Housing Bubble, credit bubble, public planning, land use, zoning and transportation in the exurban environment. Specific criticism of smart growth, neotradtional, forms based, new urbanism and other top down planner schemes to increase urban extent and density. Ventura County, California specific examples.
Monday, May 04, 2009
Housing = Circuit City
Remember when CC had their massive bankruptcy sale? Did you see any bargains? Neither did I.
That's what we are seeing in the housing market right now. A bunch of consumaholics convinced they've been denied long enough and 20% off MSRP is a deal.
FIRST thing you do when holding a 50% off sale is double the price.
I've seen a number of places around here (SF Bay Area) with "Price Reduced!" signs. They've shaved off 5k and think this is enough. It does get people to look, but then they see the price and laugh.
PF, I didn't realise you were in the Bay Area as well. The wife and I would like to buy, but I still rate the prices as being 100-150K more than they are worth where we'd like to buy.
Ah this is a great post. The after party has kicked in. After four long years of being “priced out forever”, I finally got to do my “I love what you do for me Toyota - freeze frame in mid air jump” as people were losing their shirt. Six months later though, like clockwork, it’s back to business as usual. Is this a final jump-the-shark?
Yup. Oakland now (the nice part, and yes, there is a nice part of Oakland). Was in Napa before that and was raised in Concord.
What part of the Bay are you looking to buy in?
Out in the wastelands (Fairfield, Pittsburg / Antioch), the prices have hit rock bottom. So many empty houses, you can pretty much find a bargain. Keep the extra money though - you'll need it for ammo.
Closer in, prices still have a ways to drop. Desperation hasn't hit yet. I suspect it'll hold through summer, but as we go into fall, we'll see price drops. There are some bargains out there, but you have to look carefully.
We're renting a house in San Mateo and the places that are going up for sale in the neighborhood are 650K-700K and I simply can't rationalize that much for a 3 bdrm, 1 bath house.
We both work in the city, and don't want to move much further than a 30 minute commute, so we're willing to wait and see how far down it will go.
We're thinking late this year, early next year, the "oh, shits" will start and it will be a good opportunity.
I don't know about other areas but cheapo houses in Phoenix are actually going pretty actively. You can get decent little places in the sub-$65K level but they are getting snatched up quick. Good single family homes for $50/sq ft are popular and a lot are going on cash offers.
4br-3ba single level / pool 1678 sq ft built 1960 $64,000
Four bedrooms on a corner lot with a diving pool plus garage converted to family room, pool table room, extra sleeping room with a fireplace and third bathroom. Needs fix-up but great rental investment.
That Manzanita post over at Jim's had me just about writing off humanity altogether.
As they say, people make decisions with their emotions and then use logic simply to rationalize them. People are still absolutely in love with the idea of homes as an investment, and it's going to have to be beaten out of them before this can all be over.
We'll give them spring and maybe a little bit of summer, then the beatings will commence.
CC was a farce. I think I went 3 times. Nothing ever got cheaper but it disappeared. Fry's, Best Buy and the Sony outlet have better deals on a daily basis.
I will however, be telling my grandchildren about the deals at Good Guys and CompUSA during their liquidation.
I think we're going to see a continued divergence in housing prices based on location, and specifically on access to employment. Don't get me wrong, they will continue to go down for the next year or so at least, but declines in cities with strong employment and short commutes will be slow.
On the other hand, there will be plenty of inventory at shockingly low prices in remote exurbs with no access to employment--fantastic news for telecommuters and "airplane" commuters (e.g. traveling salesmen), not so useful for the rest of us. The days of homes going for $500k in California regardless of city, county, town, or neighborhood are long over--but don't hold your breath for homes in La Jolla or Malibu going for sub-$200k.
P.S. For electronics or automobiles at liquidation prices, don't bother with "Going Out of Business" sales when eBay or Craigslist is just one click of the mouse away.
Bank demolishes a partially built subdivision (16 homes) after repo - cheaper to demolish than to complete them. With prices where they are, they wouldn't be able to sell them.
Speaking of remote exurbs and airplane commuting, here's a property I saw on Craigslist not long ago ... why spend half a mil on a California shoe-box when the same money will get you this 29,000 sq ft, 160 acre spread in unspoiled New Mexico:
$550,000 / 8br - Magnificent Ranch for Sale (Belen, New Mexico )
The property consists of castle like structure with the main home at 12,000 SF, maids quarters, foremans quarters at about 2500 SF, 5 workers quarters and a pilot quarters. The home has two large airplane hangers with its own landing strip. All together the home has 29,000 SF under cover with huge storage and shop quarters. The ranch consists of 160 acres but can be purchased with 60 acres for about $350,000. the price is negotiable. There is also a huge party room and a two story recreation room with a bar. The structure has 21 bathrooms. It belonged to a multimillionaire cattleman, Lyndon B. Johnson as well as movie stars and sports notables visiting the ranch in its hayday. The main quarters can be moved into immediately some of the other living spaces need renovation.
There are certainly stalled condo developments smack in the middle of industrial Irvine. How will they bulldoze those? Another 9/11? Funny how mixed use became the buzzword when housing became more precious than commercial. The only planning that went into Irvne was how to expand Donald Bren's pocketbook.
Remember when CC had their massive bankruptcy sale? Did you see any bargains? Neither did I.
21 comments:
FIRST thing you do when holding a 50% off sale is double the price.
I've seen a number of places around here (SF Bay Area) with "Price Reduced!" signs. They've shaved off 5k and think this is enough. It does get people to look, but then they see the price and laugh.
