"Starting to look"?
Man, if it looks like a duck, it quacks like a duck...
Classic Ponzi Scheme, classic asset bubble. And a textbook boom and bust. Nice to see the MSM catch up, albeit a year later...
Selling a new home is getting harder and harder: Just ask the builders who are being forced these days to entice potential buyers with expensive inducements such as free swimming pools and fancy kitchen cabinets.
At the same time, the torrid pace in the existing-home market is slackening, as prices are leveling off and properties are staying on the market a lot longer than they used to.
Adding it all together, a variety of experts now say, the housing industry appears to be moving from a boom to something that is starting to look a lot like a bust.
The latest housing data, released Tuesday by the National Association of Realtors, made clear that a significant slowdown is under way.
July 26, 2006
NY Times uses the "B-word" - "The housing industry appears to be moving from a boom to something that is starting to look a lot like a bust"
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MSM is talking about a housing bubble busting but they are not talking the full extent or telling what the real causes are.
And they are NOT talking about the upcoming recession which will be magnified by the housing bust.
Things have slowed down, but house are selling where I am at. They will hopefully just return to pre-boom levels. Stop buying all that crap with all the "FREE" money people have taken out of your house. Add in higher energy costs, federal spending and a never ending war, yes I say there are going to be problems.
What's the current number of unsold homes? A record I beleive. Something like 3.5 MILLION.
Ka-BOOM.
I'm starting to look but wont buy till it hurts to let go of my hard come cabbage.
Don't forget the fraud. I heard of a recent case in Toronto, where a homeowner rented her house to tenant who subsequently "sold" it while posing as the owner. The "buyer" took out a massive mortgage, the "owner" signed the papers and then the two of them vanished with the money. The real owner only became aware of the scam after the bank initiated foreclosure proceedings. The case went to court and the judge ruled that even though the mortagage was fraudulently obtained it was still a valid mortgage. The real owner was responsible for it.
Debt and lack of discipline. The REIC women and female FBs and maybe even married female FBs may get looser with the goodies as this unfolds. Heckova good trend for single guys like me.
From a very informative stock message board I lurk on.
http://tinyurl.com/nfko3
"It first came up when the first girl was complaining about her (legitimate) job. Was thinking aloud, there has got to be a way to make money quicker with less work. She said jokingly maybe she could become a prostitute. Well she didn't become an all out whore, but she did end up selling sexual images for money.
The second girl, I had no idea until I told her the story of the first girl. I said isn't that crazy... and then it turns out that she too has even gone to an agency to consider selling images for money."
I call shenanigans on that Toronto mortgage fraud urban legend.
Have a relative in the Phoenix area who bought a house without selling the first one. He thinks that he got a decent deal on the second one, but now can't sell the first at peak prices. He has half-woken up and dropped the price some, but it is nowhere near enough. And the longer he waits, the worse the outcome will be.
Honestly, I live in the Phoenix suburbs, I live in a tract house, and I like it here. But a tract house (even a big one) on an 8,000 square foot lot in a crowded Peoria, Arizona subdivision is not worth $600K. Nor $500K. Nor $400K. It might sell in that range, but not at the top of it. I would not pay more than $300K, assuming that I had sufficient reserves for utility costs.
Last paragraph in story about rents going up. . .
This may be the case at the bottom of the market, but the mid-market may see a decline. . .the reason? All those condos and spec houses are being rented because people can't face up and take the loss. . .half of my building here in SD is rented because owners keep "waiting for the market to improve.". . .yea, and in the meantime, they loose between $500 and $1500 a month, depending on their loans and what they can get for rent. There are thousands of mid-range condos for rent around here. . . it is the low end where the shortage is.
Bull****. No title company is going to sign off on a property without positively identifying the seller as the legal holder of the property. There is mortgage fraud out there, but this is a "friend of a friend" urban legend.
Don't forget the fraud. I heard of a recent case in Toronto, where a homeowner rented her house to tenant who subsequently "sold" it while posing as the owner. The "buyer" took out a massive mortgage, the "owner" signed the papers and then the two of them vanished with the money. The real owner only became aware of the scam after the bank initiated foreclosure proceedings. The case went to court and the judge ruled that even though the mortagage was fraudulently obtained it was still a valid mortgage. The real owner was responsible for it.
