It’s Just A Waiting Game
The Billings Gazette reports from Montana. “The subprime investment jitters have hit Yellowstone County government. On Tuesday, Yellowstone County Commissioners asked the Montana Board of Investments to return nearly $72 million of its investment funds because of the potential exposure to risky loans and other concerns. Yellowstone County Finance Director Scott Turner said he just got nervous and so did the commissioners.”
“‘All three agreed to redirect the money to the bank for now until we get a better comfort level with what’s going on,’ Turner said. In addition to the subprime risks, Turner said he could no longer get a quote on the daily yield or the investment returns on county funds.”
The Missoulian from Montana. “Production and employment in Montana’s wood products industry continued to decline in the third quarter because of the ongoing U.S. housing slump and related low timber prices.”
“Todd Morgan, director of forest industry research at the University of Montana’s Bureau of Business and Economic Research, said Tuesday it is the second consecutive year with significant declines in Montana’s industry because of national housing issues.”
“Morgan said weak markets, mill curtailments and closures can be expected well into next year. ‘I haven’t seen anything yet indicating a recovery in 2008,’ he said.”
The Idaho Statesman. “Home sellers and real estate agents hoping for a turnaround in the Treasure Valley’s housing slump will have to keep waiting. The latest housing data show prices slipping, with little reduction in the backlog of unsold homes.”
“Throughout the market a common sight has become the real estate sign claiming ‘price reduced.’ ‘Prices are coming down. I’ll guarantee you that,’ said George Tallabas, a Realtor in Nampa who has been concentrating on selling farms and ranches since the residential market tanked in late 2006.”
“The problem is the number of homes for sale in the Treasure Valley. October’s statistics showed 7,411 single-family homes in the Treasure Valley awaiting buyers, compared with 6,595 in October 2006. Sales aren’t making much of a dent in the supply.”
“Don Hubble, owner of Meridian-based Hubble Homes, said there are still buyers at the right price. For example, his recent listing of a home in Caldwell priced at $109,990 drew 2,000 hits on the Intermountain MLS. ‘They called us to see if it was mistake because they had never seen a listing get so many hits,’ Hubble said.”
“He said builders can’t offer the same deal in Meridian, even though land prices have fallen from about $160,000 an acre a year ago to below $80,000 as 2007 nears an end.”
“‘We seriously over-built,’ said Boise State University economics professor Don Holley. ‘I think it’s going to take at least a year to work through all that inventory. Maybe two years.’”
The Oregonian. “Almost every Clackamas County homebuilder sings the same refrain these days: There are lots of buyers out there, but they’re scared. Dire news reports about subprime mortgages, foreclosures and glutted markets elsewhere, especially in Sun Belt, have tarred Portland as well, the builders say.”
“‘What’s killing us is the perception of the market,’ said Tony Marnella, owner of Marnella Homes, which has a 115-lot subdivision in Happy Valley.”
“‘You’ve got all those people sitting on the fence. They think if you buy it today it’s going to be worth less tomorrow,’ Marnella said. ‘We’re just waiting to see what happens.’”
“‘For the next 60 to 120 days there are going to be some good values’ as developers clear their backlog of homes, said Ken Hoffman, a north Clackamas County real estate broker. ‘Bankers are saying to builders, ‘You’ve got to move that inventory,’ Hoffman said. ‘Builders are going to have to take it on the chin.’”
“At Oregon City and Canby subdivisions, Sequoia Development is trying to lure buyers by promising to make mortgage payments for six months. Sequoia’s 276-unit condominium and townhouse project just north of Clackamas Town Center has some units available for rent or with a lease-to-own option. Developers and Realtors say that may be a sign a project is struggling.”
“In Canby, Jason Bristol is dabbling in land development as a second career. He is seeking city approval to build 19 townhouses on an acre he owns. He’s currently renting out four houses on the site.”
“Bristol expects a real estate revival. But, he said, ‘every time I check the MLS, I see a lot of the same houses still for sale.’”
“Two years ago, Lori Loen, a real estate broker, knew exactly how she would spend her days, scouring the southwest suburbs, searching for more land to feed an insatiable housing market.”
“A lot has changed since then for Loen and virtually everyone else involved in the region’s housing industry.”
“The scramble to lock up land for new residences is largely on hold as unsold housing inventories have climbed and many potential buyers are clinging to the fence.”
“A smattering of statistics underscores that the suburban housing market, and corollary efforts to buy raw land for new houses, have slowed. The average price of homes sold in Lake Oswego in 2006, for instance, was $596,600, Lake Oswego Realtor Adelle Jenike said, citing monthly data provided by RMLS. So far this year, that number stands at $547,700.”
“‘The prices of homes have dropped, no doubt about it,’ Jenike said. ‘But we’re not seeing anything like the horror stories on television from around the country.’”
“Last month, according to the same information, the Portland area had an 8.4-month inventory of homes for sale. It’s the highest rate of inventory since January 2000, when the figure topped 10 months.”
“In October 2006, by contrast, the inventory was 4.6 months. In 2005, when the area housing market was red-hot, that figure had dropped to 2.2 months, representing one of the lowest inventories in years.”
“‘Two years ago, we all thought things were insane and probably unsustainable,’ said Ken Gertz, owner of Gertz Construction in Tualatin. ‘But by any long-term measures, the Portland market itself is still very strong.’”
“Other parts of the state, he added, aren’t keeping up. Jackson County, for instance, has slowed dramatically in recent months. ‘And Bend is a tomb,’ Gertz said. ‘But we all knew that. There was no way it could sustain the level of growth it had seen the past two or three years.’”
“At the fledgling Villebois master-planned community in Wilsonville, developer Rudy Kadlub is still planning to start construction Jan. 2 on the 73 rowhouses, townhouses and condominiums.”
“‘We’re continuing to take a very aggressive approach,’ said Kadlub, founder of Costa Pacific Communities. ‘The more ‘there’ we create, the more overall traffic there’ll be.’”
“Former Portlander Jacinda Kirk, a 26-year-old renter in suburban Seattle, would like to buy a place outside of Seattle, but she can’t afford it. ‘We left the Portland area thinking it was expensive,’ Kirk said. ‘We moved to Seattle and said, ‘Oh. my gosh. We love Portland prices.’”
