Ït's ãll ábout housing local, state & national.

[texasredneck]

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[commentator]

And your tax question is?

[Tennesseer]

Moved to Market Talk at texasredneck's request.

Tennesseer/Moderator

[bimetalaupt]

Feb 3, 2011 17:59:27 GMT -5 texasredneck said:

Plano, Texas Statistics You Must Know

2010 2011 %(+/-)

Total Active Residential Listings 883 / 998 +13.0%
Average Residential List Price $268,551 $290,830 + 8.3%
Average Residential Market Time 60 Days 89 Days48.3%
Residential Homes Sold YTD 1966 / 1483 -24.6%
Average Number Of Sales Per Month 280 / 211 -24.6%
How Many Months Inventory 3.3 / 4.7 +42.4%
Average Sales Price $259,602 $280,021 + 7.9%
% Sale To List Price 96.6 % 96.2 %-0.4%

Per Local Realtor


I stated several days ago I thought the market in North Texas was getting worse, believe the downturn started 3 months ago, so the numbers will probably get worse.

Texas,
The information I received in 2008 was do not pay more then $85/sq foot for a normal house in Abilene,TX.. ( by a real good banker friend of mine).. Boy did I get a lot of go to looks from agents. Did they tell you what the average was per sq foot?

in the 290,000 range the per foot is about $102 in Abilene.. on the golf course.

Attachments:

[texasredneck]

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[decoy409]

texasredneck, I just love the title!!!

Say did you see that building new homes is going over better than trying to get rid of the millions and millions of robo signed ones! Then it's, 'Strong Sales in Housing!' or 'Building is Up!' or 'Hardwware and Home Improvement Sales Up!'

I can't wait to open the present! We are reading the card that came with it which is the Foreclosures in Residential. The present is being preparred to open called Commercial!

I am laughing my rear end off right now because it is so disgustingly funny!

[usaone]

Feb 4, 2011 14:59:51 GMT -5 texasredneck said:

An avg. price per foot for the year was not available. 4 years ago I had a home listed on a creek lot for about $101.00 per sq. foot.
A home three doors down sold in November 2010 for about $107.00 per foot, but this was probably a fluke. The buyer was a divorced man in his 80's and he told the Realtor he had decided not to move into the home, but he would close the purchase.
He did so and re listed 2,900 sq. ft. for $325,000.00 on a creek. That is $112.06 per foot. It has not sold.

I suspect that the increase in average list price is because more expensive homes are being put up for sale rather than a higher price per foot.

Those figures look pretty good. Especially in the dead of winter.

[texasredneck]

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[neohguy]

I've been watching property in my area very closely for a couple of years now. The past month had a lot of closures in the $20-$50/ square foot range. Most have been on the market for at least 18 months and were originally advertised in the $80-$100/ square foot range. Suburban semi-rural property has now dropped to the $50-$60/ft range and is being bought. I track mostly foreclosures (cash sales) because conventional sales aren't happening yet.
Crazy world. A young family can get a loan in one day for a new $27,000 car that loses 15%-20% of its value when they drive it off the lot but they can't buy a relatively sound 1000 square foot structure for 35k-45k that would last a century with proper care.

[texasredneck]

This message has been deleted.

[neohguy]

Feb 4, 2011 17:13:41 GMT -5 texasredneck said:

neohguy Crazy world? Well maybe. Housing has deep structural problems that no one is willing to address or even discuss.

In the old days there were local savings & loans who took in deposits and made loans on homes in their community. The savings & loans are nearly all gone now.

Bought up by the big boys who sold their loans to Fanny & Freddie or sold them as securities to the stupid. The big boys, Fanny & Freddy are broke and the stupid are wiser now.

So there is no way to provide financing for houses, especially at todays construction costs of $135.00 or more per sq. foot.
Soon homes will be only for the rich, everyone else will live in tenements.

