The Housing Market

bill_vincentMarch 30, 2007

I'd like to know from personal points of view, how things seem to be doing in your area, with reference to existing home sales, new housing construction, forclosures (if you know). I know of several people who've said that the real estaste market is tanking in their area, and I also know of many who say it's just as nuts as it's been over the last decade. What's it like in YOUR area, and what general area is that?

Note-- I'm looking for PERSONAL observation-- not stats.

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Bill, I'm in California's Central Valley, Fresno, where things have tapered off quite a bit from the wild times from early 2003 through much of 2006. Lots of places are now for sale and they are staying on the market for months in many cases. We have several homes in our neighborhood that have been for sale for months, whereas, last year at this time, they would have sold in weeks.


    Bookmark   March 30, 2007 at 7:17PM
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Hey Bill. I'm in the hotbed of real estate activity and angst, Los Angeles County. I always keep an eye on the market and what my home is worth - just like every other homeowner here. It's a hobby.

My area is a beach town located between some of the most expensive real estate in the US. The area is very dense and most homes here were built in the 40s thru 70s. There's no more land to develop on. I hear that every 5th home in L.A. County is over a million dollars.

We have not seen a bubble burst. Prices are holding steady, but houses are staying on the market longer. That's not saying it's bad, since houses were selling within a matter of days and a few weeks during the "rush" period not long ago.

Last year saw a lot of activity in the beach areas. Lots of last-minute flipping, folks hurrying to cash out, retirees taking the hot market as an opp to cash out and move to cheaper states.

During the winter it was very slow, not much for sale at all. I guessed that folks started getting scared from all the bubble talk. Them that were going to sell had already sold. Them that didn't need to sell decided to wait and see.

It's just starting to flow again - for sale and open house signs look like back to "normal."

I took a trip to Reno to visit friends who cashed out of California. They bought in a new development of million dollar homes. Lots of ex-Californians. Lots of new development. I'm watching that market with interest because I may be in the market to buy some land there this year. Going back in May for more research. I'll be talking to my friend tonight and I'll post again with the Reno report.

My brother and his wife have been unable to sell their nice lakeside home near Detroit for over 9 months now. They have relocated due to jobs. I told them to sell it now at a loss because that ship is continuing to sink. Hope they listen to me.

    Bookmark   March 30, 2007 at 7:18PM
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I'm in Minnesota - it's a lot slower than it was but desireable places still can sell quickly. I got a flyer about a lake place for sale on the same lake as ours and it was sold before I even got the flyer. Someone I work with has had a newish upscale condo for sale for nine months with little/no action. Someone else I work with has had their nice entry level urban house for sale for a week and lots of action and close to getting an offer. I check the real estate listings where I live - probably just nosy as I like to see the photos. I notice there are far more vacant places for sale than there were in the past - an indication to me that things aren't selling as fast as they used to. Fortunately I don't know anyone with foreclosure problems, unmanageable ARMs, etc.

We're having a contractor do some updating at our lake cabin. He also builds new homes there. I figured his business would be very slow. He said he hasn't felt much impact - he's busy building starting in the spring and could barely fit my little project in. I think his business may be more people building retirement homes who aren't impacted like the average homeowner.

    Bookmark   March 30, 2007 at 7:29PM
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In CO. We are in the top 10 with foreclosures, primarily the Denver area.

Houses are staying on the market longer, prices a tad less but not much of a change in well established, older neighborhoods.

The problems are the new housing areas where people got into them easily with many opting for refinancing and equity lines 2 and 3 times over. Sadly, this is not the first time Denver has over built and skimmed on quality. Many of these new housing areas have lost their value quickly, owners stretched, homes not taken care of and neighborhoods with a wide range of problems. These homes are a tough call to sell, overbuilt duplicates, prices lower than owners can compete with to get them sold and many now priced lower than the loans on them.

The above is primarily why we are in the top 10 and suspect our buddy list is due to same issues.

Still a lot going on in the remodeling business and new homes being built in select neighborhoods.

Will be interesting to hear about other areas.

    Bookmark   March 30, 2007 at 9:41PM
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Well, need to update my research in an upscale Metrowest MA town, but there are some honeys of houses just sitting there month after month. Some owners have pulled them off the market and are waiting "for better days".

We tried to sell ours as a tear down a few years ago, and though it was only one of seven sites for land only in town, and in a fantastic neighborhood with a large level lot, we could not sell it with any equity left, hence, the remodeling spree.