“Kirk would like to see prices come down. She keeps clicking through the Internet in search of a deal in Seattle or Portland. Kirk, who’s married with an infant son, recently found a Beaverton home with a yard on a corner cul-de-sac lot. It’s 1,900 square feet, four bedrooms and has 21/2 bathrooms. Price: $350,000.”
“In Issaquah, a Seattle suburb, she found a 1,700-square-foot, four bedroom and 21/2 bathroom townhouse with no grass for her son to play. Price: $440,000.” “‘If we’re going to spend $400,000 for a house,’ she says, ‘we at least want a yard.’”
The News Tribune from Washington. “Though Tacoma’s largest developer, Prium Cos., has yet to make a formal announcement, the company has quietly pulled its eight-story Hanna Heights condominium project off the market.”
“The company, which had not sold one of the 35 units in the building at Sixth Avenue and Fawcett Street despite a recent upgrade to granite countertops and other upscale amenities, is converting the building to apartments.”
“Real Estate agent Julie Sargent, who was attempting to sell the building’s condominiums, said Prium notified her about three weeks ago to halt condominium sales efforts. Hanna Heights is not the only Prium project that has seen the effects of the slowing real estate market and the credit crunch.”
“Near Sixth and St. Helens avenues, Prium’s plans for a 20-story condo tower, Jay Heights, have been put on ice.”
The Seattle Times from Washington. “The housing crunch hit Renton-based First Financial Northwest Wednesday, as the lender said it would set aside $4.5 million because one of its large borrowers, a residential developer, may have trouble repaying $37.3 million in loans.”
“The company…described the unidentified customer as ‘an entry-level builder’ that took out 90 separate loans for projects in King, Pierce and Thurston counties. The single-family homes in those developments sell for an average $300,000 to $400,000.”
“The developer, First Financial said in a statement, ‘has experienced a slowdown in home sales as a result of tightening credit markets, which has [sic] a greater impact on entry-level borrowers.’”
The Seattle PI from Washington. “Seattle’s 12-month reign atop the nation in annual home-value increases came to an end in September, according to a report released Tuesday. Seattle’s annual appreciation has declined for 19 straight months.”
“September’s year increase was the lowest since June 2003, and home values actually dropped from the prior month for two straight months — the first consecutive decline since November 1995 through January 1996.”
“‘That’s really what I’ve been telling folks to expect,’ said Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University. ‘Consumers have more choices in the marketplace, and they’re negotiating better deals from sellers.’”
“One of those sitting on the sidelines is Dave Anderson, who moved to Seattle from New York in 2005 for a job. He has been in a position to buy a home for about a year.”
“‘It seems like there’s sort of a euphoria that continues or a denial that the national situation will affect the local market here,’ he said. ‘I think a 5 or 10 percent correction, coupled with sort of a consensus that Seattle is not immune to price declines would make me feel a lot more assured that the bubble is over.’”
The Columbian from Washington. “It’s been four months since Lori and Fred Clark put their Vancouver house up for sale and joined thousands of sellers in pursuit of a shallow pool of buyers.”
“While they haven’t had any offers for their one-story ranch, the Clarks say they’re willing to wait out the market. However, they’ve taken down the ‘For Sale.’ They’ve also cut their price.”
“Despite slowing Clark County home sales, the Clarks don’t plan to take their 2,000-square-foot house off the market. The retired couple say they’re prepared to hold out through the slump.”
“‘It’s just a waiting game,’ Lori Clark said.” “Lowering the home’s asking price to $325,000, down from $339,900, hasn’t helped, the Clarks say. Back in August, their real estate agent was showing the home about three or four times a week.”
“‘There’s been no interest at all since the end of October,’ Lori Clark said.”
“‘They think it’s better to wait for better deals,’ said Sana Mathews, the Clarks’ Realtor. The Clarks are among plenty of sellers. Their home is counted in an 11.4-month supply of new and existing homes for sale here, according to RMLS. Last month’s inventory was up from a 7.2-month supply during the same month last year.”
“The Clarks’ had hoped to sell their Lincoln-area home in time to escape another cool Vancouver winter. They’re planning a move to the warm climate of Albuquerque, N.M.”
“‘But we’re going to wait and do things step by step,’ said Lori Clark. ‘We’ll sell this house and then go there and pick out a place.’”
“‘It’s just a waiting game,’ Lori Clark said. Lowering the home’s asking price to $325,000, down from $339,900, hasn’t helped, the Clarks say. Back in August, their real estate agent was showing the home about three or four times a week.”
Having moved away from the Portland, OR metro area back in ‘96, I find it staggering that anyone would be asking over $300k for a house in Vancouver, WA. It’s nothing more than a dreary bedroom community for Portland, and the commute to and from there totally sucks.
In a nutshell, Vancouver is an exurb taken to the extreme.
“‘But we’re going to wait and do things step by step,’ said Lori Clark. ‘We’ll sell this house and then go there and pick out a place.’”
At least the Clarks are smart enough not buy a house in the other place while waiting and waiting and waiting… They might as well wait for Nasdaq to go back to 5000.
The Clarks’ had hoped to sell their Lincoln-area home in time to escape another cool Vancouver winter.
.. invest in some nice warm sweaters and knit caps..
Yes, can we get you a butler and trip to Spain as well my Lord?
And who in their right mind would move to Vancouver, WA, and not realize they’ll be subject to a “cool winter,” which in reality is a rainy nightmare that varies between drizzle and downpour under an unending sea of gray clouds?
Okay, I might be biased because we live in Northern Colorado now with an average of something like 320 days of sun annually, but the winters in the Portland/Vancouver area really are nasty.
The same people who move to my area, which is surrounded by five ski slopes, and be surprised the winters are cold!
“which in reality is a rainy nightmare that varies between drizzle and downpour under an unending sea of gray clouds?”
I love it! We need to hire you to write full pages adds in all our tourist rags to improve our image among the Californians. Make sure to mention the ice storms too.
Isn’t there a huge HP site in Vancouver?
It’s still a relatively small employer when compared to Portland overall, and why work there when you could be at the HP site in Fort Collins?
Here’s the other thing. What’s with people these days who work and live somewhere for their whole lives only to retire to somewhere else that must obviously fit their preferences? Does that mean that all these equity locusts who live in miserable places that are cold and windy really hate living there? Does it mean that perhaps they were only living there for the money? If so, that’s kind of sad. If you don’t like where you live, then move already. Waiting until you retire is nonsense.
