October 25, 2006

HousingPanic Stupid Question of the Day


What are your friends and neighbors saying about your local housing market now?

54 comments:

Anonymous said...

?

J said...

"values here won't go down, that's only happening elsewhere"

Meanwhile every block has at least one or more for sale signs on it as we head into the cold North Eastern winter slow season... tick, tock, tick, tock..

Stuck in So Pa said...

Not a clue, or how its callopse will affect everyone.
One bright note, kid at work came up and thanked me for talking him and his new wife out of buying in 05, down in a suburb of Baltimore of all places. They still rent. He asked:"I guess you feel vindicated ?" That was kinda nice!

David in JAX said...

My friends and family don't really talk about the housing market. If they do, they know that it's a disaster in our area. They don't care because they bought their houses pre-run up and aren't interested in buying or selling. They do laugh about idiotic condo developments though.

My neighbors are another story. I sold my house at the peak and rent a condo from a seriously FB. He bought eight condos in our complex and is seriously negative cash flow. He can't sell the condos because nobody will buy them. Most of my neighbors are buyers who think they will sell their condos for huge profits in two or three years. When I talk to them they are rosey about how "condo rich" they are. When I bring up the fact that several have been for sale for over a year for less than what they payed they always come back with "well, that's a two bedroom flat and I have a two bedroom townhouse," or "well, that's a two bedroom townhouse and I have a two bedroom flat." They are absolutely clueless. But, what do you expect from a condo buyer in 2005.

SeattleMoose said...

Seattle is a mixed bag right now. In the nicer "close-in" areas things are still moving (sold signs still slapped across For Sale signs).

But in the outer areas and less desireable areas you can see houses sit and sit. There are even a good number of "price reduced" places becoming more frequent.

The local media/RE industry are spinning very hard against the "bubble talk".

azfamdeals1 said...

Friends in North Scottsdale just removed home from MLS after no sale and 3 price reductions(appx 100K) in six months.
Say they will re-list after about 60 days at pre-reduction selling price!
Meanwhile their plans to move out of state is delayed indefinetely while creating family and employment chaos because they believe their home is "worth" what they list it for not what a buyer is willing to pay.
They strongly believe the market will get "much better" in the Phoenix metro area by 2007.

Anonymous said...

A colleague of mine bought a $750,000 house in March this year and listed their old home for $580,000. They reduced the price 5 times down to $480,000. Just received their first offer since March (!) for $420,000 but didn't accept it. They're going to "wait for a better offer"!! They currently have over $1,000,000 in loans costing over $7,000 a month.

kilobar said...

I have a friend in Denver that listed his loft about 6 months ago at $550k. He got an offer for $525k and turned it down. Since then, he's reduced his asking price twice and is now at $515k and hoping for $500k. Oops!

Long Island Real Case said...

Long Island

I bought in Mid-August with an "non-contingent" offer 15% off final listed price ($150k savings), and 35% from original listed amount(February)

Then I tried to sell old one, 4 price reductions: -5% (after 2 weeks), -5% (1 month after), -8% (1 month after)

Just closed sale at final listed price, 17% net reduction from original listed, -$70k, 100 days in market.

Note all comps in neighborhood still sitting there (6 months min), still listing at levels 15% higher than my closing.

Cost of carrying multiple mortgages (2 months) $7,000/month

Go figure whether is worth waiting it out through winter...

Anonymous said...

Dave in Jax...I moved to Jax about a year ago, it's amazing the amount of condo and apartment conversions going on in this town. The prices are South Florida prices. I find it very hard to believe there are enough people in Jax able to pay $350,000 for a 1 bedroom. I work with one local redneck, he and his fiancee ( a realt-&#-or ) have been talking all about buying pre-construction condos and homes to resell after completion. Clueless.

Anonymous said...

It is funny to hear the retired people saying, "This place is different". They probably paid 20k for their home years ago, but now it make sense that their run down ranch is worth half a million dollars? They think that buyers are just waiting in line to buy. I guess they don't the true market conditions at the Early Bird special tables.

Anonymous said...

