Desperate home sellers turning to auctions

[soup]

Sep 2, 12:02 AM EDT
Desperate home sellers turning to auctions

By MICHAEL POLLICK
Sarasota Herald-Tribune

SARASOTA, Fla. (AP) -- Back in December 2004, when David Holland paid $315,700 for a new home in an east Venice Centex subdivision, the granite-and-tile beauty looked like an easy flip.

But as Centex's sales slowed down, his property turned into a flop.

Last week, Holland cut his losses. He put his house up for an "absolute auction," meaning no minimum and no reserve. Once the auction company advertised the house that way, Holland had no choice but to let the property go to the highest bidder.

He walked away with $255,000, a painful reminder that real properties, like stocks, do not always go up.

In a real estate market turned upside down, auction specialists find their phones ringing almost non-stop from would-be sellers desperate for some action.

http://hosted.ap.org/dynamic/stories/F/FL_HOME_AUCTIONS_FLOL-?SITE=FLPET&SECTION=STATE&TEMPLATE=DEFAULT

edit to add time stamp.

[soup]

1. Construction spending slows

Posted on Sat, Sep. 02, 2006

ECONOMY
Construction spending slows
Construction spending showed a big drop across the country due to the slowing housing market, but commercial development remained strong.
From Miami Herald staff and wires

Construction spending across the country has fallen by the largest amount in nearly five years, reflecting spreading weakness in the housing industry.

The Commerce Department reported Friday that construction activity dropped to a seasonally adjusted annual rate of $1.20 trillion in July, down 1.2 percent from June. It was the biggest monthly decline since a 1.3 percent fall in August 2001, when the country was mired in its last recession.

The bad news of the housing slump was balanced by another report released Friday that the nation's unemployment rate is down to 4.7 percent. Employers boosted payrolls by 128,000 in August, easing some fears that the economy might tip into recession.

Construction spending, however, is plunging far more than Wall Street expected, showing the significant impact of the Federal Reserve's two-year campaign to raise interest rates on the housing industry.

http://www.miami.com/mld/miamiherald/15422018.htm

[napi21]

3. Lots of people all over the Country are going to be hit with this!

Way too many people bought more house than they could afford and used adjustable rate mortgages. Lots more bought second housesjust to make a buck. I have been watching this market closely for the last 2 years, and I saw this coming.

[ClintonTyree]

4. Why do people believe the government's unemployment numbers?

Those numbers are so manipulated and exclude those who's benefits have expired, it in no way reflects the true employment situation. Yet people are so gullible they'll believe the rosy picture painted by the Department of Labor. :puke:
Payrolls were boosted by 128,000 in August. SO WHAT? It takes the addition of approximately 350,000 jobs a month JUST TO BREAK EVEN with people entering the job market and those who have been laid off from their current positions. Yet everyone gets a chubby when numbers like these are released, as if it's GREAT news! Can you say, "irrational exuberance"? :shrug: WHY are people so damned gullible?

[ClintonTyree]

2. My daughter works..........

in a law office that handles foreclosures, and nothing BUT foreclosures. They're busier than they've ever been, having to add personnel to handle the increased work load. She gets telephone calls everyday from people who are crying their eyes out, on the verge of completely losing it because they're losing their homes.
She can't handle it anymore, she's looking for another job or considering grad-school. I told her it's only going to get worse and she'd better save herself, save her sanity and get out NOW!
If Florida is having trouble the rest of the country is in DEEP doo-doo. People still flock to Florida as their retirement paradise they flock there because jobs are fairly easy to obtain. But most of those jobs are in the service industry and don't pay nearly enough to make a mortgage payment on a $375,00 home. Hell, most retirees don't want a huge house either, they want to simplify their lives.
But there's no "housing bubble" IF we're to believe Bush's crack economic team. :eyes: Yeah, right. And there are still caches of weapons of mass destruction all over Iraq too. :eyes:
I don't think most people realize what a precarious position the American economy is in right now. If they did, total panic would ensue.

[soup]

7. I used to work in the foreclosure dept

at a bank 1985-89. Horrible soul-killing work. But we needed the paycheck - and Dunkin' Donuts wouldn't hire me (no experience) - no kidding.

