‘A Lot Of People Got In Over Their Head’ In Colorado
The Rocky Mountain News has this update from Denver. “More than 9,500 real estate foreclosures have been filed in the Denver area in the first half of the year, about 34 percent more than in the first six months of 2005. It’s on pace to be the worst year ever in terms of the number of foreclosures, topping 17,122 in 1988, though the area’s population growth since then means the total percentage of homes in foreclosure is smaller.”
“‘I do believe there is a crisis,’ said Peter Lansing, president of Universal Lending, who served on a foreclosure task force during the late 1980s. ‘We do need to do something about it. It is all of our responsibility.’”
“Experts said foreclosures are being driven by several factors: adjustable rate mortgages that are rising with interest rates; interest-only loans; houses sold to people with less than stellar credit ratings who in previous years wouldn’t have qualified for loans; programs allowing homes to be purchased with no down payment; overbuilding; the lack of new, high-paying jobs; and predatory lending and fraud.”
“Soaring foreclosures are a puzzle because the rest of the economy is doing so well, said Tom Clark, executive VP of the Metro Denver Economic Development Corp. ‘We thought the foreclosures would wash out by the end of the summer, but now with rising rates it looks like that is not going to happen until the first quarter of 2007,’ Clark said.”
“Economist Tucker Hart Adams said she has no doubt it will get worse before it gets better. She said many homeowners can’t afford to pay hundreds of dollars more per month as their adjustable rate mortgages move upward. ‘I think in the ’90s, when we had this unprecedented improving economy, we convinced ourselves the good times would never stop,’ Adams said. ‘A lot of people in Colorado just got in over their heads.’”
“Real estate broker David Binkowski in Denver, said most of the foreclosures he sees are in homes priced below the $300,000s and the owners often have refinanced out all of their equity.”
“Lansing said..’we did have a woman come in our office who wanted a reverse mortgage, and we looked at her history, and her previous lender just had her refinance, and refinance, and refinance, just to generate fees.’”
“Lansing said consumers need to educate themselves. A lot of it is common sense, he said. ‘You don’t really believe there are 1 percent mortgages, do you? But just the other day I heard an ad on the radio talking about getting a 1 percent mortgage.’”
“Some officials blamed loose lending practices and aggressive building. They said that has contributed to a record inventory of unsold homes in the metro area and slowed the appreciation rate for existing homes. ‘I have always maintained it is the lending practices,’ said Jill Voegtle, chief deputy public trustee for Denver.”
From the Gazette in Colorado Springs. “Homebuyers last month had their biggest selection of properties to choose from in 17 years. About 5,700 single-family homes were listed for sale last month, a nearly one-third increase over June 2005 and the biggest one-month supply since 5,836 in June 1989. The figure was short of the one-month record of more than 6,200 in June 1988.”
“Perhaps adding to the supply were homeowners who had bought properties with adjustable-rate mortgages, interest only mortgages and other nontraditional financing methods, said Todd McLain, a member of the Realtors Association board of directors. Many of those homeowners are seeing their adjustable rates and monthly payments soar, McLain said. As a result, some are selling rather than locking into a new, higher fixedrate mortgage, he speculated.”
“The increase in housing inventory might help push prices higher, said Marilyn Newell, another Realtors Association board member. A surplus means buyers have more choices and homes on the market must be well-kept and competitively priced, she said.”
“‘Because we don’t have as many buyers,’ Newell said, ‘they have the luxury of going with the home that is in perfect shape.’”
‘Experts said foreclosures are being driven by several factors: adjustable rate mortgages that are rising with interest rates; interest-only loans; houses sold to people with less than stellar credit ratings who in previous years wouldn’t have qualified for loans; programs allowing homes to be purchased with no down payment; overbuilding; the lack of new, high-paying jobs; and predatory lending and fraud.’
Check, check, check..oops, forgot the GSE’s, appraisal fraud, self-serving special interests, etc………..
all the above with the exception of appreciation, which foreshadows what will happen to the bubble markets when the equity train stops.
Yes, as boulderbo says, a market can tolerate all of the listed stuff, but lack of appreciation ( or dropping prices) is the one ingredient that pushes it all over the edge.
‘We do need to do something about it. It is all of our responsibility.’
Huh? say that again? Why is is my responsibility to bail out someone who did not know the meaning of the word “Adjustable”?
It begins! This from a mortgage guy.
Some one needs to make a .gif or .jpg icon we can post on the bubble blogs saying, ‘no Fannie/Freddie bailout!’ Yeah, it isn’t an issue yet, but that’s why you want to lay the groundwork now. I’m getting my ‘ no CMHC bailout’ ready for Canada’s bubblesphere . . .
