Starting to Get the Hint

Housing Bulletin — Marking Down House Price

Dennis Rodkin
Call it a wave of price cuts or a market adjustment, but there is no way to mask the fact that people selling residential real estate locally have been dropping their asking prices in droves. Deal Estate combed through data from the Multiple Listing Service of Northern Illinois and found that one out of three single-family homes sold in the Chicago area so far this month were bought only after the initial asking price dropped at least once.

...

Solid data for comparisons to past years is not available, but several real-estate agents who have made sales this month agree that price cuts are unusually common right now. “What’s happening is that people who priced their homes in early spring are coming down now anywhere from 5 to 10 percent,” says Mary Duncan, the sales manager at Prudential Elite Realtors in Naperville.

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One home belongs to a couple that transferred here two years ago; now, having been transferred once again, they are essentially asking what they paid for the place back then. The second residence is a newly constructed house that has a twin next door, which sold, in 2005, for $299,900. After listing the newer house last fall at $334,900, Fields has dropped the asking price—to $299,900.

Keep going! Keep going! There is so much more "fluff" out there.

The fact of the matter is that some people are going to get screwed. When the music stops, someone will be without a chair. I'm just surprised it has kept it up as long as it has.

Renting Can Be Good

For retirees, renting can be a savvy move

For retirees, renting can be a savvy move

By SCOTT BURNS
Universal Press Syndicate

Q: Our townhome will be paid for in two years. My husband and I will both be 61. If we sold at that time, we would probably walk away with $400,000 to $450,000. The townhome will be about 15 years old. I am sure there will need to be some repairs — new roof, siding, etc.— because of the age of the building.

Why would it not be better to invest the money in a CD at 5 percent interest? That would yield about $20,000 a year without ever touching the principal. Then we could rent rather than own. I realize homeownership may eventually gain income, but homes also take a lot of money to maintain.

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A: Very good idea. And ahead of the crowd. You are likely to find that the rent and utilities will be less than the operating cost of your house. And since you'll no longer have equity tied up in a house, you can put it to work to pay your rental expenses.

SEE?!

Not So Fast

Is That Gain on Your Home Really So Big?

Tuesday June 19, 9:54 am ET

By Selena Maranjian



Here's a not-so-uncommon scenario these days: You bought your lovely home, be it a castle, bungalow or yurt, for $200,000 five years ago. Today, it's worth about $300,000. That's a tidy 50% total gain, or 8.5% on a compound annual basis. Right?

Not so fast -- you've probably oversimplified matters. For example, think about what you've put into the home over the years. Some of those purported profits probably went to businesses like Home Depot (NYSE: HD - News), Lowe's (NYSE: LOW - News), or home-building supplier USG (NYSE: USG - News).

But, but, but....... I thought I was supposed to be a millionaire!?

You Mean We've Been Here Before?

Rate Rise Pushes Housing, Economy to `Blood Bath'

By Kathleen M. Howley

June 20 (Bloomberg) -- The worst is yet to come for the U.S. housing market.

The jump in 30-year mortgage rates by more than a half a percentage point to 6.74 percent in the past five weeks is putting a crimp on borrowers with the best credit just as a crackdown in subprime lending standards limits the pool of qualified buyers. The national median home price is poised for its first annual decline since the Great Depression, and the supply of unsold homes is at a record 4.2 million, the National Association of Realtors reported.

``It's a blood bath,'' said Mark Kiesel, executive vice president of Newport Beach, California-based Pacific Investment Management Co., the manager of $668 billion in bond funds. ``We're talking about a two- to three-year downturn that will take a whole host of characters with it, from job creation to consumer confidence. Eventually it will take the stock market and corporate profit.''

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The primary cause of the 1990 to 1991 recession was a real estate boom and bust similar to the past seven years, Roubini said. A real estate ``bubble'' in the mid-1980s led to speculative buying and lower credit standards that resulted in widespread foreclosures, he said. The defaults triggered a credit crunch that turned into an economic recession in the spring of 1990, said Roubini, who is an economics professor at New York University's Stern School of Business.