Dealing with the legal side of it was interesting - Final summary judgments, property inspections, shuffling paperwork and numbers.

The human side of it was devastating - Heartbreaking. It took more from me than I had to give.

When they transferred me to the collections dept. and I was expected to make calls demanding payment, I had to quit. Had to save myself. So, I understand what your daughter is going through.

For what it's worth, your advice to her is sound.

[Tellurian]

8. ......

[cap]

5. houses are going up on ebay...

believe it or not...
try and google florida condo and see what you get.

[WePurrsevere]

11. In some areas of the country the market never went totally crazy, the

resale value and sell through there are still decent and even very good like in Florida.

We're lucky that we live in one of those areas that has started ( ::knocking on wood:: ) to finally actually go slowly up. I've heard from others in similar low priced areas say much the same thing. One of our theories is that those who can move (can work online, etc) and don't want to give up having their own homes are moving to areas where they can afford a rather nice home at a fraction of what they paid in the booming markets... and a much more comfortable mortgage payment (if they can't pay cash).

For instance... if you don't mind the cold ;) ... a person/family could own a lovely 4 bedroom, 2 bath 1880's farmhouse with a gorgeous wooded water view you could see from the wrap around porch and 30 acres of privacy for $170k. We just bought a nice old farmhouse (with a big old dairy barn) in need of a bit of work that sits on 7+ acres near the Canadian (Ontario) border for under $60k. (this is not an unusually low price btw) and very soon there will be a very nice ("cute") 3 bdrm 1.5 bath Cape Cod sitting on 4 mostly wooded acres (antique apple trees and birch mostly) just a few miles from the Adirondack Park, (Quebec) Canada and skiing going on the market soon (ours) and, once we've done a few easy cosmetic touches, we're fairly sure that it will probably sell within a year and fairly close to the mid 80's (okay, ::knock on wood::;)). Thankfully the market where it is has slowly gone up since we bought it a bit over 7 years ago. These homes are all in nice areas with very good schools, wonderful (mostly MYOB) people, beautiful scenery, farmers markets set up in Town Squares, decent shopping near by, fun outdoors activities, etc. There are some gorgeous houses in the towns as well if you prefer people and super close shopping over privacy and land. Admittedly higher end jobs are not as easy to come by but.. if you can work from home/have a source of income you can do okay (which is one of the big reasons we could move up here from a higher priced market area).

Anyway.. as I think you were trying to say :) ... Although the housing bubble is unfortunately bursting in (too) many areas there are still pockets where it is steady and perhaps even vastly improving (like Florida and up here) but hopefully at a slower and "healthier" pace. B-)

(edited for spelling & typos :hangover:)

[annabanana]

15. That sounds lovely.

If your town has lots of kids to shovel the snow, and maybe run errands for older folks when the snow is high, retirement up there sounds possible.

[WePurrsevere]

16. It is lovely. We have a man who comes and plows our rather long driveway

for $25. There are always folks who are willing to do things that you may not be able to and charge half what it does downstate (for instance: auto mechanics charge only about $40 - 50. an hour).

This area reminds my husband and I of when we were growing up. Neighbors helped neighbors of they needed help, folks (including young people) holding the door open for you, the markets offering to help you out with your groceries, etc. Strangers wave hello and/or smile and nod in acknowledgment of your existence and the Amish drive their buggies along the road and sell their baskets, crafts, preserves, veggies and baked goods along the roads for a lower price then I'd pay in the store. People may think you're weird or different but most of them figure it's your business what you do as long as you don't bother them.

We're close to 2 college towns, one of which is fairly artsy and reminds me of something out of a New England postcard (Canton, NY). In one hour I can be in Ottawa, Canada or Watertown, NY and the 1000 Islands and 2 of America's "castles". If you don't mind snow and cold it's a wonderful place to live. My husband and I are middle aged and already "retired" but on SS disability. Some things are higher then some areas... most are lower so we can actually survive on what we get every month. :)