This reflects the culture we live in here. If prices go up, it is my personal profit. If prices go down, it is everyone else’s responsibility. Moral hazard at its best. I hope that all of these people learn a personal lesson from all of this. And by the way, here in Denver, the economy is not booming….
Its the republican way….Privatise the profit, socialize the cost.
nope, the I’m a victim deal is the new dealers deal
DNC all the way
OY, again with this. Not that I’m against free expression anywhere, I just wonder who’s robbing all of us blind while we bicker about ideologies.
In the aftermath of this bubble, perhaps we might learn that the only ideology or “ism” that counts is one that passes the real-world stress test of corruption. (as I have said in a prior post-sorry if this is a repeat to some). Neither Republicans, nor Democrats, Libertarians nor Liberals have been able to put forth a plan that combats the current thievery that has made our playing field far from level.
A friend of mine in Wall St describes the financial sector as utterly immoral — it is all about short-term profits -and getting yours any way you can -legal or illegal - let them sue you later. Hmm remind you of what’s happening in real estate?
Our country has to decide whether it wants to grow a pair and fight this activity — because this corrupt hand is now what steers Washington. I’m waiting for ideas from either side or whatever’s in between — but don’t talk to me about the past or who’s to blame - just hand me a plan to make sure we have a fair, really competitive market, insead of the bribe-driven money grubbing, steal all you can cesspool we have now.
If you are wondering how much worse it can all get, just reread “Atlas Shrugged.” No one is going to be able to stop this. It will just implode as the corrupt will eventually turn on themselves when the rest of us have nothing more to give.
Human nature… If you are doing well you complain about paying taxes… If you are really down on your luck you complain about the lack of a safety net… You really cannot have it both ways. The magical balance between these two extremes is sought but never achieved…
Nope, I am doing well and complaining about the lack of a saftey net. Because I love my country and dont want it to turn into Mexico, which is what the Republicans are well on their way to doing…welcome to the USA, Mexico with Nukes.
Kenny. Baby. Chill.
Here is the plan for the U.S. and immigration
http://www.eagleforum.org/column/2005/july05/05-07-13.html
I disagree with the idea that people are only mad about illegal immigration for economic reasons. I have a good job and have seen well above average wage growth over the last five years, but I am very angry about the on-going illegal alien invasion.
Quality of life is not all monetary. I live in the IE in Southern California and have seen a tremendous amount of white flight from LA and San Diego to the area. Neighborhoods in the beach cities have become so overrun with illegal immigrants that they have destroyed the quality of the public schools, caused a huge increase in gang activity, and every vertical surface is tagged. Who want’s to live in that kind of environment? The answer is people don’t; so they flee to the IE despite the heat and the smog, or they leave the state altogether (and they are p1ssed because the government has allowed things to degrade to this point while patting us on the head and saying its good for us).
And so people endure punishing commutes to their jobs so they can live in a nicer community and send their children to decent schools.
When we had the “day without a Mexican” everyone I spoke to was ecstatic about the effects. Commute times were less than half what they would have been on a normal day. All neccessary services were still operational (but my neighbor’s lawn went an extra week between mowings - very tragic).
Our nation’s economy is heading for a severe recession, or outright depression, and Congress wants to give illegal aliens the right to citizenship just as the economy is stagnating. How can they expect people not to be angry with them when they ignore the will of the people so blatantly?
I have been saying that these immigration problems would destroy America as we know it for 20 years.
As i have said on this blog this “housing crisis” is just the tip of the iceberg.
The “integration” of America has been planned by the Bilderburgers, CFR, One-worlders for a long time.
I was a Buchanan supporter before the “media” managed to brand him as a “nazi”.
I am surprised the someone here is attuned to the workings of the Coucil on Foreign Relations, Club of Rome, Royal Institute of International Affairs and the various other ties to World Government/United Nations/World Bank IMF conspiracies.
I thought this was just for “tin-foil hat” people…it’s not real……it’s all just our imaginations.
And, yes, George Bush was a member of Skull and Bones at Yale.
To conquer the Nations, the players must first “regionalize” the World.
The “EURO” is part of that plan. Now the Nations will begin to meld together.
It is well known by socialogists that mergers of peoples usually begin with “trade”. That is why it is usually about economics, not about people, races, languages and cultures.
It’s the DEVOLUTION of our world into the “new world order”.
NAFTA, GATT, and all the other TRADE AGREEMENTS all fit into the plan. Expect a regional currency as the Dollar begins its spiraling decline.
Another regional currency will be developed of the Southeast Asian Market.
