Just Not Upside Up Enough
It’s Friday desk clearing time for this blogger. “The Wichita area appears to be losing ground in the foreclosure epidemic. ‘For us, it’s directly tied to our employment situation,’ said Stan Longhofer, director of the Center for Real Estate at Wichita State University. ‘This is about the time when people who got layoff notices are starting to get hit with foreclosures.’”
“He said that the easy financing may not have led to a large housing bubble, but it did leave quite a few people with little equity when it comes time to try to sell the house. The homes haven’t lost value, but laid-off workers may discover that their homes haven’t appreciated much in recent years. So, he said, instead they may let the house go into foreclosure. ‘They’re not really upside down,’ he said, ‘just not upside up enough.’”
“Earlier this year in Los Angeles, Goldman Sachs took possession of the home of Gladys Aguirre, a housecleaner who’s married to a construction worker. Together, the couple listed monthly earnings of $7,480, including $3,480 from a job she’d held for two months. Aguirre originally took a $444,000 subprime mortgage on Sept. 1, 2005, from a subsidiary of big subprime lender Ameriquest Mortgage Co., which shut down in 2007. The adjustable interest rate sent her monthly payments zooming to $3,800 from $2,479, and Aguirre couldn’t keep pace on that loan or a $119,000 second mortgage. She filed for bankruptcy protection.”
“Aguirre’s Los Angeles lawyer, Eber Bayona, declined to discuss her case, but said that subprime loans amounted to ’setting up the person for failure’ because interest rate adjustments hit borrowers with ’shock payments.’ For example, he said, loan agents promised applicants that they could buy a $600,000 house for payments of $1,200 a month, and the buyers ‘never read the fine print … (and) didn’t know their interest would increase and that eventually they would lose their house and their money.’”
“The foreclosure crisis started with sub-prime borrowers, but in the last six months, it has increasingly reached unemployed homeowners like Cesar Hernandez. Four years ago, the construction worker put in 50 hours a week. He bought a three bedroom house in Palmdale for his wife and daughter. But he hasn’t worked now for eight months, and he can’t make his mortgage payments. He has two weeks to get out of the house.”
“‘I don’t know what I’m gonna do,’ Hernandez said, nearly breaking down into tears. ‘I just really don’t have a place to go.’”
“About 19 miles east of Lodi, you’ll reach a 505-acre piece of property known as Higgins Ranch. Until the economy took a nosedive, this was the future site of a 600-house development. It was going to change the town of Wallace. Then the market dropped.”
“The two developers who owned the property each filed for bankruptcy in 2008, with one of them reportedly owing various banks more than $972 million. Now Higgins Ranch is up for auction, with a minimum price of $750,000. It’s a far cry from the $3.2 million the developers had briefly sought when they placed it on the market. The amount is also less than the reserve in a spring auction, when nobody bought it for the minimum price of a little less than $1.2 million.”
“‘Higgins Ranch would best be described as a gleam in someone’s eye,’ said Chuck Cantoni, a long-time member of the Wallace Community Services District.”
“If you’re listing your house in Utah County, be ready to slash your price. According to data released by the Utah Association of Realtors and the Salt Lake Board of Realtors…the average price dropped from $229,900 in the third quarter of 2008 to $215,000 in the third quarter of 2009. Bruce Arnett wanted to move his family into a larger home so his father, who has multiple sclerosis, could move in. He took the plunge and moved from his house in Eagle Mountain to Traverse Mountain in Lehi about two weeks ago. He decided to rent out his Eagle Mountain home.”
“‘We knew the prices were going to be the lowest that they’ll be for several years,’ he said of his newly purchased Traverse Mountain home.”
“Lindsay Jones is hoping the third time’s the charm. The aspiring first-time homebuyer has fallen out of escrow twice, and is waiting to find out if her offer on a third property will result in the actual purchase of a residence. She started looking seriously in the spring, wooed by tax incentives and her conviction that home prices were at or near the bottom. Jones hoped to take advantage of an $8,000 federal tax credit for first time homebuyers that will end in November.”
“‘That was a huge factor,’ she said. ‘It figured into my purchase price, because it was part of my budget for making repairs. You walk into even the ones in nice areas and they’re seriously gutted. People got really upset and kicked holes in walls or left all their trash everywhere or took off with major appliances.’”
“The Obama administration endorsed plans to extend an $8,000 tax credit for first-time homebuyers, saying it is helping stabilize the nation’s housing market. The tax break has ‘brought new families into the housing market and contributed to three consecutive months of rising home prices,’ Treasury Secretary Timothy Geithner said.”
“Lawmakers also said they won’t extend the break beyond the new April 30 deadline. ‘The American people should understand this — and the affected industries — this is the last extension,’ said Senator Johnny Isakson, a Georgia Republican. ‘Tax credits like this only work by creating the sense of urgency to take advantage of them.’”
“A Senate committee reached a compromise yesterday to extend the $8,000 tax credit for first-time home buyers, a boost the housing industry expects will help it pull out of its two-year-old downturn. Lawmakers in Washington also added a $6,500 tax credit for other primary-home purchasers and raised the qualifying income limits to $125,000 for single taxpayers and $225,000 for joint taxpayers, housing-industry sources said.”
“The credit has helped, acknowledged Marshal Granor, a principal in Granor Price Homes, of Horsham. But he added, ‘I’d love for it to go away, for a month.’ ‘People who believe there is no rush aren’t buying, they are waiting for more bargains from more squeezed sellers,’ Granor said.”
“Exactly who made Bernadine Shimon think that she could buy a new house shortly after declaring bankruptcy and losing another home to foreclosure? The American taxpayer, that’s who. Without a Federal Housing Administration willing to guarantee a $125,000-plus mortgage, this Denver-area schoolteacher’s recurring ‘dream of homeownership’ could not come to pass. Shimon’s down payment was a tiny 3.5 percent. This single mother is so strapped that she had to cash in her retirement savings to come up with the 3.5 percent. Her case was cited in a New York Times article about, not surprisingly, the sad shape the FHA finds itself in.”
“Much of the blame for the housing bubble-then-bust goes to these government agencies. Kenneth Donohue, inspector general of the Housing and Urban Development Department, seemed to be shaking his head. ‘What does the FHA think it is doing by asking only 3.5 percent?’ he asked. (FHA is part of HUD.)”
“But committee Chairman Barney Frank of Massachusetts insists that these mortgages are needed to ‘keep prices from falling too fast.’ Thing is, we can’t support real-estate values with shabby lending practices. That’s what got us into trouble.”
“Florida’s economy remains in a downward spiral, according to sales tax statistics released this week by the Florida Office of Economic & Demographic Research. Consumer and business spending statewide fell 7.5 percent from August 2008 to August 2009. Spending in Palm Beach County dipped 7.4 percent, while Treasure Coast sales fell 4.2 percent from a year earlier.”
“Blame the real estate bubble of 2005 and 2006. Florida’s property frenzy sparked rapid rises in home prices, rampant overbuilding and record-low unemployment. Now, the state is suffering from the hangover created by the real estate party. ‘We’re coming out of a deeper hole than the nation at large,’ said University of Central Florida economist Sean Snaith.”
“When the Monterrey apartments in south Fort Myers sold for a record-breaking $79.6 million in March 2006, its buyers had high hopes of converting its 408 units into condominiums at a nice profit. But less than four years later, the luxury complex near HealthPark hospital is the subject of a $65.8 million foreclosure filed by the lender. Monterrey was never turned into condos and it remains a rental community.”
“As the residential real estate boom peaked in 2004 and 2005, there was heavy demand by investors and home buyers to get into the market and apartment complexes provided a quick solution when demand couldn’t be met by existing houses and new construction, said Michael Timmerman, a Naples-based senior associate with Fishkind & Associates. Developers bought large apartment complexes and sold the individual units as condos, creating what was almost ‘an infinite amount of product people could buy,’ he said.”
“But as prices slid starting in early 2006, condos became less attractive and harder to rent out — now it’s often cheaper to buy or rent a house, Timmerman said.”
“One of the hardest hit is Renaissance, converted from apartments four years ago at the height of the boom. Foreclosure actions have been filed against the owners of 24 of the 112 units and Bill Davis, who’s on the condo board, said several units have substantial damage inside them from months of neglect. Still, he’s optimistic.”
“‘We’re getting more and more money coming in’ as banks take back the condos in foreclosure and sell them to new owners, Davis said. ‘The landscaping’s kept up, the pools are kept up and we actually have a balance in the bank account.’”
