Nobody Wants To Buy At The Top
It’s Friday desk clearing time for this blogger. “A casualty of Denver’s hot real estate market is the once-lucrative practice of ‘fixing and flipping’ distressed homes. Soaring housing values and a dearth of foreclosures leave investors with a shortage of properties suitable for buying on the cheap and reselling at big profits. Glen Weinberg, owner and chief operating officer of Evergreen-based Fairview Commercial Lending, said that despite rapid price increases along Colorado’s Front Range, residential real estate investors often have unrealistic expectations of property values. Earlier this week, he had a client seeking a $460,000 loan for a Parker home that appraised at $350,000.”
“‘What people think the market is and what the reality is are two different things,’ he said. ‘I joke that if I don’t make a person cry at least once a day, I’m not doing my job.’”
“Prices for the most expensive U.S. homes grew at the slowest pace in three years as wealthy buyers became worried about overpaying following a surge in values, Redfin Corp. said. ‘Rich people have a lot of money, but nobody wants to be the guy or gal that buys at the top of the market,’ said Redfin Chief Economist Nela Richardson. ‘With all the price appreciation, there’s widespread concern that the market may be topping out.’”
“The markets with the biggest price drops for trophy homes were Boston, where values slumped 18.7 percent in the first quarter; Alexandria, Virginia, with a 12.4 percent decline; and Hollywood, Florida, where prices were down 6.9 percent.”
“In Whatcom County, the foreclosure activity has increased significantly in the first four months of 2015. This indicates that banks are now releasing shadow inventory because overall home prices have risen to a point that they can recoup some of the losses, said Peter Roberts of John L. Scott Real Estate’s Bellingham office. ‘This is part of the cleaning-up process,’ Roberts said, adding that he expects banks to work through most of this shadow inventory by the end of 2015.”
“This increase in bank repossession in April in the Inland area and the nation was foreshadowed by a 23-month high in scheduled foreclosure auctions in October 2014, RealtyTrac VP Daren Blomquist. Ray Wright, a Realtor in Riverside, said a few more homes are coming on the market. ‘I’ve been making offers with buyers on more foreclosures than I have in the whole year,’ he said. ‘It might be indicative of something that’s happening naturally as the pre-foreclosures are moving through the system.’”
“Just as the Orlando-area housing market has tightened with a slim inventory of home listings, banks have started selling more foreclosed houses, a new report shows. For the second month in a row, the four-county Metro Orlando area experienced an increase in foreclosure sales. The increase of foreclosure sales comes as Central Florida’s supply of listings is so thin that it is almost half of what is considered a healthy market. And for sellers, median prices in the core market of Orange and Seminole counties are up about 85 percent from a trough of less than $95,000 in January 2011.”
“‘Some people believe that maybe the banks have held back and are intentionally selling now. I’m not sure about that, but it is a very opportune time for banks to liquidate this inventory because of market conditions,’ said Daren Blomquist, VP of RealtyTrac.”
“A real estate agent in Western Australia’s Pilbara says there has been a significant rise in the number of vacant homes in Newman for the first time in years. Kathy Stevens said about 30 per cent of private rentals in Newman were sitting empty. Ms Stevens said it was a far cry from two years ago when there was a long list of people waiting to secure accommodation in Newman. ‘Two years Newman had a waiting list for people wanting accommodation because every available accommodation, caravan park, motel, camp was booked out,’ she said. ‘This is what lead the demand to build. Unfortunately the demand and the finished product didn’t come to the market together.’”
“If you travel through the suburbs of the Indian capital, Delhi, you will see miles and miles of built homes with nobody living in them. In fact, Anshuman Magazine, chairman and managing director of property consultancy firm CBRE South Asia, said in a recent article that ‘around 12 million completed houses’ were ‘lying vacant across urban India.’ And despite this, there is a huge shortage of housing in urban India. Many of these homes have been bought as investments by people who have ‘extra’ money to invest.”
“A substantial portion - no one knows how much - of this is black money on which taxes haven’t been paid. Hence, homes have been bought but nobody is living in them. Further, most builders like catering only to the affluent population in India and home prices have gone beyond the reach of many of them too. Hence, it is not surprising that as per the 2011 Census, 13.7 million households in Indian cities live in slums. The number of people living in these slums is around 65 million and forms around 17.4% of the urban population. Other estimates put the slum population living in Indian cities at a much higher level.”
“A 2012 report quotes S Parasuraman, director of the Tata Institute of Social Sciences in Mumbai, as saying: ‘Nearly 60% of Mumbai’s slum population lives in 8% of land.’”
“As the wind whistles through half-finished skyscrapers and over empty boulevards, a development billed as China’s answer to Manhattan at times bears out the ‘ghost town’ label some have given it. Chinese officials hope the towers of the Yujiapu Financial District will one day house a trading center to rival New York’s Wall Street or London’s Canary Wharf. But more than three years after construction began, all but one of the buildings planned for the development in the northern Chinese port city of Tianjin appear unfinished, alongside vacant spaces where others should stand.”
“As China’s economic growth slows after a decades-long boom, these buildings — many of which still lack exterior walls — some 150 kilometers from Beijing raise questions about the viability of the scheme, which state media say will cost a total of 200 billion yuan ($32 billion).”
“On the side of one of Yujiapu’s unfinished tower blocks, a huge banner listed a phone number, seemingly inviting inquiries for office space. When reporters called it turned out to be a real estate agency — but the woman who answered said she had not heard of the project.”
“The ’spectre of deflation‘ is spurring the world’s major central banks into a dangerous struggle for stronger domestic growth that imperils financial markets and ignores the needs of developing nations, Reserve Bank of India Governor Raghuram Rajan said. ‘I fear that in a world with weak aggregate demand, we may be engaged in a risky competition for a greater share of it. We are thereby also creating financial sector risks for when unconventional policies end,’ Rajan told an audience of economists and investors in New York.”
“Million dollar homes always grab headlines when they sell in Manatee and Sarasota counties. But away from the glitz of high-priced properties, there are thousands of home buyers out in our communities who just want to find single-family homes they can actually afford. Generally priced under $225,000, these homes are becoming more rare on the real estate market, according to a recent statistical study. The reason for this isn’t that homes in this price range are off the market. What’s actually happening is prices are rising on these homes, taking them out of range for people with modest incomes.”
“I saw this myself last year when my wife and I closed on one of the last homes that could be had for under $200,000 in the small Palm Aire neighborhood we live in. Since then, we’ve watched with morbid interest as our neighbors have put their homes on the market for $300,000 or even $400,000. Median home prices are up over 17 percent in the past year in Manatee County, well beyond the approximately 2-percent national growth in incomes over the same period.”
“There are a few affordable existing homes on the market, but they might not be selling as homes to working people. Leah Secondo, a real estate agent in Bradenton, has sold six in the above-mentioned price range this year. All but two went for cash. Talk to any agent in town and they’ll label that buying profile with one of two words: ‘Investor’ or ’snowbird.’”
“What’s the future for the housing market? We’re already seeing it. The local real estate industry is seeing sales growth in the higher-priced homes categories, particularly those priced over $1 million. At the same time, apartments are going up as quickly as developers can build them as many people choose renting over buying. After the recession and the housing market crash, the hope among putative home sellers and real estate professionals was that prices would build back slowly so as not to outstrip buyers’ ability to afford them. So much for that.”
