2008 melt down

[Rick Hoge]

It was one year ago today that the market went down almost 800 points.

That was just shortly after I had just signed on two new clients. It was only in January & February that my phone was REALLY dead.

Since then I have noticed an increasing number of inquiries.

So how did your year go and are things improving?

[jstoddard]

Re: 2008 melt down

The mortgage bond market actually crashed a year before that - Sept 2007... so I saw the second half of 2007 as a spiral down and 2008 as pretty much a total loss... 2009 not much better.

What you're seeing now is some pent-up demand from cash buyers and the like who have held out until thing bottomed, so they can get the best possible deal. Once that demand has been satisfied, there's going to be another steep dip UNLESS we get some action in the jobs sector.

To have a real, sustained housing recovery in any market, people have to be working. I'm hoping that "Energy Tech" and "Infrastructure Repair" and some other areas will drive jobs growth but I'm not seeing it yet. In fact, I'm not seeing anything that would suggest there's going to be any kind of sustained housing recovery. On top of that... the other foot of commercial real estate failure is about to fall... followed by a second round of sub-prime mortgage foreclosures.

I, like a lot of people, was hoping that when Obama took office, there would be massive and rapid spending on infrastructure repair a la the 1930's WPA , followed by massive and rapid spending on incentives for green energy providers a la the Carter incentives, etc. I also thought we were going to have some mortgage relief so people who got hosed could stay in their houses. That hasn't happened either.

So - forget what you hear on TV and what you read in the media... common sense should be telling you that unemployed people do not buy nor remodel houses, neither do people fearing for their jobs. The economy is still losing 300-500,000 jobs every single month. Until that trend stops, and in fact reverses, where we're net ADDING jobs again... you're not going to have any growth in housing. It simply cannot happen. If your localized market is picking up... local factories hiring... etc. thank your lucky stars. That means some sustainable recovery.

Anyone left in the game is going to have to be very efficient and work very smart. That's where technology can help you.

JLS

[Allan Edwards]

Re: 2008 melt down

It was one year ago today that the market went down almost 800 points.

Thanks Rick, you are the 2nd person today to remind me of the "big drop". I do see things picking up, at least on the custom side, the spec market still in the toilet. I also see things more competitive, people are getting multiple bids on their homes, and they are more price sensitive. I do have a lot of stuff I'm bidding, that is the good news.

[Ohiobuilder]

Re: 2008 melt down

I have seen a slight up tick here with custom buyers. I have 2 starts for this fall, first new home contracts in a year. I have another custom that will start next spring, they are cash buyers that have been hanging on and are worried about inflation and rising prices so they are moving forward.

I did start a master bath remodel this week, it has been fun. I wasn’t very excited when I took the job but now that its going I see how different it is than building new.

I just finished one of my most expensive and most custom homes last month, that customer said several times that he would not have built the home if he had seen all this coming. They are delighted now that they are in and I am delighted they built with me!

Ps: nice post joe…

[David Meiland]

Re: 2008 melt down

I tend to agree with Joe, the fundamentals are not there. The U.S. and its economy have gotten fat and lazy and need to get back in shape. Could take years. In the meantime emerging economies are growing and planning on eating our lunch. My bet is that the best times are behind us for good.

[brujenn]

Re: 2008 melt down

I'm busier because I've diversified. Now, instead of just designing homes and additions, I'm also remodeling, washing cars and dogs, and mowing lawns.

I'm just glad I'm only 51 and have 2 years to save up for my 2nd kids college tuition.

[jstoddard]

Re: 2008 melt down

Dave -
That's a bright and cheery outlook ;-)
I don't know about "for good" - hope not...

Turns out the last wave of "good times" really wasn't all that great after all since it was all built on the back of phony home equity and consumer debt.

A good push into green/alt/energy would do what we need to do and then some. It would create thousands of new products and services, and jobs out the ying-yang in every sector of the economy. As long as we didn't do something really stupid like send the manufacturing of all that stuff to China and Mexico and the customer service to India.... I mean, we'd never do something that dumb... right?

JLS

[Dick Seibert]

Re: 2008 melt down

Joe:

I don't thinks so, at not least with this administration, the growth in jobs is going to be government jobs.

As the job news grows ever darker--the Labor Department announced Friday that unemployment hit a 26-year high of 9.7%--a ray of light is shining from one unexpected quarter: the federal government.

A golden age of work for the government is just now dawning, according to a report released last week by the nonprofit Partnership for Public Service, a group in Washington that promotes government employment.

