thehousingbubble@gmail.com
Blog

It Feels Like 2006

A report from the Seattle Times in Washington. “Since the local market peaked last spring, single-family home prices have fallen twice as fast in the Seattle metro area as in any other region in the country, according to the monthly Case-Shiller home-price index.The total drop for the full metro area in that span totals 6 percent, after falling another 0.3 percent in January from the month before.”

“The current median cost of a single-family house is $655,000 in King County, $475,000 in Snohomish County and $355,000 in Pierce County. The Pierce County figure is tied for a record high, while King and Snohomish are well below their peaks reached last spring.”

From Reuters. “U.S. homebuilding fell more than expected in February as construction of single-family homes dropped to near a two-year low, offering more evidence of a sharp slowdown in economic activity early in the year. ‘The sugar high is just about over,’ said Joel Naroff, chief economist at Naroff Economic Advisors. ‘The risks are more toward the downside than the upside.'”

From WTOP in Virginia. “A historic home for sale in Old Town Alexandria, Virginia, built in 1795 that served as the boyhood home of Confederate Gen. Robert E. Lee just had a big price cut. Originally listed for $8.5 million in April 2018, the listing price has been reduced to $6.25 million.”

The New York Times. “Clayton Morris walked away from his job as a Fox News host in 2017 to devote himself to the next phase of his professional life: helping regular people achieve financial independence. Their plan was to connect mom-and-pop investors with turnkey investment homes in Detroit, Indianapolis, Jacksonville, Fla., and several other cities. All clients had to do was put up the cash and wait for the checks to arrive.”

“Nearly two dozen customers are now suing Mr. Morris and his company. They contend that the properties were in worse shape than advertised, and that rehab work paid for upfront was done poorly or not at all. Vacant lots sold on the expectation of new homes being built are strewn with trash. One house gutted by fire was sold a few days later to an unwitting investor, according to a lawsuit.”

“‘He comes across as this nice, likable family guy,” said Brian Freeman, a California lawyer who plunked down about $40,000 for a ramshackle home that was in such bad shape he was issued fines. ‘He’s famous and I thought, ‘He’s not going to ruin his entire reputation.’ Obviously, in hindsight, I feel like such an idiot.'”

The Times-Herald in California. “Nearly two-thirds of Bay Area residents say the quality of life here has gotten worse in the last five years, according to a new poll. Diego Vela, a software engineer, commutes from Dublin to his office in San Francisco on BART. Some days it takes as long as 90 minutes to come and go from work. It’s time spent away from his wife and infant daughter, and he hates it.”

“Vela, 30, has a good salary that could be the envy of friends and family back home in Texas. But then he explains to outsiders the high cost of living in California. ‘It looks nice,’ he said, ‘until you factor in reality.'”

The Wall Street Journal on Arizona. “Across the country, the housing market overall has slowed. But in the regions just beyond the affluent suburbs, new home building and sales are showing signs of life. Rising mortgage rates and home prices, especially in urban centers, are once again motivating buyers to drive until they can afford a home, including in Dallas, Las Vegas, Atlanta and the San Francisco Bay Area. Low gas prices help as well. Last year, Maricopa, Arizona issued permits for nearly 1,000 new homes. In the depths of the housing downturn, in 2010, it issued just 110.”

“Buyers are ‘having to drive further from the city center in order to be able to afford a house,’ said Doug Duncan, chief economist at Fannie Mae.”

“Josh Bush and Danielle Rhee were drawn to Maricopa from Portland, Ore., for the housing prices. They bought a $250,000 six-bedroom home there last year—less than it would have cost them to get two bedrooms in Oregon, said Mr. Bush, who is 29 years old.”

“Mr. Bush, who designs fire sprinkler systems, leaves for his job in Phoenix before 6 a.m. each morning to keep his commute to about 50 minutes. The drive can take two hours if he hits traffic. He considers the trade-off worthwhile. ‘If you move into town, you’re going to spend your entire salary paying for a house,’ he said.”

