The Situation Is Deja Vu To The Early 2000’s
The Boston Globe reports from Massachusetts. “After renting for four years, Maggie Crowley is about to join the ranks of Boston homeowners. Her new digs: a snug 297-square-foot studio in the Back Bay. The price: a hefty $366,000. Crowley hopes to live in the condominium for a few years, renovate, and eventually rent it out or sell for a profit. ‘It’s a place for right now and an investment.’”
“It’s unclear how high the demand will be when more of these teeny units hit the market, said Timothy M. Warren Jr., the chief executive at Warren Group, a real estate information service. ‘These things are a different ballgame,’ he said. ‘There’s some market. I don’t know if you can sell 1,000 a year.’”
The Mercury News in California. “The Bay Area’s real estate market soared in June, setting some new records for sales and prices as homebuyers scrambled to act before mortgage rates climb and the new school year begins. Saratoga-based Alain Pinel agent Mark Wong said, ‘over asking’ bids are not as extreme as they were a few months ago, when buyers typically would throw an extra $400,000 or $500,000 into the mix to make their offer more attractive. The sellers’ market is at ‘a point of leveling off right now.’ Walnut Creek-based agent Michele Manzone, of J. Rockliff Realtors, has observed a similar abating of multiple offers: ‘I think some of the buyers have backed out of the marketplace because of frustration,’ he said.”
The Miami Herald in Florida. “The future is in question for at least a dozen new condo projects that were originally proposed to be developed east of Interstate 95. A growingly bearish sentiment for South Florida’s previously booming preconstruction condo market has emerged since the last winter tourism season ended. More and more developers are opting to revise their original plans for preconstruction condo projects or even attempting to sell off their development sites. The series of changes is not a surprise to industry watchers given the loss of buying power for international investors combined with a surge in the number of newly proposed projects in South Florida.”
“The latest count of new South Florida condo projects for this cycle stands at more than 355 towers with nearly 43,000 units even when excluding the projects in question, according to the preconstruction condo projects website CraneSpotters.com.”
The News Press in Florida. “Community Homes LLC, a custom home builder in Cape Coral, has run into trouble – leaving the city with partially completed houses whose owners are getting tagged with liens by unpaid subcontractors. The situation is deja vu to the early 2000s when builders often overextended their finances in trying to keep up with the growth boom. Many of Community’s customers are German or Swiss, most of whom did not use a bank to finance their purchases, said Darrin Schutt, a Cape-based attorney who’s representing some of the people with unfinished houses.”
“Lee Building Industry Association president Victor DuPont wasn’t familiar with Community’s plight but said that generally builders get in trouble when they try to use money paid by recent customers to help pay off older jobs on which the builder lost money. ‘You kind of get ahead of yourself,” said duPont. ‘Our business is a cash-flow business, obviously,’ he said. ‘What I’ve seen happen is basically the old thing of robbing Peter to pay Paul, and eventually when there’s no more Peter to pay Paul, that’s it.’”
The Midland Reporter Telegram in Texas. “The sharp downturn in crude oil prices and the impact on oil and gas activity is increasingly being seen in Midland-Odessa’s overall economy. The downturn in the area’s oil and gas industry ‘is starting to get a foothold at this point,’ said Karr Ingham, the Amarillo economist who prepares the Midland-Odessa Regional Economic Index. Consumer spending and employment are what Ingham describes as the last dominos to fall. Housing prices remain high, averaging $260,564, up 10 percent from $236,885 last May. Prices for the year are averaging $238,292, up 1.1 percent from $235,618 last year. ‘At some point housing prices will have to fall as demand weakens,’ Ingham said.”
The Connecticut Post. “Years after the end of a recession characterized by a housing-market crash, the crisis has yet to abate in Connecticut’s largest city. It’s the continuation of a years’-long trend that has seen lis pendens filings in Bridgeport far surpass anywhere else in Connecticut. ‘I would love to say it’s slowing down, but it really hasn’t,’ said Doris Latorre, director of foreclosure prevention at Bridgeport Neighborhood Trust. ‘We continue to have new people walking in the door and we really see haven’t see a slowdown.’”