Anonymous said...
A colleague of mine bought a $750,000 house in March this year and listed their old home for $580,000. They reduced the price 5 times down to $480,000. Just received their first offer since March (!) for $420,000 but didn't accept it. They're going to "wait for a better offer"!! They currently have over $1,000,000 in loans costing over $7,000 a month.

Wednesday, October 25, 2006 3:21:20 PM
-------------------

W/o giving away too much specifics, can you tell us what they do for a living?

Anonymous said...

Just moved from DC to Virginia where we rent. Met a few of my new neighbors who asked if we bought. Upon saying, "No, we rent," I felt the typical look down the nose that is typical. Thereafter, the neighbors proceeded to tell us that we should buy and that it was a "buyer's market." I told them that even though I make six figures, I simply could not afford the place at current prices. After a few hours, and realizing that we were nice people, they began telling us not to buy, that the market was dropping and that many of their friends were really worried about what was going to happen.

Anonymous said...

I live in Northern VA, and am 25. Currently I rent, but other people my age are looking to buy. They seem to think there are great deals out there for townhomes. 425K -$475k for a townhouse 30 miles out is not a "good deal". I keep trying to tell people to wait and save money renting, but no one listens. Everyone seems to forget that just 2-3 years ago, 600k-700k houses were going in the 300k's...

I have always been under the impression that no more than 30% of your income should go to your mortgage. Or your should only buy a house 3.5 times your combined annual earnings. AKA no one my age can "buy" a house here.

All the homeowners seem to think this is just a blip and things will pick up in the spring. I think they are all in for a big shocker.

David said...

Keith,

Are those pictures of trolls?

Salt Lake Mortgage Guy said...

Salt Lake City and all of Northern Utah enjoyed a great 3rd quarter for housing. Contrary to the Moody's report that said SLC would be down 3%, it ended up 23%.

There are some houses that are sitting, but DOM actually decreased in the quarter.

A home I looked at buying in April for $330k, was fixed up by an investor and just sold for $594k.

Sorry to "rain on your parade" of gloom and doom.

David in JAX said...

Dave in Jax...I moved to Jax about a year ago, it's amazing the amount of condo and apartment conversions going on in this town.....

A lot of them are starting to go back to apartments now. Two condo developments that we looked at that were converting in December are already back to apartments. The asking price for the POS's was over $300k. Your also right about the prices / salaries here. It's the blue collar city of Florida and salaries here are low. The average family of four here makes less than $40k, but the average home sales price is about $240k, and that buys you a 1400 sqaure foot concrete block crack house, of which there are thousand here.

Also, you should get a handle for the blog.

Patch Tuesday said...

I don't have any friends; they're all pissed off that I'm a Bubblehead, that's responsible for their declining home prices...

Metroplexual said...

My neighbor works for Realogy (formerly Cendant) he is just spouting the NAR party line.

jrinlv said...

We sold our 5 acre property in Oregon early this year (2006) and I am certainly happy that we bailed out when we did. We are now renting in Las Vegas, and will until prices are further reduced. Not too many For Sale signs in some areas but many areas are investor infested and have many signs. Two huge condo developments are being constructed near our rental house. One has starting price of $1.2M and the other at $850K. STARTING PRICES. Granted, these are nice condos but each development will have many, many units and how many people really can afford those prices? INSANE market.

leakaway said...

"Nope, not here."
"What are you talking about?"

Anonymous said...

San Diego: I met two people yesterday who are in for ruin. the first got an interest only loan for an overpriced home in Scripps Ranc - the value fell, he can't make the increasing payments & has resigned to let the bank foreclose. Another just gave up a $50K deposit on a condo because the value of the condo fell more than the deposit. OUCH.
HAHAHAHA!

Anonymous said...

Saltlakemortgageguy....

"A home I looked at buying in April for $330k, was fixed up by an investor and just sold for $594k.
Sorry to "rain on your parade" of gloom and doom."

Kindly post the address & details of that sale so us doomers can independently verify your optimism.

Haggis

in denial said...

my old neighbors own an "indoor landscaping" company in sonoma ca.
they own 1 in sonoma and 2 on maui,
they have 2million dollar 5 year arm
resets in 08!
they`ve not even begun to consider listing any of their 3 properties.

told me im missing out on big bucks when i sold in 05. i cleared 1Million in profits after taxes. dont know when to quit i guess.

joey said...