America will be turned into a 3rd world cesspool, as we transfer our wealth and technology to the other “developing countries”.
So, who gives a damn about getting affordable housing when your city is a crime-infested gang-land?
When this thing finally does pop and the mess is revealed, the Guvmint will sell MORE IMMIGRATION as the “solution” to the surplus housing……and the People will buy the sales pitch.
We already have MANY, Many more illegals and so-called legals than the officials admit. Just look around. Our Country is being transformed right before our eyes………..and there is nothing we can do about it.
Remember the Senate and the President (internationalist) both want to “legalize” the illegals……even though about 85% of the “people” oppose it.
I feel we have lost our Country.
I hope some parts of it will be left, but i fear not.
Nice link the the CFR. Thanks.
It’s mind boggling, isn’t it? What I don’t get is how dense so many Americans are. They pretend its all OK, when it’s really not. I am almost 40. Never in my life did I think I would fear my own government…that they would use us for their own personal ends.
For this reason…I cannot stand Bush and I cannot stand the two Democratic CA Senators Boxer and Feinstein. Even thought they say they are for the people and workers, they constantly vote for MORE MORE MORE immigration. MORE! Insanity. I truly hope Californians will wake up and see that being “pro-choice” is not enoough to keep Ms. Boxer in office. She must also listen to us…same for Feinstein.
Totally agree. Remember the bailout of American bondholders, e.g. Citibank, when Latin American went poof? Remember LTCM? The S&Ls?
Or 9/11 victims or Katrina victims and now soon to be named mortgage victims of the 21st century.
What we have in this country is socialism for the rich and free enterprise for the poor.
Same here and in the rest of the world.
Socialism for the arms dealers and the bums that live on generous government handouts for stupid military projects.
“Its the republican way….Privatise the profit, socialize the cost.”
Got it all wrong. Economic Freedom is Republican rhetoric at most, but never ever in the Democrat platform. Making other people responsible for the individual’s mistakes is Marxist. Go back to high school government class.
Had a good laugh watching CNBC today. They had a segment on how to sell a used car. They talked about cleaning the engine compartment and other parts of the car to make it “appear” as if it was well taken care of. As I watched this BS I wondered if it had occurred to them that they were basically providing tips on how to screw someone into buying a total pile of crap car.
This country has become so corrupt it doesn’t even notice it anymore.
Yep, the economy has been very weak here for several years.
Like the wishful thinking of ’soft landings’, ‘it is all of our responsibility’ will never come to pass. Even in the event of a government intervention, those that made the worst decisions will on average pay the highest price. What responsibility exists must fall to those that created this mess: irresponsible lenders, irresponsible realtors and irresponsible buyers.
If it works like all other bail outs, those who most need it, won’t get it. And a new breed of liars, crooks and thieves will disappear with most of it. But it will all look good on paper, and congress and potus can sleep well at night.
I am sure George and Dick, Alan and company sleep real well every night. Is there anything else than crooks, liars and theives ?
‘We do need to do something about it. It is all of our responsibility.’
Yes, as long as you limit “all” to the mortgage Racket/Industry. I wonder what his solution is ? Refund all those lending fees into a settlement fund ? Carry those suicide loans for free ? Ain’t gonna happen.
I’d like to reword what CentralBanker wrote before:
Borrow 100K, it is the borrower’s problem.
Borrow a few million, it is the bank manager’s problem.
Borrow a few billion, it is the bank’s problem.
Borrow a few trillion, it is the taxpayer’s problem.
“Borrow a few trillion, it is the taxpayer’s problem.”
AAAAAaaaaaggghgghghhghghghhghghghhgghghhghghghg!!!
To an extent the last case is fair, because taxpayers are the very main cause of the problem, or at least the enablers.
Yes, many of the taxpayers are the source of the problem but not everyone.
Take us: We are renting [after losing about 50K when we sold our Cedar Park [next to Austin] TX home] and have a piece of mind being debt free and with some money in the bank. But we’ll be on the hook to pay for other people’s folly.
AAAaaaghghghg! is right…
Let me get this straight, a stranger cuts off his hand because he is careless and stupid and WE have to pay for it……BS!!!
“Experts said foreclosures are being driven by several factors: adjustable rate mortgages that are rising with interest rates; interest-only loans; houses sold to people with less than stellar credit ratings who in previous years wouldn’t have qualified for loans; programs allowing homes to be purchased with no down payment; overbuilding; the lack of new, high-paying jobs; and predatory lending and fraud.”
None of the examples listed couldn’t have been avoided with a little research and basic understanding of simple economics.