Just look at older generations. People stayed put and had ties to the land and their ancestral homes. Guess that whole mentality got thrown out the door.
“Just look at older generations. People stayed put and had ties to the land and their ancestral homes.”
With all due respect, I think you’re putting the older generations up on too high of a pedestal. They also had their flaws, misused and wasted resources, started wars, beat their children, etc., and they fell for bubbles just as often as people do nowadays.
I hear ya. I got an good job that pays OK, but I’ve had it with living in Chicago. I didn’t grow up here and have no friends I’d really miss.
However, there are some fields where jobs exist in only a handful of places, and I can count on my hands the number of metro areas where I can find work in mine: here, NY, SF, maybe Boston, maybe DC and if I’m really lucky Seattle. But not Denver, which is really where I want to live, and I’ve looked. So as long as I can’t land something in Seattle and can’t afford the other places (and don’t want to move to DC at all), I stay here.
Cut the cord. Trade your own. You can do it and then you can live wherever you want.
It’s not actually trading I do right now, and for a few reasons I want to stay here for at least a few more months. But I would like to move somewhere with mountains in time for next year’s hiking season, and it says something that I’m posting this from work.
I would too. Every time I go to Santa Fe or AZ or southern CO, I ask myself why I’m too damn cheap to just move.
passthebubbly,
there’s a couple of things to consider. For one, I’m not exactly sure why people seem to want to move away from an area they actually like just for cheaper housing. In the end, the house isn’t everything nor does is guarantee a better quality of life. I’ve heard so many people who moved out of such and such state and then say that they would move back in a heartbeat… if only the prices were lower.If you’re in that mindset, then you shouldn’t have moved to start with.
The bigger agenda is retirement, of which you and everybody else will need an enormous amount of. I look at it this way. Am I pissed that California is so expensive? well ya- otherwise I wouldn’t be here. But the one good thing it has done is allowed me to save up a buttload of money. The job market has been good to me here, and as you mentioned, certain industries are more prominent in certain cities. It just so happens that many of those are in overpriced areas. But rent is still dirt-cheap here and I happen to be fairly frugal. If you can live like that, then you can save up quite a bit.
I figure that in another 4-5 years, my nest egg will be saved up and I’ll have a sufficient amount of cash for a downpayment in California once the prices have alleviated. If not, I’m prepared to move to another area, of which many I’ve already investigated and have real estate cheap enough to simply buy and be done with it. If you like mountains, check out parts of NC or TN. It is a hell of a lot cheaper than CO and you’ll get more bang for the buck.
Lastly, the older I get, the less I like cities in general. If I wind up living in the middle of nowhere, like middle KY for example, then I might quite content. Bottom line- if you can’t afford a house in “x” city, then make the most of the situation and save up for the bigger picture first- retirement.
“If you like mountains, check out parts of NC or TN.”
Ha! Way ahead of you there. I go down to WNC a couple times a year, and will be there over Christmas, perhaps to hike Mt. LeConte for the 8th time. Asheville has quite a bubble now as it turns out, although rents are still very cheap and prices in the boonies (ignoring the resorty places such as Cashiers and Blowing Rock) never really budged much.
Mt. Leconte is not too far from where I grew up. Yes- you’ve nailed the nail on the head: the cities in the smokey mountain region are expensive… but if you don’t mind driving say- 15-20 minutes out, the prices start to fall dramatically. People from larger cities do not seem to comprehend the fact that cities in many Southeastern states do not ‘behave’ like those on the coasts. The reason being that there simply isn’t the population density. NC, TN, KY… they all have state populations less than any number of large major cities on the coasts. This means that people don’t make insane 2-3 commutes to their jobs. Most of the cities in this region peter out fairly quick.
Frankly, I grew up in the ” boonies” so I can live either way. I think I’d prefer boonies. If you can swing that, you can buy ACRES of land for less than a crappy studio condo in Chicago. I’m not sure how long it will stay like this. Every time I visit the family, it seems like an entire chunk of town exists where it didn’t just a year ago. That and sprawl and the lack of community planning is making some suburbs into real eyesores.
Anyhow, best of luck to you. Sounds like you have a plan.
Thanks. As it turns out I’d like to live in Colorado first, while my body is able to climb the Rockies and ski with any sort of ability, then move to WNC later in life and enjoy its more moderate winters. I see a lot of older people on the trails when I hike in NC/TN, which I find reassuring.
We moved to CO to escape the prices and overcrowding of CA. But if prices ever reverted back to normal, taxes lessened and the herd thinned back home, we’d probably go back. We like CO, but miss our family and friends and lives we’d known literally all our years. But right now, Cali is just too much to take and keep your sanity.
No. It’s now a very small HP site.
But, Vancouver has that motel with that charming sign-ROOMS FROM $39….
are we still going for that soft landing?
They are using a new dictionary.
Soft is the new hard. Plateau is the new cliff.
Joshua tree is the new black.
Does that mean we’ll see Britney and Paris and Lindsay going to parties “wearing” one soon…just to show their street cred, of course?
“‘All three agreed to redirect the money to the bank for now until we get a better comfort level with what’s going on,’ Turner said. In addition to the subprime risks, Turner said he could no longer get a quote on the daily yield or the investment returns on county funds.”
We need people like Turner running our fed & state govts. The kind of people that look out for the citizens.
Yeah, that kind of stood out in my mind as well but the truth is (not discounting your original statement) is why did he wait until he couldn’t even get a BID on the paper to pull the plug? I realize these guys wear a lot of hats but this really was a no-brainer.
I’m only half-impressed; putting that kind of money in a bank is just as big a mistake. Treasury Direct or Bust.
Part of the Florida funds’ problem assets is that they have $650,000,000 in CDs at Countrywide Bank.
Boy, this is gonna hurt a lot of these Seattle folks. What kind of a pricing $+400K for a less-than 2000 sq2 feet home ? How much money must you make and what type of profession you must be in to afford these houses ? I seriously think housing prices in most if not all of U.S.A cities are out of quack, way out of quack. My max that I would pay for any house, any city, and I don’t care if it is Manhattan, NY is $200K, not a penny more. And one wonders why there is cheat, greed, lie rampant in our society nowaday…
“out of quack, way out of quack”
Too funny - reminds me of someone who once told me it was a “doggie dog” world.
Can’t decide which is funnier…hmmm…. I’m going with out of quack….