“Some temporary programs have expired, she said. ‘We are seeing waves of people coming in the second time around,’ she said. ‘It’s not because they don’t know how to manage their financing, but what they got was not a permanent fix, and they haven’t been able to secure themselves financially in that time.’”
The Record in New Jersey. “The number of New Jersey home repossessions by lenders has soared in the past two years and is on track to increase again in 2015. Eric, a software engineer who wanted to be identified only by his first name, was moving with his spouse last month into an apartment in Hackensack after losing the 2½-bedroom house he had lived in for nearly 30 years in Englewood. He said the house is now worth $350,000 because of a big drop in real estate values since 2008, but the lender has insisted that he repay $550,000, which includes penalties and fees added on while his attempts to get the bank to lower the principal amount failed.”
“The house went to a sheriff’s auction in May. Then last month, the new owner stuck a notice with black electric tape to his front door, saying eviction proceedings would begin in five days, signaling the end of a six-year ordeal, during which time Eric had made no mortgage payments. ‘My friends think I was living rent-free, but you are not really living. You don’t know if you’re leaving next year or next month,’ he said. Eric said he had gotten into financial trouble after losing his job at an Internet company in 2008.”
“There were nearly 49,000 new foreclosure complaints filed statewide last year, the most since 2010, according to data from the Office of Foreclosure. ‘It’s a difficult situation,’ said Michael Affuso, director of government relations for the New Jersey Bankers Association. ‘We are closer to the next recession than we are from the last recession and there are still about 85,000 properties in foreclosure, and probably 40 percent are older than 2013.’”
Good luck to Maggie on her new purchase of a glorified jail cell at $1200/sq. Foot! I’m sure that’s a great investment lol.
she will have to have a very creative love life in a loft bed.
From the article:
“Units of 450 square feet or smaller fetched an average of $358,389 in the second quarter, up 14 percent from a year earlier and 54 percent from the same quarter in 2011, according to LINK.
“That’s more than the median price of a single-family home in Massachusetts, $320,000. The average price of condominiums larger than 450 square feet has increased by 36 percent since mid-2011.”
As the price goes up the demand goes up. Go figure.
Plus, as a bonus, there’s those HOA fees the buyer has to contend with.
“297-square-foot studio in the Back Bay. The price: a hefty $366,000″
My yacht has more room than that.
Yikes! years ago I lived in two different 500 sq. foot 1920’s studio apartments and they worked fine for me, was working and going to school…but that size is the absolute minimum that would not feel cell like to me.
Mortgaged 4000 sq ft feels like a life sentence.
In DC metro areas, “normal” people living in places have not seen prices increasing. If rich people buying 800k 2 bedroom townhouses see their property values collapse…well they’re rich and can afford it. For those of us that are no rich, there is no bubble and is barely a recovery. Prices declined in the affordable suburbs (places where 75-150k income can buy a house).
http://www.longandfoster.com/Market-Minute/VA/Prince-William-County.htm
22151 good turnover ,flat prices
Well… Not really. Not at all.
How low has demand fallen in Nova. 15 year lows?
“Saratoga-based Alain Pinel agent Mark Wong said, ‘over asking’ bids are not as extreme as they were a few months ago, when buyers typically would throw an extra $400,000 or $500,000 into the mix to make their offer more attractive.”
Most extreme real estate mania conditions on record?
saratoga has homes for 500K?
so $0 list price
in upstate ny that sounds about right
free house then add taxes and utilities and u have a house payment
Not really. Saratoga NY median is in the 200-300k range and down YOY. Worse yet, the long term median price is 65% lower than current bubble/fraud pricing.
Oooooph.
They’re talking about Saratoga, California, a suburb of San Jose.