Too much finger pointing is going on already and the party has barely started. When will people look in the mirror to find the answer?
I don’t find any precendent in recent history for bailing individuals out for being stupid or greedy. Lots of people in Silicon Valley got hosed on their stock options and got stuck with huge tax bills for money they never got to collect due to greed on their parts. Congress didn’t bail them out.
This did not affect enough people to trouble the politicians
When politicians pander to the majority it *could* be different.
Actually Congress should have. Paying AMT for money that you never actually see is the worst kind of tax abuse. AMT needs to be eliminated now, before more of us pay it than traditional income tax. Just another example of a stealth tax the average American doesn’t understand.
I am in the unfortunate situation where I don’t understand the implications of AMT. Can you elighten me?
AMT was created when a few millionares in the 50s or 60s were found to be paying 0 taxes (they had huge assets didn’t work and owned mostly munibonds and other sheltered income) and those were the days when there were a zillion loopholes along with much higher marginal tax rates.
Essentially it’s a tax structure that exempts most of the deductions you are allowed to take but uses a lower marginal rate (15% and 28% rather than the other brackets). You calculate tax both ways and pay the higher of the two. However, it was never adjusted for inflation following its introduction so it has begun to capture an increasingly large swath of taxpayers (some of whom, especially in expensive cites, are upper middle income rather than fantastically wealthy).
Where it came into play in the 90s is stock options (which fall under income for AMT purposes when exercised). So there were lots of folks who don’t pay tax advisors exercising their options and facing huge tax bills for the gains. The ones who exercised in say late 1999 and held got hosed as they were facing a 1999 tax liability and now could not sell their shares and deduct the loss against that income. More recently it’s hitting people’s mortgage interest deduction.
Thanks.
“The increase in housing inventory might help push prices higher, said Marilyn Newell….
This lady must have gone to Harvard School of Economic where increased supply and reduced demand result in higher price …
WTF!?!?!? Supply and Demand… I give up…
Infinite supply of fools.
She must be the sharpest tool in the shed.
Tha bitch be trippin
Bravo Ben, you often throw those “WTF?” zingers in at the end of a post. This one is a classic, put it in the book.
BTW, not new here, posted a bit many months ago, lurking for a while. Can’t. Stop. Reading. Blog.
Know the feeling. Is there a 12-step program for blogs?
No kidding. I’ve been reading this blog since June ‘05. Many a potentially productive hour has been spent reading the stories and posts here. Not to say that the education hasn’t been worth while. Perhaps if I start wearing a tin-foil hat, the urge to read will subside.
My kids are starting to miss me.
Yup, Ben’s blog has been sweetening my morning coffee pretty much since it’s inception. There must be thousands of readers who, like us, don’t post often, if at all.
Does anyone else wonder what happen to LVLandlord?
Marilyn and Suzanne. Suzanne and Marilyn.
Morons.
“The increase in housing inventory might help push prices higher, said Marilyn Newell of the Platinum Group Realtors in the Springs and another Realtors Association board member.”
Add this one to the hall of fame.
Marilyn Newell…clips from HS yearbook
Pinnacle of life: assistant “spirit squad” coordinator
Gradepoint: 2.1
Ambition: Hair designer
Favorite music: Madonna
Favorite book:
Favorite subjects: drama, home economics
Worst subject: logic, math
Favorite activity: shopping for shoes
Post HS education: Century 21 correspondence course
And now….a RE “expert” sought out by the media for her sage advice.
Really, how could any of you question the wisdom of this “professional”?
“The increase in housing inventory might help push prices higher, said Marilyn Newell, another Realtors Association board member. A surplus means buyers have more choices and homes on the market must be well-kept and competitively priced, she said.”
Push prices higher? What the… ?!?!! Oh wait, it’s a Realtors Association board member saying this nonsense. No wonder. Only in a realtor’s fantasyland does a raging surplus of product sitting on the market lead to higher prices. Idiots! (Or liars.)
but in her perfect world of ever increasing commisions people will only buy the expensive houses because there are so many to chose from. Why would you peons buy anything less than the best house available no matter what the cost ?
It makes perfect sense. Obviously, the owners of these homes are so pleased about the good fortune of being home owners, they are trying to spread their serendipity around. The real cause of the increase in inventory is the sense of sharing and charity which is a hallmark of American. Of course the value of homes will go up when the prospective buyers realize what a tremendous act of charity these seller are engaged in and will pay more for the house than they should to reward these kind and generous home sellers.
Wait, I think I see the logic here.