PF, I didn't realise you were in the Bay Area as well. The wife and I would like to buy, but I still rate the prices as being 100-150K more than they are worth where we'd like to buy.
Ah this is a great post. The after party has kicked in. After four long years of being “priced out forever”, I finally got to do my “I love what you do for me Toyota - freeze frame in mid air jump” as people were losing their shirt. Six months later though, like clockwork, it’s back to business as usual. Is this a final jump-the-shark?
Tach -
Yup. Oakland now (the nice part, and yes, there is a nice part of Oakland). Was in Napa before that and was raised in Concord.
What part of the Bay are you looking to buy in?
Out in the wastelands (Fairfield, Pittsburg / Antioch), the prices have hit rock bottom. So many empty houses, you can pretty much find a bargain. Keep the extra money though - you'll need it for ammo.
Closer in, prices still have a ways to drop. Desperation hasn't hit yet. I suspect it'll hold through summer, but as we go into fall, we'll see price drops. There are some bargains out there, but you have to look carefully.
In the City itself, prices are still too high.
We're renting a house in San Mateo and the places that are going up for sale in the neighborhood are 650K-700K and I simply can't rationalize that much for a 3 bdrm, 1 bath house.
We both work in the city, and don't want to move much further than a 30 minute commute, so we're willing to wait and see how far down it will go.
We're thinking late this year, early next year, the "oh, shits" will start and it will be a good opportunity.
San Mateo. Just be sure to not be within the noise footprint of the HSR elevated along the Caltrain corridor.
I don't know about other areas but cheapo houses in Phoenix are actually going pretty actively. You can get decent little places in the sub-$65K level but they are getting snatched up quick. Good single family homes for $50/sq ft are popular and a lot are going on cash offers.
Example ... actually this one is a bit on the high side:
4BR/3.5BA Single Family
3168 sq ft built 2007
$180,824
Queen Creek
http://phoenix.craigslist.org/evl/reb/1154762989.html
Here's a more mid-range one -- about $38/sq ft:
4br-3ba single level / pool
1678 sq ft built 1960
$64,000
Four bedrooms on a corner lot with a diving pool plus garage converted to family room, pool table room, extra sleeping room with a fireplace and third bathroom. Needs fix-up but great rental investment.
http://phoenix.craigslist.org/wvl/reb/1154759888.html
That Manzanita post over at Jim's had me just about writing off humanity altogether.
As they say, people make decisions with their emotions and then use logic simply to rationalize them. People are still absolutely in love with the idea of homes as an investment, and it's going to have to be beaten out of them before this can all be over.
We'll give them spring and maybe a little bit of summer, then the beatings will commence.
CC was a farce. I think I went 3 times. Nothing ever got cheaper but it disappeared. Fry's, Best Buy and the Sony outlet have better deals on a daily basis.
I will however, be telling my grandchildren about the deals at Good Guys and CompUSA during their liquidation.
I think we're going to see a continued divergence in housing prices based on location, and specifically on access to employment. Don't get me wrong, they will continue to go down for the next year or so at least, but declines in cities with strong employment and short commutes will be slow.
On the other hand, there will be plenty of inventory at shockingly low prices in remote exurbs with no access to employment--fantastic news for telecommuters and "airplane" commuters (e.g. traveling salesmen), not so useful for the rest of us. The days of homes going for $500k in California regardless of city, county, town, or neighborhood are long over--but don't hold your breath for homes in La Jolla or Malibu going for sub-$200k.
Hell, I'd take 500K on the Bay Area peninsula, so from your lips to God's ears.
P.S. For electronics or automobiles at liquidation prices, don't bother with "Going Out of Business" sales when eBay or Craigslist is just one click of the mouse away.
Of interest:
http://www.ktla.com/landing_news/?New-SoCal-Housing-Development-Demolished=1&blockID=283213&feedID=171
Bank demolishes a partially built subdivision (16 homes) after repo - cheaper to demolish than to complete them. With prices where they are, they wouldn't be able to sell them.
Speaking of remote exurbs and airplane commuting, here's a property I saw on Craigslist not long ago ... why spend half a mil on a California shoe-box when the same money will get you this 29,000 sq ft, 160 acre spread in unspoiled New Mexico:
$550,000 / 8br - Magnificent Ranch for Sale (Belen, New Mexico )
The property consists of castle like structure with the main home at 12,000 SF, maids quarters, foremans quarters at about 2500 SF, 5 workers quarters and a pilot quarters. The home has two large airplane hangers with its own landing strip. All together the home has 29,000 SF under cover with huge storage and shop quarters. The ranch consists of 160 acres but can be purchased with 60 acres for about $350,000. the price is negotiable. There is also a huge party room and a two story recreation room with a bar. The structure has 21 bathrooms. It belonged to a multimillionaire cattleman, Lyndon B. Johnson as well as movie stars and sports notables visiting the ranch in its hayday. The main quarters can be moved into immediately some of the other living spaces need renovation.
(spelling/typos in original)
"U.S. Home Prices May Be Lost for a Generation"
http://tinyurl.com/dn5ert
PM
8 bedroom and 21 bathrooms?
Shoot, musta had killer parties in the bar to need 21 bathrooms.
h.
U.S. Home Prices May Be Lost for a GenerationBoomers... wrecking the country for 20 years and counting!
Their legacy will be nothing less than a complete embarrassment.
There are certainly stalled condo developments smack in the middle of industrial Irvine. How will they bulldoze those? Another 9/11? Funny how mixed use became the buzzword when housing became more precious than commercial. The only planning that went into Irvne was how to expand Donald Bren's pocketbook.
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