‘Fewer Buyers Than There Were’ In California
The Santa Cruz Sentinel has this update from California. “June’s median home prices were up $10,500 over May. Still, the $760,000 median price for a single family home did not beat November’s record of $789,250, as reported by number cruncher Gary Gangnes. February’s recent low was $709,000.”
“Supply continues to grow, too, according to Gangnes’ numbers, with 62 percent more homes on the market than were for sale a year ago.”
“‘If you have something special it’s not going to be sitting around, but it’s not going to be going over the asking price,’ said broker Gregg Camp. Camp said he doesn’t see sellers flooding the market. Instead, ‘there’s fewer buyers than there were.’”
“Single family home sales were down 14 percent compared to June 2005. That is the lowest number of sales in June in four years. The number of sales of condominiums and townhouses in June was down 38 percent from last year and a 10-year low for that month.”
“The number of condominiums and townhouses listed is about 2.5 times larger than one year ago. The unsold inventory index is the highest it has been in more than nine years.”
And the Voice of San Diego had a look at the latest numbers. “It’s been nearly 10 years since the median sales price of homes in San Diego dropped year-on-year.”
“‘There’s an awful lot of people out there who just don’t feel as rich these days,’ said John Karevoll, an analyst with DataQuick. ‘Over the past five years, most San Diego homeowners have made more money owning their home than they’ve made at work.’”
“Analysts said the price drop has to be a concern to one particular group of people: the majority of people in San Diego who bought homes in the last couple of years using so-called ‘creative financing.’ Last year, close to 80 percent of new home purchases were made using interest-only or negative-amortization loans.”
“Anyone who bought in the last couple of years banking that their property will increase in value substantially should be concerned by these figures, Karevoll said. He said if that turns out to be a large chunk of new homeowners in San Diego and elsewhere, and if home prices continue to fall, there could be serious repercussions for the economy.”
“Add price decreases to the large number of exotic loans out and mix in any sort of additional stress on incomes, and Karevoll said the results could be disastrous for California and elsewhere. ‘There could be a bloodbath,’ he said.”
“Peter Dennehy, of Sullivan Group Real Estate Advisors said the drop in median prices is merely due to sellers getting real about the fact they’re in a buyer’s market. There are currently 22,890 homes listed for sale in San Diego, according to real estate brokers ZipRealty. Dennehy said sellers are starting to realize that if they want to sell their home, they’ll have to drop their price.”
‘Over the past five years, most San Diego homeowners have made more money owning their home than they’ve made at work’
Correction, they have only ‘made’ this money if they sold at the right time. Now we are going to see the myth of ‘liberated equity’ destroyed, as all the borrowed loot has to be paid back. And weren’t there record sales in the south last year, using mostly the riskiest of loans?
Makes me sick.
Demonstrates the unsustainability of this run, though. Let’s take the median average in SD around $50K * 5 years = $250K+ home price appreciation over five years. Probably this is conservative.
Now, let’s say a potential first-time buyer has been making the median and saving 20% of their income over that time for a down payment (not many are doing even this). $50K * 5 years * .2 savings = $50K.
Net result. First-time buyer is going to need to pony up an additional $200K in loans than would have been necessary 5 years ago.
Yeah, that can go on forever.
Yes there is a reason our savings rate is negative. Why save when we can inflate our way to prosperity?
I just saw Adam Smith’s “Invisible Hand” fly by, and it was pissed. It was muttering something about a long list of candidates for thorough b!tch-slapping, and something else about the nature of “payback”.
It’s itinerary included Wall Street first, then a very long and detailed list of specuvestors and FBs. One of it’s minions was last seen flying in the direction of San Diego.
I think that this might signal the imminent reduction of auger-inn’s bar tab.
Are you sure it was not the “visible hand” you saw?
I just flashed on Yellow Submarine.
This just hit the wires:
‘The Federal Reserve will stick to its mission of avoiding a damaging rise in inflation, Minneapolis Federal Reserve President Gary Stern said on Thursday.’
‘It is the responsibility of and is within the ability of the central bank … to avoid inflation and provide for a stable low inflation environment,’ Stern told business leaders. ‘We at the Federal Reserve will adhere to that objective.’
And also this, DR Horton down big after-hours:
‘D.R. Horton Inc., the largest U.S. home builder, said on Thursday that orders for new homes fell 4.4 percent in its fiscal third quarter, and the company slashed its yearly forecast due to the soft housing market. The value of the new orders fell even more, down 7.4 percent in the quarter ended June 30.’