“With any luck, the price boosts will slow soon. But if not, there’s always the next crash.”
‘In the history of sudden wealth loss, Li Hejun may have set a new record. Li, who was China’s richest man until this week, saw his fortune drop by as much as $15 billion in a half-hour as the stock in his company, Hanergy Thin Film Power Group, fell by nearly half.’
‘In a similar wealth decline, Hong Kong property and electronics magnate Pan Sutong has lost more than $11 billion this week as shares of two listed companies, Goldin Financial and Goldin Property, both closed down more than 40 percent.’
‘Pan owns around 65 percent of Goldin Property and more than 70 percent of Goldin Financial, according to filings. His fortune was listed at more than $28 billion, making him Hong Kong’s second-richest man.’
‘That means that the two men have lost more in one day that the total net worth of Carl Icahn , Steve Ballmer or Michael Dell.’
‘Pan is known for his large lifestyle. Pan also owns vineyards around the world, including three in France and one in California’s Napa Valley, called the Sloan Estate, which he purchased in 2011 for around $40 million.’
Poof!
I’d be ecstatic to have 5% of what they have left over after “poof”
Whaaa go uppeeee must go downeee!!
He owns wineries around the world! I dont think it matters too much. He could not spend it all in a lifetime anyway.
Sometimes reality can really be a bitch …
“Newman rental housing vacancies rise significantly since mining downturn says property agent.”
“A real estate agent in Western Australia’s Pilbara says there has been a significant rise in the number of vacant homes in Newman for the first time in years.”
“Kathy Stevens said about 30 per cent of private rentals in Newman were sitting empty.
“Ms Stevens said it was a far cry from two years ago when there was a long list of people waiting to secure accommodation in Newman.
“Two years Newman had a waiting list for people wanting accommodation because every available accommodation, caravan park, motel, camp was booked out,” she said.
“This is what lead the demand to build.
“”I think it’s probably situation status quo until something radical happens with the mining industry.”
Go here for an example of something radical happening with a mining industry:
https://www.google.com/search?q=bodie+ca&biw=1813&bih=857&tbm=isch&tbo=u&source=univ&sa=X&ei=5QpfVaJV1biiBMbag-gH&ved=0CEQQsAQ&dpr=0.75
I’ve always wanted to drive through there.
While it isn’t a ghost town, my favorite mining boom/bust city is Potosi, Bolivia. In 1600 it was as large and rich as Madrid. You visit there now, and it’s almost impossible to imagine that.
‘A 410-square-foot blue house on East Second Street with one bedroom, one bathroom and a window air conditioning unit is being listed on AustinRealEstate.com for $450,000.’
‘Yvonne Esparza, the realtor for the property, said the asking price reflects Austin’s high demand for housing and low supply. “Real estate is location, location, location,” said Esparza said. “Several years ago, you could buy a house out here for $29,000. And really the value has gone up a lot.”
“A lot” is an understatement. According to Travis County tax appraisal records, the property value in 1993 on the lot was $7,030. In 2014, it was valued at $202,961. This year, its value is $267,414.’
“I figure, somebody’s just shooting for the sky and seeing if somebody buys,” said Felipe Estrada, who lives across the street. “It was placed on the market probably three or four years ago and it was on the market for almost $200,000 and I was surprised that it sold at that price.”
‘The prices homes sell for directly affects property values. Residents on East Second Street not only have one house going for $450,000, but the house two doors down is listed for $550,000 and another house across the street is selling for nearly $700,000.’
“There are several properties that are purchased in East Austin and investors come in and tear it down, build it up and sell it for over a million dollars. Some for over two million,” Esparza said. “It is concerning. It just makes it more challenging to save and pay every year. I don’t think anybody wants to see their taxes go up.”
People often cite that it is hard to build in Austin, and so there are supply constraints that will help keep prices high. That may be true for some parts of town, but even the best parts of down will be affected by relative values of homes elsewhere around (and near) Austin. The supply constraints don’t extend just outside the City limits.
There is lots of housing planned (and being built) north of the city limits. We were pitched on one such deal recently–when we asked about how they would compete with other builders (ie. if things go downhill, how do you compete if you don’t have the cost structure of a public builder, etc.), their answer only related to how strong the market was. In other words, don’t worry about the competition…the market is so strong, it won’t matter.
I heard the same logic when people were pitching us on deals in So Cal in 2004-2006 (the market is so good that it doesn’t matter that we have a competitive disadvantage if the market softens).
Complacency is not a good attitude to have…especially regarding competition when trying to sell homes.
There are no “supply constraints” anywhere in Texas given the massive excess inventory, falling demand and yes…. falling prices.
Fort Worth, TX Housing Inventory Balloons 55% As List Prices Fall
http://www.movoto.com/fort-worth-tx/market-trends/
There are always supply constraints when you’re looking for a neighborhood zone that has USA 1950s demographics. To be blunt, when you want to live where there are 95%-99% White people, the supply is low or the price is high.
I have a friend who is still trying to find a house in a high-White zone for low-White prices. It’s impossible. He’ll never succeed. But since he’s Liberal you can’t tell him anything like that. Naturally, he never talks about race, he just uses terms like “low crime” and “good schools”.
I hear you on the LIEberal code language.
Your friend will succeed eventually. Hoard cash and stay out of debt in the mean time.
What is YOUR solution? Besides, make more money whitey!
Falling housing prices.
“window air conditioning unit”
Does it come with a microwave too? lol! at these Realturds/
‘Stories about inflated housing prices across Canada, and warnings from the Bank of Canada that a market correction is overdue should not scare off renters who are thinking of buying into Yellowknife’s housing market, according to one local realtor and City councillor.’
‘Adrian Bell of Century 21 Prospect Realty did the math several years ago in his blog on life in Yellowknife and demonstrated that anyone renting a two-bedroom apartment would be better off buying a house.’
‘Even a single adult would do better than continuing to rent a one-bedroom apartment, says Bell. They would come out of the first five years of interest-heavy payments with lower monthly costs and a nice pile of equity.’
‘Still, housing in Yellowknife comes at a hefty price. According to the territorial government’s ‘Come Make Your Mark’ pitch to potential migrants, the average home price in 2013 was $410,808 compared favourably to Calgary ($429.224), Toronto ($508,578) and Vancouver ($744,559).’
‘But there is far more choice than there was at the beginning of the decade. Close to 1,000 new housing units have been added to the Yellowknife market in the past five years, giving first-time buyers a range of choices, from older modular homes scattered throughout the city to the promise of new condominiums on Twin Pine Hill.’
‘Adrian Bell of Century 21 Prospect Realty did the math several years ago in his blog on life in Yellowknife and demonstrated that anyone renting a two-bedroom apartment would be better off buying a house.’
Realtor math, not real math.
Yellowknife? Why don’t you just buy a beach house on the Arctic Sea? Maybe the idea is to market the town to mainland Chinese investors as a comparative bargain.
4 months of the year it is mostly dark there. Also -10 for a high and -50 for a low in winter!!!
“‘Some people believe that maybe the banks have held back and are intentionally selling now.’”
An astonishing observation!
“I’m not sure about that …”
Not sure, huh? Well then you are an idiot.
“… but it is a very opportune time for banks to liquidate this inventory because of market conditions,’ said Daren Blomquist, VP of RealtyTrac.”
Funny how that worked out.
