Charlotte is interesting. It shows zero deviation up or down from the long-term trend. Is this a profile typical of mid-size cities outside of FL and CA?
Charlotte has been a huge recipient of relocation efforts from higher-priced urban areas in the north, especially New York and especially in financial services. Low housing prices made the area attractive for relocated claims-processing, data-processing and call centers.
I don't know of any other city like it for relocation.
Charlotte is still UP? Talk about Bubblicious Economies; downtown Charlotte (the three-mile island between 51 and the northern suburbs) had price increases through 2004 that made the NJ suburbs of NYC look Eminently Reasonable.
downtown Charlotte (the three-mile island between 51 and the northern suburbs) had price increases through 2004 that made the NJ suburbs of NYC look Eminently Reasonable.
Ken,
Do you have any links to data for this? I'm curious about Charlotte since the overall price appreciation looks to be about as reasonable and even keeled as possible (almost suspiciously massaged [though, I doubt this is the case {no pun intended?}]).
Maybe it's just that the downtown area skyrocketed while the outer areas languished? I'd guess that downtown is now dropping (or sales volume is locked up).
CA equity locusts still swarming in portland. Home-brewed speculation is running rampant. There are 4 rehabs within a two block area near my home. Also lots of denial.
Can't wait to compare these fasinating graphs with graphs of months-inventory for the various cities....
My thinking is it takes about 1-2 years for average people to begin to mentally recognize, face, and finally accept and conced that their house doesn't still have the windfall gains it had in recent times.
I wonder when this decline will be reflected in property taxes.
This is a sad sign of the times.
" The town is pushing a program that would let seniors work part-time, for $7 an hour, to help pay off some of their property taxes.
"People shouldn't have to sell their house, move away to a place with less taxes, leave behind their family and friends," said Town Supervisor Paul Feiner. "
Anyone interested in Charlotte intrastate migration trends need only go to the U-Haul website and book One-Way from either Los Angeles or Boston. last i looked the ratio was 3:1 and 4:1 depending upon in migration or out.
Charlotte, NC is a financial-hub-in-the-making. Once banks restructure and close their NY offices, Charlotte and other high-tech but less expensive alternative cities will experience a boom.
"There are lots of things people can do for the town and it wouldn't cost us that much to pay them."
lol....Ok just pay those old geezers $4/hr, and it would cost even less!
jeeze!
.....
On a serious note, there is no god given right to possess land permanently. Land taxes are one of the most fair taxes of all -- because the right to have a piece of land is at cost to the community. When someone can't afford it, that means it's time to move on.
Land taxes are one of the most fair taxes of all -- because the right to have a piece of land is at cost to the community.Yeah and when the guy next door buys at three times the price you paid which is far more than you would consider rational then your taxes triple based on the stupidest guy in the room. That's your idea of fair? What other taxes do you pay that you want to have based not on your costs but based on the highest price for a similar item some idiot is wiling to pay? Care to have your water bill based on the per gallon cost of AquaFina?
Area Under,
The same method cannot be applied to first derivative (percentile graphs for instance) data.
I am convinced that it is going to be impossible to predict a bottom until we have data through Q3 08. Then we can look and see if we can see a bottom. Anyone who says they can see a bottom before then is lying. We just don't have enough data on this event yet and hopefully by now everyone realizes that past behavior is worse than useless, it is dangerous. Look at the damage to the MIs who relied upon past default rates for but one example.
Coté: there are more intelligent land tax regimes out there. For one, land tax should be neutral . . . those who wish to own more than the average plot should pay some tax, and those who wish to own less surface area should not pay any at all, indeed get a dividend.
Troy,Churchill is wrong. Mayhaps he wasn't wrong for his time but increased density of the built environment today carries increased internal and external costs relative to more modest densities.
"People shouldn't have to sell their house, move away to a place with less taxes, leave behind their family and friends," said Town Supervisor Paul Feiner. "
This is my town. For the average property owner here, you would only have to work about 2,000 hours at $7 an hour to pay your annual property taxes. In other words, full-time.
Greenburgh school taxes go up 10-15% each year, depending on district.
I downloaded the case-Shiller Spreadsheet and noticed several things:
Every city had a month over month decline. Portland OR and Charlotte, Dallas, and Atlanta are the only ones of the 20 cities not to see over a 2% price decline since the peak. But every city except for Portland OR and NY, NY are declining at a 10% (or more) annual rate! To think... this is October. January and February are the two brutal selling months of the year.
With credit continuing to tighten and buyers realizing more and more its a waiters market... expect the trend to accelerate.
Though prices in Seattle are flat (exactly 0%) YOY, prices are already down -11% from July. Things are very bad here and getting worse. See this post for more:
Seattle has always lagged the nation in ups and downs. I know, I live here and have since 1991. If you go on Find All the Homes for Sale & Experienced Real Estate Agents | Redfin you can see houses for sale all over the map like little dandelions on a page. some areas look as 'weedy' as parts of SoCal.
There is no question we are turning down, it just isn;t showing in the data yet.
Robert Cote I agree with you. In both residential and commercial RE the idiots are setting the valuation bar. Local governments,due to rapid increases in RE values have been able to increase revenues without increasing the tax rate per $100 of assessed value.Those days are long gone and wont return for many years.Look for local Gov. to trim employment and expenses.
