Saturday, August 9, 2008
Monday, August 4, 2008
Recession & Cars
Roll into the recession in style - luxury cars go under the hammer
Potential buyers and onlookers at Saturday's car liquidation sale at Orwell Motors on the Ballymount Road in Dublin.Photograph: Kenneth O'Halloran
In a sign of the times, Porsches and BMWs are sold off as a high-end car dealer goes under, writes Rosita Boland
ON SATURDAY in the packed forecourt of Orwell Motors in Walkinstown, Dublin, most members of the public were eagerly examining the Mercedes, BMWs and Saabs that were due to sold in a receivership car auction.
However, Dubliner Sandra McQueen was staring mesmerized at the large Gucci handbag hanging off the arm of a potential female buyer. "Some of the handbags here are worth more than what I can afford to pay for a car," she confessed.
Ms McQueen had come to the auction looking for a bargain. Unlike most of the others there, her budget of €3,000 was modest, and she was after one of the very few lots of 00- and 01-registered VWs and Peugeots.
Most people were focusing exclusively on the prestige cars: the 05 BMW 630 Sport, the 06 Lexus IS220, the 06 Mercedes E200 and others.
There were a total of 55 lots, most of them high-end cars. Orwell Motors, a long-established Dublin car dealership specialising in expensive cars, went out of business at the end of last month.
Bank of Scotland (Ireland) appointed Paul McCann, of accountancy firm Grant Thornton as receiver, and it carried out Saturday's auction. It was a condition of the auction that all payments had to be made in full, either by bank transfer or bankers drafts, so all transactions on the day were in effect cash.
It was easy to spot the professionals. The expressionless car dealers worked in pairs, took notes, and walked around the cars like farmers examining cattle. They opened bonnets and scrutinised engines with detachment. You could almost see the euro signs in their eyes.
The private buyers, on the other hand, were mostly couples simply dreaming of driving posh cars, like Maurice and Mary Quinn, up for the day from Newtownforbes, Co Longford. They were interested in the 06 BMW 320 and the 06 Lexus IS220, "but only if they're giving them away," stressed Mr Quinn.
Friends and software professionals Kumar Rubra and Ven Ramachandran. both from India, were not surprised that Orwell Motors had gone out of business. "These guys have been caught out because they were high-end. There's no money now in the secondhand market with the VRT [vehicle registration tax]," Mr Rubra commented. His friend was there to try to buy a Saab, BMW or a Lexus.
"It's not going to stop here," declared Bobby Bolger, from Naas, Co Kildare, who was looking for a Mercedes. "More dealers are going to go bust. Secondhand cars have long been overvalued in this country. Cars will have to come down to more realistic prices.
"We're in a recession now, and car sales are going the way of property sales," he added.
The car attracting the most attention was a black 2000 Porsche Boxter 3.2 convertible. Men, in particular, circled it with the frequency of goldfish doing laps, while their female companions stood aside, looking either indulgent or worried.
It was the only car in the auction that one Dublin couple had come to bid on. "We're only interested in one car. The Porsche, if it's a good deal," said the woman firmly. They declined to give their names.
"You can't use my name, because I work in financial services, and I can't possibly be seen to be talking about a recession," explained the man. Isn't that why we're here?
The auction started bang on 11am, by which time more than 130 people had registered as potential bidders, with many more present as onlookers. Bidding was consistently brisk, and it took less than three minutes to reach a selling price of €45,000 for the 05 BMW 630 Sport. It took longer than that to sell a 2000 VW Polo, which went for €2,300.
Other sales included €33,000 for an 06 Mercedes E200; €24,000 for the 06 BMW320 DSE; and €22,000 for an 06 Saab 9-3. The Porsche went for €17,500. The man from the financial services was outbid.
© 2008 The Irish Times
Potential buyers and onlookers at Saturday's car liquidation sale at Orwell Motors on the Ballymount Road in Dublin.Photograph: Kenneth O'Halloran
In a sign of the times, Porsches and BMWs are sold off as a high-end car dealer goes under, writes Rosita Boland
ON SATURDAY in the packed forecourt of Orwell Motors in Walkinstown, Dublin, most members of the public were eagerly examining the Mercedes, BMWs and Saabs that were due to sold in a receivership car auction.