And once the banks have their money back, that’s when the Fed will raise rates.
As I have posted recently, in just the past few months, I have seen about a half-dozen Berkshire Hathaway RE signs pop up in my neighborhood. I suspect that some if not most of them are foreclosures.
‘The section of the magazine was called Real Escapes and in 2005 I was in charge of it, despite having never owned any real estate in my life. This meant that all the renovated castles in Scotland, subdivisions of modernist prefabs and Tuscan villa communities that crossed my desk looked pretty seductive.’
‘I would paraphrase press releases at a length of 1,500 words, and the magazine – a bimonthly lifestyle supplement to a major national business publication – would run enticing photography or renderings supplied from the developers.’
‘Was this journalism? Not even close.’
‘What it was was junkets galore. I traveled to places where wealthy businessmen might want a vacation house, often on a developer’s dime, sometimes on a modest allowance from the magazine. This was 2005 and 2006, the tail end of an exuberant time. Loans were cheap and money was everywhere: a kind of ubiquity of wealth that didn’t yet seem foolish, sinister or unreal. Or it didn’t to me.’
‘It does now. Ten years later, amid warning signs of another housing bubble, I can see that the hints were everywhere: deserted developments, half-built luxury condo towers, empty construction sites. There was the private island off the coast of Antigua where the developer showed me new house after new house, all apparently sold to wealthy buyers. Five million, ten million, twelve, he said. Not one of them looked as if they’d been ever been inhabited.’
Bahahahahaha … all these developers and other real estate schmuck spend gobs of their own money to entice other schmucks to buy the crap that these real estate schmucks are selling and then what do they do? Why they all flood into my bank so as to joyously participate in the ever (and, hopefully, forever) lucrative (lucrative for me, at least) signing-on-the-dotted-line ceremony.
Bahahahaha … the buying schmucks work and the real estate schmucks work and I … I get to reap.
Reap, reap, reap … endlessly reap.
God’s Plan.
Bahahahahahahahahahahahahahahahahahahahahahah
You mispelled ‘rape’.
He was right about the schmuckfest though.
‘Just as the city of Santa Fe found common ground with San Francisco in raising the minimum wage, it might also find the larger city’s efforts helpful if it moves forward to curb the influence vacation rental sites such as Airbnb might be having on renters.’
‘Some estimate that Santa Fe has between 600 and 800 units available for vacation rental on Airbnb and VRBO combined. As of today, there is no effort to make owners register these units or pay taxes, even though Santa Fe has a short-term rental ordinance.’
‘At the same time, rents have climbed in many part of Santa Fe with an estimated vacancy rate below 5 percent.’
‘… it might also find the larger city’s efforts helpful if it moves forward to curb the influence vacation rental sites such as Airbnb might be having on renters.’
So is the goal to make rents increase? Because AirBnB increases the supply of short-term rental housing; in principle this should put downward pressure on rents.
I think the argument is that they take 12-mo rentals and remove them from the rental pool; they correspondingly add supply to the hotel/resort-and-equivalents rental stock. That would have the effect of decreasing vacancy rates and increasing rents for year-round rentals, and increasing vacancy and reducing rates for hotel/resort-and-equivalents.
“I think the argument is that they take 12-mo rentals and remove them from the rental pool;…”
Uh, isn’t that what always happens when someone takes out a lease on a 12-mo rental? Except these guys are adding back to spot market rental supply when they buy.
Oh, I totally agree—I was attempting to restate what I understood their argument to be, _not_ agreeing with it.
Clearly, they have a myopic view of the demand-side of the market for 12-mo rentals. They are looking only at end-users (intending to live in the unit), while the demand side also clearly includes people who believe that they can sub-lease them as short-term rentals for a profit.
‘A flyer is going around North Portland rental properties, using choice language to express how displeased people are over rising rent. Walter Pozarycki put a one bedroom apartment near Mississippi Avenue for $1,550, people have accused him of being greedy.’
‘But with Portland having one of the highest occupancy rates in the country, he expects to fill it quickly. Joe Haemer has lived in the Boise neighborhood since the late 1980s.’
‘Thursday night she was out having a beer, celebrating that she rented out a cottage in her backyard for $1,500 a month. “Yes, I’m greedy,” Haemer said. “But you know what? I earned it.”
They will have to be greedy. Not being greedy when the time comes to cash in on a mania, means you will just fall behind as your taxes and other expenses just rise with the mania. Of course you could reduce your expenses, living more simply, but few Americans want to do that, since they’d “feel poor”.
Manias are very lucrative in the United States for cultural reasons. Instead of America we should be called Amania. It fits better.
That’s a very good point. I would add that our economy is turning everybody into a gambler, and not in an entrepreneurial sense. In any gambling situation the casino usually wins.
You still can choose not to play, but our economic and political leaders are determined to punish that choice.
‘The Las Vegas housing market is being hobbled by legal wrangling and disagreements over homeowners association foreclosure proceedings that have resulted in thousands of homes sitting empty and untouchable in legal limbo.’
“It’s a huge issue in Nevada right now,” said attorney Jacob Hafter, the principal of Hafterlaw in Las Vegas. “There are thousands of cases in the courts about this right now.”
It seems like Florida would be having an even bigger problem with HA’s. Don’t they practically run the state?
Nice post Ben…Interesting…Lots of people not paying their HOA dues…That in turn over time, makes the reserve fund severely underfunded…When time comes to do replacements/preventative maintenance, there is no money…
I saw this happen a very long time ago on a very large townhome development although for other reasons…The HOA was run very poorly…They went 10+ years without ever doing a reserve study or increasing their monthly dues…At the end of the day, the HOA had to secure a very large bank loan and the HOA dues quadrupled for each owner..The value of the units fell by 50% immediately…Foreclosures followed…It was a mess…
Perhaps the idea is to make the HOA so underfunded that it can’t afford to take people to court, which costs for lawyers and other legal fees.
HOAs only made sense when people could flip. You may not have been ‘home’ in the domicile anyway, so what did you care about nosy HOA enforcers or their fees? You were aiming to climb the “property ladder” and eventually have a big house way out in the boonies where every face you saw was white as snow. At that point, you’d “made it”.
HOAs were only a means towards an end, and once the end became impossible to pursue, the means became a burden. Of course, HOAs are organizations and like all organizations or organisms they will try to survive. So we have many HOAs today which should be shut down, but they won’t allow it.
When I was young and naive and thinking of buying instead of renting, a realtor took me to a condo complex I was interested in. She kept making little remarks about potholes in the parking lot, and cracks in the walls, and finally pointed out that it was the shared responsibility of the condo owners to fix these things. She was probably only trying to push me into buying a more expensive house, but I was already thinking that house owners have these same kinds of problems. But I still appreciate her honesty about what being an owner of a mortgage involves.
DAve,
this sounds like the HOA I own in in Rancho Mirage. No fee increases for years, no reserve, cheap greedy owners, place falling apart. Selling about $100,000 under market for fee land. a total nightmare
‘City officials in Indianapolis are applauding a law that Indiana Gov. Mike Pence signed last week that won’t let municipalities hold banks responsible for upkeep on vacant homes.’
‘Supporters of the bill say the state’s current tax sale process pertaining to vacant homes is so complicated that the homes often stay empty for years. State Sen. Jim Merritt, an Indianapolis Republican, says the new law will make “it a quicker process and a cleaner process.”
