November 21, 2008
New Manhattan housing data provides window into bleak fourth quarter by NY Real Deal - snips:
…Manhattan data compiled by the appraisal firm and released yesterday showed that the volume of signed contracts in September and October plummeted roughly 75 percent from the same period last year. “It’s pretty unbelievable,” said Jeffrey Jackson, a principal at the firm. He estimated that roughly 50 to 70 transactions are being signed per week in Manhattan, far fewer than in previous years. The number of recorded sales in Manhattan in 2007, for example, was a record 13,430, according to city data, yielding an average of 258 sales per week. Jackson’s data was culled from contracts signed between September 1 and mid-November for homes his company appraised. That number, Jackson said, makes up one-third to one-quarter of all sales in Manhattan… Jackson estimated that apartments are now selling for roughly 10 to 15 percent less than they were in early 2008… “The reason people aren’t signing contracts is because they believe [the home] will be worth less tomorrow. There is no compelling reason for a buyer to step up and purchase today“… “There’s been an enormous shift in overall demand,” he said. “The absorption rate is atrocious.” However, he said, the speed of the slide means the city’s real estate market may crater sooner than expected…
NYCity coffers shrink as deals slow by NY Real Deal - snips:
The slump in commercial building sales is threatening to take a sizable bite out of New York City tax revenues this year, which could force Mayor Michael Bloomberg to make even more drastic choices than he already has to keep the city budget balanced. The local economic slump, led by billion-dollar losses on Wall Street and rising foreclosure rates, has already forced Bloomberg to propose rescinding the city’s 7 percent property tax cut and imposing minor budget cuts into fiscal 2009. And, last month he said the city now faces a $500 million budget gap this year and will see the fiscal 2010 deficit rise to $3.3 billion, which is $1 billion more than previously expected…
Peter Schiff Was Right !
http://www.youtube.com/watch?v=2I0QN-FYkpw
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Quantitative Easing by Guardian UK - snip:
Quantitative easing is what non-economists call ‘turning on the printing press’. In extreme circumstances, governments flood the financial system with money, easing pressure on banks by giving them extra capital. Ben Bernanke, the chairman of the Fed, won the nickname ‘helicopter Ben’ when he floated just such an idea earlier this decade. US economist Milton Friedman had originally said it would be theoretically possible for governments to drop large amounts of cash out of helicopters for the public to pick up and spend”…
US Stocks Retreat, S&P to Lowest Level Since 1997 by Bloomberg - snips:
U.S. stocks slid and the Standard & Poor’s 500 Index plunged to its lowest level in 11 years… The Standard & Poor’s 500 Index extended its 2008 tumble to 49 percent, poised for the worst annual decline in its 80-year history…. “It’s an ugly mess out there,” said Randy Bateman, who oversees $15 billion as chief investment officer of the asset management unit of Huntington Bancshares Inc. in Columbus, Ohio. “The economy is confirming it is very, very weak.” (TODAY Nov 20th) The S&P 500 slid 6.7 percent to 752.58… The Dow Jones Industrial Average sank 443.8 points, or 5.6 percent, to 7,553.48. The Nasdaq Composite decreased 5 percent to 1,317.05… |
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November 21, 2008
From the Sacramento Bee:
October brought another dubious honor to the Sacramento County real estate market, as median home prices for new and existing homes combined dipped below $200,000 for the first time since April 2002. The symbolic drop — to $195,000 — came exactly one year after the county’s median sales price for the same category fell below $300,000, according to MDA DataQuick statistics released today…[The] median price is 34.9 percent below Oct. 2007 and 49.6 percent below its Aug. 2005 high of $387,000.
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The Sacramento Association of Realtors reported that 73 percent of October sales in Sacramento County and the city of West Sacramento involved bank repos. Alan Wagner, SAR president said the pattern will last “well into the future” because many vacant bank-owned homes have yet to come to market.
From News10:
Many leasing agents can’t understand why there are so many apartment units for rent across Solano County. “We expected to see a high occupancy rate due to the foreclosure crisis, but it never happened,” said Katie Evans, a leasing agent at Riverstone Apartments in Suisun City.
