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How is the credit bubble affecting your city?
Old 08-03-2007, 02:36 PM   #1
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How is the credit bubble affecting your city?

I have noticed something new in my mid-size, southern city in the past month or so. Red "for sale at auction" signs in front of foreclosed houses are popping up all over the place (even in good neighborhoods), houses are sitting for months and months on the market (even in good school districts), stores don't seem to be as busy as they used to (many stores have closed recently)... What's more, I start seeing people trying the sell their luxury cars (newer SUVs, lexuses, jags, maybe 2-3 years old tops) on their own. They park them on their lawn with "for sale" signs... I've seen people do that before with old beaters, but not with perfectly good looking, luxury cars.
The curious thing is that my town has a vibrant economy, fairly high wages (due to a highly qualified work force), low cost of living, very low unemployment and a large number of newcomers every year which helps the city grow at a good pace. The RE market is supposedly healthy (if you talk to realtors) but it does not feel this way. So even though I live in a city with a healthy economy, in the past few months, I have seen signs that more and more people are heel over their heads with debt.
Do you see the same thing where you live?
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Old 08-03-2007, 02:52 PM   #2
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Yep, I see the same thing too. We must live in the same area.

I wonder if things are really different, or is it that we are actually paying attention to our money and retirement needs therefore noticing the negative issues more often? :confused:
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Old 08-03-2007, 02:53 PM   #3
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Not really here in D.C. The D.C. area is relatively recession-proof because the Government never goes out of business nor does it cut back on its spending. That said, houses are staying on the market longer, and sellers are more eager to cut their prices (although not by a significant amount). I haven't seen too many folks trying to sell their luxury cars or other toys, but I have seen people trying to unload their "investment" condos in luxury high rises.
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Old 08-03-2007, 03:12 PM   #4
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Jay,

our local economy is dominated by the defense industry and federal government entities. So right now our local economy is doing very good. There is no recession going on down here... Yet it looks like more and more people are feeling the pinch...
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Old 08-03-2007, 03:19 PM   #5
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Dreamer...here in SE Virginia we have multiple military bases and the largest shipyard in the world.....so I have always assumed that we are at least a little insulated.....even so, I have noticed that house prices have at the very least stablized and that sellers seem to be willing to negotiate if they REALLY want to sell....I haven't noticed "nothing much" out of the ordinary regarding folks selling their "toys"....but now that you've mentioned it, I'll keep an eye out!
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Old 08-03-2007, 03:32 PM   #6
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Where I live there are an incredible number of foreclosures, a lot of them are basically homes that didn't sell for a year or more so the owners stripped out as much equity as they could via 2nd's and have now decided to "sell" them to the bank via foreclosure. I have looked at a few in my neighborhood in the county public records site and I cannot imagine how they appraised high enough to get that kind of debt going. I suspect much of the "appraisal" process was done with some computer model rather than a physical site visit. Perhaps the appraisal process was outsourced to India or China? In any event the banks will NEVER get back their $$ on most of these homes.

I think a key enabler for this is the practice of banks selling off the mortgages to the secondary market rather than keeping them in their own portfolio. So, some faceless mutual fund who bought a basket of GNMA of FNMA securities just got hosed.

What's truly amazing is - despite all this, the builders are as busy as ever putting up square mile after square mile of cookie cutter tracts - "life in the borg collective" as I call it. Each tract is fully equipped with the requisite strip malls with all of the usual amenities - tanning salon, gas station, chinese take out. So, the madness is in commercial too.

There must be a lot of ER going on where I live, but I suspect without FI. Or perhaps everybody except me works in construction nowadays?
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Old 08-03-2007, 04:16 PM   #7
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Where I live houses are just sitting on the market .The new construction has slowed down and the builders are really cutting prices .My So 's son lives in a new condo development .He rents but the condos are for sale .His is the only occupied unit right now .Pretty scarey !
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Old 08-03-2007, 04:47 PM   #8
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Around here it seems like everyone is selling their houses in a couple of days. I have seen some sit on the market for a month or two. Prices seem to have gone up a lot over the past year (as in more than 10%).
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Old 08-03-2007, 04:58 PM   #9
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Houses move slower here, but they seem to go at decent prices.
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Old 08-03-2007, 05:22 PM   #10
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Around these parts, houses are selling pretty quickly.....faster than in the past it seems. There are NO homes for sale within several blocks of me, which is actually a little unusual....there's typically 1 or 2 anyway.

There's still quite a building boom going on also, there are several major condo projects going up.....3 with marinas. One of those is also includes a shopping complex and a hotel. There are also quite a few fairly large subdivisions being built and annexed to the city. The homes are being bought up faster than they can be built.

One condo development that is being built a phases, had the first 92 of 96 condos sold within a few weeks of announcing the project, before any construction had even started.

The unemployment rate here is very low, and commercial building and development are growing by leaps and bounds. No house woes here! And there are few if any foreclosures listed in the classified anymore. Life must be good!
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Old 08-03-2007, 05:49 PM   #11
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New houses are still going up everywhere here, but we have a lot of outstanding inventory so I'm sure that'll correct severely soon. We're trying to sell but we're up against 9 months of inventory right now...