I don't know why some parts of the country have higher construction costs than others. Maybe it's the cost for the lot? New construction in NE Ohio is being advertised for less than $100.00/square foot.

www.trulia.com/OH/Akron/44312/

[frankq]

Neo,

To answer your question it has to do with three major factors besides land acquisition costs: Labor costs, impact fees and zoning requirements including open space requirements per development. Many municipalities hit developers with upfront fees for schools, requirements for openspace and stormwater retention that includes ponds and connective infrastructure as well as landscaping requirements and impact fees due the city of up to 25K per house. All this get split between homes built on the available land left to build on. More mature cities have been more picky in what they wanted built during the boom too. Why allow a 200K house on a 14,000sq/ft lot when they can have a 400K house on the same dirt footprint and generate 2x tax dollars with the same impact on services? As we go forward, this mindset is changing to some degree though...

[neohguy]

We have to get back to reality then. The housing I've been looking at was built between 1900 and 1970. The typical size (around here) is 800 sq ft-1200 sq ft with a full basement and a detached garage. Typical urban lot size is ~7500 sq ft. Most of the previouse owners raised between 2-5 children in these homes quite happily. the 3000 sq ft home for 3.3 people is not affordable to most people (not to mention being a waste of energy and resources).
I have seen some movement towards realistic new construction housing. Akron is trying to get one off the ground in the UOA neighborhood. They want to demolish a couple dozen blocks of older blighted homes, many currently for sale for less than $20.00/sq ft, and build a variety of sizes from 600 sq ft-1000 sq ft. with local retail within walking distance.

[itstippy]

Thanks for the insight FrankQ. I was blaming the developers for putting giant houses on postage stamp lots. I should have known the City planners were pushing it too. And, of course, there was a ready market. You can't blame developers for building McMansions if that's what's selling, just like you can't blame GM and Ford for building Escalades and Navigators when they were selling like crazy.

The amount of "beigeville" housing built in my area during the boom is astounding. 90% of the owners are upside down. They're making the payments but they can't afford to sell and they can't save any money because they have too much house. If they get divorced, or need to relocate for a new job, or whatever, they're screwed. At that point they just walk away and let the bank have the house. They have no other realistic option. It was their dream house and it's turned into a giant blood-sucking nightmare.

[usaone]

Builders build what the people wanted.

[neohguy]

"At that point they just walk away and let the bank have the house.

Read more: notmsnmoney.proboards.com/index.cgi?board=moneytalk&action=display&thread=2897#ixzz1DDa2lAUV"

The bad thing about this is the big banks can really care less. They'll sell it for whatever to get it off the books and Fannie (taxpayers actually) gets to pick up the loss.
The house that I recently purchased for 52.5K was a Fannie property. The amount that was owed on it before default was nearly 120k.
I have to agree with Tex and V_L when they say that banks that their loans, and no longer service them, have little interest in providing respectable loans. The fact that the US taxpayer guarantees that the bank will be paid regardless of their recklessness invites irresponsibility.

[usaone]

What the older folks dont understand is that young people still aspire to own a home. It is still the American Dream.

In spite of the banks and the government housing will revive.

[texasredneck]

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[texasredneck]

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[vl]

I'm sorry but... TEXAS would be a poor example of rebound potential in home values. The state has over-built without sustaining resources... the EXACT scenario that occurred in the late 70s. It took 14 years to recover. Go look up your 2007 stats on Texas real estate. According to RealTrac.. 1 in 75 homes in Texas were in foreclosure then magically, that figure nearly evaporated. For a fact, most current Texans are actually out-of-staters there for jobs that are shy of having a savings component. As soon as jobs begin to appear back where these folks came from, Texas will see a MASSIVE de-valuation. If it takes any longer to create jobs in the other states, Texas will reel from MASSIVE hikes in utilities because it has no capacity to keep providing at the current demand rate.
That said... many Texans are buying up those $50 Detroit homes because Michigan HAS all of the sustaining capacity any state could want and believe that home values... ANY home values will skyrocket with job creation here. That is a myth. Detroit will likely not recover at all as whole sections of it become void of services. If it loses control of the Water Board, it will just be a bunch of streets without anyone permanently living there.
Texas real estate is a losing proposition every possible way the future unfolds.

[neohguy]

www.businessinsider.com/zillow-fourth-quarter-798-billion-2011-2
| Feb. 9, 2011, 9:17 AM
The total value of U.S. homes dropped another $798 billion last quarter, according to numbers out from Zillow.