…
“Many people might be moving away or losing jobs or moving in with friends or family membvers to save cash,” said Gloria Daskalakis at Dover Park Apartments in Fairfield.
From the AP (via News10):
High foreclosure rates and employee costs are forcing the Northern California city of Rio Vista to consider bankruptcy…[City Manager Hector] De La Rosa says Rio Vista could shut down within the next week….
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November 21, 2008
From Fortune:
With declines of 30% or more California markets like Sacramento and San Bernadino, home prices and rents in those areas are approaching equilibrium, according to Deutsche Bank analyst Lou Taylor, who compiles a valuable quarterly survey housing costs in 55 urban markets.
As home prices continue to fall, Taylor predicts that dozens of grim markets could reach equilibrium by year end. “We’re getting back the affordability levels of 1999, before the bubble began,” says Taylor.
From the Modesto Bee:
Great news: Home prices have fallen! At least that’s great news for people buying homes. New statistics show home affordability has soared in the Northern San Joaquin Valley as plummeting prices enable more families to attain the American dream…The National Association of Home Builders/Wells Fargo Housing Opportunity Index calculates that nearly 60 percent of homes sold in the region during July, August and September were affordable to local median-income families.
…
The affordability index, however, is only as good as the data it’s based on, and some question whether the income statistics used are current. The index, for instance, calculates that the median- income Stanislaus family earns $56,500 per year. But many workers in the region have lost jobs this year, and unemployment is rising. “Income numbers often lag,” cautioned Dr. Stephen Endsley, a Modesto real estate investor. “It may look like we have housing affordability, but do we really consider unemployment? First-time buyers have to have confidence before they go out and buy, but many of them have questions about (the stability of) their employment.”
From the Stockton Record:
The City Council on Tuesday approved The Grupe Co.’s $3 billion plan to build 7,000 homes in a massive subdivision on a Delta island on the city’s northwest side.
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Two people spoke against the proposal Tuesday, saying the city is unwise to expand into the Delta and to approve vast housing plans while Stockton is in a foreclosure crisis. “It cannot help but further depress the housing market,” said one of the speakers, Ann Chargin.
From the SF Chronicle:
Jing Hua Wu, the engineer who police say fatally shot three executives at a Santa Clara startup company last week just hours after being fired, spent the last few years amassing a large portfolio of investment properties. According to public records from eight counties in three states, Wu and his wife own at least 19 homes and vacant lots worth more than $2.4 million…Records show that Wu and his wife, Jie Zheng Wu, went on a property-buying spree starting in 2004…In California, they bought a modest home in Elk Grove (Sacramento County)….
[A]uthorities said they are looking into whether Wu’s financial situation had been affected by his foray into real estate before the nation’s foreclosure crisis.
Blog commenters eat real estate “experts”
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November 19, 2008
by G. Sax
“Historically, it takes at least seven to ten years to plan and implement a major transit investment.”
That’s from the 2030 Transit Master Study, 32 pages of maps, charts, and recommendations for the Twin Cities transportation system for the next 20 years.
Light reading for a Tuesday night and just the tip of what you can get at www.metrocouncil.org, www.regionalrail.org, and www.dot.state.mn.us. So I read a lot tonight because I’m able to multitask during The Real Housewives of Atlanta (NeNe’s husband was a saint in the finale).
A lot of people are skeptical of light-rail transit (LRT) and the Central Corridor LRT line that will connect downtown St. Paul to downtown Minneapolis. I’m pretty into it if we can get the show on the road. It’s bad enough that we didn’t get LRT going until 2004. It’s bad enough that the Southwest Transitway Corridor to Eden Prairie has been stalled until only recently. It’s bad enough that cities like Portland, Sacramento, and St. Louis are ahead of us. Last time I looked, none of those fine cities had four professional sports teams.
What gives? We have the population and we have the transportation bottlenecks to warrant additional options. That doesn’t mean the traffic problems will be solved; we’ll just be able to get out of them on a comfortable, modern ride.
The Washington, DC Metro is a model of mass transit done right, but the Beltway is still a parking lot. Chicago’s “El” is both historic and convenient, but the Dan Ryan, the Stevenson, and the two presidents are all still a fresh hell. The BART system in the San Francisco Bay Area tunnels under the bay for goodness sake, and yet I still want to carve my eyeballs when at the 80/580 connect.
