Telmnstr

There are no windows! It's nuclear hardened or something.

B U S T E D !!! The realtors are always standing by, with their finger on the flagger. A few notes. ARM loans are ideal when interest rates are really high, and have a good chance of going lower. Real estate transactions generally eat what, 4.5-5% with a discount broker and 6% with normal Realtors. So if the house actually appreciates at 2-3%, after a few years it could be close. Look to see what a similiar house would rent for. If the rent of a similiar house is the same as the mortgage (with 20% down) + insurance + taxes, then the price is probably somewhat correct. I realize there is a tax deduction for mortgage interest (which really should be removed, but that is for a different discussion). If you really do want to buy a house, lowball! If your not embarrassed to present the offer, your offering too much! The market is going to go down. There is no place for it to go. The lax lending is coming to and end (investors are starting to see losses on the crap loans, mortgage firms are laying off in droves, prices are nosebleed levels). The punchbowl is being removed, and prices will move back to fundamentals. Fundamentals are technically 2001 prices!!!! Seriously, it's some wood, some contractor grade fixtures and some dirt. Real estate is generally really illiquid. The past few years have been a mania, and people often weren't paying attention or don't wish to remember outside of those years. THERE IS NOTHING TO JUSTIFY THE RUN UP IN PRICES OVER THE LAST 2-3 YEARS. SALARIES HAVE NOT CHANGED. EVERY REGION has something that is "it's different here because." You want to see some real devestation? Check out Pheonix. California residents had massive amounts of equity thanks to run ups, so they decided they would invest in those cheap cheap houses down in Pheonix. Except, there aren't really people to occupy them. www.housingtracker.net shows over 40,000 houses on the market. I think the number is actually over 50,000. It is absolutely nuts. BBOY You want to know what the craziest thing about posting it real on craigslist? You can totally rip up a listing and people will still respond. I wanna roll wif.. the gangsters... but so far, they all think I'm just too white and nerdy.

I think it is something that is happening in a large number of markets. It's all about affordability. Median income doesn't afford median priced houses in HR. Right now the median priced house on the market is $349K and median household income is $50-60K. $50-60K affords $150-180K home. Three years ago, this was in check. Now it's not. It will revert to a situation where homes will be priced in line with salaries, because lending will tighten up. A whole bunch of people that are invested in mortgage backed securities are going to loose a bunch of money. The reasons why this has happened is that lenders are willing to lend people large sums of money, even if they won't be able to pay it. The lenders don't hold the paper. The appraisors are supposed to verify the property is worth the amount of the loan, to help protect the people holding the loan. But lenders lean on the appriasors to hit the numbers. There is a bunch of this documented, and appraisors complaining that if they don't hit the numbers, they get blacklisted and get no business. So the checks and balances are off. Not all insitutions are involved with this. But the NAR themselves said that 30% of all home purchases in 2005 were investors, and I believe similiar numbers in 2004. Just look at the inventory. I just walked down for food at Hells Kitchen and passed the same condos for sale that I saw some 6 months ago. A few have sold. It's just bad. It's bad for the economy. Another thing that I didn't quite realise was that HELOCs are generally not fixed rate loans. If you do not own, now would not be the time to buy IMHO. It's time for the market to revert. Visist www.housingbubblecasualty.com and read his older posts. He was in the mortgage industry and telling stories of what he was seeing. Also www.thehousingbubbleblog.com is a GREAT resource. Those people have accurately predicted everything. And BTW, the media has quotes David L. from NAR nonstop. He is nothing but a sales person mouthpiece for the real estate industry. The MSM (main stream media) does zero homework, and repeats what they are fed. They helped PUMP IT UP (a little more, get you going on the dance floor.. sorry technotronic) to the top. Now that it's levelling off and coming into the decline, they are beating it down. And the line "The sellers market is over, it's now a buyers market" is more stupid realtor drivel. It's not a buyers market, it was a sellers market but now everything has halted and nothing is moving. Prices are too high and sellers don't want to (or can't because they can't afford to) lower, and no one is left to buy into the ponzi scheme.