Hope we don't end up with one of those upside down mortgages!

    Bookmark   March 31, 2007 at 7:34AM
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Thanks, folks. This is pretty much mirroring what I'm hearing in another forum. I've heard so much contradictory information in the news and cable news talk shows, that I decided to start putting together my own information and decide for myself what's going on.

Up here, existing home sales have slowed bigtime. Homes will sit on the market for 4-6 months. There was one guy up here a couple of months ago who even decided to include a new Honda Accord in the purchase as an incentive. The homes that ARE selling are the top homes in their price range, and 9 times out of 10, they've been staged.

One the other hand, new construction is exactly the opposite. There are still alot of builders up here building spec homes, and most of them are sold by the time they're finished. I know of only one home between 4 different builders that I know on a personal level that's sat on the market for any length of time, and even it was sold a month and a half after it was built.

The bubble's leakin, but it hasn't quite burst yet. While sales are most certainly beginning to flatten out, it seems to be more of a regional thing with respect to the markets that are really tanking, and usually there's something more to do with it than the national economy. Case in point is northern Michigan, which seems to be in the worst shape with respect to the housing market. But that has more to do with sagging U.S. auto sales, than any other factor.

Julie, I wish you the best of luck, and pray you don't get caught short in this.

    Bookmark   March 31, 2007 at 10:30AM
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Houston's booming again! They're still building like crazy further and further out from the major employment centers, and building highways as fast as they can trying to keep up. (Thank goodness I don't commute!)

Where we are, over the past five years, this neighborhood has turned into tear-down city, with builders buying up 30-50 year old custom ranch homes from the original owners, now mostly in their 80's, and putting up 6-7,000 SF mansions that they sell to families with young kids. (How can they afford $2M houses at that young an age? Maybe they come from CA?) The house next door is fully framed for 6,700 SF, and the one diagonally-opposite just sold to a custom builder. Every day we see about 20 cars pull into our little 8-house cul-de-sac looking for something to buy...

Hope the pace holds out until we're ready to sell!

    Bookmark   March 31, 2007 at 10:35AM
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In our area of CT, anything under $300,000 is still moving but anything over is taking a long time. Unlike the last burst bubble so far I have not seen prices drop.

    Bookmark   March 31, 2007 at 11:48AM
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eandhl-- That last bubble burst got me, and got me HARD. I had a house just north of Waterbury in Terryville that I'd finished myself. Everything was marble, granite, and stained oak, and on the day before the closing in October 89, the bank appraiser put it at $265K. 4 years later when I lost it, it had devalued to 117K, and the home was in better shape then, than it was at the time of the closing, with the landscaping I'd done, finished basement, and so forth.

    Bookmark   March 31, 2007 at 12:18PM
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Bill--I grew up in Terryville! Did you move there as an adult? It's a small enough place that I know you either aren't my age or didn't grow up there.

I live in the New Haven area now. I no longer have family in Terryville but still have aunts, uncles and cousins in Wolcott and Waterbury.

Sorry the local real estate market wasn't kind to you :(

    Bookmark   March 31, 2007 at 1:54PM
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Isn't that funny-- I grew up where you are NOW-- over off Racebrook Rd. in Orange, and my family's shop used to be right at the corner of the Post Road and the Boulevard down in New Haven. Even now, if you look up on the side of the building, you'll see signs that say "Architectural Tiling and Terrazzo Co., Inc" (as kids we used to tell people our dad owned AT&T). :-) My brother's the state firemarshal there in Orange (Jamie), and most of the rest of my family is in Branford now. As for Terryville, I had a house on 262 right across the street from Lake Plymouth.

Small world!

    Bookmark   March 31, 2007 at 2:25PM
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Sweeby, most of the California exodus is to the neighboring states (Nevada, Arizona, Oregon) and Texas. If most long-time Californians are like me, we like the western-type landscape. I think Texas is included because it's 10-times less expensive and retirees or people who want to start a family can get a lot for their money they saved while in Cali.

    Bookmark   March 31, 2007 at 2:28PM
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Friends here in northern NJ are still selling very quickly for high prices. Some houses weren't even officially on the market yet, and they sold.