U and I understand that. The DingBat brought up Saratoga NY
Living rent free in a house for 6 years ? Guess he did pay the electric bill,real hard to feel sorry for this clunker, wonder what the lesson-learned thing is for this loser
He lived in the house for 30 years and owed twice what it was worth. Do you think he is a slow learner?
said Doris Latorre, director of foreclosure prevention at Bridgeport Neighborhood Trust. ‘
how many gov workers are in the housing industrial complex?
chop heads
‘Many of Community’s customers are German or Swiss, most of whom did not use a bank to finance their purchases, said Darrin Schutt, a Cape-based attorney who’s representing some of the people with unfinished houses’
The article goes into progress payments and how the buyers didn’t oversee the project like a lender would have. BTW, this is supposed to be one of the strongest housing markets in Florida, if not the country.
It’s always mystified me why that area has appeal for Germans. I would understand if it had a longstanding German-American community, like Tarpon Springs has a large population with Greek heritage, but it doesn’t have that. Maybe it was just a clever advertising campaign.
‘Last week, Ellis E. Conklin took readers on a road-trip to Bellingham, 90 miles north of Seattle. As he reported, “a steady trickle of fed-up and stressed-out older, self-employed (for the most part) Seattleites are swimming . . . to Bellingham, the northernmost city of more than 50,000 in the contiguous U.S.”
‘“The reasons behind the farewell to the Emerald City are hardly surprising,” Conklin continued. “The horrendous cost of housing, the escalating disparity of wealth, the rising level of homelessness, the onslaught of massive (and generic) high-density development . . . ” and on and on.’
‘on Tuesday afternoon Danny Westneat at The Seattle Times published details of a leaked draft report from the Housing Affordability and Livability Agenda Committee…But no one seems to have expected the bombshell Westneat reported: The committee was recommending an end to single-family zoning in the city, a hallmark of Seattle’s neighborhood feel. The firestorm was fast and immediate. While Conklin’s story stood on its own, the timing was such that many readers couldn’t help but note the connection.’
“We’re giving Sequim a close look,” wrote one reader in reaction to Conklin’s Bellingham article. “The last straw is Seattle’s plan to repeal all single-family house zoning. It’ll get delayed, long enough to sell and get out. The ‘progressives’ hate the way we live, and the developers can make lots of money chewing everything up for apartment blocks. The choice is to stay and complain, or just leave. We’re going to go.”
‘Added another: “No surprise here. Retirees who’ve lived and worked here for decades can no longer afford to live here, and the neighborhoods are being ruined by Eastern Bloc style multifamily housing with no parking. Not realistic in a rainy, hilly environment with poor infrastructure. Soon it’ll be a city composed only of the homeless and $150,000-earning, bike-riding 35-year-old high-tech managers. No thanks.”
‘Eastern Bloc style multifamily housing with no parking’
I thought about this years ago when I drove through Portland. Lots of concrete and signs telling me what I could do or not do. I kept going.
UN Agenda 21 style living at its finest!
Coming soon to a neighborhood near you.
Globalism FTW!
‘Buyers bought more than 1,000 homes in the Amarillo-Canyon area during the second quarter, making it the busiest three-month period on record.’
“We can find no record of 1,000-plus homes selling during a calendar quarter in the Amarillo market,” said Coldwell Banker First Equity Realtors Broker Randy Jeffers, who has for many years compiled statistics for the local market. “I didn’t know if we could sustain sales activity, given the low inventory (of homes for sale) we’ve had to deal with.”
‘Just how many sales above 1,000 varies in the reports, depending upon what neighborhoods were included in and around Amarillo and Canyon. Some include a few outlying towns such as Pampa, some do not. And some include manufactured housing, while others do not.’
‘The inventory of homes available to buyers has continued to shrink. “Inventory is tight,” Glenn said. “I do sense the builders would build more houses if they had the lots to do it.”