‘The new rules will allow code enforcement officials to declare properties vacant and speed up selling process. According to a housing data analyst, Indiana had 5,217 vacant homes at the end of January.’
‘Like many New Jerseyans on the precipice of foreclosure, Diane Ostering keeps clawing her way back. Then, it seems as if the State of New Jersey always stomps on her fingers.’
‘After once being approved for a mortgage modification, she lost it when the state cancelled previously approved assistance. Again on the brink of a deal, she has learned the state has a lien on the home.’
‘Ostering admits she combined bad moves with bad timing while trying to save her terminally ill father’s Bloomfield home. She moved back in, acquired it from him for $1, then refinanced, “stupidly” taking out an adjustable rate mortgage from a new, high-flying lender that would soon collapse.’
‘She borrowed more than needed, intending to use the extra money to fix up the house. As her Dad’s chronic obstructive pulmonary disease worsened, she planned to sell the house and move him to a handicapped-accessible residence. Then, the Great Recession cut her work hours at an IT consulting firm before eliminating her job entirely.’
‘But Ostering found help — or so she thought.’
Every Friday Ben’s blog is full of jokes. Here’s one:
“She has been promised help from lending institutions and state programs, only to have promised assistance disappear for no reason.”
“For no reason.” Get it? Bahahahahahahaha
Here’s another joke:
“The state told me I had to have a mortgage modification in place to keep the money,” Ostering said. “The bank told me they couldn’t process the modification without the money.”
Bahahahahahahahahaha …
“The Hardest Hit Fund requested that we return the funds originally issued on Ms. Ostering’s behalf commenting only that they were issued in error,” Kevin Friedlander, a regional vice president for corporate communications at Wells Fargo, said via e-mail.”
Bahahahahahahahahaha …
And another:
“Ostering protested, and has spent the last two-and-a-half years fighting.”
Fighting, two year of fighting. Bahahahahahahahahaha …
“But last month, again on the verge of a modification, Wells Fargo notified her that the state has a lien on the property. Ostering was aware the state imposed liens on properties enrolled in the program, “but I was told by someone in Homekeeper that it was just a formality and took a couple of months to come off after they took back the money.”
“… but I was told by someone in Homekeeper that it was just a formality …”
Bahahahahahahahaha … “just a formality” … bahahahahahaha.
God, I love this blog.
These “formalities” is part of what it makes it fun. Formalities and fine print.
Also the term “adjustable rate” - the most fun off all.
Mr. B is just cruel and evil…..
“Mr. B is just cruel and evil…..”
Cruel and evil = without baggage, truly free.
No, the real cruelty and evil is putting pens in the hands of stupid people and then tossing papers in front of them to sign where 100s of thousands of dollars are often in play. That’s what’s really cruel and evil here, since it ultimately affects the taxpayer.
Stupid people shouldn’t be able to sign for more than a couple hundred dollars. If that. A cellphone contract is the most we should allow stupid people to sign up for.
Stomp = what do I have to do to NOT pay the mortgage I signed
‘But Ostering found help — or so she thought.’
There is no “help” after paying multiples of construction costs for a 40 year old depreciating asset like a house.
Remember… current asking prices of resale housing are 3x higher than long term trend and 2x construction costs.
‘It’s been chiseled into the minds of Chinese bureaucrats – they must “maintain social stability” to climb the career ladder. This amounts to a license for clamping down on any sign of disturbance. Increasing numbers of strikes have been met with vigorous suppression.’
‘About a third of the reported protests in the country over the past year are over labor issues. Most are staged by workers from China’s countryside who migrated to cities in search of work. They make up about 60 percent of China’s industrial workforce, providing almost all the workers in the export industries that fill stores around the globe with goods. Guangdong Province, just north of Hong Kong, contains the biggest concentration of such factories in China and has witnessed the largest surge in worker protests.’
‘Most demands are over unpaid wages, under-paid wages or poor work conditions, due to employers breaching the law. Last year, in the largest strike in Guangdong of the last three decades, more than 40,000 workers went on strike at a vast shoe factory in the city of Shenzhen. The factory, owned by the Taiwanese firm Yue Yuen, the world’s biggest footwear manufacturer, produces running shoes for major brands. The strikers had an unusual demand: that the company pay for back years of unpaid employer contributions toward their retirement, which in Shenzhen legally should be 13 percent of employees’ total wages.’
‘Workers’ worries are exacerbated by the fact that some foreign investors, always scouring for low-wage investment sites, have been relocating manufacturing from Guangdong to cheaper inland provinces or overseas to South and Southeast Asia. Vietnam, for instance, has overtaken China as the leading exporter of garments to the US market. Some cities in Guangdong like Dongguan, once a favorite destination of Taiwanese manufacturers, are now deindustrializing. When relocating, some companies simply refuse to honor their obligations, leaving workers stranded with unpaid wages and years of unpaid employer contributions to the funds.’
‘In the two years since President Xi Jinping came to power, local governments in Guangdong have been cracking down on the NGOs and legal-advice offices.’
‘In interviews, staff members report that local authorities tap their phones and computers, monitor their movements, and barge into their offices at odd hours to interrogate them about activities and contacts. Increasingly, landlords who rent out office space to such NGOs have been ordered to evict them.’
‘During recent months, the harassment has escalated into violence.’
“Vietnam, for instance, has overtaken China as the leading exporter of garments to the US market.”
I wonder when the Chinese start to complain about unfair competition and currency manipulation? They can dish it out, but they can’t take it.
The Chinese are running the Vietnam textile plants.
‘Odessa’s boom ended in March, at least as judged by a regular study of economic indicators like building and spending activity, but also, of course, oil and gas activity.’
‘But the Odessa Economic Index by Amarillo economist Karr Ingham also illustrates how bottoming oil prices, a plummeting rig count and mounting announcements of layoffs take time to ripple through the broader economy.’
‘For example, the major signal the economist weighs in gauging the health of Odessa’s economy — inflation-adjusted taxable spending — continued to increase in March. But, “it is folly to suggest the Odessa economy will remain unaffected by the oil and gas industry contraction— of course it will be affected,” Ingham reported.’
“I don’t see any way we are going to get around losing a significant amount of oil and gas jobs, which is to say several thousand anyway,” Ingham said in an interview Wednesday. “And that sort of begets the loss of other jobs as it plays through the economy.”
‘The study released Tuesday by the chamber uses data for March that shows the first decline in the overall index in five years. During that period, Ingham said the region gained about 23,000 jobs and saw general spending more than double. Home prices increased by some 33 percent since 2010 to an average of more than $190,000.’
‘March data shows little signs of weakness in most of those indicators. Notable exceptions for the month were in home permits and value of sales. Permits taken out to build new homes decreased about 9 percent in March and about 11 percent for the first quarter. Homes sales value decreased about 9.5 percent in the first quarter.’
‘But the monthly average home price in March was also about 7.8 percent higher.’
‘Statewide labor data shows some 10,000 jobs lost in the oil and gas industry, “with thousands more to come,” Ingham wrote. “We ought to be at least prepared for the possibility that we aren’t done with this,” Ingham said. “And there could be another round of price declines.”
‘There is no reason to believe reports for April, May and the coming months should show much improvement from March, Jones said. “Overall, nobody is running for the hills,” Jones said. “Nobody is overly worried about things. It’s going to come back, and things are stabilizing.”
