The housing market isn't what the government wants us to think it is...

[Lacarnut]

I lived in Coral Gables years ago.  We have vacationed in the Captiva / Ft Myers area a few times since.  I have also considered just putting the Motor Home on a winter lot.  Spent a week looking at parks this spring.   The jury is still out on which way to will go.  But there are plenty of foreclosures to look at (with plenty of Chinese dry wall).

I would not touch a Repo with Chinese dry wall with a 10' pole. Gotta watch out for the ones that have been used as Meth labs also.  

[debk]

It's got to be regional. Over the past year I've partnered with a builder and we're buying depressed properties on the cheap here in Asheville, NC, fixing them up, and reselling them. Had realtors in this area right after we started saying they needed spec homes to show, so we've kept them in the $200K range and have had much success.

Getting ready to expand what I'm doing into Central Florida in 2014. Lots of opportunities.

.

Congrats on doing so well!!


Stats on my local market, these are from my county and 3 of the largest populated counties that "touch" mine.
These are for single family dwellings only... no condos, PUD, multi-family(2 or more), commercial included.


Current listings: average days on market 120+

All lists   - 6630 - ranging in price $5,000-$9,975,000. average price $259,639. 827 are over $400,000.
REO lists -  455 -                      $9,900 - $1,349,000.                   $125,581.

REO lists are approximately 7%

Solds since 01/01/2013: average days on market 90+

All solds   - 5193 - ranging in price $305 - $3,212,500. average price $189,206.
REO solds -  929 -                       $1750 - $989,000.                     $92,073.

REO solds are approximately 17.9%

In last 30 days:

All solds  - 708
REO solds - 79

REO solds are approximately 11%


Those numbers make things look pretty good.

I have done 190 reports in the last 6 months. 95% are at some point in the foreclosure process. It could be as early as 2 months behind on payment all the way to bank owned and on the market.

I'm one of many doing these reports. For one company alone, I know that I am one of 93...those are just in my area - in other words, we cover the same territory.

I have 4 due tomorrow, 2 Saturday, 1 Sunday, 3 Monday and 1 Tuesday. Of all of them, only the one on Tuesday has been foreclosed.

I'm in a market that is probably double the size of the Asheville market.

Is there a surplus or a shortage in my market? I guess it depends on who's interpreting the statistics.

[NHSparky]

Kids today don't want to be burdened with property maintenance and prefer to rent or live in condos.

That'll likely change when they wake up and see the shit they have to put up with, or if someone sat them down and showed them how much money they're dumping down a hole either through rent, or by condos, which drop first, and recover last.

[obumazombie]

That'll likely change when they wake up and see the shit they have to put up with, or if someone sat them down and showed them how much money they're dumping down a hole either through rent, or by condos, which drop first, and recover last.

Houses aren't particularly good investments. Some would say they're not investments at all.

[debk]

That'll likely change when they wake up and see the shit they have to put up with, or if someone sat them down and showed them how much money they're dumping down a hole either through rent, or by condos, which drop first, and recover last.

My BFF and I just had a discussion a week or so about "young people" not interested in buying houses. She's president of an organization that over a 100 county HOA's belong to, on the board of Scenic ******, and is very politically - non-party affiliated, but keeping to building codes & zoning, trying to eliminate "good ole boys" backroom dealings with new development, etc. -  involved with the MetroPolitan Planning Commission, Building Codes Enforcement, County Commissioners and City Council. When she started getting involved in all this stuff about 3-4 years ago, I told her she was tilting at windmills....but I have to give her a lot of credit...they are starting to pay a lot of attention to her! I'm her "go to" resource for real estate... particularly statistical data regarding the housing market in certain areas of town, and some other stuff with real estate.

Back to discussion... she said she had heard the same thing from some members of a couple of groups...(all who live in "high end housing"...)

Here is what we determined after a lengthly discussion of whether or not "young adults" are interested in owning their own homes. ..