“The number of homes in foreclosure continued to rise in the Portland-Vancouver metro area, according to a third-quarter tally. There were 6,123 total housing units in foreclosure in the third quarter in the Portland-Vancouver area, up more than 78 percent from the 3,432 houses in foreclosure during the same period in 2008. ‘It wouldn’t shock me if it was at least two more years before we work our way through the troubled properties,’ said John Bruce, a mortgage banker with Lake Oswego-based Summit Funding Inc.”
“The local real estate market has lately been hampered by the high unemployment rate and a new wave of ‘option ARMs’ or adjustable rate mortgages, Bruce said. While the values of homes were rising, borrowers were happy with option ARMs, Bruce said. However, many of those loans have now reached a five-year ‘reset’ period in which loan amounts will reflect the true interest amount.”
“‘With the clarity of hindsight, there’s no way they can make those payments,’ Bruce said of home loan borrowers with option ARMs.”
“The foreclosure crisis has taken a turn in California’s wealthy Marin County, according to Miriam Alex-Lute at Rooflines. Marin residents waged a legal fight a few years back to keep out Habitat for Humanity, the charitable group that builds houses for low-income buyers. But now that abandoned, foreclosed houses are showing up in Marin, Lute reports the county is opening the door to Habitat, which will rehab one of the foreclosed properties.”
“Just three years ago, Marin county residents were busy raising money for a legal fight to stop Habitat for Humanity from building four homes affordable to families making under $56,000/year, saying it would ‘blight’ their exclusive neighborhood of million dollar plus houses. (The project is still being debated.)”
“But now they are being welcomed with open arms in another part of the county as they renovate one of the foreclosed homes that even Marin has acquired a passel of. Habitat bought the house, which needs extensive rehab, for $215,00. It doesn’t sound affordable exactly to those of us in more affordable parts of the country, but in a county where the median home price is $800,000, I guess it qualifies.”
“Nothing like a wave of foreclosures to change those ‘Not In My Backyard’ attitudes.”
“The economy is creeping out consumers this Halloween season. Sales of costumes, props and other accoutrements are trending lower this year — locally and nationally — as consumers opt for homemade outfits over elaborate store-bought or rented ensembles. ‘In the 31 years I’ve been in business, it’s the worst year ever,’ said Geraldine Alfieri, owner of Geraldine’s Costumes (in) Cathedral City.”
“Business is down 80 percent over last Halloween, largely because of a lack of conventions and corporate events, she said. ‘Corporate business is almost gone,’ she said.”
“Andy Allen, 86, of La Quinta is going as a hippie. He bought a vest, headband, round glasses and a peace-sign necklace. ‘It’s cheap,’ Allen said.”
“Bridgeport tops the list on a real estate Web site’s index of the best Chicago neighborhoods for trick-or-treating. Zillow compiled its Trick-or-Treat Housing Index, used its own home value index and statistics on density, walkability and crime to find out where kids are likely to get the most candy, with the least walking and the smallest safety risks.”
“Ranking fifth was the trendy Lakeview neighborhood a few miles to the south. Zillow said the ‘beautiful homes’ in the neighborhood could mean plenty of trick-or-treat candy and ‘real estate eye candy.’”
“The North Side’s Rogers Park neighborhood came in fourth, in part for the ’scary good real estate deals’ for adults with housing prices down 16 percent.”
“Andy Allen, 86, of La Quinta is going as a hippie. He bought a vest, headband, round glasses and a peace-sign necklace. ‘It’s cheap,’ Allen said.”
This year ann is going as marie antointte, sporting a green cake!
“let them eat green cake”.
*** “Andy Allen, 86, of La Quinta is going as a hippie. He bought a vest, headband, round glasses and a peace-sign necklace. ‘It’s cheap,’ Allen said.” ***
At his age you wonder if maybe he just had original duds from the 60’s stashed away in his closet/attic/etc? Obviously not.
But good for him for getting in the holiday spirit! (Around here in Citrus Heights, all I see lately is grouchy-assed gray-beards. Every male over 50 has their impatient, pissed off, gettoutta-my-way-assholeishness radiating like nuclear cloud)
Groovy, Andy A. !!
“At his age you wonder if maybe he just had original duds from the 60’s stashed away in his closet/attic/etc?”
My daughter will be wearing a costume I sewed for my neice about six years ago. It cost more to make than a store-bought costume would have, but it is much nicer.
Don’t forget that “the 60’s” hippie-wise mostly means the end of the 1960’s, when Andy Allen 86 was already in well into his 40’s. Thus not qualified to fit into a movement that “didn’t trust anyone over 30.”
If you want to go full tilt hippie all you have to do is not bathe for a week or two and sleep in your clothes that you got at the Salvation Army.
And if female, don’t de-hair underarms or legs.
vests, headbands, peace signs all came about when they got mainstreamed.
de-hair underarms or legs.
It is winter. No more shorts. You shave first! LOL
There has always been a fine line between “hippy” and “white trash.” I think the hippies have library cards.
“And if female, don’t de-hair underarms or legs”
I imagine being a girl and looking nice is a lot of work but I’d rather not have a girl that is fuzzier than me.
NO Fuzzy Bare girls….Please !!
Do you guys even notice, if the person is in their bare state?
That is what I thought. No- hehe
“…all you have to do is not bathe for a week or two and sleep in your clothes that you got at the Salvation Army.”
Your ignorance in this regard is simply appalling. These kids, for the most part, (as we’re starting to see today,) were educated young people who got out of school at the cusp of a demographic boom in the midst of a recession, and unable to find employment or reasonably-priced housing banded together into communal living arrangements. Bathing, however, was still a popular social construct–particularly in regards to um, successful mating. Mostly middle-to-upper-middle class in upbringing, there was nothing “dirty” about them, but their unconventional style and willingness to question the status quo scared the crap out out of a generation still cowed by McCarthy era repression.
I would just like to say that it is my conviction that longer hair and other flamboyant affectation of appearance (were) nothing more, than the male’s emergence from their drab camoflauge into the gaudy plumage that (was) the birthright of their sex. Some are of the opinion that elegant plumage and fine feathers (were) not proper for the male when actually, that is the way things are in most species.
And just for the record, the media-concocted word was spelled “hippie.” Please make a note of it.
I don’t think that X-philly’s ignorance of hippies is appalling. Too many other things are appalling nowadays. And let’s face it, hippie-ism evolved because they didn’t want to get drafted. All activism ceased when that risk passed. Then they went mainstream contributed to the current financial fiasco.
ignorance of hippies appalling -
oh my!
And your self-importance and pretentiousness makes me LMAO
my aunt took up with a hippy so-called musician. She used to bring him and his buds to our house when my parents weren’t home so they could raid our fridge. We could smell them coming.
We thought that was pretty appalling and gross even.
(I must have touched a nerve there, who knew?)
Every male over 50 has their impatient, pissed off, gettoutta-my-way-assholeishness radiating like nuclear cloud)
I hope to live at least into my 80s so that you can at least have this statement made about you too when you reach 50 (assuming you are a 20 year old now)
Don’t trust anyone over 60
This year ann is going as marie antointte, sporting a green cake!
“let them eat green cake”.
If you went as Timmay Geithner you would have to walk around with a steaming brown paper bag. You would have to say, “let them eat $hit” when talking about “the masses”.
We’re going to the Andiamo nearest our house with a Halloween coupon entitling us to get two expensive Andiamo dinners for 20 bux. It’s our little treat to ourselves. Also, Andiamo gave out 2 free tickets with their Mille Grazi card to the 2nd City attached to one of their restaurants, so we’re going to see “The Wrath of Conyers” for free tonight. We’re having a very happy Halloween based on the bargains/deflation we’re seeing around here.
“Michael Timmerman, a Naples-based senior associate with Fishkind & Associates.”
The guy has associates getting quoted in the media now? Actually, I might go as Fishkind for Halloween. Instead of candy, people can give me little bite-sized pieces of credibility. Cue the seal!
LMFAO
Earlier this year in Los Angeles, Goldman Sachs took possession of the home of Gladys Aguirre, a housecleaner who’s married to a construction worker. Together, the couple listed monthly earnings of $7,480, including $3,480 from a job she’d held for two months. Aguirre originally took a $444,000 subprime mortgage on Sept. 1, 2005, from a subsidiary of big subprime lender Ameriquest Mortgage Co., which shut down in 2007. The adjustable interest rate sent her monthly payments zooming to $3,800 from $2,479, and Aguirre couldn’t keep pace on that loan or a $119,000 second mortgage. She filed for bankruptcy protection
To misquote Gollum: “The stupid, it burnsss ussss”.
