Real Estate Crash thread

[cramer]

Wow, maybe not the cars, but there must be a couple sleds hidden in there somewhere...

no all my family down here is basically my wifes family. Fillipino's. They are weekend warriors at the resort at best. My immediate family is either to poor to buy a house or bought one 15 years ago and still own the same one.

[liv2ski]

I liked that above post from Benny on the Pheonix foreclosures and how big investors are coming in and buying up $5M blocks of homes. I am guessing some of those are coming out as REITs, so I need to find some info on CBI out of Calgary and see what they are offerring. Could be a good investment in another 12 months. Not sure I am ready to pull the trigger yet on RE, as I am concerned about further down turns in the stock market. See the stock market thread comments I left.

[4matic]

San Ramon Ca.: Co-workers sister lost a house to multiple bidders. Just bought a house and was lucky because multple bids higher than hers were waiting. No homes for sale on my street in a crappy Bay Area neigborhood.

[mock vomit]

Though I see some things that seem to show the end of this "rainbow" of real estate melt down... other things still not looking so good;

(CBS/ AP) An industry report shows that a record 12 percent of U.S. homeowners with a mortgage are behind on their payments or in foreclosure as the housing crisis spreads to borrowers with good credit.

The Mortgage Bankers Association said Thursday the foreclosure rate on prime fixed-rate loans doubled in the last year, and now represents the largest share of new foreclosures. Nearly 6 percent of fixed-rate mortgages to borrowers with good credit were in the foreclosure process.

At the same time, almost half of all adjustable-rate loans to borrowers with shaky credit were past due or in foreclosure.

California, Nevada, Arizona and Florida accounted for 46 percent of new foreclosures in the country.

Meanwhile, new U.S. home sales were almost flat last month, indicating that the housing market's recovery will likely be a slow and gradual process.

The Commerce Department said Thursday that sales rose 0.3 percent in April to a seasonally adjusted annual rate of 352,000. But the increase came from a downwardly revised rate of 351,000 in March.

April's results missed the expectations of economists surveyed by Thomson Reuters, who expected a sales pace of 360,000 units.

[liv2ski]

This had a very interesting graph by metro area for YTD and over the last 5 years. Check it out as it would appear some areas have hit bottom.
http://articles.moneycentral.msn.com...cesByCity.aspx

By MSN Money staff

U.S. home prices actually rose 0.4% in the first quarter of 2009 and fell just 3.3% over the past 12 months, according to data released today by the Federal Housing Finance Agency. That's a major reversal.

"Our latest data are consistent with growing evidence that housing market conditions may be stabilizing in some parts of the country," said director James B. Lockhart. "I am hopeful that this first quarter data combined with recent market stimulus programs, such as the first-time homebuyer tax credit and President Obama's Making Home Affordable Program may mean that home price depreciation may be easing."

FHFA's house price index includes data from mortgages for both home purchases and refinancing.

Of the 20 cities with the greatest price declines over the past four quarters, all but two -- Las Vegas and Phoenix-- were in California or Florida.

In 70% of the metropolitan areas tracked by the housing agency, prices dropped at least somewhat year over year. On a five-year basis, though, just 25 metro areas are in negative territory, mostly from economically devastated Michigan and now-deflated inland areas of California.

[mock vomit]

I certainly haven't sold enough $30,000,000+ homes this year!

America's Most Expensive Homes
Check out the Nation's Priciest Oceanfront Mansions, Ski Lodges and Country Estates

By MATTHEW WOOLSEY
Forbes.com
June 28, 2009

There's been a lot of denial among luxury homeowners. In 2006, it was thought that the luxury market wouldn't suffer the same fate as the broader market. A year later, high-end home buyers were thought to have endless, deep pockets, further insulating the top-tier from the cratering economy. As the nation's markets in 2008 went from bad to worse, some in the industry claimed that the dearth of trophy properties outstripped supply.

This year, reality set in. No one is buying $100 million homes. Few are buying $30 million homes. Properties in that range are either being reduced by amounts similar to the national debts of small countries--Dunellen Hall, reduced by $50 million from $125 million to $75 million, and BootJack Ranch to $68 million, a reduction of $20 million from last year's asking--or are being pulled from the market entirely.

