Rumor has it that ENers are prone to wild speculation. Here's your chancw to put those talents to good use. So far whenever people talk about bubbles popping "their area" is either ground zero or unaffected. And when someone claims to live in the blast zone it is always with the modifier that their pesonal circumstance is not going to take a hit. I'll start. My primary residence is off ~$200,000 from the peak and isn't half done. Okay, here's a tenative list of regions ranked bubblewise. Anyone have a better ordering or wish to add a few?
California's Central Valley - In California and includes Bakersfield, Fresno and Sacramento
Las Vegas - Too close to SoCal, too fast growing/young and in for a COL shock
Phoenix/Scottsdale - vicitim of success
Gulf Florida - demographics, taxes, services, insurance
Orlando & Miami (tie)
There's a quick top five. Next the 5 least impacted and why.
31 comments:
First, by default. And there is a lot of that going on here in Frestown.
Massachusetts will suffer a prolonged period of stagnant or slowly declining prices. They have a very high number of foreclosures and have recently taken steps to halt them and now have a plan to refinance $250 mil in sub-prime mortgages that have reset to higher rates. Affordability issues are due to high prices and on top of that demographics are working against them.
Fresno's an odd bird -- the closer you get to the river the nicer the QoL, with some areas having the nicest houses that can be found between Bel Aire and Atherton.
Back in 2001-2002 I was looking at a place -- 13,000sf corner lot, nice pool, interesting early-80s custom-build architecture, that ended up selling for $300,000. Sold again last year for $650,000. Might return to $400,000 eventually.
Don't forget San Diego/San Marcos/Temecula in that top group. Very bubbly, with overpriced crappy tract homes, flippers and scams all over the place.
I'd also add the Washington DC area, including Arlington, Tysons in Va. Huge price increases in a short space of time and people having to move further and further away to buy, resulting in a horrendous commute.
And slowly inching its way to the upper levels of the list would be the PDX metropolitan area. It's not quite there yet but it sure looks like it's on its way judging by the amount of For Sale signs that are blotting the landscape and the rising number of foreclosures. Locals tell me that there was a large infestation of CA equity locusts in the last few years. Of course folks are also saying "but things are different here" when asked about the chances of the bubble bursting. Riiight. San Diegans said the same thing a couple of years back...
Can't comment on any contenders for the bottom five but I'm curious to see what people come up with and why.
My primary residence is off ~$200,000 from the peak and isn't half done.
Bummer.
I moved to the Fairfield-Vallejo area in 2003 and the market was in full bubble mode then. Houses in my neighborhood would sell the day they went on the market and for well above list price. (I rented since I move so much.) During Spring 2005, the houses just stopped selling. Denial was rampant, and now some have foreclosed. These were $500-700K homes. No one had ordinary 80%, fixed rate, 30 year mortgages.
Here in East Anglia, housing is doing quite well.
Rob,
I'm sincerely confused. Some of your brightest, kindest and most funny posters have flown the coop. So many of them demonstrated an unbending loyalty until your shabby treatment sent them away. Why did you treat them that way? I honestly want to hear your thoughts if you want to share them.
While real estate in much of the country languishes, property in Manhattan continues to escalate in price, and that includes parking spaces. Some buyers do not even own cars, but grab the spaces as investments, renting them out to cover their costs. . . . For developers in New York, parking is the highest and best use for below-grade space and fetches about the same price per square foot as actual living space, which costs much more to develop. . . the average parking space costs $165,019, which is about $1,100 per square foot. That is close to the average apartment price of $1,107 per square foot.
http://iht.com/articles/2007/07/12/america/park.php
NYC ain't going nowhere because the co-op and condo boards here "vet" people and ask for their pay stubs, W-2 slips, employment and educational history, general character, and some require a 20% down payment.
I'm one of those people who went through this, including the down payment.
*Most* of these mortgage shenanigans are taking place west of the Rockies, and in Florida, IMO...
@ Anita Biernow
WTF? Pls explain.
RogDawg
So where do the AV and the Inland Empire areas of So Cal figure into this list?
The situation is not as bad as say 1990, no big nation wide rescission going on, but lots of homes for sale.
For grins, check out RedFin.com. Good way to look at what's on the market, what it once sold for and where it's at now.
Anita, off topic but in briefy:
The price of keeping people entertained and informed got too high. It was a price I was unwilling to make other people pay. Expectations got too high, disappointment was inevitable. I made a judgement call to let Casey's drama play out on IAFF first leaving some people to think they were betrayed. Besides, eveyone wants to direct. Finally, the trolls made serious inroads and drove the s/n ratio way down.
The "shabby treatment" comment is uncalled for.
I agree with whoever posted about northern VA, and I'd add Hampton Roads, though it's not going to be anywhere near as dramatic as the CA bubbles. We lost the Ford plant, Chesapeake has grown so quickly as to create a supply glut, and North Carolina has lower tax rates (allegedly). Virginia Beach went from having a home vacancy rate of <1% two years ago to having a much higher one. Average Joes competing with military BAH and Ford employee wages bit off a lot more than they could chew mortgage-wise in the quest for homeownership.
At 11:27 AM, Rob Dawg said...
Anita, off topic but in briefy:
The "shabby treatment" comment is uncalled for.
Agreed - some teasing perhaps, but no shabby treatment. ...except for a few trolls who very richly deserved it - and in those cases it was a race to see whether Rob or one of the regulars would thump said trolls first!
The "shabby treatment" comment is uncalled for.