    Bookmark   March 31, 2007 at 4:15PM
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I'm just outside of DC in Maryland. I bought a little under a year ago after looking for over a year. We put contracts with escalation clauses on 2 houses before we finally got one - again over list. When I sold my condo in the same neighborhood , I had a full list offer in 2 days, even before the first open house. That kind of action certainly doesn't seem to be the case anymore. Houses are staying on the market longer, and the prices are down a bit (although still nowhere close to sane!), but well priced houses around here still get offers within a few weeks. I got hooked on the online real estate sites when I was looking, since I was selling FSBO, so I keep a pretty close eye for what is going on in my little square mile neighborhood.

    Bookmark   March 31, 2007 at 7:54PM
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Bill, I am sorry you got hit hard in '89, pretty much anyone that bought in the mid 80'2 ans sold in the late or early 90's got hit. This time so far I really don't see the drastic drop.

    Bookmark   April 2, 2007 at 7:52AM
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Bill...can't remember specifically, but was that during the oil crisis? Or were you hit with another economy/job impact? CO got had on the housing/job market back then.

Greatfully, both my husband and I quickly found new positions, but transferred to another state. And we had to sell since renting our home wasn't an option with rentals in the pits too. Many people were moving out of state for jobs.

Our property dropped to a rediculous value as your home did. There were so many HUD take overs that selling prices didn't give us an option to sell without losing big time.

I found a little known escape clause in our loan during that time....paid them a pitance to take back the loan without affecting our credit. We did have to eat our initial investment, but thankfully this wasn't significant in the scheme of things. How or why this clause was put in place is still beyond me and it took some heavy digging to find it. That we were thankful to have great jobs and being able to get rid of that property is an understatement.
There is still a lot of money around for investment buying and this could be a windfall for them. I'm not one of them, have never done well on that deal. Will be interesting how our housing situation evolves. And I still think the problems are based more on the loan situations rather than economy. As another poster mentioned....many still head here to buy homes of same quality but less price than what they sold in higher market locations. And, CO is a fine place to settle into.

    Bookmark   April 2, 2007 at 11:07AM
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I live in NYC (in Eastern Queens, one of them five boros). Our neighborhood skyrocketed beyond control - we are in a very quiet area of Queens, with great schools, parks, low crime. A lot of small ranches, some older colonial homes...with the low rates, builders here have done what they've done by Sweeby - tear down all the old homes, build huge McMansions on 40x100 lots and sell them for well over $1million. We also have much lower taxes than neighboring Nassau County, so that's not helping much. These 50-60 year old, 1300 sq ft ranches had been selling for at least $700K.

It seems though that a lot of these McMansions are staying on the market longer lately, and there are also a lot of homes up for sale - the prices of the older homes have dropped, but not the McMansions. There is one in particular that I think has been for sale for at least a year for 1.2 million. It has NO yard (they build two on what was once a lot with one home), and is right across the street from the community college (LOTS of traffic and noise during the school year).

I am also noticing a lot of these McMansions for sale AFTER they were built and lived in for a while - guessing they owners could not keep up with the payments.

Personally, I hope the market drops. Though I like having the equity, I hate what has happened to my neighborhood.


    Bookmark   April 2, 2007 at 11:55AM
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I believe the market drop in CT at the time you are speaking was related to the huge drop in defense spending. At the time, the CT economy was wrapped up in Sikorski and the Groton base, and lots of other military type spending. The entire military market lost tons of federal funding, and hence the large dip in the real estate market. I'm speaking as someone who bought a "starter" home condo in '89 in Meriden and had to rent it out from '93 to '02 or so b/c it lost 1/2 it's value and it took that long to recoup. That was an ugly time. That experience taught us some valuable lessons though. We've never "over" renovated or over valued our house since then.

    Bookmark   April 2, 2007 at 2:49PM
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Our market in Anchorage AK is still steady, but perhaps not psycotic as it's been. We purchased our townhouse on a lake for $275 three years and it was appraised as is (we're remodeling) for $350 today, $475 after the remodel. A nice gain, but townhomes in the mid $400's to low $500's are in high demand. Townhomes on lakes are basically unavailable. I know (from offers we receive regularly) that we could sell it above appraised value quickly with many bids.

Townhomes above us (not on the lake) which were $235 to $250 when we purchased are selling now for $315 or so in vintage 80 condition.

Homes have seen steady increases, probably about 10% or more annually. The only slow down was in the over $1MM values which had declined somewhat when oil concerns began, but now (a year later) they're turning well.

