In other words, has the greatest fool already bought?
Tell your stories here about friends/neighbors (or yourself) on the buying or selling side.
I can tell you I don't know a soul in this world who is actively thinking about or trying to buy a house. But I know plenty of folks thinking about or trying to sell
hmmmm....
January 24, 2006
Question for HP readers: Does anyone know anyone who's still out there trying to buy a house?
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30 comments:
There must be some buyers out there becuase houses are still selling for near-record prices.
A new condo project called New Port is being built in a hideous industrial area next to Tampa Bay. The developers had an open house the other day, and several people attending put down deposits. The condos (there are, I believe, five high rises planned) start at $700,000 ($500 a square foot). They will overlook a junky ship repair company and an industrial wasteland. I suspect the land is highly contaminated. It is in one of the worst white trash areas of Tampa. The advertisements make it look like paradise, and use the slogan "Where the city meets the bay," with pictures of dolphins, though the bay is actually on the other side of the ship repair company, and the only water by the future condos is a very tiny inlet marina.
The fools who buy in this horror have no idea of the traffic nightmare that they will produce, the polluted nature of the area, or the fact that everyone else in Tampa will be laughing at them for paying a fortune to live in a glorified trailer park. Only in Tampa can an industrial wasteland be marketed as a beauty spot, and only in Tampa would the politicians and city planners be so greedy and without conscience as to allow this to take place. I want to know where the EPA is in all of this. It obviously does absolutely nothing to protect the environment, but it should at least protect people from buying property in a dangerous area.
Tampa is always behind the rest of the country in everything, so it may be a while before the idiots here catch on that the bubble has burst. One would think people could see with their own eyes that a million dollar home in a slum is a slum home, but for some reason they cannot. The Emperor has no clothes, but nobody will say so.
A friend of a friend of mine is house hunting for a condo in SF. I hear reports of bidding wars and quick sales. I think the low end of the market is still hot because people think they can still squeeze in and they still have their heart set on buying something no matter what. If you're obsessed with buying, then it can still look like the market is in a frenzy. There are definitely still a lot of crazed buyers out there--and a lenient lender for each one...
SF is particularly deluded in its perception of itself as an important and major city in the world, but really it's simply a tiny little place with a lot of touristic charm. It would love to be somewhere up there with NYC or Paris, but it's not even close. It's such a pretentious place. As I said, deluded.
A very close acquaintance is in the process of closing on a condominium this week in San Jose as an "investment". She is getting a mortgage that is interest-only for five years, intends to rent it out and be the landlord.
I felt it was not my place to interfere, but felt that $450K+ for a non-free-standing condo seemed a little steep.
I assume you all agree?
We are looking to move from the Chicago suburbs to California this year. Our suburban house has sold for a bubble price to a speculator who has tried to turn it but it is laying on the market.
Any way we like the wine country north of San Francisco and the Central Coast. It is only recently that property in these areas have come off the "hot" list. In one case the price has dropped nearly 700,000 on a property that was first listed last March in Sonoma county for 1,900,000. When the market softens it is fascinating to see how humble the RE agents become!
Oh I know that many of you think of California as an overpriced armpit.... but come to the Chicago area which has super high real estate taxes and is in economic decline... and California looks like paradise!
We are looking to move from the Chicago suburbs to California this year. Our suburban house has sold for a bubble price to a speculator who has tried to turn it but it is laying on the market.
Any way we like the wine country north of San Francisco and the Central Coast. It is only recently that property in these areas have come off the "hot" list. In one case the price has dropped nearly 700,000 on a property that was first listed last March in Sonoma county for 1,900,000. When the market softens it is fascinating to see how humble the RE agents become!
Oh I know that many of you think of California as an overpriced armpit.... but come to the Chicago area which has super high real estate taxes and is in economic decline... and California looks like paradise!
We are looking to move from the Chicago suburbs to California this year. Our suburban house has sold for a bubble price to a speculator who has tried to turn it but it is laying on the market.
Any way we like the wine country north of San Francisco and the Central Coast. It is only recently that property in these areas have come off the "hot" list. In one case the price has dropped nearly 700,000 on a property that was first listed last March in Sonoma county for 1,900,000. When the market softens it is fascinating to see how humble the RE agents become!
Oh I know that many of you think of California as an overpriced armpit.... but come to the Chicago area which has super high real estate taxes and is in economic decline... and California looks like paradise!
Sorry for the multiple posts.... my computer ran aground in the blog edit mode.
