A Stark Reminder That Not All Investments Pay Off
Real Estate Weekly reports on New York. “As late as a year ago, most real estate experts scoffed at the notion that New York’s luxury condo market is heading for a bubble. But in the past months, opinion has shifted noticeably as more and more new luxury towers are being announced. At a panel at last week’s NYC Real Estate Expo, most industry leaders agreed that luxury condo development is heading in the wrong direction. The most vocal critic was Ofer Yardeni, head of development firm Stonehenge. ‘Condo development is on life support,’ he told a packed audience at the Expo, adding that the much-touted luxury condo market on 57th Street ‘has just stopped.’”
“Last month, Extell Development’s Gary Barnett told Crain’s New York Business that he believes the luxury market may be nearing a dip. ‘We’re not there yet, [but] I think we’re seeing the beginnings of a slowdown,’ Barnett said during a tour of a model apartment at One57, where a penthouse is reportedly in contract for $90 million. A full pipeline of development could create an over-supply of luxury homes that would cause the entire market to contract, the developer believes.”
The Boston Globe in Massachusetts. “A year ago, it seemed nothing could stop the Massachusetts housing market recovery. Flash forward to today: Sales are down, foreclosures are up, and buyers are walking away from pending deals. Construction of new housing is falling again. To top it off: Single-family home prices in September fell compared with the same month in 2013, the first such price decline in two years, according to the Warren Group.”
“With prices in many local markets rising quickly in previous years, some buyers have hit a price wall, drawing the line on spending extra for post-sale repairs, said Steve Hussey, a home inspector and licensed real estate broker in Boston. ‘They feel they’re already paying too much and just walk away from deals and then that property goes back on the market again,’ he said.”
The Press Democrat in California. “Sonoma County’s home sales continued to trend lower in October. The county’s median price last month declined 2.2 percent from September, to $485,000, but still remained 6 percent higher than a year ago. In recent months some sellers have encountered buyer resistance and eventually reduced their initial asking price, said Brian Connell, managing broker at the Santa Rosa Mission office of Coldwell Banker. ‘It’s because the property was priced too high in the first place,’ he said.”
“Only 6 percent of October sales involved financially distressed properties, compared to 48 percent three years ago. Even so, the county still has plenty of homeowners facing financial troubles and the threat of foreclosure, said Brenda Alarcon, an agent with Bradley Real Estate in Santa Rosa. ‘There still are people in distress,’ she said. ‘They’re just a few payments away from going under.’”
The Orlando Sentinel in Florida. “The good news on the foreclosure front for Metro Orlando during October was strong signs of recovery. The bad news: The region ranked second nationally for its foreclosure rate, a new report shows. Orlando real estate agent Matthew White, of Sloane Realty, said Orlando’s real estate market might have a slower comeback than that of coastal areas that have plenty of vacation rentals near the beaches. Vacation homes were the first thing that owners left behind during the recession but they became the target for buyers nationally after prices bottomed out. ‘If you’re in financial trouble, the first things I would let go is my second home,’ White said.”
Cronkite News in Arizona. “Wilson Gee, owner of the Ahwatukee Lakes course, let the course go fallow because the water bills were too high. Then he became embroiled in a years-long ongoing dispute with angry homeowners who’d paid premium lot prices to face the golf course. Gee wants to convert the dead golf course into homes, and the homeowners are threatening to sue him. Broken ball retrievers and trash litter the landscape, a stark reminder that not all investments pay off. Barbed wire fences ring the lakes.”
“Ben Holt, 74, has lived on the Ahwatukee Lakes golf course since 1998. He played there three times a week with 11 golfing buddies. Now the golf course is dead. ‘All these people paid a premium for these lots because they were on a golf course.’ Holt says. For now, Gee says he just wants to sell his dead golf course property. He’s sympathetic to the residents’ anger, but to him the golf industry isn’t viable anymore. ‘When you look at the business end, it’s very difficult. Sometimes we’re cutting our own throat just to survive, so everyone is dropping prices,’ Gee says.”
