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Is the party over
gary_6
Member Posts: 60
The party is over. Guy several blocks from me purchased his home for 915K March 05. For whatever reason it's on the market now. Started at 949 then went to 900 now down to 875K still with no takers. On top of this he has to pay realtor fees once he sells. I'm a realtor on Long Island. Taxes are killing people. Another guy built his home 3 years ago he's selling because his taxes are nearly $18,000. It's funny that people don't take the increase of taxes into consideration when they build. If you look new homes are sitting a long time before they are sold.
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Comments
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Real estate values
Had a customer of mine just sell his house.Millon dollar home if I ever saw one.Realitor said lets go with 895k and let them bid it up,this was last july.He just took the highest bid last month and that was 700k.Intrest rates in the mid 6 range one must ask themself is the party over,is the good old day's of tapping equity for a new boiler and pulling out enought for a lexus to boot over?.This site is great,yes it's probly a three month lagging indicator but will show as I feared, the party is over.
www.zillow.com0 -
Yep!
Here in Michigan, probably the most depressed state economy in the nation, the party shut down last fall. Lot's of builders around here with no work, that's zero, nada, nothing to do for the summer. We have a couple remodels scheduled and are quoting tons of change out work due to folks wanting more efficient heating equipment so we have a good amount of work to do.
One of the largest bulders in Grand Rapids has a summer home just up the river from me. He said he has never seen as many new spec homes on the market in the 40 years he has been in construction. His words "The blood's going to be running pretty deep. It went from a seller's market to a buyer's market in one month"!
A couple real estate folks from the "Gold Coast" area, (Northwest Lower Michigan) have told me the housing market between $150K and $1M just flat quit. Homes under and over those amounts are still selling. In fact they both said the 7 figure stuff is going strong yet. Selling everything they can get their hands on.
My gut feeling is that in most areas of the US, we are about to pay the price for the artificial boom created by hysterically low interest rates. That's right, hysterical, as in an over reaction to a problem.0 -
Geo
Interesting.
My neighbor Debbie Galant was a writer for the NY Times and recently started a blog about my area.
http://www.baristanet.com/
(if you scroll down the page on Barista, there is an interesting article on gas lamps titled "What price quaintness". The gas lamp in the picture was taken across the street from my house.)
She was just talking about zillow. This is what they had to say.
http://www.nytimes.com/2006/04/02/nyregion/nyregionspecial2/02lizill.html?_r=2&oref=slogin
Robert O'Connor/NJ0 -
I'm selling my neighbors home the lady paid 50K, 25 years ago. I brought her a 600k offer and she tells me " come on Gary I'm not going to GIVE the house away". Folks are going to be in for a rude awakeing. How long did people think it was going to last. Yeah we're all going to be living in million dollar homes making middle class incomes. Everyone NEEDS 3000 sq. feet now to live. How did all us folks survive growing up in them small capes.0 -
Robert
Interesting quote from that article, and very enlightening as far as determining what is of value to most homeowners.
I would dare bet there are more than a few right now that wished they had skipped the SS appliances and gone for a heating system upgrade.
"Does he know if my basement is finished?" Mr. Cereola asked, referring to Mr. Barton, Zillow's chief executive. "Does he know if I have custom cabinets or stainless steel appliances in my kitchen?"
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S Ebels
Another link from "Barista" about a house up the block. Take note of the property taxes we pay in Essex County. Click on the link "Add my two cents" and read what "face" says.
And they wonder why we charge so much......
http://www.baristanet.com/barista/home.html
Robert O'Connor/NJ0 -
And another good reason to vote for the party...................
that keeps taxes manageable. It is yours to decipher. Mad Dog
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speaking of real estate taxes
This is a job we got up and running today. Its not finished yet. I have to go back tommorrow to hook up the secondary LWCO and paint it up real purdy.
This guy pays $58,000 in property taxes but was too cheap 30 years ago to remove the old American Standard out of the way, Go figure.
I actually made a real dumb mistake on this one. While putting it together I forgot which side faced front. OOPS!
Robert O'Connor/NJ
Thanx Connie........edit!0 -
Wow, an old Ideal Water Tube
a cast-iron monster if there ever was one. I think American Radiator came out with that model to try to compete with the smaller Smith Mills series, but the Mills was a more efficient design. The Water Tube is essentially a two-pass design not unlike the old Smith Mercer boilers.
What type of steam system is in that house? I bet it's Vapor. And is that an old Williams oil burner?
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Oops, double post
I hate when that happens......
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Space
From a guy who grew up with three (of six) brothers in a bedroom with two bunkbeds.....People don't NEED 3000SF for a four person household!!