(If) you are in your 20-30's, you have tens of thousands of college tuition debt, you have a job making less than $35,000 a year, you have a car payment, maybe married, maybe have a kid or two, credit may or may not be stellar (which it almost has to be these days to qualify for a house)...

Someone - whether it be on the phone, internet, etc - asks you if you will be buying a house in the next 6 mos, what are you going to say?

What's you answer going to be?

A. I don't want to be tied down to a mortgage.
B. I don't want to take care of a yard.
C. I like apartment living with a pool, tennis court, people to hang with
D. All of the above.

or....

E. I don't make enough money to buy a house.
F. I don't qualify for a mortgage...because of debt to income ratio, or credit score.
G. I won't live in the area I can afford because of gangs, murders, drugs. etc.
H. E-G all apply.

BFF and I each have 2 kids. Our daughters have mortgages because they are married and dual incomes were considered, and all 4 are making in excess of $50K/year. Our sons aren't married, neither can afford a house on their sole incomes - where either one would be willing to live. Both of our sons would admit to not being able to afford one to their friends because many of their friends are in the same boat, but I seriously doubt they would tell a stranger they couldn't.

Just like everything else to do with the housing industry, the data is skewed to fit whatever the desired result. 

[debk]

In today's email....

It sounds crazy, but it makes perfect sense
Five Star Economist Mark Lieberman sees a troubling "deja vu" in the housing market.  Quickly built up demand for housing, fast rising home values, overbidding, relaxed lending standards, and something else... something we don't usually look at.  Furniture and appliance stores are seeing a dramatic slowdown.  Why does this matter?  Mark explains "The falloff at furniture and appliance stores suggests homeowners may be stretched to make monthly mortgage payments".  Many economists fear these signs.  If people are stretched for basic housing needs, and their jobs don't start paying them more soon, they might need to start giving up other payments altogether, and that's what we saw in 2005, just over 8 years ago now.  Some agents are surprised to hear that many states are still seeing increases in foreclosure filings, as we reported on last week.  And with job creation far under what it was 10 years ago, the signs are troubling.  Banks are now looking to release more REOs before a potential double dip, while they can still get a higher dollar amount for their REO assets. 

I knew appliance purchases were an indicator of new housing, but never thought about it as an existing homeowner. Outside of "garage" refrigerators, I have only purchased appliances if one breaks and it's cheaper for new than to fix.

[Texacon]

deb, I fear we're moving back to the lending practices that caused all this problem.  Where I sell I'm seeing a LOT of buyers using USDA loans and FHA loans that will allow not only 100% financing BUT they'll allow the seller to pay ALL of the buyer's closing costs.  Seriously.  Before those seller contributions were capped at 3% and sometimes, in the subprime market, up to 6%.  These USDA loans will allow the seller to pay "whatever is needed" for the market.

Right now I have a deal working that is right at $80k and the seller is contributing $5,000 to the buyer's closing costs!  On top of that the buyer is asking for an allowance to have the repairs they want made.  Usually no big deal but in this case they're asking for very minor things and they want $2,000 grand.  I'm talking about things most people would overlook but the problem is the buyer has NO money so they want everything pristine when they move in.

I'll lay dollars to donuts this home is in foreclosure in less than 2 years.

KC

[Eupher]

deb, I fear we're moving back to the lending practices that caused all this problem.  Where I sell I'm seeing a LOT of buyers using USDA loans and FHA loans that will allow not only 100% financing BUT they'll allow the seller to pay ALL of the buyer's closing costs.  Seriously.  Before those seller contributions were capped at 3% and sometimes, in the subprime market, up to 6%.  These USDA loans will allow the seller to pay "whatever is needed" for the market.

Right now I have a deal working that is right at $80k and the seller is contributing $5,000 to the buyer's closing costs!  On top of that the buyer is asking for an allowance to have the repairs they want made.  Usually no big deal but in this case they're asking for very minor things and they want $2,000 grand.  I'm talking about things most people would overlook but the problem is the buyer has NO money so they want everything pristine when they move in.

I'll lay dollars to donuts this home is in foreclosure in less than 2 years.

