‘The Party Has To End At Some Point’ In California
An update from the Bakersfield Californian. “The days of instant equity are over. The real estate market’s torrid pace has slackened. Interest rates are on the rise. Introductory rates for exotic loans are ending. And tens of thousands of homeowners are starting to miss mortgage payments.”
“About 530 Kern County properties entered some stage of foreclosure during the first three months of 2006, according to a recent report.”
“Local real estate companies are taking notice, said Phil Brown. Brown recently held a couple of workshops to help educate local agents. He said he expects foreclosures to keep climbing. ‘More and more folks are going to get in trouble.’”
“The recent uptick in foreclosure rates doesn’t come as a surprise for industry insiders, said Dustin Hobbs with the California Mortgage Bankers Association. ‘The party has to end at some point,’ Hobbs said. ‘It’s not catastrophic.’”
The Orange County Register. “Homeowners behind in their mortgage payments after hocking the house to pay for a major remodel or a new boat or car may be in for a rude awakening. If they previously refinanced and their lender decides to foreclose, they may not only lose their house, but the bank also may be able to go after their other financial assets including stocks, savings and their paycheck.”
“A foreclosure may mean a big tax bill from the IRS and state Franchise Tax Board for any shortfall between what the bank gets for the sale of the owner’s home and the value of the loan. ‘This is going to become a hot topic,’ predicts Bradford L. Hall, managing director of Hall & Co., CPAs in Irvine.”
“Some homeowners with little of their own money in their homes may think they will do what strapped homeowners in the ’90s did: turn over the keys to their lender if things get really bad and walk away.”
“But Hall and other financial experts warn that things may be different this time because so many people have refinanced. The difference is the recourse loan. In California, refinanced loans, second trust deeds and home equity lines of credit are generally considered recourse loans. In these cases, a lender can file suit and go after almost any of the borrower’s assets once they obtain a court judgment. ‘They can literally go after everything you have,’ Hall says.”
From the Press Express on Inland Southern California. “With home sales slowing, builders are offering incentives..to draw potential buyers to their new communities. Builder concessions began to appear in the winter and some industry experts had predicted they would melt away in the spring, which traditionally marks a resurgence of home buying.”
“But the sales decline has persisted into summer and builders are still striving to eliminate a larger inventory of unsold homes than they have seen in years.”
“A consulting service for the home building industry said in the first five months of 2006, new home sales dropped almost 50 percent in San Bernardino County and more than 29 percent in Riverside County compared to the same period in 2005.”
“As of May the two-county Inland region had 617 newly built homes still unsold and another 2600 homes under construction without pre-commitments from buyers. Patrick Duffy said that is about double the region’s inventory of unsold homes built or under construction in May, 2005.”
“At a K Hovnanian Homes condo sales office, sales consultant Sojja Cerini said incentives are very important to first-time buyers. ‘You aren’t selling the product. You are selling the payment,’ Cerini said.”
“That day, K Hovnanian was offering to pay up to $7,000 in closing costs at the Palacio De Oro condominium project where Cerini works. A $15,000 incentive package was available for a $329,000 three-bedroom condo that had just fallen out of escrow.”
“Cerini said builders generally prefer offering concessions such as upgraded flooring, cabinets and granite countertops or covering homeowner association fees for a year rather than cut home prices. ‘It is better for previous buyers,’ she said. ‘Seeing prices drop would worry them.’”
“Mike Van Daele, chairman of Van Daele Communities, said last week the Riverside builder slashed $30,000 off the price of the last 20 homes in a Menifee development. He said the company was responding to especially slow sales in southwest Riverside County caused by a loss of move-up buyers from San Diego County who have seen declines in their home equity.”
“Van Daele said incentives, other than price cutting, have not proven very effective in stimulating sales. He said they can confuse home buyers who may wonder how much value there is in giveaway upgrades that builders offer.”
“Roger Anderson, director of sales and marketing for Tanamera Residential Group, said builders that saw price discounts spur the sales of standing inventory also have begun lowering prices in new construction phases by about 5 percent.”
Buiders will start dropping prices in couple months.
They put so much gravy that even 30-50 %
decline still keep most of them profitable.
mortgage resets, deficiency judgements, short sales. these were such obscure terms last year, but we were discussing them on this board. i think as a market mechanism, this board is a much better indicator of where things are going, imho.
