Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
This whole episode is nowhere near done--in fact, I think it is just beginning. This whole screwed up mess is just starting to impact employment. In other words, foreclosures, defaults and late payments by borrowers are going nuts even before most of those borrowers have seen any impact to their cash flow from a job loss or layoff. When those start hitting borrowers, too, things could really go over the cliff. In places like Colorado, the impact will be double: Not only will people be losing jobs and cutting back spending, but so much of the local economy is dependent on the "chain letter" of real estate development and construction that, when those segments of the economy tank when the "chain" is broken, many thousands more Coloradans will lose their jobs. Just as this BS economy spiraled crazily up on the real estate bubble, now it will crazily spiral down. I wouldn't give a plugged nickel to be working in construction or real estate in Colorado right now--chances are a lot of those people will be without jobs in a year or less.
As for the Fed, they shouldn't be trying to bail this mess out by lowering interest rates and flooding markets with money. All that will accomplish in the end is debase the dollar more. Since we are so hopelessly dependent on imports, the falling dollar will send inflation through the roof ($104 oil should convince anybody that scenario is already happening). In other words, people who actually are financially responsible are going to get to help pay to bail speculators, irresponsible lenders and borrowers out of their screw-up by having to pay prices inflated by the Fed's folly. Far better to let those ne'er-do-wells get their ***es handed to them, and wring all this speculation out of the real estate markets--painful as that might be. It's going to happen, anyway--at least the dollar might have some shred of value left.
When all is said and done, the basic problem is that there is a few trillion dollars of pure vapor floating around in the US economy. We're a lot poorer than we think we are, and--sooner or later--Americans are going to figure that out. Trouble is, the foreign exchange markets are already getting the message.
Meanwhile, while people pontificate on this forum about how neat it would be to live here or there in Colorado (or anywhere else), the American economy is beginning to collapse into a huge pile of ****--a pile worth a whole lot less than anybody thought it would be just a short time ago.
Housing market catching steam, an article from the Rocky Mountain News, reports that based on data from Metrolist, independent broker Gary Bauer released a report on Thursday that shows home sales activity picked up in February, while record foreclosures continue to keep prices down on previously owned homes sold in the Denver area. In February, a total of 5,126 single-family homes and condominiums sold by Realtors were placed under contract, a 4% increase from the 4,929 in February 2007, according to reports. In the first two months of the year, 9,676 homes were placed under contract, a 4.9% increase from the 9,221 placed under contract in January and February of 2007. Larry McGee, president of the Berkshire Group said, "This is very encouraging because it is indicative of strength in the Denver-area market, which will lead to a healthy spring market." Housing market catching steam : Real Estate : The Rocky Mountain News
We have been seeing this uplift in the housing as well. We have been getting more design contracts for residential homes within the past month.
We have been seeing this uplift in the housing as well. We have been getting more design contracts for residential homes within the past month.
Yeah, but you are just one of the people actually doing this stuff. People like you ( designers, builders, realtors ).... what the heck do you guys know? The doom and gloom writers are much smarter than you. They have an infallable wormhole into the future. You guys are too busy getting things done.
We have been seeing this uplift in the housing as well. We have been getting more design contracts for residential homes within the past month.
Yeah, but you are just one of the people actually doing this stuff. People like you ( designers, builders, realtors ).... what the heck do you guys know? The doom and gloom writers are much smarter than you. They have an infallable wormhole into the future. You guys are too busy getting things done.
If you are naive enough to believe what the real estate spin machine pumps out, you get what you deserve. In addition to writing, I spend a lot of time researching, and I have no self-serving incentive to distort things.
I can demonstrate many examples of houses that have been taken off the market and relisted a few weeks later, resetting the days on market counter and hiding the fact that a home has been sitting for sale a long time. I see data showing that contract cancellations are shooting up, meaning the number of contracts signed overstates the sales volume by over a third, yet the realtor spin machine makes no mention of that because they want to paint an untrue rosy picture.
The beauty of forums like this is that you get to see more than just what NAR or BillyBob Realty wants you to see.
Doom and gloom in my writing merely reflects reality. The numbers also back that up, if you take the time to look under the cover and see what they really say.
Now...does Noahoma see a pick-up in business? Probably, I have no reason to doubt it...but up from what? Last month? Last quarter? How much volume...ten or twenty design jobs in a month?
The macro numbers tell a grim tale. You might find a few diamonds by looking up a goat's a**, but most of what you'll find is...well, something else. No amount of wishful cheerleading will change that.
Bob, I have no argument with your numbers or your integrity. Even though I'm well aware that I don't have to read this thread, I do anyway. I just love it when someone like Noahoma slips in a post with a more upbeat tone to it and I can't resist commenting on it. As stated earlier in this thread or perhaps in another one, Reality is what it is and focusing on it ad infinitum simply perpetuates more of the same.
Bob, I have no argument with your numbers or your integrity. Even though I'm well aware that I don't have to read this thread, I do anyway. I just love it when someone like Noahoma slips in a post with a more upbeat tone to it and I can't resist commenting on it. As stated earlier in this thread or perhaps in another one, Reality is what it is and focusing on it ad infinitum simply perpetuates more of the same.
