0
0

How is your local housing market holding up?


 invite response                
2006 Oct 9, 1:35am   11,472 views  82 comments

by astrid   ➕follow (0)   💰tip   ignore  

modest housing correction

What kind of percentage drops are you seeing in your neck of the woods? Where do you see the most weakening and where do you see the least weakening? Please give any favored examples of the housing bubble collapse in progress.

#housing

Comments 1 - 40 of 82       Last »     Search these comments

1   astrid   2006 Oct 9, 1:42am  

I'll go to my old stumping ground Leesburg, Virginia. Possibly one of the top ten bubblebust sites. I'm seeing huge inventory increases compared to last year, listing prices are about 15-20% down from the peak last year.

The worst part for home sellers is that the builders are still building quickly in the area. There's plenty of weakness in all the sectors - condos, townhouses, smaller McMansions (2500 to 4000 sqft) and larger McMansions (4000+ sqft), gated communities, retirement communities - everything. So much for the zoning-locked theory peddled by agents and newspapers in the last two years.

2   astrid   2006 Oct 9, 1:52am  

Yesterday, I checked realtor.com to check for progress on a former neighbor's property - it started listing in August at 625,000 (the same price my parents listed their home in February of 2005), then dropped to 600,000. It is now listed at 525,000! I know the house was bought for about 470000 in late 2003.

Personally, I don't think this house will sell for 525K. It is sold as-is and there's tons of similarly priced homes of similar size and lot size nearby, in near pristine condition. I can very easily see this home selling for less than the 2003 purchase price.

3   Claire   2006 Oct 9, 2:34am  

Apparently the FDIC has just released a quarterly report that may be of interest, but the article did not give a link to it. Has anyone checked it out? Or got a link?

Thanks

4   FormerAptBroker   2006 Oct 9, 2:34am  

Good stuff and a rent vs. own graph on the Marin RE Bubble Site:

http://marinrealestatebubble.blogspot.com/

5   Claire   2006 Oct 9, 2:36am  

Alas, in my area, while there are a lot more for sale signs, and houses are taking longer to sell, it seems like there is a big supply of suckers that are still willing to take the plunge! Houses are being reduced but normally by 5 -10% and then some of them go for way over asking! Mountain View and Los Altos, CA :-(

6   FRIFY   2006 Oct 9, 3:10am  

Looks like we'll be getting some new rental inventory soon...

http://tinyurl.com/kfdgv

"That's the solution! I'll just rent it out!"

7   lunarpark   2006 Oct 9, 3:11am  

YOY listings (using numbers from www.mlslistings.com):

Combined condo/SFH

Zip or City 2005 2006
95014 117 133
Sunnyvale 183 221
Mtn. View 96 117
S.C. County 4161 5527
Saratoga 156 147
95032 95 140
95033 76 83

SFH Only:
95126 56 59
95128 48 79

8   astrid   2006 Oct 9, 3:27am  

Thanks for all the great observations, keep them coming!

PS - I forgot to mention that the peak for the house I mentioned would be around $700,000 in June-August of 2005. Yup, a 30% drop and I see more coming. Couldn't have happened to a more deserving scumbag slumlord wannabe FB.

9   e   2006 Oct 9, 3:37am  

Alas, in my area, while there are a lot more for sale signs, and houses are taking longer to sell, it seems like there is a big supply of suckers that are still willing to take the plunge! Houses are being reduced but normally by 5 -10% and then some of them go for way over asking! Mountain View and Los Altos, CA :-(

I guess I'm competing with Claire! My observations are pretty similar. I'd also include Palo Alto into that mix.

10   astrid   2006 Oct 9, 3:56am  

eburbed and Claire,

I would describe the DC market in a similar manner this spring and early summer. SFHs and townhouses that were priced well, in good condition and good location were still moving for close to last year's prices. But now I'm seeing genuine downward price pressure.

There's plenty more to fall, but a broad 20% haircut in Northern Virginia and even more than 20% in Florida is a very good sign. Maybe you'll start to see real price cuts now that the rainy season is in.

11   Peter P   2006 Oct 9, 4:00am  

Inventory should be shrinking as we speak as people pull listings for the winter.

Palo Alto and Los Altos may soft-land with occasional upward thrusts.

12   Peter P   2006 Oct 9, 4:08am  

The question on my mind always is are they planning on trying to sell next year?

Yeah, during the alleged spring buying "frenzy".

13   Claire   2006 Oct 9, 4:19am  

Well, I've pinpointed where I would like to buy, but prices need to drop by 30% (would be stretched if they only drop by 20%) if I'm going to be able to buy. Luckily I am not ready to buy just yet, so I'll just have to hope the market drops by the middle of next year!