However, Dubliner Sandra McQueen was staring mesmerized at the large Gucci handbag hanging off the arm of a potential female buyer. "Some of the handbags here are worth more than what I can afford to pay for a car," she confessed.
Ms McQueen had come to the auction looking for a bargain. Unlike most of the others there, her budget of €3,000 was modest, and she was after one of the very few lots of 00- and 01-registered VWs and Peugeots.
Most people were focusing exclusively on the prestige cars: the 05 BMW 630 Sport, the 06 Lexus IS220, the 06 Mercedes E200 and others.
There were a total of 55 lots, most of them high-end cars. Orwell Motors, a long-established Dublin car dealership specialising in expensive cars, went out of business at the end of last month.
Bank of Scotland (Ireland) appointed Paul McCann, of accountancy firm Grant Thornton as receiver, and it carried out Saturday's auction. It was a condition of the auction that all payments had to be made in full, either by bank transfer or bankers drafts, so all transactions on the day were in effect cash.
It was easy to spot the professionals. The expressionless car dealers worked in pairs, took notes, and walked around the cars like farmers examining cattle. They opened bonnets and scrutinised engines with detachment. You could almost see the euro signs in their eyes.
The private buyers, on the other hand, were mostly couples simply dreaming of driving posh cars, like Maurice and Mary Quinn, up for the day from Newtownforbes, Co Longford. They were interested in the 06 BMW 320 and the 06 Lexus IS220, "but only if they're giving them away," stressed Mr Quinn.
Friends and software professionals Kumar Rubra and Ven Ramachandran. both from India, were not surprised that Orwell Motors had gone out of business. "These guys have been caught out because they were high-end. There's no money now in the secondhand market with the VRT [vehicle registration tax]," Mr Rubra commented. His friend was there to try to buy a Saab, BMW or a Lexus.
"It's not going to stop here," declared Bobby Bolger, from Naas, Co Kildare, who was looking for a Mercedes. "More dealers are going to go bust. Secondhand cars have long been overvalued in this country. Cars will have to come down to more realistic prices.
"We're in a recession now, and car sales are going the way of property sales," he added.
The car attracting the most attention was a black 2000 Porsche Boxter 3.2 convertible. Men, in particular, circled it with the frequency of goldfish doing laps, while their female companions stood aside, looking either indulgent or worried.
It was the only car in the auction that one Dublin couple had come to bid on. "We're only interested in one car. The Porsche, if it's a good deal," said the woman firmly. They declined to give their names.
"You can't use my name, because I work in financial services, and I can't possibly be seen to be talking about a recession," explained the man. Isn't that why we're here?
The auction started bang on 11am, by which time more than 130 people had registered as potential bidders, with many more present as onlookers. Bidding was consistently brisk, and it took less than three minutes to reach a selling price of €45,000 for the 05 BMW 630 Sport. It took longer than that to sell a 2000 VW Polo, which went for €2,300.
Other sales included €33,000 for an 06 Mercedes E200; €24,000 for the 06 BMW320 DSE; and €22,000 for an 06 Saab 9-3. The Porsche went for €17,500. The man from the financial services was outbid.
© 2008 The Irish Times
Sunday, June 8, 2008
Tuesday, April 8, 2008
Sharp Drop ~ Precarious housing position in UK!!!!
House price fall sharpest since 1992
Reuters
April 08 2008
LONDON (Reuters) - House prices fell in March at their sharpest pace since the recession of the early 1990s, the country's largest mortgage lender says, raising expectations that interest rates will fall this week.
House prices fell 2.5 percent month-on-month in March, Halifax said, more than six times the drop analysts had predicted and the largest monthly drop since September 1992.
That took the annual three-month rate of house price inflation down to 1.1 percent, less than half the expected level, and the average house price to 191,556 pounds.
Secure your mortgage with a five-year fixed-rate
The pound fell and interest rate futures rose as the surprisingly weak figures reinforced growing expectations that the Bank of England will trim interest rates by 25 basis points to 5.0 percent on Thursday.
