# When Is This Market Going To Turn Around?



## ESSaustin (Mar 27, 2010)

"when the economy recovers, five years from now,"!!!!

Jeseus, I hope it's going to turn around quicker than five years! They all say Texas was not hit as hard, but it sure smacked me around. In 2008 I had two specs on the market, that would usually go for about $425K. I had to drop the price $100K to dump them, AND brought $10K to the table to close.
Central Texas is starting to pick up again, but no where near full throdle.


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## Silver02TDI (Mar 29, 2010)

Well that exactly was a large root cause of the problem.... Speculators buying up the market, making it unaffordable for the rest of us that just want a home of our own


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## tonytnt (Feb 5, 2010)

rstarre said:


> I have 14 vacant lots ready to build in the Chicago area. Starting at $10.000 each. I want to sell half of them and they are listed in the MLS. So far not one buyer, even though I offered to finance the land myself. I was hoping 2010 would be better, but so far it is even worse. There is virtually no new homes being built in my area whatsoever. is it this bad in other cities?


I am about 5 miles west of your lots. Are they on 143rd st or 143rd place? The property on 143rd place & 144th place does not have sewer lines and pretty much unbuildable. The lots on 143rd st does have a sewer line running about half way down 143rd st. I am interested if they are on 143rd street and close to the sewer line.


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## rstarre (Dec 19, 2008)

tonytnt said:


> I am about 5 miles west of your lots. Are they on 143rd st or 143rd place? The property on 143rd place & 144th place does not have sewer lines and pretty much unbuildable. The lots on 143rd st does have a sewer line running about half way down 143rd st. I am interested if they are on 143rd street and close to the sewer line.


The lots are on 143rd street. Zoned single family. But it is fairly easy to rezone for small 2 story town homes which I have plans for. Two of the lots have the sewer line right in front. The other two are a 100 ft away. Sewer guy gave me a price of $30 a foot. Private message me and I will give you the addresses.


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## Tiger (Nov 21, 2007)

rstarre said:


> I have 14 vacant lots ready to build in the Chicago area. Starting at $10.000 each. I want to sell half of them and they are listed in the MLS. So far not one buyer, even though I offered to finance the land myself. I was hoping 2010 would be better, but so far it is even worse. There is virtually no new homes being built in my area whatsoever. is it this bad in other cities?


Illinois has one of the highest unemployment rates in the country (11.5%). Unemployed people struggle to hang onto what they have.


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## PrestigeR&D (Jan 6, 2010)

*really,,,,,,hey Tiger,,,,,*

maybe you should investigate a little further, your not even listed in the top 5,,,, Michigan 14.5% currently ,,,don't mean to sound like a hard ass, but, don't throw things up that are NOT true! ,,,,OK your hanging out with some well rounded "craftsman= PEOPLE" ,,,:thumbsup:

I live in a depressed area,,, born & raised here in Buffalo NY,,, but you know what--- FAMILY & FRIENDS,,, and it is what it is,,, stop whining ,,,,,,, you will be OK ,, it's a lot easier to complain about things that it is to get yourself up and on those bootstraps and get on with life,,, it's to short, just stay busy & productive,

,,, http://www.bls.gov/news.release/laus.nr0.htm
B


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## Tiger (Nov 21, 2007)

PrestigeR&D said:


> maybe you should investigate a little further, your not even listed in the top 5,,,, Michigan 14.5% currently ,,,don't mean to sound like a hard ass, but, don't throw things up that are NOT true! ,,,,OK your hanging out with some well rounded "craftsman= PEOPLE" ,,,:thumbsup:
> 
> I live in a depressed area,,, born & raised here in Buffalo NY,,, but you know what--- FAMILY & FRIENDS,,, and it is what it is,,, stop whining ,,,,,,, you will be OK ,, it's a lot easier to complain about things that it is to get yourself up and on those bootstraps and get on with life,,, it's to short, just stay busy & productive,
> 
> ...