I live in PA, in an older rural community right above the Maryland state line.
We are catching just the fringe of the Baltimore bubble up here.
A few overpriced,cheaply constructed $250,000 s**tboxes,on 50x75 lots,thrown up
in a couple weeks to attract the DC crowd who think its cheap way up here(probably is compared to DC) and worth the TWO HOUR ONE WAY commute thru freeway hell to downtown Washington.
A new place just went up down from us on a back dirt road,in "the sticks", 1600 sq
ft, barebones construction, with a 'water view' (LOL) of a tiny creek a thousand feet away you can only see in the wintertime.Small half acre lot,price $300,000.
Those of us who live on this road year round thought it would be for sale forever.
My place is a old 8000 sq ft monster,(NOT the biggest on our road I might ad) on a two acre lot, accessed this year at 100% for $132000, very high accessment for this area.
And we were going to appeal the assessment!!!
Suprise,suprise, it sold in under two weeks. Buyer is an out of state executive transferred to his companies' office somewhere between Baltimore and DC. Still a Hell of a drive!
The only person that would buy here for that amount would have to be WAY out of state!!
Now we don't know whether to ride it out, or ask the new neighbors if they have a friend who would like to make us millionares!!! We are still in shock.
I know of 2 people in my office who have bought up from their $600-700K homes in San Diego without selling their original homes first. Talk about crazy. One is a childless couple who bought a brand new 2500 sq.ft. home nearly 45 minutes from work (increased commute time by a half hour). They are now carrying 2 mortgages and can't drop the price on the first house because so much of the money is already planned for. Now, the only solution is to cash out the 401K or sell some stock.
Anon - Tuesday, January 24, 2006 8:16:56 AM
Hey, thanks for the SF troll! That one always gets them going on craigslist. Great to have folks like you around!
Anyway, I do know a few people looking to buy around SF. However, they are lowballing, so I'm not sure this really qualifies as "looking to buy" the way Keith means it.
I know of two properties near by apartment that have been sitting on the marke for a very long time. One is crappy and is asking 800K (and has rejected a lowball bid).
There's a nicer house that was just knocked down from 770K to 740K. It's also been on the market for as long as I can remember.
It'll take a while for sellers to get the message, but they will. These properties will sell, but only when the sellers are willing to drop the asking price.
My dad has been looking for lots of 10-40 acres for about a year now. I try to talk him out of it, but at least he knows the market is faultering. So if he does make an offer, he will low ball. (He's the kind of guy who always gets vehicles for less than dealer invoice.)
He has $700K equity in $800K house, and looking to spend $150K. I think he'll be okay.
I know a couple of people in Tempe/Phoenix currently selling their existing houses to buy bigger houses. I also know a couple of people who just refinanced to cash out equity gained by the bubble. So people are still buying but I do hear more people saying the word 'bubble' than a few months ago so at least those buying should be conscious of devaluation, I would think.
My neighbor is a mortgage broker who previously worked at Shoe Carnival. She has been arguing with me for months about how condos are super hot around here and it's impossible to lose. Well surprise surprise I ran into her on Friday and she is not really looking anymore, starting to believe that condos are overpriced. She may have just salvaged her rep with me!
Other friends of mine sold one unit of a shitty triplex for a $60k gain and immediately put that equity into a $250,000 4/2/3 tract home over an hour drive from their work. It's 45 miles on 4 lane urban roads with stoplights every 1/4 mile. Plus now they have no money to spend on anything else. The only saving grace that is keeping them from being FBs is the 20% downpayment they made. I fear that won't even be enough to save them in a downturn considering how far they are away from the main draw of this area (Tampa Bay).
Ahhhh...rest not. Those overpriced condos in downtown Tampa. It's certainly no paradise but I'm all for development of that area and if it screws over the idiots who are paying $500/sq ft for a condo overlooking a ship salvage yard, so be it. The real problem will probably be once those people foreclose and we'll not only have a downtown that is empty after dark, there will be housing down there that everyone has said they needed and wanted yet no one will buy it. Urban blight may be renewed.
I sold my house here on Long Island in the summer of 2005 for a bubblish price (a really good profit). Currently living with my boyfriend and just looking, not going to buy anytime soon. Currently, 4 of my friends are selling (total of 6 properties, varies from $550K to $1.5Mil, 3 primary residence, 3 flips), and only one couple is looking to buy around 2007... talk about equilibrium!!!
