Housing Bubble Bursting?

[Terrel L. Shields]

sounds like Bolshevek to me

Right now smaller homes that are affordable, say $200K or less are selling well. Subdivisions are full of $300K houses that have been on the market for months.

We have a new "upscale" apartment house built 10 miles out of town. One wag assured me that all the units were already leased, which I knew was BS. I went thru there on my way home about 6 pm. Ha Ha. ½ the units are not even complete and one window was blowed out and black like it had been on fire. There are 300 units and about 50% are completed. There might have been 40 cars in the parking lot, no more.

Another builder developed 60+ acres with ¼ ac. lots out of town (we call 'em Greenfield subdivisions or "rurban") Found out it was on the market "as is" and the dirt work is about 80% done and no paving yet. $1.5 million. He gave $700,000 for it, I would guess he has that much in it...sounds like they just want out.

 

[Randolph Kinney]

Sellers turn to auctions as houses sit in cooling markets

More home sellers try residential auctions
As the housing market cools and selling a house gets harder, more homeowners are turning to residential auctions to sell their property, says an article published by South Florida Sun Sentinel. Only about 6% of real-estate sales were accomplished through auction in 2004, but in 2010, that percentage could swell to 30%, the paper says. Auction home sales rose 24% between 2003 and 2005, according to an article published by the Los Angeles Times. The Los Angeles Times says the Internet has fueled much of the growth, particularly eBay. The article suggests inspecting a home before bidding on it at auction, using caution when considering a foreclosure auction property and using both live and online auctions to find available properties.

 

[Randolph Kinney]

For all you AVM fans, run Zillow or whatever you like on the property shown in the PDF in the above post or shown in the following link:

http://homeauctionadv.com/default.aspx

This house is subject to lender's approval of the highest bid. This really is a short sale auction.

[FONT=Arial, Geneva, sans-serif]Lender Confirmation [/FONT]
[FONT=Arial, Geneva, sans-serif]Seller will accept the high bid; however, t[/FONT][FONT=Arial, Geneva, sans-serif]he purchase price is subject to confirmation (acceptance) by the seller’s lender, who is owed more than the home is worth. We anticipate this acceptance.[/FONT]

The listing price is under what the house is worth. I wonder how close to market value this auction will get?

 

[Terrel L. Shields]

My nephew just closed on a short sale. The Mtg Co ate $7000. Seems the couple split up and was just going to let it go back. They had a second for $35K and a $15 K judgment against the man. Cleared the judgment, Mtg. Nef said, they owe more than its worth, but we'll list it for that plus commission. They did. Got an offer. fell thru. Got another. Mtg Co. toting the note balked. Skippy did his job, appraised it for sales price for the new buyer. Mtg Co. manager finally gets involved, realizes the thing won't bring within $30K what they have offered now so they "eat" the $7,000. Beats the prospects of selling later as REO.

Today, vacant land is still selling very high on auction, but commercial and houses are selling quite low....of course, condition is a factor there. The little tracts are drawing the wanna be land barons speculating. People whom I know have limited funds are borrowing to the max to buy small land tracts and hoping to flip to developers. Most are not getting any offers whatsoever...still go to the auction and bingo.

 

[Austin]

Insane defined: Repeating an action that fails everytime

You guys are talking about what is happening but I am worried about what is going to happen. These are just the opening shots. Locally we have the highest unemployment rate in the state and within the last year have lost 4% of our local jobs. Dan River Mills was the biggest employer in the region and I just knew that if they bit the dust the bottom would fall out of the entire region. Well six months prior to December 2005 we lost 1200 jobs when two tobacco processing plants closed the doors, then in December 2005 Dan River Inc. was sold to an Indian company and all jobs went to India taking another 1,200 jobs. Local employment is 22,000.

What would you anticipate is the result to this point? The answer is nothing. The market is loaded with property for sale and June sales were down 25% from a year ago. The last 5 months are the best I have ever had. Local people can’t even hire help. 1,000 job seekers left the area and the population is down from 50,000 in 2001 to 46,000 now. We went out to eat tonight and went to three restaurants before we could get in one. The first one we went to was new and had not opened yet. They were training employees. Things have never been better it would seem.

Here is my concern: The lenders know what is going on and are just holding off to avoid a stamped. Once panic sets in things will really get rolling. You would not believe the people around here that have been living off the equity inflation on their homes. Refinance every two years or so. It’s like throwing a ball up in the air. It stops dead still at the top but then accelerates down to the grown. We are at the dead in the air phase and ready for the plunge.

One local developer announced back in the spring he was starting construction on a 128 unit apartment complex in June. So far, no activity on the site. Investors are coming from all over the country buying downtown property to convert to apartments. The population is going down and the vacancy rate is already in excess of 25%. There are five of these projects within 200 yards of my office. They seem to be betting on the retirees living in these things, people that can’t afford the up keep of a house. What is going to happen to the houses they move out of? The quiet before the storm I fear. One loan voice crying in the wilderness…..

 

[JSmith43]

Eat, drink and be merry, for.......

 

[Big ole Boy]

Insanity

Insanity got a foothold when Bur turned around and shot Hamilton .... or did insanity get a hold when man thought he could fly?

Perhaps insanity all began long befoe we were born.

Today we have actors (Not owners).

The process of De-Evolution is formed on many hands of cards stacked on the table of denial.

 

[Steve Owen]

You guys are talking about what is happening but I am worried about what is going to happen. These are just the opening shots.

Yeah... here it comes....

http://www.kansascity.com/mld/kansascity/business/15199561.htm#jobs

Unemployment rising in the staid Midwest is sure proof that the Fed has gone too far. I believe (based on past experience) that when it hits 8 percent around these parts it will start to have a major effect on housing. Now at

a five-month high of 4.8 percent

and rising.

So, what is it in your area, Austin? I would assume that you are either approaching or above the magic number. (Or does your experience indicate a different number for your area?)

 

[Austin]

Unemployment in my area is 10.5% and has been there for a while. The adjoining county to the west is about 10% and longer term than ours. During the depression the rate was only 20% so we are well over half way there.

Once upon a time Martinsville, VA, 30 miles west of here had more millionaires per capata than any other city in the country. It was a town of furniture manufacturing. The furniture industry bit the dust before textiles and tobacco.

 

[Big ole Boy]

Former Head of the RTC

Bill Seidman was on CNBC the other day and was asked a question about inflation and why there seems to be such a large disconnect between the publish rate of inflation and what people are actually experiencing at the grocery store.

....I was surprised by his response .. ... he seemed to be caught off guard ..... and made the offhand remark that inflation affects people differently based INCOME .......

....so, I thought inflation was calculated on the costs of things and now this former RTC enforcer from his "Ruling Class" suburb in Naples, FL is telling me its really calculated based on some "fictional income" logirythim ??????

Seidman response was that of a man with a disturbed look on his face ......

I say again, how does inflation have anything to do with the estimate of inflation unless they are using the incomes of the top 1% in some sort of macro nominal income verse cost.

If so, then as Seidman quite accurately stated .... "inflation affects folks differently based on their income" ....

... seems to me hand to mouth inflation is running around 20% per year already and has been for a number of years ....

...... so when you say the FED will have to keep rates low ..... you forget that the FED has been misleading the american public for years about real inflation and that now the chickens are coming home to roost......