The link below gives the latest available state unemployment figures. The average of the top ten states (ranging from 11.1%-16.2%) including Puerto Rico equal 12.76%, so *Illinois has one of the highest unemployment rates in the country*. The last time I checked the classified section of the local paper there were 6 full pages of foreclosure legal notices. This has been going on for almost two years. My sister in Greyslake area sees a dozen pages every week. This has significantly reduced the value of homes in the area making the purchase of foreclosed homes more attractive than newly built homes. This speaks directly to the question of the OP.

I spoke with a career realtor recently who said he's never seen anything like it in the housing market, including the early 1980s.

http://www.bls.gov/lau/


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## PrestigeR&D (Jan 6, 2010)

*Well,*

Tiger,,,
According to the link I put up ,,,"For March" your state was not even mentioned among the highest,I am not saying it is not bad there, it's bad all over the country,,, I think we just have to adjust to the economy ,, every company has had to make adjustments "up & down" the board, layoffs, eliminating positions, cutting wages,cutting hours, price adjustments for services,,etc,etc. We Just have to get through this mess 

Have a great weekend Tiger:thumbsup:
Brian


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## modterry (Nov 14, 2008)

*The FED and the Govt's Dirty Secret*

This is my 3rd major recession. The 87 era was much worse. Colorado was soo over built. We don't have the "See Through" offices and retail we had then.

What you are not told is the Fed has made the banks reduce their loan portfolios drastically in real estate. What that means is they must lower the loans to capital. 

Plus our friends in Washington DC are so hungry for more taxes that the genius' in the White House doesn't want job growth - just govt dole.

Banks are holding off due to loan limits , and the proposed new taxes that are in the works.

Why loan money to us when the banks can make 3% on T Bills and borrow from the Fed at almost 0%

What that means - 1 - 2 years more slow volume.

We really need to replace 1,000,000 units / year and current permits will be around 600,000 for 2010.

Housing stock may rise in value. Buy fix ups, in low to medium price ranges within FHA / FNMA financing guidelines.

Many thanks,

Terry


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## ryanjm (Mar 21, 2009)

All this talk about what the government is or isn't doing is pretty irrelevant imo. People like to place the blame on "the government" for any problems they have in their life. The truth is, the banks had zero lending standards up until 3 years ago. This resulted in a glut of homes bought by people who couldn't afford them. Greed and irresponsibility by the banks and the homeowners. Nothing the government is or isn't spending money on is going to fix that, it needs to be corrected by the free market economy, and that isn't a quick fix.

Fast forward to today, all of those homes are now being foreclosed on and many are going for less than what it cost to build them. My parents just bought a 2nd home (brand new, on the market for 2 years) in AZ for peanuts compared to what it would cost to build. It's almost pointless to be a builder out there now until homes like that are off the market.

So until all of this inventory is sold and people get used to the idea that you actually have to have a down payment in order to buy a house, the market will be down compared to what it was. Because of all this overgrowth and the unrealistic demand that was created with zero lending standards, you've also got too many builders competing for the same customers. Some need to go out of business and leave the market so that the others can survive. This has already been happening, but I wouldn't be surprised to see it continue to happen for a while.

Someone posted earlier from NE Ohio about how the market is terrible here too. I've heard that as well, but there are still buyers if the price is right. A development which had lots going for $180k+ recently was taken over by the bank, and now that the lots are going for their true value, 120k or so, they are being sold. We're working with half a dozen people who all bought lots there, plus several others who are looking in the area, and we're a very small operation. The demand is picking up again here I think. It just may not be back to how it used to be for a few more years at least.


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## LeadsUSA (May 20, 2010)

Just a quick question, and please you guys - I am not spam, my name is Shane, and yes I am a real person just doing some research.

How many of you guys and gals utilize internet marketing to it's fullest extent? By this I mean, how many are using PPC & SEO to their advantages. From my research, I can find 1000's of customers looking for products and services each and every month in most major cities. I'm just wondering why more people are not utilizing these resources for their own gain?