‘The current home sales environment is characterized by an increase in both existing and new homes available for sale, higher than normal cancellation rates and an increase in the use of sales incentives in many of our markets,’ Donald Horton, the company’s chairman said.’
DHI getting POUNDED! auger-in buy these guys a round. I will pay for the next one - NO LUBE.
DHI at a 2 year low!!
Bartender! A round of lubeless painful ass-poundings over to the Don Horton table please! (we can settle up later crispy)
Several other HB’s are going to the woodshed also. TOL, SPF… There is blood in the streets!
Update On Scal housing market: Taylor Woodrow is rushing to complete an exclusive 50-home tract of million dollar homes in the San Gabriel valley Foothill community of Azusa. The development is being carved right up against the fire-prone chapparal brush-covered hills just east of route 39 off sierra madre bvld. Taylor woodrow, a London-Based HB, has set up their fancy A/C sales office on site.
Apparantly they are gambling that there will be takers for these homes in the face of a Scal RE market on the precipice : They are rushing like mad to complete these units before the Market tanks.
“Three distinct floor plans range in size from 3,999 square feet to 4,755 square feet will be available, priced from the low $1 millions. Large yards averaging 8,500 square feet”
In my opinion, with houses this size, these yard sizes are less than adequate…especially for $1M+ houses.
They are building these homes on 20-30 degree slopes abuting the San Gabriel mts. Not much open space available for large ample lots. The HB must be selling the view or mountain/wilderness proximity. You are correct, the yards will be small, more like townhome/condo-size lots.
Azuza not a particularly attractive area, has always been the armpit of the San gabriel Valley mountain/hill communities thou there seems to be an attempt to gentrify the upper mountain partion of the community.
Need to make a quick note on the 40,000 acre+ fire raging on sparely populated desert scrub region on the eastern slopes of the San Bernardino Mts and some ways northwest of yucca valley/hwy 62. There is some concern that this fire may creep up the eastern San Berdo mt national forest slopes and hit the beatle-decimated/denuded pines on the rugged eastern slopes east of Big Bear/San Gorgonio Wilderness. If the fire hits this area all hell will break loose as the entire San Bernardino mt pine forest has large stands of beatle-stripped denuded pines which are instant tinder for fires.
They missed the boat. The market is crashing at an accelerating rate. I begin to suspect the builders may have run out of borrowed money to pay for share buybacks.
http://tinyurl.com/fvjqb
TxChick –
You still long these dogs? Because they seem to be getting collectively spayed…
Looks like the “E” in the p/e just took a 40% DUMP!
But these are oversold! Oversold I tell you! My charts tell me! My CHAAARTS!!
That’s hilarious! LOL! Technicians will win many rounds and make money right up to the point where fundamentals assert.
All the bad news is priced in already, right?
Never thought I’d say this but….GO FED!
Sorry OT. but DHI (DR Horton) just preannounced much lower guidance, and KBH and others are now lower a couple more dollars in after hours trading.
well I hope my DHI put order fills immediately!
An interesting opinion piece from The Christian Science Monitor
No safety net for Fannie and Freddie
By David Reiss, Thu Jul 13
NEW YORK — It is received wisdom on Wall Street that the federal government would bail out Fannie Mae and Freddie Mac if they could not pay their debts -– even though they are for-profit, privately owned mortgage finance companies. That’s because they were specially created by the federal government to encourage homeownership.
This is received wisdom notwithstanding required language on Fannie and Freddie securities that they are “not guaranteed by the United States and do not constitute a debt or obligation of the United States,” and it allows Fannie and Freddie to borrow money more cheaply than other private companies because they are perceived as low-risk borrowers.
Fannie and Freddie had been the darlings of Wall Street as they reported growth and profits year after year by borrowing money at low rates and using it to purchase residential mortgages that pay interest at higher rates. But the seemingly remote possibility of a bailout has become more likely as wave after wave of accounting scandals involving the misstatement of earnings sweep over the two companies.
The risk that these scandals pose has been compounded by the fact that Fannie and Freddie’s hedging strategies expose them to serious risks: If the interest payments that the two companies owe to their lenders become mismatched with the interest payments they receive from homeowners whose mortgages they own, the companies can become insolvent. While only a handful of policy wonks focus on this arcane issue, the cost to taxpayers of a bailout could be hundreds of billions of dollars, easily dwarfing the cost of the Savings and Loan crisis of the 1980s. Hundreds of billions of dollars: That figure should make taxpayers sit up and take notice.
The Bush administration, while not generally known for its financial prudence, has been trying to back away from this implicit guarantee and potential liability. This makes it the first administration to do so since these two for-profit companies were formed nearly 40 years ago.