Charlotte Case-Shiller is up 4.3% YoY but is down from the recent peak. Most importantly, Charlotte home prices are up a sum total of 34% for the past 8 years (Radar Logic data, which is similar to case-Shiller has it up only 20% for 8 years).
Seattle is up 3.3% YoY but it has definitely turned down from peak during the summer. Radar Logic has it down 6.4% since June.
So, there really is no silver lining for home prices.
There's always going to be leadeing and lagging cities. San Diego is almost always leading on both trends, so I knew we were bubbling up fairly early. And when we crashed it got obvious the rest would follow.
Portland and Seattle are seen as "green cities" - good public transportation and low energy costs. Charlotte not so much but the city seems to be trying to get greener. DOn't know if this affects people wanting to live there, but it has been a trend lately to want to live "greener".
Charlotte is not the only large NC metro area to regester price gains: the same is true for Raleigh/Cary. For some reason these cities never experienced rapid price increases.
Looking at the 2nd graph in the post linked below, it is pretty clear that bottoms and durations could be roughly estimated by mirror-imaging past bubble peaks about the trend and peak lines to get a rough idea (similar to 'area under curve' calculation).
With that, I don't see a return to a meaningful upward trend before about 2013 or so.
Area Under,
The new construction home market is so totally screwed I don't think it will be relevant until 2013 or so like you say but that won't matter to the general housing market which will show some signs of recovery long before that.
Charlotte is not the hub of NASCAR because of bankers but because it was a blue collar small manufacturing based town until the last few decades. The shift of manufacturing to Asia and the huge growth of what was a rather small bank (NCNB) in particular and banking and sales in general has drastically altered Charlotte demographics. To the extent that this process continues could explain why Charlotte is an outlier.
By 'recovery' (in FL CA AR NV) if you mean increased repo sales and lots of short sales forming the majority of sales, then I agree. I think what matters most to investors is not sales numbers (since there is likely more pent-up supply than demand) but when will values actually begin a sustained rise out from this mess.
From the comments: A friend of mine who works for WaMu told me about this new plan which rolls out the 27th of this month, one thing I forgot to mention is this will only effect 3,000 accounts for now. My assumption is this number will grow as we are only 1 year into 3 years of increasing mortgage problems.
Oh and HELOC contracts are written so they can be changed at any time, all lenders reserve this right.
"Are Seattle and Portland still receiving equity nomads from CA?"
We are nomads with equity from San Diego (came on job transfer) but waiting for recession before buying. Our house buying rule is very simple - buy in a recession.
Are Seattle and Portland still receiving equity nomads from CA?
F. Frederson: we call them equity locusts in these here parts.
Much of the CA money coming to Oregon was going into retirement meccas like Bend and Jackson County in So. OR. But sales in those areas are now dead.
Inventory in Portland is quite high at this point and sales are slow even here (NO, they said it could never happen in Portland!). Portland was one of the last places to come out of the tech-recession - we had the highest unemployment rate in the country for quite some time in the 2002 to 2004 period. Now we're just slow to housing deflation party.
Robert -- (hbhh: 'Land taxes are one of the most fair taxes of all -- because the right to have a piece of land is at cost to the community.') "Yeah and when the guy next door buys at three times the price you paid which is far more than you would consider rational then your taxes triple based on the stupidest guy in the room. That's your idea of fair? What other taxes do you pay that you want to have based not on your costs but based on the highest price for a similar item some idiot is wiling to pay? Care to have your water bill based on the per gallon cost of AquaFina?"
Great point. In the inflation of land prices everything has been distorted.
And unfortunately the effect on tax revenue is only another reason for politicians to interfer.
Chances are they will tax (on net) us renters to pay (on net via loan guarantees (FHA and GSEs)) to richer people -- current owners. They will work to prop up prices (lessen decline). A horrific reverse-robin-hood. And then perhaps we go like Japan in the 90s.
Only chance to prevent this is to expose it as much as possible.
Charlotte will probably still be appreciating. I just don't see a bubble there.
squeezed | 12.26.07 - 1:40 pm |
I agree there doesn't seem to be a bubble there, but the question remains, what effect will tighter lending requirements have on the market. Also, are the price:income and price:rent ratios sane?
Add in what potential layoffs may be ahead in the area. BoA is headquartered there I believe.
People who 'don't see a bubble' are assuming that bubbles only express as huge price increases. Bubbles are actually distortions in what would otherwise occur. Did Charlotte have Countrywide Finance providing lending? Exotic financing? Loose credit? High growth? Speculative construction? If so Charlotte is bubblicious every bit as much as Phoenix.
On a serious note, there is no god given right to possess land permanently.
Um, what part of the concept of "private property" do you not get?
Land taxes in general imply that the property is owned by the government and leased to the people. Just goes to show how the people have been anesthetized against creeping socialism.
Oh and HELOC contracts are written so they can be changed at any time, all lenders reserve this right.
Does this seem plausible?
It doesn't sound plausible to me without knowing details. My HELOC has two time periods. In the first period, I can write checks or mayke payments at any time, in any amount, up to the line limit. In the second period, it converts to a self-amortizing loan at whatever balance remains. No more checks.
Maybe they have a right to accelerate the second time period. This would lock the borrower into a loan with a lower limit for the duration of repayment, if less than the maximum line has then been borrowed.