‘In all likelihood, Odessa will emerge from the oil and gas downturn with an economy stronger than it was before the boom, Ingham said. Total spending should be higher, there will be a net gain of jobs and a housing market, relieved from some of the strain of recent years, should emerge with higher home values.’
“Even though this is going to be a period of contraction,” Ingham said. “We are not going to the point where we were before.”
“‘In all likelihood, Odessa will emerge from the oil and gas downturn with an economy stronger than it was before the boom, Ingham said. Total spending should be higher, there will be a net gain of jobs and a housing market, relieved from some of the strain of recent years, should emerge with higher home values.’”
And this is because …?
Because of the settlement from the Jade Helm invasion.
‘U.S. authorities announced a settlement with Vadian Bank AG, the second institution to reach a deal under a program that allows Swiss banks to come clean on American tax dodgers in exchange for avoiding prosecution.’
‘The deal is the latest example of the increasingly tough line Washington has taken on Swiss secrecy, which U.S. officials contend makes the country a haven for hidden money. But when it comes to America’s own regulations designed to flag dirty money, critics say there’s a big blind spot: lawyers.’
‘Regulators have effectively deputized U.S. bankers in the fight against money launderers and international terrorists, imposing increasingly stringent requirements that institutions know their customers and report suspicious activities, but critics say lawyers have received a pass.’
‘U.S. regulators have expressed concern that anonymous corporate shell entities, sky-high real estate markets and rocketing art prices have made the U.S. an attractive destination for money laundering.’
‘Most of those transactions need to go through banks, which are required to report their suspicions — for example a foreign politician with a reported income of $50,000 depositing $50 million for the purchase of a New York condo. Indeed, banks that feign ignorance of criminal activities of customers have faced record penalties in recent years.’
‘But most of these deals also require attorneys, who have no such requirement, argues Heather Lowe, director of government affairs for Global Financial Integrity, an organization that advocates for tougher laws to combat money laundering. “Lawyers are considered one of the gatekeepers of the financial systems,” Ms. Lowe said. “We need to be more responsible within that role.”
‘Unlike the U.S., countries across the European Union have imposed laws requiring attorneys to report suspicious transactions. In the U.K., in the 12 months prior to September 2013, the legal industry filed 3,935 suspicious activity reports with authorities, according to the U.K. Solicitors Regulation Authority’
‘For years, U.S. legislators have introduced proposals that would impose some reporting requirements on the industry, but have made little progress amidst heavy opposition from lawyer groups.’
‘But proponents of lawyer AML requirements say that attorney-client privilege often doesn’t cover the kinds of transactional advice that might trigger AML concerns. That’s because attorney-client confidentiality is usually considered waived if a third party, such as the buyer or seller in a real estate transaction, is part of the discussion, said Ross Delston, a Washington,D.C.-based AML specialist.’
‘The attorney-client privilege argument is a “knee-jerk” response, he said. “Lawyers in commercial transactions do all sorts of things that involve third parties being present,” Mr. Delston said. “Real estate transactions, setting up a company — all of those typically involve a third party and therefore there is no privilege.”
‘An unusual opportunity is available this week for first-time home buyers willing to trade off appreciation to buy a house at a below-market price. One is a two-bedroom town home at 119 Atherton Loop, Aptos. The price is $328,577 plus homeowner association dues of $230 per month.’
‘The other is a four-bedroom. The price is $433,698 plus homeowner association dues of $50 per month. Compare those prices to the median price in April according to MLSListings: $760,000 for a single-family home.’
‘A check of listings at Realtor.com found 51 four-bedroom homes in Santa Cruz, the lowest prices being $649,000 and $699,000, with many asking more than $1 million.’
‘The below-market homes are in the county’s Measure J inventory of 500 affordable homes, which means buyers must agree to accept restrictions on the resale price. Those restrictions are what keep the homes affordable.’
‘Usually what happens is the owner of the affordable home sells it in a private transaction, with the county checking to make sure the buyer falls below the income ceiling and is financially qualified to take on ownership. About 10 per year change hands.’
“People don’t sell homes they can afford,” said Conway.’
‘The last lottery was in 2009 when three homes were sold. During the economic downturn, as jobs were eliminated, the spectre of foreclosure arose for the four-bedroom home in Soquel and the town home in Aptos.’
“We bought several homes to protect them,” said Conway. “The county protects its affordable homes because they are so needed … It’s cheaper to save them than to build.”
‘A limited number of homes for sale and higher selling prices are making for one painstaking U.S. housing recovery. Contract closings on previously owned properties unexpectedly dropped 3.3 percent to a 5.04 million annualized rate in April after a 5.21 million pace that was the strongest in almost two years, figures from the National Association of Realtors showed Thursday in Washington. Prices jumped the most since the start of 2014 as the inventory of houses on the market declined from the same time last year.’
‘First-time buyers accounted for 30 percent of all purchases for a second month. A year ago, the share was 29 percent. They are slowly coming back into the market — “very slowly,” Lawrence Yun, NAR’s chief economist, said at a news conference.’
‘Last month, it took about 39 days to sell a house once it came on the market, the least since the middle of 2013, Yun said. Also, about 40 percent of the listings sold at or above the asking price, indicating multiple bids are becoming common in some areas, he said.’
“We don’t want prices to get too far ahead of income, but that is what’s happening because of lack of supply,” Yun said. Given the trend, the median price this year will probably top 2006 as the highest on record, he said.’
Sellers asking fantasy wishing prices are pricing themselves out of ever finding a buyer.
P.S. I helped my family sell my parents’ home four miles from Ferguson earlier this year, where for some reason prices have reportedly dropped by half since last year. We had to reduce the initial list price quite a bit from what we thought it would sell. It sold after a three month long Dutch auction, once we discovered the current market value.
US Housing Demand Plunges To 20 Year Low
http://2.bp.blogspot.com/-fqSztKilps8/VFlPKlr52JI/AAAAAAAAhKU/v5oS41S-y0s/s1600/MBANov52014.PNG
‘Housing starts, home prices and sales were all up in March, according to new data from Arizona State University. But there are some supply issues. Current listings are below last year’s inventory levels and a limited number of homes are available for less than $200,000.’
‘Home builders took out more than 1,400 permits for new construction in March in Pinal and Maricopa counties. That is up 43 percent from a year ago and the best volume in the month since 2007.’
‘ASU housing expert Michael Orr noted that the average size of new homes is getting larger, which could mean home builders are not focused on entry-level buyers.’
‘Glendale could see nearly 300 new homes built by the end of this year, as developers complete four subdivisions that take advantage of infill opportunities in the city.’
‘A few subdivisions are already slated for completion in 2016 or 2017. In February, the City Council held a hearing on Zanjero Pass, which will involve 491 houses on 171.6 acres at the northeast corner of Citrus Road and West Olive Avenue.’
‘StoneHaven is hoping for at least 1,100 homes, Froke indicated, on 354 acres about a half mile southeast of the University of Phoenix Stadium. Other residential projects across the city, ranging in size from 3 and 20 acres, could begin development as soon as next year.’
‘The far western portion of Glendale, within the city’s municipal planning area, will likely see some significant annexation activity in the next couple of years, he added. A number of property investors, who own between 1,500 and 2,000 acres along Loop 303, could be annexed within 12 to 18 months.’