The Ottawa Citizen in Canada. “Ottawa’s condo market — until recently a glittering star in the housing industry’s sky — is tarnished these days. A glut of unsold inventory is the major cause, according to Canada Mortgage and Housing Corporation’s most recent housing outlook for Ottawa. Calling the slippage in condo sales a ‘notable drop,’ PMA Brethour Realty Group’s Patrick Meeds says reasons for the decline include slowing purchases by all-important first-time buyers who, faced with poorer job prospects, are being cautious. As well, investors are buying less. Meeds says they’ve bought a lot in previous years and may be both maxed out financially and scared off by still-increasing prices.”
Japan’s economy unexpectedly shrank an annualised 1.6 percent in July-September after a severe contraction the previous quarter. The Nikkei benchmark closed the morning session down 2.6 percent to 17,037.65. It touched 16,993.89, its lowest level since Nov. 11.’
‘Even with Monday’s fall, the Nikkei is up 8.8 percent since Oct. 31, after the BOJ announced additional easing and the Government Pension Investment Fund decided to increase its allocation to Japanese equities. A trader at a foreign brokerage said investors expect the BOJ to buy exchange-traded funds (ETFs) Monday afternoon.’
“Anytime the Topix is down in the a.m. session, you would think there may be some ETF buying in the p.m. session,” he said.’
This is a real Mickey Mouse operation these central bankers and Keynesian’s are running these days.
‘Federal Reserve chair Janet Yellen recently treated the nation to an astonishing lecture on the solution to rising wealth inequality–according to Yellen, low-income households should save capital and buy assets such as stocks and housing.’
‘It’s difficult to know which is more insulting: her oily sanctimony or her callous disregard for facts. What Yellen and the rest of the Fed Mafia have done is inflate bubbles in credit and assets that have made housing unaffordable to all but the wealthiest households.’
‘Fed policy has been especially destructive to young households: not only is it difficult to save capital when you’re income is declining in real terms, housing has soared out of reach as the direct consequence of Fed policies.’
‘I have marked the wage chart with the actual price of a modest 900 square foot suburban house in the S.F. Bay Area whose price history mirrors the Case-Shiller Index, with one difference: this house (and many others) are actually worth more now than they were at the top of the national bubble in 2006-7.’
‘But that is a mere quibble. The main point is that housing exploded from 3 times median income to 12 times median income as a direct result of Fed policies. Lowering interest rates doesn’t make assets any more affordable–it pushes them higher.’
‘While Yellen and the rest of the Fed Mafia have been enormously successful in blowing bubbles that crash with devastating consequences, they failed to move the needle on household income. Median income has actually declined since 2000.’
‘Inflating housing out of reach of young households as a matter of Fed policy isn’t simply unjust–it’s cruel. In the good old days, a 20% down payment was standard. How long will it take a young family to save $130,000 for a $650,000 house? How much of their income will be squandered in interest and property taxes for the privilege of owning a bubblicious-priced house?’
‘If we scrape away the toxic sludge of sanctimony and misrepresentation from Yellen’s absurd lecture, we divine her true message: if you want a house, make sure you’re born to rich parents who bought at pre-bubble prices.’
Since poor people refuse to buy stocks, the government will have to do it for them with their retirement funds. It’s for their own good.
‘Federal Reserve Governor Jerome Powell, formerly a Wall Street lawyer and investment banker, said Monday he’s watching carefully for excesses in the financial markets due to the central bank’s near-zero interest rate policy. “I would say things are fully priced out there. I don’t see bubble territory, and we don’t see leverage building up,” Powell said on CNBC.’
You can find here that corporate debt outstanding went from $5.2 trillion in 2007 to $7.6 trillion this quarter.
http://www.sifma.org/research/statistics.aspx
“I don’t see bubble territory…”
I finally get what is meant by this phrase. It means “It hasn’t started to collapse yet, we think”.
Since poor people refuse to buy stocks, the government will have to do it for them with their retirement funds.
Poor people have retirement funds? You aren’t talking about SS, because technically that isn’t a “retirement fund”.
Look to Japan for one instance. Won’t SS be the only source of retirement funds for most working poor?