JMHO TG0 -
Some Random Reflections
I can fully understand the increase in the money supply when there is enough equity to be squeezed out of a property, leveraged into cash for any number of things.
Many of those things have been jobs for a lot of Wallies, system upgrades (and yes, competing with Beemers, Mercedes and other Driveway Candy).
With that comes the natural cycle of inflation in the classic sense: More money chasing finite resources, which drives up the prices, even and especially locally. Ask any Coloradan: When many cashed out of California looking for the Good Life at Altitude, native Coloradans were priced out of the homes of their birth. Supply and demand. Drop that kind of money into a local economy and there you go.
Say you owned one house and had a fixed income. Assuming your life and health is good and the status quo works for you and no imperitive to change your situation: Short of cashing out for downsizing, can there be any benefit to taking out a home equity or refinancing, even at a lower rate when you have only a few years left on a 15, 20 or 30 year mortgage?
And with one home owned, I could never see the big deal made over increasing home prices. Higher property taxes and all of the value is "on paper" -someone elses opinion of what your house is worth but ONLY IF you were to sell. (And if you did, where would you go?)
Now, if you own two, three or more properties, you have a rational, significant nest egg, one that kept ahead of general inflation. Still even if the ride is over (or it is a dip in the roller coaster) you are still ahead of the game.
But the good side I see is the opportunity for another cycle of home ownership. When I was starting out, it always seemed that every property I bought was about double my annual income at the time. That held true until the early to mid 1990's. Now the average (average- nothing special!) house runs about five to six times my annual income at this point. How can a couple just starting out even get on the bottom rung without serious trust fund help or a boost from a wealthy or wealthy-and-dead relative? A pause will help them to catch up at least.
Not to minimize the short term dry-up, that has to hurt. But this is like everything, cyclical. Good things will come of this too.
My $0.02
Brad0 -
Brad
I agree, everything is cyclical. Interest rates had to rise and the feds is doing the right thing, slow, easy climb back to better position. The Fed kept us in a good position by lowering it slowly but at that level we have no room to move. Now the fed has a little breathing room and I suspect a few more points up in the next year, maybe not a given for every quarter but a little higher.
The market will adjust.
The partys over only for those who thought it would'nt end. Its a correction and maybe a good one for those who forgot they don't need that much room to live. I also grew up in a three bedroom ranch house with two older brothers. Don't ask me how that house is still standing but it is.
The game is changing and we need to change with it. I think alot of people forgot it could change.
Scott
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Good points Scott
We start work on a 13,000 square foot monster next week and the number of "humble abodes" in this particular developement has increased. Are we at the top of the curve??? Maybe. Only time will tell.
If Darin and I had decided to put all of our eggs into the new construction market we would eventually feel the down side of the cycles Scott mentions. But we didn't.
Energy prices are not coming back down and people are going to be looking very hard at lowering their monthly utility bills. So while the "building boom" may have begun to fizzle, the "energy boom" is just getting started.
This is an opportuntiy to bring HVAC systems into the 21st century IF you offer the technology. Replacing grandma's boiler/furnace with an exact copy just isn't going to cut it anymore. Companies offering 1950's technology wrapped in a shiny new jacket will be scrtaching their heads when fewer people buy their goods.
Mark H
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Oh please,
spare us this line of thought!0 -
Oh,
and which one would that be??0 -
tain't necessarily so
Although I wish it were. PA's new Uninformed code is already in its 9th revision & its only been in existance for about a year! It's costing way too much to keep buying the latest revision.
Now, you'd think in all those revisions they'd at least close up the gaping loophole governing HVAC work. But nooooooooooooooooo.
If you yank out that old coal converted to oil converted to gas monster and simply plop in a new unit that matches the Btu rating - no permit and no inspection required!
However, do your job right and install the much smaller Manual-J sized unit & now you must submit the M-J calcs, get a permit and an inspection. Bear in mind, the permitting process is onerous, expensive, time consuming and that the inspector has no prior experience or training to understand how to drill down into the M-J calcs (garbage input = garbage output) or how any given appliance (its venting & operation) should be installed. The only thing they're inspecting at this point, is duct or pipe insulation. No duct or pipe sizing sizing education for the inspectors, so you can't expect much to be inspected.
Well gee-willikers, I wonder which one will prevail? Let the buyer beware.
As for the bubble bursting? I'd be content if the garbage selling for way too much took a hit. The majority of new construction, especially cookie-cutter stuff like condos, is all-to-often a travesty. Builders gather together a collection of the lowest bidders available and the buyer pays premuium dollar for that result.