As for urban blight being renewed in Tampa, it never went away. Developers didn't buy hideous areas and knock them down, and then replace them with something beautiful; they built in the middle of the eyesores and waste, leaving everything hideous still standing. Tampa will never be anything but a filthy, trashy city run by the Mob, no matter how many greedy, tasteless New Yorkers move here and tell their friends back home that it's beautiful. It isn't. The terrible, potholed narrow streets, miserable traffic, tiny lots, ugly houses, horrible weather, outrageous property taxes (2 1/2 percent of the bubble sales price in the "nicer" neighborhoods), endless billboards, strip clubs and porno shops, ultra-high pollution, high mold-count, incredibly high venereal disease rates, and boggling illiteracy rate all combine to make this one of the ugliest, most uncomfortable, places on Earth.
The idiots who think Tampa is a major city (they used to promote it as "America's next great city") have obviously never lived lived in a real one. If it weren't for the football team, nobody would know the place existed. Ybor City, a slum district, is falsely portrayed as our version of the French Quarter. But, the French Quarter is wealthy, and Ybor City is poor and horrible, with absolutely nothing do there unless you're a boozing teenager enamored of tattoos.
People can deceive themselves till the end of time, but a dump is still a dump no matter how you spin it.
Here's an interesting headline from Florida Trend Magazine:
"REAL ESTATE: The Party's Over
'Flipping' will run its course this year as the face of Florida's real estate landscape changes."
To read the article, go to:
http://www.floridatrend.com/sptimes/?a=5718&s=2
I've read that the housing peak was June 2005, and that makes sense to me. I sold my house in Las Vegas within two days of putting it on the market and so many lookers that I parked down the street to stay out of the way as they lined up and took turns going through the house. It sold at full price and the prospective buyers were Polish investers, an Indian family, a retired couple, and neighbors in a townhome a few blocks away bought it. They closed on June 4th and I left Nevada and drove flush with cash to Missouri. I took my time (6 months) searching all around the area I moved to for the perfect home on acreage. I low-balled my offer, they refused. I didn't counter. One month later, after no lookers and no offers, they called my realtor and asked me to offer again. I did and they accepted. Many of the homes I originally looked at were already long on the market by June 2005, and still are. I noticed that winter photos from 2004 were being updated to summer photos in 2005, and have now reverted to winter pictures as the homes get relisted to try and look fresh, often with new pics of the homes from different angles to fool those who keep aware..and often new realty companies representing them. The ones that sold dropped prices (not high here anyway). Some of those who refuse to lower prices date back to Jan. 2004 and other months in 2004 for their first listings and have still not sold. I found the place for me on 4.3 acres,custom brick 2355 sq. ft. architecturally detailed home for half the price of my Las Vegas home and far better built. I paid cash for it. Was it the right thing to do? It was for me. I have and had no debt (other than the mortgage on the LV house before June 05)anyway and that six months with no house and living in a studio with all my household in storage depressed me. Sean was right, the buyers are moving to inexpensive parts of the country to purchase homes and convert that bubble equity into better homes, or free & clear. Missouri, fyi, is gorgeous, nice people, sophisticated in the larger towns (I'm north of Springfield), and the weather is fairly moderate (the first three weeks of December were frozen hell, but since then....SPRING!). It all depends on what your priorities, situation, current location and market conditions are. I have kept up on Las Vegas out of curiosity and the number of homes for sale as exploded since June, and the DOM has gone to 60-90 days average with prices declining. I even told the buyers of my house who asked me why I was selling why I was selling..I told them this bubble will burst. They didn't believe it. It sure looks like it is to me.
My little sister and her husband bought a house in San Diego for $700K in June 05. Before this, my mom and I were pleading with them not to jump in and to wait a little while. I've lived through the SD RE slum of the early 90's so I know what it could be like. They went ahead a purchase one anyway and told us after the fact. I tried to be happy for her to show support, but I have a gnawing feeling that they're going to lose at least $100K when this is over. I guess one must make one own mistakes. They will most likely be okay since they both make decent money, but they could have saved so much by waiting a little. Sad....
NV->MO anonymous: Wow, that is an amazing story. I need to start a RE Eagle list, and you'd be one of them. I am surprised you were completely candid with the buyers. I only told my buyers that I wanted to move to another town.
Congratulations on the free and clear property. I'll take my proceeds and do the same in a few years. I'm tied to my job now plus I'm going to be patient for significant declines.
Update: My dad just looked at a vacant lot, and luckily he didn't like it. It usually takes him two months to find something that he even wants to scope out. Hopefully he'll see real market movement and be much more cautious.