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## tedanderson (May 19, 2010)

That's exactly what I am doing Leads. I've been getting some good responses through the use of internet marketing. But all in all, you still can't beat face-to-face one-on-one contact.

The majority of my leads come as a result of who I network with in person.

But to address the OP's question, it is starting to turn around in the Washington DC area. We had quite a few new developments that were started in 2006 and late 2007 that sat empty and inactive with sidewalks and curbs in place but no asphalt or houses. I had my doubts as the grass and underbrush started to grow back in but over the course of the last 3 to 4 weeks these sites are starting to get cleared out again and the sales trailers are being put into place.

One thing that I noticed, however, is that the prices are starting much lower than they were a few years ago. What was starting in the mid $600's is now being advertised in the $300's.

But as it was said before, there are still issues with the financing. The banks aren't lending unless you have perfect A1 credit. And even those people have a few hoops to jump through. I think its a situation where nobody wants to go first and look like the only idiot out there who gave out home loans that went bad. But as soon as a lender starts taking chances on first time borrowers and they start making money, eventually everyone else will start lending again also.


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## bearcat (Mar 24, 2010)

tedanderson said:


> But to address the OP's question, it is starting to turn around in the Washington DC area.


 wonder why 
we need a depression in the DC area from lack of government jobs.


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## tedanderson (May 19, 2010)

One thing that I find interesting is that the majority of the people here are still gainfully employed (by the govt) in spite of the economy. The only reason why the foreclosure rate is so high is because we built too many new houses too quickly and sold them to people who couldn't afford them. 

It shouldn't have taken a rocket scientist to figure out that a couple making a combined income of $60K couldn't afford a $600,000 house. But those greedy loan officers and realtors said, "...that's no problem. You will be able to refi every 4 to 5 years.." which was true at the time but what they didn't account for were all of the expenses associated with a house that size. They never considered that the utility bills in a house that was 7 times larger would cost 7 times as much. And repainting the house isn't exactly a weekend project let alone the other maintenance items.


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## tbronson (Feb 22, 2010)

Its called No Doc loan. Meaning that no one verifies what the person(s) actual income was/is. And allowed for abuses like that. A $600k house at todays rates with 3% down translates to about $3,600+/- mortgage payment. at $60k a year that means that most of the take home pay is going to the mortgage. Good grief.


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## laxdad (Jul 22, 2009)

so it was only the realtors and loan officers? =)

i would think that the builders, banks and ultimately the buyers would be just as responsible, dontcha think? no one held a gun to the buyer's heads and said to buy the house. and the builders using in house title and lending was a recipe for disaster (as well as a respa violation in most instances). and just about any human with a 7th grade reading level knew what they were getting into. they just NOW don't like that the party ended befere they could get out.

almost no one in the US paid attention to the fact that incomes had not quadrupled, so why should home prices? rates were artficially low (still are) and bank/investor lending standards became so easy that if you could fog a mirror, you could get a loan.

why rent a house and come out of pocket with deposit and first/last, when a builder will pay all closing costs, and get the loan approved this afternoon. and i can move in 2 weeks from now. 

rates should be/will be at 8 or 9 percent soon. and most starter home will be within 3 times the avg income soon... about 120-150k. more in some areas, less in others. So, what's that gonna do for our incomes? 

unless of course inflation rises up and makes a gallon of milk 15 bucks. then of course, all bets are off lol


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## JustaFramer (Jan 21, 2005)

I know one thing there was a plat or rather a large area of plats owned by different developers and was planned with the city to develop. When I started work in that area. I was told there was 10 years of work in that area. that was 1998. Fast forward 4 years and the thing was tracted out. The frenzy cut the work load by 4 to 5 years. In theory that development would of finished out in 08 or 09 maybe even 10. 

That would of been responsible building. Now it is probably a farm of foreclosures since this was a high end area with over inflated housing prices.