Blue, you sound like those guys at the who wanted to “carve-out” part of their SS to invest in the stock market. That was 2005-2006 or so. Even idiot McCain knew it was just a ploy to pocket juicy fees for Wall Street money managers, funded by government money paid for by future taxes.
Donk,
You sound like a free shit army auxilary member with empty pockets and her hand out.
I don’t want anything of the sort. I am responding to Yellin’s motivations (above my post).
It’s difficult to know which is more insulting: her oily sanctimony or her callous disregard for facts
A real world Marie Antoinette moment.
“They are poor? Let them acquire assets!”
That article is from the “Of Two Minds” blog, probably already familiar to most here but if not well worth a look, C.H. Smith is a very sharp guy and an excellent writer….have been following him since before Bubble 1.0 popped, he called it very accurately and long in advance much like the HBB.
http://www.oftwominds.com/blog.html
Actually if you read her speech, she didn’t say that. She stated the factual evidence that the wealthy had most of the stocks and property and that income and wealth inequality was not good for society.
She also spoke recently of her concern about affordable housing. She actually said that.
If unaffordable housing is a Fed concern, why don’t they stop suppressing mortgage rates so that interest rates and home prices can revert to normalcy?
She also claims that Bubble 2.0 is a very good thing overall, but especially for those in the lower 50% of society (by wealth)…an incredible claim indeed worthy of M. Antoinette
“Fortunately, rebounding housing prices in 2013 and 2014 have restored a good deal of the loss in housing wealth, with the largest gains for those toward the bottom. Based on rising home prices alone and not counting possible changes in mortgage debt or other factors, Federal Reserve staff estimate that between 2013 and mid-2014, average home equity rose 49 percent for the lowest half of families by wealth that own homes.12 The estimated gains are somewhat less for those with greater wealth.13 Homeowners in the bottom 50, which had an average overall net worth of $25,000 in 2013, would have seen their net worth increase to an average of $33,000 due solely to home price gains since 2013, a 32 percent increase. ”
http://www.federalreserve.gov/newsevents/speech/yellen20141017a.htm
‘But that is a mere quibble. The main point is that housing exploded from 3 times median income to 12 times median income as a direct result of Fed policies. Lowering interest rates doesn’t make assets any more affordable–it pushes them higher.’
I think we all knew this would happen at least we talked about it often back in the day ~ 2009
this was the most telegraphed event ever- raise sales taxes 40%?
New Keynesland down
EU=pu
Yeah…Flood the market with QE and simultaneously raise taxes…I did’t work..
EU=pu ??
Classic…LOL….
In reality, what the central bankers are doing isn’t even close to a Mickey Mouse operation — I just visited Disneyland, and although it’s way overpriced, it is an extremely well run place, with very attentive management (unlike most CB’s and financial experts, who can’t see a bubble when it’s staring them in the face).
One basic problem: the elites are trying to solve non-financial problems (such as employment and income growth) through financial means. There is only so much the Fed can do to help the economy (and a lot it can do to hurt it).
Oceanside, CA Sale Prices Sink YoY; Crater 12% QoQ and 5% YoY
http://www.zillow.com/oceanside-ca-92057/home-values/
Rents rising, foreclosure dropping, list prices rising..
Sale prices dropping. Hmm, everyone seems to be on board except the buyer. Zillow’s Home Value Index has dropped 5%, from $405,000 to $384,000 in the last 10 months.
HA, good to see you putting so much faith in Zillow. BTW, they forecast prices increasing 2% in 2015.
No crises in Oceanside and no more 20% annual gains. Good to see a more normal market. Thanks for posting.
Falling prices, falling rents and collapsing demand.
What’s not to like Jingle_Fraud?
Rents have increased from $1966 in January to $2058 in September. It’s your post, I assume you read it before posting it. Rents are higher.
One of the problems with renting is the rent often goes up, in this case $92/month or 4.68% in 9 months or 6.24% annually.
I am not saying to buy a house today, because I agree the market is changing velocity and perhaps direction, but I do hope you will start living up to your name and correctly analyze the data you post! HA!
Not “Zestimates”. Falling rents, falling prices and rising foreclosures.