It is the problem of our time. A problem because I’m only 30 and even I remember a time not too long ago- less than 10 years ago in fact- when buying a home was less about the price and the fear of not being able to pay for it and more about a long term piece if debt that would act more like a retirement fund. Meaning you put a token payment in the lender’s hands every month and in a few decades-just like a retirement plan- it would pay off and provide a place to park your stuff in the meantime.
These days it means finding something- anything- that you can afford. What is going to have a lasting legacy is the fact that we made a huge transition where the majority of the avg homeowner’s income is going towards debt. That’s what I see the most, which is that more and more people will be living with severe financial difficulty for years to come even if they can afford.
An overall degradation of the quality of life.
“A problem because I’m only 30 and even I remember a time not too long ago- less than 10 years ago in fact- when buying a home was less about the price and the fear of not being able to pay for it and more about a long term piece if debt that would act more like a retirement fund.”
Actually, I don’t remember it ever being like that, and I’m 43 and have been a homeowner for 15 years. Depends on where you live, I guess.
“Depends on where you live, I guess.” Indeed it does. I grew up in the South where even today homes can be had for under 100k. If you’ve only lived on one of the coasts, financial security has been under fire for decades.
You are so right. This may have already been posted, but it bears re-posting:
2 Out of 3 Middle Class Families on Shaky Financial Ground
http://www.reuters.com/article/pressRelease/idUS86914+28-Nov-2007+PRN20071128
The info in this article is based on a recent study. Excerpt below:
– Only 31 percent of families who would be considered middle-class by income– Only 31 percent of families who would be considered middle-class by incomeare financially secure.
– One in four middle-class families match the profile for being at high risk– One in four middle-class families match the profile for being at high riskof slipping out of the middle class altogether.
– More than half of middle-class families have no net financial assets– More than half of middle-class families have no net financial assetswhatsoever.
– Middle-class families have median debt of $3,500 and at least half of them– Middle-class families have median debt of $3,500 and at least half of themhave no assets.
– Only 13 percent of middle-class families are secure in their asset levels -meaning that they have enough to cover most of their living expenses for ninemonths should their regular income cease; 79 percent are “at risk” in thiscategory, meaning they could not cover the majority of their expenses for eventhree months. Another 9 percent are “borderline.”
– Twenty-one percent of middle-class families have less than $100 per week– Twenty-one percent of middle-class families have less than $100 per week
BayQT~
Annoying little article. Nowhere does it state what is the definition of middle-class families. It was like reading an article that said “without a doubt” good people will live 30 years longer than bad people.
I think the message in that article was correct, but without a definition of middle-class families the information is just about worthless.
i’m having a deja vu
I think I’m having a deja vu
LOL! I wonder why they printed it like that?
BayQT~
RE: Families on shakey ground
Get a divorce with the attendant division of fixed assets, alimony, and child support stuffed your azz in your late 40’s and see where you are at.
Intact dual income families are pikers in comparison.
“2 Out of 3 Middle Class Families on Shaky Financial Ground”
Not a problem because the middle class is disappearing. So the it will fix itself.
You know, if you’re on Shakey Financy Ground ™; you’re probably not middle class.
Ah - but you haven’t been listening to the Seattle RE pundits. You see, out there - you’ve got…er…Microsoft Millionaires and … er… Technology…JOBS and er… Boeing. This is why Seattle can rationalize $250/sq ft. for a townhouse in an ugly overbuilt suburb.
It is paying $800 million for assets that had a book value of $3 billion.
ok so now we have a number
26%
ouch
Don’t forget the 1.75 Billion loan at 12.5%. I have a feeling that is where most of the profit is. In other words, I think they overbought at 26 cents on the dollar.
Ouch is only beginning.
Got popcorn?
Neil
Who’s paying $800 million–link please? I didn’t see that in any of the articles on this thread…
Oh, I see it now on the last thread: ETrade’s sale of $3billion to Citadel. Guess I should read the threads in order.
This is good and I’d rather it not get lost in the noise.
http://www.minyanville.com/articles/fre-fnm-MBI-RDN-MTG-abk/index/a/15046
“With many of these shops on their last legs and struggling to make payroll each month, any deal they could sell became a deal good enough to close. In short, in the past eight months, Fannie and Freddie bought, and Radian and MGIC insured, some of the worst loans ever originated…
If Mortgage Insurance replaced the second lien, and there is currently no bid for second liens – who will miss the last seat this time around? “
Now, to plagiarize someone else’s response:
DING! DING DING! We have a winner!!!
This is one of those “unprecedented aspects” of the current economy that has me thinking 8 quarters of negative economic growth - the “New and Improved” Depression.
Get ‘em while they’re hot, folks…
Let’s play a word game. Here’s a quote from the original post:
“‘What’s killing us is the perception of the market,’ said Tony Marnella, owner of Marnella Homes, which has a 115-lot subdivision in Happy Valley.
Inside that word “perception” is, IMHO, the real reason the market is so slow right now. That word is “price.”
inside that word is a way to calm the nervous jitters Tony must surely be suffering.. get a ’script for some ‘perc’s.
As the saying goes:
“It’s hard to make a man understand something when his livelihood depends on him not understanding it.”
I guess I’m just in a foul mood today, but I get so tired or reading or hearing about the same old story- a couple in some nasty cold place that wants to sell out and move to somewhere warm- aka- AZ,FL, NC, GA, etc etc etc. What pisses me off is that almost all of these jackasses have essentially no plan whatsoever as to what they will do with their lives once they arrive at the predetermined warm destination. The generis assumption on their part I assume is to live off the sale of their previous home.
Life is not that simple. Even if someone gives you a house elsewhere and you get to keep all of your “hard-earned” equity, you STILL need a game plan. “da-Howse” is only a tiny portion of the whole pie. I NEVER hear anyone mention that they want to sell and move somewhere and actually have a plan for jobs, finances, retirement, or anything else. We’ve got a lot of these types of folks moving into my parent’s home state of TN, and I swear half of them seemed to have bought site unseen. Morons.
that couple, “the Clarks”, are already retired .. simplifies the gameplan. Need a hospital nearby .. hopefully there’s a square dance club.. an indian casino is a big plus.
even worse. I hate retirees. They basically bring zilch to local economies, and due to the fact that they can live in the middle of nowhere can actually degrade living standards for those around them by jacking the prices. Most grotesque example: Florida.
