Real Estate Crash thread

[Benny Profane]

"How Mark Zandi, who prepared this spreadsheet according to the meta data, could look at this data and come up with his recent paper in collaboration with Blinder, claiming that the recession is over, is simply beyond rationalization."

Oh, no, that's easy. Zandi is employed by Moodys. Take anything he says with a pound of salt.

[agent j]

http://www.bloomberg.com/news/2010-0...ecession-.html

We're not in a recession. It just feels like a 'quasi-recession' since there is this pause in the ummm...moderate recovery. Alan Greenspan says so. As long as housing prices don't dip, we should be good .

[powder11]

"How Mark Zandi, who prepared this spreadsheet according to the meta data, could look at this data and come up with his recent paper in collaboration with Blinder, claiming that the recession is over, is simply beyond rationalization."

Oh, no, that's easy. Zandi is employed by Moodys. Take anything he says with a pound of salt.

maybe you should take advantage of the rollback on prices and go buy yourself a house already

[liv2ski]

maybe you should take advantage of the rollback on prices and go buy yourself a house already

Nope, I am with Benny on thinking the writer of that piece made it sound not as bad as I think it is. There is no way I would buy RE in the USA at this time.

[Benny Profane]

maybe you should take advantage of the rollback on prices and go buy yourself a house already

Dear Lord, I am so fucking happy I don't "own" a house right now. Do you think for one moment that all of this is over? Third inning, amigo. Just imagine someone predicting that over four million would be that far underwater when I started this thread.

You're right, though. When the dust settles, and, if I'm still alive, I may be looking for a nice little nest with my cash.

[neck beard]

[B]
* 19%, or 14.748 million of the 77.570 million US households, are in negative equity


* 4.133 million of the 14.748 million of underwater homeowners are underwater by 50%+, meaning the owe more than 50% more than their homes are worth

Ruminating on those numbers.　

There are 77 million households in the US. 19% owe more than their house is worth. Damn. That is huge.

Of which 4 million....

It barely passes the sniff test of accuracy it is so surreal.

[powder11]

Dear Lord, I am so fucking happy I don't "own" a house right now. Do you think for one moment that all of this is over? Third inning, amigo. Just imagine someone predicting that over four million would be that far underwater when I started this thread.

You're right, though. When the dust settles, and, if I'm still alive, I may be looking for a nice little nest with my cash.

healthcare for the boomer generation is the next big bubble, but sadly you will be the victim on that one as well.

[Benny Profane]

Not really. Paid for with supplementary after Medicare. It's good to work for a big company with retiree benefits. But, I'm not fat, don't smoke, and I ride 120 miles a week, too.

[doughboyshredder]

I bought a couple years ago. 60k in mortgage payments and I still owe 16k over zillows estimate.

My asshole hurts.

[meatdrink9]

I decided to do some research on my local market to see how its done since the real estate crash. FRZ, this info should be good for you. Ogden has fared way better than most locations in the US.



2007 represented the peak of the market here in Utah. What's weird is the average sold price is still up from 2007 numbers, but the number of homes that actually sell is way down and the number of days on the market has more than doubled. In other words if you had to sell right now it would be difficult/time consuming, but values haven't really dropped off much. For this being the largest national real estate crash in decades I feel like our community has weathered the storm really well. We never really exploded price wise (steady gains) so the fall has been minimal. We're trying to sell a home ourselves. It's been on the market roughly 3 weeks. We've had 5 showings, but no offers. I feel like we're priced right at market value. It may be tough to compete with the REO's and short sales.

All the rentals continue to cash flow well. Lending does seem to be coming back to some degree as well. We recently refinanced a property with the same lender that had the original loan. They then sold the loan to Fannie Mae (and we have over 4 mortgages, ...interesting). We also were able to buy another property recently (financed 80/20, again over 4 mortgages). A loan officer friend of mine sent me an email saying he could lend on investment properties up to 10 mortgages. (30% down), but rates were just above 5.0% The constriction of credit seems to be loosening up. The "no interest or payments for a year" credit card offers are rolling in daily again as well.

I agree that I don't see RE values climbing anytime soon, and I also agree that selling right now would be difficult, but great loan rates and plenty of REO's makes for tiny payments and great rental cash flow opportunities.

[Benny Profane]

Mr. Meatdrink

Do you know much about this "resort" up in Eden?

http://ogden.craigslist.org/reb/1878571757.html

I'm not going to ski there, just Snowbasin and Powder, maybe. I've spent a little time around there in pre olympic times. Is it still as dead as it was back then?

I'm not going to spend that much, but, it may be a possibility in the future.