Oddly enough, I've gotten anecdotal evidence from several friends and neighbors here in upstate NY that there are quite a few local "expatriates" coming back from N.C. Coming back with the kids, to be near Mom 'n' Dad and the Ould Homestead.
"It doesn't sound plausible to me without knowing details. My HELOC"
I would be surprised to find any home loan that did not require it to be repaid or changed whenever it suited the lender. Times have changed from the time when you had some kind of social contract
It doesn't sound plausible to me without knowing details.
Rich,
I know zipideedoodah about HELOCs or much of anything.. but I'd bet $100 that the average HELOC contract states that a lender can cancel the line of credit if they determine that the Home (underlying asset) has declined in value.
repeat after me:
Home Equity Line of Credit
no Equity, No LIne of Credit
Not only can WaMu do this, they double damn better be doing this lest the bank examiners get wind of their doings.
I've never heard of a lender invoking this action for this reason, but it may be allowed per the contract. Here is the relevant language from another HELOC agreement (not WaMu):
Suspension
Your right to request additional advances may be suspended, or your maximum credit limit reduced, at our option in the following instances: (1)
you fail to make the scheduled payments due to us; (2) you fail to make timely payments to the holders of Deeds of Trust/Mortgages senior to
ours; (3) you fail to pay real property taxes prior to delinquency; (4) you fail to maintain the required property insurance; (5) the value of the
Security Property declines significantly below the appraised value upon which we relied in approving your application; (6) we reasonably believe
that your ability to meet your payment obligations is impaired because of a material change in your financial circumstances; (7) governmental
action precludes our imposing the annual percentage rate provided for or impairs our security interest such that the value of our interest is less
than 120% of your maximum credit limit; (8) the maximum annual percentage rate under the plan is reached; or (9) a regulatory agency has
notified us that further advances under this plan constitute an unsafe and unsound practice.
Note clause (3) you fail to pay real property taxes prior to delinquency.
Normally I hear how the Dec 10th property tax revenues are shaping up by Christmas but this year I'm not hearing anything, just averting of the eyes and mumbling of platitudes. OT but does anyone speak conference call? I was trying to read the Genworth Financial transcript at Genworth Financial, Inc. to Hold Strategic Update for Investors - Final - - insurancenewsnet.com but it all sounded like was Chip Diller in Animal House telling the rioting crowd to remain calm.
Area: Overall, how are Buffett's investments working out over the last 40 years?
Alec: Weak dollar is not a bad thing for the average, non-Euro-travelling American. Anyway, dollar has found a bottom and may well rise against Euro and Pound in the next year.
Land taxes are a fascinating and deep question, regarding fairness vs income taxes and sales taxes. Way to much for a blog comment area, but it's about the ideas that land value is increased by the community (other people), and so the community should as it were benefit from that gain, which it created, totally unlike wealth created thru labor or capital (work or investment returns). So Land is unique in this way. Also, without land taxes, you eventually get a society of landlords and renters where new buying is more and more difficult to gradually impossible in time. Complex stuff to discuss here.
But....for the more shallow stuff:
TJ: re "ownership": what is it precisely? It's when other people (the community, police, etc) protect your holding of something. Should we do that for free?
Point being, he is not buying into the 'service' sector, and probably wished he had dumped before august, since they will need to raise rates/fees quite substantially maintain any profit, if at all.
Not going to try to defend the controversial stuff I posted just above. Instead, look up Henry George for the initial idea, etc. Don't expect to find everything I said above there. If some interesting and sophisticated response comes about it, I may reply. No strawmen will be of interest to me. Time is too valuable.
Weak dollar is not a bad thing for the average, non-Euro-travelling American. Anyway, dollar has found a bottom and may well rise against Euro and Pound in the next year.
Aheadofthecurve
Except for those americans who have to buy commodities like wheat, corn or gasoline. I believe that's everybody except Ed Begley Jr.
The dollar has stabilized for now due to ECB propping up the banking system. Once the banking system stabilizes the USD will begin its macro drift down again.
hbhh,
There's probably 4 or so long posts about Henry George on my blog going back years. And yes as a matter of fact I do have a better formula. The basis for property taxation should be a very low flat base fee plus
an area based fee plus a very low flat base fee for any buliding plus
a building area based fee with (the kicker) a multiplier based on the
ratio of built area to lot area.
How did I dream this up? Easy, I back calculated from what a property
"costs" its municipality based on the properties' character.
Every lot costs a small amount regradless of size. Call it a management
fee.
Bigger lots consume some municipal services at a rate roughly equal to area.
Buildings likewise encumber greater external costs for both factors.
Finally, there needs to be a density penalty but the rationale is far too complex for here.
Folks:
The government does own the land. Has ever since governments were invented.
Did God give the promissed land to individuals? No. He gave it to the Israelites...i.e. tha Nation.
In feudal Europe or Britain the King ("Prince" in Machiavelli's term, "government" in more modern terms) owned the land and could take it back from a Duke, Baron, whomever.
More recently, and still today, the US Government owns vast tracts of land, particularly in the West and can either sell it (with the stipulation that you pay your local real estate taxes) or rent it or its produce (timber, oil, grass), or keep it.