It's just the start. Next year some $1 to $1.5 trillion dollars worth of adjustable loans will reset, jumping up the payments. It is my understanding that a good portion of the people that took out these loans either do not understand the terms, or have the thought that real estate prices will never go down and will always appreciate at rapid pace. So we could see huge amounts of forclosures. Finally the gov't stepped in and busted 11 mortgage lenders in Boston over the fact that they were pushing loans that after they reset, the buyers will no way be able to make the payments. They coached the buyers thru lying about their income to make the numbers work. Also in California Centex and other builders were doing sales of $100,000 and $150,000 off of new homes. This puts the comps for all the new buyers under water, so if they didn't put a bunch of money down, then they can't sell without a loss. In a down market, owning a home makes someone immobile. They can't follow the jobs without leaving a mortgage payment behind. The comments on the Pilot Online article are priceless. Especially the one lady responding to the guy who cashed out. From her perspective, the person who cashed out at the peak pretty much gave up his American citizenship by getting rid of his house. Now he is a scummy renter (who will be able to buy back his house much cheaper in a few years). Housing prices are going to fall like a rock. Especially once the lenders are no longer able to resell the garbage mortgages on the secondary market. Then they will have to re-introduce lending standard and very few will be able to qualify to buy a house. The stats on the older housingtracker.net site say that inventory in Hampton Roads is up some 350% since 1 year ago or so. There are for sale signs EVERYWHERE. I'm always looking for spots where I can take pictures of 5+ signs in one shot. Another thing that is interesting is it appears that with the large runup in housing prices, buyers bought new homes before selling the old homes. Because homes moved so quick, the assumption was that the old house would sell rapidly. But once the new home was finished and the buyers moved into the new home, the market had cooled and the old home wouldn't sell as rapidly at the price they expected. There are some stories creeping up. I tend to look on craigslist for houses that are listed "in move in condition" ... that is a good sign of either a flip or someone who moved up without a contingency. You are right - real estate generally swings back and forth. The crazy lending has led to an unprecedented run-up in prices, that will swing back to the norm... which just happens to be a very large decrease. Also, just to make one feel better... the last time the loan products that are in use today by the masses were popular, was right before the great depression. They aren't new products.

$170K in 2003/2004 to $330K in 2006 doesn't make sense. There is no real fundamentals behind it, other than lenders giving suicide loans to everyone. It is starting to shake out, but it won't rev up until 2007. News just hit that in Boston they finally hit 11 mortgage lenders with giving loans that they *know* would become unaffordable to the buyers in 2 years. They fraudulently upped the income. Go to PilotOnline.com and hit up real estate -> Finanacing, and look at the ads. Half of them talk "No income verification" and "Stated Income Loans." This is those. Liar loans. I found out that a friend had 70% of household income going to mortgage to live in a nicer but not over the top neighbrohood. He has EE degree, wife is teacher. This was a $150K-$180K hood a few years ago, and I think he had to bid against others to get the place. Some friends, after they got married seemed to need to jump into housing. Unfortunately, it's a society thing. My main point is, nothing happened in the past few years to really justify increases in house prices other than lax lending standards. Now that is going to fall apart, the rich will get rich off of it and everyone else will suffer. It's sort of like the .com boom, but the margins were bigger (50% margin max on stock to 103% CLTV loans on houses). It's going to fall apart, and take the economy with it. The sooner, the better.

Farm fresh site? Where exactly is this site? Someone told me there was some talk of the Levins brass bed building or something, but it isn't going to happen? I dunno, $2000/month apartments. That would pretty much require a 6 figure gross household income for proper affordability. They have to remember that renters aren't homebuyers, and can't get teaser rates on their rents for 2 years, and worry about rate adjustments in 2 years. There is a number of fancy condos for rent showing up from Granby Street in the $1500/1600 range. These are the same ones that were trying to be sold for like $400k and crap. That is a loss, and I still don't see renters. I live in a pretty fancy, supposidly desireable building. Rents are clocked around $1200/mo for two bedrooms. When they moved to this, we saw like 4 of the units empty out. I think the greedy landlords are hitting the breaking points of the renters. Many of people bought in recently, even if they shouldn't have. Even though people are only going to live here 2 or 3 years, they still buy properties after seeing the huge appreciation over the past few years. Generally the 6% realtor fees coming in, and 6% realtor fees selling would kill the idea of buying for short term. But worse times have been forgotten. I'm wondering how the sales are going down for the condos along ?Bousch? street. I need to tour the sales pavillions one day.

Hooray! Sounds like they are getting there.

Amen brother, I laid it out on Craigslist the other day. Many of the middle of the road houses for rent in Hampton Roads require a annual gross household income of around $180K. I have friends that are making $60K+ that are scratching their heads because the rents are so high. Obviously this follows the high cost of housing. Many indicators point to an upcoming recession though. USA just does't manufacture that much, we've taught our competitors how to build better products and are rapidly turning them into our "knowedlge" workers. This doesn't leave much. As far as houses, just start asking owners of house's if they could afford their properties at the prices they are asking. They say no. "Glad I got in when I did." HR is going to crash, it's going to crash hard, and it's already happening. Main stream media isn't talking about it, but the numbers tell a story. And we haven't even started with the ARM resets. People will get forclosed, the rich will swoop in and buy up the houses for pennies, and get richer. Last year there were funds starting with investors beginning to prepare for the slaughter. Check out the news in Arizona, Florida, San Diego, Boston. And you know what? It's a good thing for HR. First we need to beat down the greed. People are lazy and greedy, everyone has these expectations of retiring rich for doing nothing. 100% profit in 2 years on a used house isn't proper. The high cost of housing makes our region very unattractive for businesses. No one benefits with so much money going into basic housing. Also remember that housing downturn is going to kill lots of other jobs. This is bad. The crazier part is many of the people drunk their own kool aid. Real estate agents own lots of properties bought on leverage. You can see em trying to flip em on craigs. Mortgage brokers, etc.