Elanor,
Too funny. That’s not to say const. workers and housecleaners shouldn’t be allowed to own homes ( just not $500k ones? )
We’ve all kind of lost sight that Equityquest was among the first to go under. Another “serial settler” that did people wrong, took their money and settled in court ( keeping the diff. )
More REIC thuggery.
” For example, he said, loan agents promised applicants that they could buy a $600,000 house for payments of $1,200 a month, and the buyers ‘never read the fine print … (and) didn’t know their interest would increase and that eventually they would lose their house and their money.’”
I’m sorry, but I have to pipe up here. I’ve been reading on this blog for about 3 years, and these stories keep popping up in California. I’m not saying this didn’t happen to some degree all over the country, but aren’t there disclosures in CA at the time of signing.
I’ve bought 3 houses and sold 2 of them, for 5 seperate RE transactions, all of them at least 6 months apart - in 2 different states. I’ve sat at a closing table 5 times and every single time the person conducting the closing has stopped at the loan agreement summary page, reviewed the basic terms with the buyers (and when the buyers were using I/O, it was explained that for the first 5 years all payments were to interest and the principle did not decrease at all, and after 5 years the rate varied….).
I find it utterly inconceivable that a buyer in Ohio or NY could not know they were getting a mortgage that contained future payment surprises. I guess CA is just totally different in this respect.
Perhaps it’s the closing agents who are so slimey in California?
CincyDad,
As have “I”. Can’t recall a single closing where things weren’t spelled out in pretty clear terms?
Again, and I don’t have the link/multiple articles at my fingertips, but we’ve had numerous sightings that the ‘brunt’ of the damage came from approx. 20 Zip Codes! Hello?
Yet somehow, this became “our” problem. We’ve no doubt CA was rife w/ affinity fraud but I hardly think the “nobody told ME!” defense was confined to the ESL crowd. It’s to be expected. In the 90’s everyone daytrading on E-Trade understood perfectly ‘well’ how leverage/margin worked. When it turned against them.., all of a sudden they “didn’t get it”!
Would you cut that $hit out? We can’t allow these people to act like victims if we actually point out there culpability in the matter. The MSM does “victim” reporting. It doesn’t know how to do “honest” reporting. Geez.
LOL! Yeah..
The USAToday article IIRC had yer’ basic “heat map” ( of course… ) w/ much of FL, AZ, LV and huge swaths of SoCal in retina burning red!
I’m sure folks in Guttenberg, IA are only too tickled to cover their bad bets.
Of course they were told. The thing is — when you are incapable of seeing that far into the future, why would you care? Anything could happen between now and then and of course those values were going to keep going up and up and up and up and ………….
Does anyone think they actually made that much? I’d bet money they lied on their no-doc loan application.
Only in America can you borrow $450K, not pay it back, and still be a victim.
Wichita commercial realty is down 30% from peak, houses over $120K are not moving, unemployment is around 9% - and a local title company announced today they’re opening 2 new offices. The denial is just as strong here as everywhere else.
‘committee Chairman Barney Frank of Massachusetts insists that these mortgages are needed to ‘keep prices from falling too fast.’
One would think at least one reporter might make the connection and ask this guy, ’so congressman, this means there is the clear understanding that current buyers will be underwater, with so little down?’
And as we’ve seen, when people are in that position, ‘they may let the house go into foreclosure.’
More foreclosures equals lower prices. The politicians are throwing “first time buyers” under the bus. Come on media, here are the flaws in the biggest story out of DC, and you guys can’t pick it up?
Give them six months, Ben — they’ll eventually jump on the bandwagon, once the story is common knowledge that cannot be denied. It’s the job of bloggers to break news stories any more
The only thing good ole Barney knows about being underwater is when he goes bobbing for pickles at the Massachusetts state fair.
In the hot tub maybe…
We are the fast acting consciousness that is lying dormant among all those in power. Sort of like peptobismal or that fizzy stuff for hangovers.
“keep prices from falling too fast”
One got to wonder if it is better if prices fall slowly. That gives more first time knife catchers the chance to get into trouble and more foreclosures down the road.
Is Barney Frank that stupid or is he just so corrupt that he doesn’t care what happens to those people and the county as long as the campaign contributions add up?
“Is Barney Frank that stupid or is he just so corrupt that he doesn’t care what happens to those people and the county as long as the campaign contributions add up?”
Yes.
“Is Barney Frank that stupid or is he just so corrupt that he doesn’t care what happens to those people and the county as long as the campaign contributions add up”?
Yes,Yes, and Yes.
The #1 job of a politician is to get re-elected…. period!
Slobbering Barney and his brethren (the 535) swim around the bottom of cesspool.
UNLESS we Change voting to not allow Lobbyists to buy the elected. It will always be thus.
We’ve been living in the illusion of a democratic republic for a very long time.
I think the assumption is that either the PPT will keep inflating real estate prices by whatever means are necessary to ensure that the first time buyers don’t turn into knifecatchers, or the govt-engineered financial recovery will reflate the bubble.
I can’t imagine the Congress savors the prospect of having to answer why their housing purchase incentive program ended up saddling lots of financially savvy young families with a falling knife housing investment.
“keep prices from falling too fast”
Now that it has been revealed (new studies cited on HBB about a week ago) that many MANY defaults are “strategic,” it is more important than ever from the BANKS’ point of view to try to keep the amortization curve ahead of the depreciation curve.
Have posted a lot on this subject before, because it seems to be the key to the perfect performance of my few dozen borrowers. None is underwater at the present time, but some would eventually be underwater if (let’s say) a 10% depreciation rate were to persist for seven years or more. At a 15% depreciation rate, they would be underwater much faster, after paying me much less, etc etc. And on the other hand, a 7% depreciation rate could persist forever without putting any of them underwater, because the amortization would take the loan balances down faster than the depreciation would take the property values down.
az_lender, what is the typical term of your loans, that they decline in principal balance so quickly? They must be for a fairly short duration…
Nothing against your business, my friend, but it is the need to save lenders from mass walkaways which provides the impetus for the Fed to financially engineer reflating housing prices.
So far, so good, but it remains to be seen whether the reflation effort is sustainable.
I agree completely. That is exactly my point. MY business does not require a “reflation,” a mildly controlled decline will do. Because, as Prime_Is_Contained notes above, my notes go only 15 years and they all start w/ 20% down (or more).
Thirty-year notes with practically nothing down can’t tolerate deflation of more than a few percent a year.
And when you consider the fact that selling costs are usually 5-8% (depending on what/how you sell), these 3.5% FHA buyers are “underwater” from the moment they sign the closing docs. They can’t sell them (net) for more than they owe.
The future foreclosures of all these new buyers rest squarely on the politicians who are pumping all of this housing stimulus.
CA:
5-8% is way too high.
After all with this new thingy called the world wide web, people should be able to locate their own houses and call the owner and go there without all this “professional” help from a reelatur….i guess
———————————-
these 3.5% FHA buyers are “underwater” from the moment they sign the closing docs
Ya know Ben, I wonder if this ‘journalist’ phenomena of not asking the hard question AtThatMoment isn’t just the same as what happens to me when someone says something mean/stupid and you stand there and think..something feels really wrong in my gut that he/she just said but I don’t know quite what to say. Then an hour or a day later, you think, AHA, he got one over on me, next time I will say the right response.
It really happens when there are 1- alot of people around at that moment. Somehow the lessons of life, ‘be nice’ etc burble up and keep you from saying something from the gut.
Interesting trend in BK courts. Besides being able to strip off totally unsecured 2d mtgs. in a Chpt. 13, judges are getting angry when the mtg. Cos. cannot prove they own the mtg. in the 1st place.
http://www.nytimes.com/2009/10/25/business/economy/25gret.html?_r=4
This argument has not caught on on the west coast but back east judges are eating it up!
If not for the govt-backed mortgage loans, I believe private market mortgage rates would be in the 9-12% range or more.
All of this pro-borrower legislation/activity is going to keep private money out of the mortgage market for a long, long time, IMHO.
I wish it was desk clearing day everyday.
Look at the bright side - EVERY DAY is bits bucket day!
I am pleased with myself, as I have just cleared MY desk and my office floor and even vacuumed. Cleanliness and (relative) order rule!
That always feels good.
Congrats!
I agree, Fridays are my favorite HBB days.
+1
My favorite HBB day is the day when I get to make Eddie look like a complete jackhole. Yesterday was an especially good day.