It's been a bad year for America's Most Expensive Homes, our annual list of the nation's priciest oceanfront mansions, urban townhouses, monumental ski lodges and country estates. Mainstays like the $125 million Fleur de Lys in Beverly Hills, a 45,000-square-foot re-creation of Louis XIV's palace at Versailles, and the $100 million Tranquility, a Lake Tahoe 20,000-square-foot mountain home on 210 acres, are still at the top of our list, two and three years after they came on the market, respectively.

In 2008, it took a $75 million price tag to make our list. Now there are four homes priced below that: the $68 million BootJack Ranch in Pagosa Springs, Colo., with its 77,000 square feet of cabin space, including a 13,800-square- foot main house, a $65 million Brentwood, Calif., ranch designed by Robert Byrd, a $60 million Beverly Hills mansion built in 1919 by silent-film stars Douglas Fairbanks and Mary Pickford and a $60 million Upper East Side apartment with a mind-boggling 10,000-square-feet of space.

To compile our list, we spoke with brokers and consulted listing agents and real estate appraisers and scoured real estate listings. We didn't include private listings, also called pocket listings, because they're quietly shopped around among elite buyers, nor did we measure land sales. The so-called Spelling Mansion, a 123-room Holmby Hills spread, which has reportedly been on and off the market at $150 million is currently not publicly listed and therefore was not included. The penthouse of the Pierre Hotel in Manhattan is also officially off the market.

When did the high end of the market truly fall apart? When the financial crisis set in, particularly after Lehman Brothers failed Sept. 15 and Freddie Mac and Fannie Mae went into government conservatorship on Sept. 7. In New York, and the Hamptons, that completely shut off the sales spigot. "There are only two closed sales above $30 million that I know of," says Jonathan Miller, principal of Miller Samuel, a Manhattan-based appraisal firm. "There were a few additional sales that closed in September, but they went to contract before the party ended. "It's the same story on the West Coast, almost 3,000 miles from Wall Street.

"I'm calling peak June, July of 2008, that was the end of it," says Mauricio Umansky, a broker with Hilton and Hyland in Beverly Hills, who despite the downturn has sold two $30 million homes since the financial crisis set in. "When September 15 hit, that was the boom lowering."

Of course, if it takes a couple more years to sell the $125 million Fleur de Lys or the $100 million Tranquility, their sellers are most likely willing to wait. After all, these homes been sitting on the market for years, and the amount a broker can make in commission off that kind of sale is enough to retire on.

Perhaps that's the fifth factor in the high-end market: It only takes one offer.

THIS home is so swanky they built a mountain growing out the top of it;

What does $155 million get you? Apparently, a home. With a 30-car garage, a bowling alley, and its own ski lift at the Yellowstone Club near Bozeman, MT. And the title "The World's Most Expensive Home" from Forbes magazine. The Disneyland-sized estate eclipsed the record previously held by the $139 million "Updown Court" in England, and makes Trump's renovated $125 million estate in Palm Beach look like a beach shack.

I think if all us Dentist's here at TGR charged each of our customers a buck a visit, we could pool the money and make this ^^^ the official Mag club house?

[skier666]

OK, 17 days ago. we officially put our San Francisco 'condo' up for sale. Traffic at the two Open Houses have been stronger than they've seen in a long while, and have had around 3 private showings but no offers as of yet. Just to compare, when we bought this place, we literally had to run to the real estate office and make an offer before it sold. The 20 units in the building only took a few weeks to completely sell out.

I've been researching non-stop for our next property on the North side of town for the last 2 months with only a few selling, most have reduced prices 5-10%. Very few places going for list. The day of overbidding is gone.

Financing has been, well, interesting. It took us a while, but after 2 months we finally found a lender that will lend for a SF 'condo' at 20% down for a jumbo loan. Most lenders are requiring 30% down no matter what. FHA loans don't apply. Hell, I don't blame them. since I don't see prices rising anytime soon, or see many people with $300K in their back pocket to throw down on a $1 million condo.