Rob, at the top of this very blog post, you are giving everyone here "the finger". hehe.
Okay, back on subject. NYC will suffer a different form of meltdown. Its' critical mass world financial center status is fading fast. It is one of the very few US Cities mantaining its' 1950 population. What happened to Boston and Philadelphia will eventually happen to a lesser extent to NYC. Interestingly the last two crisies in NYC occured at the exact same time as they strated work in the 2nd Ave subway (1920s and 1970s). Guess what they just started building again?
Benoit™,
I was making fun of "we're number one!" because being the number one bubble spot is nothing to be proud of. Think "flying fickle finger of fate" award.
I did indeed miss San Diego and the Inland Empire/High Dessert areas of Southern California. They deserve to be on the list.
Norther VA (aka exurban D.C.) I'm not so sure about. Government ain't gettin' smaller and it is still attractive to rust belt refugees and west coast equity nomads.
At 11:46 AM, Rob Dawg said...
"Benoit™,I was making fun of "we're number one!" because being the number one bubble spot is nothing to be proud of. "
Here's a little tip, Rob: It's not really too much of a joke if it peeves people off and you have to explain it afterwards. Free tip."
Signed,
Jerry F'n Seinfield
Quick rule of thumb I'd use for this analysis.
The markets that saw the fastest gains in the shortest times are going to be the ones to face-plant hardest and fastest.
Northern VA and Hampton Roads have been mentioned.
I work in one and live in the other.
They'll "dip", and certain neighborhoods will crash, (Ashburn and South Riding in NoVa's Eastern Loudoun Co.), but the employer base of both regions is heavily salted with the Federal payroll, and both regions have SCADS of older inner burbs with older housing stock to form a "floor" (or entry level SFH's if you prefer).
Wow, Dawg--guess it sucks to be left with us posters who are NOT bright, kind and funny. Harrumph!
I am already on the list. Orlando, FL.
Front row seat.
My home on zillow down $100,000.oo from Sept 16.
@ Benoit,
lol!
Have I told you lately that you are a sergon of words.
U da man.
@ Yorkshire Pudding
lol
Here's a little tip, Rob: It's not really too much of a joke if it peeves people off and you have to explain it afterwards. Free tip."
The title is thus changed so that everyone gets the joke.
For the record; I'm enjoying the present company.
Sharky hits upon one of the key elements that makes this time different. He is correct that the areas with the fastest rises will see the deepest hits. The problem is "this time" those areas were both disproportionately the most recent sales and the more exoticaly funded. Little or no time equity build up and huge carrying costs make for a bad situation. Everything else about those high prices hetrodynes. Higher taxes, higher insurance, etc. You are going to find people side by side with 50%/month differences in carrying costs and the person overpaying is the one with no equity to protect.
I'm happier than shit to be living in my little bubble area - Vegas Baby!
Since I just moved here less than a year ago I'm renting and waiting. I rent 5 miles from work and don't have to cross any major traffic centers to get there.
My strategy is let the prices come to me. I have my stellar credit, a price I've set and more than a 20% down payment if I so choose.
So now I'm scouting out neighborhoods. There really are some decent little old fashioned (not ghetto) neighborhoods here and tehre in Vegas. One of them is within walking distance of work.
Prices are just starting to fall but the denial (and months of inventory on market) is incredible.
I'm debating starting to actually *gasp* go to open houses and stuff like that after this summer.
I can't imagine it being much less than a year until prices drop enough for me to pull the trigger.
PS....it seems like that $200 per square foot number just won't drop where I want to buy. I think it's lower than that in some of the newer subdivisions way out North and down by Henderson but my commute would be horrid.
@ Alpha Dawg,
RE: For the record; I'm enjoying the present company.
Thank you, mee too.
@ Vegas Scum,
Hang in there and don't compromise! You shall find a great deal from a FB in 08!
Then you can walk to work, when there is not a heat wave, anyway.
gtg,
happy hour is calling me and it's walking distance.
tee hee
what does this mean ?
From the Market Ticker blog (with a hat tip to the Implode-o-Meter), some pretty incredible news:
In individual issue news items, Countrywide (CFC) traded over 13,000 $30 PUT contracts for July today. That contract has no bid, which means they were bought. That’s an absolute lottery ticket but if it pays off…… you have to wonder - does someone know something? That’s so crazily out of the money and expiring next Friday - there’s no way that’s rational unless someone is very sure that the company is going straight in the crapper within a week! The stock is trading near $36 right now! That is almost certainly an institutional bet as the per-contract cost for a retail investor would be positively prohibitive.
For “why would someone do this”, you could look at AHM today. Down almost $2, or more than 11%, on the news leak about layoffs. Subprime contagion, given that AHM is nearly all ALT-A? Hmmmmmm…..
(In all fairness, it may simply be cheap insurance against a disaster. $64,000 worth of cheap insurance that the buyer completely expects to lose. But still…. unless you’re concerned that there might be a disaster, why would you flush $64,000 - that expire before earnings?)
Countrywide is scheduled to report earnings on July 24. The July puts expire on the 20th.
Posted on HP, Rob Dawg.
Very interesting housing news.
Thank you, Rob. I knew if I asked you would help me understand.
I'm sorry I intruded but I didn't want to clog your e-mail.
There was no disrespect meant to the people posting.
In my fruitless attempts to keep up with the CaseySphere, I somehow missed this interesting NYT article recently cited by Marinite. Even in apparently safe supposedly unaffected locations some of us W-2 loosers still feel the pain.
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