‘A 2012 city report on annexation possibilities in the Loop 303 corridor projected that Woolf Crossing could support nearly 1,000 new homes on almost 650 acres. “I would anticipate that Woolf Crossing would / could be developed in the next couple of years. They are part of the Loop 303 Corridor property owners that we are dealing with in this area,” Froke said.’
‘It’s like Airbnb on steroids. An East Side condo board is suing the owner of a two-bedroom apartment with a sprawling balcony who allegedly makes his unit available to guests paying up to $200,000 for six weeks.’
‘The board of Peregrine Tower claims Charles Salcetti is running an illegal bed-and-breakfast out of his $1.35 million apartment. The Manhattan Supreme Court suit says Salcetti, a Maryland-based commercial-real-estate executive, claimed the apartment would be for his personal, residential use when he purchased it last year.’
‘But over the past six months, the unit has hosted 35 different guests who belong to an elite timeshare company called Lifestyle Asset Group, according to court papers.’
“It’s a small building and we all know each other,” resident Allison Lange, 33, said of the 22-unit tower. “All of a sudden there started to be a flow of suitcases and packages and people asking for taxi services,” she said.
‘The accusation is blunt: Airbnb, say some, is sucking up apartment units that otherwise would be available to renters. In San Francisco, that claim is spoken so loudly - by so many politicians - a city agency just filed a report on it.’
‘Similar claims are heard in Santa Monica, Calif., in Manhattan and some Brooklyn neighborhoods, a few areas in Seattle and also a sliver of Boston and adjacent Cambridge.’
‘Listen to Kip (last name withheld) — a self-described 60+ woman living alone in Beverly Hills in a two bedroom apartment. A few times a month, said Kip, she rents it out through Airbnb. “That helps me with the cost of living,” she said. She stressed she would never take in a roommate but is happy with having guests a few nights a month. “It’s helped me boost my flagging income,” she said.’
‘Christopher Nulty, an Airbnb spokesperson, had fighting words in response to the San Francisco report in particular. “This comes from the same people who want to ban new housing in the Mission [a San Francisco neighborhood], ban home sharing and make San Francisco more expensive for middle class families,” he said. “Home sharing is an economic lifeline for thousands of San Franciscans who depend on the extra income to stay in their homes.”
That’s so silly. People who use AirBnB are renters on the spot market who happen to be willing and able to pay more than the owners could get renting out the place in a traditional lease market contract. Plus the owners get to continue living in the place when not renting it out.
All told, this financial innovation makes the tight SF rental market more efficient, provides more short term housing options for tourists who contribute dollars and jobs to the local economy, and helps cover the high monthly nut of ownership in The City.
What’s not to like, if you aren’t a communist?
I’m a libertarian. Sure, let’s get rid of all the taxes and regulations. But do it legal. I smell another “new paradigm” thingy here, which is common with manias. Years ago in Sedona AZ, there was a big stink made about second home owners (speculators) renting out houses to tourists. The usual stuff; put it on Craigslist, drunken weekends, neighbors complain, and the police got involved. At the root of it though was why would people own a second house in Sedona? Plenty of resorts and hotels. You can start a B&B anytime, just follow the rules.
About that time I was told houses were going up $10,000 a month.
But no, we have all these people just dieing to own a micro-hotel all of a sudden. And what do you know, many express a certain financial difficulty if they can’t. This while prices are up, up, UP! I don’t think it’s a coincidence.
“But do it legal.”
I’m with you there. Funny thing is, our legal system doesn’t seem to always make a priority of ‘doing it legal.’
AirBnB sucks up what long term rental housing that is available for people who actually live and work in the area and turns it into short term rentals for out of town hipsters too cheap to pay for a hotel. It lines the pockets of landlords who realize they can make twice, 3 times or even more in renting short term than the renting to local blue collars folks (such as myself), driving us out of neighborhoods we’ve lived for years.
They do this often in violation of local zoning and housing regulations, and often pay no hotel tax that any legitimate hotel/motel would be obligated to pay.
Communism’s got nothing to do with it. It’s about being able to afford a decent place to live.
I have many friends in the Palm Springs area who could not afford their homes if they did not Airbnb or VRBO the properties. They think they are grand but we know better. They are wanna be hotelier. It has pitted neighbor against neighbor in Deep Well.
‘could not afford their homes if they did not Airbnb or VRBO the properties’
But I keep hearing owning is cheaper than renting?
“In Whatcom County, the foreclosure activity has increased significantly in the first four months of 2015. This indicates that banks are now releasing shadow inventory because overall home prices have risen to a point that they can recoup some of the losses, said Peter Roberts of John L. Scott Real Estate’s Bellingham office. ‘This is part of the cleaning-up process,’ Roberts said, adding that he expects banks to work through most of this shadow inventory by the end of 2015.”
What nonsense. It’s a well-known fact that shadow inventory is a myth.
Why? I know people that lived in their homes without paying their mortgages for several years before the bank finally sold them. These houses aren’t counted anywhere until the sale.
These houses aren’t counted anywhere until the sale.
Wouldn’t those houses be counted in the 90-day delinquent data?
‘A South Florida watchdog group is filing a complaint against the federal housing agency known as Fannie Mae. HOPE Inc. says Fannie Mae neglected foreclosed properties in predominantly black and Hispanic communities but kept up homes in white neighborhoods.’
‘Wednesday, HOPE and 18 other fair housing groups from across the country held a national press conference to call attention to Fannie Mae’s alleged racial discrimination in how it maintained foreclosed properties nationwide. Fannie Mae has denied the accusation.’
“Fannie Mae is wreaking havoc on middle- and working-class communities of color nationwide through a pattern of neglect that is frankly appalling,” said Shanna L. Smith, president and CEO of NFHA. “Fannie Mae’s failure to take care of its massive foreclosure inventory in African-American and Latino neighborhoods further destabilizes the communities hardest hit by the foreclosure crisis.”
‘The proposed Lilac Hills Ranch project would add more than 1,700 homes on 608 acres in Valley Center. The San Diego County Board of Supervisors is being asked to amend its general plan to allow the development.’
‘North County neighbors fear their rural lifestyle will be disrupted by the Lilac Hills Ranch project, a housing development proposed by Accretive Investments Inc. It would include more than 1,700 homes on 608 acres.’
‘The housing project would “be on the lemon grove, out about 300 feet from where we are now,“ Mark Jackson said, gesturing toward the hill behind his house. “That’s where the start of really high-density urban development will be,” he said.’
‘Matt Adams, vice president of the San Diego Building Industry Association, said the county supervisors have good reasons to amend the general plan to allow a development like Lilac Hills.’
“We have a housing shortage in San Diego County,” Adams said. “Homes cost as much as they do now because we don’t build enough of them, and we haven’t for years. SANDAG says we should be building 1,000 homes a month just to keep pace with population growth, and we haven’t done that in 10 years. So we have to start making decisions about where we want to house our citizens, both our current citizens and future citizens.”
‘Hutchison said developers don’t build where the general plan says they can build, because land is cheaper in undeveloped areas.’
“If you look at land like is behind me, it sells for much less, maybe $20,000, $30,000 an acre,” he said. “If you get into the community centers, it’s going to be higher density and consequently more expensive. And it could be over $250,000, maybe up to $500,000 an acre.”
One day you will wish for a pleasant lemon grove.
And no mention of where all of the water for these new homes is going to come from . . .