Oh, we will still have traffic. The action at 494 and 35W will still be as hot as the single lane at 394 to eastbound 94. There is no golden spike, but we still need more options. While we’re at it, let’s do the new transit project properly with stops at Hamline, Victoria, and Western. And, Rep. Alice Hausman, I think you’re wrong about the routing of the Central Corridor behind the Capitol. That’s the best place to put it. It’s a fantastic, unobtrusive path to Robert Street. I like most of your policies, Alice, but I had to call you out on this one.
Anywow (as in “wow, did I really write that last paragraph?”), we’re quite overdue for a decent dedicated-rail mass transit system. The great cities of the world have one, and I’d like to think that St. Paul ranks (with some help from its younger, taller brother).
The 16 and 94 bus lines are cool for getting back and forth between the downtowns, and I have fond, “Kiss Me on the Bus” by the Replacements memories of riding a lot of the local bus lines, yet we’re not taking full advantage of our potential.
What’s sad about all this is that we used to have one of the best streetcar lines anywhere. There’s an interesting fiction book by Stanley Gordon West called Until They Bring the Streetcars Back. It tells a harrowing, St. Paul-based tale. It also serves as a love story to the streetcar lines.
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November 19, 2008
Am I the only one who is tired of looking at this? Located on the corner of Jefferson Avenue and West 7th Street. I checked with my nieghbors to see if anyone even remembers how long it has looked this way and no one knows for sure. We think it has been at least three years that this bill board has looked like a mess. If my house looked like this the city would make me repair it and I live on a side street, this thing is huge and located on a major street. Why? Would you want to buy a home near this?
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November 19, 2008
I get the same question from the sellers I work with every November and that question is: ‘Should be take our home off the market until after the holidays?’
This year my answer is: ‘It depends’
It is true that activity slows during the holidays. There are usually not as many homes on the market and there are not as many people looking at homes. It is also true that homes sell for slightly more in the spring, well at least they used to.
I don’t know how to advice my sellers. I don’t know if home prices will be higher in the spring or if the economy will be better or worse. My only thought on the subject is that sellers have a far better chance of selling their home if it is on the market. I can safetly predict that St. Paul homes will be sold during the holiday season. Maybe yours will, maybe it won’t.
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November 19, 2008
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NY MTA Preparing For “Doomsday” Budget Scenario WCBSTV NY - snip:
Report: MTA To Slash Jobs, Multiple Subway Lines Budget Deficit Means 1,500 Jobs On The Line; At Least 2 Train Routes Could Be Completely Removed Fare Hikes For Passengers Could Be ‘Whopping’ Sources tell CBS 2 the association board is preparing a worst case “Doomsday” scenario that will be presented during its monthly meeting on Thursday…
NY state manufacturing falls to another record low in November by Reuters - snip:
…”It’s almost like a snowballing effect as we’re starting to see the manufacturing numbers get worse,” said Maxwell Clarke, chief U.S. economist at IDEAglobal in New York, who had forecast the Empire index would drop to minus 25. “We expect sharp declines with a slow recovery from this recession“… |
Repressing the Depression by Printing More Money
says Harvard Professor Part 1
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New York Budget Gaps Threaten Broader Economy by WSJ - snips:
The holes blown in New York budgets by Wall Street’s meltdown could reverberate through the Northeast region and beyond, after several years in which the financial capital’s strong performance helped drive national growth… New York state and New York City are preparing to address big budget deficits. And that is bad news for the wider U.S. economy, especially as other powerhouse states reel from job losses and sizable deficits. Next door in New Jersey, tax revenue fell short of projections by $258 million for the first four months of the fiscal year, and state officials there last week said Trenton’s budget deficit could reach $1.2 billion, triple the previous prediction. Neighboring Connecticut’s budget deficit, meanwhile, could hit $6 billion over the next two years… New York finds itself in a particularly perilous spot because of its increasingly heavy reliance on the financial sector as its tax base… Wall Street accounts for 5% of all jobs but could account for one in five job losses. “We’ll feel the major effects come January and February, when people would normally be getting bonuses,” says David I.Weprin, the city council’s finance-committee chairman… “the city and the state will have to tighten their belts permanently,” says Kathryn Wylde, president of the Partnership for New York City, a group of chief executives. “The financial-services industry will never be the bonanza [for the city] that it once was“…