[AKPogue]

Mr. Meatdrink

Do you know much about this "resort" up in Eden?

http://ogden.craigslist.org/reb/1878571757.html

I'm not going to ski there, just Snowbasin and Powder, maybe. I've spent a little time around there in pre olympic times. Is it still as dead as it was back then?

I'm not going to spend that much, but, it may be a possibility in the future.

I stayed there a few years ago. It was nice place and pretty quiet.

[meatdrink9]

Mr. Meatdrink

Do you know much about this "resort" up in Eden?

http://ogden.craigslist.org/reb/1878571757.html

I'm not going to ski there, just Snowbasin and Powder, maybe. I've spent a little time around there in pre olympic times. Is it still as dead as it was back then?

I'm not going to spend that much, but, it may be a possibility in the future.

This is right at the bottom of the steep road to Powder Mountain. I don't anything specifically about this development, but here's a little sales history about this property specifically:

Listed over a year ago: 07/09/2009 Originally at $299,900
Sold quickly in 2006 for $327,500
Sold in 2005 for: $235,000 (cash deal)
Sold in 2003 for: $177,000 (plus 17K in concessions)

Based on the info above I feel it still has a ways to come down.

Snowbasin has definitely seen more traffic lately. Having Salomon, Atomic, etc... move to town has brought a lot more skiers. There are always demos going on somewhere in the area. Same with winter OR being in SLC. A lot more "industry types" coming in to visit and test product. I don't really spend much time at all up in Eden or Huntsville. I know the market did a massive climb up there a few years back. The average home price was over 400K. Then prices dropped 30% in one year. Ouch. $120K loss in one year on that average $400K home. I'm more conservative in my investing and have stuck with cheaper properties (the reason I haven't been burned through this whole mess). I'd say Huntsville and Eden are still relatively "dead". A small mountain valley with a few cool businesses. Lots of farms and the occasional monster home. I run up there quite a bit in the spring, but that's about it.

[meatdrink9]

Mr. Meatdrink

Do you know much about this "resort" up in Eden?

For giggles I pulled a similar report for Eden, Huntsville, Liberty and took it back as far as it would let me go. You can see the wild ride that location has taken. Big climb, big crash.

[PowderHorse]

I used to live in Huntsville and worked as an agent at Wolf Creek from 2005-07. It was dog eat dog with the Realtors for a while. I liked the valley OK since I have horses and ski but it does have the usual weird Utah vibe going on. I LOVED Snowbasin (OMG 05-06 was a sick winter) and there was never anyone skiing up there my first winter.

We got REALLY fucking lucky and sold our house in fall of 07 for a decent profit. It went to hell shortly after that. I also had a rental in Ogden and sold that for an OK price but it had been a losing battle with the tenants so sorta broke even on that. My Realtor friends tell me it's been really tough to sell up in the valley but Ogden is hanging in there, slow but steady.

Where I live now, even if I sell my house for full asking price I will be taking a loss but it could be worse, at least it was "cheap" to start with.

[Sirshredalot]

I didn't realize this thread was so full of Ogdenites. Where do you Ogden folk figure the local market will be in 3-4 years? I'm hoping to make the move out there in about that time frame, god willing.

I bought using the federal credit in DC and I'm hoping that things are the bottom of the market right now so that I can cash out some equity and get Utarded in a few years, but we'll see. My wife and I bought a beater in a neighborhood that we're happy with. We figure that if we sink 50k and a bunch of sweat into the place then we ought to be 150k in the black without general appreciation, but I'm definitely sweating the landing of the market now that the credit's gone.

[meatdrink9]

Powderhorse, yeah the skiing at Snowbasin does not suck. It was one of main reasons I moved back to Utah. There have been some epic seasons up there. It's still empty when compared to most Utah resorts. The last two seasons haven't been that strong though (snow wise). We need the snow to come on strong early and get a base going. The numbers seem skewed due to the late spring, but most of the resort wasn't open until basically Feb this year. I need more "city" than the valley offers, but it is a pretty place and close to tons of outdoors activities. Downtown Ogden has has less of that "Utah vibe" too. Nice work selling in 2007.


Sirshredalot, I wish I had a crystal ball and could say. I still think Ogden is a good value/undervalued, but the state of the economy will be driving the market to some degree. That said, I buy a house in Ogden every time I save up enough to do so. I used to buy a lot more when lending was easier, but now I'm only grabbing 1-2 homes a year. I actually just bought an awesome property that I'll be making my primary residence. I'm beyond stoked about this house. I've been working on it for about a month now. The plan is to be moved in before ski season. I'll post some before and after photos in a couple of months.