Newageredneck,
I will freely admit that I have been wrong in some of my past predictions. Over 5 years ago, I predicted that the real estate market was being grossly overheated and that a major burst of that speculative bubble was imminent. What I didn't factor in to that prediction was that lenders would repeat the very same mistakes that they made in the late 1970's (I thought they had learned from that debacle--siily me), only do it much bigger this time around. Well, they did. The opened the lending floodgates with 125% of equity loans, ARM's, subprime, interest only payments, and the housing ATM--effectively creating a margined real estate market every bit as speculative as the margin-fueled stock market bubble that led up the crash of 1929. Millions upon millions of consumption-addicted Americans jumped right in, sucked all of the "equity" out of their homes ("equity" in this case being mostly speculative "paper" equity BS), turned that paper equity into a real and absolute financial liability, and blew most of the cash proceeds from that borrowing on consumption. So, the speculative party got to go another 5 years, and the bubble got blown up even bigger.
Now, with things starting to unravel, you've got the Fed falling all over itself to give the addict some more "hair of the dog." It's tantamount to giving a heroin addict in withdrawal a great big shot of morphine because he's in some pain. It might make him feel better for just a little bit, but it actually aggravates the addiction that is killing him instead of trying to make him better.
As to the comment that Noahama made about getting some design contracts--good for him. Even in the worst of times, the best in a field will get some business. And, as I said earlier, the REAL downward leg of this mess hasn't even really started yet.
I think people seeking the services like Noahma offers will typically be more affluent with enough liquidity that this slump doesn't affect them to the extent that it will the lower & middle classes. Eventually, even the upper class is going to feel the squeeze...it's just a matter of time, and then custom home designers might need to think about other things to do.
I think people seeking the services like Noahma offers will typically be more affluent with enough liquidity that this slump doesn't affect them to the extent that it will the lower & middle classes. Eventually, even the upper class is going to feel the squeeze...it's just a matter of time, and then custom home designers might need to think about other things to do.
I can say, that in oct. nov. and dec. and the very begining of Jan. we were dead, no new contracts, no new designs. we had a steady decline of builds over 2007. mid jan. we started getting more contracts with direct clients,and a few spec stuff. We are now working on quite a few spec stuff with builders that are starting to take risks on items again IE: hot tubs, more elaborate landscaping. Which they typically will not do when things are going south. It is true that most of our homes are in a higher price point. We had a trend going last year, it was actually quite amusing to notice. Homes from 100'-300's were still selling, not as fast as they have in the past, but they were still moving. Homes in the 1mil and up were selling like hotcakes, with twice as many new starts as the previous year (2006-2007) and it was completly dead in the 450-750 range. No jumbo loans for people to get ahold of. The government has just recently upped the ammount through their programs, and we are starting to see stuff in that range move again.
As I write this, oil is creeping right up to $107/barrel. Very soon, Americans--including a lot of financially responsible ones, people who pay their bills, don't borrow tons of money, and live within their means--will be paying at the gas pump for the follies of irresponsible lenders and borrowers. The Fed, not satisfied that it has mucked things up enough, will inject more liquidity into this mess, and likely cause another leg down in the value of the increasingly worthless dollar.
Good ol' Mr. Kunstler, with his pithy (and admittedly sometimes over the top) hyperbole, comments on this in today's (March 10th) blog, hits the nail on the head once again. The whole blog can be read here ( James Howard Kunstler ), but the last few paragraphs bear quoting directly:
Quote:
Well it was a bad week on the money scene in what is sure to be a worsening year. Paul Krugman [a columnist for the New York Times that Kunstler quotes earlier in the blog] and his fellow club members can pretend that the hallucinated finance economy is not really flying to pieces. After all, he / they are trying to avert panic. But, as noted previously in this space, the only thing we have to fear is not fear itself. We have to fear the consequences of actions by a banking leadership that has shown the grossest irresponsibility (and an American public that has been conditioned to expect a steady diet of getting something for nothing).
The US faces a pretty stark choice right now: it can let the losers take their losses -- both the big institutions who created and traded in fraudulent securities, and all the "little guys" who borrowed too much money trying to get rich quick, or trying live like the millionaires they see on TV. We can let them go down, and suffer the consequences of their bad choices (and maybe prosecute some of the culpable bankers and corporate executives), OR, in an effort to let these losers off the hook we can wreck the whole machinery of capital by making our medium-of-exchange worthless.
The people in charge -- both in and out of government -- can't face the losses, so for now they've apparently decided to wreck the currency. The dollar has lost two percent of its value against the Euro just in recent weeks, as cheap loans from the Fed pour into the black hole on Wall Street (never to be seen again). Other soft-pedalers in the media claim that the financial markets have "already priced in" yet another expected .75-point interest rate drop by the Fed this week, but I'm confident that such a move will only accelerate the dollar's vanishing act.
I'll admit, it's hard to believe what's going on in the American finance sector. But incredulity in the face of a rare catastrophe isn't the same as pretending that it not happening. A whole flock of black swans is flying in front of the sun. Don't expect to work on your tan this month.
This thread is now close to a 30 page dead horse in some peoples' minds, no doubt, but it will be no where near as demoralizing as the real thing that is about to collapse around everyone's ears.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