Bad time to be in the market if you need to sell.
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Old 08-03-2007, 08:10 PM   #12
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Originally Posted by Jay_Gatsby View Post
Not really here in D.C. The D.C. area is relatively recession-proof because the Government never goes out of business nor does it cut back on its spending. That said, houses are staying on the market longer, and sellers are more eager to cut their prices (although not by a significant amount). I haven't seen too many folks trying to sell their luxury cars or other toys, but I have seen people trying to unload their "investment" condos in luxury high rises.
Born and raised in the DC area and I never bought the recession-proof idea......and still don't. That said a recesssion here IS pretty superficial compared to other places, but the folks that are on the margin do suffer quite a bit. In my 'burb, there are LOTS of houses just sitting on the market for 6 months or more whereas a year ago everything got snapped up in 30 days. The qty of townhouses and condos for rent/sale is really off the chart. Prices are down maybe 20% asking, but suspect much more for the ones that actually close. Everybody is pretending like things are OK, but I suspect its much much worse than it looks. I have not noticed more than usual qty of cars for sale.
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Old 08-03-2007, 08:18 PM   #13
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Houses are sitting here as well (northern Florida). didn't run up as extremely as the rest of the state, but prices continue to soften. The houses that are sitting have dropped their prices - but not by as much as the ones that are selling.

It is going to get a bit worse - the state is experiencing a $1.5 billion revenue shortfall, so goverment now has a hiring freeze and all agencies are looking to cut budgets by at least 10%, statewide. no layoffs, but no movement.
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Old 08-03-2007, 08:24 PM   #14
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In my suburban Michigan neighborhood, larger inventory of homes on the market than in the previous 8 years I've lived here and they are still selling ...but what used to sell in two or three weeks is now taking six months or longer and usually only after some price reduction thrown in. Prices are down by 10% or more from one year ago.

Two houses on my street, for example-- one was foreclosed over a year ago and still is vacant and the other just sold after one full year on the market. Ouch.

Interesting sidebar though: I'm seeing a LOT more of my neighbors doing significant improvement to their homes -- roofs, new windows, interior updates, etc. Much more than typical.
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Old 08-03-2007, 08:31 PM   #15
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I have been seeing a lot of "For Sale" signs in the New Orleans area, and prices for undamaged homes, which were much higher during the year after Katrina, have dropped considerably. Those few in my neighborhood that have sold, are selling for about what they might have got in 2004 (in my opinion) if undamaged. It's a little hard to judge these things, though. Some could have problems from storm damage that I don't know about.

Many of the badly damaged houses that had 10+ feet of flood water for weeks have had signs out for a long time, and gutted and even un-gutted flooded homes are asking what they would have been worth before the storm. I don't really understand that. Are they looking for the greater fool? They don't sell. Newspaper articles quote the local realtors' association as saying that sales numbers are way down and inventory is way up.

We started to notice an increase in luxury cars with "For Sale" signs a couple of years ago, before the storm. The number rose to heartbreaking numbers in 2005 after the storm, when people who had lost their jobs and houses were struggling to survive and rebuild.

Our economy in my suburb is supposed to be thriving and sales tax revenues are up.
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Old 08-03-2007, 09:56 PM   #16
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Greater Dayton Ohio area.

Many homes for sale; price reduced signs; no down payment signs. Papers full of sheriff's sales. Many abandoned/long empty homes. People squatting in empty homes; selling drugs; setting fires; occasional body turning up. Much theft of siding/plumbing/wiring.
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Old 08-03-2007, 10:20 PM   #17
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I am wondering how the RE market in Canada is doing.
Is any one of the Canadians here care to share?
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Old 08-03-2007, 11:03 PM   #18
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Somerset, NJ....a lot of houses/condos are just sitting for months. There was new construction that was started early last year....for months now, they have just been pushing soil from one end of the field to the other. It is an absolute shame, because the drive to work with fields on either side was nice.
There are a lot of SUV's parked on the front lawns as well.
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Old 08-03-2007, 11:07 PM   #19
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south florida seems to be down 20 to 30% off peak craziness. sales very slow. inherited palm beach county house for sale priced appropriately for area (we matched lowest priced similar product in same area while we have more waterfront so we hope to be next to sell) but not even a lowball bid since 1st offered for sale late january. medium price in palm beach county has just dropped below broward medium price which is the position each held pre-bubble.

i don't see any foreclosure signs in my area of broward county. realtor.com shows 3 houses for sale under 300k. the house directly behind me recently went up for sale at $350k (owner has alzheimer's; house not updated since built in the 50s). the house two doors down from me is for sale for $430k. it might have gotten $550k at the peak. (owner has plenty of cash but wants to move to las vegas.) there are very few houses for sale in this area. and only three at our price level where inherited house is sited.

realtor.com shows only 3 teardown deepwater houses sold in area of inherited house within past 12 months, average price $1.15mm. my area, surprisingly to me, shows 7 houses sold since march with average price of $460k.

looking foward to no longer owning real estate and living the vagabond life. i'm already packing in anticipation of the market turn.
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Old 08-04-2007, 06:25 AM   #20
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Interesting thread.
Upper midwest. Economy not thriving, but employment available. Property just not moving--really not at all, seems to have hit a brick wall. Some foreclosures, but not overwhelmingly so. What happened here is that we did not boom, so apparently we'll not bust, more like a slow decline until we reach some type of equilibrium.
Do notice that people are staying put and improving their homes--roofs, windows, gardens-landscaping, driveways, pools and the such.
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