Have any of you ever heard the word "escheat"? And don't tell me its just another way to spell "cheat". It's what happens to land when there is a complete failure in the chain of title...the land goes back to the government.
Alec: I will agree that the dollar weakness has had some role in commodity price increases, though I think increased demand due to rising living standards in Asia has been a much bigger factor. On the plus side, the weaker dollar has been responsible for a large portion of US growth in the past year.
I still see the dolar rising against the Euro, as they have their own problems-the property bubble in Britain and Spain is greater than most places in the US.
Portland and Seattle are seen as "green cities" - good public transportation
Seattle won't even have the beginning phase of a mass transit system in place until 2010. Not sure by what standard this is considered "good". Last place I lived in city I had a 13 minute drive to work. Although it was on a single bus line door to door, taking Metro was a 45 minute trip. It was faster to bike than take public transit.
hbhh - Robert Cote - The largest cost in terms of taxes for most landowners in most places are the school systems where they live (here in Florida - I think Medicaid is second). In my area - and probably the whole state of Florida - everyone with 1 or 0 kids in the public school system subsidizes everyone who has 2 or more. So how does this enter into your thinking?
FWIW - I have zero kids in school. But I do believe in a good free public education system (perhaps not through college - but at least through high school - which was probably an 8th grade education 50 years ago). OTOH - my mother - Hunter College class of 1940 - had a great almost free college education. She never would have been able to go to college had it not been almost free.
And don't take up my time talking about charter schools or school vouchers. Too many poorly capitalized/run or downright fraudulent charter schools in my area to interest me. And my niece teaches in a private religious school in another part of the country (up north) where there is no "science" in science (it's all creationism and the like from the git-go). No science labs. No experiments. If someone wants to pay for that for his kids out of his own pocket - that is ok by me - but I'd rather spend my tax dollars elsewhere.
I still see the dolar rising against the Euro, as they have their own problems-the property bubble in Britain and Spain is greater than most places in the US.
Aheadofthecurve
I've driven the whole of Spain 6 times in the last 3 years and the only region where it's truly go-go like the manic parts of the states is along the southern coast. There it's like s. Florida piled on top of Arizona, all either 2nd or retirement homes for the English/Scots/Welsh/Irish.
On the outskirts of Madrid there is development due to housing demand but not truly frothy. In Valencia/Barcelona/North coast planning commissions have the market pretty well regulated so development doesn't explode.
Spain's problem is Ireland's: the economy is humming along quite well but the governments don't have the monetary policy of raising interest rates to squelch demand and that leads to asset inflation rather than price inflation.
Any bubble in Spain is directly related to the UK bubble, and will weigh more heavily on the Pound than the Euro.
Although the Case-Shiller index doesn't cover it, the Pittsburgh market is another city with positive growth, according to a recent article in the Pittsburgh Post-Gazette (data was from RealSTATs).
Are Seattle and Portland still receiving equity nomads from CA?
Charlotte is interesting. It shows zero deviation up or down from the long-term trend. Is this a profile typical of mid-size cities outside of FL and CA?
Are Seattle and Portland still receiving equity nomads from CA?
I know one that moved up there last year and couldn't stand the rain and so he moved back and bought a different house in the same neighborhood.
Charlotte has been a huge recipient of relocation efforts from higher-priced urban areas in the north, especially New York and especially in financial services. Low housing prices made the area attractive for relocated claims-processing, data-processing and call centers.
I don't know of any other city like it for relocation.
Charlotte is still UP? Talk about Bubblicious Economies; downtown Charlotte (the three-mile island between 51 and the northern suburbs) had price increases through 2004 that made the NJ suburbs of NYC look Eminently Reasonable.
I still wish Case-Shiller took into account sales volume in the areas as well.
What use is it to a homeowner if a price is at a certain level, but the sales volume in their city is meager?
downtown Charlotte (the three-mile island between 51 and the northern suburbs) had price increases through 2004 that made the NJ suburbs of NYC look Eminently Reasonable.
Ken,
Do you have any links to data for this? I'm curious about Charlotte since the overall price appreciation looks to be about as reasonable and even keeled as possible (almost suspiciously massaged [though, I doubt this is the case {no pun intended?}]).
Maybe it's just that the downtown area skyrocketed while the outer areas languished? I'd guess that downtown is now dropping (or sales volume is locked up).
CR, who says you only post negative news stories?
CA equity locusts still swarming in portland. Home-brewed speculation is running rampant. There are 4 rehabs within a two block area near my home. Also lots of denial.
Can't wait to compare these fasinating graphs with graphs of months-inventory for the various cities....
My thinking is it takes about 1-2 years for average people to begin to mentally recognize, face, and finally accept and conced that their house doesn't still have the windfall gains it had in recent times.
I wonder when this decline will be reflected in property taxes.
This is a sad sign of the times.
" The town is pushing a program that would let seniors work part-time, for $7 an hour, to help pay off some of their property taxes.
"People shouldn't have to sell their house, move away to a place with less taxes, leave behind their family and friends," said Town Supervisor Paul Feiner. "
PageNotFound
A.Greenspend, that sounds like a keeper of a story, but the link did not work.
Anyone interested in Charlotte intrastate migration trends need only go to the U-Haul website and book One-Way from either Los Angeles or Boston. last i looked the ratio was 3:1 and 4:1 depending upon in migration or out.