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## laxdad (Jul 22, 2009)

i went on an est for a deck yesterday. high end twnhse dev. homes went for 500k plus a few years ago. my prospect bought his as a foreclosure for less than 300k. all around us were home in obvious disrepair that he said were also foreclosures. 

there are 2 foreclosures in my court right now. i think one guy paid his way out. the others will be out of there home in a couple of weeks. they both bought at the top of the market. them 480 plus. me? 169k


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## Double-A (Jul 3, 2006)

RandomTask said:


> I would say the one thing to pay attention to is lending standards and the availability of loans in general. The housing market is going no where without the mortgage market. It’s now a well known fact that the housing boom was created by the worst lending standards in history (and of course securitization and other derivatives). These lending standards created the sub-prime, alt-a, no-doc and various other mortgage “products” we’ve heard so much about during the past 5 years.
> 
> These ultra low lending standards and sub-prime mortgages no longer exist, and they may or may not return to the market anytime soon. And without them, it’s going to be pretty difficult to fill the void they have left.


This pretty much sums up one part of the equation. The other parts are, we have too much available on the market right now and the banks have zero incentive to lend.

When I was a lad, back when the Earth was still cooling, banks made money by lending money and by selling their loans to investors. These investors would reap the benefits of interest over the long term. 

Fast forward to today. Business schools are teaching that the way to make money for yourself, is to destroy your company by marketing items that, while rewarding you, destroy your client base for those products. 

You can thank folks that don't believe in oversight, and regulation, and do believe in the fairy tale of ethics in business and in a self correcting market for all of this mess. 

So yeah, the White House's statement about the economy recovering in about 5 years is just about on target. It's going to take about that long for the current inventory to be consumed, and for the banks to find a new revenue streams, and for the rule makers to decide that it's in their better interests to reign in this stupidity and personal greed by tying the stupidity of short term performance bonuses to long term performance instead. 

As to the OP's issue of too much inventory, well, I suggest you try and partner with the city or Habitat for Humanity, or some other organization that might help you divest these properties. 

When life leaves you holding lemons, make lemonade.


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## rstarre (Dec 19, 2008)

there is hope


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## Duck042 (Aug 19, 2008)

Arizona, Nevada, and Florida led the charge down in the housing market, and there are still a lot of vacant houses here in Phoenix, particularly on the outer suburbs. Also, there are still a lot of people who've been just hanging out waiting for a foreclosure notice, living rent-free for months! The pace of foreclosures is only increasing, and I don't see enough buyers stepping up to justify much new construction here for at least five years:

http://www.businessweek.com/news/20...sures-climb-44-to-record-in-may-update1-.html

June 10 (Bloomberg) -- U.S. home foreclosures reached a record for the second consecutive month in May, with increases in every state, as lenders stepped up property seizures, according to RealtyTrac Inc.


I've been slammed with remodeling work since the beginning of the year, but it's only for folks in the upper income brackets. The other 95% of the population only has money to spend because they're not paying their mortgage, and they're definitely not spending it on a house they're about to get kicked out of... :thumbsup:


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## brcon (Oct 7, 2009)

I find private remodeling business is way, way down starting in 2009. Mostly, I think, because a lot of work was financed by home equity loans, lines of credit and people taking cash out of their houses.

Well, that's over.

I think it will take several years for the economy to shake out. And only if we do something about jobs and low wages. Sending our jobs to Mexico, China and India affects everybody; not just those who lose those jobs.


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## DREAM1 (May 25, 2010)

when is the market going to turn around? iv been hoping for a cpl years now.i guess some one needs to call china and see if they are hiring.


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## caseyleen (Feb 5, 2010)

rstarre said:


> I have 14 vacant lots ready to build in the Chicago area. Starting at $10.000 each. I want to sell half of them and they are listed in the MLS. So far not one buyer, even though I offered to finance the land myself. I was hoping 2010 would be better, but so far it is even worse. There is virtually no new homes being built in my area whatsoever. is it this bad in other cities?


I am interested in one of those $10,000 lots if you still have them. You say you will finance the lots your self? Are you still willing to do that?


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