Southern NH update. Things are slowing down abit. There are alot more condos with lower prices and there are actual some single unit houses under 200K(not one in summer of 2005. Alot of condo complexes have 5 or 6 for sale instead of the usual one or two listed. People definately talk about a slowdown but it's not like the San Diego/Florida crash. I'm actually seeing decent townhouses I could possible afford. Nonexistent a year ago. NH will also get hurt by brutal property taxes that are skyrocketing(5 grand for a 300 grand house roughly.Mass is definately slowing down also.

Salt Lake Mortgage Guy said...

Haggis,

My mistake on that property. It was taken off the market after 3 weeks.

I thought it had sold .

Anonymous said...

I moved to S. Florida a year ago and everyone talked about real estate. I have a wife and daughter and we rented a 3-bdr house. I couldn't believe the pressure from neighbors to buy - "you have to buy", "price always go up", etc. I just started a new career, so I definitely could not afford the pmts. and I've been around S. Fl. real estate for 20 years and I know this is a huge bubble. One of the bubbleheads converted and starting to spout common sense. But the family down the street, who we are friends with, sat us down and "explained" to us the reasons we have to buy. I basically told them, #1, I can't afford the payments and #2, "what goes up, must come down". They are nice people, but they are dense.

Anonymous said...

update from middle america (south oklamoma), our prices have only been appreciating about 2-3% per year for the last 10 years, but they seem to be holding up fine. Average number of homes for sale, though we certainly have our share of homeowners who have exagerrated opinions of their homes value. Our typical sale price works out to about $60 to $70 per square foot depending on exact location and special features of the house

Anonymous said...

"My mistake on that property. It was taken off the market after 3 weeks.

I thought it had sold .
"

Hum.... SaltLake guy... Sounds like you just got caught bullsh*tting us. Next time, back your facts up instead of sticking your foot into your mouth.

Anonymous said...

"My mistake on that property. It was taken off the market after 3 weeks.

I thought it had sold .
"

Hum.... SaltLake guy... Sounds like you just got caught bullsh*tting us. Next time, back your facts up instead of sticking your foot into your mouth.

Anonymous said...

"Salt Lake Mortgage Guy said...
Haggis,

My mistake on that property. It was taken off the market after 3 weeks.

I thought it had sold .

Wednesday, October 25, 2006 5:35:14 PM "


That's just lame! Real, real lame.

not buying the bubble said...

They all say it's red hot. Absolutely red-hot. In fact I've talked to 5 people who bought new houses this year alone, and 3 more who are planning to buy early next year.

Bottom line is houses are still selling, prices are basically flat. There's no huge decreases in prices anywhere.

For all your talk of a huge housing collapse, it's not happening.

Anonymous said...

Not much.

No one realizes the extent of it.

No one ever wants to talk about the bind they are in - just how well they are/were doing....

Anonymous said...

OC UPDATE- People here are just dense. zprices that last year were $750K are now $640K but some morons don't think the market is coming dow.
LV Update- Last years $425K can be bought at 350K from many different builders.
AZ UPDATE- Builders just bending over. Buyers are just smiling with a big hard on. While the resellers are still stupid enough to overpriceby upto 100K while the builders eat their lunch.

Anonymous said...

a relative of mine says "6 months from now is the perfect time to buy."

David in JAX said...

For all your talk of a huge housing collapse, it's not happening.

I'll just speak on my area of the country, NE Florida.
1. All time high in number of homes listed.
2. Sales down 50%.
3. Prices down YOY two months in a row and MOM 14 months in a row.
4. 10 month inventory (record).
5. Average sales price six times average family income (unsustainable).
6. Crash just starting.
7. People catching on and refusing to fall for the same BS.

Yes, it is happening.

Patch Tuesday said...

Better yet, check in at Realty Times and see what your local real estate agents are saying about "your" market:

http://realtytimes.com/rtmcrtop/home.htm

Post any good lies you find...

foxwoodlief said...