True…. it was no different than swatting flies with a sledge hammer.
If I had I bp meds I would have taken some to lower my bp after his posts.
Different pov are great, when they constantly put down those believed to be lesser humans,
I actually like opposite views. It helps me think weather or not I’m on the right path.
Look at life from both sides now.
It’s lifes illusions I recall.
There were times that I was actually “higher” than my Cpt. and a couple of my Lt’s. I actually had to sit on one of them until we got control of an ambush fire fight. Our colonel heard about it and he laughted and asked me to kindly stop sitting on his officers .
Eddie won’t post on down-Dow days. He lost too much money.
Happy FDIC Friday to all
I wonder how many Shiela will shut down tonight? Maybe none because of Halloween?
Many months ago there was a story floating around that FDIC was setting up a temporary office in Florida. Last week they closed down 3 Florida banks. I would be amazed if Florida wasn’t represented again tonight.
Lisa: I’m not a state. I’m a monster.
Homer: No, Lisa. The only monster here is the gambling monster. I call him Gamblor.
That seems very fitting as Lisa was dressing up as Florida.
“You enjoy orange juice, old people like you.”
“Maybe none because of Halloween?”
Guess again!
9 banks in major holding company fail
FBOP’s banks in California, Illinois, Texas and Arizona bring the number of ‘09 failures to 115. Depositors insured up to $250,000.
By CNNMoney dot com staff
Last Updated: October 30, 2009: 11:25 PM ET
Quick Vote
How strong is any economic recovery in your area?
* Very strong 5%
* Small signs of a rebound 31%
* No recovery here 64%
NEW YORK (CNNMoney dot com) — Nine subsidiaries of FBOP Corp., a multistate holding company that included California National Bank of Los Angeles, succumbed Friday to the nationwide banking crisis, bringing to 115 the number of banks closed by regulators so far this year.
The Federal Deposit Insurance Corp. said the nine banks in California, Illinois, Texas and Arizona that made up the privately held FBOP were taken over by U.S. Bancorp (USB, Fortune 500) of Minneapolis. The banks, which had combined assets of $19.4 billion and deposits of $15.4 billion, will open Saturday as U.S. Bank branches.
The nine banks are Bank USA N.A. of Phoenix, California National Bank of Los Angeles, San Diego National Bank of San Diego, Pacific National Bank of San Francisco, Park National Bank of Chicago, Community Bank of Lemont in Lemont, Ill., North Houston Bank in Houston, Madisonville State Bank in Madisonville, Texas, and Citizens National Bank of Teague, Texas.
Together, the nine banks had 153 offices.
…
How about having a “pool” in each Thursday’s bit bucket. Everyone tries to guess how many banks will be shut the next day by the FDIC.
My guess for this week: 5. I’m guessing a below-average week just because last week was an above-average week.
I dunno - Sheila is saying to heck with to big to fail and Timmay disagrees…hmmm
I guess (throwing dart blindfolded) - four.
Leigh
NINE! …look at it this way, Leigh and I were right…together.
Nine! Nine this week!
We are now at 116. We have 61 days reamining in 2009. Considering last week seven banks were shuttered, and this week nine were shuttered, assuming that this week was on the high end…
We could be seeing 177 total bank failures this year!
(I know - I’m extrapolating from two data points - bad statistics. But that doesn’t stop the NAR, does it?)
“I’m extrapolating…”
That’s my territory
The Friday desk clearing is all about actual RE stories. The Bitch Bucket ends up going off on tangents about the left and right social and economic theories - much more heat than light there.
The blog bitch box gets full quicker than the company bitch box.
Only wish for that if you can afford to be unemployed.
“More foreclosures equals lower prices. The politicians are throwing “first time buyers” under the bus. Come on media, here are the flaws in the biggest story out of DC, and you guys can’t pick it up?”
When Barnie Frank flat out said doomed-to-fail FHA loans were okay because they had prevented a rapid collapse of home prices, that should have been plastered all over the MSM. But it wasn’t. Yes, our gov’t policy is to goose the next round of FB’s….zero equity at time of purchase, on the hook for an overpriced house or ruined credit if the loan goes belly up. They are leading the sheeple to slaughter.
And the longer these crappy loans are out there, the longer the crash goes on.
Right on.
Why doesn’t someone ask “so federal policy is to find a way to force younger people to pay more when buying homes from older people your age, right?”
“Tax credits like this only work by creating the sense of urgency to take advantage of them.”
Otherwise, why pay $20,000 extra if you think that $8,000 will still be there?
Think about that national debt! The only way to make older generations pay it is to pay less for their houses!
What I find amazing is the extent of this toxic scum infected REIC abcess.
I know there are gazillions of real estate agents, brokers etc, because I know there are a lot of uneducated people out there.
But I have to wonder about these so called groups like “Fishkind and associates”. And the so called “senior executives” that work for these companies. Why would you pays these morons good money for “market analysis” when you can come to a sight like this and get the very best analysis for free?
And what self respecting University would allow a Real Estate department on their campus.
It’s no wonder we find ourselves in this crisis.
The carbuncle that is the real estate industry, needs to be lanced with a red hot iron and expunged to the depths of the ocean
said Senator Johnny Isakson, a Georgia Republican. ‘Tax credits like this only work by creating the sense of urgency to take advantage of them.’”
Any half thinking person should see this “program” for what it is. Nothing more than a mirage. The housing market is on a pathetic plan for life support.
Far to many people have been conditioned to believe that “Big Nanny” can cure all ills, when it fact the system is slowly being poisoned to death.
I’m from the government, and I’m here to ‘help’ you!
A sense of urgency is key in creating a mania and it is precisely what is missing from the market. I’m not sure they can recreate the global housing mania we saw in 2005 unless they allow one thing to happen….. let the prices collapse we’ll see an active market like no other.
‘They’re not really upside down,’ he said, ‘just not upside up enough.’”
More mealy-mouthed, airy fairy, unquantifiable RealtLiar speak. Nothing is flippin’ static in this world. Nothing.
It’s tough to get “upside” in Wichita, even when the aviation business is doing good. When the layoffs start, it doesn’t really matter how much you drop the price, nobody is buying anyway. All the local banks know this, and for the most part kept their standards for income verification, down payments, etc. And until recently, a $400-500K house was unheard of, so you didn’t have people $200-300K “upside down” on their house.
That doesn’t mean that the California Mortgage lenders did. Prices didn’t get stupid here until the California people started moving here (along with their Mortgage companies) and started throwing their “equity”/borrowed money around.
Every time the aircraft manufacturers start layoffs, property values drop 20% or more, and take 3-4-5 years to recover before “appreciation” starts again. So the “house prices only go up” slogan didn’t get much traction with the people who have lived thru a couple of these cycles.
It may not be volatile but the way that puke was talking, there is no price action. Prices trend in one direction or the other.
This story is a bad sign.
First it was people way underwater mailing in the keys. Then it was people just a little bit underwater. Now it’s people just a little bit over-water where it won’t cover the UHS commission and other closing costs.
Each step in this progression adds a whole cohort of senders of jingle mail.
meh…he just saved or created equity.
During the low interest years, 2001 to 2007, the character of my neighborhood changed noticably. From the time we moved in in 1988 through the 90’s the neighborhood was predominately upper middle class types, a sprinkling of doctors, lawyers, senior business managers, sucessful small businessmen etc. Over the past few years, most of the homes turned over and were purchased by individuals a step or two down on the econmic ladder, more middle income tradesmen, teachers, firemen, cops, double income factory and clerical worker types. They were, I suppose, drawn by low interest rate loans, which made quarter million dollar homes “affordable” to them at the median $39K/household income. The neighborhood has begun a slow decline in quality as homes are no longer meticulously maintained, more vehicles are left unattended on the streets, lots of “boys toys” parked around the houses and now we are beginning to see homes abandoned to foreclosure. Those homes become a blight very quickly.
At the same time, many of the original residents of the neighborhood took the step up to $500K to $750K plus homes (expensive by Spokane standards). This was spurred by the ability to sell their pervious homes and low interest. But those neighborhoods are beginning have their problems as well as many of the high income jobs that allowed individuals to take that step up have left town, previously successful small businesses have fallen on hard times and layoff of upper level managers, particularly in the financial services sector, has decimated the business community and ARM and other interest rate inducement programs have reset. There are many homes for sale in the hill side McMansion nieghborhoods and few are moving. There are not so many foreclosures yet. I suppose that step of economic ladder has more financial resources available to tide them over and has more to lose in the equity carried over from the sale of previous homes and more to lose in a credit downgrade. But, over time, as these homes sit on the market eating $3,000 to $4,000/month in precious financial resources, the time will come when it no longer makes sense to continue to feed that pig, and foreclosures will begin to creep up the hill.