“Compared with the last boom, builders and lenders say new communities aren’t reliant on subprime mortgages and speculative investment. Buyers are more often using loans backed by the Federal Housing Administration that require only a 3.5% down payment and a minimum credit score of 580, or Department of Veterans Affairs or U.S. Department of Agriculture loans that require no down payment.”

“Jordan Rose, an attorney who represents many developers and home builders in the area, said during the last boom, she used to work in her car using a portable modem because she didn’t have time to make it back to the office between zoning meetings.”

“She is even busier now. ‘It feels like 2006 without the fake high at the end of the rainbow,’ she said. ‘There’s the same exuberance, but the buyer is real.'”

Related Posts
This Post Has 35 Comments

  1. ‘Brian Freeman, a California lawyer who plunked down about $40,000 for a ramshackle home that was in such bad shape he was issued fines. ‘He’s famous and I thought, ‘He’s not going to ruin his entire reputation.’ Obviously, in hindsight, I feel like such an idiot’

    I’ve read that stamping your little feet helps.

  2. ‘Mr. Bush, who designs fire sprinkler systems, leaves for his job in Phoenix before 6 a.m. each morning to keep his commute to about 50 minutes. The drive can take two hours if he hits traffic. He considers the trade-off worthwhile. ‘If you move into town, you’re going to spend your entire salary paying for a house’

    Drive til you qualify – check!

    1. I *LOVE* these long commute time loanowner articles.

      Because they showcase the human misery sold by REALTOR.

      You were sold a lie, you overpaid, and oh yeah, you’re underwater.

    2. This is the truth about Phoenix. The only affordable homes for ordinary people are way out there, resulting in long commutes. Those commutes become hell if you hit traffic.

      This is Phoenix! I don’t think it’s worth it to live here anymore.

  3. ‘Some days it takes as long as 90 minutes to come and go from work. It’s time spent away from his wife and infant daughter, and he hates it. ‘It looks nice,’ he said, ‘until you factor in reality’

    Well it was cheaper than renting Diego.

    1. ‘It looks nice,’ he said, ‘until you factor in reality’

      Is Diego hitting the shroom fields before he make these life choices like taking a job and finding a place to live? If not reality what is he factoring in?

    1. More asset price inflation policies to be delivered pronto by central planners together with hammer of Thor precious metal smashes to maintain the facade of normalcy.

  7. “Nearly two dozen customers are now suing Mr. Morris and his company. They contend that the properties were in worse shape than advertised, and that rehab work paid for upfront was done poorly or not at all.

    A Real Journalist devoid of integrity or ethics? This is my shocked face.

  8. “She is even busier now. ‘It feels like 2006 without the fake high at the end of the rainbow,’ she said. ‘There’s the same exuberance, but the buyer is real.’”

    No, Jordan. The only “real” part of any transaction involving Yellen Bux is the debt being incurred by FBs.

    1. “Let me just say, [MSNBC] should have their top host on primetime go before the cameras and hang their head in shame and apologize for lying to people for three straight years, exploiting their fears to great profit,” Greenwald began. “These are people who were on the verge of losing their jobs. The whole network was about to collapse. This whole scam saved them. Not only did they constantly feed people for three straight years total disinformation, they did it on purpose, Tucker.”

      He continued, “There was a whole slew, not just me, of left-wing journalists with very high journalistic credentials, far more than anyone on that network, like Matt Taibbi and Jeremy Scahill and many others, including myself, who were banned from the network because they wanted their audience not to know that anybody was questioning or expressing skepticism about the lies and the scam they were selling because it was so profitable.”