The average home is down 27 percent from peak. This puts the total loss from the housing crash at an incredible $9.8 trillion
And sorry, but it's not over yet.

www.calculatedriskblog.com/2011/02/corelogic-house-prices-declined-18-in.html
Tuesday, February 08, 2011
CoreLogic: House Prices declined 1.8% in December
Notes: CoreLogic reports the year-over-year change. The headline for this post is for the change from November to December 2010. The CoreLogic HPI is a three month weighted average of October, November, and December and is not seasonally adjusted (NSA).

From CoreLogic: CoreLogic® Home Price Index Shows Decline for Fifth Straight Month

CoreLogic ... released its December Home Price Index (HPI) which shows that home prices in the U.S. declined for the fifth month in a row. According to the CoreLogic HPI, national home prices, including distressed sales, declined by 5.46 percent in December 2010 compared to December 2009 and declined by 4.39 percent in November 2010 compared to November 2009.

Excluding distressed sales, year-over-year prices declined by 2.31 percent in December 2010 compared to December 2009 and declined by 2.81 percent in November 2010 compared to November 2009.
...According to Mark Fleming, chief economist with CoreLogic, 2010 was a year of ups and downs as a result of the improvements brought on by the tax credits followed by the declines that occurred when they expired. “It was a bumpy ride which ended with a net gain/loss of zero. Despite the continued monthly decline in home prices and year-over-year depreciation, we’re encouraged that on an annual basis we’re unchanged relative to a year ago. Excess supply continues to drive prices downward, but the silver lining is that the rate of decline is decelerating,” he said....This is the fifth straight month of year-over-year declines, and the sixth straight month of month-to-month declines. The index is only 0.07% above the low set in March 2009 (essentially at the low), and I expect to see a new post-bubble low for this index with the January release
noir.bloomberg.com/apps/news?pid=newsarchive&sid=a458vWAFmsdE
Stiglitz Expects 2 Million U.S. Foreclosures This Year (Update1)
Feb. 9 (Bloomberg) -- Nobel Prize-winning economist Joseph Stiglitz said another 2 million foreclosures are expected in the U.S. this year, adding to the 7 million that have occurred since the economic crisis of 2008.

“U.S. foreclosures are continuing apace,” Stiglitz told a conference near Port Louis, the capital of Mauritius, today. “A quarter of U.S. homes are underwater.”

The number of U.S. homes worth less than their outstanding mortgage jumped in the fourth quarter as prices fell and lenders seized fewer properties from delinquent borrowers, Zillow Inc. said in a report today.

About 15.7 million homeowners had negative equity, also known as being underwater, at the end of the year, up from 13.9 million in the previous three months, the Seattle-based real estate information company said. The total represented 27 percent of mortgaged single-family homes, the highest in Zillow data dating to the first quarter of 2009.

“Americans today are worse off than they were 10 to 12 years ago,” Stiglitz said. At the same time, the U.S. faces “increasing inequality”, with the “upper 1 percent controlling 40 percent of wealth. Instead of trickle down, it has trickled up.”

Foreclosures slowed in the fourth quarter as lenders including Bank of America Corp. and Ally Financial Inc. halted some home seizures after accusations they used improper documentation and processes. Attorneys general in all 50 states are investigating the practices.

The booming economies of Asia are “too small to be the engine of recovery for the U.S. and Europe,” Stiglitz said. “They cannot make up for the deficiency.”

[djrick]

They'll sell it for whatever to get it off the books and Fannie (taxpayers actually) gets to pick up the loss.

Read more: notmsnmoney.proboards.com/index.cgi#ixzz1DVxCwg00


Freddie Official Says He Has No Duty to Shareholders
By MICHAEL J. DE LA MERCED

As the Obama administration works to determine the fate of Fannie Mae and Freddie Mac, a director of one of the mortgage finance giants says he has no fiduciary duty to the company’s shareholders.

Here is a transcription of a conversation between Mr. Rose and William A. Ackman, the head of Pershing Square Capital Management, regarding the subject:

Mr. Ackman: So you can make decisions that are adverse to shareholders?