Like so many other companies that come to the area (drug stores, Sonic), if we get one... there is 16 more on the way!

Lookin' good! Better than lining all them old people up on the sidewalk along Bousch street in front of Nauticus!

I understand it was tied up severely in politics. Basically, American Maglev maintained ownership for a while so ODU couldn't do work. And it is also my understanding that it isn't popular on campus. *Shrug*

I dunno, who wants to buy a "new" house that has been sitting for 6 years? At the sales rate of 11 per year (of course, it was only summer, but that is the most active selling season), that is 9 years of inventory. In other markets companies like Centex have done $100K off sales. The other recent buyers roll into lawsuit mode, crying about the devaluation of their properties. I don't think it holds up in court though. Builders build. They have to clear it off of their books. The McMansions will put pressure on the 400K houses. Not unless wages shoot up, but that is very unlikely because the fed wants to protect the value of the dollar.

Celeveland Street, over behind / near the F/X building. There is a trailer park, and some industrial stuff back there. We know the city wants all lower class housing gone, so the trailer park is a no brainer, but the Benz repair place might be an issue... <BR><BR> With a maglev train for transport to/from town center of course.

No! Someone else linked to it from www.thehousingbubbleblog.com ... the crazy part is, it's not visible from the homepage of PilotOnline.com, so I totally missed it. Very interesting stuff though. The 600K houses will become 400K houses, and 400K houses will become $300K houses.

Hah! Man, you guys. It was probably some uppity local McMansion owner NIMBY type! I have no issues with skaters. I'm all for more half pipes in skate parks. There was a large homemade one on the street where I grew up. I'd bust my ass if I tried to skate such a thing, though. Last time I rode a skateboard, we took my crappy NASH Executioner to mount trashmore and rode it down the hill. It performed well. And then the radio flyer. *That* was dangerous.l

http://home.hamptonroads.com/stories/print...3&ran=22501 Silver lining in housing slump The Virginian-Pilot

Followed by my POSITIVE (as in attitude, not HIV) comment. Go maglev! You are our future. /me fires up "Breakfast Club - Right on track"

They might be referring to Class A and maybe B office space. I rent flex office space, and told the landlord that I was looking to get rid of it. They popped a 2 year renewell with 2 rate increases. The landlord pretty much begged me to stay. It's flex space, definitly not A or B. There is a for rent sign on every building, and I can see town center from the street (Cleveland Street). Downtown Norfolk is pretty well eaten up. Once trader moves into their building it should free up some space in Virginia Beach.

There might be other factors, like how much does housing and transportation cut into the salaries. How many of the affluent people that are on the high end shop locally, or are they on business trips every weekend to DC and NYC? I've met people .. get this... who live in Hampton Roads but work in DC. They rent a room up there, and travel on Sunday eve to Maryland, then back on Friday Afternoon. This gives their families higher standard of living. I thought it was nuts myself, but after meeting others that live in Chesapeake and work in Richmond... nuts. Now it's more difficult due to the rising costs of energy. Someone else might of hit it on the head. I think much of this regions money is on the North End of Virginia Beach, Williamsburg, and perhaps Ghent. Do these other regions have an upscale mall that is close to the upscale shopping facilities?

Yea, another thing that would be useful is average versus median. People making nothing, and making megabucks, can distort the median values. Right now the median price of homes sold in the region might increase a few thousand each month, but in reality buyers are getting much more (or less) house. On another note... a friend of mine works for Norfolk Public Schools, and he tells me stories about how they are getting more and more schools that are eligable for reduced lunches. They just got their first high school that is now in the program or some such. The way a school gets in the program is when a certain percentage of students come from dirt poor families. He said for the schools it is increasing each year. Not a pretty picture, when the kids are supposed to be a future. We will get have a future of kids with chip on their shoulders full of hate, and more violence. He also was talking about how a very insanely large portion of the students (by statistics) will never travel more than 6 or 7 miles from the home they live in now, due to growing up in poverty. Pretty crazy. I also think it is funny when Myera Oberndorf and other local leaders applaud Star Track records (NERDS, Neptunes, Chad Hugo and Pharrel Williams). I guess they haven't listened to the Clipse and other local artists totally promoting black on black violence.