Big Apple’s Residential Real Estate Market Shine Is Wearing Off by MarketWatch - snips:
…With Wall Street bonuses expected to decline significantly this year and the credit crisis only getting worse, Manhattan - where prices stood firm as those in the rest of the nation crumbled - is destined for a hit. “It’s going to affect all price points,” said Jonathan Miller, president and chief executive of Miller Samuel, a real estate appraisal and consulting firm. “Consumers right now are in a wait-and-see mode, and it’s not going to get better until the credit situation does.” The economy’s recent tumultuous twists and turns haven’t shown up in official data yet. In the third quarter, co-op and condo inventory numbers increased and sales numbers fell from their respective record lows and highs last year, according to a report from Prudential Douglas Elliman. Listing inventory for co-ops and condos climbed 34.6% to 7,003 units from the 5,204 units in the prior year quarter. Inventory levels in 2007 were near historic lows due to the record level of sales activity during the period that absorbed excess supply. The number of sales fell 24.1% to 2,654 from the prior year quarter of 3,499… Some real estate executives say they are already seeing a slowdown…
BROOKLYN HOME PRICES DROP by CityFeet - snips:
…Brooklyn home prices are just beginning to follow the nationwide trend as pricing… “It has become a buyer’s market, with more inventory out there and sellers being forced to bring prices down to get property to move,” said Sam Heskel, executive vice president of HMS Associates… “Not to downplay the difficulty of getting financing in this tighter credit market, but if a property is priced well and the buyer has good credit and a decent income, the market right now favors the buyer.”.. The report contains data on single- and multi-family homes as well as condos and co-ops. The report includes neighborhoods that show both increases and decreases, and deemed together a fair reflection of what is happening in Brooklyn as a whole…. “What’s happening in Brooklyn reflects the Manhattan market,” Heskel said. “Wall Street layoffs and smaller year-end bonuses are having an impact on the Manhattan market, and that means Brooklyn prices will continue to come down as well. You’ll have fewer Manhattan clientele coming to Brooklyn because Manhattan prices are lower too.”
VIDEO WEBCAST - LaRouche: Civilization’s Last Chance?
Bloomberg - Home Prices Plunge in 80% of US Cities
MarketWatch - NAHB Market Index Hits Record Low
MarketWatch - Modified Mortgages Often Re-default
AP - Big 3 carmakers beg for $25B, warn of catastrophe
NY Post - GOVERNMENTS CAN’T HANDLE GLOBAL RUN ON GOLD COINS
UK Telegraph - Volcker issues dire warning on slump
GlobalResearch - The Great Depression of the 21st Century
CNBC - Where the Layoffs Are-Is Your Firm on the List?
MarketWatch - Citi To Cut Deep, 53,000 Jobs
CNBC - JPMorgan may ramp up job cuts
FT - Hong Kong grain ship hijacked by pirates - Xinhua
CNN - Pirates take Oil laden ’super tanker’ toward Somalia
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November 19, 2008
From Bloomberg:
Home prices fell in four out of every five U.S. cities in the third quarter, a record spurred by distressed foreclosure sales across the country. The median price of a U.S. home declined 9 percent from a year earlier….
The steepest price declines were all in California. The area surrounding San Bernardino had a 39 percent fall in its median home price to $227,200. Sacramento saw a 37 percent decline to $212,000, and San Diego had a 36 percent drop to $377,300. The U.S. median is $200,500.
From CNN Money:
“We’re clearly seeing a broadening, as well as a deepening of the declines,” [Mike] Larson [a real estate analyst at Weiss Research] said. “That indicates we’ve moved past the time when price drops were fed by bursting of real estate bubbles to one in which the broad economic downturn, marked by job losses, is taking hold.”