14   Randy H   2006 Oct 9, 4:22am  

In South Marin the inventory is starting to rise again, after a short plateau. Interestingly, there has been nearly complete turnover in inventory, with almost everything we were tracking that didn't sell taken off the market.

Having driven past a few of these it seems as many are empty as are rented now. I admit I am surprised at owners being willing to leave +$1M homes completely empty, some for many months now. I'm guessing -- just guessing as I have little data -- that most of these are 100% owned by absent owners, or maybe family estates where the last parent has passed on and the kids aren't around here anymore. Zillowing a couple of these I usually get "No Sales Data Available", which usually means "last sale was a long time ago".

Prices are erratic, insane, unmanageable. I literally saw a 3/2 + an office the size of a closet with a $2.2M asking and then a 4/3 + 1/1 rented + 1/1 in-law for $1.9, and even a little land. Both in the same school districts, neighborhood, and with comparable upgrades.

We actually bailed out early on open houses because the "searching" has become too hard. Too much sporadically priced inventory, and not enough time to go to every one to figure out what's obscenely mispriced and what's just grossly overpriced.

15   Claire   2006 Oct 9, 4:22am  

If the prices do drop by 30%, I wonder how many other people will jump in, making it harder for me to get the deal and creating bidding wars again :-(

16   Peter P   2006 Oct 9, 4:27am  

I admit I am surprised at owners being willing to leave +$1M homes completely empty, some for many months now.

I am not surprised. People do all kinds of framing/mental-accounting to derive utility from bad situations. This is why we have trends.

17   Peter P   2006 Oct 9, 4:29am  

If the prices do drop by 30%, I wonder how many other people will jump in, making it harder for me to get the deal and creating bidding wars again

I am just going to avoid Palo Alto, Los Altos, and Mountain View. There are other acceptable areas.

18   Peter P   2006 Oct 9, 4:30am  

We actually bailed out early on open houses because the “searching” has become too hard.

Be careful Randy, other people may think that you have to rent. :)

19   Doug H   2006 Oct 9, 4:34am  

Astrid sez:

"It is sold as-is....."

I do love to see that in a listing because it's another indicator how scared the seller is.

It tells us:
a) I'm trying to circumvent disclosure
b) I'm hoping you are stupid enough to waive inspection
c) I can't spell "screwed", as in "I am"
d) All of the above

It's a great "tell" for the poker table

20   EBGuy   2006 Oct 9, 4:38am  

Okay... I pounded the pavement for the people and toured some open houses in my burg this past Sunday. I am using the classic 2/1 bungalow for my metric. Unfortunately, they seem to be holding fast at $600+k. (Well, that is asking price -- checking the sales prices of homes that closed from the newspaper also seems to indcate that $600+k is the going rate). Sigh... I guess these are the "starter" homes in my neighborhood so they may have more "price pressure" than the larger homes. I also observed there seemed to be a lot of open houses when I drove around later in the day, so maybe inventory will finally do some of the sellers in... And to further add insult to injury, someone moved into an overpriced rental around the corner. (I hope this isn't a case of rental rights on an upward trend chasing after the home price.) Still waiting for the 2/1 bungalows to dip below $600k to declare an signs of the BA bubble deflating.
Enjoyed a couple of acts at the free "Hardly Strictly Bluegrass Festival" this weekend in SF with 100k other folks -- yes, we are different out here (hows that for an intangible).

21   speedingpullet   2006 Oct 9, 4:43am  

OK - I've been keeping a spreadsheet on the places I'm interested in here in Los Angeles, and here are some averages....

...all 103 properties are:

- 2+ Beds, 1+ baths
-Older (pre-2006)
-SFRs
-Have a ratio of more than 5:1 of house:lot size (ie 5x yard to house)
-Less than 1 miilion Zestimate as of 9/15/06
-Geographically bounded (E - topanga canyon blvd (N27); N - the 101, W - the 101, S - LAX and/or the 10).
- Less than 15 miles away from the husbands workplace in Santa Monica (90404)

Although sorted by Zipcode, I've glommed some together to get a better sample size - some have single zips.
All data is taken from ZipRealty and Zillow searches, so I have no idea if they are accurate.
These are means, not medians - ie a simple @SUM calculation, divided by the sample size.