By the fall of 2012, the Partnership estimates, the federal government will have hired 273,000 new workers for jobs the group calls "mission critical." In other words, those are all positions that are considered crucial and will definitely be filled. That's a 41% increase over the three previous fiscal years. The jobs will be scattered around the world, from Washington to Portland, Ore., and even to such far-flung places as Japan.¹

Rick talks about his weatherization program with government funding, well around here the county is taking the money, the building inspectors are acting as supervisors and they are hiring part time people at $15 an hour.

By late spring, thanks to $5 billion of stimulus funding, thousands of new weatherizers similar to Crowe will be sealing up low-income homes in the Bay Area and across the country. They will primarily come from the country’s 1.7 million unemployed construction workers, retrained as lean, greening machines.

These new weatherization hires will be some of the earliest manifestations of stimulus money in local communities. The East Bay will likely receive millions in additional funding, creating scores of new jobs.²

I know Mike Silva who is running the program, his first job as a building inspector was as a full time inspector on one of my larger homes in 1982, for a couple of months he was full time with us, he says why should the county turn the money over to private parties, they need to keep their own employees working?

We voted for it, and this is what we are getting.


¹ http://www.forbes.com/2009/09/08/fut...ner=careersaol
² http://510report.org/2009/03/11/weat...-the-bay-area/

[Dick Seibert]

Re: 2008 melt down

I thought this was interesting.

There’s a definite flip side to that market statistic, though: If you’re fortunate enough to still have money, there’s likely never been a better time to acquire “luxury” property at bargain rates. Such homebuyers should be able to get roughly 20 percent “more house” than they did in recent years, Josh Brian Losh of luxuryrealestate.com told the AP.

In Rancho Santa Fe, a chi-chi parcel of San Diego County that’s played host to Bill Gates and Howard Hughes and where the top price listing is almost $30 million, the unthinkable is now a reality: You can get a house for a million bucks. Foreclosures, short sales and the like now account for 15 percent of all sales in the enclave, and prices have dropped and average of 30 percent.

Want 2,200 square feet Spanish-style home in a gated golf-course Rancho Sante Fe community? All it takes is $800,000. There, as elsewhere, big-item sellers are cutting prices about 50 percent faster than the national average for all housing, according to Trulia.com.¹

¹http://www.dsnews.com/articles/index...use-2009-09-28

[David Meiland]

Re: 2008 melt down

I'm just glad my parents didn't name me "Josh Brian Losh".

[Overbuilders]

Re: 2008 melt down

So - forget what you hear on TV and what you read in the media... common sense should be telling you that unemployed people do not buy nor remodel houses, neither do people fearing for their jobs. The economy is still losing 300-500,000 jobs every single month. Until that trend stops, and in fact reverses, where we're net ADDING jobs again... you're not going to have any growth in housing. It simply cannot happen. If your localized market is picking up... local factories hiring... etc. thank your lucky stars. That means some sustainable recovery. JLS

Unemployment 'unexpectedly' rises...

http://www.bloomberg.com/apps/news?p...d=amFfJ2eaWTxk

[betterdrywall]

Re: 2008 melt down

I'm not sure how things are going, I have to leave out soon to go to work on a job this morning, I have serveral ongoing jobs my subs are working on. Yesterday my supplier asked if they could send out my delivery early because I was the only drywaller with an order going out and there guys did'nt have anything to do at the supply shop. I've been getting alot of phone calls from other sub crews that work for my competition ,at least 2 or 3 a day asking for work. I'm still keeping very busy . but I'm afraid it will come to a dead stop soon, and I am worried some.

[jstoddard]

Re: 2008 melt down

BetterD -
You're "worried some" - as you should be. What are you doing to prepare ?

You're smart to be worried - but the smart operators get out in front of the curve and do whatever they can to protect themselves. Not meaning to single you out - but this is the time to face facts and do some planning so you have a contingency plan. You'll do that and I guarantee 90% of your competition won't. You'll be in the best shape you can be at that point.

JLS

[betterdrywall]

Re: 2008 melt down

Doing away with anything I can live without .

[Overbuilders]

Re: 2008 melt down

Unemployment is 'officially' 9.8%, which translates to an actual figure closer to 16%-17%. Fugly. Getting fuglier. Heard and interesting analogy by Steve Forbes this morning comparing the stimulus program to taking an overflowing bucket of water from one end of a pool and dumping it in the other, losing some along the way as government is prone to do.