For those of us who opted not to take the plunge, it is a bit of a bittersweet victory. I would image that most of us, as have I, have paid off our houses, have seen a reasonable level of appreciation and generally enjoy our property and maintain it accordingly. But, watching a once very nice neighborhood beginning its gradual decline takes much of the satisfaction away. We have to seriously consider at what point does the dimunition of quality begin to affect the value of our property, and with that, when it is time to cut those losses and sell.
Spokaneman,
Excellent post, but it could be worse! ( You could live in Bend, OR! ) And it doesn’t stop there. I’m all about avg. Americans improving their lot in life but if you could have seen the sheer number of incompetents ‘ascending’ from their casual job down at the Wilco co-op to “big time builder” it was enough to set your teeth on edge.
You’re absolutely spot on throughout.
What’s the real story in Bend?
Just last week we saw a HGTV episode of House Hunters where this couple was looking for a place in Bend. Prices were in the $250+ per square foot range. They were happy to buy a nothing-special house that was listed for $789K. They paid “only” $739K. Still over $200/sq ft.
We watched for the production date at the end of the show. It was 2009.
P.S. I also looked at a map of Oregon to see where Bend is. Holy cow, why would you buy in the middle of nowhere?
Bill in Carolina,
Wow, since I’ve been clean & sober ( haven’t set foot in a Home Depot since 2002! ) and long weaned myself off propitty p0rn, I missed that. Incredible they’re still getting anything flirting w/ those levels?
But what about those shows ‘isn’t’ staged? You’re right, now that you mention it, Bend -is- in the middle of nowhere. I’ll bet a lot CA’s that formed that ant trail have figured that out?
I just liked the way Spokaneman took things out to their logical progression. Again, upward mobility is all fine and well, but I think we’ve all seen the consequences of when people move up before they’re ready.
Bend is beautiful, been there several times on vacation. It would be easy to delude youself that you could make a living there, especially if going home ment SoCal.
I call BS on that story. Not you Bill. My SIL lives near Bend and I keep a keen eye on the market there. $789k will buy a monstrosity times 3. If you want to see a housing price collapse, look no further than Bend, OR.
Bend could be considered a resort town for the Mt. Bachelor ski resort. But it’s still about an 18 mile drive from town to the slopes.
The problem is that Mt. Bachelor is no Vail or Sun Valley. People don’t fly in from across the country to ski at Mt. Bachelor - it’s mostly local Oregonians. It’s like Bogus Basin above Boise - a nice local ski place for the family but nobody flys in just to ski Bogus.
Just a little local history:
Named so for it’s dubious history of false “strikes”, claim jumpin’ and assorted and sordid deeds and misdeeds.
DennisN has “clear title” and mining rights in a safe deposit box ( under an assumed name ) he’d be willing to let go for a ’song’.
Just yesterday I was taking a little walk along the Hudson River at the SE extremity of Adirondack Park. And there were signs saying “vacation rental” despite great dilapidation. And there were very UNsurprising signs saying “for sale by owner.” People seem to think ANYTHING away from urban blight is in the “if you build it they will come” territory.
“People seem to think ANYTHING away from urban blight is in the “if you build it they will come” territory.”
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THANK YOU AZ for the vindication. What have I been saying about my native brethren in upstate and VT all these years on this blog? If your statement doesn’t sum it up, nothing does. Thematically, the consensus of the natives is “everyone from elsewhere (NYC,CT,NJ) are millionares and they all want to live here.” The truth is that they are poor, living from hand to mouth and chronically underemployed so of course someone from elsewhere with a full time job that pays appears to be wealthy!!!!
Hmmm… SE adirondack…. Say… Corinth, Lake Luzerne, area. I must be close.
Think it was a little north of Lake Luzerne. I don’t really know, because I was just taking a breather near the end of my auto trip from Ottawa Ontario down to Glens Falls.
Prices were in the $250+ per square foot range. They were happy to buy a nothing-special house that was listed for $789K. They paid “only” $739K. Still over $200/sq ft.
Two-fifty a square in Bend, Oregon? Good gah-rief!
Jerry Lopez lives there.
Overpaying for R/E in Bend, OR is just another form of insanity…
Should move to Sand Point, Id ! Largest percentage of retired LA PD including Mark Furman. NO crime problem and ‘right to carry’. Few commie libs in town as well.
We live in Bend and it is in the middle of nowhere. Unless you are an active outdoor sports person who likes good mtn biking, road riding, trail running or okay skiing, I don’t know why you’d move here.
Bend is a nice location with not much in the way of jobs. There used to be a lot of jobs building houses, but, well, you know how that turned out. It used to be a big destination for California equity rangers, but that’s an endangered species now.
The median sale price has dropped below $200K. It’s probably down to roughly 2003 levels, and headed lower IMHO. There’s still a ton of delusionally priced real estate on the more upscale west side, and it’s not moving. If they closed a deal for $700K+ it would have been one of the few this year.
$1200/month doesn’t cover the PPT Tax and Insurance, much less any interest or prinicple.
Yeah, I’m not complaining, we never had a huge price spike, nor have we yet seen a huge downturn in prices, and if you price a house right, it will sell. I paid a little over $100K for my house in 1988 (kept me awake for lots of nights) and could reasonably expect to sell it for $270K now. I paid it off in a little over 10 years, and have greatly enjoyed mortgage free living.
At the peak of the market a couple of years back, I probably could have sold my house for $315K or so, but had I done so I would be sweating a $300K mortgate again.
I’ve put some money in the place over the years, but mostly for stuff that made it more enjoyable for me, and more importantly my wife and kids.
I have no beef with home ownership and think that if done correctly it is a sound personal financial strategy. Huge If.
But, as the song goes, “ya gotta know when to fold ‘em”. I’ve always felt that the quality of a neighborhood is inversely proportional to the number of cars parked on the street.
“inversely proportional”
Amen. I’d much prefer to live in an area of ‘eh… homes than row upon row of McMansions where cars preclude from even being able to see if there’s a damn sidewalk?
One area ( and it’s both sad and laughable ) near me in Molalla, OR has a huge subdivision where 5th wheels and boats line the street! I’ve never heckled my friends that live there ( Molalla is the butt of Jeff Foxworthy jokes when he comes to town ) but I’ve never understood how people could live like that?
“inversely proportional to the number of cars parked on the street.”
When I see a For Sale sign that’s been up for a year disappear and a few pickups, jeeps and motorcycles parked out front all of a sudden, I assume the place was rented to some dudes. Hubby always disagrees, says it could have been sold for cash. Yeah right LOL.
where 5th wheels and boats line the street!
but I’ve never understood how people could live like that?
Hemet/San Jacinto.
“…near me in Molalla, OR…”
Well ‘ya have a nice turbine drop zone right there. Skydiver?
That’s what I’m thinking about where we live. I just don’t know if I want to take on another mortgage or rent. We’re about paid off here.
You could have gotten a nice starter home in Greenwich CT easily for less that in 1999, and not a fixer either.
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At the same time, many of the original residents of the neighborhood took the step up to $500K to $750K plus homes (expensive by Spokane standards)
Soon as you saw the first neighbor of the “couple notches down” move in nearby you should have sold all your RE and become a renter - in an apartment complex.
Apartment complex renters are better behaved, have not so much to lose, and are not so stressed about their job insecurities because they are more portable. They are not desperate. In many places you can break a lease if you lose your job and have to go elsewhere.
“They were, I suppose, drawn by low interest rate loans, which made quarter million dollar homes “affordable” to them at the median $39K/household income.”
Median $39k/yr household income? That explains Spokane well; certainly not the land of tall cotton. Nice weather in the summer, but lots of gloomy unreinforced masonry buildings being a former industrial city. Lots of gawd there too; that’s how they deal with technology that they can’t deal with. The brain drain has been happening there for years.
“He said that the easy financing may not have led to a large housing bubble, but it did leave quite a few people with little equity when it comes time to try to sell the house. The homes haven’t lost value, but laid-off workers may discover that their homes haven’t appreciated much in recent years. So, he said, instead they may let the house go into foreclosure. ‘They’re not really upside down,’ he said, ‘just not upside up enough.’”
How many different ways can you say that Wichita’s housing market is drowning in the post-Housing Bubble bust without actually saying anything of the sort?