Stick with the data. Jingle_Fraud.
Alameda, CA Homeowners Slash Asking Prices 9% In October; Housing Demand Plummets
http://www.zillow.com/alameda-ca/home-values/
Southlake, TX (Dallas Metro) Sale Prices Fall 4% YoY On Cratering Demand For Housing
http://www.zillow.com/southlake-tx/home-values/
Boulder, CO Sale Prices Plummet 17% YoY; Sink MoM and QoQ
http://www.zillow.com/co-80302/home-values/
‘For the first time in the 30-year history of the Australian Bureau of Statistics’ housing finance series, the value of investor loan approvals in September, at $11.94 billion, was greater than the value of loans to owner-occupiers, at $11.77 billion. Investor finance approvals have risen 68 per cent since the RBA starting cutting the cash rate in 2009.’
‘Mr Eslake said this trend was driving a build-up of risks in the housing market, aided by the widespread use of negative gearing, which allows investors to offset interest costs against tax. “The latest data from the Australian Tax Office for 2011-12 suggests that 19 per cent, or around one in five, Australian taxpayers is a landlord,” said Mr Eslake. “And of this, around 13 per cent of these taxpayers are taking advantage of negative gearing,” he said.’
‘This meant that 68 per cent of landlords declare an income loss on their property investments. “Therefore these landlords are relying on capital gains to offset income losses,” said Mr Eslake. “This is a strategy subsidised by the government, but it may not be a good one if dwelling prices don’t rise,” he said.’
“capital gains to offset income losses…”
In saner times, an investment that lost money would go down in value.
Their golf course is closing? Boo hoo. Sounds like more foolish Phoenix residents being duped by the REIC players. It’s an interesting article and it looks like the owner now owes many years of back taxes because he needed a working course to keep some tax break he got. What the hell is government doing giving a golf course in a nice area a tax break?
Golf… another pimped counterfeit to get suckers to pay inflated prices for a depreciating asset like a house.
A million gallons of water a day.
From the article:
“Phoenix has it worse than other metropolitan areas the same size. Maricopa County alone has more than 220 golf courses.”
“Golf courses and cemeteries, two biggest wasters of prime real estate.” Al Czervik, Caddyshack.
” Broken ball retrievers and trash litter the landscape.”
Are they too lazy to at least go out and pick up the trash so they don’t have to look at it? That’s right, if you own a McMansion you can’t be seen picking up trash. People would question your social status as a McMansion owner. This is Phoenix, why don’t they hire the you-know-whos to do their dirty work, and then deport them afterward?
My guess is that since the course is probably overrun with weeds it’ll be an eyesore even if they do pick up the trash.
lots of mosquitos when I lived near that thing. they should close it and dry it up.
I used to live on Tano st. Air conditioner would run night and day in the summer.
“Holt, the president of Save the Lakes, is determined to keep the Ahwatukee Lakes golf course a golf course. He has a 4-inch binder stuffed with land deeds, city zoning restrictions, maps, phone numbers, and purchasing agreements. Every week, the 130 members of Save the Lakes meet to discuss what’s happening to the golf course adjacent to their property. There are 80 additional neighbors on standby ready to donate money whenever the big call comes. The cause: a lawsuit to prevent Wilson Gee from redeveloping the desiccated land that was once a golf course.”
This reminds me of the farmers in central California. They are so mad that someone took away their water, but THEY JUST DON’T GET IT. They are actually RUNNING OUT OF WATER. No one is taking it from them. It’s gone. It’s probably never coming back. Why, instead of whining and organizing binders full of easements and zoning and whateverthef*#k, aren’t they gathering whatever assets they can scrape together and getting the hell out of there?
‘China’s bad loans jumped by the most since 2005 in the third quarter, fueling concern that a cooling economy will be further weakened as banks limit lending to avoid credit risks.’
‘Nonperforming loans rose by 72.5 billion yuan ($11.8 billion) from the previous quarter to 766.9 billion yuan, the China Banking Regulatory Commission said in a statement on Nov. 15.’