Indeed, former Treasury Secretary John Snow had repeatedly denied the existence of the implicit guarantee. And just recently, Treasury Undersecretary Emil Henry stated that the United States should avoid “unnecessary” bailouts of these two companies. Clearly the Bush administration is trying to adjust Wall Street’s expectations about the implicit guarantee.
But convincing Wall Street that there is no guarantee is not as easy as “sayin’ it ain’t so.” Wall Street believes that the implicit guarantee was part of the original charters of the two companies, which were formed to create a liquid national market for residential mortgages. This national market was intended to replace the fragmented local mortgage markets that failed to move capital from mature markets, such as the Northeast, to rapidly growing housing markets, such as the West. Fannie and Freddie succeeded in nurturing such a market, which provided diversified investment opportunities for those with capital and decreased borrowing costs for those who needed it -– a genuine win-win scenario designed by the government and executed, mostly, by the private sector.
Moreover, the very structure of Fannie and Freddie’s charters gives strong support to the notion that the federal government will bail them out if they cannot make good on their obligations, notwithstanding the required securities disclaimers quoted above.
The charters grant them special regulatory privileges, including lines of credit with the Treasury, exemption from a broad swath of securities regulations that affect other public companies, and presidential appointments to the board of each company. These terms create the appearance of a special relationship between each of these companies and the federal government, a relationship that Wall Street has taken to the bank.
For most of those who follow these issues carefully and dispassionately, there is agreement that the national mortgage market is now vibrant and that there is no need to grant these special regulatory privileges to Fannie and Freddie, which could expose taxpayers to inconceivably huge liability.
Moreover, principled commentators on the right and the left, including American Enterprise Institute scholars and Public Citizen’s Ralph Nader, agree that the implicit guarantee is no longer justified in today’s sophisticated mortgage market. For the former, the guarantee amounts to the privatization of profits and the socialization of losses. For the latter, it is just another example of corporate welfare. And indeed, in today’s world, it is both of those things.
As the Fannie and Freddie scandals have lapped on the shores of Capitol Hill, Congress has considered a variety of regulatory reforms that are all decidedly incremental and none of which would eliminate the implicit guarantee.
Momentum is building, starting within the Bush administration, to take bolder action. Both sides of the aisle in Congress should follow the administration’s lead on this financially prudent course.
David Reiss is an assistant professor of law at Brooklyn Law School.
Copyright © 2006 The Christian Science Monitor
Copyright © 2006 Yahoo! Inc.
All rights reserved.
Cutting off the GSE’s taxpayer “safety net” would be an incredibly courageous move for any politician to make and immeasurably reward savers, while mercilessly punishing reckless FBs and institutional MBS buyers as well. Mortgage rates would begin to rise overnight and hasten the bubble’s demise. It would probably deepen the (already inevitable) coming recession, but lead to much less market liquidity and irresponsible lending in the future.
In other words, it has almost no chance of actually happening.
Yes we have gone too far to let the free market work. The government should stay involved to create even great maladjustments.
The longer we wait to take our collective medicine the more bitter will be the taste.
“In other words, it has almost no chance of actually happening.”
Brilliant.
It’s housing socialism and deep pocket insurance for the lenders. A complete mess. The Bush Administration is taking the lead on stepping back? Bullshit. He was the biggest cheerleader when it was convenient for him to be, stating many times his goal was to raise homeownership levels so everyone who wants a home can get one. He made this mess, or encouraged it.
“hedging strategies expose them to serious risks: If the interest payments that the two companies owe to their lenders become mismatched with the interest payments they receive from homeowners whose mortgages they own”
so if you borrow short and lend long you’re f’ed when the yield curve flattens out or inverts? okay, whew! good thing that’s not happening…
That yield curve has been flat as a pancake, with suspiciously low volatility considering the turmoil in submerging markets and commodities. One might almost suspect that the yield curve was recently targeted by some agent with tremendous market power in order to hold those yields as flat as a pancake.
Right now, the yield curve has a broke-back appearance; it seems to be screaming “recession warning over the next five years.”
http://www.bloomberg.com/markets/rates/index.html
The GSEs don’t short and lend long, they made a fortune buying volatility on the institutional market and selling it to homeowners who never really did pay attention to the premium for their mortgages refinancability. While the price of volatitly is considerably lower, the spread between those two hasn’t gone away.
There was no safety net for New Orleans until after the Katrina disaster, after which $200b in hurricane relief was offered. We will not know what the real policy on Fannie and Freddie is until we see the response to a crisis. Only at that stage will we truly know whether they are “too big to fail.”
