First the low end got taken out with the subprime collapse - thus screwing around with the median price data. But now the high end is getting taken out by the fact that getting a Jumbo ($417,000 or greater) is damn near impossible.
Poor KB Home. Poor Toll Brothers. Nobody to buy your overpriced ugly prefab homes anymore... Here's the latest from housing meltdown Las Vegas - I'm heading there next week, wish I had time to tour the empty Toll neighborhoods. We'll see...
Newsweek - The New Money Pit It started with subprime mortgages. Now owners of McMansions are defaulting, and the effects of the housing bust are beginning to ripple through the economy.
Walking through the gated community of Black Mountain Vista on a hill in Henderson, Nev., Thomas Blanchard offers a guided tour of real-estate woe. A row of stucco duplexes that recently sold for as much as $500,000 sit empty. "That's a repo," the real-estate agent says as he stands in front of 678 Solitude Point Avenue. Then he points to the adjacent houses, where yellow patches blot the spartan lawns and phone books lie on front porches, their covers bleached from weeks under the desert sun. "No. 680, repo; 684, repo. Those two at the end, repo."
Three years ago, this Las Vegas suburb was teeming with modern-day prospectors armed with low-interest mortgages, all hoping to strike it rich in real estate. Now, what started with the subprime-mortgage mess and subsequent credit crunch are turning communities like Black Mountain Vista into luxury ghost towns.
Buyers who got in over their heads are being forced to abandon their homes, leaving behind empty McMansions on the California coast and see-through condominium towers on Miami Beach. Real estate is turning into a money pit, sapping the fortunes of home buyers, hedge-fund managers and house painters alike. The really bad news? This is only the beginning.
September 10, 2007
Newsweek on the Las Vegas housing crash, empty McMansions, failed flippers and the end of the Great Housing Ponzi Scheme
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25 comments:
The upper end of the market is definitely starting to crumble. I've been reading how the upper 75th percentile of housing prices in Los Angeles has gone down from $999k in August 2005 to about $780k right now.
Finally confirmed with a walk down my street in East Pasadena, CA. Two years ago a 1000 sq ft box on my street sold for $715k. I just picked up a flyer for an 1800 sq ft house down the block for $740k and I'm sure close to $715k if you have any negotiating skills.
The market certainly has turned quick since the credit crisis. Things could get ugly pretty darn quick.
BB
I would rather see this happen fast than slow!
What no Time Magazine report?
"Buyers who got in over their heads are being forced to abandon their homes"
should read:
"Lenders who's dead beat, speculative, POS loser, sh@& ass loan holders won't pay their debts are being forced to foreclose on the moron's "homes".
THOSE HOMES ARE NOT THEIRS!!!
Why do so many of these places have such stupid names, "Black Mountain Vista" it's in the middle of the desert, where is the mountain!!!
"But now the high end is getting taken out by the fact that getting a Jumbo ($417,000 or greater) is damn near impossible!"
Excuse me! The high End! A little sh$t box in LA is going for $550,000! Just HOW any of these people are able to buy or sell these homes is the unsolved mystery of the year. How is this possible when the Jumbos have been virtually eliminated? How can anyone anywhere say a home is valued at more than $417,000 when the easy credit is no longer there?
Now owners of McMansions are defaulting..................
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I always wondered how them Gen-Xers could afford a McMansion on their salary at Starbucks.
Anonymous said...
Why do so many of these places have such stupid names, "Black Mountain Vista" it's in the middle of the desert, where is the mountain!!!
September 10, 2007 2:32 PM
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Dumbass,
There are mountains in the desert. If you ever get out of your mom's basement take a drive between L.A. and Utah via Las Vegas and you'll see numerous mountains. This isn't the Sahara desert doofus. Oh and there is a mountain called...get ready...Black Mountain in Henderson. Holy fucking shit, who woulda thunk it?!?!?
God it is amazing how uneducated you morons are about even basic aspects of life yet you offer financial advice.
Anonymous said...
"But now the high end is getting taken out by the fact that getting a Jumbo ($417,000 or greater) is damn near impossible!"
Excuse me! The high End! A little sh$t box in LA is going for $550,000! Just HOW any of these people are able to buy or sell these homes is the unsolved mystery of the year. How is this possible when the Jumbos have been virtually eliminated? How can anyone anywhere say a home is valued at more than $417,000 when the easy credit is no longer there?
September 10, 2007 2:52 PM
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Sell a house for $400K of which you have $200K equity, get a mortgage for $400K, and there you have a $600K purchase.
Oh and believe it or not, some people in LA actually make lots of money. See you HPers are confued. Everyone YOU know makes $12 an hour. So you assume EVERYONE makes $12 an hour.
I used to live in Vegas and moved in 2005. I recently went back for a 3 day visit. It is amazing the building that is going on there. Throughout the entire strip are cranes galore, building Trump Tower, additions to the MGM... condos going up up up. And it's weird cause we knew it was the tailend of development planned during the boom. It's sorta like when you look at a star and realize that the light left that star many millions of years before. It's like you are looking into some weird past history.
Anyway, as we were heading to the airport we commented to our taxi driver about an of place boutique spa/hotel off the strip. He said it was supposed to be condos that no one bought, so they turned the place into a hotel.