Charlotte, NC is a financial-hub-in-the-making. Once banks restructure and close their NY offices, Charlotte and other high-tech but less expensive alternative cities will experience a boom.
Let me try:
PageNotFound
PageNotFound
That story is just too much!!
Why pay em $7???
"There are lots of things people can do for the town and it wouldn't cost us that much to pay them."
lol....Ok just pay those old geezers $4/hr, and it would cost even less!
jeeze!
.....
On a serious note, there is no god given right to possess land permanently. Land taxes are one of the most fair taxes of all -- because the right to have a piece of land is at cost to the community. When someone can't afford it, that means it's time to move on.
Charlotte is still seeing people fleeing from Florida, the north east and California
Portland is still seeing people fleeing from CA
When this ends? Guess what? its all over.
Portland, OR is experiencing house appreciation because in-migration of Californians.
Look out "Wifey's World", competitve hordes of botoxed and doubly-enhanced Southern Californians are heading your way.
Robert Cote:
Ah ha. Now, also use your 'area' method on the graphs in this prior post to get a better idea of the bottom & duration.
Calculated Risk: Comments on the 2008 NAR Forecast
.
Land taxes are one of the most fair taxes of all -- because the right to have a piece of land is at cost to the community.Yeah and when the guy next door buys at three times the price you paid which is far more than you would consider rational then your taxes triple based on the stupidest guy in the room. That's your idea of fair? What other taxes do you pay that you want to have based not on your costs but based on the highest price for a similar item some idiot is wiling to pay? Care to have your water bill based on the per gallon cost of AquaFina?
Area Under,
The same method cannot be applied to first derivative (percentile graphs for instance) data.
I am convinced that it is going to be impossible to predict a bottom until we have data through Q3 08. Then we can look and see if we can see a bottom. Anyone who says they can see a bottom before then is lying. We just don't have enough data on this event yet and hopefully by now everyone realizes that past behavior is worse than useless, it is dangerous. Look at the damage to the MIs who relied upon past default rates for but one example.
Coté: there are more intelligent land tax regimes out there. For one, land tax should be neutral . . . those who wish to own more than the average plot should pay some tax, and those who wish to own less surface area should not pay any at all, indeed get a dividend.
Winston Churchill on the subject
Troy,Churchill is wrong. Mayhaps he wasn't wrong for his time but increased density of the built environment today carries increased internal and external costs relative to more modest densities.
This is my town. For the average property owner here, you would only have to work about 2,000 hours at $7 an hour to pay your annual property taxes. In other words, full-time.
Greenburgh school taxes go up 10-15% each year, depending on district.
I downloaded the case-Shiller Spreadsheet and noticed several things:
Every city had a month over month decline. Portland OR and Charlotte, Dallas, and Atlanta are the only ones of the 20 cities not to see over a 2% price decline since the peak. But every city except for Portland OR and NY, NY are declining at a 10% (or more) annual rate! To think... this is October. January and February are the two brutal selling months of the year.
With credit continuing to tighten and buyers realizing more and more its a waiters market... expect the trend to accelerate.
Got popcorn?
Neil
Though prices in Seattle are flat (exactly 0%) YOY, prices are already down -11% from July. Things are very bad here and getting worse. See this post for more:
Afferent Input: Why YOY doesn't tell you the whole story
And this is THE place to go for info on the Seattle bubble:
Seattle Bubble — News & discussion about real estate & the housing bubble in the Seattle area.
Seattle is a very special place...
Seattle has always lagged the nation in ups and downs. I know, I live here and have since 1991. If you go on Find All the Homes for Sale & Experienced Real Estate Agents | Redfin you can see houses for sale all over the map like little dandelions on a page. some areas look as 'weedy' as parts of SoCal.
There is no question we are turning down, it just isn;t showing in the data yet.
Robert Cote I agree with you. In both residential and commercial RE the idiots are setting the valuation bar. Local governments,due to rapid increases in RE values have been able to increase revenues without increasing the tax rate per $100 of assessed value.Those days are long gone and wont return for many years.Look for local Gov. to trim employment and expenses.
--
CNBC on Housing: No Silver Lining.
REALLY.
Charlotte Case-Shiller is up 4.3% YoY but is down from the recent peak. Most importantly, Charlotte home prices are up a sum total of 34% for the past 8 years (Radar Logic data, which is similar to case-Shiller has it up only 20% for 8 years).
Seattle is up 3.3% YoY but it has definitely turned down from peak during the summer. Radar Logic has it down 6.4% since June.
So, there really is no silver lining for home prices.
Jas
Does anyone know where to find truthful information about the KC metro housing market? If denial were donuts around here I'd be really happy!
The place to go for portland housing info (and banter):
Portland Housing Blog
Cheers
There's always going to be leadeing and lagging cities. San Diego is almost always leading on both trends, so I knew we were bubbling up fairly early. And when we crashed it got obvious the rest would follow.
Portland and Seattle are seen as "green cities" - good public transportation and low energy costs. Charlotte not so much but the city seems to be trying to get greener. DOn't know if this affects people wanting to live there, but it has been a trend lately to want to live "greener".
"Lakeside property prices to hike 53%"
404 Not Found
"There is very high growth in that area," said Lincoln County Tax Administrator Madge Huffman. "The growth is just on a steady increase down there."