Anon: "Missouri, fyi, is gorgeous, nice people, sophisticated in the larger towns (I'm north of Springfield), and the weather is fairly moderate (the first three weeks of December were frozen hell, but since then....SPRING!)"
Please don't post positive plugs for Missouri RE on here. Us native Missourians like to keep that a well kept secret and the last thing int he world we want are a bunch of coastal junkies and yuppies bringing their urban lifestyles to our beautiful, rural state.....SHHHHH
Re: anonymous
(Tuesday, January 24, 2006 10:09:20 PM)
Congrats!
I also did the same thing. Part luck, part careful strategy. Sold a flimsy tract house on .15 acre in SF Bay area. Moved to Connecticut. Old farmhouse with tons of "character"(weekend projects) on .5 acre. Yes, there are some trade-offs to such a move, but overall we're better off (education in CT is ranked 2nd, education in CA is ranked 46th). You're right about the stresses of moving. It's not easy.
It was a big advantage to sell the house in one day, with multiple offers, and over the asking price.
A cousin of mine lives in Tampa - she a chain smoking, marginally employed, budweiser and nascar type of woman - but she loves it! Told me that Tampa suits her just fine :-)
Anonymous said...
"A cousin of mine lives in Tampa - she a chain smoking, marginally employed, budweiser and nascar type of woman - but she loves it! Told me that Tampa suits her just fine :-)"
You mean our Mayor? Or the Queen of Gasparilla? Either way, your talking Tampa High Society.
I live in Porltand, OR, and the market is still hot here. While growth in appreciation has leveled out month to month, the year over year numbers are still in the 20% range.
My sister and her Husband just moved here to get the hell off the East Coast and they are looking for a house to buy. We have so many people like my sister moving to Portland for the lifestyle. All of the inner city neighborhoods are seeing some pretty steep appreciations. I live close to Downtown so I don't know what is going on our inthe suburbs excspt from what my coworkers tell me. Still hot in the burbs too apparently.
Also Califronians are flocking here, cashing out in SF and LA and buying properties outright and sometimes even putting cash in their pockets. Job growth isn't that hot here, but the California wealth effect and the migration to Portland from other parts of the country seem to be keeping the market going up.
Portland was late to the game and given that people were moving here three years ago without jobs even when there were unemplyed people everywhere, I think the draw of Portland proper may be enough for Porltand to buck the current downward trend. Only time will tell.
"A cousin of mine lives in Tampa - she a chain smoking, marginally employed, budweiser and nascar type of woman - but she loves it! Told me that Tampa suits her just fine :-)"
You are describing the 2/3 of the 1/3 of Tampa that is white.
Portland, OR: That sounds just like Miami. I mean people want to move to Miami even without jobs and pay ridiculous prices for house. There can't be a slowdown in Miami either I suppose. Get over the denial phase. Portland isn't that great - been there, done that. Many Californians are stupid, so as long as they stay on the west coast that will suit me fine. They will fuck up Portland next, just give it time.
I know some people in Northridge Ca who bought a dumpy ranch style home on a large lot for $700K about 1.5 years ago.. a really high price at the time. You remember Northridge...the place that turned into a wasteland for 5 years back in 1992 thanks to an earthquake? Well.. these "entrepeneurs" threw a little paint on the walls, added a room, pulled a boatload out in refi money (to help pay the mortgage, you see) and stuck it on the market for 1.4 Mill. That was 8 months ago. Seeing as it didn't sell, they decided to file a bogus insurance claim for some damage that came with the house when the bought it. Somehow, the insurance company paid out and they managed to remodel the kitchen and pocket $25K to boot, but they really needed that money to help pay the mortgage. Anyhow, there they sit still... no buyers. They dropped the price to 1.2 and now they are really sweating it out as it would appear they were not just a greater fool.. they were probably the greatEST fool to ever buy in Northridge. As I sit here in my house in an equally price part of So-Cal, one that I bought in 1999 with 30% down, which I refid in 2004 (no equity pull, just lower the rates) with a 20 year loan that I have faithfully accellerated payments on and will pay off within 12 years and carry a full monthly nut LESS than what it costs to rent an apartment in this town, I know that Im good for the long haul no matter WHAT happens to the RE market.. the rest of these aholes who buy beyond their means? You all deserve it.
Hey how are you doing? just letting you know that someone from Central America read your blog!
Regards,
Charles
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