KC

I gotta tell you, KC and deb, the more of these horror stories I hear, the more I'm convinced that selling my house is a veritable impossibility.

The housing market's been shit, even since '04 when Mrs. E and I moved to Ohio; and again (worse) in '07 when we moved to Missouri.

No way in hell, for example, would I pay the buyer's closing costs -- not unless the price of my house was jacked up enough not only to cover the note and a puny amount of equity, but also to cover those closing costs plus 10% for the hassle factor.

Maybe I ought to go ahead and drop $8K for a heat pump since it looks like I'll wind up croaking in my current house. Want to go south for retirement. Am sick and tired of shoveling snow.

[USA4ME]

Back to discussion... she said she had heard the same thing from some members of a couple of groups...(all who live in "high end housing"...)

Here is what we determined after a lengthly discussion of whether or not "young adults" are interested in owning their own homes. ..

(If) you are in your 20-30's, you have tens of thousands of college tuition debt, you have a job making less than $35,000 a year, you have a car payment, maybe married, maybe have a kid or two, credit may or may not be stellar (which it almost has to be these days to qualify for a house)...

Someone - whether it be on the phone, internet, etc - asks you if you will be buying a house in the next 6 mos, what are you going to say?

What's you answer going to be?

A. I don't want to be tied down to a mortgage.
B. I don't want to take care of a yard.
C. I like apartment living with a pool, tennis court, people to hang with
D. All of the above.

or....

E. I don't make enough money to buy a house.
F. I don't qualify for a mortgage...because of debt to income ratio, or credit score.
G. I won't live in the area I can afford because of gangs, murders, drugs. etc.
H. E-G all apply.

BFF and I each have 2 kids. Our daughters have mortgages because they are married and dual incomes were considered, and all 4 are making in excess of $50K/year. Our sons aren't married, neither can afford a house on their sole incomes - where either one would be willing to live. Both of our sons would admit to not being able to afford one to their friends because many of their friends are in the same boat, but I seriously doubt they would tell a stranger they couldn't.

Just like everything else to do with the housing industry, the data is skewed to fit whatever the desired result. 

Yeah, I admit the Asheville market tends to lend itself to more retirees, but the area has been attracting some factory work fleeing from the Northeast and California which has brought in some young professionals. I would think in K-ville you'd get some companies wanting to be close to the resources at UT, but I've never done anything in the K-ville market to know about the area. Did some deals in Kingsport and Johnson City, but that's been 15+ years ago.

.

[Texacon]

I gotta tell you, KC and deb, the more of these horror stories I hear, the more I'm convinced that selling my house is a veritable impossibility.

The housing market's been shit, even since '04 when Mrs. E and I moved to Ohio; and again (worse) in '07 when we moved to Missouri.

No way in hell, for example, would I pay the buyer's closing costs -- not unless the price of my house was jacked up enough not only to cover the note and a puny amount of equity, but also to cover those closing costs plus 10% for the hassle factor.

Maybe I ought to go ahead and drop $8K for a heat pump since it looks like I'll wind up croaking in my current house. Want to go south for retirement. Am sick and tired of shoveling snow.

In most cases that is what's happening.  Make a deal at $80k and want $5k back in closing cost assistance?  No problem, we'll write the contract at $85k and give you the $5k at closing.  They are financing 100% of it then asking for other costs to be paid.  It's pissing me off.

The buyers I'm working with now, through another agent, don't really want the repairs done ... they want the CASH!  They will probably end up getting a check at closing.  I'm telling you, 2 years and this home hits the foreclosure market.  I've seen this happen before and it's ugly.

KC

[Dori]

Maybe I ought to go ahead and drop $8K for a heat pump since it looks like I'll wind up croaking in my current house. Want to go south for retirement. Am sick and tired of shoveling snow.

Why don't you become a snowbird?

[debk]

deb, I fear we're moving back to the lending practices that caused all this problem.  Where I sell I'm seeing a LOT of buyers using USDA loans and FHA loans that will allow not only 100% financing BUT they'll allow the seller to pay ALL of the buyer's closing costs.  Seriously.  Before those seller contributions were capped at 3% and sometimes, in the subprime market, up to 6%.  These USDA loans will allow the seller to pay "whatever is needed" for the market.

