If there is one post you read about the housing bubble this week it should be Ghost Housing Market. Incredible post.
There is the Sacramento Real Estate Statistics Blog which offers what it promises. The author just launched a spin off blog titled Sacramento Area Flippers In Trouble Blog. It shows dozens of properties that have been bough recently and are now being offered at less or the same as the previous purchase price. Some flipper already have negative equity in their property. It will be ugly as the housing prices continue to decline in the bubble markets. The blogger blogs "If you ever needed proof that itÂ’s possible to lose money on real estate, I'’ve got it for you."
Bubble Markets Inventory features posts about Henderson, NV (Las Vegas suburb) and Poway, CA. Solid blog.
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Here is a nasty old house in the ghetto (based on Injin Lover's aka Redskins Fan's sensibilities) that sat on the market for about 4 days before it went to contract. Asking price was 1.9 million. Let us all keep track of the sale price after the closing, shall we?
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Typical redskins fan here:
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What's sad is you can buy a house like that in flyover country for 200-300k easily. It's too bad nobody builds them like that anymore.
ReplyDeleteAnonymous said...
ReplyDelete"What's sad is you can buy a house like that in flyover country for 200-300k easily. It's too bad nobody builds them like that anymore."
uh, yeah ... and could that have something to do with the fact that jobwise most of us just "fly over" that house there and the kind of towns it sits in?
"uh, yeah ... and could that have something to do with the fact that jobwise most of us just "fly over" that house there and the kind of towns it sits in?"
ReplyDeleteMany of the towns this sits in have great economies, often with the same paying jobs as DC. The big difference is most those areas don't have the ridiculous zoning, slow growth, smart growth, idiotic ideas that seems to pervade this area. I grew up in the midwest and the hoops you have to jump through to get anything built around here is ridiculous.
Bubbleheads this is why we have outrageous prices around here, everything is either high-rise condos or McMansions. You can't get anything else built dealing with the local govts.
Good article, pretty much outlines all of the risks that exist in the housing market. Would hate to be a sales rep for one of the homebuilders and watching my commissions slip away as the local flippers cancel their orders.
ReplyDeletelance... most people who live in "flyover" country are probably quite happy that folks like you prefer to "fly over" them as opposed to "stopping by"
ReplyDeleteI am really sick of this housing bubble discussion and defence from housing cheerleaders. The facts ae simple, prices will drop by 30 to 40% in next 12 to 24 months. It is a a fact which speculators/cheerleaders do not want to accept, good for them they can buy more and then fall will be more severe.
ReplyDelete> Here is a nasty old house in the ghetto
ReplyDeleteWell, it's not a nasty house, it's a nice house, though the neighborhood is not chichi, it is Shaw, I think. The house is HUGE for sure, did you see the size of the rooms? The bathroom was bigger than most DC bedrooms.
And, ask people in flyover country about their job markets. My family lives in flyover country, in an auto-dependent town. Losing your job there is a big deal, as it is usually because everyone around you is downsizing. And an old charming house like that would be in the older part of town where my family lives, which neighborhood would generally be undesirable, they just keep building new houses, so that old neighborhoods become not so desirable in less than 20 years.
Flyover country is cheaper, but less dynamic. You choose your priorities, or, like me and so many others, you are here because your industry is here.
boy are bubbleheads nasty and bitter! how can one reasonable argue with the fact that as the last poster said there's a good reason why the "same" house in flyover country isn't the "same" house. such hatred adn bitterness. and why the bad wishes towards realtors or anyone else. are your lots in life so bad that you have to lash out at others. assuming you are a bubblehead of middleage or beyond, you made your choices not to buy when you could have, no one forced you to hold off from buying. and those of you too young to have bought before, you're making your choice to hold off now. again, no one is forcing you to do not buy. and please don't say you can't. there are plenty of places in the District and elsewhere where a young (or not-so-young) person can buy a fixer up, starter home in a transitional area for little down and little per month ... earning the opportunity to get equity in the future like the rest of us have done. either way, i am just shocked at all the bitterness shown by your posts ... and the glee with which you wish others harm. you know there's a thing called karma ... be careful what you wish on to others. peace to you.
ReplyDelete"I am really sick of this housing bubble discussion and defence from housing cheerleaders. The facts ae simple, prices will drop by 30 to 40% in next 12 to 24 months. "
ReplyDeleteNo they won't.
ronaldcaglass,
ReplyDelete"when you got a man in a gorilla suit dancing in the rain in south florida begging people to buy a condo. =) even got the picture to prove it!"
Can you please send me the pic along with a brief description of what condo building and where? I would love to post it. bubblemeter@gmail.com
Thanks.