"Don't forget the fraud. I heard of a recent case in Toronto, where a homeowner rented her house to tenant who subsequently "sold" it while posing as the owner. The "buyer" took out a massive mortgage, the "owner" signed the papers and then the two of them vanished with the money. The real owner only became aware of the scam after the bank initiated foreclosure proceedings. The case went to court and the judge ruled that even though the mortagage was fraudulently obtained it was still a valid mortgage. The real owner was responsible for it."
???? Canadian Court? Remind me not to buy a house in Canada.
The question isn't how many unsold homes it is how may vacant or foreclosed homes. Most of those that don't sell will never make it to the market place in a bust as the people will stay put. Those who are over extended will be foreclosed and some one will buy at a discount and turn into a rental just like in every other housing cycle.
Texas appears in a mini-boom due to the high price of oil and people moving here to escape the higher prices in bubble areas. Texas isn't immune and is a big state and like every where, location means a lot. You can have a boom going on in Austin while thirty miles away a town like Taylor can be in a virtual depression (has been for years). It is about jobs.
Interest rates are still below historic norms. The Economist just released a list of the most expensive cities and NY city was way down the list and that is one of our most expensive cities.
I understand the dicotomy in the USA, those who are prospering quite well and those who are just getting by and the fact that banks are lending to those at the bottom which is against all common sense but I guess you need to keep them in debt so they'll take any job at any price just to remain behind in all their payments and borrow to make ends meet.
In the medical field in Phoenix our wages increase 110% in ten years. Radiology, Nursing, Respiratory therapy, other sub-specialties, saw substantial increases in pay after seeing declines in the late 80s and early 90s which also drove many health care professionals out of Arizona. And the wages we got in Arizona are higher than some areas of California, but not all. My best friend who is a Cat Scan tech in Monterey earns $110,000 a year working 40 hours a week and pulling call one weekend a month.
The only people I know that seem to hurt are those without an education. Most of the dual income families I know make a minimun of $80,000 a year and that is if they don't have any specialized training. The nurses I work with all have husbands or wives that are also professionals, engineers, doctors, respiratory therapists, lawyers, so all make over $200,000 a year. And some of the other Doctors I work with in specialties like Interventional Radiology or Cardiology earn over $500,000 up to $1,000,000 a year. One of the cardiologists I worked with was building a 20,000 sq ft house and paid cash. His wife is also a Radiologist.
The point is there are a lot of people out there making a lot of money and not living above their means. Doesn't matter that I may feel that $500,000 or a million is ridiculous to pay for housing, a lot of my friends buy them and pay cash for them or if they don't, they put a couple hundred thousand down and pay extra each month with the goal of paying them off in 7 years.
Only a handful of all the people I know or have ever worked with live beyond their means. Some do make six figures and live from pay check to pay check and they will suffer no matter if there is house bubble or not as eventually you'll get so deep in debt you'll never get ahead no matter how much you make.
Live with in your means.
Get an education that offers you a job that pays.
Buy a house less than you can afford.
Live on one income if you have two.
Pay your house off as quickly as you can, that goes for other financed buys like a pool or car, though better save and pay cash.
If you live some where you can't afford to live like you wish, move some where you can.
"Only a handful of all the people I know or have ever worked with live beyond their means. Some do make six figures and live from pay check to pay check and they will suffer no matter if there is house bubble or not as eventually you'll get so deep in debt you'll never get ahead no matter how much you make."
These days I meet hardly anybody who lives within their means.
New home sales fall more than expected in June 20 minutes ago
Sales of new U.S. homes fell more than expected in June to a seasonally adjusted annual 1.131 million rate and the median home price fell for the second month in a row the government reported on Thursday, as the U.S. housing market showed more signs of cooling.
The 3 percent drop in new home sales was the first decline since February, the Commerce Department said. Compared with a year earlier, new home sales were down 11.1 percent.
Analysts polled by Reuters were expecting new home sales to cool to a 1.160 million annual rate.
Median selling prices dipped to $231,300, but was still above the $226,100 median price in June 2005.
In a further sign of a cooling housing market, the number of homes available at the current sales rate rose to a 6.1 months' supply, the highest level since March. There were 566,000 new homes for sale at the end of the month, a record high.
Regionally, home sales tumbled 11.3 percent in the volatile Northeastern housing market to 55,000, the slowest pace since July 2004. New home sales slipped 6 percent in the South and 7.9 percent in the Midwest, but they rose 8.2 percent in the West.