You mean… knitting classes and duffers playing golf 6 days a week *don’t make a contribution to society!?
Yeah, that and when you’re in line they have nowhere to go and all day to get there!
“I hate retirees.”
It’s easy to engage in gen bashing until you realize that you’ll be in an equivalent generation someday.
Some of us don’t plan on retiring. We consider retirement to be boring. We also think that retirement can make people boring.
yes.. it is easy to stoop to gen bashing. I’ll rephrase it to say that I’m tired of people who seem to have absolutely no financial power other than to sell their overpriced home in such and such” progressive” city and then move to a cheaper one. This just so happens to fit the bill for a lot of retirees who probably otherwise had no retirement savings yet were able to cash out the house.
I guess what rubs me the wrong way is that so many of these people lived in other areas because they detested areas such as the south and Midwest due to assumed political and regional interests that didn’t befit them.
But now that they’re all retired and realize that that the supposedly progressive place they lived in all their lives is actually a financial liability, then damn the torpedoes, to the South/Midwest they go! Cheap prices await~!
Totally oxymorinic.
yo.. slim.. Some of us don’t plan on retiring.
that’s not a great “plan”, imo..
when your aching body can’t take it anymore, you might wish you had planned on it.
guess what rubs me the wrong way is that so many of these people lived in other areas because they detested areas such as the south and Midwest due to assumed political and regional interests that didn’t befit them.
But now that they’re all retired and realize that that the supposedly progressive place they lived in all their lives is actually a financial liability, then damn the torpedoes, to the South/Midwest they go! Cheap prices await~!
____________________________________________________
Once you no longer need public services like decent public schools and commuter roads, then of course living in places that provide those amenities (and continuing to pay for them) becomes a financial liability. It makes sense to take the whatever you were able to accumulate from living in that higher income area, and moving to place that is simply hot and cheap. You seem resentful that some people have that option.
Arizona Slim – no kidding. Technically I “retired” this year (only 42). 40~ish years of doing nothing? Don’t think so. Spent the last two years getting my masters in early education so I can spend how ever long I feel like continuing to work teaching. Took the last half of this year off, and will take the first half of next year (graduate in June), and as our actual income is set (farm that’s fully paid for) so no summer school. Will spend that traveling with the wife. Teaching just gives me something to do the other 9 months of the year. Besides, where else can I have fun telling the Social Studies Prof. “I refuse to be part of the indoctrination program”?
JoeyinCali – big difference between not retiring ‘cause we don’t feel like it and retiring ‘cause we hate what we do for a living… I always wanted to “end” teaching – start next fall. So, am I “retired” or still working? Really depends on how you view what you do and if such is because you have to in order to pay your bills, or because you just feel like doing it.
A time will come when it’s too late to make changes or to plan ahead. Keep that picture in mind and everything will work out fine.
Where does it say they have to bring anything - they’ve done their time. Why shouldn’t they do whatever they want where they want and can afford. They are your parents, grandparents, aunts, uncles and all the others that worked, raised kids and did all that you are now doing. What’s with resenting that they want a few years to enjoy now that they’ve finished with all the responsibilities? Maybe you don’t want that later in life, but I’m betting most people do. And trust me, here in Palm Springs area they bring zillions to the economy. Sure they can be annoying and sure I’m envious, but I don’t begrudge them having some fun.
RE: And trust me, here in Palm Springs area they bring zillions to the economy.
I especially like the husband and wife government
career double-dippers, both retired @ 50 with their pensions enhanced with private monies derived from a business that is able to undercut any competition because of their $200k per annum retirement dole.
You know them and you know how many retirees out here are them? There are tons of them out here that were regular folks in the day when you worked your job for 30, paid off your house and retired with your fixed pension, SS and housing proceeds. They didn’t cheat anyone, they didn’t screw anyone - they just did what they were supposed to. Even if they double dip and own a business - That means they worked, retired, took another job and opened a business - and how is that such a bad thing? You don’t seem like a very happy camper lately - yesterday it was women ripping off men in divorce, today it’s all retirees ripping everyone off. I’m sorry for whatever has made you so unhappy.
RE: You don’t seem like a very happy camper lately - yesterday it was women ripping off men in divorce, today it’s all retirees ripping everyone off. I’m sorry for whatever has made you so unhappy.
I’m not much of a Dancing with the Stars type.
I read a lot and simply comment from the experience of having walked on this earth for half a century.
And I figure knowledge and wisdom come from experience.
Personally, I don’t believe any household should have more than 1 income derived from a government source.
I’ve been exposed to government workers and I know what they produce, which isn’t much.
Any family unit with 4 sources of government derived income, I would readily call them pigs to their face.
So don’t feel sorry for me.
And you can judge ALL government workers at all levels from those you have personally met? I take exception to your remarks having worked for 2 states and in private industry. The large majority of people I worked with worked hard and produced beyond requirements. Working government jobs used to be considered public service because and the pay is below private sector and people took such jobs (and many of us still do) to contribute to the greater good. You can call me a pig all you want because I’ve worked several government jobs, but I know my work habits and what I’ve produced so your name calling is irrelevant.
Working government certainly can be public service - teaching, firefighter, police, social worker. But the often quoted FANTASY that they get less than the private sector - forget it. What private sector job is basically sercure and guarantees pay increases despite the economy ?
It’s not just you my friend. Even on rare occasions when I AM.. in a good mood just one article about these clueless types can ruin an otherwise perfectly good coffee break. The sad part is there are multitudes of them.
It’s all part of the “boom mentality”. Had they actually stayed in the same house for 30 yrs. and paid it off you wouldn’t be hearing this silly talk! BUT… if someone “else” is footing the bill (buyer) then it’s all fun and games. You’re right, it’s almost as if it’s done by a coin toss.
Hey, it works for Missoula! Seems to be nothing but military and govt retirees keeping the housing prices afloat here.
Jetson, you’ve just described many of the people who move to hot ole Tucson. And more than a few of them discover that the home sale proceeds don’t last as long as they thought. Which means they get to slug it out in Tucson’s not-so-hot job market.
