June 21, 2007


27 comments:

Roccman said...

.
.
.
.
.
Blood Bath Time

http://www.bloomberg.com/apps/news?pid=20601109&sid=akV2sasSGUY8&refer=home

X-er said...

Hey that’s my cubical!

borkafatty said...

For the last three years, George Bush has been "borrowing" money from the Federal Reserve to pay for his wars. That money gets poured into the US economy through Halliburton and other military contractors. But, inflation has been avoided because during that same time, real estate was used as a "cash sink". Soaring home prices soaked up the extra cash in the economy as people paid a million dollars for the same homes our parents paid $75,000 for. On paper, homeowners look richer (and are taxed more) but it's really the same old 3 bdrm, 2bth with a bad roof and termites.

Anonymous said...

Is that Greg Swan working overtime to try to get a listing?

Anonymous said...

A struggling home debtor stuck in an endless cycle of debt and misery, with no end in sight.

edd said...

[Tell me no hamsters were harmed.]

As a tsunami of defaulted properties
hit the market, 'REO' will be a big issue.
If you find such 'distressed' property, and
it's near real value, you will be tempted.

When negotiations reach a certain point,
you will often be asked to waive every
kind of duty, law, or liability you can
think of, since it's a 'REO property', so
there will be no disclosure of defects of
any kind, or liability for defects, and so on.

Don't buy that story unless the lender that
held the mortgage is the current owner.
This is a common scam perpetuated
with the help of conventional ignorance.

If the lender that held the mortgage is
not the current owner, it ain't REO
(or Real Estate Owned).

Even many unreal estate
professionals don't know that ….
'Real Estate Owned' is the same as
'Lender Owned', which is the same as
'Bank Owned', which is the same as
'Foreclosed' or a 'deed-in-lieu' possession.
(If you don't agree, do some research;
this scheme is ending.)

The seller is obligated to disclose any
substantial defects noticed during a careful
walk-through, or from other sources.
(Laws may vary with country, locality,
and state of corruption.)
One source: www.realestateabc.com/homeguide/reo.htm

Anonymous said...

and yet homes in the bay area are still getting multiple bids, homes in NC are still selling in less than a week, NYC prices are still up YOY.

This epic housing crash is limited to a Phoenix suburb or two, Miami and Bakersfield.

Anonymous said...

FYI - Hamsters taste like chicken.

scooby said...
This comment has been removed by the author.
scooby said...

I've been selling real estate the past 7 years and have been quite successful, that is until last June. I primarily marketed a northern suburb of Minneapolis which has experienced tremendous growth in the past 10 years.

Frankly, it's over. The housing market has officially crashed. Here are some recent sold statistics for the area I market:
March thru June 15
(2004) Sold 172 units
(2005) Sold 216 units
(2006) Sold 168 units
(2007) Sold 53 units (350 active listings)

During this same timeframe only 17 new construction listings have been sold. Of these, 6 of them were bank owned. Currently, there are approx. 130 active new construction listings.

Ok, so the housing bubble has popped; what does that mean for the average person? First, we are losing the largest manufacturing industry in the U.S. You will begin to see unemployment tick up, but many of these jobs were under the table. Meaning, the skilled workers were being paid cash. These individuals will not be able to file for unemployment. The loss of these jobs will bubble up over the next 1-2 years and will surface on the bottom lines of retailers like Home Depot and Lowes.

Second, as prices fall, home equity loans will be a thing of the past. Falling home prices are the single leading factor in the bubble burst. Prices started falling well before foreclosures were an issue. My estimation is prices began to fall in early 2005. Homes prices have now retreated to 2003-04 levels. Meaning a home that sold in 2005 for $250,000 is now selling for $220,000 (as long as it’s in perfect condition). Homeowners’ getting over their heads financially is nothing new; however; the difference now is they can’t just sell their house, because they owe more than it’s worth. I turned away 20+ listings this year due to homeowners being upside down on their mortgages. As a result, they are walking away and letting the banks foreclose on them. As more and more foreclosures (up 90% from last year) hit the market home prices will continue to be pressured downward. Before it’s over (if things don’t spin totally out of control) we will see price levels equal to the year 2000…Approximately, a 20% decrease in prices.

Now, you may say, “great, I can’t sell my house for what I owe on it. I will just stay and wait for the market to turn. I have a good job and can get use to the idea of staying in my home a little longer. This problem doesn’t really affect me.” Wrong, as more and more homeowners are unable to tap into their homes equity they will no longer be buying cars, 4 wheelers, big screen t.v.’s, computers, lawn tractors, updating kitchens, roofs or siding etc. Millions and millions of homeowners will be putting off discretionary spending out of necessity. This will result in a tremendous fallout in the retail sector of our economy, which in turn, will have a direct effect on the transportation and manufacturing industries. Many jobs will be lost and many more homes foreclosed.