Mr. Rose: Correct.

Mr. Ackman: And there’s no liability to you?

Mr. Rose: Correct.

dealbook.nytimes.com/2011/02/09/freddie-director-no-fiduciary-duty-to-shareholders/

[itstippy]

Gadzooks, what timing. See my simultaneous post on the Zombie Economic Theories thread.

They should have traveling Fannie & Freddie fundraisers called "Stone Barney Day". We put Barney Frank in a big padded purple dinosaur suit and bury him up to his knees on the fifty yard line of local stadiums. Admission is free, and egg-sized stones are $5 each or $1 each for shareholders of FNMA/FRE stock (who are, after all, both shareholders AND taxpayers. Ouch!).

5 minute clock, no timeouts.

[neohguy]

Good articles djrick and itstippy.
The potus and Bernanke have both stated publicly that they are trying to support (read inflate) the real estate market and the stock market. They are fools. Although housing values have fallen 27%, Housing is still too expensive for the middle 60% of the people to aquire. The only reason there are sales is due to cash buyers and gse guaranteed loans. Despite the fact that a 100k loan is currently cheaper than rent for a 50k house, most people can not buy due to debt and/or the banks reluctance to provide conventional loans.
The stock market comments will eventually come back to haunt them when the public wakes up. Real wages in the US are in a multi decade stagnation and the majority of people do not have disposable income to buy stocks. Seniors in their 70's that have been responsible savers are being punished for not gambling on an ever rising market.
I'm not concerned with current $130.00 construction costs. That cost will fall as 99'rs and young people entering the work force become willing to do the same job for less. I still think the long term trend is deflationary for discretionary purchases whether it be cars, housing, or stocks. The market will eventually demand smaller cars with less frills, smaller houses at an affordable price, and stocks that are fairly valued instead of a government supported melt up.

[vl]

Fannie and Freddie. There are NO shareholders! The word- shareholder is misleading. There are participants in the yield return by investment, not ownership by shares. He is correct. The purpose of the government-sponsored-enterprises was a government/public participation in a common bandwidth of high integrity mortgages prompted by the majority of America working manufacturing jobs with steady wages. They basically service bank spew these days. There is no good reason for these to exist or for "participants" to expect reasonable returns or even their principle investments to survive a closure.
That said... We the People of the United States, in order to form a more perfect Union, don't need banks or Wall Street to monopolize mortgages and credit-- either. We need a whole new system based on the flaws of the old system.
Too bad I can't get through to the Law-Makers, the foundation for stability isn't complex, it just stops Big Finance through segregation.

[neohguy]

The Consumer Metrics Institute's view on housing:
Consumer Metrics Institute Member News: February 9, 2011 - An Update Plus Mid February Odds and Ends

Lakewood, Colorado


First of all, there are a number of "odds and ends" that deserve mention without meriting a full newsletter/commentary of their own:
-- If you have not yet read our general (i.e., "Home Page") commentary on the impact of "strategic defaults" on consumer spending, we encourage you to do so now. We had previously seen suggestions in the press that mortgage delinquencies were a source of at least some of the consumer spending increases observed last year, but we were not aware of anyone attempting to quantify the impact. Per our calculations, the bottom line is that such delinquencies could be freeing up as much as $90 billion per year for consumers at the expense of the mortgage bankers. If we further assume that somewhere between one-quarter to one-half of the $90 billion actually ends up in consumer spending, we might expect to see discretionary durable goods gaining 2% to 4% annualized (relative to the pre-default era).

-- The "Owner's Equivalent Rent of Primary Residence" ("OER") component of the Bureau of Labor Statistics' ("BLS") Consumer Price Index ("CPI") is often misunderstood. It stands in as a proxy for the monthly cost of principal, interest, taxes and insurance for those who own their primary residence. It was nearly flat for calendar year 2010, reportedly only increasing by 0.3% during the year. Although this number is low, some of our readers have questioned how it could even be that high given the pounding that both home prices and mortgage rates took over that same span of time.