West: western/coastalMalibu, Topanga, south Calabasas, Pacific Palisades:
Freq - Av list price - Av sq ft - Av Price cut (%) - Av DOM
19......$1,258,184.....$894.39..10.19...................142

South San Fernando Valley: west Tarzana, Encino, Sherman Oaks, east Studio City:
Freq - Av list price - Av sq ft - Av Price cut (%) - Av DOM
44.......$1,115,294...$631.09....4.33....................85

Westside: Santa Monica, Beverly Hills, Hollywood, Culver City, Palms/Del Mar, etc..
Freq - Av list price - Av sq ft - Av Price cut (%) - Av DOM
40.......$948.947......$821.43....1.34....................69

Total:
Freq - Av list price - Av sq ft - Av Price cut (%) - Av DOM
103....$1,107,475....$782.30....5.29....................99

Unsurprisingly, it appears that the higher the List Price and DOM, the bigger the reductions.
Still at an overall price reduction of just over 5% it appears that, scientifically ain't nothing goin' on but the rent....here in LaLaLand ;-)

Again, spurious data with a small and eccentrically chosen population, but sort of fun to see nonetheless.

22   Claire   2006 Oct 9, 4:44am  

On the other hand, if some people find they can't sell, maybe they will decide to rent, so I could just rent a house in the area I like instead:-) Although the dog is a handicap....

23   Claire   2006 Oct 9, 4:46am  

And the rent prices are higher in the area I want to be in!

24   Doug H   2006 Oct 9, 4:53am  

Claire sez:
"If the prices do drop by 30%, I wonder how many other people will jump in, making it harder for me to get the deal and creating bidding wars again "

If the market as a whole is down 30%, then it's the new "norm". If it's a particular listing then other buyers might be ready to move on it. To increase your odds on getting your offer accepted, say the magic words...."Cash Now". Position your offer to meet the sellers needs and you get a "move to the front of the line" card.......

If anyone doubts the power of cash, just mention the word to a motivated seller and watch them slobber all over themselves. Who was the dude with the dogs and a bell.....Pavlov (sp)?

25   Claire   2006 Oct 9, 4:56am  

Okay, but I need a mortgage - so how do I get to "cash now"? Just get everything set up so that it'll be a quick sale?

27   MtViewRenter   2006 Oct 9, 5:17am  

Claire:

Here's the link to the FDIC report.

http://www.fdic.gov/bank/analytical/stateprofile/index.html

28   e   2006 Oct 9, 5:23am  

Well, I’ve pinpointed where I would like to buy, but prices need to drop by 30% (would be stretched if they only drop by 20%) if I’m going to be able to buy. Luckily I am not ready to buy just yet, so I’ll just have to hope the market drops by the middle of next year!

Crud, I guess we're not competing since I need prices to drop by 50% and return to 2000 levels to buy.

You win Claire!

What I really wish I could do is lock in a 30 yr fixed mortgage right now. Today's low rates, with tomorrow's low prices. That'd be a real win-win.

Any ideas on how to do that?

29   DinOR   2006 Oct 9, 5:27am  

"Prices are erratic, insane, unmanageable"

"That will crater sales and make things worse next spring"

"Momentarily ignoring the very real possibilty of defective craftsmanship"

Ahhh Monday, and those cards and letters keep coming in! Here in Oregon, a very sloppy (and slippery) market. I was talking with a builder over in Bend and his take on that market is........is....... not good. No one that posts here is THAT young that they can't remember when "mansions" were rare indeed. In fact even larger towns (Seattle, Portland) may have had (up until recently) but a handful of them and pretty much everyone knew where they were, who owned them and a little bit of the history behind them.

Well that is sooooo FIVE years ago! If volumes (or lack thereof) continue at this pace, McAlbatross sellers should be in full panic mode by March. My take is that builders are now retreating at such a brisk pace that it's not hard for me to visualize partially completed subdivisions at all! I'm not just talking about abandoning "Phase II" I'm talking about house, vacant lot, vacant lot, house, vacant lot etc.

If the conversation has turned to a "tightening" of lending standards for consumers, it has to be doubly so for the builders. It just hasn't reached our ears yet.

30   Claire   2006 Oct 9, 5:30am  

MtViewRenter - thanks for the link

eburbed - if prices dropped by 30% I could probably just about squeeze into the area I want, but no the most ideal houses, but I would probably be stupid for doing so.

A 50% drop would be heaven, but I think a lot of other people will be jumping on those prices too, so it will become a bidding war scenario again.

Plus I wonder how many people will just decide to rent their houses, rather than sell, in the expectation that prices will rise again and of course, they don't want to give away their house - right?

31   Peter P   2006 Oct 9, 5:31am  

What I really wish I could do is lock in a 30 yr fixed mortgage right now. Today’s low rates, with tomorrow’s low prices. That’d be a real win-win.

