Fascinating article in the NYT on the start of Talk Magazine just ten years ago. The Internet was looming, poised to end Talk and so many other magazines in just a few short years, but the party went on, heedless, in the shadow of the Twin Towers. It’s been a hell of a decade.
Daily Archives: August 2, 2009
Not surprising to some of us, the $8,000 first time homeowner’s credit and cheap $100,000 foreclosure sales are doing nothing to lift sales in the $750,000 and up market: that would be Greenwich.
“We’re extremely oversupplied,” says Sherry Molitor, a local real-estate agent. “Sellers are struggling to realize that we’re back to 2001-02 prices.”
The divide between the mass market and the high-end — generally defined as homes that cost above $750,000 — partly reflects the effects of Washington’s housing-rescue plan, which is producing winners and losers.
Policymakers have helped spur sales of lower-priced homes by offering first-time buyers a federal tax credit of as much as $8,000, by driving mortgage rates to near 50-year lows and by expanding the mission of the Federal Housing Administration, which will guarantee mortgages for consumers buying homes with down payments as low as 3.5%.
Sales at the lower end are also helped by the large number of foreclosed homes that banks have dumped at fire-sale prices, which has pulled down values of neighboring houses and sparked bargain hunting. Prices in both Las Vegas and Phoenix are down more than 50% from their peaks of several years ago, according to the S&P/Case-Shiller index.
Home prices tracked by that index rose 0.5% for the three-month period ending in May versus the three-month period ending in April, the first monthly gain in nearly three years. Prices have shown signs of stabilizing in recent months as the share of distressed homes, including those that sell out of foreclosure, falls from highs reached earlier this year.
Low prices have ignited a home-buying boom in some markets. In June, sales of single-family homes in the Las Vegas area were up about 70% from a year earlier.
For affluent buyers, it’s a different story.
The $8,000 tax credit for first-time homeowners phases out for single buyers whose incomes exceed $75,000, or married couples earning more than $150,000. Low-interest-rate mortgages backed by the FHA and government-controlled mortgage companies Fannie Mae and Freddie Mac are only available on loans below limits set by Congress. Last year, Congress increased those limits to $417,000 in most markets, and to as high as $729,750 in certain high-cost markets, including parts of Hawaii, California, New York and Washington, D.C.
The whole article is well worth reading but here’s my favorite quote, illustrating as it does the role of NAR “economists”:
When the foreclosure crisis began two years ago, there were few signs the high-end market would suffer. “It’s God’s country,” Leslie Appleton-Young, chief economist for the California Association of Realtors, told an audience of real-estate agents in 2007. “When is the 30% decline in Marin County’s market going to happen? Not in my lifetime.”
Home prices there have fallen by 21% from their 2006 peak, according to Zillow.com, a real-estate Web site. Ms. Appleton-Young now says there’s “no doubt that the high-end housing prices have adjusted and will continue to adjust.”
We never see a dead market – instead, we have “a choppy one”. And God forbid, prices never drop like a stone they, in the words of Ms. Appleton-Young, “adjust”.
Reader XYzzgy sends along this link to a Reuters report on the “shadow inventory” – homes that are not presently for sale but whose owners intend to put them on the market as soon as they see an uptick. There are those, plus all the houses banks own, could own or will soon own – Greenwich inventory, now at a record high, could double. Wouldn’t that be fun?
Many analysts agree the market may have turned an important corner after Case-Shiller home price index for May rose for the first time in nearly three years, but a massive supply of unsold homes is waiting in the wings and could easily swamp the recovery before it can gather speed.
“The number of homes listed officially on the market, while still at historically high levels, might be only the tip of the iceberg,” said Stan Humphries, chief economist at real estate website Zillow.com in Seattle, Washington.
According to Zillow’s latest Homeowner Confidence Survey, 12 percent of homeowners said they would be “very likely” to put their home on the market in the next 12 months if they saw signs of a real estate market turnaround, 8 percent said “likely,” while 12 percent said “somewhat likely.”
The survey of 2,123 adults aged 18 and older, of whom 1,357 are homeowners, was conducted online.
Survey results could translate into around 20 million homeowners trying to sell their homes, a startling number given that the Census bureau indicates there are 93 million U.S. houses, condos and co-ops, Humphries said.
According to the National Association of Realtors, the market is currently on track to sell 4.89 million homes annually.
NYT: Chavez still supplying Colombian guerrillas with rocket launchers, small arms and fake ID, among other items. He shut down 37 radio stations yesterday. In fact, the guy’s just a laugh a day. But if we won’t deal with a nuclear-armed Iran, we’re hardly likely to dare interfere with this mini-Castro. Maybe we could send Jimmy Carter back down there and then bomb the place.
The Noels have a history of importing and mistreating illegals from Brazil, so this story of a whole truckload of illegals running around the Riverside Shopping Center (sent in by Riverside Reader) caught my eye. I don’t know how much importing illegals by the truckload fetches these days, but the Noels could certainly use the money.
UPDATE: It was actually a rescue of kidnap victims from Texas being held for ransom. Relatives armed with baseball bats freed the hostages, the bad guys were caught. Eddie Lampert was unavailable for comment.
Idiot graduates from college, sues for refund of tuition when she can’t find job. Graduated in April, sued in June. Unless this girl filed her suit pro se, the lawyer who filed it for her should be dragged from his walk-up office/apartment, set afire and dragged past the local courthouse for the encouragement of his peers.
British NHS cuts off pain injections for elderly, refers them to acupuncturists instead. Saves millions. Reached for comment, medical care rationing supporter Professor Alan Washburn told FWIW’s Edgar martins that he wasn’t the least bit disturbed by the news. “That’s England,” he said. “When we introduce ObamaCare here, it will be run by devoted and trusted bureaucrats. No problem. Besides, if the pain’s really too much to bear for some oldster who’s had a full life, she can jolly well jump off a bleedin’ bridge now, can’t she?”
Operation Embarrass Your Congressman. The idea is to get hold of your Congressman’s public appearance schedule (I’ll do that for Jim Himes shortly), grab some like-minded colleagues and (civilly) ask the fellow embarrassing questions like, how much of the Health Care bill have you actually read? If “the $1 billion allotted for your Cash for Clunkers program was expected to last through November and instead was exhausted in one week, how confident are you about the cost estimates for your health care plan?’. Etc. Lots of suggested questions at the link but surely you’ll be easily able to come up with your own. As the Professor reminds us, dissent is patriotic!
UPDATE: For some reason, the “find out when Jim will be in your neighborhood” feature on his web pages doesn’t work. in fact, it doesn’t exist, but he promises it will be “coming soon”. So I’ve subscribed for his emailed newsletter and if he’s any more forthcoming there on where he’ll be this month, I’ll post it.