Slim: Of course they want to moves somewhere warm - the older you get the harder the cold can seem on the body and the better the heat feels. As for being bored or boring in retirement, who’s to judge what anyone else wants to do with their lives. If they’re happy kicking back - who’s to say. For those that want to be active, there’s plenty of things to do besides work that are stimulating and productive. If I didn’t need to make money, I’d never work another day at a job and can think a many things to do to be active and contribute to the community. I see a phase here on the blog of folks becomes more judgmental and finding blame with other groups of people - generational, race, immigrants, geographical and it frustrates me. I detracts from the real “evil doers” that are much more institutional in nature. IMHO the financial institutions and policies, the government and lack of integrity, the whole housing debacle and all the players are way more dangerous and worrisome then retirees or poor people. More pain meds for me - rant off.
Blame has become the U.S.’s amusing new way of failing to look for constructive solutions. How unattractive. How pointless. How frequently mistaken.
RE: my parent’s home state of TN…
Yup-all those tranquil little town’s of post WW II America with their self-supporting agricultural bases, mills, plants, and craftman based small businesses all pissed away into the maw of globalism.
Nothin’ keepin’ these place alive ‘cept SS, disability, and welfare
payments.
But after 3 to 5 years the searchers will find their dreams and savings gone and they will become a new legion of Depression era Oakies who will head to who knows where.
And all will be as it was.
“‘We seriously over-built,’ said Boise State University economics professor Don Holley. ‘I think it’s going to take at least a year to work through all that inventory. Maybe two years.’”
I am the only one who thinks that the statement sounds a little wacky?
I mean, these are homes! Not cars that you can clear out quickly. And that people can easily replace.
If there is a serious housing glut, it takes several years to play out. And it takes actual people who want to live in them to remove them from the inventory, instead of investors snapping them up to ‘wait for the market to return’.
I agree. I here this crap all the time. Sellers are going to wait, and wait, and wait for the market to return, but it’s never going to happen. By the time it recovers nobody will even remember the RE crash of 2007.
something rarely mentioned is who the “We” in We seriously overbuilt actually is. Who started it all.
It begins with the local municipalities, who must approve the various projects, conversions and buildings before the dogs of war can be let loose.
Since the various tax and fee revenues from development are near impossible for politicians and bureaucrats to turn down, it seems that just about every hairbrained “developer” who wanted to add to the housing glut was instantly rubber-stamp approved.
Central planning never works.
if only it was that simple…
Here in Texas, we had a massive overbuilding boom during the mid to late 80’s. For several years in the early 90’s, things were really bad. There were a lot of empty houses - most turned into rentals where the landlord would expect at least 3 months of vacancy between tenants. Some landlords saw their places vacant for 6 month stretches. As you indicated, there were too many houses and not enough people. The only nice this is that property was very very cheap - you could pick up a nice duplex for $45K. Renting it out was a real pain though.
The problem today is many of the houses in Boise and elsewhere are upper end McMansions or at least upscale suburban homes. These will be a lot more difficult to rent out and more difficult to maintain. It’s going to be an interesting few years.
Here in Tucson, there are quite a number of rentals that were formerly for sale. I’m watching one that was on the resale market for two years. It was taken off the market this past summer. Now it’s for rent.
All that pent up supply…
“If there is a serious housing glut, it takes several years to play out. And it takes actual people who want to live in them to remove them from the inventory, instead of investors snapping them up to ‘wait for the market to return’. ”
A few jobs might help too…
“A few jobs might help too…”
I am of the opinion that there are more houses than people to occupy them, regardless of price point.
Roger H stated very well what I believe will happen in the next several years.
OT
On BloombergTV, the CFO from Jefferson cnty Fla can’t get money from the closed investment pool for teacher payrolls due tomorrow. He’s obviously scared. It feels like things are spinning out of control doesn’t it?
And it will be a wakeup call for municipal employees, who believe that they are immune from the ebb and flow of the economy. If the city or county are broke, they are broke. It will be expecially painful in communities that hired and spent assuming tax collections would increase at double digit rates into perpetuity.
RE: And it will be a wakeup call for municipal employees, who believe that they are immune from the ebb and flow of the economy.
Good point, C~!
Missing a payroll is huge, absolutely huge. Something you think only happens in a small construction or restaurant business, not in local government. All I can say is - Hallelujah!
Oh, there’s a problem in Florida? Couldn’t be, Sean Snaith, Florida’s own taxpayer funded premiere eCONomist, said everything would be just fine.
Oh and what exactly is an “Entry-level builder” btw?
Oh and more importantly why was this entry-level builder able to get NINETY different loans totaling 37.3 mil? Bet you’re regrettin’ THAT!
From the same bank yet to boot. You see that kind of stuff with hedge funds using the same collateral at 9 different banks, but one bank is on the hook for all of this.
The other key is that the loans to builders is classified as commercial lending. If you evaluate how much banks are exposed to residential real estate you have to figure out how much of their supposedly “safer” commercial portfolio is really sunk into residential development.
Or did the builder build entry-level homes?
Either way, damn poor writing skills…
the whole thing stinks.. unidentified borrower.. a president retiring on Dec 1, a month before the [responsible] subsidiary is to be merged into the bank.
.. they went public a month ago selling 21M shares at $10 a share.. announcement made after the market closed.
I wonder if any insiders shorted this stock. Check out the chart.
http://tinyurl.com/2yqt74
Interesting that the average value of those loans is $414,444. Pretty big building loans.
The loan balance probably includes the lot purchase, all hard and soft costs, anticipated profit (yes, that gets disbursed), loan fees, and 18+ months of accrued interest. The bank’s loss on a construction loan supported by a completed, unsold house, can easily be 50%.
Paulson is still working on a way to freeze ARMs. I am curious as to why he thinks this will help the housing market. I would think it would cause serious losses to the owners of loans, contributing to the further deterioriation of our credit markets.
http://www.businessweek.com/magazine/content/07_50/b4062000057239.htm
The way I see it the days of easy credit are over. Hence, so are the days of grossly overpriced homes. Reworking these loans doesn’t change that fact. All it really does is trap these people in their overpriced homes, and as you said probably deteriorates the credit market even more. Many won’t qualify, many will forclose anyway, and many will be forced to sell at a loss down the road.
Freezing ARMs will buy time which will induce the FBs to keep making their payments. The longer the FBs keep putting money into the system the longer it will take for the bubble to deflate.
This will be a good thing; it won’t be good to the FB who will eventually capitulate but it will be good for the rest of us watching on the sidelines.
Those who can readily pay after their resets won’t qualify, of course. Yet neither will those who don’t have the financial means to own a home even after refinancing. “We’re focusing on the middle bucket,” says Paulson.