"The overall impression is that house prices were buckling markedly even before the latest escalation of the credit crunch," said Howard Archer, an economist at Global Insight. "The increasing danger of a sharp housing market correction heightens pressure on the Bank of England to cut interest rates."
Most economists expect house prices to fall this year as the credit crunch bites into the real economy. All the major lenders have now withdrawn mortgages covering 100 percent of a property's purchase price as banks grow more cautious and tighten up their terms.
But Halifax said the price decline may be only slight due to "strong economic fundamentals".
"We expect there to be a modest fall in UK house prices this year," said Martin Ellis, chief economist at Halifax. "Any declines, however, should be viewed in the context of the significant price rises over recent years. The average UK price has risen by 120,860 pounds during the past decade from 70,696 pounds to 191,556 pounds -- an increase of 171 percent."
Last month, house prices fell 0.4 percent on the month, leaving them 4.2 percent higher in the previous three months compared with a year earlier, Halifax said.
Related links
House prices fall for sixth month
Housing - to move or home improve?
Buy-to-let: small players are the casualties
See the best mortgage buys
The best rates for homeowner loans
Reuters
April 08 2008
LONDON (Reuters) - House prices fell in March at their sharpest pace since the recession of the early 1990s, the country's largest mortgage lender says, raising expectations that interest rates will fall this week.
House prices fell 2.5 percent month-on-month in March, Halifax said, more than six times the drop analysts had predicted and the largest monthly drop since September 1992.
That took the annual three-month rate of house price inflation down to 1.1 percent, less than half the expected level, and the average house price to 191,556 pounds.
Secure your mortgage with a five-year fixed-rate
The pound fell and interest rate futures rose as the surprisingly weak figures reinforced growing expectations that the Bank of England will trim interest rates by 25 basis points to 5.0 percent on Thursday.
"The overall impression is that house prices were buckling markedly even before the latest escalation of the credit crunch," said Howard Archer, an economist at Global Insight. "The increasing danger of a sharp housing market correction heightens pressure on the Bank of England to cut interest rates."
Most economists expect house prices to fall this year as the credit crunch bites into the real economy. All the major lenders have now withdrawn mortgages covering 100 percent of a property's purchase price as banks grow more cautious and tighten up their terms.
But Halifax said the price decline may be only slight due to "strong economic fundamentals".
"We expect there to be a modest fall in UK house prices this year," said Martin Ellis, chief economist at Halifax. "Any declines, however, should be viewed in the context of the significant price rises over recent years. The average UK price has risen by 120,860 pounds during the past decade from 70,696 pounds to 191,556 pounds -- an increase of 171 percent."
Last month, house prices fell 0.4 percent on the month, leaving them 4.2 percent higher in the previous three months compared with a year earlier, Halifax said.
Related links
House prices fall for sixth month
Housing - to move or home improve?
Buy-to-let: small players are the casualties
See the best mortgage buys
The best rates for homeowner loans
Thursday, April 3, 2008
California ~ The housing strains are showing
L.A. Land: Peter Viles on the rapidly changing landscape of the real estate market in Los Angeles and beyond
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« More on McCain's housing speech Main Paulson: Let housing prices fall »
California freefall: Home prices down 26% in February
Signs of distress are piling up in the California housing market, where prices are falling at three times the national rate of decline.
--Statewide, median sales prices fell by a stunning 26% from year-ago levels in February, with home prices dropping at a rate of nearly $3,000 a week, the California Association of Realtors reports. Further, the CAR says the Fed's interest rate-cutting campaign "will have little near-term direct effect on the housing market."
--In the San Fernando Valley, losing a home to foreclosure is now almost as common for families as buying a home. The L.A. Daily News: "During January and February, there were 1,084 foreclosures and 1,335 sales of houses and condos in Valley communities from Glendale to Calabasas, according to the San Fernando Valley Economic Research Center at California State University, Northridge.""It's bad. It's really bad," market analyst Nima Nattagh told the Daily News.