‘As China heads for the weakest economic expansion since 1990, Communist Party leaders have discussed lowering the nation’s growth target for 2015, according to a person with knowledge of their talks. Bankers’ low appetite for risk and their rising concerns about asset quality are leading to a “sluggish” expansion in credit, according to UBS AG.’
“We are still suffering from the aftermath of the credit binge and massive stimulus measures put in place in 2008,” said Rainy Yuan, a Shanghai-based analyst at Masterlink Securities Corp.’
“suffering from the aftermath of the credit binge…”
All that debt was supposed to make them rich. It works the other way around every time.
“All that debt was supposed to make them rich. It works the other way around every time.”
And there it is. This ought to be posted on a banner here.
AMEN!
The reality is it always does. 2008 proved it. Don’t look now, the debt clock has more RED than GREEN.
“Communist Party leaders have discussed lowering the nation’s growth target for 2015.”
They are lowering the growth target because their economy is falling off a cliff, not because they have the ability to control the rate at which their economy grows. The writer should have pointed that out.
I miss A-Dan…where is he? He should be here to reassure us that everything in China is just peachy!
“Wilson Gee, owner of the Ahwatukee Lakes course, let the course go fallow because the water bills were too high. Then he became embroiled in a years-long ongoing dispute with angry homeowners who’d paid premium lot prices to face the golf course. Gee wants to convert the dead golf course into homes, and the homeowners are threatening to sue him.”
So I conclude from this that the value of these homes come from two sources:
1. The homes themselves, and …
2. The view that is offered by the home, the view that comes with owning the home.
One can control number 1 (the home) because he owns it, but he cannot control number 2 (the view) because it’s owned by somebody else.
Which makes golf course property a bit more interesting than, say, ocean front property in that one place’s view can be controlled by somebody else while the other place’s view cannot.
Anyway, just throwing this out as something to think about.
At least golf courses do not usually swallow homes built at their edge.
…. and the truth is they paid massively inflated prices for a depreciating asset.
If you can somehow add value to a property by offering up some sort of “view” - a view of something that is in demand for one reason or another - then you can take something that is close to being nuthin’ and turn it into something that is really close to being really sumptin’.
A “view” of a golf course? It would seem to me such a thing would be a negative.
It’s all in the marketing (which is another way of saying that it’s all in the mind).
Mark Twain showed us how to get other people to pay us to whitewash a fence.
Marketing 101.
Does anyone here think that people will willingly fork over thousands of dollars for a Rolex because they are solely interested in being able to find out what time it is?
A view of green green grass, especially in PHX where it gets so hot and dry and steriley deserty, is very calming. Viewing greenery has been proven to be good for lowering stress. Picture two views, one of rocks and cacti and the other of long fields of green grass. People who haven’t lived here and are used to the greenery being prevalent where they used to live don’t realize how much you will miss that green.
Exchange buckets of scarole to see turf? Notta chance.
I get it about missing the green, but I don’t get 1 million gallons of water a day to make a patch of green. How about moving away from the desert floor?
I knew someone who had a house on the edge of a golf course. He couldn’t sit in his back yard because he might take a golf ball hit.
people will willingly fork over thousands of dollars for a Rolex because they are solely interested in being able to find out what time it is ??
Has little to do with what time it is…You see the Breitling ad ?…Hey, lets jump in our P51 Mustang and on this HOP we are going to fly to the desert and land because there is desert (as in yummy) there waiting for us…
And you sir, who are special, need this watch…Like the ad says…”Breitling…Instruments for professionals”…
Up-chuck…
A view of green green grass, especially in PHX where it gets so hot and dry and steriley deserty, is very calming.’
It will take 1000 years to get natural desert again. Now I imagine its just tumble weeds and Blowing dirt.
They should plant Desert trees, throw down rock and make a nice bike path.
The same topic came up this morning when I was talking to a Southwestern friend of mine. He said that people there would be willing to pay for high-quality photographic art of green hills and rivers because they miss the green green grass.
I agree Blue, if they didn’t like the desert then why did they retire there? There are plenty of places to escape the cold and still have green grass.
people there would be willing to pay for high-quality photographic art of green hills and rivers because they miss the green green grass.