And what if there isn’t any water in the “middle bucket”?
When the incentives are there people can come up with the money. There are 401ks, either their own or a relatives. There are IRAs. Savings bonds. Children’s UGMA accounts. Pension cashouts. Etc, etc, etc.
But are people really going to liquidate retirement funds to pay for a house that is worth substantially less than what they owe? And what fraction of homedebtors couldn’t possibly make fixed 30 year payments at 6%? I’m guessing there will be surprisingly few takers.
They’ll pay to keep the house if they think the bottom is near.
With all the BS flowing from the NAR and MSM the FBs will gladly cling to the hope that all will turn out okay very soon.
The comments on this article read like this blog.
Unfortunately most voters that the Bushies are pandering to don’t read Business Week articles.
Does this apply to ALL ARMS? What about flippers & speculators? what about refies & HELOCs? Is there a formula to decide if people can pay the reset? What’s included in the expenses - new cars, vacations, lots of electronics, entertainment, expensive clothing? Or are they just going to let people say I’m getting reset and I can’t afford it? I haven’t really seen details yet - has anyone else?
“Don Hubble, owner of Meridian-based Hubble Homes, said there are still buyers at the right price. For example, his recent listing of a home in Caldwell priced at $109,990 drew 2,000 hits on the Intermountain MLS. ‘They called us to see if it was mistake because they had never seen a listing get so many hits,’ Hubble said.”
Bingo, it’s all about price.
It’s official……..housing bubble has popped.
http://www.moneyweek.com/file/38704/its-official-the-housing-bubble-has-popped.html
‘I think a 5 or 10 percent correction, coupled with sort of a consensus that Seattle is not immune to price declines would make me feel a lot more assured that the bubble is over.’
Knife-catcher in waiting
My thought EXACTLY–this guy will buy here in Seattle when it has just started to turn. It’s late to arrive here, but it will with a vengeance eventually. It might even go faster here since there will be more pent-up need to correct.
Message to ALL SpaceCadets/Sellers/RE RATS/Brokers/Lenders is as FOLLOWS:
Either DROP your PRICES or REPACKAGE your PIGS in a NEW DRESS as the POS is totally UNATTRACTIVE as Presented. The new lipstick ISN’T WORKING.
Message from Earth OVER
16 month inventory level at Treasure Valley.
To quote Peggy Bundy, “I can do 16 months standing on my head”.
Just IM’d a buddy, who’s a RE broker in SoFla.
He looked up info for Northeast Miami-Dade/Southeast Broward 33160 area code.
Grab a chair or a bottle, folks.
There were 95 condo closings in 33160 … from 5,509 listings.
58 months worth of inventory.
Ya, I am looking for a rebound in 09 … 2109.
Hey, could you ask him about 33063?
‘The more ‘there’ we create, the more overall traffic there’ll be.’”
I’m under the impression there is plenty of “There” out there already my friend and there is no traffic “there” either. BTW I submit this post for most “theres” award if any.
There you go. You win!
Bonus: There is no “There” there.
Snowden: I’m cold, I’m cold.
Yossarian: There, there. There, there.
That’s who we need, Milo Minderbinder!!!!!!!!!!!!!! He could save us.
my vote for quote of the week. From mr build it and they will come
“In Issaquah, a Seattle suburb, she found a 1,700-square-foot, four bedroom and 21/2 bathroom townhouse with no grass for her son to play. Price: $440,000.” “‘If we’re going to spend $400,000 for a house,’ she says, ‘we at least want a yard.’”
How greedy and “unrealistic” Jacinda Kirk is. Doesn’t she realize that anything less than a 200-300% premium over 2000 prices will “insult” the seller’s ego? I just don’t understand the selfishness of these 20-something buyers today. Don’t they want to finance their parents’ luxury retirement for the next 30 years (while themselves being reduced to Top Ramen & living like ascetic monks)?
So what’s with the small lots anyway. I thought it was the planners insisting on density & open space, like 50% common area it seems like here. But is it just developer greed? Sometimes I think small would be nice after the acre of friggin LAWN we have but then that just puts you closer to the cretins next door.
Sometimes I think small would be nice after the acre of friggin LAWN we have but then that just puts you closer to the cretins next door.
That’s always been the way I looked at it. Gimme space and lots of it or forget it. I don’t even want to see their house, much less into their bathroom window.
Hedges, my dear, hedges.
The criteria is simple: to be able to romp sans clothing in one’s yard without terrifying the neighbors….
I think across the country, lots size have remain the same or has gotten a little bit bigger. It is the size of the house that has gotten out of control. A lot of people here alluded to the fact that many houses are built very close to each other where windows are only feet apart. I live in a neighborhood where houses are 3000+ sqft sitting on a 7000 sqft lot with a detach garage the size of old houses (1000 sqft). As you can see, there aren’t much space left for backyard and front.
Cinch
JACINDA IS 26 YEARS OLD. A 440K price implies an annual income of at least 125K. She should be looking for an 800 sq.ft. rat trap she can clean up and make liveable.
If this very young person is even close to average in her expectations of what constitutes appropriate living conditions we are dead as a society.
It didn’t say whether or not she was married, but 1700 sft townhouse for a couple+kid doesn’t sound that unreasonable to me. What IS unreasonable to me is that a 1700 sft townhouse is going for $440k in a not-so-special Seattle suburb.
Agreed. A 1700sf condo sound ok for a family. Sad thing is, she is so naive she has no idea how much money $440k is for a young family. People are so insane when it comes to the desire to own homes.
Is this bothering anyone else? Where were all these REIC people who saw this coming last year or the year before? Seems like everyone saw it but kept quiet for fear of upsetting the suckers they were selling to. All instant experts after the fact. Lying bastards.
Moral of the story:
If you own a house that is unoccupied (and you are making the mortgage payments) you are toast.
I know of several people who own houses which are “investment” properties. They realize that things are becoming very dicey and they want to unload them. Market = bad. Getting worse.
Unfortunately, they have decided to pull the house off the market and wait.
Wait…for what?
Disaster.
I really believe that unless they get rid of these investment properties, they will get pulled underwater like a cement block around their ankles. As long as they are making their monthly payments + property taxes and not getting any income in the meantime, they are drowning.
Their albatross will ruin them financially and they will end up losing their primary home, as well.
It’s only going to get worse as time goes on. Wish I could convince them.
Wish I could convince them.’