Adding to the confusion is the explanation provided by the BLS on "How the CPI measures price change of Owners' equivalent rent of primary residence (OER) and Rent of primary residence (Rent)." The explanation prominently states on the first page that the expenditure weight in the CPI market basket for Owners' equivalent rent of primary residence (OER) is based on the following question that the Consumer Expenditure Survey asks of consumers who own their primary residence:
"If someone were to rent your home today, how much do you think it would rent for monthly, unfurnished and without utilities?"

This prominently stated survey question misleadingly implies that the OER is derived from a homeowner guesstimate of the rental value of their home. Instead, the above question is used only to determine the portion of a homeowner's budget that is dedicated to the "equivalent of rent" for the owner-occupied residence. The actual monetary value for that equivalent is derived from a separate survey of renters.

Although the actual process is far better than having homeowners guess at what their homes might rent for, it is still flawed in a number of respects. First of all, it still uses the homeowner's guesses to allocate the "equivalent of rent" within the whole household budget. Secondly, and more critically, it assumes that homeowner's costs for shelter are moving in lock-step with those of renters.

This past year has been a time when rents have firmed as the availability of rental properties has tightened, even while the real-world overall costs for owner-occupied housing has arguably dropped. On the surface it might seem surprising that the availability of rental properties has tightened, given something like 19 million residences vacant. Unfortunately, banks would rather auction than rent -- despite the "price discovery" inherent during an auction of any "impaired" asset. While it may seem reasonable to use a home rental equivalent as a proxy for home ownership costs in the CPI, in fact the two sets of costs respond to completely different market forces and dynamics.
Much better would be some process that utilizes the same types of mortgage weightings as what we performed while trying to quantify the impact of "strategic defaults" and mortgage delinquencies. If that process was properly done it would capture changes in monthly costs as a result of refinancing as well as recognizing that a growing portion of our population has been aging into paid-off mortgages (now some 25 million households), causing the actual aggregate monthly shelter costs for at least the "Baby-Boomer" demographic to be declining.

Add into that the $90 billion per year in reduced out-of-pocket costs experienced in the real world by mortgage defaulters. However "illegitimate" or transient such cost reductions may be, they are real and they are being experienced by "Main Street" Americans. At any given moment some 5 million owner-occupiers currently have their actual "rent equivalents" near zero.

And one might ask where else that deflationary "cost of living" decline is shown?

-- We have been asked from time to time to provide copies of the PowerPoint presentation that we use during our speaking engagements. We've now made a modest start in that direction, with the publication of the first two of what we hope will be a series of "YouTube" videos that help explain what we do. The first two such videos cover (at a very high level) both our methodologies and their limitations:

Economic Data for the 21st Century - Part 1 (Duration 7:35)

and

Economic Data for the 21st Century - Part 2 (Duration 11:35)
Like us, they are neither slick nor highly polished. Instead they simply try to communicate, being nothing more than our PowerPoint slides with a voice-over done by the very definition of a vocal "non-talent." However the videos do explain what we are attempting to do and how that differs from the approach used at the Bureau of Economic Analysis.

We will let you know when we eventually add to those presentations.

-- Over the past several weeks we have had a couple of occasions when we have not published updates to our indexes for several days. We always get a slew of e-mails at such times, wondering whether something has gone seriously amiss. Our standard reply can be found in one of our "Frequently Asked Questions", and it bears repeating here:

"Authentication and validation of our data collection process is our highest operational priority, and you may notice occasional multi-day delays in the publication of our indexes as we verify and/or aggregate samples for more statistically significant meta-analysis -- especially in cases where the sample sizes are less robust. From time to time one or more of our data sources may experience a significant service interruption. Although for their purposes (providing targeted ads) the down time may not be critical, we still need to have every day's data captured and accounted for. As a consequence on such occasions we delay publication of the indexes until all of the data is complete and correct, with our end result still being day-by-day indexes -- only updated several times per week during those incidents instead of every day."

As always, we appreciate your patience.

(If a chart is not visible above, please click here to see this commentary as a Web Page.)