Karevoll is offically FULL OF SH*T. He says this about a possible “bloodbath,” but this morning’s LA Times quotes him as follows:
“A bright spot, analyst Karevoll and others note, is that the value of existing homes in San Diego is still gaining. The market’s weakness is mainly in new homes, he said.
‘Today’s situation is more reflective of a normal environment,’ said Karevoll, who predicts that other California markets will follow San Diego County and eventually will hit flat or negative growth, but not give up all the gains made in the last few years.
‘San Diego had a 100% increase in the past five years,’ he said. ‘So far, it’s been able to keep 99% of that, which isn’t so bad.’ ”
Oh yeah, I like the “negative growth” I wonder if he said that or if the writer just made it up on his own.
In a year the #1 best seller will be a book full of quotes from RE “professionals” (Karevoll, Toll, Liarreah, Suzanne, Appleton-Young, etc) that will expose them for what they were at THIS point in time…complete liars.
I wonder what the title of the book will be?
Maybe this….
“Liars Inc., How The RE Industry Ruined America”
Any other ideas?
“Barbarians at the Gate: How Toxic Loans Bankrupted Homeowners”
“When Genius Failed: How the MBS Market Crashed”
“Liar’s Poker: A McMansion is a Money Pit with a Realtor standing next to it”
“The Predator’s Ball: The Inside Story of David Liarah and the NAR”
“Monkey Business: The Fannie Mae Method of Accounting”
‘So far, it’s been able to keep 99% of that, which isn’t so bad.’
Hate to spoil his self-pity party but 1% down is more than 1% up, therefore when houses lose 50% of their values the next year or so, that will erase 100% of the gain. Bummer.
Karevoll has mastered the difficult art of talking from both sides of his mouth at the same time.
The title should be “‘There could be a bloodbath’: Dataquick”
I’ll re-post my comment to the VOice of San Diego articel from another thread:
Best quote of the day:
‘Both Gin and Thornberg described the drop in prices as “statistical noise”.’
Check out the graph. Looks like a pretty solid trend, but then I’m not a chief economist…..
Then there’s this one:
That synopsis was backed up by Peter Dennehy, senior vice president of Sullivan Group Real Estate Advisors. He said the drop in median prices is merely due to sellers getting real about the fact they’re in a buyer’s market.
…..So it’s not a real price drop, right?
“statistical noise”.
MY A$$.
‘Both Gin and Thornberg described the drop in prices as “statistical noise”.’
I would describe their commentary as “statistical noise.”
Karevoll is playing a little CYA! This gives him (and other RE shills) the ability to speak out of both sides of his mouth.
The ability to transition from “bloodbath” to “flat or negative growth” is a unique opportunity reserved only for the RE industry which has no accountability.
realtors make the bush admin spin look like amateur night.
tough call actually…..
These comments are certainly very different from those he made way back yesterday.
When will we get this kind of news in L.A. proper?!?! I do see prices dropping a little teeny bit here and there, but I also see “seller selects services” “Offers must be submitted by…” “seller will entertain offers between” blah blah blah… are we truly an island or what? must…. be…. patient…..
F’ em.
Lowball time is coming up.
Ignore all of the sellers demands. LA proper is starting to get the big haircut. Prices are already being cut by 10-15% in the upper end (South Bay, Santa Monica, etc). They still have a ways to go, and everybody knows it. The real bloodbath is yet to come, when all of the mid-level purchasers who simply can’t afford to drop their prices (heloc, etc) get crushed by the banks.
HELOCs, 100% ARM Financing and the winner is… Option ARMs.
These chumps hand their keys back at once when the ARMs reset and they have no choice as the rest of their debt catches up to them at the same time. Finaced furniture, leased cars, fuel going up and credit card debt running away. Not going to be long now… but it’s gonna be severe.
negative growth- that’s new bubble lexicon. price counselor was also new today.
This news from today is going to hurt, too:
[i]“US Treasury mulls own stamp on tax code overhaul
WASHINGTON, July 13 (Reuters) - U.S. Treasury officials are likely to put their own stamp on a proposed comprehensive overhaul of the tax system suggested by a blue-ribbon panel in November, an official said on Thursday.
…Senate Finance Committee Chairman Charles Grassley, an Iowa Republican, pressed Solomon to tell the panel when Treasury would forward its recommendation to President George W. Bush. The Treasury is working from the recommendations of a bipartisan panel that proposed a series of steps aimed at making the U.S. tax system simpler and fairer, including eliminating many deductions and reducing tax rates.
