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The "I really miss 'America's Overvalued Real Estate'" thread
invite response
2006 Jul 5, 6:36am 31,447 views 377 comments
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HARM,
Sorry I missed the 4th of July party and the free surf lessons but I was:
"Driving through Bakersfield EARLY Sunday morning"*
On my way to see what I can only describe as the perfect example of "boomertopia" Sun City Anthem in Henderson, NV has everything boomers could want! The "clubhouse" is bigger than a Dept. of Defense building with state of the art work out equipt. and all kinds of "activities" like gardening and quilting along with of course plenty of golf! The only thing I kept wondering was why can't these people find some dive bar and drink themselves to death like my dad did? Hey! It was good enough for him? Really, do we truly need ALL of these "amenities"? Couldn't this money be spent better elsewhere?
*The Girl with Far Away Eyes, Rolling Stones circa 1978?
Peter P
2006 Jul 7, 4:45am
Peter, do you know why the underline text tag doesn’t work?
I tried before and somehow underline did not work.
How did HARM get it to work here?
Peter P
2006 Jul 7, 4:50am
Perhaps because underlines look too much like links and WordPress does not like deceptions. :)
DinOR Says:
Personally, all of the research was done in 2003/4/5 so all that is left for me to do is to sit back and watch. Ben Jones does a great job keeping everyone “on task†but I consider my travels through the “epicenter†of the bubble fairly valuable “on site intel†b/c you get to see abandoned sub divisions first hand! I live in the PDX area and yes, (we’re in a bubble too)!
Did you have a chance to read the link I posted on this thread? The Mercury News had a bold-type, screaming front page headline that it's a buyer's market in the Central Valley. (btw, it's not really yet). Interesting to hear about your observations. I like the idea of now taking the tack of sitting back and watching this whole mess play out.
Peter P
2006 Jul 7, 5:03am
The central valley has only begun to see the beginnings of a “buyers market.†I think the realtors® are calling it a buyers market to scare the last holdouts into buying before “it goes up again.â€
Never a better time to buy, right? ;)
http://marinrealestatebubble.blogspot.com/2006/06/where-are-we.html
This morning on KFOG, I heard a radio spot for KB Homes - did anyone else hear it? Haven't come across such an ad on mainstream FM radio before. To paraphrase:
A "young couple" needs to move out of their condo w/ new babies, etc. so they go to a KB development. Because of rumors of a buyer's market, they decide to "take the plunge" and buy. The KB agent gives them a great mtg rate beating the rising mtg rates, incentives, and gets them a great home at a great deal.
Sounded very desperate to me.
Peter P
2006 Jul 7, 5:08am
Because of rumors of a buyer’s market, they decide to “take the plunge†and buy.
Well, if they can afford it, why not? A home-purchase is more than a financial decision. They better be prepared to be in for a wild ride.
skibum,
I will check out your link!
Mrs. DinOR came up with a name for all of the sub divisions we saw coming down 99E. "Roof Farms" b/c it's all you can see for miles like so many rows of corn! And built so close to the freeway? We then started the debate about could a squirrel go from SAC to Fresno without ever touching the ground?
While in LV my client (gun nut) insisted we "go out to the desert" to make some noise! Well, uh O.K. I'm figuring "hell's half acre" here and we get just past the South Coast and he pulls over and we begin to bake. I'm not complaining mind you, the guy has money and in a twisted way I kind of like the heat. Perhaps something only an Oregonian can appreciate. So were a blastin' away and I ask about all of these "frame only" shells we see all around us and he explains that some days a construction "big wig" comes out to the job site with a clipboard and walks around but assures me many have been in the same state for almost a year. I guess I'd have to say they are "pre-abandoned"? It looks to me that financing has dried up and there they'll sit until they manage to work through the inventory. Many of the billboards (NO, not "those" billboards) tout condos' in the mid 100's!
Peter P
2006 Jul 7, 5:26am
We then started the debate about could a squirrel go from SAC to Fresno without ever touching the ground?
If squirrels are not all starved to death because house-buyers are no longer feeding them.
DinOR,
I love the "Roof Farms" - it may deserve consideration for the hosing bubble dictionary. The observation of an increasing number of abandoned construction projects seems to be happening much earlier in the cycle than I would have thought. Someone posted earlier about all the abandoned sites in LV, I've read about a few in Boston, too. I would think that with financing secure, land purchased, etc., the financially smart thing to do would be to go ahead and finish the project. I wonder if it's flippers bailing (and probably eating the deposit)?
Just a guess, but a year, year and half ago there wasn't much any where in the LV market avail. for the mid 100's let alone a NEW condo. I emphasize "new" not that it means that much to me but seems to mean everything in LV.