Charlotte is not the only large NC metro area to regester price gains: the same is true for Raleigh/Cary. For some reason these cities never experienced rapid price increases.
Robert-
Looking at the 2nd graph in the post linked below, it is pretty clear that bottoms and durations could be roughly estimated by mirror-imaging past bubble peaks about the trend and peak lines to get a rough idea (similar to 'area under curve' calculation).
With that, I don't see a return to a meaningful upward trend before about 2013 or so.
Calculated Risk: More on New Home Sales
For additional perspective on these numbers, if you go back to the December 2006 release of the Case-Shiller data, you see this:
And one year later:
December 2008 predictions anyone?
Area Under,
The new construction home market is so totally screwed I don't think it will be relevant until 2013 or so like you say but that won't matter to the general housing market which will show some signs of recovery long before that.
I missed this one!
Wamu cutting helocs without notice
Blogger: Page not found
Charlotte is not the hub of NASCAR because of bankers but because it was a blue collar small manufacturing based town until the last few decades. The shift of manufacturing to Asia and the huge growth of what was a rather small bank (NCNB) in particular and banking and sales in general has drastically altered Charlotte demographics. To the extent that this process continues could explain why Charlotte is an outlier.
Just a thought.
Jim
I'm not arguing with you NC Jim, just adding on to your thought.
But even if Charlotte continues to be an outlier and prices don't go down, or don't go down much, what impact will that have nationally?
For example:
North Carolina population = 8,956,505
Los Angeles County population = 9,948,081
good public transportation
monorail! monorail! monorail!
obviously donna has never lived in seattle.
Robert:
By 'recovery' (in FL CA AR NV) if you mean increased repo sales and lots of short sales forming the majority of sales, then I agree. I think what matters most to investors is not sales numbers (since there is likely more pent-up supply than demand) but when will values actually begin a sustained rise out from this mess.
December 2008 predictions anyone?
Here goes:
PDX -8% nominal
SEA -3% nominal
Charlotte will probably still be appreciating. I just don't see a bubble there.
WaMu to cut HELOC limits on existing loans without notice:
Blogger: Page not found
If true, this is pretty serious...
From the comments:
A friend of mine who works for WaMu told me about this new plan which rolls out the 27th of this month, one thing I forgot to mention is this will only effect 3,000 accounts for now. My assumption is this number will grow as we are only 1 year into 3 years of increasing mortgage problems.
Oh and HELOC contracts are written so they can be changed at any time, all lenders reserve this right.
Does this seem plausible?
"Are Seattle and Portland still receiving equity nomads from CA?"
We are nomads with equity from San Diego (came on job transfer) but waiting for recession before buying. Our house buying rule is very simple - buy in a recession.
Are Seattle and Portland still receiving equity nomads from CA?
F. Frederson: we call them equity locusts in these here parts.
Much of the CA money coming to Oregon was going into retirement meccas like Bend and Jackson County in So. OR. But sales in those areas are now dead.
Inventory in Portland is quite high at this point and sales are slow even here (NO, they said it could never happen in Portland!). Portland was one of the last places to come out of the tech-recession - we had the highest unemployment rate in the country for quite some time in the 2002 to 2004 period. Now we're just slow to housing deflation party.
Robert -- (hbhh: 'Land taxes are one of the most fair taxes of all -- because the right to have a piece of land is at cost to the community.') "Yeah and when the guy next door buys at three times the price you paid which is far more than you would consider rational then your taxes triple based on the stupidest guy in the room. That's your idea of fair? What other taxes do you pay that you want to have based not on your costs but based on the highest price for a similar item some idiot is wiling to pay? Care to have your water bill based on the per gallon cost of AquaFina?"
Great point. In the inflation of land prices everything has been distorted.
And unfortunately the effect on tax revenue is only another reason for politicians to interfer.
Chances are they will tax (on net) us renters to pay (on net via loan guarantees (FHA and GSEs)) to richer people -- current owners. They will work to prop up prices (lessen decline). A horrific reverse-robin-hood. And then perhaps we go like Japan in the 90s.
Only chance to prevent this is to expose it as much as possible.
MTHood -- nice post!
Charlotte will probably still be appreciating. I just don't see a bubble there.
squeezed | 12.26.07 - 1:40 pm |
I agree there doesn't seem to be a bubble there, but the question remains, what effect will tighter lending requirements have on the market. Also, are the price:income and price:rent ratios sane?
Add in what potential layoffs may be ahead in the area. BoA is headquartered there I believe.
Note: I don't live in Charlotte.
R-C-, could you please post a link to the U-Haul outmigration data? That would be a great metric to track over time.
People who 'don't see a bubble' are assuming that bubbles only express as huge price increases. Bubbles are actually distortions in what would otherwise occur. Did Charlotte have Countrywide Finance providing lending? Exotic financing? Loose credit? High growth? Speculative construction? If so Charlotte is bubblicious every bit as much as Phoenix.
On a serious note, there is no god given right to possess land permanently.
Um, what part of the concept of "private property" do you not get?
Land taxes in general imply that the property is owned by the government and leased to the people. Just goes to show how the people have been anesthetized against creeping socialism.