My condolences, but an unlikely dream at best. Their Come to Jesus Moment must be their own - at best, in their world your advise was foolish in the past, is unwanted in the present and will be remembered with resentment in the future. Be prepared to help, but only if they ask for it. Otherwise, just smile and look happily pious.
“I know of several people who own houses which are “investment” properties. They realize that things are becoming very dicey and they want to unload them. Market = bad. Getting worse.
Unfortunately, they have decided to pull the house off the market and wait.
Wait…for what?”
This is $1 million question I’ve been waiting for someone to answer. Are they expecting the Bubble Fairy to descend from the skies and sprinkle “no-$ down/ARM” fairydust over their little slice of heaven if they just “wait” long enough?
If it’s a non-recourse state, maybe they’re just gonna wait a couple months and mail the keys in. They crap their credit rating, but if they already “own” their primary they have no reason to save it in the first place.
That depends on how they filled out their mortgage forms and whether the non recourse provision applies to second or investment property. I think a lot of fraud is going to surface with “occupied” mortgages being claimed for non occupied houses.
In the next block sits a property that was sold (after 8 months on the market) by a couple I’ve called Mr. Doom and Mrs. Gloom.
Remember them? Well, they’ve moved on to a happier life in a much hipper neighborhood than this one. Or so I’ve heard. They did carry two mortgages for almost a year, so I’ll have to get back to you on that “happier life” statement.
Anyhoo, their former property was split in two, and a cheapo house was put up behind the former Doom/Gloom residence. The whole kit and caboodle has been for rent since June.
Friends who live across the street tell me that people will come by, take a look at this place, then leave a few minutes later. Apparently, it’s not proving to be the tenant magnet that the investor/buyer thought it would be. We figure that he’s losing at least $2,000 a month.
“‘If we’re going to spend $400,000 for a house,’ she says, ‘we at least want a yard.’” — what’s funny is, she won’t be “spending” 400k on a house - she’ll be “spending” closer to $1M when it’s all said and done…
“In Issaquah, a Seattle suburb,”
Interesting, I guess it depends on what your definition of suburb is.
Seattle is still in the denial stage, but cracks are showing through. The builders in Snohomish county (just north of Seattle, and sharing in the RE boom, but at lower prices) know the wind has changed. My husband works in a shop that does mostly residential electrical wiring and 2 months ago they were going gangbusters as all the builders around here tried to get their spec homes completed to get them on the market while they have a chance to unload them, and now his shop has laid off half of their workers this week because it is so slow. He has worked there for about 15 years and they have never laid off workers; the few times things have slowed they give less hours until it picks up again but this time they know that the slowdown will be too long and severe too keep everyone on because there is very little coming down the pipeline.
Why is no one (not even CNN’s or CNBC’s sites) talking about how horrible today’s OFHEO (ofheo.gov) Q3 numbers were! 17/20 CA markets were pummled including an average of CA homes falling 8% YOY when you remove the bogus apprasails. See the OFHEO’s PDF doc for more details.
It may be that the purchase only index will tend to lag the all properties index for a while. It’s easier to accept a price decline on a re-fi than on a sale. When we did re-fi’s on our house we didn’t care much what the appraisal said. When it comes time to sell we won’t be quite so disinterested.
Don’t you just love the Montana news media, the Billings Gazette saying the sub-prime problems have hit Montana. But it has to be in some way were they don’t have to write anything bad about the local markets. Nothing about trusties sales, or builders going broke, land developers going into shock. Nothing. All the major papers in this state have done the cover-up story a couple of months ago, interview two mortgage brokers, both of them saying there no problem in our market. `
They then ask you to be a yokel and buy local, which is a good thing for most things except for local media.
Cinch
Denial runs real strong in Montana. A friend of a friend is has been trying to unload a bunch of lots for a year now with no success. Why doesn’t he lower the asking price? He has actually, but any further and the guy is bankrupt. Just a matter of time until it is official.
This guy made money hand over fist speculating on lots over the past 5 years, but kept leveraging up his winnings and now will have nothing to show it except a bad credit rating.
Actualy this story is what used to be called Afghanistaning. Back in the bad old days of Montana, when the Anaconda Company ran the state, the company had bought control of most of the major papers in the state, including the Billings Gazette and the Missoulian. They did this to shut them up. The rule was, you can print anything about Afghanistan, but you don’t dare publish anything critical about the company or Montana. So Montana had the lamest newspapers in the nation. Anaconda is long gone, the newspapers were sold 50 years. But old habits stay. The Montana news media is sill lame. The new “company” is Builders, realtors, and land developers and their trade groups.
Here in the Portland outskirts where I live, I’m seeing lots of new stuff hitting the market, as if folks were suddenly realizing that Portland MIGHT NOT be different, and they’d better lock in their gain if they’re going to. Unfortunately, I’m afraid their timing is late.
“At the start of the party, the punch is flowing and everything’s going well, but you know at midnight it’s all going to turn into pumpkins and mice,” he said. “People think they’ll be able to get out just before midnight, but everyone else thinks that too.”
Warren Buffet
“The Clarks’ had hoped to sell their Lincoln-area home in time to escape another cool Vancouver winter. They’re planning a move to the warm climate of Albuquerque, N.M.”
Is New Mexico warm in the winter?
I bought in Deming, NM and their snow falls at night. When the sun shines later in the day, it melts. The key is elevation, not latitude, to avoid cold winters. You can find snow even in Hawaii, I’ve seen it from the plane (no desire to touch or experience it when I’m there!).
Yes, New Mexico (Albuquerque) is warm in the winter. It feels biting cold today outside. It snowed on Thanksgiving night. A few flakes fell today. Last year, we had a 18 in snow storm that shut the whole city down for 2 weeks. So, there definitely is a winter here. But it is frequently sunny and warm (50 F) on many days during the winter. Occasional snowstorms. Can get a lot of wind. But mild compared to the midwest, and most other northern climes.
“Despite slowing Clark County home sales, the Clarks don’t plan to take their 2,000-square-foot house off the market. The retired couple say they’re prepared to hold out through the slump.”
Hold out for what? Even lower prices? Face it people, the insane prices (in relation to income) are not coming back in any of our lifetimes. The only way houses will ever go up in value (after the necessary price corrections are finished, which is at least 3 years out) is for a general significant increase in everyone’s incomes. That will not happen for a long time.
How long do the Clark’s expect to live?