Daughter #1 (and husband to be) just had their offer accepted on a nice older home. About 1,800 sq. ft. w/ all new faux wood floors and much updating for 196K. I can't say I was "sick" about it, after all his folks came up with a sizeable downpayment for for the kids. Who was I to say anything? It had sat for months without an offer and I think they could have got it cheaper but they're happy and I don't see a lot of room for downside other than the opp. cost for the 50K down. Since I didn't write the check it wasn't my turn to talk. I really am trying to be the "perfect" in-law here people!
DinOR,
I don't know the LV market at all, but either way, as long as the usual mantra stays true - they plan to live there a while, they are not financially stretched making a purchase (sounds like it given the in-laws' help), etc. etc. - then sounds okay to me.
BTW, according to:
http://www.benengebreth.org/housingtracker/location/Nevada/LasVegas/
median ASKING price is down in LV from 349K a year ago to 339.5K this week (~2.7%), while inventory is up from 16K to 22K.
skibum,
A couple of months ago I would agonized over just who got stuck with unfinished condos/projects. Not that it's unimportant. It's certainly important to whom ever had to eat it, it's just not important to me! F'd is f'd. I must admit though that I hadn't heard about "derailments" in Boston! And yes, I didn't think this phase would occur so damn early. But in the end this WAS the world's biggest game of musical chairs so as flippers re-invested their "profits" into a bigger better, nicer newer project they and their cash were bound to part company. All that raw lumber just sitting there is ugly and someone here mentioned what will become of all these vacant and un-airconditioned homes after year+ in 120 degree heat? That IS a good question!
skibum,
Oh oh oh, I should have mentioned, the home they are buying is about four blocks from us here in Oregon. The wife and I were just visiting in LV while I did a few client appts. So the kids actually will pay a little over a hundred dollars per sq. ft. but I will say that for all of the updating (much remains to be done). It's just one of those deals where an older home needs a younger couple (and I think I'll leave it at that).
Peter P
2006 Jul 7, 5:53am
I should have mentioned, the home they are buying is about four blocks from us here in Oregon.
That is great. 2-4 blocks is the optimal distance. :)
So the kids actually will pay a little over a hundred dollars per sq. ft.
I doubt it is possible to get anything built for less than 200/sqft here in the silly valley, land EXcluded.
Whenever Peter P starts in with his food references, I totally lose my focus. On that note: If I was a rich specuvestor, instead of sitting in my cubicle eating a ham sandwich reading patrick.net, I'd be eating at L'Opera in Long Beach, having porcini mushroom & locatelli romano ravioli, with a nice Brunello di Montalcino -- something from the 1999 vintage, perhaps. Or maybe sushi with an Alsatian Gewurztraminer. Mmmmm.
Peter P
2006 Jul 7, 6:13am
Mmmm, ravioli. I used to work in a restaurant that served great butternut squash ravioli in the autumn. Oh, and the goat cheese calzones were to die for.
My favorite ravioli: oxtail ravioli
Now I’m craving carmelized onions. Yum!
That should not be too difficult to make.
Must plan for a blogluck party!
Much higher inventory with rising prices, albeit rising slower than last year, or even stable prices, is not a "buyers market".
Sure, there's more choice, but what it really is, is a "realtors(TM) freaking out 'cause there's not enough volume to go around" kind of market.
As in all things, the buyers market occurs when the price is near the bottom, when "price/earnings" is no longer insane, a la Warren Buffett. Prices in the 5-7 times median family income range are the target for a buyers market.
Calling it a "buyers market" now is a desperate attempt to sucker those still on the sidelines into taking the plunge, like lemmings. Last man holding the bag is the greatest fool.
Uh, I prefer the McDebors, McMortgage Brokers and McRealtors to take the plunge first, thank-you.
Looking forward to the correction in 2007-2011... ;)
Buyer’s Market: When used by a Realt-Whore®, this means a housing market with exploding inventory, plunging sales and sellers that refuse to negotiate on price.
Peter P
2006 Jul 7, 7:07am
Buyer’s Market: When used by a Realt-Whore®, this means a housing market with exploding inventory, plunging sales and sellers that refuse to negotiate on price.
Should we call it Seller's Non-market instead?
Seller's market: seller has the power
Seller's non-marker: seller does not have the power
How about "Null market": market where neither seller nor buyer have a clear advantage.
Peter P
2006 Jul 7, 7:17am
How about “Null marketâ€: market where neither seller nor buyer have a clear advantage.
Who has the advantage then? I thought it was a zero sum game. :)
The funniest thing right now about this "buyer's market" is that the ones getting pinched the most on a cash-flow basis are probably the realtors, who need the commission $$ to get paid.
DinOR: sorry about the misread re: OR vs. LV.