Right now I have a deal working that is right at $80k and the seller is contributing $5,000 to the buyer's closing costs!  On top of that the buyer is asking for an allowance to have the repairs they want made.  Usually no big deal but in this case they're asking for very minor things and they want $2,000 grand.  I'm talking about things most people would overlook but the problem is the buyer has NO money so they want everything pristine when they move in.

I'll lay dollars to donuts this home is in foreclosure in less than 2 years.

KC

K.... USDA are the rural development ones right? If so, we have them here too, and they are 100% loans. What's really weird, is the location of these RD loans...some are inside the city limits, in 50+yr old neighborhoods.

I had a couple houses that were flips get RD loans (I was seller's agent for one of my investors). They wanted every damn thing too. It came down to something really stupid.... it was an "as is" listing, and the buyer's agent wanted a vent cover. Told him it wasn't there to begin with, it wasn't asked for in the home inspection(seller's did agree to do a couple of the home inspection items) and if he thought I was going out and buy one the day before closing, he could think again! He said I was hateful and wouldn't even come into the closing room.    His buyer's were really nice... he on the other hand was a little shit.

He lied through his pearly whites about the loan, closing time, etc. I flew into the lender when the lender got mad at me for "scheduling" the closing and wanting to know when the title company would be getting the loan information. I told her to look at the contract! She didn't even have it yet!!! This was less than a week prior to closing. We ended up closing only 2 or 3 days late, but from then on, I had to put on showing instructions for that seller, that the little twit was NOT allowed to show any of their listings. My seller was adamant about him not being allowed on her properties.

[debk]

Yeah, I admit the Asheville market tends to lend itself to more retirees, but the area has been attracting some factory work fleeing from the Northeast and California which has brought in some young professionals. I would think in K-ville you'd get some companies wanting to be close to the resources at UT, but I've never done anything in the K-ville market to know about the area. Did some deals in Kingsport and Johnson City, but that's been 15+ years ago.

.

Loudon County, has lost Yale Lock - 200 some employees. And they lost another company that had about 150.

Over the last couple of years, Knoxville lost Goody's executives offices, UT has had repeated layoffs over the last couple of years (BFF was losing her job the end of Sept, but has found a different job at UT. Her entire dept(her group supported one of the Colleges for all media) has been let go over the last year, only the main person will still have a job after Oct 1. There were about 15 in the group over a year ago. Plasti-line is gone(it was called something else when they closed - they make huge signs, like Mickey D's arches,etc). Levi's is gone. There was another big one, but I can't remember, what it was. Most of these were executive jobs. A lot of new jobs have come in, but most have been retail, customer service in the minimum to $12-15 max per hour. It was either January of 2010 or 2011, 1400 jobs were lost in Knox and Blount County in less than 6 weeks, predominately white collar. 

Anderson County, has improved in manufacturing. But Oak Ridge's housing is the worst it has been in forever. Last yr, home values dropped 30%.

Roane County... HT Hackney moved out of Knox County and moved into Roane. Good for Roane, bad for Knoxville.

Sevier County is thriving on tourism. Bless them.. Knox County is hoping to pick up on the overflow.

Campbell County.. basically has lost 75% or more of manufacturing type jobs with nothing to replace them.

Back after a couple of really bad hurricane years, when people were leaving Florida and moving to TN, NC, SC... Knox County went crazy building houses in the $150-400 range. Buyers came, but not to the extent the developers were hoping. And the wonderful people in charge of Knox County new business opportunities are not exerting themselves to bring in new businesses. Dumb asses... 

[zeitgeist]

Yeah, I admit the Asheville market tends to lend itself to more retirees, but the area has been attracting some factory work fleeing from the Northeast and California which has brought in some young professionals. I would think in K-ville you'd get some companies wanting to be close to the resources at UT, but I've never done anything in the K-ville market to know about the area. Did some deals in Kingsport and Johnson City, but that's been 15+ years ago.