My friends in Phoenix all recognize the market is slow to stagnant. Most don't see prices falling and believe they will go back up in 2007. Of course I believe they need to fall 40% and maybe they will, maybe they won't, I'm no pychic and just because I believe it to be so doesn't mean it will. And in my one friends neighborhood where they paid $212,000 in 2001 and I wouldn't give them $275,000 (which I believe close to value) a neighbor's house just sold for $465,000 (has a pool and some upgrades) so apparently there are still fools out there or people who sold big and came from out of state with cash and felt it was a bargain. Still I don't see the bargains I saw in Phoenix in 1982 and 1992.

My family in Los Gatos, California says market is still moving and prices haven't fallen in their area, but like most posts the very best areas seem to be resistant so far and only those extreme ends of the market or those far away from good jobs are stagnating. Still think California is in for a significant reduction in most areas but not all.

Here in Texas, sunny and bright in Central, Texas. Austin is booming as is San Antonio and Houston. Dallas is down and foreclosures up. Biggest problem in Texas isn't the price of a house but the taxes on property. I see a tax revolt coming nationwide in that area due to the high valuations but that is another issue.

Most of the properties they show in the NY time for comparisons of sales in NY City and other areas show most selling for list or about 4% below, I'm sure they are selective in the listings they show.

End of story? I agree with most that many areas need a major reduction in price to bring them back into line with fundamentals. Flippers will get screwed. People who bought for a home and within their means will be okay. If our housing market was like Australia or Britain or Ireland maybe I'd be in a "housing panic" but since we are still not the most out of line for prices of all the major economies I'm not too woried.

SMARTER THAN KEITH said...

HaHA- JustcallaDenver realtorand she will tell you all about their foreclosures.
HHAHAHAHHHAHAhAHAHHAHAHAhAHAHAhA

Anonymous said...

Here in Portland OR they are saying that the downturn won't happen. They think all the shitty condo towers with cubicles of air for $500,000 in a city with a median income of $46,000 will sell like hotcakes.

They actually believe their houses went up 100% in 5 years and that it's sustainable.

Anonymous said...

You gloom and doomers are wrong-a friend of mine just bought a condo in downtown Salt Lake City for $650,000 and flipped it for $750,000 two weeks later.





Oh, wait, actually he bought it for $750,000 and has it listed at $650,000. Doesn't matter, it's still a good story about real estate always going up.

Anonymous said...

here's what my neighbors have said:

bizjournals.com
Pulte lays off nearly a third of workforce
Wednesday October 25, 3:10 pm ET

Pulte Home Corp. laid off almost a third of its workforce Wednesday, the same day the latest figures for home sales revealed a dramatic slowing of the local housing market.
Pulte laid off about 60 workers from a local workforce of a little more 200 people. The Florida Association of Realtors reported Wednesday that sales of existing single-family homes in the Jacksonville area fell 23 percent from a year ago.

A Pulte spokesperson was not available for comment.

Pulte is the second-largest Jacksonville area homebuilder, having built 1,167 homes in 2005.

Published October 25, 2006 by The Business Journal

Nassor said...

I live in the Minneapolis/St. Paul area and I don't see a major collapse happening here. Beyond a doubt there's a slowdown. I also believe that the market here hasn't reached it's floor. The thing about the Twin Cities is that outside of some micro bubbles (Lake Minnetonka, Lake Calhoun/Uptown, Whitebear Lake, Woodbury, etc..) the overall market never quite became a full on boom.

The fundamentals in the Twin Cities are good. Minnesotans have the 6th highest household income at approximately $56,000. The median home value if I recall correctly was about $240k at it's peak this Spring. The median Minnesotan would qualify for a standard mortgage of $210k (30yr fixed, 3x income + %20 down, and the going interest rate) while the median price is $240k. At that price the median home is 12.5% over what the median Minnesotan can afford.

What I don't know is what the impact of the national housing market slowdown on the overall US economy. Minnesota's strongest ties to the US housing market are through US Bank, Wells Fargo (not HQed here, but lots of ties), Best Buy, and Target. If the US economy declines enough that the median incomes in Minnesota start to decline then the housing market may be in trouble. Otherwise I predict a stagnant market for 2-5 years until income inflation erodes that 12.5% and makes buying a home with a sound mortgage attractive to a normal person living here.