Goldman Sachs = Repo Man
“Earlier this year in Los Angeles, Goldman Sachs took possession of the home of Gladys Aguirre, a housecleaner who’s married to a construction worker. Together, the couple listed monthly earnings of $7,480, including $3,480 from a job she’d held for two months. Aguirre originally took a $444,000 subprime mortgage on Sept. 1, 2005, from a subsidiary of big subprime lender Ameriquest Mortgage Co., which shut down in 2007. The adjustable interest rate sent her monthly payments zooming to $3,800 from $2,479, and Aguirre couldn’t keep pace on that loan or a $119,000 second mortgage. She filed for bankruptcy protection.”
“If you’re listing your house in Utah County, be ready to slash your price.”
That’s where my SIL and ex-hubby bought a $500K+ McMansion the summer before they got divorced.
Not to get too personal on a public forum, but did the financial strain of buying such an expensive house contribute to the marital downfall?
…..?
( Not at all )
Not to get too personal on a public forum, but did the financial strain of buying such an expensive house contribute to the marital downfall?
She was banging four of the Mexican sub-contractors so it was definitely housing related.
ROTFLMAO
I don’t know the full story, but suspect the unaffordable McMansion purchase was more of a symptom of problems than a primary cause.
It looks to me like a snake got the early birds.
MarketWatch First Takes | Evening Winners and Losers
Early-cycle bird gets worm
As investors hunt for higher returns amid a “new normal” of reduced expectations, analysts point to early-cycle stocks as among those that stand to gain as Asian demand for goods picks up.
Oh my gosh, PB!! That is absolutely cruel!
Sorry — I had second thoughts that you or another gentle soul on the blog might find that offensive.
But don’t you think that snake is a pretty good metaphor for the way that Megabank, Inc operates these days?
But don’t you think that snake is a pretty good metaphor for the way that Megabank, Inc operates these days?
—————
Well yes, you’re right about that.
It was just a bit shocking to see when clicking on the link! I kept thinking it was some kind of trick, and that someone would rescue the poor thing. (Can you tell I **don’t** like fishing?)
From the original post:
“Just three years ago, Marin county residents were busy raising money for a legal fight to stop Habitat for Humanity from building four homes affordable to families making under $56,000/year, saying it would ‘blight’ their exclusive neighborhood of million dollar plus houses. (The project is still being debated.)”
“But now they are being welcomed with open arms in another part of the county as they renovate one of the foreclosed homes that even Marin has acquired a passel of. Habitat bought the house, which needs extensive rehab, for $215,00. It doesn’t sound affordable exactly to those of us in more affordable parts of the country, but in a county where the median home price is $800,000, I guess it qualifies.”
“Nothing like a wave of foreclosures to change those ‘Not In My Backyard’ attitudes.”
To which I say:
I’ve been a Habitat Tucson volunteer for five years.
One of the neighborhoods where I worked was the scene of protests. And, lemme tell you something, it’s not one of Tucson’s finest neighborhoods.
The protestors were up in arms about the fact that “those Habitat people” were coming into the area. Well, Habitat just kept right on with its plans, and it completed the 36-house Balboa Laguna community in 2007.
The Balboa Laguna residents have been active in efforts to start a neighborhood association, and, Lord knows, that area needs one. I know both the current and past presidents of the Balboa Laguna HOA, and I occasionally give neighborhood leadership-type tips to the current prez.
So, long story short, having Habitat come into your area isn’t the end of the world.
Habitat’s rehabbing activities seem benign to me, but I never understood its BUILDING activities in a grossly overbuilt world.
Ya gotta point there.
But, to be fair, some of the Habitat Tucson homeowners were living in some pretty crummy rentals. Which Tucson has in great abundance.
I can remember hearing one lady speak at a public event. She remarked on the big difference between the old apartment and the new house by saying, “I can breathe!”
The old apartment’s mold was really messing with her health, and despite her repeated requests for cleanup help, the landlord blew her off.
Gotta love it: Build a house so that dysfunctional families can move in next to people who can afford to live in a neighborhood.
And Jimmy Carter is big into HFH. ‘Nuff Said.
The neighborhood in which Balboa Laguna is located is full of rundown rental properties. Putting a community of 36 homes in the midst has had quite a positive effect. I know of several B-L homeowners who are involved in efforts to clean up the area.
And they aren’t what I’d call dysfunctional families. Quite the contrary. I can recall one house dedication where a very handsome young man, probably the first in his family to go to college, who went on at great length about how proud he was — of his mother.
This handsome fellow’s majoring in chemistry at the University of Arizona. And, I’m sure, attracting the attention of more than a few of the UA ladies.
I see his mom at the gym now and then. She and the family are really enjoying their B-L life.
dysfunctional families
And Jimmy Carter is big into HFH. ‘Nuff Said.
Again with this nasty, myopic, arrogant talk against some groups. Always reminds me of the catty girls in HS.
For example, he said, loan agents promised applicants that they could buy a $600,000 house for payments of $1,200 a month, and the buyers ‘never read the fine print … (and) didn’t know their interest would increase and that eventually they would lose their house and their money.’
600,000 / 1200 / 12 = a term of 41 years and 8 months, assuming the loan was interest free. This expectation is unreasonable to anyone with a piece of paper, a pencil, a knowledge of the / operator, and any amount of intelligence.
While their lawyer says that the loan set them up for failure, it’s pretty clear these people are doomed. Frankly, I wonder how they manage to tie their shoes without accidentally strangling themselves.
The shoe-tying step is taught some time before the Times Tables step (which isn’t taught much any more), and that’s taught some time before the Guzinta step, which apparently is no longer taught even with a pocket calculator.
The shoe-tying step is taught some time before the Times Tables step
Velcro. So that learning curve is G-O-N-E, along with the sense of confidence a child gets learning they can do it all by themselves.
Wouldn’t a normal person divide 600,000 by 1,200 just out of curiosity? Or is it me that’s weird?
I wonder if it’s actual stupidity, or if deep down they knew what the answer to the question would be, and so they just avoided asking it because they wanted a house soooo bad and didn’t want anything so mundane as basic arithmetic to stand in their way?
Answer’s 500, and I did it in my head.
Hey- Does anyone on here live in Temecula, CA? I see big McMansions on small lots for $250k. 30% less than it would cost to build. Temecula has highly ranked schools, is it an awful place to raise kids? I hate being an inlander, but sooooo cheap and a 3 car garage to set up a shop in. 2 hrs to Big Beat, 1 hr to Swami’s.
I was a native San Diegan until recently moving to Texas. My parents have kept their horses in Temecula for 15 plus years. Temecula was originally a small cowboy town before the sub-primers(settlers) came. Wineries have appeared more and more over the years… On the weekends I used to go with my dad riding. I remember Highway 79 was a small two 2 lane road with one stop sign. IMHO I feel Temecula really set the tone for the San Diego/Riverside bubble. Track homes appeared everywhere in a 5 year span and jumped from 1800sft to 3200 sqft. The middle class dream in S.D.packed up and moved to Temecula! Your commute to work became an easy hour and a half one way.
The only jobs that were created in this town were Grocery Stores and Home Depot. Not to mention every fast food chain. Highway 79 is now 4-6 lanes on each side with track homes on both sides as far as the eyes can see. What used to be a 10 minute drive off the freeway is now an extra 30 minutes for my dad. And if anyone here is familiar with this area they will no how bad Interstate 15 is going into S.D. It has been 5 years and they’re still not done widening the freeway. And if your commute is to L.A. then you have to deal with the 60/91 which is even worse. Unless your retired and can work from home don’t bother.
A couple years ago my wife and I drove to a wine tasting event in Ontario, Ca.We decided to drive up the I-15 for a more scenic drive. We noticed on the way that every exit had the same shopping center(Lowe’s, Best Buy, Bed Bath, etc.)… We laughed
Buck,
Excellent insight. Good friend ( retired Navy ) moved out there before the, ahem “subprime settlers” lol, and really lamented watching the area go downhill.
We’d drive thru sub div’s and he say; Yep, used to practice w/ my revolver -right- where these houses now stand! He -hates- there now, especially as a renter ( sold Feb ‘06 ) but after health issues, really can’t live anywhere else. Great insight on their influence on the area. Hot-bed for fraud.
Track homes appeared everywhere in a 5 year span and jumped from 1800sft to 3200 sqft
Having grown up in and around this entire region since 65, one thing that astounded me was those homes had signs during the bubble that stated.. 7 bedrooms, or 9 bedrooms+++ I would ask as I was driving through the ruined countryside, who has that many children these days. Now I think, aha, the developers were planning ahead when the bubble burst and we all moved in together. chuckle.
