June 23, 2006

What a housing bubble burst sounds like: "The market isn't soft. It isn't even slow. It's dead."


Pop. It's over. Ding dong, the housing bubble is dead. Even David Lereah can't lie his way out of this one. Now comes the panic. Thanks 200 mbps for the link. From New York:

It's over.

The crazed phase of frenetic home buying in Westchester, Rockland and Putnam counties has screeched to a halt — leaving some industry experts wondering if the sound they hear now is the housing bubble bursting.

"The market isn't soft. It isn't even slow. It's dead," said Liz Rosenblatt, an agent with Fuerst & Fuerst Inc., a real estate firm in New Hempstead.

Scott Stiefvater, a broker-owner at Stiefvater Real Estate Inc. in Pelham, said prospective homeowners are still looking at properties. "They just aren't buying," he said. "I'm getting a little worried."

After nearly seven years of unprecedented strength, the housing market has taken an unexpectedly steep slide, real estate professionals throughout the Lower Hudson Valley concur. It's gone from multiple offers for more than asking price just hours after properties were listed for sale to no offers at all, even after price reductions.

At least some homeowners, however, are panicking. Worried that increased supply will lead to rapid price deceleration, they are rushing to put their homes up for sale. Some of them think the market will only get worse, real estate agents said.

50 comments:

Anonymous said...

I think many will be amazed at how far and how fast home prices drop now that panic is setting in

Boomer/bubblesitter/renter/whoissoscrewed said...

Something else that is Dead:
The Governmnet Home Owners Insurance Company called Citizens, in Florida, is out of money and all Home Owner Insurance companies have left the state. All Florida Home Owners are going to be hit with a hugh assessment by the State Government to re build the 1.5 billion dollar Home owners Insurance reserve that is GONE....Zero....Nada.

Another nail in the 125% of value/ ARM/HELOC coffins.

Anonymous said...

Market is already being flooded in Southern Nassau County. When panic fully sets in, nobody will be able to sell a thing.

Anonymous said...

FU*K this is getting really ugly really fast

I smell panic!

Mamboni said...

At the end of 2003, I sold my 5 BRB colonial on the north shore of LI, NY and bailed out of upscale suburbia. I was thrilled with the price paid by the buyer, though I couldn't believe that my home could be worth that many dollars and someone was willing to pay it, let alone afford it.

I am a professional and was earning double six figures - yet we couldn't save much and had to live modestly, though my mortgage was smallish (~$175K) at 7.5% from our purchase of the home in 1990. You see, LI NY is a very expensve place to live: high property taxes, very high utilitiy rates, high sales taxes, high home owners insurance, taxes, taxes, taxes. In 2003, my wife and I sat down and itemized our monthly budget: $10,000 per month just to cover the basics (including food, gas and dry cleaing - also more expensive)!!!! You can't believe it until you add it up yourself. Sure, you're paying for teachers driving Lexuses, county cops starting at $100K and location location location.

So, for me, the kitchen was too hot, and I capitulated and left LI to live in a more affordable and less crowded locale. Well, after I left, the prices of homes kept rising at 20% per annum. All I can say is if it was barely affordable in 2003 (if you earn $200K-plus) then it is most certainly unaffordable today, unless you earn $300K-plus, which applies to maybe 1% of the working public. On top of that, I had watched my LI neighborhood go from bucolic and quaint (circa 1990) to crowded, noisy, and Queens-NY-like (circa 2003)in a matter of a few years, as all the yuppies and X-generationers started building McMansions on postage stamp-sized properties for $1M-plus with property taxes of $15-25K.

The pricing structure and cost-of-ownership paradigm in LI NY is an illustration of utter complete madness - totally overpriced - and unsustainable. LI RE is going to crash, big time. It needs to come down 40% to be of any assemblance of reasonable value, IMHO.

veritas_faust said...

Maybe a bubble popping is the same sound as one hand clapping.

Or...

Maybe its the sound of sheer terror when people realize they weren't investing when they got those No Doc, No Down, Voodoo Loan products; they were gambling.

Sometimes when you gamble you lose a hand.

Seems like these fools went "all in" on a bad bet. It must suck to be them.

brokersleaveyoubroke said...

mamboni

I left Nassau county (Garden City) 40 years ago and at that time I didn't think there was one building lot left in the county. And traffic was horrible even back then. I can't see why anybody would pay anything, much less a premium, to live there. Good move on your part.

Anonymous said...

Oooh! Oooh!

It's going to be time to start buying pretty soon.

Anybody want to own a paid-off house?

Soon you will be able to obtain financial security with a free and clear home.

Anonymous said...

It is starting to smell like the 2000 Dot Bomb crash all over again, I really hope all these stupid idiots who used arms, IO, no docs, and neg ams don't cause our economy to go into full depression.

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