>>> Only a handful of all the people I know or have ever worked with live beyond their means. Some
An interesting sociological observation in the book "Bell Curve" is that most people only socialize with people similar to them. This causes groupings which mean you work with similar people, (same income range, education range required for the job, similar grade of school, etc.), you live in a similar neighborhood (income range due to housing prices), kids play with kids at school with similar parents, shop in stores nearby, etc.
I have this up here where I live in the Seattle area. I live in an "upper middle class" area where everyone I know both husband and wife are professionals, even if some are doing the stay at home mom thing for now.
Blogs like this give me a view outside of my bubble...
Anonymous again calling me a faggot. Want to suck my pay check? First, I never said I as a Doctor, I said I was a medical Professional, and no, not a nurse. A lot of people in other responses have bantered on if I am a Doctor. While in Phoenix I was the Director of Radiology for two hospitals so was in Administration. I am retired AF (though as I've posted I turned down a pension on moral grounds as I don't need the money and can't stand taxpayers supporting me) and while in the USAF I was initially a Radiologic Technologist and then went into Aircraft Maintenance where I worked with the F-16 and F117 fighter programs. I've lived in Asia, Europe, Florida, California (born), Arizona, Texas, Nevada. I worked at the Nevada Test site (area 51) have a degree in Religion, Aircraft engineering, liberal arts, and Radiology. I am working on a Masters in Health Administraton and am on a year Sabbatical while I do that from my career and can afford to own a home and live without working.
What does it matter what my career is? There were quite a few of our medical staff that made much more than some of our Directors or Managers and a few even came close to matching our CEOs income because they were hourly employees instead of salaried and so were paid for the 60 hours a week they worked.
Every nurse I worked with made between $85-120,000 depending on how long they worked for us, if the were ICU nurses, and overtime. Our nurses worked three 12 hours shifts so anything over that was over time and most worked five days a week. Some of our nurse supervisors earned $1,000 a day for their work. Agency nurses easily made $40-50 an hour. In my department my lowest paid Rad Tech made $26.50 an hour. Our Ultrasound techs all earned over $100,000 a year without overtime. A lot of our nurses had husbands that also were nurses so you can see that most of the individuals in our hospital except housekeeping and dietary or nursing assistants made good money. Even our CNAs earned $15 an hour with benefits and more if they had insurance from their spouse and took pay in lieu of benefits.
Most of my non-medical friends are military retired and DO draw their pensions on top of their salaries from their new jobs and their spouses work. Most of my buddies earn between $54-65,000 with their jobs without including their pensions ($1200-1800 a month) and their wives are school teachers or work in the legal field. The point is that there are a lot of people like them in Phoenix and we all bought our homes a long time ago. Most in 1982 and I'm the only one who sold and they've kept them as rentals, so add that income to their earnings.
Anonymous get a life and an education if you don't make enough to buy a house and pay your bills or start a business as some of my friends own auto body shops and such and are millionaires and make us medical folk look poor and the Doctors I worked with 'cept the newbies were all millionaires. Cardiology and Radiology doctors make big bucks but work 16 hour days and perform a lot of procedures and earn every penny compared to what, a baseball player making a million per ball toss?
Most the people I know are from late 30s to early 60s and all of them are doing quite well thank you very much. I am amazed at the number of friends and coworkers that were in their late 30s and early 40s that had already paid off their homes, cars, no credit card debt and had lots of investments in stocks etc. since most of my earning power came after I left the Air force so that impressed me.
Young people today have lots of opportunities in Medicine, law, engineering, technology and if they spend and invest wisely can easily retire at 50. My nephew in SJ is 28 and earns almost 100,000 a year working in the high tech industry there. His wife works as well and I sure would loved to have earned that kind of money at his age. His parent's helped him buy a house, which it seems is one of the ways most Californians can afford to buy is through the wealth of their parents. California made a lot of millionaires of very ordinary blue collar families. Even if my parent's paid for Los Gatos home were to go down 80% in value they'd still have at least a mil just from their 50 years of investing and saving and having bought a house in 1962 and having that "fixed" mortgage of $116PITI payment as their incomes went up so they could save the difference instead and that was on top of raising three families! My Mom raised my dad's seven brothers (orphans) then here four, then six grandchildren (drug addict sister) and still were able to save money.
So anonymous be less of a victim and get rid of that victim mentality and make something of your life. America offers so many opportunities to those who work hard, get an education and invest. One of our nurses came from Nigeria and within 10 years of being here was a millionaire. She worked 60-70 hours a week while her husband finished his engineering degree, they bought a house and then rented it out and bought another until they owned 10 houses (all pre-bubble in Phoenix) and sold 1/2 of them in 2005 and paid off all the others. So many examples like her.