“mortgage resets, deficiency judgements, short sales. these were such obscure terms last year, but we were discussing them on this board. i think as a market mechanism, this board is a much better indicator of where things are going, imho.”
Also, we were laughed at and sneered at by the cheerleaders for this real estate bubble - the specuvestors and the veterans. We, who have no real estate, but have a good amount of savings in diverse investments, will have the last laugh.
“The recent uptick in foreclosure rates doesn’t come as a surprise for industry insiders, said Dustin Hobbs with the California Mortgage Bankers Association. ‘The party has to end at some point,’ Hobbs said. ‘It’s not catastrophic.’”
Spoken like a true newbie fool.
Having lived through a foreclosure binge in NY state I can tell you it’s totally catastrophic on the local housing market and economy as people lose houses and have to leave the area for greener pastures. Taxes and condo fees don’t get paid until these foreclosures are sold leaving local goverments and condo HOA’s in deep fiscal trouble. House prices drop easily 50%. An area with large amounts of foreclosures will have a high unemployment rate and literally retail shops will die on the vine from lack of traffic. Dustin Hobbs needs to stop polishing his stinger and get some history lessons.
What part of NY, and when?
‘It’s not catastrophic.’”
Pass the bowl.
A good follow-on question would be “If foreclosure is not catastrophic for housing, what is catastrophic?”. Perhaps he is more concerned about rogue asteroids obliterating entire subdivisions of tract homes.
Nah, he’s got a 3 foot tall water pipe next to his bed. He doesn’t even have to get up to get high.
Strange thing about the ARMs sold when the 15y was at 4.75% and 30y was at 5.125 - The mortgage finance industry was selling the ARMs knowing good and well the time that rates would shoot up wasn’t far off. They figured that they were building in a return customer since they knew the resets would be scaring the ARM holders into refinancing, at much higher rates.
Notice the recent AD campaigns, aimed at frightened douchebag ARM holders that are holding the bag and need to go back to the trough at a time when the feed isn’t nearly as good…
They can’t go after everything in AZ if it’s a SFR because of the anti-deficiency statute. The mortgagee has a choice between a judgment on the balance due or the house, but not both. Most will just walk away and that will leave an interesting situation between banks and builders. Builders need financing to build, they get that financing from the bank, but when the banks start becoming owners of homes they have no desire to own, I wonder how they will feel about extending more financing to cash strapped homebuilders so that more inventory can come on the market.
The dynamics of the housing bubble implosion will be very interesting, and in a perverse way fun thing, to watch.
Now the mortgage brokers can’t get the return business because the equity isn’t there to refinance . They were lying to alot of these people about their ability to qualify for the fixed rate note in the future anyway .
They got the big commissions on the adjustable with the pre-payment penalties . I bet mortage brokers just loved flipper borrowers .
Convenient and guaranteeing future business?
‘They can literally go after everything you have,’ Hall says.”
This is scary stuff but lenders won’t get cash…they’lll just get crap from Walmart
Simmssays…11 Foolish Ways to Spoil You Kids
http://www.americaninventorspot.com/spoil_our_kids
They will get the consumer crap and sell it for what they can.
Cheap Plasma TVs, jet skis, and boats for everyone (with cash).
…in the last downturn a friend bought a near-new $66k boat for $18k cash. Good deals ahead for those with savings…
Just talked to a friend tonight who is a boat captain. He’s been doing a lot of boat repo work lately. Says people are just nonchalantly walking away from their toys.
“Van Daele said incentives, other than price cutting, have not proven very effective in stimulating sales. ”
This is what we need more developers to accept…and start slashing away.
Simmssays…World’s Most Amazing Propane Tank
http://www.americaninventorspot.com/amazing_propane_tank
The propane tank is made of transparent aluminum.
This guy is a bloody genius:
“It’s feast or famine for big banks,” says Dustin Hobbs, spokesman for the California Mortgage Bankers Association. Banks usually compensate for the decrease in mortgage earnings by closing home loan offices and, in some cases, consolidating staff.
“Because the market is cold, our business has to compensate,” he adds. “If it heats up again, you’ll see businesses expand again. It’s a cycle.”
http://www.bizjournals.com/sanjose/stories/2006/05/01/story8.html
‘The party has to end at some point,’ Hobbs said. ‘It’s not catastrophic.’
Yeah, not catastrophic for him, he has a job, no matter how many other people get in the mortgage biz get laid off. A true humanitarian, this one.