I will admit that Minnesota is unusual with it's high incomes and somewhat reasonable home values.

Anonymous said...

It's over, run for the hills.

Ronald McMansion said...

Dave in Jax reiterated: For all your talk of a huge housing collapse, it's not happening.

Well, here's more ammo for Dave (someone beat me to it, but I wanted to add some fuel to the McGriddle)

Pulte laid off about 60 workers from a local workforce of a little more 200 people. The Florida Association of Realtors reported Wednesday that sales of existing single-family homes in the Jacksonville area fell 23 percent from a year ago

Anonymous said...

I just had a pair of friends buy places in San Francisco. I consider both intelligent, I guess they found good deals - relative to earlier this year and definitely compared to 2005 pricing. Both props cost about $700k. I can't imagine them holding their value, as I think many of us know this - price adjustment, soft landing or whatever you call it, is going to follow historical patterns and last several years. So these props could easily be valued at $500k in the next 18 months or so... It's a normal down cycle and they last a long time. Last one in SF was '90 thru '96 or thereabouts..

I am sitting tight renting and can wait it out...

Anonymous said...

The market is still doing well in the median price range in the mid-South. Steady as she goes. The upper end homes 2x the median are slower but still selling. Homes over $750k are really slow.

Anonymous said...

Not buying bubble said: For all your talk of a huge housing collapse, it's not happening.

Didnt you know? The bubble will not fall off the cliff like the stocks did. It will be a long and painful death. Along the course of that death march we will see several idiots still enlisting for the biggest asspounding of their lives. Cheers biatch.

Doug said...

When groups of old men I knew started concocting plans to pool money together to put a downpayment on a house being built for $750k because they'd all be rich when it actually listed it would be at $1mil...I knew we were in trouble. That was 1 year before I sold my house in CA (June 2005) and just before things went into the crapper.

Anonymous said...

i find the disconnect between prices and price changes fascinating.

People won't bat an eye at a 350k house, but balk at dropping the price 15k. That's not even 5%!!

The actual home price is not real money in these people's minds.

Anonymous said...

Median home prices in Seattle have dropped for two months now. The first real drop in prices in over two years.

5K drop in Sept. Not much, but prices flatlined all summer. Your really starting to see inventory rising steadly. There are a ton of new condo projects in Seattle and its city of Bellevue currently under construction. Thousands of new condos will be coming on the market in 2007. Many were bought by flippers who must be really sweating right now.

Friend of mine bought a house for 400K in June. Kept bragging about how after she bought it, the appraiser told her in went up another 10K in value between the time she bought and closed.
I went to see it for the first time last week. I think she way overpaid for what she got.

Anonymous said...

this will be like a big glass of water left out on the high desert

slow but relentless evaporation of liquidity

at night the evaporation slows, during the day it speeds up

day after day, night after night until there is nothing left in the bottom of the glass but some salt and grit

Melsky said...

It won't happen here in Toronto, that's only in the states. "It's diferent here"

Meanwhile they continue to overbuild cardboard condos and cookie cutter housing developments in the thousands, just like they did before the last big crash.

If I owned property in Toronto right now I'd sell it pretty damn quick.

fasbird said...

I have been trying to buy in Mesquite, NV, 75 miles NNE of Las Vegas for 13 months. Each time I got serious, I was able to see prices steadily dropping and backed away. This is a booming little town with much more new housing than old places. Big name builders were going crazy and prices were running the good ole 30-40% ramp up. Building now has stopped except for those caught in process who obviously have to finish. As builders, they have to sell or fire their crews and go back to work. 10-15% discounts are pretty common in the $400-500K range and some "free" upgrades of interior stuff to $15K. Inventory is about 6 times as per MLS.

Still, weird events keep popping out. Smart or desparate sellers drop into the mid to upper 200s and sell in hours... causing other prices to jump up to something like 2005 levels. Huh?

I just made more than reasonable offers of something like 2005 minus 15% on two places that have way more than 100 DOMs. Each were insulted, offered to drop a huge $10K. Hope they enjoy their payments.

I used to think I was a pretty smart guy, but this has me just plain confused.

Fasbird, outside looking in.