Housing Rolling Along 2

Quote from jficquette:

I guess that is a not so subtle hint to sell before foreclosure comes.


John
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And that is probably why inventory levels are absolutely exploding in many areas. And these are probably just the smart few that are selling, the rest are unaware and complacent.


http://www.fresnobee.com/business/story/12603299p-13310134c.html
Prices of existing houses are falling a minimum of 1% to 2% per month, much to the consternation of homeowners used to seeing appreciation rates of 20% to 30% per year — and any would-be sellers are in a state of denial, agents say.


http://www.madison.com/tct/business/index.php?ntid=95414&ntpid=0
‘There’s inventory out there that we’ve never seen before,’ said John Deininger, director of the RASCW. ‘The concept that it can go up every single year is naive.’”


http://www.rrstar.com/apps/pbcs.dll/article?AID=/20060818/BUSINESS04/108180016
“Echoing national housing trends, the Rock River Valley is turning from a sellers’ to a buyers’ market, complete with a growing supply of, and shrinking prices for, existing homes. ‘Have you heard the saying the little pig gets fat, but the fat hog gets butchered?’ asked Jim Barbagallo, president of the Rockford Area Association of Realtors. ‘People who price their homes too high hoping to cash in are seeing them sit out there.’”


http://www.dallasnews.com/sharedcon...s/stories/081806dnbusforeclosure.317270a.html
“More and more North Texas homeowners are in big trouble. Residential foreclosure postings are at record levels. More than 3,800 houses are threatened with foreclosure next month in the Dallas-Fort Worth area. ‘This is bringing back nightmares of 1988 and 1989,’ when thousands of Texas homeowners lost their properties during a regional recession, said George Roddy. ‘The average number of postings in 1989 was about 2,000 a month,’ Mr. Roddy said. ‘And that is when we saw a massive devaluation of residential properties in some areas.’”


http://www.theaustralian.news.com.au/story/0,20867,20174559-5001942,00.html
“Many Americans are desperately refinancing, finding themselves with thousands of dollars less a year in disposable income than they had last year. Debt levels are sky high and the savings rate is negative.”


http://www1.pressdemocrat.com/apps/pbcs.dll/article?AID=/20060817/NEWS/608170305/1033/NEWS01#more
In Sonoma County, home sales hit an 11-year low for the month of July and have dropped for 10 consecutive months in year-over-year comparisons. While the slowdown was anticipated since the market peaked a year ago, longtime brokers were surprised by the price drop.”

“‘I didn’t think it would go down as quickly this soon. I don’t think it’s hit bottom,’ said broker Beth Robertson in Rohnert Park.”
 
Quote from Covertibility:
Not bad given the monumental crash everyone has predicted for the past 4 years. [/B]
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Must be the typical mentality nowadays, "soft landing". Still living in denial. Sad.
 
I guess this week's home sales numbers are going to startle some people.

I say that based on some comments by the homebuilding companies about how sales have fallen off a cliff.

We'll see.

John
 
I see that Toll Brothers has 80k lots. That is about a 8 year supply. That's nuts.

This is the same thing US Home did in the late 70's when I worked for them. They bought tons of options on lots and bought tons of lots outright. They expect rising land values to offset carrying costs, plus they were captializing taxes and interest on the lots.

John
 
Nothing new under the sun. People never learn. There is an old saying “Fools are soon parted with their money”. I have several friends that bought 600-700K condos last year with combined family income of about 100K. This is nuts, and when I tried to explain to them that they are above and beyond overstretching themselves, I was told that I know nothing. Their RE brokers apparently had them convinced that their condos will be worth over a million within few years.

It is amazing that people spent weeks and months researching when they decide to buy a new plasma TV, but would buy properties with no second thoughts.

This will end in tears, and I am afraid in rather large ones.

redduke
 
Quote from jficquette:

I see that Toll Brothers has 80k lots. That is about a 8 year supply. That's nuts.

This is the same thing US Home did in the late 70's when I worked for them. They bought tons of options on lots and bought tons of lots outright. They expect rising land values to offset carrying costs, plus they were captializing taxes and interest on the lots.

John
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So when we interpret the financias for the homebuilders, is it phoney numbers once again? Since they capitalize carrrying costs on lot inventory rather than expense the costs.

Phoney baloney numbers all over again?
 
Quote from kowboy:

So when we interpret the financial for the homebuilders, is it phoney numbers once again? Since they capitalize carrying costs on lot inventory rather than expense the costs.

Phoney baloney numbers all over again?
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I don't know what they do now. In the mid 70's the accounting standards board issued a fasb that said it was ok to capitalize interest and taxes on construction projects. It was issued primarily for builders of big projects, dams, skyscrapers etc.

US Home was real aggressive with it and ran with it and the IRS said it was ok.

John
 
Quote from RedDuke:

Nothing new under the sun. People never learn. There is an old saying “Fools are soon parted with their money”. I have several friends that bought 600-700K condos last year with combined family income of about 100K. This is nuts, and when I tried to explain to them that they are above and beyond overstretching themselves, I was told that I know nothing. Their RE brokers apparently had them convinced that their condos will be worth over a million within few years.

It is amazing that people spent weeks and months researching when they decide to buy a new plasma TV, but would buy properties with no second thoughts.

This will end in tears, and I am afraid in rather large ones.

redduke
More...

I'm looking forward to it. I'm aiming to pick up properties in Southern California in several years as the dust from the California RE avalanche settles. I'm particularly fond of Newport Beach and Corona Del Mar areas.

RoughTrader
 
ive been talking to good brokers so far this week. they are quoting cap rates like 150 to 200 bps where they were 6-8 months ago; we'll see when the most recent deals start closing. resi housing seems to be real slow and commercial appraisal fees have come down by 10%-15% and turn-times have been reduced by a week. SVP at a major lender told me that appraisers were calling and offering to do $2,500 jobs for $1,800. he has passed on some bids because they were too low to do an adequate job.
 
http://www.sun-sentinel.com/news/lo...ales,0,2680559.story?coll=sfla-home-headlines
Sales across the region continued to plummet, especially in Palm Beach County, where sales were off 44 percent compared to last July.”


http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20060823/BREAKING06/60823016
“Realtors in the Sarasota-Bradenton area sold 49 percent fewer homes in July than they did a year ago, and the median price on the homes they did sell declined 11 percent. The Port Charlotte-Punta Gorda market was nearly as dismal. July closings declined 37 percent to 236 from the 374 of a year ago. The median price of a Charlotte County home fell 4 percent from a year ago to $228,300 from $236,600.”


http://www.naplesnews.com/news/2006/aug/23/sales_down_housing_market_remains_sluggish/?latest
“Realtor-assisted single-family home sales in Collier County slumped 51 percent last month compared to July 2005. The median price dropped 6 percent in the year. Home sales in Lee County dropped 32 percent, from 1,026 in July last year to 694 last month. The median price dropped 8 percent. Condo sales in Lee County dropped 50 percent...


http://www.orlandosentinel.com/business/orl-toll2306aug23,0,318409.story?coll=orl-business-headlines
“Toll Brothers Inc. said Tuesday that its third-quarter profits fell by 19 percent as the housing-market malaise weighed on sales and caused the luxury home builder to abandon some locations. CEO Robert Toll told analysts during a conference call that he doesn’t yet see signs of improvement nationwide.”

“‘I don’t see a turnaround in any of the markets,’ he said. ‘I don’t see any forming a bottom.’”
 
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