Closin’ the bold.
Thanks
If this was to continue with then all major High Tech jobs would disappear from San Jose.
Yes, but you have the satisfaction of knowing that Dustin Hobbs thinks that the mortgage bankers will be fine. Of course they will, even if the mortgage banks go under the bankers will be okay because they will take their ill-gotten gains and start a whole new bank with OPM. The whole system is nothing more than legalized thievery. (rant off)
What’s killer about this is…most people tat work for the banks pull loans from their banks because of discounts they get. Let your people go, your people can’t pay their loan payments…A wammy no matter which wayo you look at it.
“But Hall and other financial experts warn that things may be different this time because so many people have refinanced. The difference is the recourse loan. In California, refinanced loans, second trust deeds and home equity lines of credit are generally considered recourse loans. In these cases, a lender can file suit and go after almost any of the borrower’s assets once they obtain a court judgment. ‘They can literally go after everything you have,’ Hall says.”
How many lenders are telling potential clients this??? How many people really are aware of the consequences?? Not many, I’ll wager…that’s why Ben’s blog can be VERY helpful to those who know next to nothing about their “investment”…I’ll also wager that there are many people reading this blog who will wise up and divert a disaster. Herein lies the power of blogging…information fast, cheap, checkable, and without the preponderence and bias of mainstream media.
Ben’s blog is only helpful to those willing to open their minds to the reality of this situation. Even well-educated professional types are still in the dark on this subject. A coworker of mine was telling me just a few days ago that she and her husband just made an offer on a home outside Los Angeles. When I asked her if they had thought about renting for another year or two to see what happens to the market she said “No, my husband is tired of being a renter. Besides, prices are still going up!”. I just nodded and went back to what I was doing.
yeah, I know…and what exactly does “tired of being a renter” mean? I hear it all the time! I know you may not be able to paint walls, etc., but why can’t people have some patient intelligence? Hopefully, even the “tired renters” can learn something here.
Actaully — many landlords will let you paint the walls — as long as you ask politely and show them that you’re going to paint light colors. My landlord really likes the colors of my apartment.
“yeah, I know…and what exactly does “tired of being a renter” mean? I hear it all the time! I know you may not be able to paint walls, etc., but why can’t people have some patient intelligence? Hopefully, even the “tired renters” can learn something here.”
Very good question. Tired? Renters are sleep-deprived? Maybe if they have noisy neighbors, but that is usually because the noisiest neighbors are in the cheapest rentals. Ha! I’ve been renting for ten years. I am not tired. I’ve been treated like a king. I think I would be tired if I had to do some maintenance work right away when I got home, tired from work. And that happened to me when I was a mortgage payer in the early 1990s. I was tired of being a mortgage payer on an asset that had a declining value. And yes, my next door neighbor in a house next to my house I was paying for once had a party and guests were outside on a weeknight (morning?) at 3:00 a.m. talking loud. I guess they did not care that other people have to work for a living. “Tired of being a renter” - that line makes me ROTFLMFAO!
I’m treated like a king too. I ask for anything and it is done within a day. But I don’t ask for much. And I have to admit, I’m tired of renting.
How much are walls painted your colors worth?
25K
50K
75K
100K
150K
200K
300K
In my neighborhood a 30% decline is 300K. That is a lot of money for painted walls.
I think I would quickly tire of paying 2 to 3 times my rent in order to finance a mortgage, to say nothing of all the other expenses, risk, and loss of freedom associated with homeownership.
Yes, there’s still a fair amount of this in SD too. I find that it’s tyically those outside of a Finance arena that are most susceptible to it the housing fallacies although there are exceptions. Usually anyone (finance background or not) that has bought during the past few years, is still unaware of what’s going on other than noticing some of the symptoms of it, but not making connections just yet. That I blame on the MSM in SD. It’s only been in last month or so that SD UT and other SoCal media outlets have started to print not so favorable reports.
Another root cause is just that people don’t have a lot of time anymore to watch what’s happening. They’re working 60 hour weeks, shuttling kids to soccer practice, and maintaing their homes, etc. They don’t have the time to scan blogs because as far they’re concerned, there’s not much incentive to do so. Hence, Joe 6pack and family will not know something is seriously wrong until it’s already upon them and too late. This is why there will not be a soft landing and an overshoot on the way down.