It's hard to buy anything for $100 or so. Three years people told me I was nuts to ask $115 for my 750sq ft condo (nice unit, nice neighborhood etc) but I turned it on my own in a few weeks for $117. They're going for $140 to $150 now.

High end stuff turns quickly ($500 and above) because of the oil industry and supporting industries. Most staff do a two to five year stint here, so they buy with no intention of doing a remodel themselves, and like the finished condition stuff to be well done. They can't take a loss because of typical contracts (the oil companies take the losses if they move staff during a market downturn).

It's impossible to beg a contractor to do any work, and if you want high end stuff, you have to be willing to bribe I get someone good within a few months. I'll be cutting bribery checks by the end of the week I hope!

My appraisal was interesting. We looked up the comps (all over $400) and found they'd turned in just days when they came onto the market, all sales within the last 12 months or less.

Last week we had an interesting market perspective on ocean front value in Washington and Oregon. We went down to shop for our range and ended up dreaming of the next move. They seem to be steady and upwards as well, but you can get quite a bit of house for $1MM if you can cut a check ;p

We're looking for the ideal place to settle next. Denver sounds like it might be a bargain now :) and Oregon wine country is high on the list. Properties seem to be steady in growth there, not nearly the bargains I saw in Denver. The Pacific Northwest in general seemed steady if you stay out of the major cities, where it seems to be hit and miss.

The price of ranges though....ranged significantly :oP heh heh

    Bookmark   April 2, 2007 at 4:57PM
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Igloo...I may have not explained clearly. The bargains are in the new subdivision (1 - 5 yrs old, cookie cutter houses. They would be something to hang on to for a few years and hope their location would evolve into a nice neighborhood.

Existing homes in established neighborhoods have not dropped in price, or if any it is very little. They are well worth their higher price due to location, upkeep, renovations, etc. Our economy is good, jobs available. It definitely isn't on the downside as what happened back in the 80s.

And I need to stop sharing this because I am not someone who knows anything about real estate or buying, other than a home to live in. Just what I see and hear.

    Bookmark   April 2, 2007 at 5:29PM
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Oh heck you ruined my dream of a loft space downtown for cheap! I'm still going to look to Denver :) It meets all of our criteria for a new location.

We had a cookie cutter house in Houston (the Woodlands actually) TX. They were building so many that you just couldn't sell one that wasn't brand new. Even though it was a nice home, lots of upgrades, etc., there were just too many available. It took dh six years to sell, and that wasn't until I forced him to let me do the $2000 to stage etc., stuff. (Designed to sell tv show). It did sell right after that but only because it was the only house staged in the neighborhood of similar houses...five for sale on one block! Thank god for TV design shows! (They've probably cost me much more than we saved, but we did finally dump that house!)

    Bookmark   April 2, 2007 at 7:42PM
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Bill...can't remember specifically, but was that during the oil crisis? Or were you hit with another economy/job impact?

Geogirl's right. Connecticut's two biggest industries are defense (a whole lot more than Sikorsky and the sub base) and insurance, and when that recession hit, Connecticut got a triple wammy. We got hit by not only defense cuts, but at the same time, insurance companies were laying off literally by the tens of thousands. The trifecta was a governor (Weiker) who didn't give a damn what anyone thought. He was going to do just as he pleased, and quite frankly, his pleasure seemed to be taxing companies right out of the state. When my family's company went under, I literally couldn't get a job at McDonalds, and I'd put my whole savings into building that house 4 year prior, so when the company closed, I took any work I could find, from retail sales to car sales for a couple of years, which didn't go far, being that there were 4 kids in the house. I sold off every firearm, every piece of jewelry, everything I personally owned to try and hang on to that house. Wasn't enough, though, and we were lucky that the bank allowed us to just walk away from it in 93.

    Bookmark   April 2, 2007 at 10:31PM
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Wow, Bill! I've felt some of your pain, tho' not all of it, thank heaven.

My ex and I closed on a house at the absolute pinnacle of the market out here for the time - April, 1989. It was in a neighborhood that was short on charm, just barely affordable to upper-middle class yuppies, (LA County) but boasted a public high school that you could still send your kids to without fear. The big employers in the area were aerospace/avionics. Then peace broke out and a whole lot of jobs went away. Meanwhile the developers converting the crummy little old rent houses into 2 and 3-on-a-lot condos kept going and going until every last A-2 lot had been converted and available housing for purchase doubled city-wide. By 1991 our $400K condo with the $320K loan was worth $279K.