The California Association of Realtors reports median prices fell 27.2% from year-ago levels in the hard-hit Inland Empire east of Los Angeles, 30.9% in Sacramento, and 39.1% in Santa Barbara County.
On a percentage basis, the California price meltdown is more than three times as severe as the national decline of 8.2% in median prices reported this week by the National Association of Realtors. On an absolute basis, the California meltdown is even more severe: Nationally, prices fell over the past year at a rate of $338 per week; in California, prices fell at a rate of $2,788 per week.According to the CAR, "The median sales price of an existing, single-family detached home in California during February 2008 was $409,240, a 26.2 percent decrease from the revised $554,280 median for February 2007." The February 2008 median price fell 4.8 percent compared with January’s revised $429,790 median price."The Federal Reserve Bank’s recent action to reduce the federal funds rate will have little near-term direct effect on the housing market," said CAR Vice President and Chief Economist Leslie Appleton-Young. "However, Fed rate cuts should result in more favorable real estate finance rates as we move through the year."
Median home sales prices sometimes exaggerate swings in market activity. A year ago, median home sales prices in California continued to show price gains, even though the market downturn had begun. At the time, the collapse of sub-prime lending had the effect of freezing the lower end of the market. With fewer sales of less expensive homes, the market was dominated by sales at higher price points, and median sales prices showed gains.
The opposite appears to be happening now, as lower-priced foreclosed homes come onto the market, increasing sales at lower price points, while the market for more expensive homes has slowed dramatically. Thoughts? Comments? E-mail story tips to peter.viles@latimes.comPhoto Credit: Associated Press
Posted by Peter Viles on March 26, 2008 in Foreclosure Permalink
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Comments
Peter,
Thanks for the post. I just read a few articles about this in the last few days. Here in the Santa Barbara area we are seeing huge reductions in prices in certain areas while others are remaining fairly stable (having reached a bottom seemingly). The problem for us with a lot of these statistics is that they include Lompoc and Santa Maria for Santa Barbara and these markets are very different.
With that said, we are seeing a fair amount of activity in the last 7-8 weeks with a lot of pending sales. No price increases to speak of but a lot of activity. Condos though are still up in the air.
Posted by: Santa Barbara Real Estate Voice March 26, 2008 at 10:40 AM
I am ecstatic to see the collapse of home prices in California...I do feel sorry thought for middle class families that were duped into bad loans.....Yet, it is great to see this collapse in the real estate market happening....
Posted by: John March 26, 2008 at 10:51 AM
More hysterical nonsense.
The drop is related to foreclosures being dumped on the market........skewing the numbers.
Ignore this nonsense
Posted by: Joe smith March 26, 2008 at 10:52 AM
Let's see some more on the positives to come from the CA housing correction.
Greedy idiots will be punished.
What's left of the intelligent and rational middle class will have a higher likelihood of being able to afford a decent home without moving out of state. (A few months ago, you needed a 6-figure household income to afford a home in L.A.'s worst neighborhoods.)
Our politicians will actually have to show leadership and think and make difficult decisions, since they can't just ride along taking credit for the sunshine and ongoing prosperity. (Business punishing laws and taxes, combined with terrible public schools and a high cost of living IS NOT a recipe for sustainable community and economic development.)
Posted by: John March 26, 2008 at 10:54 AM
Median prices were half a million..hahha..What a joke. People don't have that kind of rea money. Living way above their means. I hope they are all homeless for years. They have cost people who do it the rigfht way much now in taxes and stoack market collapse.
Posted by: Mark March 26, 2008 at 10:55 AM
The California prices were inflated and overpriced to begin with. Who wants to live in a liberal state where you are taxed to death, gas prices are inflated due to everyone bowing to the extreme environmentalists?
Sell those houses to graduating students from Berkley....oh wait, you have to be productive human being with a job to get a house.
Posted by: Darrell March 26, 2008 at 10:56 AM
To say that median prices are down 26% does not necessarily mean that every million dollar home is now worth 740K. It could mean that million dollar homes are sitting on the market while 500K homes are selling at a brisk pace. It could mean that there are no more million dollar homes ON the market and all the 500K homes are selling slowly.