“Usually anyone (finance background or not) that has bought during the past few years, is still unaware of what’s going on…”
Unfortunately, they may not “get it” until their ARM resets and they find themselves upside down with no easy way out.
I agree with you regarding the time issue…that’s why after initial investigation, I’ve got my real estate bubble blogs down to 3 or 4, my financial blogs down to 2, my socio-political blogs to half a dozen…I can get all the information I need and want in a relatively short time….if I combed the web for articles/information that are trustworthy and accurate, I’d be sitting here all day! It took time at first, to find the ones that I trusted and could verify….I don’t read print media except in waiting rooms…and when I do, I always have a sense that they are WAY late to report what I’ve already read on my blogs…and another thing…I learn quite a bit reading the comments..there are so very savvy people here, and it’s helped me tremendously, especially in understanding more advanced economic policy.
Could you recommend some good financial blogs? I’ve started looking and can’t find any yet… thanks!
“They’re working 60 hour weeks…”
So am I…and it’s a great opportunity to keep up on the blogs. I hope the IT Department isn’t watching me. Oh yeah, I run that department…whew.
Reminds me…I often wonder how the “regulars” (Ben, TxChick, Get Stucco, etc.) find the time to write so much during the weekdays. My guess is they are all financial types making their living from passive income and investments. Whatever it is, they provide a lot of useful information. Thanks.
“Reminds me…I often wonder how the “regulars” (Ben, TxChick, Get Stucco, etc.) find the time to write so much during the weekdays. My guess is they are all financial types making their living from passive income and investments. Whatever it is, they provide a lot of useful information. Thanks.”
I have been working 50 hour weeks most of this year. In 2005 I worked over 650 hours overtime. I’m stepping up my hours to the high 50s. But I have time for this blog, as well as time for a one hour work out every day. But I get only 6 hours of sleep every night. I sometimes get to this blog at lunchtime at work. I’m also interested in the peak oil topics, in the articles on http://www.kitco.com about gold and platinum, and on other investment topics. Investing is my hobby. One always makes time for hobbies.
“When I asked her if they had thought about renting for another year or two to see what happens to the market she said “No, my husband is tired of being a renter. Besides, prices are still going up!”. I just nodded and went back to what I was doing. ”
Its would be interesting to see how your coworker progresses to stress and depression from seeing her home tumble in value. If and when they say .. it will come back… One can say … “and what do you base that on?”
I find people like this all the time and email them a couble of articles and ben’s blog link. Week later they turn 100% around and will not consider buying until we bottom.
Education of the masses is important regarding the RE bubble.
Lots of people are still in denial about the bubble - just last week I was at the dog park talking to a fellow dog owner who got just got laid off from his tech job in Santa Clara. Told me he decided to buy a house in San Mateo (this decision came after his job ended) because he figured he could make at least as money off an appreciating house as he did while he was working!!
I don’t know the guy that well, but he seems relatively intelligent. Apparently the kool aid is still being dispensed. . .
“Welcome to the San Francisco Bay Area: home of the most financially self-delusional!”
Agreed !
Thats a crack up. Moving to San Mateo is a odd move to make.
Yes, large companies like HP, Sun, Intel, Seagate are laying off masses of employees. Most likely here in the bay area rather than other states or China/India. Far to expensive to employee your workforce in the Bay Area due to higher home prices with ever declining margins.
I doubt this guy in the park you met has made that connection yet. If you buy one of those $1 million shacks today, its just dont see how many well paid people there will be down the road will be able pay for those homes.
Just dont make sense when you look down the road.
“home of the most financially self-delusional!”
The dot.com frenzy/bust proved it for me. Anyone with a pulse, money in pets.com or a “business plan” thought themselves an entrepreneurial genius. I was there, I did that–but learned $omething. But it seems just as many dusted off the dot-bomb rubble and jumped back in. Pure genius.
The SF Bay area has a permanently installed reality distortion field.
Gotta love it. There is a folk hero in San Francisco named Emporer Joshua Norton who after losing his entire fortune, and that of others, in a bad commodity investment (trying to corner the rice market of all things)–proclaimed himself Emporer of the United States and Defender of Mexico, and started printing his own currency. Now there’s an idea. Cool thing is, Norton’s currency is now actually worth something!
Anyway, I have a friend of a friend who I hear paid 2 million for a house in San Mateo, now he’s a professional and all, but I strongly doubt he making enough to support that with a fixed mortgage. I think he did that to make it with the babes. Problem is, he still isn’t getting any dates…
At least she didn’t buy at the top. That was probably September or October 2005. Congratulate her for not buying at the top!