It doesn't sound plausible to me without knowing details. My HELOC has two time periods. In the first period, I can write checks or mayke payments at any time, in any amount, up to the line limit. In the second period, it converts to a self-amortizing loan at whatever balance remains. No more checks.
Maybe they have a right to accelerate the second time period. This would lock the borrower into a loan with a lower limit for the duration of repayment, if less than the maximum line has then been borrowed.
I'm sure Tanta could illuminate.
Robert's point is one often missed by the bulls.
The massive SC-immigration itself is a bubble. Watch what happens to that area when migration trends stabilize.
Oddly enough, I've gotten anecdotal evidence from several friends and neighbors here in upstate NY that there are quite a few local "expatriates" coming back from N.C. Coming back with the kids, to be near Mom 'n' Dad and the Ould Homestead.
Happened right in the house next door to me, too.
"It doesn't sound plausible to me without knowing details. My HELOC"
I would be surprised to find any home loan that did not require it to be repaid or changed whenever it suited the lender. Times have changed from the time when you had some kind of social contract
jg,
You inspired me to update my indexes:
Exurban Nation: U-Haul Index Charlotte
Boston vice Charlotte: $2,249 vs $676.
as my boss says "charlotte is full of failed new yorkers"
-Does this seem plausible?
It doesn't sound plausible to me without knowing details.
Rich,
I know zipideedoodah about HELOCs or much of anything.. but I'd bet $100 that the average HELOC contract states that a lender can cancel the line of credit if they determine that the Home (underlying asset) has declined in value.
as my boss says "charlotte is full of failed new yorkers"
Charlotte is full of jobs that were stolen from New York.
repeat after me:
Home Equity Line of Credit
no Equity, No LIne of Credit
Not only can WaMu do this, they double damn better be doing this lest the bank examiners get wind of their doings.
well.. I mean.. "declined in value" by some calculated amount.. based on the amount of the credit and the original appraised value of the home.
That's what I'd bet $100 on ...
Very clever, R-C-, to use price to deduce demand. Thank you.
That makes sense, your equity has evaporated --> your line of credit based on that equity has evaporated.
But it's mean to do that over Christmas! Scrooge-like!
Land taxes in general imply that the property is owned by the government and leased to the people.
tj & the bear | 12.26.07 - 2:20 pm |
Shouldn't land taxes be unconstitutional? Forgive my ignorance, I understand paying a tax on a transaction or on income but on ownership??
-Does this seem plausible?
I've never heard of a lender invoking this action for this reason, but it may be allowed per the contract. Here is the relevant language from another HELOC agreement (not WaMu):
Suspension
Your right to request additional advances may be suspended, or your maximum credit limit reduced, at our option in the following instances: (1)
you fail to make the scheduled payments due to us; (2) you fail to make timely payments to the holders of Deeds of Trust/Mortgages senior to
ours; (3) you fail to pay real property taxes prior to delinquency; (4) you fail to maintain the required property insurance; (5) the value of the
Security Property declines significantly below the appraised value upon which we relied in approving your application; (6) we reasonably believe
that your ability to meet your payment obligations is impaired because of a material change in your financial circumstances; (7) governmental
action precludes our imposing the annual percentage rate provided for or impairs our security interest such that the value of our interest is less
than 120% of your maximum credit limit; (8) the maximum annual percentage rate under the plan is reached; or (9) a regulatory agency has
notified us that further advances under this plan constitute an unsafe and unsound practice.
note clause 5.
OT-Amidst the gloom here, one pretty sharp guy is buying a company whose products include plumbing and construction-related equipment.
"Buffett Votes "Yes" On US Economy With Marmon Deal"
Buffett Votes “Yes” On US Economy With Marmon Deal – 24/7 Wall St.
Note clause (3) you fail to pay real property taxes prior to delinquency.
Normally I hear how the Dec 10th property tax revenues are shaping up by Christmas but this year I'm not hearing anything, just averting of the eyes and mumbling of platitudes. OT but does anyone speak conference call? I was trying to read the Genworth Financial transcript at Genworth Financial, Inc. to Hold Strategic Update for Investors - Final - - insurancenewsnet.com but it all sounded like was Chip Diller in Animal House telling the rioting crowd to remain calm.
Funny, but for me the Marmon deal signals Buffett's macro belief that the USD will remain weak for some time.
hey Mr. Buffet, how are those bubble investments in insurance companies and ratings agencies working out?
Area: Overall, how are Buffett's investments working out over the last 40 years?
Alec: Weak dollar is not a bad thing for the average, non-Euro-travelling American. Anyway, dollar has found a bottom and may well rise against Euro and Pound in the next year.
Land taxes are a fascinating and deep question, regarding fairness vs income taxes and sales taxes. Way to much for a blog comment area, but it's about the ideas that land value is increased by the community (other people), and so the community should as it were benefit from that gain, which it created, totally unlike wealth created thru labor or capital (work or investment returns). So Land is unique in this way. Also, without land taxes, you eventually get a society of landlords and renters where new buying is more and more difficult to gradually impossible in time. Complex stuff to discuss here.
But....for the more shallow stuff:
TJ: re "ownership": what is it precisely? It's when other people (the community, police, etc) protect your holding of something. Should we do that for free?
Give you a free ride?
Not from my pocket, thankyou.
Says this libertarian.