D. wants this home: Nice.
ReplyDeleteSaw this on patrick.net. A MUST READ:
ReplyDeletehttp://tinyurl.com/h2dh4
"Incredible post"
ReplyDeleteHardly, it's barely credible. I don't disagree with the premise that real estate prices will decline some (not the 70% that Redskins Fans is waiting for), but the hyperbole throughout this post completely undermines its credibility.
For example, the author argues: "ATM - Add to the problems, all of those home owners that used their homes like ATM machines to buy cars, boats, skiddos and vacations." ALL homeowners did this?? Well, I know this is bubblehead creed, but of course not ALL homeowners did this, probably not even most homeowners.
This statement is not credible, yet bubbleheads find it "incredible," probably because it echos their long held but yet to come true beliefs.
"For example, the author argues: "ATM - Add to the problems, all of those home owners that used their homes like ATM machines to buy cars, boats, skiddos and vacations."
ReplyDeleteALL homeowners did this?? Well, I know this is bubblehead creed, but of course not ALL homeowners did this, probably not even most homeowners."
That is NOT what the author is saying. He is saying that there are so many homeowners that used their homes as ATM.
If the writer meant all homeowners used their house as an ATM he might have wrtitten 'All homeowners used their homes as ATMs"
So, real estate is cyclical. Big yawn. Like stocks and bonds and commodities go up in a straight line.
ReplyDeleteIf the bubbleheads think they can time the market - then go for it! They obviously missed the last cycle. Maybe they'll be more successful this time around.
In the meantime, living in a group house in Silver Spring is not my idea of "success".
News Story titled "The Coming Housing Crunch" :
ReplyDeleteHere
Anon 4:12--
ReplyDeleteHow did you get that pic of me? Just kidding.
I don't know... what is more ridiculous- the guy in the pic or out of staters who want to borrow tons of money for the privilege of living in an area with millions of guys like him? (And, LOL, me too!)
Anon 6:49--
I think I said that most houses around here are worth, to me, about 30% of their asking price, which is different than saying they will decline 70%. I have also said many times that while I believe REAL prices will decline substantially, I do not have any idea how much nominal prices will decline.
A Redskins fan
"By the traffic at the open house, there seem to be a lot of people that think they can afford the mortgage and the condo fee of 360 that does not even include utilities!"
ReplyDeleteOr they coul be looky loos!
DC_Too,
ReplyDeleteWhile you are posting what happened back during the depression, can you please also tell us why this isn't relevent to now since (a) we have plenty of lending safeguards in place specifically because of lessons learned back then and, more importantly (b) it was a general economic collapse that caused the real estate market failure ... and we are currently instead experiencing a great economic expansion due to the technological revolution and globalization ... particularly here in DC where we are the nerve center for this technological revolution and globalization effort. Or, do you rather just leave people with the wrong impression? Btw, a link would have done the trick .... This is after all David's blog ... and large articles should be left for him to post.
Was listening to the show "Intersection" on WETA radio this morning here in NoVa about real estate; a caller asked the host whether it's a good time to buy and commented about the rapidly declining real estate market in part of California where his brother lives. The host said it's a good time to buy now and DC/NoVa area has no peaks and valleys like California. This was what the host actually said and I didn't make it up. Is it really true that NoVa has had no peaks and valleys in real estate?
ReplyDelete" Is it really true that NoVa has had no peaks and valleys in real estate?"
ReplyDeleteWhat utter BS.
"By Jamie Smith Hopkins
ReplyDeleteSun Reporter
Originally published July 23, 2006
First of three parts
The Baltimore metropolitan area stands ready to add more than 200,000 jobs over the next 25 years, propelled by the huge economic engine of the nation's capital and the growing demands of talent-hungry employers. But it won't have enough homes for all those workers."
see link above for the entire article.
U.S.A. population in 1920 was around 100,000,000.
ReplyDeleteU.S.A. population in 2006 is near 300,000,000.
Now, we have things called "Interstate Highways" and "suburbs". These things did not exist in 1925. What other fundamental differences can you discern between 1925 and 2006? (some hints to get you started: global economy, intra & inter-national air travel, population migration, and more!)
If we believe that the US is today very much like it was in 1925, we're brain-damaged. (just think of the changes WWII brought to bear between then and now)
"add more than 200,000 jobs"
ReplyDeleteYeah, well all 200,000 adults who fill those jobs will live in group homes, thereby surpressing demand for housing and keeping real estate prices down.
"If we believe that the US is today very much like it was in 1925, we're brain-damaged. (just think of the changes WWII brought to bear between then and now)"
ReplyDeleteAnd if we can't learn lesson from the 1920's we are ALSO brain damaged.