Bizzare! Some of the houses at the oceanfront well exceed 35 feet. A friend's family friends have one that had to be built to commercial specifications due to the fact that it was 4 stories (on top of being on stilts) and had a commercial elevator (complete with battery backed exit signs on each floor). I do know that some of the cities have rules against garages and other structures being taller than the primary house. In Fairfax, the city approved the plans so they should take the fall. They weren't looking out.

Miami values have skyrocketed due to low interest rates and lax lending in the same way that some 59 other markets have. They had a runup before us, and are falling before us. Perhaps it is an indicator of what is to come. In terms of job growth, be very careful. Many of the jobs are related to the real estate cycle. So when real estate cools off, the jobs go away. Plus when consumers can no longer borrow against their house, consumer spending will drop. This is why Americans had a negative savings rate in 2005. Speculation and mania is the reason for the run up in prices. Thanks for the tip on localmarketmonitor.com! I know that CNN had Virginia Beach as 27% overvalued. That sounds about right. Rising interest rates will kill the prices, and resetting adjustable loans will flush out a bunch of homeowners freeing up even more inventory in a market that already has skyrocketing inventory. It's leverage. I have a local friend that now has a house worth about $1 mil, and 7 other less expensive houses, and $180K in cars in the driveway.... all on a $80K salary. Borrow on one house to get more, then the others jump in value, then borrow again and again. It's an easy game until you can't find a renter or loose your primary job.

Ah yes, sorry. I do realize that Manhattan is not New York City. My thought process was that the original poster had missed other high income regions in his post that Virginia beach is one of the wealthiest cities when using median income in the country. Also are your stats for 2000 census or 2005 census? Pretty wild that people make so little in the city. I was just there last weekend. San Jose has a higher median income and wasn't in his list. So that still shows there is an error, or perhaps some sort of adjustment.

Sounds like the homeless are being driven away from downtown (how they gonna beg for change to get to Newport News). On a brighter note, sounds like the homeless might be able to play some PUTT PUTT!

Uh huh huh I hit up wikipedia and keyed in San Jose and Manhattan, and both have a higher median income than Virginia Beach. Your figures must be adjusted for something. Well whoever is hungry for even higher priced real estate or goods, I'm not sure where they work. The Trader Publishing developers making $40K aren't the ones. The govt contractors, some are more tight pursed than others. I have friends with degrees working for them and they are hard pressed to get enough money to afford their entry level condos. Now if you own a chrome rim shop, perhaps it's a different story. Don't confuse wealth with debt!!! As of late, it's been real easy for people to borrow large amounts of money. Lenders have been real lax, and this has led to lots of real estate speculators buying things like condos in towers with the intent to hold for a year and then resell, pocketing "an easy" $60K - $100K in cash. If you listen to people in the mortgage industry, on the back end some of it gets as lax as allowing $990,000 USD loans with no proof of income, no proof of employment, no documentation. All that was required was proof that the borrower was able to steadily make payments for half the loan amount ($500K) for 12 months. If that isn't scary.... I am generally a positive person (Well, used to be), but I keep up with this stuff non-stop, and do not see it getting better. Miami has _10 years_ of inventory coming online now. I get most of my information these days from www.thehousingbubbleblog.com, which tends to link to news stories from major news sites. The commentary is great. While most of it misses Hampton Roads, once in a while you will see posts mentioning our little region here. One I recall was someone who's coworker in Northern Virginia bought 2 townhomes and 1 house here in Hampton Roads to flip to make lots of money, and is now stuck not being able to sell them. Be careful with what the Pilot reports. I only read it online, but do read it daily (and comment on the stories often :-). Real Estate is a big market for the papers, so they aren't going to going to bite the hand that feeds them something around 25% of their advertising revenue. Yes, we have lots of military work. No, we aren't recession proof. When the gov't gets responsible again and cuts back the gov't spending, it can and will effect our region. Do you remember NADEP/NARF? I don't want to bite the hand that has fed me, but lets face it, the gov't is really frigging sloppy with money and wastes tons and tons and tons of taxpayer money. It's almost like acceptable welfare in many cases. As a nation, we all can't work for the gov't and sell each other houses forever. It would be nice to see housing-for-sale-vacancy rates, and also what the statistics of loans in our region is. How many people have bought on neg amort, IO and adjustable ARM loans. I've seen people say as much as 20% of all housing loans in the US are adjustable, taken out when interest rates were at record lows. There is brilliance for you.