Rate may still be falling. Tomorrow's low prices and tomorrow's low rates are a perfect combination.

Any ideas on how to do that?

It *may* be possible to hedge fixed rate with bond futures. However, this operation can be extremely dangerous. You may bankrupt yourself trying to lock-in the interest rate.

You may also be able to pay points to get a long-term lock on the interest rate. It will cost you many thousands. If interest rate goes down, you are paying thousands for nothing.

Not investment advice.

32   Peter P   2006 Oct 9, 5:33am  

Plus I wonder how many people will just decide to rent their houses, rather than sell, in the expectation that prices will rise again and of course, they don’t want to give away their house - right?

Most people will break, given the right conditions. When they finally do give up, prices will head up again. (No more greatest seller fools)

Not investment advice.

33   Peter P   2006 Oct 9, 5:36am  

Im in the “drop by 50% and then we can talk” group also … here in the Central Valley 953XX area.

No soft-landing for Central Valley. :)

34   Claire   2006 Oct 9, 6:08am  

Okay, so I was trying to work out what I could really afford, and of course you have the mortgage calculators, but how much do you need to have left to close the deal - i.e. what other expenses are there that will need to be covered on top of the offer price....

35   FormerAptBroker   2006 Oct 9, 6:25am  

SFWoman Says:

> There seem to be more houses and condos
> for sale in Pacific Heights, asking prices are
> high, they seem to stay on the market forever.

A friend bought a fixer upper in Lower Pacific Heights (Washington between Baker & Broderick) for $1.7mm in 1998 (after cashing in on the stock options she got back in ’96 fresh out of HBS) and sold (after a lot of renovation) in 2003 for $2.7mm. I was walking back from watching the Blue Angles at a roof deck party on Saturday and saw that the (similar looking) home next door has a for sale sign with a bunch of color flyers asking $3.5mm. In other notes from SF the $4mm TIC duplex on Euclid in Jordan Heights has had the price reduced again and is now under $4mm for both units (what a deal). I can’t imagine anyone buying the place unless they lower the price by another couple million…

36   FormerAptBroker   2006 Oct 9, 6:27am  

Peter P Says:

> Inventory should be shrinking as we speak
> as people pull listings for the winter.

An old Realtor once said "Homes don't sell in December because no one wants to move the tree"...

37   Peter P   2006 Oct 9, 6:30am  

OT, but I am very worried about the veal industry. Alleged animal right activists seem to be particularly hostile to this fine food. :(

38   FormerAptBroker   2006 Oct 9, 6:37am  

Claire Says:

> I wonder how many people will just decide to
> rent their houses, rather than sell, in the
> expectation that prices will rise again and
> of course, they don’t want to give away their
> house - right?

Most million dollar homes are dumps in Marin SF, and the Peninsula and you will be lucky to rent most of these places for $3,000 a month. Very few homedebtors can handle the negative cash flow of renting a home for very long.

If you have a home worth about a million and a loan around a million you will average negative cash flow of about $6,000 per month over the year (after the mortgage, taxes, insurance, vacancy, repairs and maint. and other expenses.

39   HARM   2006 Oct 9, 7:04am  

Haven't been to any open houses in a while as I've been far too busy, but based on the "wishing prices" I've observed in the local papers and RE flyers (Pasadena area), they seem to be down about 10-15% from peak (same time last year). A drop nonetheless, but certainly not drastic.

You will not find much habitable around here @1200sft+ for less than $750K. However, you can easily rent a nice SFR (as we are) for about 30-40% of the monthly cost of PITI + maintenance on a real/non-NAAVLP loan.

40   HARM   2006 Oct 9, 7:22am  

Sorry I missed the whole SUV owner = narcisstic Boomer reptilian mindset debate from the last thread. I must confess: I too am an evil SUV driver ('98 Toyota 4Runner).

In my defense, I did not buy it to look "sporty"/attract the babes/run other drivers off the road. Rather, I got it because (at the time), I did quite a lot of PC/monitor/printer break-fix for my then-current job, and you really can't haul too many CRTs in a Civic. Since I have moved on to far less HW-intensive occupations, but I have found it also has tremendous utility for moving furniture, hauling groceries & even doubling as a sleeper in a pinch (Surfer-X can back me up here). I also opted for the 4-cylinder/2WD/no towing hitch to improve mileage (21/23), which approaches that of many full-size sedans.

And far from being overly aggressive/insensitive to other drivers, I am usually polite to a fault --to the extent my wife criticizes me. So there!

Comments 1 - 40 of 82       Last »     Search these comments

Please register to comment:

api   best comments   contact   latest images   memes   one year ago   random   suggestions