As you can tell, although I grew up and spent most of my life in the Albany/Schenectady/Troy/Saratoga area, I truly love it up here. I prefer Spring and Autumn but I'll take our Winters over the Summer heat and humidity... I figure I can always add on more layers but there's only so much I can take off and not get ticketed. ;) Where we are is peaceful and I love watching the deer (I have a great picture of a fawn still in it's spots) in the field across the road. Although NY's state bird is a bluebird I'd never seen one until the other day... outside our bay window. It may sound silly but the joy of finally seeing one so small and so handsome brought tears to my eyes. Even though I can't get around like I used to nature and all of her glorious creations still never fails to move and enthrall me. :)

[suziedemocrat]

6. Check this out! VA house listed for 1.1 million - sold for 530,000.

From: http://www.post-gazette.com/pg/06235/715695-28.stm

Wednesday, August 23, 2006
By James R. Hagerty and Michael Corkery

...

Joan Guth is one homeowner who was taken by surprise. Last September, she put her stately five-bedroom home in Herndon, Va., on the market for about $1.1 million. She was confident she would get something near that price, and planned to use the proceeds to buy a retirement home in Florida. But her home in the Washington suburbs attracted few serious lookers, and in March, she cut her asking price to $899,900. Still there were no takers. Finally, on the advice of her broker, she called in an auction firm, beginning a process that would eventually reveal to her just how weak the Northern Virginia market had become.

...

On the morning of Aug. 5, the auctioneer, Stephen Karbelk, set up loudspeakers on Ms. Guth's side lawn. Ms. Guth handed bottles of chilled water to the several dozen bidders and curious neighbors who showed up. "I have a whole stomach full of butterflies," Ms. Guth said.

Ms. Eddy figured her chances of winning were near zero. When the auction began, it became clear that there were only two serious bidders. Although Mr. Karbelk tried to stir excitement, the bidding petered out within minutes. Ms. Eddy was the high bidder, at $475,000.

Ms. Guth said she would move and leave the house empty until she could sell it at a reasonable price. Late that afternoon, Ms. Eddy raised her offer to $525,000. The Guths wavered for two days before agreeing to accept about $530,000. Ms. Eddy is getting a home with five bedrooms, four full bathrooms, a half-acre lot and a three-car garage for about what some people had been paying until recently for town houses in the area.

Very interesting article!

[soup]

9. Thank you for that.

from the article:

>>Though economists had been predicting a slowdown in housing for years, many homeowners and builders were surprised by how fast the market changed. "It's just like somebody flipped a switch," says Lynn Gardner, a real-estate auctioneer who works in Northern Virginia.<<

Describes our neighborhood perfectly.

[papau]

12. Herdon is 24 miles or 40 min on a good day from DC - folks want closer

to the city as the boomers retire and no longer want to commute.

I suspect most of the "urban/suburban" housing more than 10-15 miles from the major city involved will drop in price in the next 10 years.

I do not think close in to the city housing will stop increasing in value, and I suspect rural housing will be stable as it slowly rises..

[bleedingheart]

10. The lack of American Common Sense is part of why the housing bubble

got so big.

I watched, I saw how friends bought homes that were way overpriced and way too much house for them. They were 100% sure that their homes would be worth a fortune and now they are stuck with mortgage and tax payments that are in excess of $2K+ a month and their other bills for gas (home as well as car), water, electricity..etc are all high as well.

On one hand I feel bad but on the other hand I think they are getting a unfortunate lesson in "if it seems too good to be true, it is."

There are folks who are foreclosed upon because they lose jobs, that is a misfortune.

But when one or two adults in a family are working and their income level has not changed and they dig themselves a debt hole because of their lack of common sense, that is just plain ole vanilla stupid.

[WePurrsevere]

13. Agreed. One should not believe what a mortgage/loan company...

tells them they can afford. It's better to do up a realistic budget, talk to others with a head on their shoulders and USE the brain you were born with. Sadly it's also too easy to get caught up in the buying frenzy and some of us must learn (hopefully) from our mistakes... (and if we're truly savy we also learn from others.)

[bleedingheart]

14. exactly!

people should first set out a realistic budget before they even attempt to home shop...

Doesn't matter what the realtor and the bankers say...they don't have to live with the payment they set you up with just cuz their "number crunching" says that it would be reasonable based on their "averages"...

[sarcasmo]

17. Kick to the top. This shows the true state of our economy.