So get over your obession with who I am and what I do for a living and wether I'm a faggot or not. I'd rather be a fag than a bigot.
September we going crashing down, crashing down.
Like AOL says-
Goodbye
Consumer activist and gadfly Clark Howard claims that 1 in 4 American families are late on at least one payment every month. I tend to think that the average Joe or Jane is walking a financial tightrope these days and it wouldn't take much to push them into default.
Don't mind the male nurse thing ... when he's cut off his hand in a stupid accident as he is sure to do, he'll be asking for any help he can get male or female.
What with doctors being so stupid these days, when I cut my hand really bad and when I sprained my wrist, it was the nurses who helped me, not the doctors.
Doctors are mostly primadonnas who don't give a rats ass these days.
"Consumer activist and gadfly Clark Howard claims that 1 in 4 American families are late on at least one payment every month. I tend to think that the average Joe or Jane is walking a financial tightrope these days and it wouldn't take much to push them into default."
Near as I can tell about 50% of Americans are living paycheck to paycheck.
Foxwood,
Great advice and comments recently. Keep up the good work.
Damn, I am really poor here.
Let's see, I have a hard science PhD from a top research university, Ivy undergraduate degree. Current salary, @ 38 years old? $0. Involuntarily unemployed since March; highest salary ever $65k. Few obvious prospects besides teaching piecework at $2000 per *semester*, and that's a stretch since I am a researcher and have no teaching experience.
Wife graduated from "near-ivy" east coast university, and she works hard for $15k/y.
yes, I did save, no debt except mortgage (30 year fixed at 5.25%! yahoo!, San Diego house bought in 2000, plus investments that did well in 1998-2000.
"Let's see, I have a hard science PhD from a top research university, Ivy undergraduate degree. Current salary, @ 38 years old? $0. Involuntarily unemployed since March"
You didn't know that the whole 1989 claim of a shortage of scientists and engineers was a myth generated by the universities/NSF complex trying to pander the govt for money and create a cheap labor pool of postdocs?
Also, didn't your ivy undergrad classmates point you towards medicine, law, finance, or consulting. I know that a quarter of Columbia College grads [all majors] attend law school (with a 1/5 of that cohort attending either Columbia or NYU Law) and perhaps 1/3 the CC science students apply for medical school. Also, if you didn't have the MCAT scores, pharmacy school was the other health care option to having a good life if you're not into the whole PA, PT, or nursing angle. The problem is that the idealistic side of you believed that society values scientists and I'm sure some graduate advisor led you down the faux path. I know that at Harvard, a number of science graduate students partake in the finance clubs and Goldman Sach campus gatherings to get finance quant jobs outside of the dead end world of R&D. What's your story? What's kept you in the fold?
Also, didn't your ivy undergrad classmates point you towards medicine, law, finance, or consulting.
Nobody pointed anybody to anybody. At that time I thought science would be a nice stable career at 1/2 their salary, and 1/10th of their bullshit, and I could deal with that.
You didn't know that the whole 1989 claim of a shortage of scientists and engineers was a myth generated by the universities/NSF complex trying to pander the govt for money and create a cheap labor pool of postdocs?
tell me about it.
I graduated from college in '89 and that was plastered all over. The impending massive retirement of all the Apollo era professors, yadda yadda yadda.
yeah, I'm looking into computational finance. It's damn hard to get into from the outside, now. (15 years ago, it would have been great.) It's my only hope.
"I graduated from college in '89 and that was plastered all over. The impending massive retirement of all the Apollo era professors, yadda yadda yadda."
I will never, ever forgive the lie because it's ruined many, many lives.
For example, I have a friend in chemical engineering who's in therapy today because of his horrendous grad school and industry experiences where he really believed that he was making a difference but was fooled into giving up patents, rights to research, etc. I told him numerous times to get the MD/PhD and breakout into a well paying clinical position but he didn't listen. He thought that his advisors were demi-gods and knew what was right in the world.
"yeah, I'm looking into computational finance. It's damn hard to get into from the outside, now."
Well, IT is the only backdoor in for those who didn't get recruited through those Harvard/Goldman internship programs during grad school. It's a real clubhouse and they don't like outsiders. In other words, you could possibly get some experience, programming triggers for trading systems, as a contractor, or even as a part-time volunteer for a consulting firm. Good luck.
Clark Howard is a fascist
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