Buying & mounting a photograph on a wall is WAAAAY cheaper than what you have to pay extra for a live view of same out of your window.
People who truly want green green grass can always move to where it grows without human intervention. Places like Detroit.
‘If you’re in financial trouble, the first things I would let go is my second home’
But, two houses should have made you an instant multimillionaire!
And it’s that the led to the 25 million excess empty and defaulted houses.
+1 Ben…Yep…
“If you’re in financial trouble, it’s probably because you purchased a second home.”
Second homes are not an investment. They are a cost that FAR outweighs their utility.
Neither are first houses. They’re expenses that result in loss.
The person mentioned in the article as griping is a retired Chiropractor who bought in 30 years ago. This golf course has been turned over several times I think. Just a case of the interests fighting with the interests.
“The interests can takecare of theyselves.” Homer Stokes, Oh Brother Where Art Thou?
What gets to me are all these golf courses in the parched Sonora desert. Did anyone stop and wonder “How are we gonna irrigate these monsters during droughts?” or “What’s going to happen when millions of houses are built in the Southwest and each new house will be tapping into the already over allocated Colorado river?” (for those of you on the east coast, the Colorado is puny compared to your rivers).
Most golf courses in Arizona use reclaimed water. Also, Phoenix metro gets a large portion of it’s water from the Salt River Project not the CAP.
SRP: we steal water from the north because we can.
Most golf courses in Arizona use reclaimed water.
I’ll bet that during drought periods there’s a great deal of demand for that reclaimed water.
‘A year ago, it seemed nothing could stop the Massachusetts housing market recovery. Flash forward to today: Sales are down, foreclosures are up, and buyers are walking away from pending deals. Construction of new housing is falling again. To top it off: Single-family home prices in September fell’
The astonishment in these bubble tales is amusing and instructive. “What do you mean, down? That’s not possible.” Not only is it possible, but inevitable. When else in history have houses prices gone up like this in Massachusetts? But they refer to the incredible period when prices were skyrocketing like it was a norm that would never end!
BTW, at this point it should be noted that a year, maybe a year and half ago, there were articles out of Boston telling us that appraisers had started using the multiple bids, etc, as justification to hit the numbers. I wonder if the Boston Globe remembers these appraisers now?
” I wonder if the Boston Globe remembers these appraisers now?”
I do.
A Midwestern snapshot for you. I met the new owner of the small house across the street which had been empty while in foreclosure for the last two years. He decided turning wrenches as a mechanic wasn’t going to allow him to retire so he sold all his toys, like his ATV and camper, stretched and scrapped up some money and bought the house to rent out. While tearing out the kitchen sink and all the dry wall he found the termite damage was worse than he thought. The supports were like powder. He said he was learning how to fix it up as he went along, getting friends to help him for cash.
The tenants in this working class neighborhood have a tendency to trash the houses. Two doors down was such. The landlord there decided to sell his fancy home in an upscale part of town, gutted the small rental, replaced much of the siding, repaired the roof, cut down some trees, and moved his family in.
The person who bought the totally remodeled house below them both decided to lease it out to some college-aged looking girls with three dogs. The dogs have already destroyed the front portion of the nicely staged and professionally landscaped yard. I can only imagine what the inside looks like now, dogs being what they are.
I wonder if all the landlords were inspired somewhat by the house at the end of the block? It’s a small house which was totally gutted, everything was replaced or repaired within the last three years, and all Summer long the office worker who bought the place spent every weekend mowing the lawn and tending the flowers to perfection. It looks nice. Picture perfect.
Sounds like your typical neighborhood in California.
Huntington Beach, CA Sale Prices Plunge 21% YoY On Cratering Housing Demand Statewide
http://www.zillow.com/huntington-beach-ca-92646/home-values/
The bottom is still a very long way down. Dump it if you got it.