The reason that housing inventory is increasing is because the buyers have been delayed. And if the buyers have been delayed it means they will be here soon. And if the buyers will be here soon then it means they will start buying soon. And when they start buying it will reduce inventory and push prices higher. And when prices go higher it means I can buy more shoes!!
What is so hard to understand about this?
Marilyn…you rock!
All the sales for the next two years have been pushed forward by realtors who said, ” You better buy now before you are priced out of the market”.
Question: how far away is the demand for ‘intervention’ and repeated calls (like Leareh’s) for an end to Fed rate increases? This was a ’sellers market’ just 6 months ago. By December, with inventory 2X its current levels (is that possible?) the MLS wheels are really gonna be squeaking.
I was listening to the Jim Cramer show on the radio a couple of months ago and he was bitching about the Fed’s rate increases, wondering why the Fed was trying to destroy the economy. It makes me wonder how a guy can have the kind of success he had in the investment market without understanding the fundamentals of US debt financing.
I listen to the show ocassionaly because there isn’t anything else on the radio in the early afternoon here.
Easy answer: he’s a stock jock, not a fixed income guy.
Why don’t reporters ask follow up questions to comments like those?
Such as:
Do you understand the law of supply and demand?
Did you pass high school economics?
What planet/universe are you from again?
Etc…
I’ll add one more to that list…
Why don’t reporters ask follow up questions to comments like those?
Such as:
Do you understand the law of supply and demand?
Did you pass high school economics?
What planet/universe are you from again?
Have you been drinking?
More likely a case of inability to process the info. Just replace the phrase “Flat Earthers” in this posting with “real estate bulls”:
http://www.psychologicalscience.org/onlyhuman/2006/06/i-believe-so-there.cfm
I think that’s an unfair slam on Flat Earthers. Comparing them to RE Bulls? Ouch!
This is assuming that the reporter knows
“Do you understand the law of supply and demand?
Did you pass high school economics?
What planet/universe are you from again?
Have you been drinking?”
Or smoking?
The bubble has popped. It cannot be unpopped. It has to play out. Calls for “doing something” are irellevant. Even dramatically lower interest rates are not going to translate to mortgages. Inflation fears are not going to revive exotic mortgages and without them “The Coasts are Toasts.” Speaking of which; the first cracks are appearing. The largest employer in Camarillo laid off a chunk of people yesterday. With Countrywide outsourcing and contracting and Amgen announcing corporate relocations it could be that VenCo could join OC and San Diego in a death spiral.
You must be lying Robert. All the experts, even the “bearish” ones, say there won’t be any lay offs and hat strong employment will create a soft landing. It’s different this time. I believe the experts at our universities and on my TV, not the crazy people with their facts on this blog.
Tried to go to the thrift store this morning. They closed suddenly without warning. In the same stripmall a new Home Loan Store just moved in. 100% financing to $1,500,000. [Hey, admit it. You all suspected I shopped at thrift stores right?]
No, but I bet you buy your tools at Harbor Freight
Are you serious about yet another mortgage loan store? If so, I hope they got a short term lease, because they won’t be needing that storefront for long. Unless they decide to go into the thrift store business in a few months…
Bought an electric cutoff saw on Sunday. Was on sale $19.99 (reg $39.99) and I used my internet frequent customer coupon for an additional 20% off. Sixteen bucks? I want to know how you can ship a rock from China to Camarillo for $16 nevermind a cutoff saw. I’m gonna go take some pictures. It’s so funny, they put up some signs near the other end inviting people to visit. The directions say: “Next to the KFC.”
I suspect you are selling your thrift shop finds on E-Bay for a 500% mark-up !
Tomorrow is 50% off clothing at the Oxnard store. I’m probably the only customer that doesn’t understand a word of Spanish but first quality polo shirts for 50 cents to $2.49 each is an international language.
I am a big grocery coupon user. My boyfriend has decided it is a game with me to see how much money I can save on the grocery bill. Sometimes it can be 1/3 of the total bill.
AZgolfer, my wife should give lessons. She occassionally saves up the good coupons and waits for market sales and goes for a “kill.” 85-90% amazing.
It’s really good when they do the double dollar coupons. I often get several items for free when the item is less than two dollars. Of course I might have 4 tubes of toothpaste and 3 bottles of laundry soap in the closet, but who’s counting.
Man, I wish I could get my wife into this approach. Seems you guys are running the playbook from the Millionare Next Door. Good show!
I’ll put my wife up against anyone’s.
Oversized brand new L.L.Bean winter jacket she wore while pregnant? Got the seller down to 10 cents from 25 cents.