From the Sacramento Business Journal:
Homebuyers snatched up repossessed homes at an impressive clip this year, but that doesn’t mean the Sacramento region’s housing troubles are easing. That’s because lenders might be foreclosing on homes faster than they can sell them.
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[T]he inventory of foreclosed homes isn’t dropping. The backlog of unsold repossessed homes has actually grown in the past year, to about 5,000. That number includes homes repossessed over a two-year span prior to Aug. 1 that didn’t sell by Oct. 20 (allowing a reasonable period to spruce up and market them for sale). The backlog has increased from about 3,300 at the same time last year, DataQuick said.
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Not all repossessed homes make it quickly to market. Only about 3,100 foreclosed homes were listed for sale through MetroList as of the end of October, even though the backlog of unsold foreclosures is 5,081 homes. Those homes will eventually make their way to the market.
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At least one national bank is looking to rent some of its repossessed homes rather than sell them. HomePointe Property Management, a Sacramento company that typically manages rental properties, just signed a contract to rent out “a handful” of foreclosed properties throughout the region.
From the Sacramento Bee (hat tip patient renter):
Sacramento County’s lowest-income neighborhoods continue to take the toughest, most destabilizing punches of the region’s two-year foreclosure crisis, says a new report from the Sacramento Housing and Redevelopment Agency. And it’s getting worse. “Foreclosures are continuing to increase,” said Joel Riphagen, SHRA redevelopment analyst.
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Now, many of the region’s lowest-income neighborhoods have seen huge spikes in sales as home prices have fallen. Investors are snapping up homes formerly occupied by owners with intent of renting them.
From the Sacramento Business Journal:
I think they [lenders] had continued to underestimate the problem up until very recently. The other part of it is, I go in with a reasonable approach. What I’m hearing from people I know at lending institutions is that the number of people asking for modifications, some sort of help, is somewhere around 80 percent of their customers, but the number of people who actually qualify for that help is closer to 30 to 35 percent.
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Some people with a fixed-rate mortgage read about modifications being available, so they would like to see their interest rate modified downward. There’s not much the bank can do for those people.
From the CVBT:
Residents of the Central Valley are frustrated and angry that so little impact has been seen from the Wall Street bailout, says U.S. Rep. Dennis Cardoza, D-Merced, who is criticizing Treasury Secretary Henry Paulson of foot dragging.
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Mr. Cardoza says he “reluctantly” supported the $700 billion banker bailout only after guarantees were included in the legislation that taxpayers would be protected and the foreclosure crisis would be averted.
From the CVBT:
The thousands of homes lost to foreclosure and the resulting depression of home prices are beginning to make California bit more affordable…The Sacramento region and Stanislaus County were the second- and third most-affordable metro areas in California with 59.9 percent and 59.7 percent affordability, respectively.
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The building industry argues that today’s relatively high affordability levels are likely to be a short-lived phenomenon after the market correction is completed as underlying demographic trends point to rising prices in the future once the large supply of foreclosed homes is sold. “The increase in affordability is great news for people who are looking and who qualify to buy a home in the current market, and we definitely encourage those people to do so and take advantage of the low prices while they last,” says Robert Rivinius, CBIA’s president and CEO.
From the Sacramento Business Journal:
The rough and tumble economy did not spare Sacramento-area banks in the third quarter despite the more cautious nature of community-owned banks. Only three of 11 area banks earned more through the first three quarters of the year than they did during the same nine-month period in 2007…In the aggregate, locally based banks earned $12.9 million through the first nine months, down 52.6 percent from earnings for the same period last year.
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In a normal market, people pay off a home-equity loan because they could otherwise lose their home. In the current market, people have already lost their home, and there is little or nothing for the bank that made the equity loan to recover.
From the Manteca Bulletin:
Closing schools to weather the deepening budget crisis is among 100 ideas being scrutinized by Manteca Unified…The double whammy of declining enrollment due to the foreclosure crisis coupled with the state’s mid-year deficit projection that has ballooned to $28 billion has opened the door to such a move.
From CBS13:
No too long ago, Elk Grove was booming with growth. In fact, it was fastest growing city in the country at one time. Tonight, it’s forced to pay the price for the nation’s faltering economy. The city took a big hit today with another dealership closure. Customers who bought at Elk Grove Saturn came back for a tune-up today to find their dealership closed.