Well, we hung in and when DH and I broke up I kept hanging in, and finally, 10 years later, I was able to sell for $375K. Or about 65% in real dollars.

Now I live across town, in an infinitely more satisfying area, in a house worth at least double what I paid for it. Sales here in Glendale have been glacially slow for the upper level houses and prices are down maybe 5-10%, even with a tiny inventory of such places for sale, yet things are still red-hot for the low end of the market, with a much larger inventory, and bidding wars are still going on.

Guess it all means that people are still desperate to enter the market, despite the depression at the top end.


    Bookmark   April 3, 2007 at 1:06AM
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Oh Bill,

You've been through a fiery furnace, haven't you? Trials are supposed to strengthen us, though, and it would be my guess that your kindness in supporting GWebbers stems in part from that.

I can remember selling off some valuables last decade myself to make ends meet. I tell you, though, "we ain't seen nothin'", compared to the Zimbabweans I got to know on my missions trip there a few years back. Inflation at 1600 percent, 70 percent unemployment. Government grabbing anything they can get and tearing down trade booths and houses. Family members dying off right and left. They are so patient,so faith-filled, and so resilliant.

And I stew because my luxury dual oven stove doesn't "look quite right". Some people work all their lives to get a tin roof over their head instead of a thatched one, and consider themselves in good shape.

Have a blessed holiday.

    Bookmark   April 4, 2007 at 12:19PM
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I'll second what sweeby said about Houston, it's booming. I like to follow what's happening in my immediate neighborhood, so here's an example. A house a couple of blocks from my house went on the market about a month ago. It's a 5BR with pool, very good condition from what I could observe from the outside and pix in the realtor's on line listing. It listed for $100,000 higher than the next highest home in my neighborhood that was listed at that time. And, IIRC, probably somewhere around $150K HIGHER than the average selling price for my nbhd. It sold in about three weeks.

Another example, a one story, flat roof, in what I would call "fair" condition sold in about three months recently (also in my nbhd). And three months was considered a long time for the area.

I do live in a neighborhood that's held its value very well over the past almost 50 years since it was built, and I'm more familiar with what's going on in my immediate vicinity than other parts of town, but I'd venture to say that based on the current economy here, houses are selling well all over the Houston area.

    Bookmark   April 4, 2007 at 3:17PM
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I spoke with my Reno refugee :-) and he says it looks like prices are going down about 10% overall there.

I have another brother who just left DC and moved to Austin TX so that he and his wife and 2 year-old can buy a house. So they're more Texas refugees!

    Bookmark   April 4, 2007 at 6:07PM
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In the western suburbs of Philly we've seen a slight decrease. About a 5 to 10% drop in prices and houses stay on the market a bit longer. Mostly, houses that are on the market longer are priced a bit high or have some other issue (near highway, near busy street) that kind of thing.

However, selling your house today near us is about managing expectations. In the last 9 years housing prices have almost tripled. The area is fairly stable, so not too many people bought 3 years ago and are now trying to sell. So, people who are trying to sell aren't really loosing "real" money, they were just expecting to sell for $620K and are now selling for $560K. That's not true for everyone, but for most.

The hard part is buying into this market now. We can buy a 2 BR townhouse for what we paid for our 4 BR house 9 years ago. I can't imagine trying to buy into this market now. I love the equity, but lots of young families are priced out of our market right now.

    Bookmark   April 5, 2007 at 9:15AM
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a house around the block just sold in 10 days. 900 square feet on about a quarter of a acre (this was a HUGE selling point as property is hard to find). It sold for 585,000. I am in santa cruz, CA. This property is about a 5 minute stroll to the beach. We are just finishing our remodel and will have to get our propery appraised. It should be interesting to see what it appraises for now 1300 sq/ft larger in a slower market as opposed to 10 months ago in a CRAZY market.

    Bookmark   April 5, 2007 at 12:14PM
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It's increased here but holding steady lately. We bought in 1999 at just under $300 (5 bedroom house in South OC, So. Cal), and it would sell now for around $820 (a bit higher than neighborhing homes because we put in a pool, others the same model as ours sell for around $790), but it would probably be on the market for a while. Home prices have held steady around here for at least a year as well. Maybe even dropped a bit.

We aren't selling though, at least we hope not.

    Bookmark   April 15, 2007 at 4:56PM
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