“If a new builder showed up in Amarillo, Texas, today and wanted to buy 10 lots, good luck,” Jeffers said. “Good luck. They’re all in the hands of builders and they don’t want to sell them. They don’t want to give up what little inventory we have.”
‘What helped, in the first half of this year, is buyers started taking a look at inventory that previously had been slow to sell — homes priced at $300,000 and above, Jeffers said. “Last year, we sold, in the first half, 118 homes over $300,000,” Jeffers said. “This year (first half) we’ve sold 166 homes. That’s a 41 percent increase.”
‘Inventory currently hovers at 1,100 homes on the market, with almost 250 of them being priced at $300,000 or more, Jeffers said.’
A poster yesterday was saying the bubble had missed fly-over country.
‘Houses in Strafford County are selling much faster than they did last year as the local real estate market heats up. Figures from New Hampshire Association of Realtors show a 15 percent increase in the median price of single-family homes in May as compared to May of 2014, the latest figures available. This May, the median single-family home price was $245,000. Last May it was $212,950.’
‘These figures also show that single-family homes in Strafford County are selling in about 82 days — 20 days faster, on average, than they did last year. Condo units are moving even faster. Condos are being sold in about 65 days, according to the data. That is 50 days faster than last year.
For Marc Drapeau, president of the Strafford County Board of Realtors and an agent for Hourihane, Cormier & Associates real estate agency in Rochester, the correct pricing of a home is key to a quicker transaction. “If a property is appropriately priced, the days on the market would be significantly lower than a year ago,” he said.’
‘Drapeau describes the housing recovery like a wave starting from the coast and working its way northward. Real estate in Portsmouth was first to recover, Dover was next and now Rochester.’
“If a new builder showed up in Amarillo, Texas, today and wanted to buy 10 lots, good luck,” Jeffers said. “Good luck. They’re all in the hands of builders and they don’t want to sell them. They don’t want to give up what little inventory we have.”
So, what would keep a builder like Lennar or Toll Bros. from buying some acreage and subdividing it? How long can it really take to bulldoze some streets and drop in utilities, a few months?
Either City Hall isn’t letting the Lennars subdivide, or maybe the Lennas know that this isn’t going to last and that they might get stuck with 200 empty lots should they subdivide.
Well, you know, they’re not makng any more land in Texas.
‘A large proposed land swap between a private developer and the U.S. Forest Service near Vail and Beaver Creek ski areas has rekindled the always-smoldering debate over what constitutes the “best public interest” on federally owned public lands in Colorado.’
‘More than 36 percent of Colorado is owned by the federal government and managed under a multiple-use policy that allows for everything from outdoor recreation to timber harvesting to cattle grazing, mining and oil and gas drilling. Outright housing development is not on the list.’
‘To accomplish its concept of a high-end resort development with 1,700 homes and a private ski area, Battle Mountain Resort in Minturn wants to swap 5,457 acres of more remote, privately owned land for 4,700 acres of Forest Service land at Meadow Mountain, which is right along the Interstate 70 corridor near the town of Minturn.’
‘Originally proposed for development last decade by Florida golf resort developer Bobby Ginn, the controversial Battle Mountain parcel was cobbled together over many years from old mining claims and other private parcels and purchased by Ginn and Philadelphia-based private equity firm Lubert-Adler for $32.75 million in 2004.’
‘The subsequent subprime mortgage crash of 2008 forced Ginn out in 2009 and left Lubert-Adler in full control of a property that originally was approved for two private golf courses, up to 10 private ski lifts and significant retail space. The new “more Colorado, less Florida” plan scraps the golf courses and retail and reduces to the number of ski lifts to three or four.’
Ben:
This albatross has a history stretching back several decades and has been a contentious issue up in the Eagle / Vail area for a very long time. To put a full scale development in the valley along I-70 which has seen one building after another erected - it has utterly destroyed the very thing that folks go up there for - to get away from urban sprawl.