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Here in the poor part of the country with cheap property taxes, things don't seen too bad. Am seeing fewer homes being built, but more renovations of older homes. We have a nice stock of older homes in sore need of renovation but little crime and few truly "bad" neighborhoods.0 -
steamhead
There isn't any idication that it "was" a vapor system. We were not permitted upstairs and there are no traps in the basement. The two limits I installed are set @ 1.5# and the other (manual reset) is set @ 6.5. On start up, the boiler ran for an hour and a half and the gauge never budged. Funny thing is, all we know about steam dictates doing an EDR of the house (this was not done and our contract spelled it out). The burner on the old American Standard is an Esso ??. A local contractor did cut in multible air valves in the basement years ago. The boiler we replaced, the last installer removed the 5" supplies and reduced them in the outer hallway but left one of the main 4" mains that can't be seem in the pics.
Now if I could only get paid in full?? HO witholding $500 with no explanation. If I had to do it again, I'd of passed on this one. Thanks for the intrest.
Robert O'Connor/NJ0 -
\"Uninformed Code\"
I like that
I was at a jobsite in PA last week, doing a walk-in box for another HVAC contractor who doesn't do refr work. He was proudly showing off his crew's installation of the Goodman furnace and AC "system" installed above the future ceiling. No make-up air. No ventilation intake. AC and furnace condensate common trapped to a 1" sch 40 PVC w/o an airgap AND teed to the overflow pan. The 1" is hung once in 15 ft and is teed into the re-vent of a hand washing sink. The 1" also has a trap in it right before the tee.
I just told him that we couldn't do that in NY and he said he didn't see a problem with it.
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Crazy
ain't it! One incident like that comes to mind where we added a 3-compartment sink and grease trap. While we were stringing the vent line along - supported every four feet - we came upon the above-ceiling bathroom vent system. Not a single support between spans! A running trap?
So, being the schtinker I am, I called and inquired which inspector had inspected the first install & asked that he be the one to inspect our job. Entrapment they calls it.
So, he shows up and spies our lengthy above-grade drain. Ah-hah! Where's the vent. You'll have to install a vent. So, I showed him the other side of the wall and we followed it to where we'd removed all of the mens and ladies room ceiling tiles, which also exposed the previous venting abortion. "looks great" And that's when we had a little talk. "What is it with you & (name of the night school plumbing teacher), I can't get along with either of you."
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More 4 Less
One borrowes and spends one taxes and spends. I can't tell the differance. The grand kids neices & nephews get the financial sewage. They will have to sell are graves to pay this thing off.0 -
\"I'm with the government....
I'm here to help!"....
Well that is certainly a kick in the stick. Here in my part of NY, I can only think of one area that requires a "heat loss calculation" on new equipment installs. Required regardless of the new equipments size. This is done PURELY for political reasons, a "protect the good ole' boys" rule. A way to discourage contractors from outside of the city limits from doing work in the area. Works for me! I avoid that place like the plague and when customers from that area ask why, I give them the building inspectors phone number and tell them to ask him. Ask him why my permit fee will be one hundred dollars higher than the "local" guy's permit fee.
I still believe that people are going to have NO problem coming up with a higher initial investment as long as I can show them the pay back.
Beside bringing "new technology" to the table, we have to bring it on a "different" platter. 9 times out of 10, the guy before you was in and out in under 1/2 hour. I set aside 1.5 hours for each presentation. I talk about things the other guys didn't. I ask questions the other guys didn't. I take time with the customer to find out more about what they want and what they expect. Those two are not always the same. My closing ratio improves DRAMATICALLY when I can spend the full 1.5 hrs in the home with BOTH decision makers. If they are not both present on my first appointment,I get all of the info I need AND I ask permission to return at a time convenient for both of them.
Customers today are far more educated and informed than they were 20 or 30 years ago. They understand more than the "average heeter guy" gives the credit for. Heck, in MANY cases the customer is better informed than the "heeter" guy!!!
The American consumer is a special breed and no-one can ever predict perfectly what they will buy or why. Remember "Pet Rocks" and "Chia Pets"?!?!?!?!?
Americans will get it right.
Mark H
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u think that's bad...
I agreed wholeheartly about those plumbing inspectors, I had one job that was "failed" due to disagreement among the water,building and plumbing dept.
Water dept said I don't need the useless meter oversized air chamber as I had water heater expanison tank along with pre-charged air chambers at required locations... Building dept. approved my work....then came along the plumbing inspector, telling me I must have the oversized deadend pipe and air chamber to be 12" at each fixture supplies and questioned me about the tank at water heater supply... I tried to explain him about the advantages of precharge air chambers vs useless vertical pipes.. Nope he won't budged and then I looked into his eyes and asked him if he know any about hot water heating system and/or well pump sytem.... He replied that he knows NOTHING about ethier system and as long he's the inspector and I have to complied or job will not pass... Told him to leave....