"If we believe that the US is today very much like it was in 1925, we're brain-damaged. (just think of the changes WWII brought to bear between then and now)"
ReplyDeleteAnd if we can't learn lesson from the 1920's we are ALSO brain damaged.
Now were back to the "the equities markets are fundamentally different from the real estate markets"
ReplyDeleteAlso, the equities market (singular) of 1925 was fundamentally different from the equities markets today. Look into it. (Hints to get you started: global considerations & US government regulations)
Whee!
http://tinyurl.com/rq82m
ReplyDeletegotta love this realtor...
"BTW, why complicate things -- people understand what average sales price means. Median....?"
yea nobody uses median.
she also didnt understand me when i mentioned a buyer in this market would rather pay 20k less and not have granite than pay 20k more to have it. i know people want 'luxury condos' but with most first time buyers priced out, i think they'd take a lil less luxury
Anonymous said...
ReplyDelete“Was listening to the show "Intersection" on WETA radio this morning here in NoVa about real estate; a caller asked the host whether it's a good time to buy and commented about the rapidly declining real estate market in part of California where his brother lives…..”
Yep, I caught that episode. What a joke. The realtor basicaly said:
“…… that there is never a bad time to buy if it is a home you are buying…."
That sounds eerily familiar…..
Hey David! How come no mention of the Post article from this weekend about how DC has actually gained more than 30,000 residents since the 2000 census? That sort of affects the bubblehead argument that people are fleeing DC in droves b/c of housing prices which will cause a price collapse.
ReplyDeleteAmazing how some items just don't seem to merit a thread.
There was also a very long article in today's Post on DC developer Jim Abdo's plans to turn a large chunk of Northeast DC into his next luxury housing project.
ReplyDeleteYou would think that if the Bubblehead Creed were rock-solid, that developers would see the same writing on the wall and not be rushing out to build more units since housing prices will drop massively in the coming year or two.
No thread on that story either. Of course, if Abdo had said his company was abandoning some project because of lackluster sales, you can safely assume that there would be a thread on that story.
"No thread on that story either."
ReplyDeleteI just posted it. [In general, I can't post all housing articles]
Fritz,
ReplyDeleteThere's also an article on WaPo about people moving to Baltimore b/c of more affordable housing there. From that article (http://www.washingtonpost.com/wp-dyn/content/article/2006/07/21/AR2006072100663.html):
"In his 2003 inaugural address, D.C. Mayor Anthony A. Williams (D) set a lofty goal of 100,000 new city residents, but the population -- 558,010 by the latest count -- keeps going south, or, er, north."
So which should we believe? The DC population is getting smaller or bigger?
That Post story came out the day after the Census revision.
ReplyDeleteIn other words, the Post editors screwed up and should have made revisions to the story to reflect the new Census information, but the editors failed to do so.
David:
ReplyDeleteThanks for posting that link, but man is that a weak post! If the info had been the other way, you would have been highlighting that story as proof positive that all these condos were being built in DC, yet residents were still leaving in droves. Instead, the Census finally admits that their estimates have been wrong and that the city gained more than 30,000 residents since 1999-2000, and there's not a single peep about it on your site until I mentioned it and now there is a nothing more than a link to the story.
Pretty weak and intellectually dishonest if you refuse to acknowledge any facts that go counter to your stated premise.
fritz,
ReplyDeleteI think Census did a legitimate job revive those numbers. I have not once claimed that DC population is falling in any of my posts. Look.
" That Post story came out the day after the Census revision.
ReplyDeleteIn other words, the Post editors screwed up and should have made revisions to the story to reflect the new Census information, but the editors failed to do so."
Nice catch. I noticed that too. :-)
From the article:
ReplyDelete"Census estimates are used to allocate funds in a number of programs, including Medicaid, social service block grants and foster care."
"The Census Bureau acknowledgment came after Williams challenged the 2005 census population estimate, which said 550,521 people were living in the city as of July 1, 2005. That number represented a decline of about 4,000 people from July 2004 and a drop of more than 20,000 from the official 2000 count of 572,059."
Hmm let's see Anthony Williams is good friend with one of the developer Jim Abdo who was poised to develop a big chunk of a DC property. Sounds like he wants to project an image of city that keeps on growing. Talking about intellectually dishonest. Don't think politics can influence science? Ha think about what the Bush admin is doing to the stem cell or global warming debates.
From the article:
ReplyDelete"Census estimates are used to allocate funds in a number of programs, including Medicaid, social service block grants and foster care."
Not to mention getting more dough for the city
In re Anon 2:00pm:
ReplyDeleteYeah, everyone knows the influence the Mayor of DC has over the Census Dept.
In fact, traditionally, the Mayor of DC has more power than the Chief Executive.
That's usually the case, but Dick Cheney is giving the spineless Tony Wlliams a run for his money.