Yes, yes, I am evil.
How many lenders are telling potential clients this???
What, you mean if you borrow money from someone you are personally responsible for paying it back? What a shocker.
Ben’s blog provides a useful alternative viewpoint to what the MSM would like us to believe. Who is right remains to be seen, but at least with blogs we have a easily available point-counterpoint discussion, from which people can make better informed decisions.
from OC Register article:
“Signs of trouble ahead are just beginning to appear….”
Yes, just beginning to appear. Soft landing? Return to a normal market? Leveling out? Very gentle ways to describe the beginning of a downturn that will most likely be severe.
It is true. This blog has helped me tremendously. I sold a condo (San Diego, CA) back in November 2005. I made 285K and have it currently in CD’s. I get $1,300.00 a month of interest. I had been shopping for a house, and looked for about 4 months. I am renting back from the person who bought my condo. ($1,500.00 a month). After starting to read this blog I have decided to wait and see what happens. My realtor who sold my condo gave me his MLS code and I look everyday at houses that are beeing put on the market and the others that have been on the market for a while. I have noticed that alot are dropping the prices, so that motivates me more to wait. I am not in a hurry to purchase. I rather wait and pay less later and get a better deal. The bottom line is that this blog has helped me so much. I read it everyday. Thanks!
It’s helped me tremendously as well. I’m recently married, and the next “normal” step would have been to buy a house, have kids, etc. I questioned the dramatic increase in prices in SoCal and Northern NJ (the two areas we would be considering). My wife had been talking to friends and relatives and was hit with all the usual “you can’t lose on RE”, “renting is for fools” and “they’re not making any more land” nonsense. We had a number of “debates” on the topic. I continued researching in ‘04 and ‘05 and came across contrarian views from people like Fleckenstein, Shiller, etc. Then I found this blog in ‘05 and all the useful links to data supporting the bubble theory. I’m glad we didn’t buy in ‘05 (and so is my wife!). I’m prepared to wait this out for years in order to avoid being a mortgage slave. Thanks Ben.
I’m in a similar situation to yours. I however, still have to justify to my wife why we are not going to buy a house for some time and it’s a regular battle we have.
She’ll thank you someday. Good luck.
I feel your pain. My husband and I did well in real estate in the late 90’s/early 00’s…it’s like second nature for him to want to buy land….I just keep feeding him hard data, it’s the only thing that works. I print out a particularly henious example of the bubble, and how it’s effecting people, put on his desk, and say nothing. He’s pretty much getting the idea.
“it’s like second nature for him to want to buy land”
I am in the market for land, but with this bubble, the prices have skyrocketed (on land) in my area (Puget Sound Area). It is a very unsettling feeling for me right now because I hesitate to buy since inventory is thin and prices are sky high, but with land EVERYBODY says “They’re not making anymore of it, better buy it now cause prices on land NEVER go down”. I do point out that builders are holding a lot of it, and if they start hurting, maybe they need to sell to generate cash flow and I may happen upon something that works well for me. On the other hand, land is disappearing at an alarming rate, parcels hit the market and they are gone, and I am left wondering if I will be priced out forever. I can feel a sense of urgency in me but am fighting it hoping that with the slowdown in home sales, land will follow suit. I am not wanting to purchase the land as an investment, but rather to use to grow the plants which I sell (legal plants)
Man! I hear that , Brother. I hear that all the time too.
Also the “Well, now I don’t know WHAT to plan for”
Do you get that one, as well?
“WE rent!”
Call it pride, but, I didn’t think of it - my lovely WIFE did.
Same here. On an intellectual level, my wife knows that it’s a bad time to buy, but every once in a while the nesting instinct and/or peer/family pressure kicks in and we get into a battle.
Fortunately (or ironically), as first time buyers who refuse to use a suicide loan, we are priced out of anything she actually like, so it’s a moot point anyway.
Some of us own our houses outright (because we are Damn old!) but are still considering renting if we sell now. Now is definitely NOT the the time to buy! Don’t make the mistakes that some of us, but not us, THANK GOD, have made in recent years. Don’t get your panties in a wad, or they may drop quickly!!
Some of us in fact used to own our houses outright, and did indeed sell and now rent :mrgreen:. And I don’t think the bubble where I live (Australia), and sold in 2004, was as extreme as the one in parts of the US late last year.