I’m sorry, I do have a game regarding Supermarket coupons and I managed to get my gf in on it finally. We brag to each other regarding our savings after each excursion. I nearly always save MORE than what I spend, to the point that sometimes I save twice as much as I spend. I’ve had cashiers call over supervisors to see the number when it prints up (only happens when all the self-checkouts are closed as I tend to do my shopping later at night). Tried to explain how I do such at work to my coworkers, but apparently my method works best because my gf and I have no children. Breakfast foods shopping example: If cereal is on a ridiculous sale, buy cereal (for example, $1.50 for the large box rather than the exorbitant prices they normal charge). If not? Yogurt. If not? English muffins? If not? Cottage Cheese? If not? Breakfast sandwiches. And if its an exceptional deal and no expiration problems? buy more. Generally, I can find MUCH better deals with sales on at local supermarkets than any price club, except for meats and milk and half and half. And no, I don’t waste time. I have zero patience and little time to waste. I simply sweep through the supermarkets in record time (I’m lucky in that there are 3 within a few thousand feet of each other in my area / two are actually in opposing parking lots and I tend to shop really late at night so no crowd - though its rare I even hit a 2nd one as I just switch products and I’m fine, don’t think I’ve went to more than 1 in 1 day in the past year) and there’s a BJs my gf will hit for the dairy and meat. This works obviously with all products and helps if you are not brand intolerant. Example: Coke vs Pepsi. I haven’t paid more than 70 cents or so a bottle or 2 dollars for a fridge pack of cans since I can remember. (i bring my lunch to work, only banker with a lunch box ;).
“The Coasts are Toasts”
When I read this, an image of two pieces of burnt toast simultaneously popping up from an old-fashioned toaster came to mind. Too funny …
What employer completed a right sizing?
Technicolor. 300. The press release reads like corporate doublespeak:
“This action was taken to achieve ongoing cost savings, to address continuing pricing pressures associated with the home entertainment sector, to generate operating efficiencies which will enhance Technicolor’s short- and long-term capabilities, and to strengthen the overall business.”
That’s their duplication plant. What’s going on is a couple of things:
- Duplication of CDs and DVDs is falling off due to market declines, and what’s left is moving to less expensive locations. Consumer video duplication? When did you last buy a VHS tape?
- The format war between Blu-Ray and HD-DVD means that there will be no volume in those formats for some time to come.
- If you read their press releases, you’ll see that they are transitioning to electronic distribution. Pretty smart, IMHO.
and you told me it couldnt happen.oh robert how naive are u
I thought it less likely to be the bloodbath we’ll see in OC and SD. Prices are going to plummet, that can’t be escaped by proximity if nothing else. The things going for us are still in place to make us merely not as bad as other places. Strong agriculture and strict growth regulations kept us from massively overbuilding like SD and LV and PHX. We’re also relatively rich households. These are mitigating factors that will not protect us but may soften the blows.
finally.
I couldn’t have a bigger issue with this. It is absolutely NOT “all of our responsibility”. It is the responsibility of those who acted irresponsibly. And for those who just didn’t know any better, it is (unfortunately for them) their responsibility too.
These people were hoping to make hundreds of thousands of dollars. Would the potential returns on these investments be shared by society too?
I’m being raked over the coals for being “heartless” over at: http://weblog.housing.com/weblogs/news/
Unfortunately my replies are caught in some “technical” glitch so I’ve been unable to respond. Anyone else interested should try.
Anyone who compares victims of Katrina to our soldiers in Iraq is insane, he’s just not worth the time.
Took a sidetrip to that link (and on to exurbannation), didn’t see a problem with what you wrote. I’m afraid we’re dealing with populist sentiment here. When the housing crash gets widely recognized, expect the public hand-wringing and the loud cries of “something must be done!” to become commonplace. Meanwhile, try and hang on to your wallets and bullion
Left comment on the link.
If it was your comment on it how it was the bloggers responsibility to ensure the software worked correctly, then genius! I love how he/she attacks Robert, then claims no responsibility for his inability to reply. Fits well with the bloggers thesis of “it’s everyones responsibility…[but my own].”
My opinion on FBs is that they bear 50% of the responsibility. The truth is, when you offer people cheap money, they’ll take it (it’s not like they did it on purpose, to destroy the world as we know it).
This is why public policies, whether in politics or economics, do matter, because let’s face it - most people are born followers.
Sounds like the moderator is sweating his own ARM reset.
The Colorado market is rather odd, prices never really got out of whack. The builders have just not stopped building. My sister and brother in law are RE brokers out there. They both have second jobs to make expenses. Go figure.
Some Colorado markets never had the double digit appreciation that we consider bubblecious but many others did.