Anyone want to know the result... Stay posted...
Rjb with the phd*0 -
Do Tell! (NM)
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Attention: Steamhead!!!
No answer from you as to what burner was hooked up to the 'ole Ideal? Me thinks it is an old Petro. You must be in the same age range as I, maybe 50-something?0 -
The journal had an interesting article on this...
... just as I predicted, the rush to use ARMs to refinance, reverse-mortage, etc. is coming back to bite the US consumer in the rear. I also blame the rise in "investment" property, i.e. property that the owner does not choose to reside in. Combine those two factors, and the volatility of the market will take an uptick.
The "low" interest rates that ARMs offered initially allowed people to buy houses that they couldn't otherwise afford. After all, most of us don't gauge houses just by the total price (because buying a house w/o a loan is not an option for most of us) but by the mortatge, taxes, and other month-to-month costs that living in the place entails. Around here, people were buying homes with no-money-down variable-rate loans, etc. that leave them completely exposed.
What worries me even more is that the net savings rate in the US is still negative, the Feds, State, and local government are also largely overspending, the debt just keeps piling up. Now that interest rates are rising in response, the squeals of pain will emerge. And this isn't bad (yet)... my personal doomsday scenario is a resurgence of the 1970's stagflation in response to a massive currency devaluation. That may yet happen given our trade and tax deficits.
The trigger could be as simple as the folk at OPEC decreeing that henceforth the dollar would no longer be used in international oil transactions... or the Chinese selling off their massive holdings of US currency as a response to a US policy they don't like, etc. The US dollar has always suffered in its relative value to other currencies when the US fiscal house was not in order, I just wonder how much longer it will hold together this time.0 -
Robert says
it's an old Esso, which would have been made by Gilbarco.
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Did the Esso have
the "Economy Clutch"? Or the wire screen on the head? Always wanted to see one of these up close....
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Steamhead
More than likely I'll have to return to this house. Let me know exactly what you want and I'll either get it or take a picture of it.
The American Standard was installed in 1919.
The HB Smith was installed 29 years ago.
Robert O'Connor/NJ0 -
You can see it here
in the Library:
http://www.heatinghelp.com/pdfs/130.pdf
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I guess it pays again!
To wander off the wall.
Let me know if you need additional info.
Robert O'Connor/NJ0 -
so called inspector
Follows up from my prevoius post, my contractor went to building dept and the supervisor told the plumbing inspector not to return to the job for the final... The job passed by the building dept.
Sad to say, I have many as well others do have stories about incompented(sp) inspectors .... New thread on this subject?0 -
Perhaps it is....
i am sorry to say this buh i wasn't invited to the last party nor the one you allude to of more recent initiation*~/:)
the rich always get richer ..poor people have poor ways.
or so i have heard...
When the work is going ever onward there is a law of brinkmanship Lemmings will inevitably dive off the deep end simply because the frenzy or (henny Penny complex) takes over and if the rest of the crowd is heading in that direction the lot of them are optimistic that the one ahead of them apparently knows where he is going
i just keep thinking there is something that i am supposed to do ....buh, diving off the deep end doesn't seem to be IT. i think i have something of a unique psychological make up it is multi faceted ,something of a cross with a wombat,a slow lorus,and a right cylindrical helicoid. Party ing just would not work for me:) anyway i been thinking about a nice 19200 pictal IR camera with 6 colour scales reversible....instead of the Fluke t- 50.. so that some help will be available next time someone is wondering Where the heating dollar is actually going...
the future... who knows where the dollars invested(recovered) in wet heat will be used, probably to pay for medical costs,or something frivolous, like lunch and breakfast i can see it "well....that PJ sanwich with a glass of milk ...will be $74.95..." the me saying," seems like i remember a day when we didnt earn that much in a year " 0 -
Robert
Nice install! Do you bring a shoehorn with you? I also like the old am.std. with the old esso burner. The were real top end back in the day.
Great work.
Jim Burns, JW Burns P&H0 -
I have been doing this for some time in my area only to have to find a new approach have spent an uncountable number of hours with customers only to lose the job. A large number of the jobs were lost soley on the bottom line because no matter how much I try to educate them they still don,t understand the concept of comparing apples to appples, then the rest lost because when I educate these customers the "pros" I am bidding against convince them that these things are just not nessasary. Begining this week I have instructed my techs to give these estimates based on direct replacement so that our numbers would be competitive. If we get the job I will then offer these other things as upgrades ie: proper sizing,boiler by-pass, etc. Too many "pros" in the NYC area are not even installing LWCOs even though they are code and even fewer are filing these jobs. I've gotten very discouraged but I hope that this new way may work a little better in that If we are spending time educating people it will atleast be jobs that we know we have locked.0
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