The Wall Street Journal had their own discussion group reaching back to Oct 2002 on RE bubble…
Its a riot…
http://discussions.realestatejournal.com/RealEstateJournal%20Discussions/1
Some have actually stated that “The Bubble” was a propaganda made up by Middle East Terrorist trying to undermine our economy. Can you imagine that!
Dirka, dirka, Jihad!
“We had a number of “debates” on the topic.”
Hopefully not like the infamous one:
http://www.youtube.com/watch?v=Ubsd-tWYmZw
‘I love that house…plus the schools.’
How can you argue with that?
Didn’t realize the famous “Suzanne researched this…” line came from this cheesy advert. Thanks for sharing the link.
I have to jump on the bandwagon of thanking Ben for this blog.
In the last two years I have lived in three of the biggest bubbles in the country. I started out in LA where I sold my home of 10 years in May 2004. I had wanted to leave LA for some time and felt that the prices that homes were going for were crazy and I should cash out while I could. I unfortunately decided to move to Ft. Lauderdale which turned out to be an evey crazier bubble. Luckily I only rented. After less than two years in South Florida I realized that the economics there made even less sense than the economics of LA. In addition to two horrible hurricane seasons I decided to return to California, but to San Diego this time. I realized the housing here was totally ridiculous, but I decided to live in a city that I really liked, I would make the economics work somehow. I decided to rent here in San Diego at first, but was determined to research the market so that I could buy as soon as possible. During that research I stumbled on Ben’s blog.
It was if the clouds parted. In all three markets I kept thinking that the prices just did not make sense, yet I seemed to be the only person that could see this. After awhile I began to doubt myself. Now I realize that I had it right and most everyone around me was lost.
I’m sure this blog has saved me from making a serious mistake by buying a home. It has also opened my eyes to the general economic consequences that not only the housing bubble poses, but to the coming difficult times due to the general credit bubble.
I’m sure I will enjoy a much more secure financial future due in large part to the information I’ve been exposed to here.
“I’m sure this blog has saved me from making a serious mistake by buying a home. It has also opened my eyes to the general economic consequences that not only the housing bubble poses, but to the coming difficult times due to the general credit bubble.”
Yes. We owe a lot of thanks to Ben. I am happy you have been educated (”deprogrammed”) and are no longer susceptible to the real estate hysteria. “Oh, I need to buy a house!!!” That’s a funny line I’ve seen on AOL real estate message boards over the last two years. This year I haven’t seen that line, for some reason! Ha! Prices in Sou Cal will fall. Have to. Incomes cannot support the prices. Stay on the sides and watch it unravel. Wait for 6 years and it will be bottom, when no one wants to talk at all about real estate.
Yeah, saved me too. I would have bought a crappy condo in El Cajon. I’m very glad I didn’t. The price has been stagnate for a year and now there is 10x the inventory to choose from.
Go to top of page. Click on “PayPal Donate.” Make thank you contribution so blog can continue to help others.
Veronica
You will be VERY far ahead and will have lots of really great places to choose from. Patience is a virtue and I am glad that you can see thru the hype to protect yourself.
“A consulting service for the home building industry said in the first five months of 2006, new home sales dropped almost 50 percent in San Bernardino County and more than 29 percent in Riverside County compared to the same period in 2005.”
“As of May the two-county Inland region had 617 newly built homes still unsold and another 2600 homes under construction without pre-commitments from buyers. Patrick Duffy said that is about double the region’s inventory of unsold homes built or under construction in May, 2005.”
The Inland empire/SW riverside county is finally seeing the effects of the tremendous amount of new housing being put up during the six-year Scal bubble runup. New homes unable to move spells trouble for the existing home sales market in the IE. The supply of “move up buyers out of LA?OC/san Diego will dwindle further as home prices start to level off or decline in the coastal areas.
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Alfred F. Borrower: “What, Me Worry?”
That is interesting. I think I see a person in that whole mess.
Is that Suzanne? I wondered what she looked like, thanks!
Try using the code tag.
Alfred E. Flipper….
I’m not sure if the FONT tag allows it, but you need to change to fixed width font. Like “courier” or “console”.
Shouldn’t that be Alfred E. Borrower?
i.e. Alfred F*cked Borrower
what will I see if I fold over my laptop?