But of course, that’s not the developer’s problem, is it?
The photos are interesting:
‘This “nail house” is a symbol of defiance against government plans with rich property developers’
‘One nail house sits in the middle of a new road.’
‘This nail house is out-of-place in the middle the high rise development.’
“I have more faith than others,” said Wu. “I believe that this is my legal property, and if I cannot protect my own rights, it makes a mockery of the property law just passed. In a democratic and lawful society, a person has the legal right to manage one’s own property.”
‘As is common, her dissent against the Chinese government was followed by a prolific hush over media outlets. The politically-charged subject was off the table.’
‘However, the trend has still been a popular topic among Chinese bloggers.’
“In a democratic and lawful society, a person has the legal right to manage one’s own property.”
She does know she’s in China, doesn’t she?
I guess she’s being sarcastic, like we sometimes are on our HBB posts.
I assume so. At least there she has a chance…here she’d be gone already.
Greed is in overdrive in metro Denver, especially when you consider that Parker is in the boondocks, its almost an exurb.
Realtor I am working with out there sent me a message a couple of weeks ago regarding inventory relative to prices…..in one word he described the market there……’scarrrrrrry’.
What I’d like to know is, what’s going to happen when the inventory finally does go up? Do these people not understand that a 3 bed/2 bath SFH will no longer be worth $400k?
Reminds me of a line from one of my favorite movies… “A strange game. The only winning move is not to play.”.
“We are thereby also creating financial sector risks for when unconventional policies end,’…”
Does anybody have an inkling of what ‘unconventional policies’ he has in mind?
“As the wind whistles through half-finished skyscrapers and over empty boulevards, a development billed as China’s answer to Manhattan at times bears out the ‘ghost town’ label some have given it. Chinese officials hope the towers of the Yujiapu Financial District will one day house a trading center to rival New York’s Wall Street or London’s Canary Wharf. But more than three years after construction began, all but one of the buildings planned for the development in the northern Chinese port city of Tianjin appear unfinished, alongside vacant spaces where others should stand.”
Is this the first time ever in history when a real economic collapse predated the related financial collapse? I can’t wait to see how this plays out over the next few years!
What confuses me about this story is that apparently China has more than one New New York City. Pudong (eastern Shanghai) was also supposed to be the new Manhattan style financial center. Now I won’t be so surprised when I hear about even more of them.
Yeah, what’s to stop the Chinese from building ten more? Or a hundred more? In the short term, all this construction keeps restive people employed and looks great on paper. In the long term, this is going to be the most impressive collection of ruins for millennia.
Ben:
I may have said this before - but I was in PHX in early March - my good and best friend still has his broker’s license so we went driving around looking at nabes and homes for the heck of it and what struck me was the amount of inventory out there - and to read that construction continues unabated is eye popping to say the least. We visited a new development - Shea Homes I think at Bell and Thompson Peak - gated thingy - took a tour and at 2800 s.f. and 700 k to buy in seemed a bit extreme to me. Mind you being an architect my eye is looking for fine things and seems that the price does not meet fit / finish much less the sense that there is separation from your soon to be close friends / neighbors.
Seems that the typ. 3/2 townhome in say Scottsdale Ranch or neighboring McCormick just sits and sits and sits with prices in the mid 300’s. What is going on there?
Question also - with you in being in that area - what’s with water supply etc? Seems that drought sees no end in the west.
I recently put up a youtube video on new construction north-west of Phoenix. Most of it is empty lots, asking $400-700k. The only one I found cheaper was Hovanians in the mid-200’s to 300s. But those were on really small lots. The builders have just decided to go high-end, and are offering incentives on what they got. I saw plenty of “move-in ready” signs, but they do seem to be holding off rampant spec building. But the lots are in with many more on the way.
Phoenix steals water from the northern part of the state, so that’s how it keeps the taps on.
That part of what is known North Scottsdale is a real estate shell game, that is what is going on. Many agents live in the DC Ranch, Gray Hawk location. They push that location to the limits, they want their homes to appreciate in many cases over 300 sq. ft. or much more.
You can drive North of there 5 to 10 miles very nice Sonoran Desert property with bigger lots and pick up homes 240 to 280 sq. ft. The Agents don’t care to show better dollar value so they avoid the area like the plague unless inventory gets so low they have to give in. The Toll brothers development at Bell is a joke, production homes going for 1.6 million again many agents live there but a custom homes 5 miles up with views goes for 900k and they can’t get showings? It really is a cartel area, you either as a buyer go on your own and make a great deal up the road, or go out with a buyers agent, who tells you stories of why to pay 700k more for a lesser home, small lot, and the dumb buyers are paying it.
Ben - thanks - confirmed what I saw - just did not know the magnitude or more importantly the reason for the prices….
Doom….
An observation to back up your words….
Friend of mine took me up on the ‘other’ side of Pinnacle Peak (northest of pinnacle around the Tom’s Thumb area) in early March this year to look about (this on a different day) and what I saw in terms of lot size and home size was startling. Views were great - and there was a ‘remoteness’ about it that was very attractive. Way more than I want to take care of frankly - but still the area was very nice and you could get more for your money if you are looking for big.
Agree on DC Ranch and Gray Hawk - big ol’ houses on moderate lots asking well into the millions. I like visiting there - to live not so much.
Keeping me eyes out for a decently priced townhouse in a mature area for a second home when I get tired of the gray and cold - wondering about them Canucks - what is up with them? The looney again the dollar has to be really causing a panic I would think.
Keep in mind the current raft of buyers is a spurious group. The sales are near meaningless considering housing demand is at 20 year lows. 30 year lows on the west coast.
Thanks rj.. In Real Estate steering meant racial profiling this is steering of a different nature, show them more expensive homes and push the area it means more commission for all and the agents house all increase in value, noticed owners/agent owned homes south of Pinnacle peak all are listed sky high same footage North of Pinnacle non agent listings in many cases a whopping 30% cheaper? North is cooler 3000ft, better city views, the gated developments are great but that is the problem gates stay closed so the agents use it to their advantage you don’t want to go in there. You can’t drive around in North Scottsdale everything is very private, buyers who don’t know much about internet shopping are at a real disadvantage.
Doom:
My buddy lives in DC Ranch - built there before it became what it is today - he and his wife were wound up if they should have built there - but in retrospect with what you are saying it is probably gonna turn out ok for them. The recent bag holders - not so much - I suspect that the many homes I witnessed for sale in and around DC Ranch and N. Scottsdale were an indication of a deeper problem developing there. Good jobs for one seem to be difficult to come by out there. And what I saw too that surprised me is how ’sectionalized’ or should I say ‘balkanized’ the city is becomming. Mind you I first visited PHX over 40 years ago - family had many friends there we would visit from time to time - and it never seemed to be as balkanized as it is today. PHX reminds me of Chicago just that there are more black than browns here than there. And here - blacks and browns don’t get along so well so turf is a problem.
I got off topic - sorry -
The deal with the northeast side of Pinn peak is that there was a lot more space and I mean ALOT more space for 2/3 the price. The McDowells are really nice and agree that in terms of elevation it would be a bit cooler there than the stifling heat in the summer - hence my question of Ben re water issues there.