Bottom line, I'm trying to get the equity out of our place asap, and use that to get a better deal on the next place before other countries refuse to buy US Treasuries/Greenbacks and the rates start to skyrocket.

Fun times.

[mock vomit]

You lagging markets may still have some paying to the piper left to do...

America's Most Troubled Luxury Neighborhoods

The Collapse in Prices Has Finally Come Home to the Rich
By STEPHANE FITCH and MATTHEW WOOLSEY
Forbes.com

July 4, 2009—

Has the housing market scraped bottom? Not in some of the wealthier neighborhoods -- places like New York City's Greenwich Village, Santa Monica, Calif. and Chicago's Lincoln Park. They held up nicely while the rest of the country slumped last year. This year such Tiffany zip codes are on track to fall 15 percent to 25 percent.

Why haven't you heard about this? Statistics lag. With relatively low unemployment, high-end addresses don't have foreclosures to hasten capitulation. If they've attracted luxury high-rise developers, these markets may be propped up by recent condo closings at foolish prices agreed to two years ago.

But talk to experts who know the regions block by block -- or to people who've sold (or tried to sell) a home or co-op. There is a still-growing supply of wildly overpriced, unsold homes--60,000 U.S. properties priced above $2 million listed on Realtor.com. Experts get these gloomy vibes by dividing inventory by the current monthly rate of purchases.

Click here to learn more about the 13 most-distressed cities of the super-rich at our partner site, Forbes.com.

"Any result over seven months generally means falling prices," says David Stiff, chief economist at Fiserv in Brookfield, Wis. In some tony neighborhoods the level of glut is higher than the national average of ten months.

Unsold inventories in Manhattan are at their highest levels in a decade. You can't tell by looking at data about its condo market. According to Radar Logic, which generates national realty info from its New York City office, condo values fell only 4 percent last year -- far less than the 12 percent drop for the city as a whole. It's been held aloft by new-construction condo sales above the $1,200-per-square-foot level, says Radar Logic founder Michael Feder, reflecting deals struck a year or two ago. Once they pass through the system, the average price of a condo will plummet to $900 a square foot, reckons Feder.

In addition to the 10,500 properties already listed, there are another 9,500 in the wings, estimates Manhattan appraiser Jonathan Miller. Some 2,500 of these shadow listings belong to sellers who have some flexibility to keep their listings off the market in hopes of better pricing. Developers hold the rest. Both groups are likely to rush their listings onto the market once it's clear prices are falling.

Some folks can't wait. Françoise Pourcel, 62, listed her 2,100-square-foot Tribeca loft last August at $3.5 million, in line with the sale price of a similar unit on a lower floor of her building. In June she accepted a bid for $2.5 million.

Condo prices in Manhattan would have to fall 50 percent to return to values relative to rents they had in 1999, a relatively sane year in real estate. A condo owner could then lease his home and garner net rental income (rent minus property taxes, insurance and fix-up costs) equal to about 7 percent of the property's fair market value. The current yield is around 3.3 percent. Far too low.

It's a similar story in Lincoln Park, where single-family home prices slipped only 2.2 percent last year, far less than in the rest of Chicago. But inventory has since tripled. Wagner Appraisal Group figures there's a 16-month supply. A year ago "I was almost cocky about our position compared to the rest of the market," says Jennifer Ames. No longer. After 11 months of lowering the $2.1 million asking price on her 3,400-square-foot house, Ames sold it in June for $1.6 million.

Given the glut of unsold homes, Lincoln Park's prices may well slide at least 15 percent this year -- as Chicago's did in 2008. If you look at Fiserv data going back many years, you find values in Lincoln Park track the rest of Chicago pretty closely with a one-year lag.

In Santa Monica's coveted "north of Montana" area overlooking the Pacific, listings are up 60% since last year and the number of days on the market for those listings has doubled to 140. Homes once sold in as little as a week here. Closer to Main Street, Bill H. Meyers has struggled for more than a year to sell his condo.