He put the chance of a recession this year at ``50-50,'' above former Fed chief Greenspan's 33 percent estimate. A recession is a decline in gross domestic product for two consecutive quarters.

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Housing Chain
Making it harder for those people to buy houses is going to create trouble all the way up the housing chain as people who own starter homes find it more difficult to sell their real estate and buy bigger properties, said Neal Soss, chief economist at Credit Suisse Holdings USA Inc. in New York.

``The subprime market has changed character dramatically, and that takes a number of entry-level buyers out of the picture,'' said Soss, who was an adviser to former Fed Chairman Paul Volcker.

Gee, it kind of sounds like there was a housing bubble before.



As you can see the bubbles in the 1970's and 1980's both came back to were they started. If the current ones follows the historic trend, there will be some VERY sad people.

Hello Chicago??

Chicago is not Florida..........yet. But give it enough time and this housing slump will turn into a bust. Let us take note of our older brother-in-bubble, Florida.

Price it right and it will sell

Home sellers coming down on sale prices

Carlton Proctor
cproctor@pnj.com

There's nothing wrong with the Pensacola Bay Area real estate market that several thousand more stories like Greg Chapman's won't cure.

Chapman put his East Hill home on the market in November 2005 at a time when residential prices were approaching post-Hurricane Ivan highs.

But it also was a time when the inventory of unsold homes was starting to climb rapidly.

Over the next three months Chapman got only three half-hearted inquiries about his three-bedroom brick home, listed originally at $193,600.

Frustrated and disillusioned by the process, he pulled his home off the market, deciding to bide his time and wait for the market to strengthen.

...

Harrod convinced Chapman to price the house at what he considered a fair market rate for that section of East Hill.

The result: the house sold the first day on the market at a price -- $165,000 -- Chapman said made him "extremely happy."

So happy, in fact, he proposed to his girlfriend that same day, and she accepted.

"Fair" means within reach.

I know everyone want to be a millionaire. But you cannot see ANY gains if you don't sell your wares first. The reason the market has hit the wall is because prices have far out reached the average home buyer.

Time to take a look around.

Time for a reality check.

Time to look to Florida.

The Housing Market is Silly, Silly I Say!

Look for it real close. The first time I read it, I missed it. Daley admits the housing market is in trouble.

Mayor Daley admits to housing slow down

It's designed to raise $1.1 million to help plug a $10 million hole in Mayor Daley's 2007 budget caused by weather-related overtime and lower-than-anticipated tax revenue tied to the housing slowdown. Daley has also cut off non-emergency overtime and suspended hiring unrelated to public safety.

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Earlier this week, Daley declined to rule out a post-election tax increase. "We don't know yet. . . . It's a critical time. The economy has slowed down. Housing has slowed down. The [real estate] transfer tax has slowed down. You start making decisions much earlier than later," he said.

Having watched the housing market unravel in the last year plus, there is one problem. Sellers' expectations are too high. The boom years are past and gone. Maybe if people were not so greedy, and lowered their prices commerce could commence!

Where Will They Go?

Housing slump, job losses conflict

Immigrant workers often go uncounted

By Bob Willis, Bloomberg News: Alexandre Tanzi in Washington and Valerie Rota in Mexico City contributed to this story
Published June 4, 2007


The slump in home building, the deepest since 1990, has taken only a modest toll on the U.S. job market. Workers like Francisco Leon may be part of the explanation.

Two years ago, Leon, an undocumented immigrant from Guatemala, had little trouble finding construction work five days a week in northern Virginia. Nowadays, the 22-year-old mainly does odd jobs, often only two days a week.

As Congress debates whether to provide a path to citizenship for undocumented immigrants, workers like Leon, hired off the books for day labor, are among the first to lose their jobs as home building falters. Such workers often go uncounted as well, meaning official labor statistics don't fully reflect the decline in construction-related jobs.

Will the illegal immigrants stay when the jobs, the reason they came, are gone?