From the Sacramento Bee:
AAA said gas fell another penny in Sacramento on Monday to $2.24 a gallon, the cheapest it’s been since May 2004…If prices hold, that translates into savings of more than $2.5 billion a month across the state. But that’s more than offset by the fallout from the housing crash. So-called “equity extractions” in California – the dollars generated by home equity loans, refinancing or outright sales – have fallen by $41 billion this year, according to researcher MDA DataQuick.
Not surprisingly, Californians aren’t suddenly reopening their wallets. “We’re doing the same things that we did when gas was almost $5,” said Marty Walter of Orangevale during a stop at a Union 76 station in Roseville on Monday. “We’re getting into the pattern of saving – let’s not do anything unless we have to.” Cori Brown, pumping $15 worth of fuel into her 1996 Ford Explorer at a Chevron station on Richards Boulevard, feels the pinch. Until food and rent decline as much as gas, “it doesn’t make a whole lot of difference,” she said. “This is a depression, and I’m living through it.”
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November 17, 2008
The data used to make the chart is gathered from the MLS. The data in the MLS is deemed reliable but not guaranteed. This data is for October 2008 for single family homes which includes condos, in the city of St. Paul, MN. Homes that are pending have had offers made on them, and those offers have been accepted by the seller but the sale and has not yet closed.
The prices are the actual sales prices of all homes that closed during the month of October, all 260 of them. The areas of the city that have the most foreclosures also have the lowest average sale prices. I also computed the median sales price for the month because some people like that number. This is just for the homes that closed in October $139,955 . . wow! how much lower will it go? It should be noted that what I am calling a clearnace sale is going on. The lowest priced homes on the market, many of them foreclosures that have been on the market for some time are selling.
For numbers from previous months see Local Market Conditions and Home Prices For Local Mortgage News go to Behind The Mortgage by Alex Stenback
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November 16, 2008
by Erik Hare
August has his opinions, especially first thing in the morning. Any other dog has to go out for a morning walk, but he needs his daily bark. He wants nothing more than to go outside and tell the world that he’s here, awake for the day.
The rest of the day, his sharp “Woof!” probably means something else. It’s one of his friends out in the park, either Barkley or Jasper or Leonardo or Pete or Glory or Daisy. When we hear that, it’s time to take him out to the center of the small urban park that we all share.
Dog people all know each other, or at least we know each other’s dogs. We may not remember each other’s names, but we all know Jasper’s Mom on sight – she’s the one flinging tennis balls so that her furry burst of energy can work himself out for the day.
The community is made up of many people, but those of us who see each other the most often are dog people. Our fur children sniff each other in fairly rude ways while we dance around trying to keep the leashes straight and talk. Gossip and more formal news are passed and we all know what’s been going around the park, just as our dogs got the news by sniffing the ground. Who passed by this tree last? Who got a new job? It’s all a matter of perspective, really.
You’ll find this is true in just about any city. Dogs are the center of a community because we have no choice but to spend a lot of time just hanging out at the tall end of the leash. We’re on dog time, not bizzy people time, so we absorb what’s going on around us in a way that the rest of the community just doesn’t. The same thing happens in Mears Park as it does in Irvine Park and all the other neighborhood parks across Saint Paul and everywhere else.
The city of Calgary, Alberta has off-leash dog parks scattered through the neighborhoods to encourage this kind of thing, in case it needs to be encouraged. They found that a good community of dog owners encourages a strong community overall. It’s not a big mystery. Dogs make us all take a little bit more time and require us to be just a shade more social, just like our dogs. After all, the time in the park is the highlight of their day.
As the days get shorter we’ll all spend a little less time outside being the kind of people our dogs want us to be. Winter is tough for dogs and dog owners because we just don’t feel like lingering as much as when it’s warm. But we still do from time to time, all the same. Still, it’s one of the things dog people find they miss most as it gets colder.
But we still hang out from time to time. August still has his morning bark where he announces himself to the world for one more day. Sometimes, that gets a friend to come over and we all start chatting in our own ways. That’s what community is really all about.
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WeXL Agent.