Still talking serious money to buy in the McDowells but still - the traffic in and around Thompson Peak at Pima etc. just getting out of hand - frankly traffic in PHX alone is some of the worst I have experienced short of LA and Chicago. NYC is fairly simple to get around in once you figure the subway out. Any city with no rail or decent subway me thinks is just gonna look like a heart problem at a greasy hamburger stand if you get my drift - catastrophic sclerosis.
One big job development that has happen since the new gov got elected, three computer companies sign on to build at the 101 and Bell rd. The starting pay at entry level will avg 88k and at very skill level climb to $250k and above
The new Mayo clinic research and cancer center down the road also opening soon. that is why Silverleaf if you are familiar has seen home sales in the 1.5 million to 10 million soar this last year.
This will be a boon for your friend, DC ranch and Grayhawk already out if sight will be in very high demand if they can find more land to build, the resales will do very well. take care
PS As you know many Chicago people live there in Phoenix-Scottsdale then one can imagine.
…. And will soak up 3000 of the 25 million excess empty and defaulted houses out there.
Mom’s condo went on the market again. 20% reduction from last year’s asking price. (Only offer she got was 50% below asking)
Price doesn’t include washer/dryer/refrigerator. Because she’s not “giving them away”.
And so it goes in many Flyover housing markets. Other than some health care jobs (doctors/RNs/specialists), 95% of the job market is composed of “Lucky Duck/$11-12/hour” jobs in high-tech industries like prepackaged baked beans and potato salad.
Or state workers are taking $1000/pop paybacks/bribes to issue driver’s licenses to illegals, because $11/hour government jobs just don’t pay the bills.
Flyover housing is the best indicator of the true (i.e. cash) price of housing. Banks are the same everywhere, to a degree, hence the “lucky duckies” don’t qualify well for mortgages. This has to produce a trend where more and more housing in the Flyover sell for cash, since that’s all you can get when you try to sell many of them.
Bankers also don’t want to cut you a mortgage for $30K or less. It’s just not worth it to them.
Just a basic inquiry to the brain trust:
When were the “best” houses made in the USA?
Quality of materials and construction, efficient layout, decent insulation, wiring, etc.
vs. the negatives:
Rehab costs (asbestos and lead paint removal issues, other things that haven’t occurred to me).
Just looking for opinions, and why?
Define ‘best’.
If you are talking about stick-built wood-frame construction, I’d say 1980s - early 1990s for the following reasons: 2×6 exterior walls, decent earthquake resistance, double-pane windows, and they hadn’t yet started using a lot of OSB sheathing and floor joists (I absolutely hate OSB for anything but a back yard shed). But you have to watch out for that bad LP siding that turns to mush if it gets wet during the latter part of that era.
When: IMO, where I live, it was the early-to-mid Fifties.
Why: The post WW2 work ethic was near it’s peak.
The house I now live in (for 42 years) was built in 1950 and there has been very little maintenance required over these years.
This does not mean it doesn’t now and then need a new roof or need to be painted, but I have had no structural issues.
“it’s” = “its”.
The house is a tract-house that offered several models, so if a builder learned how to solve the problems of building one house of a particular model then he also learned how to solve the problems of building all the houses that particular model.
Plus the turnover of the electricians, plumbers, carpenters, etc was small. This means they got to know one another and learned how work with one another, as opposed to working with strangers (i.e day laborers).
Here in Detroit, the box houses that popped up right after WWII (so mid to late forties) were slapped together like bologna sandwiches - they’ve held up as well as a 60 year old hooker who chain smokes and frequents tanning salons. The early to mid-fifties are when they started to build the nicer homes here as well, the ones that the people moved into after selling their box homes. Those neighborhoods have held up well over the years. I’ll be curious to see how the McMansions of the last decade age. It’s when building becomes frantic that standards drop, and unfortunately, most McMansions were built when standards of all kinds were tossed out the window.
“Here in Detroit, the box houses that popped up right after WWII (so mid to late forties) were slapped together like bologna sandwiches - they’ve held up as well as a 60 year old hooker who chain smokes and frequents tanning salons.”
A possible explanation:
The guys who returned from WW2 needed to “find themselves” - they needed to discover what they wanted to do with their post-war lives.
The first few years of this discovery process was when a lot of the wrong people were building houses - slapping them together, as you say. But because they were wrong for the jobs they eventually left and the guys who were right for the jobs eventually settled in and took their place, so by the time the Fifties came around the right guys were in the right jobs.
Just a theory - something I thought I’d throw out for discussion.
Something else I’d like to throw out: When I was fifteen and in high school we (we fifteen year olds) were to decide on a career choice (aka deciding what we wanted to do for the rest of our lives). I then thought the idea of a fifteen year old kid deciding at that age what an adult was to do for the rest of his life a bit absurd (and I still do) but nevertheless that is what we were forced to do.
And I see what happens everywhere I decide to look; Young people who spend years developing a career via education end up walking away from their intended careers because - after graduation - they then learn that what they studied for to do for the rest of their lives wasn’t what they wanted to do after all.
I think it was just that the developers were in a hurry to build houses for the returning GI’s, so they built them as fast and as cheap as they could. After things settled down, people probably got a little more discriminating when it came to real estate, and they had more money because Detroit was pretty much the only city in the world that was building cars at the time.
Our 1998 new construction McMansion was built by day laborers and it took 18 months to fix the rain intrusion issues coming through the walls. The house was thrown together, whereas our new construction starter home was built in 1984 by American tradesmen. Product delivery was better in 1984. Our walk thru had 3 minor items on it. 14 years and very few issues. I miss that time in my life.
“American tradesmen”?
LOL
Unless you’re in China. Then everybody wants to buy at the top.
http://www.zerohedge.com/news/2015-05-22/chinas-tulipmania-full-frontal-shenzhens-parabolic-stocks-just-hit-67x-pe
well, I appraised from 54 to 84 for the State and the FHAand it really made a difference in where the home were being built. And how good the building inspector were.
I found that LA area, and FHA had the strictest building standards enforced, until about the middle 70’s when it appeared that the FHA rule were being relaxed.
Politician started believing that lowering the standards would result in cheaper houses.
In the early 60’s I rejected about 1,200 houses in the Thousand Oaks area because they slabs were on 2″ thick, rejected meaning I would not approve loans for those tracts.
But moving to northern california in 66, I found that local inspectors did not even want to enforce UBC for homes.
But them were the days!
Part of the problem. Thanks for the confession.
In case any f you HBBers want to learn something about global warming instead of just arguing about it then you can go here and learn it for free:
http://forecast.uchicago.edu/lectures.html
Go here for free classes on the weather:
http://www.srh.noaa.gov/jetstream/
And for some really excellent classes from MIT - hundreds of them - on various subjects (also free), go here:
http://ocw.mit.edu/about/
This was meant to go into the bits bucket, so that’s where I am now going to put it.
There are 289 foreclosure sales scheduled for Palm Beach County Florida scheduled for the week of 6/1/15
https://mypalmbeachclerk.clerkauction.com/
The population is about 1 million people. At the height, they were averaging around 350 sales per week. You can tell by the case number that a lot of these were filed last year.
They hold the auctions online and post the results afterward. It still looks like the banks are the main auction winners.
It is stone crazy here. They are out there building like beavers. And when I talk to builders and such, it is like they know it is going to crash, and soon, but they are going to get what they can while they can.
But a lot of it is high end stuff, so I guess it is intended to be investment property. The tax collector is very happy.
We have approximately 3200 homeless people in Palm Beach County.