      “They did it on purpose. It was a total fraud that they perpetrated on their audience and to the extent that they talked about it at all, it was to call us agents of the Russian government to defame us as traitors and to lie about us continuously to their audience,” Greenwald concluded.’

      https://dailycaller.com/2019/03/25/the-intercept-greenwald-msnbc-tucker/

      1. And the narrative was DJT is Hitler or something. Truth or consequences? Nation of laws? Just like with children, no consequences, no change in behavior. HRC, for example. “Laws are for little people.”

        “If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.”
        – Joseph Goebbels

    1. I grew up in a 2 family house and Then my father built his own 2 family house, and something he stressed over and over to us was the landlord always get paid first.

      1. “… the landlord always get paid first.”

        Maybe once upon a time this was true. Nowadays a lot of people aren’t even this intelligent. But, if they make bad choices, spend all their money on toys then can’t pay the rent, I’m supposed to feel sorry for them.

    1. Shouldn’t there also be the equivalent term “mortgage-burdened” for those whose mortgage payment exceeds 30% of their income? On top of that there’s property tax, insurance and maintenance (and now less to deduct too, with SALT caps). Plus having to deal with house prices dropping. Plus, you can always escape from the rent burden by moving. You can’t easily escape the mortgage burden.

      1. “Plus, you can always escape from the rent burden by moving. You can’t easily escape the mortgage burden.”

        Renters always make it sound like if you wake up one day and decide to move, you just move. It doesn’t work that way. When you sign a 1 year lease, you commit for a year do you not?

        1. “When you sign a 1 year lease, you commit for a year do you not?”

          Yes, but the rent will not increase during that period of time. If they try to sock you with a rent increase, moving is an option.

          Likewise, if they’re not taking care of the place properly, or the neighbors suck, or of the neighborhood in general is going to pot, it’s a lot easier to move out at the end of a lease, than to sell a house and move.

  13. I do most of my business in new construction developments in Manatee and Sarasota counties in Florida. High grow areas. I can tell you with certainty that new home starts are way down. Drove through 3 complete new developments a couple of days ago. Combined total size of these 3 developments is probably around 800-1000 total sites. Large modern fairly expensive places. I counted a total of 3 combined house that were new starts. This meaning first 10 to 20 per cent of completion. Many finishing up but not to many getting started. The data on closed sale volume is way down as well and we are in our peak season right now.

    Significant enough that I am mobilizing ancillary services to leverage changing conditions in new home market. In about another 6 months to 1 year will be mobilizing distressed and foreclosure specific services. You have to roll with the changing markets and this one, in my eyes, is changing more rapidly that being reported. Not difficult to spot when you drive through new home developments. Here at least.

  16. “Compared with the last boom, builders and lenders say new communities aren’t reliant on subprime mortgages and speculative investment. Buyers are more often using loans backed by the Federal Housing Administration that require only a 3.5% down payment and a minimum credit score of 580, or Department of Veterans Affairs or U.S. Department of Agriculture loans that require no down payment.”

    NO BUBBLE HERE

    “Jordan Rose, an attorney who represents many developers and home builders in the area, said during the last boom, she used to work in her car using a portable modem because she didn’t have time to make it back to the office between zoning meetings.”

    “She is even busier now. ‘It feels like 2006 without the fake high at the end of the rainbow,’ she said. ‘There’s the same exuberance, but the buyer is real.’”

    KEEP BUILDING BOYZ

  17. Re-post of the KOMO news special “Seattle Is Dying”

    https://www.youtube.com/watch?v=b53uiRFq4Ds

    LOL@ the article posted a few weeks ago about a new loanowner in Seattle crying about multiple burglaries with a new baby in the (now underwater, mortgaged) house in Seattle.

    You listened to REALTOR, and had to buy now or be priced out forever 🙁

  18. Well I like a short 10 minute bike ride to work and homes in the area would cost me 4x what I pay for rent. Now if I wanted to suffer a Diego Vela style commute, then sure, I could plunk down 80k and have a 2k monthly mortgage with larger place but also have the nasty long commute. Thanks but no thanks.

Comments are closed.