Tanamerra, hope they have to shave 50% off of there s*@! box and they go broke. Worked for them over the last few years and always had to fight like hell to get paid, usually took 3 to 4 months and they always screwed me out of a few thousand dollars in the end. The last screwing was about 6 months ago for around $ 7500.00. Enough to fill but not enough to send to the attorney to sue for. Can’t wait to see the arrogant Anthony get a taste of his on medicine. Done with that rant. On the other hand Van Daele is ran really tight and will probably survive, may even thrive like they did in the mid 90’s.
Chris 415 - that ‘fellow dog owner’ in San Mateo will be in real trouble. If you can give an update later, please do. I lived in San Mateo a few yrs ago- most overrated overpriced place there is (actually the entire SF Bay area - but the Peninsula is the worst). Cold and foggy most of the time - even in summer. Endless traffic, and way too expensive. We left CA for greener pastures
I am truly enjoying hearing about CA downturn. Vindicating what I was saying for 5 + yrs. Ben’s blog was the first place I found with folks of similiar mind. THank you everyone that posts and teaches here.
“I am truly enjoying hearing about CA downturn.”
There are plenty here, still living in BA, that agree with you.
The RE bubble started here some 6 years back in 1999-2000.
Started to see in late 90’s double digit increases and then hitting the biggest industry implosion and recession aftermath 2001-02. And we are still having net employer/jobs migration out?
According to this US Bureau of Labor Statistics 2005 report, Santa Clara county labor force size increased 1%, SF county up 0.7%, and San Mateo county down 0.5%. So, yes, the net loss of jobs has finally slowed and/or reversed.
Here’s an article from Jas Jain on the “inventory-to-pending” ratio in Santa Clara County (San Jose, Sunnyvale, Palo Alto, et al). Inventory keeps going up and pending sales keep going down, every two weeks. You really must squint hard to pretend you can see a “spring selling season” in there.
“in the first five months of 2006, new home sales dropped almost 50 percent in San Bernardino County”
This is literally the fourth one of these “sales are down 40-50% from last year” quotes I’ve seen since Friday afternoon. I’m starting to allow myself to think that the last five weeks of goofing around in the $HGX stocks is gonna give way to some brand-new collapsing, and soon.
The arrogance keeps rolling in the OC however
Dissent on the Housing Buble - OC Register 7/9/06
Gary Watts, the Mission Viejo broker and economist, says “I would imagine that a ’soft landing’ would have home price appreciation equaling the inflation rate, but O.C. home prices won’t even be in the ‘approach pattern!’ We are and will continue to climb to an ‘altitude’ (with price gains) between 10 percent and 12 percent this year. And if we pick up a tail wind in the latter half of this year, we may climb to 15 percent. Next year’s appreciation should also keep O.C. home prices up in the air with no plans for landing anytime soon.”
This guys arrogance fills me with so much anger, because he more than most have been leading the charge and pushing people to buy who will be hurt later. Gary Watts is beyond just naieve, he is without integrity or character.
Forgot to mention, why doesn’t anyone call him on his “15% is in the bag” statement. Now 10% is in the bag. What a deceiver
Interesting. My mother who is going blind wanted to buy a condo near me and sell her house which is paid for to finance it. This blog gave me the data I needed to tell her to rent instead/
I think all of us on this bluff are calling Fat Ass Gary on his ‘in the bag’ arrogant comment. He wouldn’t have the balls to come and discuss with us because he knows he will lose, and his statements show he is without a conscience and any sense of morality. How anyone could encourage that many sheep to go to the slaughter is beyond me. At least I tried to help some avoid financial suicide.
Read about Billboard Warns Potential Homebuyers of Region’s Health Threats.
“The billboard, paid for by the Center for Community Action and Environmental Justice, greets motorists entering Riverside County in Mira Loma this way: “Welcome to Riverside County! We’re #1. Dirtiest Air in the Nation. Deadly Health Impacts.”
Ouch, glad I don’t own there.
You don’t need a billboard to see how horrible the air is there. I truly wonder how screwed those children are - any stats on the asthma rates there vs. the rest of the country?
I think that the IE/riverside county is being literally torn apart and bulldozed to make way for slapdash urban development. Fontana is a vast spread of grimy construction
and truck yards. The 10 fwy going thru fontana/san bernardino is often a nightmarish parking lot for big rigs.
Industrial/warehouse operations are just plunked down all over in an ugly sprawl which you notice in such areas as norco, roubidoux,mira loma,ontario, colton,fontana , etiwanda,ect.