[Benny Profane]

Meatdrink, thanks, especially for the details. That sub 200,000 price is very interesting, and, not too long ago. That place is huge, too, for the money, and a few of the finest powder experiences I have had have been at Snowbasin and Powder. One time I experienced a three day storm at Snowbasin, mid week, and, when I walked up to the lift the third morning after another foot overnight, there was maybe seven people standing there at 9am. unreal. Kinda lonely up there, though. Maybe I should call up the saleslady, Candice, and strike up a friendship........

[montanaskier]

i went back and read the first couple of pages of this thread....funny...in a not so funny kind of way.

[liv2ski]

Meatdrink, I would love to see one of your spread sheets on Truckee CA. I found a place built in 2008 that I like with about 2500 sq ft. Sold in 2006 as a tear down in the $250k range. Was listed in the $950k range in 2009, then relisted about 6 months ago for $750k, now listed at $495K.
WTF is going on up there? Really nice place with hardwood floors, 3 bdrm and bath and a 3 car garage. If I didn't think property prices were still going down, I would be so all over that place.

[Benny Profane]

"If I didn't think property prices were still going down, I would be so all over that place."

That sir, is the definition of a deflationary trap.

[meatdrink9]

Meatdrink, I would love to see one of your spread sheets on Truckee CA. I found a place built in 2008 that I like with about 2500 sq ft. Sold in 2006 as a tear down in the $250k range. Was listed in the $950k range in 2009, then relisted about 6 months ago for $750k, now listed at $495K.
WTF is going on up there? Really nice place with hardwood floors, 3 bdrm and bath and a 3 car garage. If I didn't think property prices were still going down, I would be so all over that place.

I wish I could get you one. My MLS subscription is Utah based only. I know Jamie Blair sells real estate in the Tahoe area now. I can't remember what his current username name is these days. But he's a smart dude.

Benny, ha ha. Yeah...midweek pow skiing at Basin is pretty tough to beat. No question the Cottonwoods get more snow, but what we lack in snow we more than make up for in lack of people to track it. It takes less snow to make it ski bottomless as the bottom isn't comprised of moguls the size of cars. I'd say give the Ogden Valley more time to come down or shop it harder. My last purchase (in Ogden) was a 4,800 sq ft Prairie Style Mansion for $160K. The woodwork is insane. A level of finish that will never be seen in new construction again (for under a mil).

[Benny Profane]

I.

a 4,800 sq ft Prairie Style Mansion for $160K. The woodwork is insane. A level of finish that will never be seen in new construction again (for under a mil).

Holy shit.

[PowderHorse]

MD - I love all your photos from the Basin and yea, MANY pow days you could just walk up to John Paul and jump on...and I loved the hike (short but sweet) from the top of the tram to ski all that untracked in the trees. I was just amazed how different/better the snow was from Colorado. Less people, more pow and way less for season passes. damn, I almost miss Utah!

Our house in the valley was on 5 acres w/ a huge irrigation ditch running through it and house was 3500 s.f., 6 bedrooms, 4 baths and 2 full kitchens. It was an insane amount of space but I guess that's what they like out there. We bought it for $315 and after living in CO, that was a steal, especially since it was only 15 minutes to Snowbasin.

So is the job market OK in Ogden these days? It was such a boom for a while, we had several CO friends coming over and buying those downtown houses as rentals b/c things were so affordable. I would think with all the companies you mentioned moving in there that is helping keep things more steady than the rest of the country.

I hope my house sells soon. Anyone want land in S.C.?? (no, I know...)

[meatdrink9]

Benny, I'll post up photos at some point. Keep in mind we will sink quite a bit in the remodel as well.

BTW, I just went back and read some of the first pages of this thread (20+ pages). Pretty crazy. You've been right on this for a long time. I was overly confident/cocky (embarrassingly so at times) at the start (but had my points). I've definitely gotten an education these last 4 years. It's been crazy navigating this mine field, but I'm really glad I did it. I'd say I've purchased 80% of my current real estate portfolio since you started this thread (got both RE and LO licenses as well). If I'd sat on the sidelines and watched all this go down/gotten this education before getting involved in real estate... I'm not sure I would have the balls to jump in the way I did (exactly when I needed to). I was too young to see the larger trends/bubble, but have always been very frugal and steered clear of speculating. "If it doesn't work today, it doesn't work." has always been one of my investing mantras. The lax lending allowed me to build a large portfolio. Luckily I was buying REO's early in an already cheap market and watching rents/mortgages not appreciation. I think this thread/caution helped steer me to safer decisions. Thanks I guess.


PowderHorse, That sounds like a serious property... especially given what you paid. I'm sure you guys cleaned house when you sold.

I don't know much about the job market to be honest. I've been self employed for 5+ years now. My rentals do fill up quickly so things can't be too bad. I know a couple of tenants who are working temp jobs though. One set of tenants came here from Oregon for the better job market and have both since landed jobs.