My Wealth Journey

A coworker that reserved a preconstruction home in the Phoenix area (even after my recommendation not to) told me that his real estate agent called and told him the home he signed a purchase contract at $350k is now being sold for around $280k. I’ve been telling him not to close, which was due for May and now he may actually listen. It is a good thing he only will lose 3k in earnest money.

That is some serious drop! Imagine being a homeowner who closed on the $350k price and now sees the $280k price for a new home!

Popularity: 12% [?]

Am I the only one not seeing the housing market bottom? More and more foreclosures are being filed, especially in the subprime market, prices dropping in areas AND incentives that are NOT factored into the prices. On homes around 300k in the Phoenix area, it is not surprising to see incentives of 25K or more in closing costs and upgrades.

The head guy at the NAR has officially called a bottom and they just released a national advertising blitz saying now is a good time to buy. Isn’t it always a good time to buy according to the realtors?

Popularity: 12% [?]

Novastar (NFI) reported earnings after closing yesterday and BOOM! The stock dropped over 30% and has dropped over 50% within the past few weeks. Novastar is a subprime mortgage company that is facing the fact that a lot of the loans they approved will not be paid back. First New Century, now Novastar, so who is next? HSBC got hit a while ago but not as bad as these two companies.

Popularity: 14% [?]

Even though the markets were closed today, XM and Sirius announced a merger that a lot of people have been expecting. Some people don’t know if the FCC will approve it but I think they will make the necessary change in the law allowing this because of other competitions such as HD radio. I don’t know how much Sirius’ stock will jump because of this but XM’s stock looks like it may jump at least 3 or 4 bucks when the market opens tomorrow. I had some Jan 08 $5  calls for Sirius that I’m hoping will  go up.

http://biz.yahoo.com/ap/070219/xm_radio_sirius.html?.v=11

Popularity: 12% [?]

I fall in the category of those who are waiting to buy a home for me to live in (I do own out of state rental properties) because I think the price levels are insane and cannot be substainable. Just searching through ziprealty’s listings this morning shows some properties have dropped over $80k in a 3 month period and yet there are still no buyers. I have a feeling a lot of homeowners are reducing their prices too slowly or not reducing the prices and simply just relisting on the MLS will get burned within the next year.

I recall a few days ago coming to a listing that had a price reduction of 10K every week for the past 2 months. I kid you not. That is 80k drop in 2 months. Now I bet if they did this all at once instead of trying to get as much as they want (not as much as they can), the home would have been sold already. I’m guessing this homeowner was some flipper who bought the home as an investment and is trying to minimze how much he has lost.

Popularity: 18% [?]

What is going on with Yahoo stock? It has been jumping like crazy the past week since they launched the update to their advertising. I sold a little bit of my holdings in Yahoo after it jumped to 29 or 30 to diversify a bit. The stock is actually more expensive than Google’s (GOOG) stock based on their P/E.

Popularity: 11% [?]

I have a rental home in Saratoga Springs, Utah. For those not familiar with the area, it is a new booming town next to Utah Lake. I was there in the fall of 2005 even though the city was rather small, I could see a ton of homes being built there and the growth potential. I picked up a single family home preconstruction home there with the plan of holding it 3-5 years as I believe the market still has quite a bit of ways to go. I’m hoping for 5% appreciation or more over the next few years.

Anyway, I was able to rent out the home after I closed on it and now that tenant is expecting to move out at the end of this month. I’ve started posting ads on a few online classifieds and have gotten a few people interested but no applications yet. One person is suppose to call the current tenants to setup a time to check out the home so I’ll cross my fingers on that.

I originally filled this home by placing an ad in the local newspaper and am very fortunate that I haven’t had to use a property management company because these tenants are some of the best I’ve ever had! All my other homes, I do use property management.

Popularity: 9% [?]