Finally, as the housing market crashes, so does the tax roll of state, county and local governments. These institutions have built their budgets on the back of the housing surge during the past ten years. It will not be unheard of to see local governments going bankrupt, schools shutting down, police departments with skeleton crews and social programs slashed. You will quite literally see ghost towns, large developments with empty Mcmansions, because it made more sense to walk away than pay the exorbitant property tax.

Sounds depressing doesn’t it. Well, history shows that it will be depressing. This is exactly what happened before the stock market crash that lead to the Great Depression.

Anonymous said...

Hey, that's a pic of the future leader of Paraguay!

Anonymous said...

Form MSN.COM: The true cost of owning a home. Wow this is amazing considering the usual "best investment you'll ever make" crap msn throws out most of the time.

http://realestate.msn.com/buying/Ar
ticle_kip.aspx?cp-
documentid=4980274>1=10130

edd said...

It would seem that the bankruptcy
reforms of 2005 likely had a bit to do with the housing bust.

But I don't hear any buzz about it.

In particular, the homestead
exemptions were seriously limited,
and that would make mchomes less
attractive.

kitchenstove said...

Scooby,

Great post!

Anonymous said...

Dow plummeted right into the close today

Spin Hamster Spin

borkafatty said...

Well put scoob..albit scary but the truth is scary...to bad some don't see the light of the situation///this will be worse than the 80's melt down hand over fist

Mozo Maz said...

Rally the troops!! Ron Paul has been black balled from an Iowa debate! Give the debate sponsors a piece of your mind and let them know Ron Paul should be allowed to participate.

Digg Article

And to think, what is *especially* galling, is that it is "Iowans for Tax Relief" that do not want Ron Paul there! WTF? They're keeping out "Dr. No" ... the representative who wants to abolish the IRS?? Shame, shame.

Anonymous said...

Cheers for Scooby. Realtors get bashed here so often, it's brave of you to post, and you have a verrry interesting "front lines" perpsective.

Adam said...

Good post, Scooby. I wish I could say I disagree with your assessment, but I don't. Many economists who are NOT employed by REIC, including Roubini, etc, also agree with your assessment.

The bottom line is the Roaring Twenties 2.0 are coming to an end, followed by the Great Depression 2.0, and you can thank you-know-who for gaming the system, deficit spending, devaluation of the dollar, etc... We told him we didn't think much of him in popularity polls, but GWB got the last laugh and showed us.

Bottom line: the U.S. will be forced to quit with the "living beyond one's means" stuff, and it's time to put our nose to the grindstone, and start manufacturing items that we can export to the rest of the world....

The fascination with Walmart's cheap China goods? Let it go, people: we're all going to pay the price of THEIR "price rollback" for years to come.

striker said...

scooby, what town are you talking about? I live in buffalo mn and it's just like you said around here too!
Nothins selling, everythings for sale, cars, boats, houses, motorcycles. Unfreakinbelievable!!

Anonymous said...

SCOOBY:
I stole your post and put it in a journal of mine, but i credited it back yo you and housing panic. Hope you dont mind too much.

fliptrolls said...

Is that like revolving debt?

Anonymous said...

Scooby I have talked with 2 Realtors in the Colorado Springs area that say it like it is to. Unfortunately your profession has a lot of people who stretch the truth some. However all professions have hacks in them be careful when you start your car from now on.

Sequoia512

Anonymous said...

Speaking of the future leader of Paraguay, do you think the secret service will guard him down there (from his exile palace)? Or will his US detail simply walk away in disgust (e.g., I'm not taking a bullet for that asshole)?

When it's all said and done, much of N. America may be hunting that bastard with native trackers and/or dogs.

edd said...

just my imagination ….

Gomer gets a margin call from Break-u Brokers.
They want 15g's to cover drops in Break-u Builders stock.

Gomer sez "hold please" and calls Break-u Bank for a transfer from his home equity credit line.

Break-u banker sez "sorry, your limit fell with our home value index, so you don't have any more credit."

And I was about to call you …. your home equity line is a margin
account, so I need 20g's now.

K.W. - Southern Ca. said...

This is worth reposting (from "Scooby's" comment):

[...Finally, as the housing market crashes, so does the tax roll of state, county and local governments. These institutions have built their budgets on the back of the housing surge during the past ten years. It will not be unheard of to see local governments going bankrupt, schools shutting down, police departments with skeleton crews and social programs slashed. You will quite literally see ghost towns, large developments with empty Mcmansions, because it made more sense to walk away than pay the exorbitant property tax.

Sounds depressing doesn’t it. Well, history shows that it will be depressing. This is exactly what happened before the stock market crash that lead to the Great Depression. ...]

It's quite conceivable for hospitals to close (i.e. county clinics) as well.

Just imagine millions of Americans without jobs who can't even get free healthcare - because it isn't there.

Anonymous said...

Now that's a hybrid!