I lived in this zip code for 16 years. They call Huntington Beach “Bakersfield by the Sea”, I suppose because of the oil rigs scattered about, (and the red necks). I hated it and I did not want to be there when, a) they run out of water, b) the “big one” hits, or c) the 22 million people revolt and mass civil unrest ensues. So, my husband and I moved to Mid-coast Maine this past July to be near family, fresh water, and affordable housing. (Yeah, we committed the cardinal sin of The Housing Bubble Blog and bought a money pit.) It is a big change, but I’m glad to be out of So. Cal. In October, I went for a visit and our annual pilgrimage to Neil Young’s Bridge School benefit concert and could not wait to get back to Maine. We drove through the Central Valley where “no water” signs and dead nut trees litter the sides of the highway. It’s sad and scary that so few Californians seem to pay any attention to the water crisis. If I owned property back there, I could not unload it fast enough.
Maine is equally hellish. I wish you luck though. I think you’ll need it.
How so?
Stick around there for 4 or 5 years and It will become obvious anywhere NYC and north. The further north, the more obvious it will become. And it’s certainly not different there in terms of the housing disaster as that is a national phenomena.
I must be daft.
why?
I have no idea what you are talking about and I am fairly intuitive. Either you are being purposefully vague or you are communicatively challenged. Your significant other must be
clarevoyant or checked out.
So in other words, you haven’t experienced the hellish existence that living in a miserably cold with a moribund economy is.
You’re in for a ride you’ll wish you never got on.
No, I have not. I’ll be okay. But thank you for your kind thoughts and words of encouragement. Move over, Iyanla Van Zandt! 😉
There is no one “okay” with it in ME. That’s why anybody who is somebody left.
Hahaha!
Hey it’s good you got out of CA. Your notion that housing is “affordable” in ME is a distorted one. It’s not and in fact you bought at the peak in a state that is depopulating for good reason.
You are no doubt correct. I have nowhere near the knowledge that you do when it comes to the global housing market, you being a “housing analyst” and all. My poor, unsuspecting husband will most assuredly find my lifeless body hanging from one of the hundred year old rafters out in our carriage barn, when I come to my senses and realize what a huge mistake we’ve made, spending just over one year’s salary on a meticulously maintained craftsman Victorian house on 2 acres in an historic village of Midcoast Maine, such a ghastly location that everyone who is “somebody” (the Bushes?, Martha Stewart?) have already left. Consider this my suicide note. Goodbye cruel world!!!
P.S. Housing Analyst… Are you still there? Housing Analyst, as I prepare my foolproof noose, tell me a story. Tell me a story about your many visits to Maine. Don’t leave out a single detail.
You forgot the tears of joy.
Enjoy your balloon framed firetrap.
I was hoping for an anecdote or two in regards to your extensive travels throughout “Vacationland”, but nothing. Why is that, I wonder… Be that as it may, I am enjoying my home more than you could ever possibly imagine, partly because it does not appear that you enjoy much of anything at all, (except using the cover of the internet to anonymously insult and criticize others), but primarily because my home is hard wired with a fire alarm and has fire retardant insulation in the walls. One of the previous owners ran it as a B & B and made a number of improvements to it in order for it to comply with local health and safety codes. You see, I survived a house fire as a small child, so making sure I wouldn’t burn to a crisp in a “firetrap” was, I assure you, of greater concern to me than it, evidently, is to you. BTW, thank you very much, “Housing Analyst”. It warms my heart to know you in particular have taken such a keen interest in my well-being. 😊 You’re a real sweetheart, ain’t cha ?💕
And it’s still a run down balloon framed fire trap.
Does it have pretty curtains too?
The fact that you attempt to camouflage your obsolescence with boorishness is not lost on me. Have you ever been to Maine, HA? Is that why you can’t share any stories about your experiences here, because you have none?
HA, this might explain your need to belittle and bully people.
http://psychcentral.com/quizzes/borderline.htm
If I overpaid a few hundred percent for a run down obsolete dump, I’d be lashing out too.
I apologize if you are misconstruing as lashing out, my attempt to help you see how counterproductive your hypercritical attitude is, not only to the HBB, but to life. However, I am not surprised. It’s pretty common for people with BPD (Borderline Personality Disorder.). The good news is, BPD is completely treatable. The bad news is, you must endure years of special therapy called Dialectical Behavior Therapy, which is practiced by only a select few therapists. Also, therapists abhor patients with BPD because they are highly manipulative and deflective.