RW: the rich specuvestor may be living the fat life, but the FB's probably doing the Maruchan ramen - can you recommend a wine pairing? Perhaps a cab for the "beef" flavor, or maybe a sauvignon blanc for the "shrimp" flavor?
the FB’s probably doing the Maruchan ramen - can you recommend a wine pairing?
Oh, please allow me:
HARM,
LOL. Can you hijack the graphic and change the word "fired" on the guy 2nd from the left to "foreclosed"? I'll admit Night Train is the only one I've had the pleasure of sampling before. Nasty stuff.
Skibum:
Maruchan ramen? Surprisingly, I thought I was the only one who knew about bumwines, but HARM has surprised me. My suggestion is Cisco, because, while it pairs with nothing except perhaps raw sewage or creme of goat tongue, the FB will be feeling no pain after one or two bottles. They can drink themselves lucid and find a temporary escape from the fact that, while their rear end is torn and aching, they can look forward to successive forced entries every single month as their ARM adjusts ever-upwards.
newsfreak,
Yes, Susanville is quite nice and we were surprised at how rugged that stretch of CA is! Also Lakeview, OR looks a lot like the "resort areas" of our youth with an emphasis on family activities like boating, horse shoes and ice cream. The place looks frozen in time. No disgusting displays of wealth at the canoe rental.
I usually do not vent anger about Realtors. To me they will always be sales people trying to make money.
But lately a random sampling of their comments is coming out as stupid, idiotic and clueless. You can find a lot gems on Realty times site.
"Are squashed housing prices preferable to inflation ?"
"Newspapers are scaring people from buying. This is actually a great time to buy".
"Despite the speculation of a RE bubble ...."
Last one is hilarious. I don't think she even realized what she was saying. She is not just denying the speculation in RE. She is saying that some people are speculating that there is speculation in RE. I say, there is a lot of speculation by realtors about speculation of RE bubble.
Why is it hard for realtors of all the people to see that house prices are ... umm ... unaffordable ? Hello ?? Knock, knock. Buyers are not a problem. Sellers are. They are stopping you from earning money by asking unrealistic prices. It's in their own interest for prices to go down. (Of course, as sales people, they don't want the prices to crash, and people to be wary of buying at all. That's not what I am saying.) I have seen very few agents blaming it on sellers - like the one OO mentioned in the last thread.
Take this Mr. Gentry reported in that SJMN article about central valley. He paid 300K for a house in Los Banos in 2003. Now 3 years later, he is whining because no one is "taking the plunge" at his 585K price. Why should Los Banos appreciate that much ? Or appreciate at all ? That is so not commutable from BA, and on top of it, it is one hell of a crappy town. Even Tracy house are not selling for that much any longer.
So who is the problem here ? How can it be a buyer's market when sellers still think they can get away with insane prices ?
When I was a poor college student in San Jose, I used to buy Maruchan Ramen when they were 10 for a dollar -- there must have been 30 different flavors. Maybe five different varieties of Chicken flavor alone -- creamy chicken, regular chicken, spicy chicken, etc. Basically, the different "flavors" were just different colors of little foil packets of ultra-refined salt. I used to just make the stuff and grimace, but I had a neighbor who could make all kinds of things using Top Ramen as a starting point, some of them almost edible.
Peter P -- What's your favorite flavor of Top Ramen? Do you prefer Nissen or Maruchan? Or maybe one of the more obscure brands that can be found in most Japanese markets? Please tell us.
"torn and aching"
"successive forced entries"
DAMN! It took until Friday but I think we have our "post of the week" winner!
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As many of you know, we recently had a casualty in our extended bubble-battling blog family. Sadly, it looks as though the founder of one of my personal favorites, "'America's Overvalued Real Estate", has sold out to the highest bidder --a commercial RE company :-(. (Note: previous rumors to the effect that the site had been hijacked/sabotaged by the NAR have proven to be unfounded.) As Different Sean might say, "there's the perfect free market at work again." ;-)
This site --an instant classic-- hosted hundreds of examples of absurdly overpriced wrecks sent in from all over the U.S. and Canada, along with the satiric and often hilarious commentary from the blogmaster. It was wonderfully cathartic and priceless for its comic relief and real-life illustrations of how unhinged sellers have become, thanks to our Fed & GSE-blown liquidity bubble. I spent many a Friday afternoon perusing the latest submissions, often reading them aloud to Mrs. HARM. Truly fun for the whole family.
In honor of this fallen giant, I dedicate this thread as a tribute to A.O.R.E. Please post local examples --with photos and/or MLS links if you have then-- of the most outrageously overpriced $hitboxes in your local neighborhoods. International submissions are also welcome. I shall kick things off by re-posting one of the most egregrious and well publicized examples from last year -- the infamous $1.2 million shack from "Naked City", Las Vegas:
Post & enjoy...
HARM
#housing