my professional life for sometime now. Recently, I read an excerpt of Anderson Cooper’s memoirs in Vanity Fair. When he was young, he’d ask his mother, heiress Gloria Vanderbilt, what is important in a career. She told him to “find his bliss”. I find bliss in real estate.”
“So, I can already see critical commentors such as Dukes and Dreamsolver champing at the bit to get a crack at telling me how dumb my decision is, based on their inability to think outside of their holistic investment box, and recognize that real estate is in fact a viable business and investment pursuit. This decision has been in the works for several months, with a lot of agonizing soul searching about the risk of making a switch from a stable job to the world of self-employment. However, at the end of the day, we realized that I am passionate about real estate, and even though the move is inherently risky, the potential reward is much higher than available from ’stage 2′.”
“What’s next? I’ve set up my home office, I’ve hung my license with a brokerage that is investor friendly. It doesn’t have the cachet that other local organizations such as Windermere and John L. Scott, but it’s an office plugged into all areas of real estate investment - wholesale, foreclosures, contract assignments, etc. I’ve decided to pay a flat monthly desk fee, which gives me the right to keep all my commissions, as well as setting my own rates. My broker, who I have referenced before in my blog, has listed the first of our two flips for 1% (technically, 4%). Besides listing our own properties for free, I’m going to be working with clients and building a network. I want to help others with money socked away, or stock investments, and who want to diversify into real estate, but don’t know how. I’ve learned some expensive lessons, and would love to monetize them in the future.”
“Though 21 days remain until my last day at Avenue A, I’m already working with a client who is interested in buying a property near the Microsoft campus (One Microsoft Way). They will be hiring 12,000 employees over the next ten years, and are building the infrastructure to support them over that period. He wants a rental for a long term (10 year) hold. I’m driving him around tomorrow to look at target properties, most within walking distance from Microsoft.”
“Everything I’m doing know is a first. It’s like learning to walk again. I’m nervous, excited, but given my life experience, confident and not willing to be pushed around. I called agents to make appointments for showings, and more than one offered to send me over a ‘package’. I have no idea what that means. I just sent off an email to my broker asking for the lowdown on what this means. I’m offering to list property for anyone in my network for 2% (5%). I’m coming into sales from an investor point of view, and I’m all about the building relationships, and priming the referral pump by getting experience.”
“This will also start the next phase of this blog. I will be much more transparent (though remaining anonymous) about my situation. I will point more people to this blog, especially those that show an interest in real estate as an investment.”
“Here’s to the future.”
posted by Seattle Eric
This guy is in la la land .
I know a couple who set up a mortgage business in Modesto. Guess what!!!! There not doing it anymore, because it tanked.
I’m sure Florida is different. Florida is nice the have alligators, hurricanes, and shark attacks. Oh yeah I almost forgot OJ lives there too. Cant miss. Go for it.
I agree…but we don’t know how big of a $$$ stash he has. If he truly has been with the company he works for since start up, he very well could be a mulit-millionare from stock options, etc. Maybe real estate is his way out of the corporate world and more of a “hobby” type career. That would put this in a different perspective.
This guy will flushed quite fast.
Though 21 days remain until my last day at Avenue A, I’m already working with a client who is interested in buying a property near the Microsoft campus (One Microsoft Way). They will be hiring 12,000 employees over the next ten years, and are building the infrastructure to support them over that period.
In India, you idiots!
I read his blog from time to time. He’s a hoot. While he has some good qualities, he’s lacking in negotiation skills and patience and gets killed over and over again by paying too much for properties. He’s much too anxious to acquire properties. I’m sure his real estate agent has him on her speed dial since she must know a sucker when she sees one. He’s a wannabe RE mogul who thinks he’s already hit the big time.
I think of him as a prime example of too much money and credit and too little knowledge.
I just left a comment toasting his courage to be akin to George Custer at Little Bighorn. I wonder if he is astute enough to see the connection.
probably not … doubt he is astute enough to learn from history or he wouldn’t be deciding to become a realtor now.
Seattle Eric cracks me up. He is waaayyyy too emotional to be in a sales position. But trying to inform him that this is NOT a good time and he might be putting his family in serious financial hardship is like beating your head against a wall.
He is a big boy, he has been warned..so be it…
Here is a new game. You can play it anywhere, but it will be particularly revealing for those in places where there is still large-scale realtor denial about the bubble:
Call a local realtor, ask them whether it would be better for you to put your house on the market now, or if you should wait until next year to get a better price. See what they tell you!