The Denver housing market hasn’t done well at all since the dot-gone crash so overvaluing may not be the issue here at all, (unless this decline is a delayed response to 2000). “Maxing out the credit card” that folks have turned their homes into just might be an issue.
The link below is a chart of Denver’s House Price Index with data from the OFHEO
Denver HPI
The alleged experts keep saying the housing bust will be localized, and it’s true many regions aren’t seeing any housing boom, but if we factor in our negative national savings rate, and a minor recession inspired by a decline of the left and right coast housing markets, we could see forclosures rise all over the country.
I disagree. Colorado just had it’s boom earlier (from mid 90’s to 2000). Denver is in the middle of a nearly worthless semi arid desert, there is no lack of land, only water. Prices in Metro Denver, and much of the front range are a good deal above what can be reasonably carried by the prevailing wages in the area. It’s been a problem for years. I lived in metro Denver from 94 to 98. Prices almost doubled during that time. In 2000 I got a job offer to move back pay was very good (70k), prices had continued to climb far than inflation while I was gone. I’m now in Fort Collins which used to be affordable compared to Denver. Unfortunately prices up here have almost caught up with Denver, but employment prospects are not nearly as good.
New nothing-in-particular houses in the middle of nowhere in Aurora going for $250K is a bit too steep, it seems. Not out of whack, but somewhat overpriced.
Wow. I read this and I just want to stand back in amazement and marvel at this feat of logic. Let’s be clear, the reason the economy is doing ’so well’ is because people have been extracting capital from their overvalued homes. The reasoning is so circular I need to sit down because the room is starting to spin. Consumer spending is a FACTOR of the housing bubble, not an argument against it (as this idiot apparently can’t figure out). Its like saying “I’m frankly quite surprised to be feeling badly today, because just last night I was feeling incredible when I was drunk off my ass. The facts just don’t add up!”.
“The increase in housing inventory might help push prices higher, said Marilyn Newell
Here is an example of your logic:
You bring your car in to the dealership because there is smoke pouring out of the engine….And what does the service tech say?
In my best David Puddy voice:
” Ah Marilyn…Ahh…Just ignore the blinking light on the dash.
And Ahhh just look out the window around the smoke and youll
be fine…Thats right…No need for service…Cars fine…False alarm.
Now get out of here.
…..most of the foreclosures he sees are in homes priced below the $300,000s and the owners often have refinanced out all of their equity.”
——————————————————————–
Very common occurrence to go out and buy that new car on a HELOC especially since the property could “only go up in value”. I come across many FB’s who bought into this fiction.
Pete Lansing should be strung up by his ya yas in front of the courthouse. He will be burned in effigy, and maybe Denver too.
this guy is a tool
maybe I’m one for not getting my html tags right. There is a link there folks and an article.
screw the tags
here it is
http://www.renewamerica.us/columns/bowyer/060705
Ben - love your blog…
I no longer need to watch sitcoms. The comments made by the foolish Realtors and their shills are enough to make me bust a stitch and they are getting more and more comical by the day! Thanks for the big yuks….
The beautiful irony will be when they contribute to the market correction by encouraging their sellers to slash prices so they can make a sale.
Somewhat off topic:
One of my co-workers is a bullying jerk; he treats the admin staff in the office, including me, like dirt. But all of a sudden, he is being incredibly nice to me and treating me with a great deal of respect.
What has changed?
Well, he has decided that my lunch-room “doom and gloom” rants about the housing bubble were absolutely correct. He actually said, to my face, that my predictions about the nationwide housing crash are clearly going to come true.
Six months ago, I was an idiot who knew nothing about the economy. Now, I am apparently a brilliant person who understands the deep fundamentals.
And all I ever did was to start reading this blog about six months ago. Thanks, everyone!
Now ask for a raise and a position in strategic planning
Great story. I think I read on this blog that Seattle is one of the last markets to crack so it must have been a tough sell.
Boulder, CO seems immune so far as well.
12 square miles surrounded by reality, but as the coastal markets go, so will boulder. high end is selling like crazy, east county and mountains going soft fast.
Agreed. The implosion is much like the iTulip prediction: Outer areas first.
I disagree again. Downtown condos? Where are the cancelled projects mostly located? iTulip is just spouting the same tired old cenurbs shall rise again stuff. Same wishful thinking that realors have about housing.
I talked to several Boulder realtors the last couple of days and they confess to me that the market has slowed considerably. I do not believe that it is yet reflected in prices but it will be eventually.
I have a personal datapoint wrt Boulder real estate. I sold a 2br condo in North Boulder in 2002 for $183K. Today I see a comparable unit in the same complex for sale at $174K, and a much nicer remodeled 2br unit for $186K.