I have posted re: Temecula, Rancho California many times and what they did wasn’t,isn’t pretty. Ruination. And the traffic at any time through is ridiculous. Just found a back way that is paved roadway now, used to be a 2 lane gravel road in the day.
9 or 7 bedrooms ? Half way houses for Illegals !!!
OK. Every town, and I mean EVERY has morphed like that in the last 25 years. You cant hide anymore. Besides that, it seems better than most of the country, weather wise and 45 mins to great beaches wise. I would never commute to SD from there.
We all think the town we grew up in is a disaster, that’s life. May it be, Huntington Beach, CA in the 70’s to Santa Fe, NM, they have all gone Big Box and tract home.
Where does one move to with good schools, good weather, decent jobs, proximate to airports for travel, low housing costs, and low crime rate?
The central coast of CA has no jobs, no airport, average schools. The rent of CA is too expensive if coastal….small world if you try to avoid the changes.
SLO airport (or should I say “SBP”) doesn’t cost all that much IF you are coming from JFK or like that. Of course the price of flights from SLO to LAX or SFO is absurd, I use a car. Central coast is optimal for persons whose job can be done from their laptop and (oh!) who don’t need to be there in summer when it’s expensive.
Moi.
Dude, you are correct. Everything has gone Big Box.
Yes, the weather is really nice.
Oh, who was posting this summer about gardening?
UPdate.
Now that it is below 85, my bell pepper plants are exploding with growth and buds. I can’t wait. Plus- my margarita plant is readying its Meyer Lemon fruit…Blender is clean and ready to go.
I am going to buy some tomato plants and see if they do as well NOW a la orange/red/yellow bell pepper plants. Maybe the bugs are g-o-n-e. shhhh we don’t want them to hear us.
If we are all stuck with Lowes and Bed Bath and Beyond, Chili’s, might as well pay $85 per sq ft for a big, new, energy efficient house an hour from the surf right??
We cant all live in Santa Barbara, San Luis Obispo, or Rutherford. If we did, it would be “ruined.”
What’s this “we”, kemosabe?
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We cant all live in Santa Barbara, San Luis Obispo, or Rutherford. If we did, it would be “ruined.”
I dont know what “we” means either.
“Business is down 80 percent over last Halloween, largely because of a lack of conventions and corporate events, she said. ‘Corporate business is almost gone,’ she said.”
Since when has Halloween been a corporate event? Were there really Halloween conventions or other conventions where you needed costumes?
When I last worked fulltime for someone else, Halloween was a day when some of the management and staff dressed up. The PTB took advantage of the day — and its festive atmosphere — by scheduling a United Way meeting.
Words cannot describe the gratitude I feel over no longer having to attend such events. If there’s one thing I can’t stand, it’s employer-driven giving. I prefer to do my giving on my own terms and my own time.
I hear that, United Way was the biggest extortion racket I was exposed to working for big companies. And we were all forced to take turns being the UW hit man who had to go around and cajole people who hadn’t seen a raise in ages to give away 5% of their wages. Thank goodness they don’t do UW at my current employer.
I’m currently working on a client site where they’ve had the United Way thing going all week, and the Halloween festivities today. Some manager was running around spray-painting people’s hair all different colors. I’m not kidding, and this is a big company with about 1000 people on this particular campus.
It’s good for me to spend some extended time on company premises now and then, to remind myself why I continue to work independently. I think if I ever do end up going back to work for someone else, it will only be under the condition that I work out of my own locale and office. As companies go, this client is one of the better ones, but I just can’t countenance all the stupid crap that goes on anymore.
When I was in Corporate America, I just ignored the United Way shills and appeals for money. As I department head (Director of Payroll for all 100,000 employees) that was kind of dangerous, but I didn’t care.
One of the things I liked about working for Lockheed was the refusal of the company to participate in United Way. Instead they had their own “Bucks of the Month Club” run internally. They would fund local charities after first checking out their legitimacy.
Wonderful — HopeNChange channeled through the NAR.
“brought new families into the housing market”
= “brought new families into the debt-serf class”
-or-
“into the valley of death rode the first time housebuyers…”
They’re lookin’ for volunteers folks, don’t be hero!
Beware of geeks bearing grifts.
Well, I just put the order in to empty my Ameritrade account…
I have one of the super elite self-emptying accounts.
HAHAHAHAHA!
Bink. Always ahead of the game! very funny!
Remember when making money was easy?
http://www.youtube.com/watch?v=WOKDK0g1Gno
“‘With the clarity of hindsight, there’s no way they can make those payments,’ Bruce said of home loan borrowers with option ARMs.”
In hindsight, real estate doesn’t always go up.
What prevents this “avalanche” from sliding downhill in snow-free zones, like coastal Cali? Or is it already underway, but unreported so far?
* The Wall Street Journal
* HOME FRONT
* OCTOBER 30, 2009
An Avalanche of Price Cuts
As luxury ski areas go into deep freeze, sellers capitulate to market realities
By NANCY KEATES
The hard sell has hit high-end ski areas.
“ANOTHER PRICE REDUCTION!” shrieked a recent email to Aspen, Colo., real-estate agents in bold red 48-point font, advertising the fact that a large home in the exclusive community of Starwood was now asking $9.95 million, 38% less than its original $15.95 million asking price. “CONTRARY TO RUMORS, 101 STEIN IS NOT UNDER CONTRACT!” screamed another, in lime-green size 24 font, about a ski-in, ski-out townhouse now asking $4.8 million, down from $7.4 million. But the biggest shocker, says Aspen broker Pamala Steadman, was the email reporting the markdown of a mansion on Red Mountain—a prestigious area of a prestigious town—to $19.9 million from $28 million.
Prices Slashed on Ski-Resort Homes
An Aspen townhouse cut its price to $4.8 million from $7.4 million Professor Bear notes this is a price reduction of (1-4.8/7.4)*100 = 35 percent.
Fall has long been considered a good time to hunt for good ski deals, from season passes to condominium rentals. But this year, the biggest discounting isn’t just on lift tickets and goggles; it’s on custom-built homes with views and slopeside condos with Jacuzzi tubs. “This is really unheard of,” says Ms. Steadman. “Sellers are finally getting desperate.”
Like the rest of the luxury real-estate market, elite ski areas initially held up better at the beginning of the housing downturn, seemingly immune from the rash of foreclosures sweeping across less-affluent communities. That was even more true at ski resorts, where land use restrictions limit inventory and buyers are often less reliant on credit. For a while, sellers just took their homes off the market.
But this summer the high-end finally hit a wall, because of the lack of financing for large “jumbo” mortgages as well as the fact that federal rescue measures only applied to lower-priced properties. According to the National Association of Realtors, sales of homes over $1 million fell 1.2% in September from a year earlier. The crunch was then exacerbated at ski resorts, where a number of projects begun before the housing bust have just been completed, says Rod Slifer, principal of Slifer Smith & Frampton Real Estate in Vail, Colo. “That’s put extra pressure on prices,” he says.
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Karma boils Mortgage Bankers in their own pot of stew
* The Wall Street Journal
* PLOTS & PLOYS
* OCTOBER 28, 2009
Bankers’ Group Burned
A trade group for the mortgage industry has proved itself a poor judge of the commercial real-estate market.
Less than two years after it acquired a 10-story building for its Washington headquarters, the Mortgage Bankers Association is putting the property on the block for what may be a big loss. The MBA said Tuesday that it has retained commercial real-estate broker Holliday Fenoglio Fowler to sell the property.
The trade group announced that it would purchase the building at 1331 L St. in early 2007 while it still was under construction. At the time, then-MBA President Jonathan Kempner said, “We have come to the inescapable conclusion that owning our own building was the smartest long-term investment for the association.”
The MBA paid $79 million for the 170,000-square-foot structure. In a letter sent to members on Tuesday, the group called continued ownership of the building, which was financed with $75 million of variable-rate debt, “economically imprudent” and said that over the long term, owning the building “would impair MBA’s ability” to serve its members.
Just 50% of the building is occupied, according to CoStar Group. The MBA occupies the bulk of that space, with about 17,000 square feet leased to other tenants, the MBA said. The MBA reported rental income of just $52,000 for the fiscal year ended September 2008, according to its most recent tax filing. The group said it planned to remain in the property through 2020. Given its low occupancy and the weak market, there is little chance the MBA could recover what they spent for the property.