In April 2008 L.A. was hurting, but Santa Monica values hovered around their peaks. So Meyers tried to unload his property for $850,000, roughly in line with what another unit in his building sold for. He turned down bids near $800,000 after he found a renter at $3,500 a month.

Now that his tenant is gone, Meyers hasn't found a replacement at that price, and getting another $800,000 bid is impossible. The data still say Santa Monica is stronger than other nearby markets. It's just 14 percent off peak prices, versus Los Angeles, down 38%. But the beach city's inventory of unsold homes has just crossed the 15-month level, as high as Los Angeles' were last year. By that grim logic, Santa Monica's values are likely to tumble as far as those in Los Angeles did last year, 27 percent.

Like Meyers, anyone who can afford to will hang on as long as possible, banking on the faith, he says, that "the market is going to come back." Meantime, excess supply is piling up.

Copyright © 2009 ABC News Internet Ventures

[grapedrink]

[rideit]

I just drove by Teton Springs (which is operational, amazingly) and Phil Major, the local fencing scion, was UNINSTALLING thousands of board feet of buck rail fence, out on the highway. (near Victor)
Maybe something 'else' was going on, but it appeared to me to be a little odd. I will try and scoop details tomorrow, but damn, the gated golf course thing is DONE here, for now! (and that is not a bad thing, IMO, it was getting out of hand.)

[Core Shot]

Well, last month I sold a flip house that was REO bank owned and made 60% return on my money in 4 months.
You can make money in this market.
Just choose wisely.

[skiwithcharlie]

I cant wait till the Olympics are over & the interest rates start rising so the housing bubble in BC will finally explode big time!

The only thing keeping the housing market going are the low interest rates. If the rates were not so ridiculously low, nobody would be talking about any kind of comeback. 2.75% rate = crack. Dont get suckered into buying by the present rates cause youll regret it a few years unless you can really afford, even with 10% rates, the place your looking at. The real good deals(at least in BC & most of Canada) are yet to come....

[ass-to-mouth]

Former co-worker sold his house last month after 8 months on the market for $182,500.

He paid $260,000 in June 05 & then dumped another $30,000 into it.

Thank god for rich in-laws.

[elevens]

You can make money in this market.
Just choose wisely.

Can I get an AMEN.

We just sold our NYC apartment for a very nice profit last week. We bought the place 3 yrs ago. It's a nice apartment that needed alot of cosmetic work. With a little elbow grease and sweat, we turned the place over.

Our place was on the market for less than 3 months and we had two folks bidding on it before we settled.

Be smart and don't be afraid to get your finger nails dirty.

[skier666]

Very nice, congrats....

I get SF condo sales activity emailed to me every week with listing price, sales price, and days on the market. A couple places in our selling range went for more than list....fingers crossed.

[powder11]

The only thing keeping the housing market going are the low interest rates. If the rates were not so ridiculously low, nobody would be talking about any kind of comeback.

According to a recent study, population increase due to new immigration and immigrant groups having larger families are putting pressure on the housing market in Canada. The low rates are just the icing on the cake.


http://www.ctv.ca/servlet/ArticleNew...709?hub=Canada

[Stu Gotz]

Another NYC selling data point - we will finalize the sale of our apartment on Monday for 10% more than we bought it in 2004. 11% below what the apartment directly below ours sold for last summer. 5% below ask.

FWIW.

[Pow4Brains]

FWIW, my folks just sold an 1100 sqft house in Madison, WI for sale by owner for $180k in a week and a half. Nothing fancy but a nice starter home. Maybe that 8k tax credit is doing something?

[skiwithcharlie]

According to a recent study, population increase due to new immigration and immigrant groups having larger families are putting pressure on the housing market in Canada. The low rates are just the icing on the cake.


http://www.ctv.ca/servlet/ArticleNew...709?hub=Canada

Of course, immigration is the only thing keeping the Canadian population growing. Without it, we would be shrinking and so would house prices. Were still not growing by very much and most immigrants cant afford anything except when the whole family lives in the house and pays their share. The low rates are keeping the real estate going but once they are gone, watch out. Once they go up, immigration wont help a thing.