My friends who are still living there are having a tough time.
Repo is a cool word now. At least the kids in this neighborhood will have cool clubhouses (empty McDumps)to play in.
I lived in Las Vegas for 5 years. Left earlier this year. Friends back in LV have a fairly reaslitic view of what's happening. In general though the attitude is we bought pre bubble, house was worth $800K last year, maybe worth $700K now and even if it is worth $400K in 3 years, so what we bought for $300K and have a 6% mortgage. Not the end of the world. I can't really argue with that.
It seems like many bloggers exagerate the amount of refi, heloc activity going on. I would guess the vast majority of owners did *NOT* refi or if they did refi, did it to get a lower rate and did *NOT* go and buy a $100K boat with the equity in their home.
But wait, I thought 10,000 people a day or some such were moving to Vegas. Where did the "It can't happen here" crowd go to?
I refied, with my credit union, from a 30yr fixed (at 6+%) to a 15yr fixed at 4.875 in late 2002. At the time, the loan guy said he was massively busy with refis. When I asked how many were for cash-out he said 75-80%. I was shocked, because, HPer that I am, I was just doing the refi to reduce interest and get to the point where I owned the house sooner.
So, yeah, plenty of people did do cash-out refis...dunno what they did with the money, pay off credit cards, buy boats, whatever...nor do I know what is going on now with the refi markets.
Your mileage may vary.
michael said...
"Buyers who got in over their heads are being forced to abandon their homes"
And then he added
THOSE HOMES ARE NOT THEIRS!!!
This is a great point. If somebody buys a house with $0 down and then probably lied on the application and then only pays interest on the loan, how the hell can they say it's THEIR home. Now I must go to every news site that allows comments and educate the authors who write about people losing "their" homes.
New word of the day. "McRepo".
God it is amazing how uneducated you morons are about even basic aspects of life yet you offer financial advice.
Wow, you're touchy with geography, huh? What was that all about? Someone needs to sell a Las Vegas POS home to eat this week. And no, I'm not the poster from before.
I would guess the vast majority of owners did *NOT* refi or if they did refi, did it to get a lower rate and did *NOT* go and buy a $100K boat with the equity in their home.
Hmmm...let's do a back of the envelope calculation here: Sane people earning $100k / year should buy a home for 2.5 X annual income, which makes it $250k max price for an affordable roof. Meanwhile the average income in America is ONLY $38k and dropping fast along with the crappy dollar.
Another thing to consider: the average amount in retirement accounts is ONLY $8k, while 50% of Americans don't have a retirement account at all. To top it off, years of negative savings and 40 million Americans without health insurance.
Hoo-wee, these homeownership thing is really working out! We can see by the above ALARMING stats that homeowners (more like homeleasers from bankers) are really swimming in money!
Hey homeleasers "who bought before the bubble" and think that are doing well: Don't lose your job during the upcoming depression, don't get a devastating illness that requires expensive and uncovered insurance, never divorce to lose that dual income or half of the crap you own + alimony, and don't get hit by a natural disaster such as quakes, tornadoes, land slides, hurricanes, floods or another GOP president.
Otherwise that "safe dream home" leased from bankers and full of Chinese crap will go bye-bye.
I live here and I hope this place crashes and burns. What was the last libertarian-leaning area is now filled with leftist tax-and-spend nanny-staters.
Oh yes... Leverage is a bitch when you are on the wrong side.
I visited Vegas in spring 2006 and an old college friend was working as a realtor there. He tried to get me to buy a house or condo there and had the whole hook and line about:
1. shortage of land in the Vegas area
2. real estate always goes up
3. rate are low
4. millions of people moving to Vegas
I told him prices were too high and would be going down. I heard from a mutual fried a few weeks ago that he had moved to a little town to become a beautician.
"God it is amazing how uneducated you morons are about even basic aspects of life yet you offer financial advice. "
That's so funny coming from the asshole who said home prices would keep going up 20% a year for the next 50 years. You call us unenducated, but you too much about Dutch history and tulipmania, do you?
Can't wait until your home is foreclosed upon, dumb shit!
"Sell a house for $400K of which you have $200K equity, get a mortgage for $400K, and there you have a $600K purchase."
That's does not do anything for first time buyers, dumb shit! And you're assuming that the seller will get $400K in the sale and get approved for another $400 loan. Lenders are tightening standards. Do you ever read the news, dumbshit?
"Oh and believe it or not, some people in LA actually make lots of money."
But most people don't make lot's of money, dumbshit! L.A. is the illegal alien capital of the U.S., dumbshit!
"See you HPers are confued. Everyone YOU know makes $12 an hour. So you assume EVERYONE makes $12 an hour. "
No, I and most of the others here make substantially more than that, dumbshit!
The same exact thing is happening where I live. In any capitalist economy to make money you must buy low sell high. If you buy high you stand to lose in the short term.
This is true with real estate, the stock market, whatever.
Palm Estates Estepona Property
Dumbass,said
"There are mountains in the desert"
What about the "Vista" part then?
Vista in this context means view, The only way you'd be able to view the black mountain from there is via google earth!!
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