Plus nevermind that I-70 is maxed out and that it’s not unusual to get stuck in traffic jams on I-70 in the mountains. Adding a third lane to the Eisenhower tunnel is not even in the cards. I can only imagine how much it would cost to add a third lane to I-70 from Frisco all the way to Glenwood Springs. Probably billions.
So bring on more development in mountains!
Yep. I-70 through the Ike is a disaster - that 7% grade on the west side of the tunnel is really bad in either direction - all them 18 wheelers really make it a challenge to get to and fro. West side of Ike through all them ski area exits and then heading through the valley near Rifle - yikes. Used to be ok in summer - now not so much.
I pine for the days of yore when things were just simpler and less pressured. Areas up in the Gore / Eagles’ nest wilderness - even those parts are filling with the folks more and more.
Yep. I-70 through the Ike is a disaster - that 7% grade on the west side of the tunnel is really bad in either direction
In the days before fuel injection cars would routinely vapor lock on that 7% grade going uphill.
285 returning to Denver was horrible yesterday afternoon
Regards,
Weekly contributor to the problem
Got Tesla?
‘The Atlantic City Metropolitan Area remains the nation’s leader in foreclosure activity in a new RealtyTrac report, with one in every 59 properties experiencing some type of foreclosure filing in the first six months of 2015.’
‘That was up about 41 percent over the first half of 2014. For those properties that completed the foreclosure process in New Jersey in the second quarter, it took an average 1,206 days — about 3½ years — from the time the first foreclosure notice was sent to the end of the process, a property sale. Nationwide the figure is 629 days, which is still the longest average time since RealtyTrac began tracking in the first quarter of 2007, the report said.’
‘Some real estate experts, such as RealtyTrac Vice President Daren Blomquist, have said new foreclosure filings related to the casino closings in 2014 that left 8,000 people jobless have not yet hit.’
‘Bank repossessions are still well above what might be considered normal. A total of 209,281 U.S. properties were repossessed by lenders in first half of 2015, up 20 percent from a year ago and 37 percent above the number of bank repossessions (REOs) in the first half of 2006 before the housing bubble burst. Completed foreclosures also remain above 2006 levels in 35 states including California, Florida, Arizona, Illinois and Nevada.’
“Less-disciplined loans originated during the last housing boom continue to account for the majority of distress still hanging over the housing market, with two-thirds of all loans in foreclosure on loans originated between 2004 and 2008,” Blomquist noted. “An increasing number of these failed bubble-era loans finally exited the foreclosure process in the first half of 2015, resulting in accelerating bank repossessions that are still well above pre-crisis levels along with record-long average foreclosure timelines for properties foreclosed in the second quarter.”
‘There were 49,105 foreclosure starts, down 4 percent from May but 4 percent higher on an annual basis. Completed foreclosures numbered 36,503 in June, a 19 percent drop from May but still up 36 percent from a year ago, the fourth consecutive month with a year-over-year increase.’
“An increasing number of these failed bubble-era loans finally exited the foreclosure process in the first half of 2015, resulting in accelerating bank repossessions that are still well above pre-crisis levels along with record-long average foreclosure timelines for properties foreclosed in the second quarter.”
Wee prediction:
The foreclosure backlog from the first wave of crisis will not be cleared by the time the next wave hits.
Bingo
http://asia.nikkei.com/Politics-Economy/Economy/Investors-flock-to-sell-properties-cancel-contracts
‘The rout in commodities deepened with prices touching the lowest since 2002 as the prospect of higher U.S. interest rates sent gold tumbling.’
http://finance.yahoo.com/news/commodity-rout-heads-toward-13-091803685.html
I saw crappy 1 bedroom apartments being offered at $2900/month last summer in Midland.
We’re back in 2004/2005.
And not a buyer in sight.
So buyers were offering up to $500K over the asking price? And we’re told that this isn’t a mania or a bubble?
Do you believe what they’re saying?
There was one that went a million over recently.
With the China debacle just getting legs under it, what preparations have you made for the other side when prices are 70% lower than today.