The headline alone does not really tell a complete story.
Posted by: Jim Roof March 26, 2008 at 10:58 AM
Who could be surprised by the California real estate price meltdown? Many parts of that market have been grossly over priced for years!
Posted by: Tony March 26, 2008 at 11:01 AM
"the median sales price of median price of an existing, single-family detached home in California during February 2008 was $409,240..."
That's still very high, something like three times the national average. CA prices are falling far because they had climbed to such ridiculous levels.
It's bad, but it was an inevitable correction.
Posted by: Dan March 26, 2008 at 11:02 AM
This isn't a big surprise. Home prices were 3 times higher in CA than the national average, it makes sense that they would fall at 3 times the rate. The CA median home price is still double the national average. I think it still has a ways to fall before normal people will be able to buy a house.
Posted by: Etosamoe March 26, 2008 at 11:02 AM
The first stage of a real estate recovery has to be price capitulation, which we are now entering. While painful for the people who bought at inflated prices, the price adjustment to more realistic levels will help people who are now able to buy or will soon. CA home prices got disconnected from reality. Reality is back in Vogue.
How long will it take for the excess unsold homes to get to "normal" levels in So. CA?
Posted by: George March 26, 2008 at 11:04 AM
Sales volume is up dramatically at the low end of the market. The banks are putting their inventory of foreclosures on the market at well below market prices and it has spurred sales. It's not uncommon to see 5 to 10 offers on properties.
All the action is on properties under $500,000 that are priced 25% to 40% lower that two years ago. While sales numbers will be up, the median price is going to plummet when it get's reported for March and April sales.
Posted by: We Help-U-Buy Guy March 26, 2008 at 11:07 AM
Great Music from Robert Plant & Alison Krauss
Robert Plant and Alison Krauss, two of the most distinctive vocalists in modern music, recently put the finishing touches on Raising Sand – their astonishing new collaborative album.
Set for release October 23rd (USA), (UK / worldwide: Oct. 29th) on Rounder Records, the album was produced by T Bone Burnett and recorded in Nashville and Los Angeles with a stellar cast of supporting musicians, including guitarists Marc Ribot and Norman Blake, multi-instrumentalist Mike Seeger, drummer Jay Bellerose, and bassist Dennis Crouch.
Plant is quick to define Raising Sand as more a band record than a duet record, as it puts the two great singers in a variety of vocal and instrumental combinations – from songs featuring two-part brother-style harmony throughout to solo features for each. Though they come from entirely different traditions, Alison Krauss and Robert Plant create an amazing, unexpected, and entirely new sound when they sing together. The material, ingeniously chosen by Burnett with input from Plant and Krauss, is the crucial thread that guides Raising Sand and gives the two unique singers a forum to interact and equally express themselves. The songs range from modern to classic, consisting mostly of lesser-known material from a wide spectrum of great blues, R&B, country, and folk songwriters – Tom Waits, Gene Clark, Little Milton Campbell, Mel Tillis, Townes Van Zandt, Doc Watson, Phil and Don Everly among them. They also recorded the Robert Plant/Jimmy Page song “Please Read the Letter,” from the 1998 album Walking Into Clarksdale. “You’ve got two singers that can handle a wide range of material – storytellers,” explains Burnett. “So you look for the stories….” Krauss explained that the genesis of Raising Sand came about seven years ago, when Plant called to say hello and that he’d love to work with her someday. A few years later, Plant made good on his word and called Krauss about participating in a Leadbelly tribute at the Rock and Roll Hall of Fame, where they sang together for the first time. The collaboration revealed instant potential to the pair, and several years later they enlisted Burnett to help them realize a more full-scale collaboration. Click here to view EPK promo video [Quicktime format]Raising Sand track listing:Rich Woman (Dorothy LaBostrie-McKinley Millet)Killing the Blues (Rowland Salley)Sister Rosetta Goes Before Us (Sam Phillips)Polly Come Home (Gene Clark)Gone, Gone, Gone (Done Moved On) (Phil and Don Everly)Through the Morning, Through the Night (Gene Clark)Please Read The Letter (Robert Plant-Michael Lee-Jimmy Page-Charlie Jones)Trampled Rose (Tom Waits-Kathleen Brennan)Fortune Teller (Naomi Neville)Stick With Me Baby (Mel Tillis)Nothin’ (Townes Van Zandt)Let Your Loss Be Your Lesson (Milt Campbell)Your Long Journey (A.D. Watson and Rosa Lee Watson)
Dramatic House price falls predicted for 2008 ~ 2010
House prices likely to fall by a quarter in two years
Richard Wachman, City editor
The Observer,
Sunday March 30 2008
Article history
About this articleClose
This article appeared in the Observer on Sunday March 30 2008 on p1 of the Business news & features section. It was last updated at 09:16 on March 31 2008.