Thanks for the input Mike (about Florida above). As you can see, there are very few posts about Florida on any of the blogs, especially about Central Florida, since most of the concentration is about South Florida and place like Ocala, which I feel is the biggest suckers bet on the planet. I bot my home in Orlando for $230k in the summer of 2003 and got out for $440k this past November. Hey, it was a very nice house in an nice neighborhood, but 440k? Um, no. Anyway, happily renting now in a nice Tampa suburb, almost everyone laughing at me when I said prices are coming down. Well, until about a month ago. Suddenly now I’M the expert, everyone asking me what is going to happen next, holding on to my words with baited breath. Including my real-estate agent brother in law. Anyway, there are 1500 homes here and almost 300 for sale, not including the hundreds of new homes they are trying to build. There is a combination of freaking out and denial here. Those in denial are agressive and mean! Thanks for the venting time. Anyone else live in Central Florida?
I grew up there and went to college there. Salaries are so low throughout the region, I don’t know how they can support these huge house prices.
I am going to grad school in USF at Tampa and I live in NE Tampa. There are new subdivisions coming up all over the place. I’ve had to move as the apartment complex I was living at was converted to condos. But there are no high wage jobs here, just service jobs that pay 40K~50K at most.
“I want to help others with money socked away, or stock investments, and who want to diversify into real estate, but don’t know how. I’ve learned some expensive lessons, and would love to monetize them in the future.”
Seattle Eric’s plaintive bio has the ring of a tragedy that has yet to see the final bitter act. Now he wants to help people “diversify” into real estate–in mid-2006? What a fresh, forward-thinking idea! I do think part of this sheer cluelessness is the fact that he is in Seattle. My brother is looking to buy his first house up there (yes, I have *tried* talking to him, but the Asian buyer/limited land myths are too firmly entrenched). Seattle is a good 6-9 months behind the cycle from the Bay Area, where I am. At least in California I can see that San Diego and Sacramento are already tanking. But there’s no such equivalent place nearby for Seattle people to take heart from. The “it’s different here” insularity up there is stunning and perhaps unrivalled in the all the land.
My Asian friends after many years denying the bubble are firmly in the bubble/correction camp now.
Asians in Asia or Asians in the US? Are they 20-millionaires (based on purchasing power of UDS in 1913, SEC regs written by Joe Kennedy defining “accredited investors”) or chumps/FBs like most everyone else?
My Asian friends are 1st generation immigrants that went to college here and are Asian-Americans.
I suspect their parents knew there was a RE bubble, having lived through wars, disasters, etc etc. and perhaps seen a bit more of life and its tragedies, ironies and follies.
After all, where is Kaifeng(-on-the-Hudson)?
He’s a dumbass, and there’s a million of him out there right now.
Don’t bother to educate him. You’re wasting your time and his.
Just wait it out. At the bottom, the Erics of the world will be flushed, and serious investors will be able to buy real estate below intrinsic value.
Report from Oklahoma. Open house Sunday 2-5 at Summit Lakes (ponds). New quality homes and townhomes. This is one of more than a dozen new developments in my town alone. Simultaneous open houses there for 3 new townhomes (well, they were new a year or two ago anyway…) and over a dozen newly completed SFH. All between 200k&300k. Oh and lots of lots available also for only 38.5k each. Come one, come all, flippers, investors, students (yes students!). They are building all across central OK like it is some kind of race to see who can build the most crapboxes. Damn flippers! Come on down before you miss out on the opportunity of a lifetime. Be sure to get yourself some of this action. You know want to. It’s a sure thing and real-estate only goes up and there are so many advantages to owning. You can buy whole neighborhoods all at the same time. Oh housing bubble, oh housing buble, wherefore art though housing bubble? You know all the boomers will be moving here soon and you can get in on the ground floor. Hurry, don’t delay, these little puppies won’t last long…
I know someone in Washington that said homes in her area went up 80k in the past year. The bubble is still growing in that area.
Drove all around Phx and Mesa(ick!) today. Open houses everywhere and never once saw what appeared to be someone looking at them.
From my observations, there seems to be almost as much FSBO signs as realtor signs. I bet the inventory is closer to 60k.
Just spent the week in Apache County. A land outfit (1st United) just sold 75 40-acre parcels over two weekends. Four years ago that would take all summer. Prices are about 3X 4-5 years ago. But you can still get off-grid land that’s relatively nice for between $1000-$1800 per acre. It appears cheap compared to the higher priced and higher altitude land (more trees) closer to PHX. It’s as though the top sets the scale and the rest falls (rises) behind. I know the PHX market and regional second home market is stagnating but rural land far out is still bubbling.
FWIW - 1st United just bought 90,000 acres - one of the largest ranches left in the USA - which will likley be sold in 40 acres lots. They say AZ land is fast disappearing (it is) but 90,000 acres will take years. It will be interesting to see how the bubble aftermath influences this market.