In the above chart the day-by-day courses of the 2008 and 2010 contractions in our Daily Growth Index are plotted in a superimposed manner with the plots aligned at the left margin on the first day during each event when our Daily Growth Index went negative. The plots then progress day-by-day to the right, tracing out the changes in the daily rate of contraction in consumer demand for the two events. The 2010 contraction event is now more than a year old, dating back to January 15, 2010. Although the chart clearly bottomed at about 9 months into the contraction (at roughly 270 days), the rise since that bottom has been neither steady nor substantial. In fact, there is no way to forecast when the indicated contraction in on-line consumer demand for discretionary durable goods will end based solely on the recent course of the blue line.

It is important to remember that an index with a value substantially above or below zero for more than a year is experiencing compounded (i.e., exponential) growth or collapse. A sustained value of +5% would indicate a compounded 5% year-over-year growth in consumer interest. Similarly, a sustained index value of -5% indicates a compounded -5% year-over-year 'death-spiral' of consumer interest. Thus our current Daily Growth Index readings in the -4.4% range are against year earlier values that were also contracting, and the contraction is now compounded with a change relative to January 15, 2010 of about -5.7%.

Since neither prolonged uninterrupted day-to-day growth nor extended contractions should be expected during normal economic times, any index should have a natural tendency to revert over time to 'normal' readings closer to the nominal long term growth rates for the consumer economy. Prolonged movements away from the long term trend line are most likely signs of an aberrant economy. So seeing signs of no material change in the above chart may ironically be the best possible signal that the economy is, in fact, undergoing material change.

[maui1]

housing will not improve until the gov't gets out of the housing market.

right now, anyone wanting to sell, has to compete with fannie mae's 'homepath', which is selling properties at 50 cents on the dollar and creating a down market for anyone wanting to sell.

not only is our gov't buying bad debt in housing, they are creating bad debt in housing.

[vl]

You are correct. I couldn't believe it when Pelosi wanted to raise the ceiling on FHA to accommodate California property values and we became willing to take any old piece of trashy collateral in exchange for Fed monies. I know what got handed over and it is far more volatile during this devaluation period. Wiping out baseline tract housing in the urban/suburban first rings certainly won't be devastating in the long run. Banks aren't warehousing those, they're holding on to larger properties assuming the values will come back "because this is a cyclical downturn and jobs and values always recover". It is not. Those who return to jobs won't see those substantial incomes and 3 years out-- the state of credit devastation eliminates higher-end buying.

Fannie and Freddie will likely be shut down. You should ask yourself what will succeed them. If it is banks and Wall Street, we will see exactly what we have just gone through in a year. Banks cannot be the future of credit, they do not have the ability to handle genuine Risk and portfolios won't have integrity without lender insurance as protection.

If we are shutting down the GSE's, we MUST divest banks back to state borders, mandate in-house portfolios, uniform credit practices, no Federal Reserve discount monies and regular reconciliation because they can't count or account properly. We cannot afford to give fake banks the power to ruin us completely.

[scaredshirtless]

So home values have dropped 9.8 trillion. I think I've read (recently even) that the associated debt has only dropped 500 billion. Now since lots of people own - its not an apples to apples comparison - but it still sounds out of whack to me.

Strategic defaults are very definitely occurring in Calif. and at the highest priced home levels. The strategic defaulters in million + homes is much higher than among the rest of us. In CA the million + loans are left to live rent free for years by the banks and heres why. With the precipitous decline in values now occurring at the top - banks have two choices on how to report the loss. Option 1 is report the loss in payemnts - let's say 5000 a month times 12 = 60,000 loss - for the year. *** OR *** Option two - foreclose and take a 300,000 or 400,000, 0r 500,000 or () loss now... today...

As long as cash flow holds out - the banks can hope for "recovery". I bet this savings in equivalent rent at the top is a serious chunk of change! I also suspect most of those in this class are saving it - not spending it. At least I would be.

Lots and lots of defaults to yet occur in CA. Unemployment above 20% out there. The state is bankrupt.

In regards to housing - look out below?

[maui1]

knowing the housing mess, is still a mess, and that it was the reason for the market fall to 6000, how can anyone value the market at 12000?

hiding the problem, does not fix the problem, but is seems a lot of people believe that it has.