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* The Wall Street Journal
* OPINION
* OCTOBER 30, 2009, 11:39 P.M. ET
Is the Stock Exchange Obsolete?
The CEO of the NYSE says the future of New York as a financial center will largely be determined by Washington.
By MARY ANASTASIA O’GRADY
In the late 18th century there was a buttonwood tree in lower Manhattan where brokers gathered to trade stocks. But by 1817, the tree had become obsolete as a trading hub. The traders migrated indoors and changed the name of their group to the New York Stock and Exchange Board. The exchange moved a couple of more times after that, and in 1903 the NYSE opened for business in the neoclassical masterpiece that still stands at the corner of Wall and Broad Streets.
Today a giant American flag stretches across the tall Corinthian columns of that elegant design—the very symbol of American economic freedom. Yet even as hordes of out-of-towners stroll by daily on tours of New York’s financial landmarks, it sometimes seems that international finance is leaving the bricks and mortar behind.
With the advent of electronic markets, equities trading now largely happens in cyberspace. That fact raises the question of whether New York, with its high taxes and high-priced real estate, still makes sense as a financial center. Equally uncertain is whether the Big Board’s legendary Wall Street address should be included in the profitable 21st century business model of the company, which is now known as NYSE-Euronext because of its acquisition of a European trading business in 2007. Is 11 Wall St. destined for the same fate as that buttonwood tree?
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“Now Higgins Ranch is up for auction, with a minimum price of $750,000. It’s a far cry from the $3.2 million the developers had briefly sought when they placed it on the market.”
The new ‘minimum price’ is (750,000/3,200,000-1)*100 = -77 percent off the old wishing price. I can’t wait until SFR list prices start finally showing similar discounts.
“‘Higgins Ranch would best be described as a gleam in someone’s eye,’ said Chuck Cantoni, a long-time member of the Wallace Community Services District.”
Thar’s gold in them thar hills!
“But now they are being welcomed with open arms in another part of the county as they renovate one of the foreclosed homes that even Marin has acquired a passel of. Habitat bought the house, which needs extensive rehab, for $215,00.”
Did they accidentally put a ‘,’ where they meant to write a ‘.’?
“For example, he said, loan agents promised applicants that they could buy a $600,000 house for payments of $1,200 a month, and the buyers ‘never read the fine print … (and) didn’t know their interest would increase and that eventually they would lose their house and their money.’”
No interest increase was necessary to sink these buyers, as even amortizing the principle on $600,000 at a zero percent interest rate would have done the trick.
“Lawmakers also said they won’t extend the break beyond the new April 30 deadline. ‘The American people should understand this — and the affected industries — this is the last extension,’ said Senator Johnny Isakson, a Georgia Republican. ‘Tax credits like this only work by creating the sense of urgency to take advantage of them.’”
Some of us (well, at least I) said all along the tax credit would be extended, and we were right. Since Mr Realtor-in-Congress is now promising the tax credit will not be extended past next April, I guess we should be extra certain it will, as lying is business as usual for NAR scum. Besides, imagine the sense of urgency that will be generated come next April as the expiration deadline approaches (snark!). ‘Buy now, or get priced out forever, by repeal of the tax break for all home buyers.’
Plan B would be for Mr Johnny the Realtor to follow through with the ‘promise’ to repeal the tax credit, while working with friends in Congress to substitute some other new real estate subsidy program of equal or greater expected price support impact. Congress, the Fed, members of the Obamanomics Dream Team and even perhaps two or so academic financial economists all have to know by now that once all the props holding up real estate prices are removed, we will be on the next leg down of a real estate crash for the ages.
We refuse to buy as long as these housing give-aways are being offered. It will probably be a long, long time before we buy.
Can anyone around these parts please explain the meaning of grin-f**k? Is this some kind of sexual practice known only to Wall Street bankers? I am having a hard time not envisioning this one, and the visions are not pleasant.
This book is going on my Christmas wish list.
Books & Arts
Wall Street’s crisis
Book of revelations
Oct 29th 2009
From The Economist print edition
Paulson: decisive if not always wise
Too Big To Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System—and Themselves. By Andrew Ross Sorkin. Viking; 624 pages; $32.95. Allen Lane; £14.99. Buy from Amazon.com, Amazon.co.uk
LAST year, as Lehman Brothers tottered, there was briefly hope that Barclays Bank would ride in with an 11th-hour bid. But the British government, fearful of contracting the American cancer, took fright and blocked it, helping to seal the investment bank’s fate. As American officials absorbed the news, an exhausted and exasperated Hank Paulson, the then treasury secretary, muttered that the British had “grin-f**ked us.”
Andrew Ross Sorkin’s fly-on-the-wall account of the great panic of 2008 is littered with such colourful anecdotes. It is meticulously researched, drawing on interviews with more than 200 of those who participated directly in the events it covers, including their handwritten notes and tape-recordings of critical meetings. The result is a compelling reconstruction of the drama surrounding the government seizure of Fannie Mae and Freddie Mac, Lehman’s collapse, the rescue of American International Group (AIG), the subsequent market pandemonium and the shoring-up of big banks’ capital with public funds.
At the centre of the action stands Mr Paulson (when not kneeling to beg congressional leaders to support his bail-out), flanked by the fresh-faced but hard-nosed Tim Geithner, who in 2009 took over as treasury secretary, and the professorial, unflappable Ben Bernanke, chairman of the Federal Reserve. Though prone to dry-heaving when under pressure, and despite being horribly sleep-deprived, Mr Paulson acts decisively, if not always wisely, as he responds to what he calls “an economic 9/11”. The same cannot be said of Christopher Cox, then the dithering head of the Securities and Exchange Commission, the investment banks’ main regulator, which Mr Paulson dismisses as “like the gang that can’t shoot straight.”
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I googled. A couple of the sites defining it seem to focus on financial language. It’s new to me.
As told by Mr Ross Sorkin, a business writer at the New York Times, the policy response was even more seat-of-the-pants than it seemed at the time. The $700 billion figure for the Troubled Asset Relief Programme was plucked from the air, the roughest of guesstimates. Regulators would back a merger one minute, only to cool on it the next for reasons that baffled bankers. The level of government intervention was deeply distasteful to the Republican Mr Paulson. But, as Mr Bernanke tells him: “There are no atheists in foxholes and no ideologues in financial crises.”
The problem with this seat-of-the-pants, prayerfull approach to dealing with financial panics is that we will never know whether the country would have been better off if that $700 bn had just been distributed evenly over, say, 114 m deserving American households, instead of getting summarily handed over to Megabank, Inc for safe keeping, will we?
BTW, $700,000,000,000 / 114,000,000 =$6K per hh. We could have put an extra $6,000 to good use last year, especially since over ten percent of our income has dried up. But then I guess the Megabankers would not have been able to continue financially raping America to cover the cost of their multi-million dollar bonuses, which would have been bad.
I guess the bailout money was “well spent,” since the helicopter drops landed square in the middle of the bull’s eye painted in the middle of Wall Street.
October 30, 2009
Geithner says bailout money well spent
As U.S. Treasury Secretary Timothy Geithner looks back at the efforts made by government to treat the financial crisis, he says “the money spent was very limited.”
The comment might seem startling given his emphasis repeatedly on the need to pull back the nation’s deficit once the economy is less “fragile” than it now is. But as Geithner spoke with the Chicago Tribune’s editorial board today, he said “I am deeply at peace with the necessity of what has been done” — including the government’s intervention in GM, investment banks, AIG and Fannie Mae and Freddie Mac. He emphasized that the money is getting repaid.
By showing a willingness to devote “overwhelming force” he says the government was able to break the panic threatening the system in the aftermath of the Lehman Brothers collapse.
“I felt that after the TARP was passed we’d broken the back of the panic,” he said.
Still, Geithner notes that while there are “encouraging” signs in recent economic statistics, “unemployment probably will rise further.” Although some analysts worry that the nation could be going through a “jobless recovery,” Geithner says the recovery so far seems to be following a typical path.
Yet, in answer to a question about rethinking tax policy, he said the economy remains too uncertain to “think about what shape restraint will take.” Likewise, while applauding improvements in credit availability and securitization through backing of mortgage-backed securities and small business loans, he acknowledged that without the government’s hand the credit crunch would be worse than it is. He says it’s too early for the government to withdraw support.
“We are in a classic credit crunch,” he said, and that, plus uncertainty about economic growth and proposed health care and energy legislation, have caused some reluctance for businesses to spend.
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I’m looking forward to reading Sorkin’s book.