.

And here is an article on one such company fleeing BlueHampshire.  Take your guns an nasty jobs the heck outa here.

http://bluehampshire.com/2013/07/22/nh-afl-cio-and-nc-afl-cio-presidents-agree-sturm-ruger-chose-n-c-to-maximize-profits-at-workers-expense/


Congratulations to NC, our loss is your gain. Lynch, our last Governor, vetoed RTW.

I have also thought about NC as a winter motor home location (over near Pinehurst).

[zeitgeist]

Are you seeing this where you are ?

Aug. 29, 2013, 8:54 a.m. EDT

Nearly half of homes are purchased in cash
The real-estate recovery is being driven by all-cash buyersLink:
http://www.marketwatch.com/story/nearly-half-of-all-homes-are-purchased-in-cash-2013-08-29?dist=beforebell

[Texacon]

Are you seeing this where you are ?

I don't know about deb but I've seen more cash buyers this year than in the past.  Even with interest rates as low as they are. 

KC

[debk]

Funny you guys should mention this...

Remember the other day, when I mentioned this group coming in and buying up houses? BFF and I were talking about it again in the last day or so.

This morning I looked in the tax records to see if I could find them.

I did....just in Knox County...they have bought 121 houses!!!! And we aren't talking cheap ass rundown houses. Some are up in the low 300's. All cash paper money.

American Homes 4 Rent Properties [One, Three, Four or Six] LLC. They are out of Malibu CA.

Just checked adjacent counties.

30 in Blount County
3 in Anderson (OakRidge)
1 Sevier ( Dollywood area)
6 in Loudon

73 in Davidson (Nashville)
83 in Rutherford (Murfreesboro-outside Nashville)
40 in Shelby (Memphis)
99 in Montgomery (Ft Campbell)

I find it extremely weird there is nothing around Chattanooga.

KC... wonder if they are buying in your area?

[Wineslob]

American Homes 4 Rent Properties [One, Three, Four or Six] LLC. They are out of Malibu CA.

Looks like you'll have some................undocumented persons shortly. We have a glut.

[Texacon]

KC... wonder if they are buying in your area?

No ma'am, I don't see anything in our county.

KC

[debk]

No ma'am, I don't see anything in our county.

KC

BFF found this article.

They are in Texas, but no mention of being here in TN.

http://www.newsobserver.com/2013/02/23/2702528/california-billionaire-bets-on.html

[Dori]

Venture Capitalist?

David Singelyn

Chief Executive Officer - American Homes 4 Rent

In the Real Estate industry, David Singelyn has 16,348 colleagues in 1,383 companies located in 82 countries. 8,166 executive movements have been recorded in the last 12 months.

[longview]

Locally some of the people I know are moving money from some funds and buying properties to become rentals for cash.  They have told me they are doing this for two reasons.  First, they think business regulations are going to get much worse, adversely influencing businesses.  Second, they think the number of people able to buy a house is going to decrease, increasing the need for rentals. 

Personally, I was going to buy something closer to where I'm working this summer/fall.  Now I am content to wait a year or even two.  My area has not yet seen the market decline that other areas have, but I think it will come.  I can wait to see how things go.  Or, I can wait until I'm even closer to retirement and buy a whole lot more property for my money 70 miles away!

[debk]

If I had the money, I would be buying rentals - affordable for me but also affordable for renter. Around here, a 3 br apartment in a nice area is going to be within a hundred or two of $1000, depending on amenities. I think if you can buy houses that are competitive to a nice apartment,  renters with kids would prefer a house. ,

[Dori]

An old neighbor of mine took an early retirement and moved to Oregon.  He would buy up neglected homes with good bones, at a good price. and paid cash.  He would clean up the property, replace windows, paint and maybe put in new flooring.  Then he would rent them out.  At one time he had a dozen or more rentals.   

[CG6468]

Market decline? What market? What decline? The market hereabouts crashed a few years ago and has not recovered one bit.