Remember, HA, that your loudest critic is the internal one coming after you, picking apart your every action, your every bite of food, your every drop to drink. It can’t be fun living in your head. I truly pity you.
P.S. Still waiting … Ever had a Maine lobster picked fresh out of the Atlantic Ocean? I have. I’ll bet you have never even set foot anywhere in New England.
Not even your engineering and architectural expertise will save you.
Deflecting. Not surprised. Since you are obviously not going to divulge the fact that you have never even been east of the Mississippi, let’s move on.
Why don’t you tell me about your home and why you feel it is superior to all others? Do you have friendly, helpful neighbors? A lovely view from your kitchen window of a babbling brook and fruit trees? Are you close to lots of amenities, restaurants, stores, etc?? Lots of fresh air so you can stay active and fit? Tell me all about what makes your abode absolutely dreamy…
Your balloon framed shack is your problem. Don’t make it mine.
You are making my house your problem. I stopped talking about it a few posts ago. Let’s talk about your house. How many bedroom(s)? Is your kitchen well-laid out? Do you have a gas or electric stove? Do you plan to have a lot of guests for Thanksgiving? Maybe make a big turkey? I’m interested in your house now, not mine.
Good. Back to falling housing prices in CA and Maine.
Go!
http://cgi.money.cnn.com/tools/homepricedata/
Lewiston-Auburn, ME Metropolitan Statistical Area
Forecast change: third quarter, 2013 - third quarter, 2014
+3.5%
Forecast change: third quarter, 2014 - third quarter, 2015
+3.5%
Market fundamentals
Median Family Income
(Second quarter 2013)
$61,000
Median Home Price
(Third quarter 2013)
N/A
Change in Home Prices
(From Third quarter 2012 through Third quarter 2013)
-0.4%
Worst 1-Year Home Price Change
(1980-2013)
Los Angeles-Long Beach-Glendale, CA Metropolitan Division
Forecast change: third quarter, 2013 - third quarter, 2014
+6.8%
Forecast change: third quarter, 2014 - third quarter, 2015
+4.5%
Market fundamentals
Median Family Income
(Second quarter 2013)
$61,500
Median Home Price
(Third quarter 2013)
$456,000
Change in Home Prices
(From Third quarter 2012 through Third quarter 2013)
+22%
Worst 1-Year Home Price Change
(1980-2013)
That was fun. Ciao!
Forecasts? Nope.
Sale prices? Down
You got burned. Live with it.
How long before FHA collapses?
Same amount of time as for everything else - the moment after it stops being backstopped by government debt, financed with printed money.
This bubble may break on it’s own, but I would prefer to encourage it by having a two tier interest rate system.
If you are going to live in the home then tier one. If not tier two at a much higher rate of interest. Speculators have “sown the” problem, “let them reap the whirlwind”.
I think this is already the case, but I don’t think it’s “much” higher…just higher.
The reason is simple. If you don’t live in the house, you are more likely to default on the mortgage.
However, I think that frequently, the way lenders get away with lower interest rates for second homes is they require much higher down payments.
You would be very hard pressed to find a 3% down payment loan for a second home…usually it needs to be 25-30%.
Quick Google search got me this…
http://www.foxbusiness.com/personal-finance/2014/09/18/how-to-pay-for-your-second-home/
What a “housing recovery” actually looks like.
http://realestateguidance.com/wp-content/uploads/2011/07/FallingPrices.jpg
I would not jump into the market now for the fact you don’t know where the bottom is. I see the market slowing and more price cuts in so cal. Don’t get caught up in price wars and thought of this is the perfect house. There’s always another home that will beat the one you want. I have to admit I have become numb to sellers huge price demand. Throwing out 600 to 700k numbers seems to be the norm but when you begin to break down the numbers and received your 1 of 360 mortgage payment, you may realized you overpaid.
“I would not jump into the market now for the fact you don’t know where the bottom is.”
You know where the bottom is… and so do I. And you also know the price bottom is a very long way down.
so “Selling LA and NY shows will get cancelled ?
what will Josh do