Also, never trust any info about real estate that comes from a bank or estate agents/ associations, they are just trying to get things going again by manipulating info and making it say whatever seems the most optimistic. In reality, house prices in BC have 2X in the past 10 years, yet the average salary has not even increase by 40%. Peps in BC spend on average 60% of their income on their house nowadays. Thats just ridiculous and its gonna come down soon enough.

[powder11]

Of course, immigration is the only thing keeping the Canadian population growing. Without it, we would be shrinking and so would house prices. Were still not growing by very much and most immigrants cant afford anything except when the whole family lives in the house and pays their share. The low rates are keeping the real estate going but once they are gone, watch out. Once they go up, immigration wont help a thing.

Also, never trust any info about real estate that comes from a bank or estate agents/ associations, they are just trying to get things going again by manipulating info and making it say whatever seems the most optimistic. In reality,house prices in BC have 2X in the past 10 years, yet the average salary has not even increase by 40%. Peps in BC spend on average 60% of their income on their house nowadays. Thats just ridiculous and its gonna come down soon enough.

I have no crystal ball as to where interest rates are headed, but most folks in the market are taking advantage of low rates and not relying on it. I can easily afford double the rate I'm paying now so its going to have to sky rocket to really make a difference.

I won't even comment on your bong talk conspiracy theories.

When home prices go up, people sell and use the equity to buy a bigger more expensive home. The equity they gained from the sale of their home allows them to afford a home that doesn't necessarily correlate with their salary. They sell the home to someone who either has done the same with a lesser value home or someone who has the $ to afford that particular home. The people who are typically shut out of the market are the ones who never got off the sidelines and will forever rent because they're always waiting for prices to come down. When prices do drop (like they did last year), those same people are too chicken to make a move because they think prices will continue to drop.

I believe the Canadian market is fairly sound and most Canadians are fairly conservative when it comes to mortgages so you just don't see people going upside down. Canadian Banks don't offer risky mortgage products and usually require a min 10% down payment. In the finance world, Canada used to be boring. Now it is the envy of the world.

RE investing rule #1:

Buy when people are selling and sell when people are buying.

[Benny Profane]

Hmmm........well, to coin a well worn cliche of the past year or so, when the tide goes out, you find out who was swimming naked. Sorry about how your collective real estate pyramid scheme turned out.

[Bart T]

yeah, well, some people deliver pizzas, some people invest in pizzerias. different risk tolerances, I guess...

Hmmm........well, to coin a well worn cliche of the past year or so, when the tide goes out, you find out who was swimming naked. Sorry about how your collective real estate pyramid scheme turned out.

[grapedrink]

whistler real estate will always be inflated, there's a very small and finite supply of property available.. but vancouver is retarded, 2 million people in the metro area and average prices 120% higher than montreal... problem is salaries aren't much higher..

[Spats]

They sell the home to someone who either has done the same with a lesser value home or someone who has the $ to afford that particular home. The people who are typically shut out of the market are the ones who never got off the sidelines and will forever rent because they're always waiting for prices to come down.

It should be obvious to anyone why this doesn't actually work. If the only people that can afford to be in the market are people who are already in the market, home values cannot grow indefinitely -- because people leave the market or size down due to death, retirement, etc.

This is basic economics. It's impossible for money to be made, net, if a fixed number of people simply sell the same houses back and forth to each other. Eventually some of them will be unable to sell their house, and they (or, more likely, their bank) loses the profits everyone else made. And that's exactly what has happened.

I'm not saying you can't make money being one of the people in the middle, and if you have, good for you -- but that doesn't make 2 + 2 = 5.3. You've been fooled by the impact of steadily lowering interest rates and lending standards (i.e. decreased price of money) into thinking that chaining yourself to crushing debt, one location, and a constant maintenance burden makes you really smart by definition.

[Egon]

Be smart and don't be afraid to get your finger nails dirty.

WWMPKS?

Well, was it worth it living in NYC for 3 years?