House prices in Britain could crash by 25 per cent before mid-2010, forecasters at Capital Economics have warned. That would wipe £45,000 off the value of an average house, currently worth £180,000.
Ed Stanford, property economist at Capital, said it was 'entirely plausible' that house prices would fall by between 20 per cent and 25 per cent in the next two years, particularly if the economy continued to be buffeted by the credit squeeze, financial markets' turbulence and sliding consumer confidence.
Capital has already published forecasts that flag a 5 per cent fall in house prices in 2008 and 8 per cent in 2009. It also expects unemployment to rise from 5.3 per cent of the working population to 7.5 per cent.
Last week, Nationwide building society revised its forecast of no change in prices this year to a modest fall. It changed its prediction after publishing figures that showed UK house price annual inflation at its lowest rate for 12 years. Prices fell for the fifth month running; March was down 0.6 per cent on February. If the trend continues Britain's housing market will soon record annual falls for the first time since 1996.
Other UK housing bears include David Miles, chief UK economist at Morgan Stanley. He reckons the market is due a 20 per cent correction. If he and Capital are broadly correct, a significant number of people who bought two years ago will find themselves in negative equity by 2010.
Not everyone is as pessimistic: JP Morgan's Malcolm Barr envisages a 6 per cent fall in 2008, but then a slow recovery.
The Royal Institution of Chartered Surveyors reports that new buyer inquiries at estate agencies are sharply down.
The market is being depressed by the credit crunch, with banks hoarding cash and demanding that borrowers put down huge deposits.
Richard Wachman, City editor
The Observer,
Sunday March 30 2008
Article history
About this articleClose
This article appeared in the Observer on Sunday March 30 2008 on p1 of the Business news & features section. It was last updated at 09:16 on March 31 2008.
House prices in Britain could crash by 25 per cent before mid-2010, forecasters at Capital Economics have warned. That would wipe £45,000 off the value of an average house, currently worth £180,000.
Ed Stanford, property economist at Capital, said it was 'entirely plausible' that house prices would fall by between 20 per cent and 25 per cent in the next two years, particularly if the economy continued to be buffeted by the credit squeeze, financial markets' turbulence and sliding consumer confidence.
Capital has already published forecasts that flag a 5 per cent fall in house prices in 2008 and 8 per cent in 2009. It also expects unemployment to rise from 5.3 per cent of the working population to 7.5 per cent.
Last week, Nationwide building society revised its forecast of no change in prices this year to a modest fall. It changed its prediction after publishing figures that showed UK house price annual inflation at its lowest rate for 12 years. Prices fell for the fifth month running; March was down 0.6 per cent on February. If the trend continues Britain's housing market will soon record annual falls for the first time since 1996.
Other UK housing bears include David Miles, chief UK economist at Morgan Stanley. He reckons the market is due a 20 per cent correction. If he and Capital are broadly correct, a significant number of people who bought two years ago will find themselves in negative equity by 2010.
Not everyone is as pessimistic: JP Morgan's Malcolm Barr envisages a 6 per cent fall in 2008, but then a slow recovery.
The Royal Institution of Chartered Surveyors reports that new buyer inquiries at estate agencies are sharply down.
The market is being depressed by the credit crunch, with banks hoarding cash and demanding that borrowers put down huge deposits.
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