I hate to see turn of the century quaint rustic ranchsteads and IE famous orange groves torn up to make way for new home tracts and shopping centers but that is happening all over the IE/SW riverside county.
IE dirty air is just one manifestation of the rapid urbanization of this region which has occurred during the RE bubble runup. The formerly rural pasturelands of Mira loma, ontario, norco, temecula valley, are dissappearing fast. The lack of a strong anti-growth/smart growth movement in the IE has enabled the developers to pitch new home tracts and industrial sites at such a rapid rate that the IE fwys are literally choked at times, which contributes to the dirty air.
Went to North County San Diego, CA today to visit family. Coming back north on the I-15, we could see the smog layer. Makes for colorful sunsets, but still hard to breathe.
“Cerini said builders generally prefer offering concessions such as upgraded flooring, cabinets and granite countertops or covering homeowner association fees for a year rather than cut home prices. ‘It is better for previous buyers,’ she said. ‘Seeing prices drop would worry them.’”
Any prudent buyer would say “Pay more and you Pay more taxes for as long as you own the home. Lower the price! You had not problem raising prices the past few years. Thing have changed and it is time RE agents and builders get with the program if they want to market their product.
Dana Point got hit pretty hard last month:
“June 2006 average sales price for Dana Point was Down by $256,636 (-24%) from the same time a year ago.
Number of sales was down by 23 homes (-39%) from a year ago and number of days on the market was worse by 19 days.”
“Dana Point got hit pretty hard last month…”
Hmm. average sales price down by $256,636. That would most likely mean that the high priced homes are not selling and the sellers of those are stubbornly sticking to their over-inflated prices. The ones that did sell were either reasonably priced or probably the bottom end of the market.
I also wanna thank everybody for this blog because i nearly bought a house last yr (april 2005)but i found this blog and got some useful information. i’ve been telling people to look at this blog before buying.
Funny thing yesterday a friend of mine who’s buying a house ask me if i bought last year would i have regretted it today? my answer was if i bought last year i would not do any research and would not look at any articles or i would not look for this blog.
Thanks Ben!!!
I remember going to an air show in Riverside in 1989 when I first moved to SoCal. It was my first time going to Riverside. Halfway through the show, the smog blew in and completely obliterated the mountains. The air show had to be cancelled since nobody could see, and neither could the pilots. It was absolutely disgusting. Wonder how much worse it is now.
Strange sightings in San Diego: My husband and I passed a Re/Max office in our neighborhood in San Diego today. Out in front of the office were a middle-aged couple holding signs - they were picketing the place! The man’s sign said something like “Beware - Re/Max are independent associates. This means no accountability. IT’S OUR MONEY”. The woman’s sign had way too much print on it to read as we passed. I wished I could have stopped to talk to them and hear their story… my husband said to me, “Seems like the End Times for the RE bubble.”
sounds like independent contractors, though i do not know how RE agents and brokers classify themselves . Have been an IC in another line of work and it is simply a way for the company you contract with to avoid any liabilities for your actions performed while contracting.
what part of San Diego?
For San Diego the biggest bubbles IMHO exist in Carmel Valley, East Lake, and of course downtown, no surprise since those are primarily condo areas.
This was in Encinitas.
What part of SD was this?? I’m very curious about this. You think the Husband and Wife were FB’s who are upset with the REMAX??
Re/Max agents in an office typically pool significant resources, like $2500 a seat and up, to buy into high end marketing like ads in glossies, cable TV, billboards and so on. These people have their emphasis on sales through marketing, so if that is not what you want then it might be best to steer clear. Buyer beware.
“Cerini said builders generally prefer offering concessions such as upgraded flooring, cabinets and granite countertops or covering homeowner association fees for a year rather than cut home prices. ‘It is better for previous buyers,’ she said. ‘Seeing prices drop would worry them.’”
You’re kidding me, right? Builders have huge margins on the upgraded flooring, appliances, etc. Upwards of 50%. So, a “concession” of $10,000 of upgrades really equals only $5,000 out of the buyers pocket.
And the builders could care less about earlier buyers, unless of course, those earlier buyers see price drops and sue the builders their home is worth less than they paid for it. Concessions are a clever way of masking those price drops at minimal expense to the builders.
Sorry, should have been “only $5,000 out of the seller’s pocket.” above.