Pay for what you get.
No welfare for land owners.
Ahead--
Point being, he is not buying into the 'service' sector, and probably wished he had dumped before august, since they will need to raise rates/fees quite substantially maintain any profit, if at all.
Not going to try to defend the controversial stuff I posted just above. Instead, look up Henry George for the initial idea, etc. Don't expect to find everything I said above there. If some interesting and sophisticated response comes about it, I may reply. No strawmen will be of interest to me. Time is too valuable.
Weak dollar is not a bad thing for the average, non-Euro-travelling American. Anyway, dollar has found a bottom and may well rise against Euro and Pound in the next year.
Aheadofthecurve
Except for those americans who have to buy commodities like wheat, corn or gasoline. I believe that's everybody except Ed Begley Jr.
The dollar has stabilized for now due to ECB propping up the banking system. Once the banking system stabilizes the USD will begin its macro drift down again.
It's a smart move for Buffett, IMO.
hbhh,
There's probably 4 or so long posts about Henry George on my blog going back years. And yes as a matter of fact I do have a better formula. The basis for property taxation should be a very low flat base fee plus
an area based fee plus a very low flat base fee for any buliding plus
a building area based fee with (the kicker) a multiplier based on the
ratio of built area to lot area.
How did I dream this up? Easy, I back calculated from what a property
"costs" its municipality based on the properties' character.
Every lot costs a small amount regradless of size. Call it a management
fee.
Bigger lots consume some municipal services at a rate roughly equal to area.
Buildings likewise encumber greater external costs for both factors.
Finally, there needs to be a density penalty but the rationale is far too complex for here.
Folks:
The government does own the land. Has ever since governments were invented.
Did God give the promissed land to individuals? No. He gave it to the Israelites...i.e. tha Nation.
In feudal Europe or Britain the King ("Prince" in Machiavelli's term, "government" in more modern terms) owned the land and could take it back from a Duke, Baron, whomever.
More recently, and still today, the US Government owns vast tracts of land, particularly in the West and can either sell it (with the stipulation that you pay your local real estate taxes) or rent it or its produce (timber, oil, grass), or keep it.
Have any of you ever heard the word "escheat"? And don't tell me its just another way to spell "cheat". It's what happens to land when there is a complete failure in the chain of title...the land goes back to the government.
Alec: I will agree that the dollar weakness has had some role in commodity price increases, though I think increased demand due to rising living standards in Asia has been a much bigger factor. On the plus side, the weaker dollar has been responsible for a large portion of US growth in the past year.
I still see the dolar rising against the Euro, as they have their own problems-the property bubble in Britain and Spain is greater than most places in the US.
CR: Thank-you for the great Christmas present! Now I'm happy, or as close as any combative, obnoxious anonymous Internet poster can get.
Sincerely,
Sebastia
Portland and Seattle are seen as "green cities" - good public transportation
Seattle won't even have the beginning phase of a mass transit system in place until 2010. Not sure by what standard this is considered "good". Last place I lived in city I had a 13 minute drive to work. Although it was on a single bus line door to door, taking Metro was a 45 minute trip. It was faster to bike than take public transit.
hbhh - Robert Cote - The largest cost in terms of taxes for most landowners in most places are the school systems where they live (here in Florida - I think Medicaid is second). In my area - and probably the whole state of Florida - everyone with 1 or 0 kids in the public school system subsidizes everyone who has 2 or more. So how does this enter into your thinking?
FWIW - I have zero kids in school. But I do believe in a good free public education system (perhaps not through college - but at least through high school - which was probably an 8th grade education 50 years ago). OTOH - my mother - Hunter College class of 1940 - had a great almost free college education. She never would have been able to go to college had it not been almost free.
And don't take up my time talking about charter schools or school vouchers. Too many poorly capitalized/run or downright fraudulent charter schools in my area to interest me. And my niece teaches in a private religious school in another part of the country (up north) where there is no "science" in science (it's all creationism and the like from the git-go). No science labs. No experiments. If someone wants to pay for that for his kids out of his own pocket - that is ok by me - but I'd rather spend my tax dollars elsewhere.
I still see the dolar rising against the Euro, as they have their own problems-the property bubble in Britain and Spain is greater than most places in the US.
Aheadofthecurve
I've driven the whole of Spain 6 times in the last 3 years and the only region where it's truly go-go like the manic parts of the states is along the southern coast. There it's like s. Florida piled on top of Arizona, all either 2nd or retirement homes for the English/Scots/Welsh/Irish.
On the outskirts of Madrid there is development due to housing demand but not truly frothy. In Valencia/Barcelona/North coast planning commissions have the market pretty well regulated so development doesn't explode.
Spain's problem is Ireland's: the economy is humming along quite well but the governments don't have the monetary policy of raising interest rates to squelch demand and that leads to asset inflation rather than price inflation.
Any bubble in Spain is directly related to the UK bubble, and will weigh more heavily on the Pound than the Euro.
Alec: Thanks for the info. I was in Barcelona and Gorona in 1995, but. sadly, haven't been back since. Barca is one of the world's great cities.
Although the Case-Shiller index doesn't cover it, the Pittsburgh market is another city with positive growth, according to a recent article in the Pittsburgh Post-Gazette (data was from RealSTATs).
Area home prices up but sales down