The high end may well be doing okay, but the mid-to-low end seems to have been pretty dead over the past 5 years.
Bill
Old Pete Lansing, true humanitarian, salt of the earth. Ten minute mortgages, payday loans. He never sold an ARM in his life. Yeah, right. None of his customers ever got into trouble with debt because he made sure his customers were all fully informed of what they were signed and they never misled nobody. Give it a rest, Pete, we are all going to end up paying for your greed.
crazy wild stuff.
Ex-Haitian strongman held in fraud case
“Despite protests by prosecutors and a human rights group, a judge set bail at $50,000 Friday for an elusive former strongman from Haiti arrested in a Long Island mortgage fraud probe.”
I have been following this blog for almost a month, and this is my first post. We are thinking of moving to richmond, VA, next year (for school) and I was wondering if anyone knows about the hosuing market around Richmond? I’v only seen comments about DC and VB…
Thanks!
Like many on this blog, I got angry when I read:
“‘I do believe there is a crisis,’ said Peter Lansing, president of Universal Lending, who served on a foreclosure task force during the late 1980s. ‘We do need to do something about it. It is all of our responsibility.’”
Is it all our responsibility, when lenders don’t keep any standards anymore. And what would you suggest we all do, Mr.Lansing? Throwing tax money at it, to save your business? I see, however, an appropriate public measures for the future: Forbid HELOCS and cash-out refinancing, or, at least, make their interest taxable, to discourage people from using them and risking their houses. You, Mr.Lansing, had apparently already the possibility to do something in the late 1980s - what did you do then?
Peter, see my comment above @ 14:26:45.
Old Pete is his own P.R. man. The best defense is a good offense. We should throw a net over the whole bunch of them.
Mr. Lansing your offer to disgorge your industries’ obscene profits of the last 5 years is gratefully accepted as a partial downpayment on restitution.
Lol……Now your talking
Agree. Notice how when things are going good, it’s “I earned it”, when they are bad - “It’s OUR problem”.
LOL. I love America.
OT: WCI confirms layoffs
http://tinyurl.com/rdc5x
Luxury homebuilder based in SW FLA confirms layoffs due to slowing housing market.
Is there any way to make a little bit of cash from transporting illegal immigrants back, now that they’re out of work?
To begin with, the US economy is not doing so well… never did.
“If the GDP methodology of 1980 were applied to today’s data, the 2004 second quarter’s annualized inflation-adjusted GDP growth of 3.0% would be roughly three percent lower (effectively netting to zero percent or below). In like manner, current annual CPI inflation is understated by about 2.7% against the pre-Clinton CPI methodology (would be about 5.7%), and the unemployment rate is understated by about seven percent against its original design and what many people would consider to be actual unemployment (would be about 12.5%).”
- end of article from Gillespie Research
watch BLS go to home prices instead of rents for 07
inflation would be wiped out
Hey, that was a good one!
“Soaring foreclosures are a puzzle because the rest of the economy is doing so well, said Tom Clark
No, you just smell the HELOC ATM.
“Experts said foreclosures are being driven by several factors…”
Each of these factors apply to the Bay Area. Why is it that the front range is getting it while the Bay Area did not (yet)? Was there a “precipitating event” like the anti-bubble crowd claims is prerequisite for a collapse?
> the Bay Area did not (YET)
The bubble spread from the centers to the outskirts; the bust will come from outskirts into the centers. Think an atomic bomb, just slower. Some centers might not even feel any bust, if their appreciation was measured before - but I heard the Bay Area was not among them.
“‘I do believe there is a crisis,’ said Peter Lansing, president of Universal Lending, who served on a foreclosure task force during the late 1980s. ‘We do need to do something about it. It is all of our responsibility.’”
If we’re going to play communism, then at least let’s play it fairly: give me my share of the housing market’s gains over the past 5 years. Then, and only then, can we talk about socializing the losses.
“Increased supply + reduced demand = higher prices”…. that woman must have gone to the same college the developers in my nabe went to….. the more buildings the developers convert and the longer they stand empty and bereft of buyers, and the more foreclosures there are, the more they hike the prices.
It now takes a salary double the Chicago median to buy a 4-room rehab in this marginal, crime-infested neighborhood.
I hope the developers and speculators get their greedy faces ripped off in the coming months, and all I want to know is WHO IS SUBSIDISING THEM?
Because how else can a developer who had no money sit on 40 vacant, unsold condos for a solid year, or even two years, without some kind of government subsidy, for which you and I are paying?