…The panel recommended eliminating deductions for many taxpayer costs, including mortgage interest and state and local taxes. The panel also proposed requiring workers to pay taxes on health care benefits provided by their employers.”[/i]
http://tinyurl.com/jqvol
Ouch. It looks like the mortgage interest deduction is still on the table for elimination.
Eliminating the deductions on houses (not apts) used as Rental properties would eliminate the housing shortage.
ha ha ha, they will finally formalize the flat tax. its that good?
Don’t count on it. No one said ‘flat tax’; they said ’simplified’. And you know what that means coming from Congress.
Does it mean you pay taxes until you flatline ?. :-^
It means that auger-inn will be stuck paying for service over at the “American Taxpayer” table. That will be one stiff tab.
The panel also proposed requiring workers to pay taxes on health care benefits provided by their employers
What?! Employers are already cutting back on this benefit and the rates keep going up, now the workers are going to end up paying for the “privilege” of health insurance?! That sucks. And that’ll take even more money out of the pocket of the lower-end potential house buyer. Brilliant idea…not.
Sounds like a possible push to promote the new HSAs (Health Savings Accounts). Sneaky. But why?
Taxing health benefits restores fairness. Currently, if your employer contributes to your health insurance, you don’t get taxed on that. But if your employer doesn’t, and you have to buy your own health insurance, then you get no tax break. Basically, the law now gives tax breaks to people with good jobs in big companies that pay health benefits, while others who don’t have employer-provided insurance must pay more.
(Kinda like the mortgage deduction, where home owners, who are wealthier than renters, get a tax break)
lili - hadn’t you heard? medical insurance isn’t a part of your pay package - it’s a gift from your employer… of course it’s an expense (currently tax deductible) for them…which is getting ever harder to pass on to the customer, given the import of supporting CEO pay…..the last category left not in line for some form of outsourcing or another…
Fascinating how they make no mention of trying to eliminate the Alternative Minimum Tax.
Maybe it needs some tinkering around the edges, but I gotta tell you that (I am posting from Australia) the AMT looks like one of the US’s better ideas.
Here a lot of wealthy people go crazy trying to eliminate income tax. They will throw money into anything and everything that offers them a deduction. That’s one reason why house prices have always been high here, relative to incomes.
One financial advice columnist put it succinctly a few years back: “Too many people act as if their marginal tax rate is 150%”.
I hear you about the ridiculous number of deductions the wealthy take. The problem with the AMT in the U.S. right now is that, increasingly, it’s not the wealthy who are getting hit the worst. You can be making as little as $60K/year and get hit with the AMT–wiping out any tax deduction whatsoever (including the standard exemption). The reformers need to boost the bottom income level so that the middle class (what’s left of it anyway) doesn’t get creamed.
“A 1-percent drop is insignificant at this point, Gin said, and there will have to be larger, more sustained home price drops before he starts predicting doom and gloom for the housing market.”
Wow, experts are really worth their weight in gold.
Oops, I meant “experts”!
So, the market will need to tank before the guy predicts that the market is going to tank.
Where do I get a job like this? “Newsflash: I predict that the sun will rise in the east tomorrow morning, but it may do a soft landing in the west.”
Exactly! “Come back to me when prices are down 30% and I’ll predict doom and gloom for the housing market.”
Actually, coming from an economist, that’s exactly what you’d expect. Isn’t economics the art of predicting the past?
When it’s down 30% he’ll be saying the worst is over now and it’s time to back up the truck! I remember that from brokers during the dot com bubble.
Expecting any of these tin whistlers to do anything but spin for the best is futile.
Wrong. He will predict it’s a good time to buy. I always wondered when the dot.com craze struck and stocks were going from 10 to a 100 in weeks, why weren’t the “experts” buying what they wanted you to buy, and then sell out before the crash “remeber..their experts” and never have to work again. Same with real estate.. What was the quote “expert” predicting in 2000, and why wasn’t he buying enough real estate so he would never have to work again. Cause he sure jumped up in the last 5 years, and even idiots walked away with $200,000 profit on medium income houses. You didn’t need to be an expert to make a lot of money in real estate over last five yeras. No, I would rather call the people “educated fools”. They talk the talk, but can’t walk the walk.
Read about National Association of REALTORS® Membership Statistics, 1908 - Present.
Wow. That is an amazing association between the number of realtors and the strength of the economy/housing market.
Great post, Melody!
What in the world happened in 1974? The realtor roll call went from 134 thousand to 435 thousand in one year!!!!! Yikes.
“When your house keeps appreciating by 10 or 20 percent a year, easier to buy that nicer bottle of wine, perhaps go out to that slightly fancier restaurant — what the hell, right?” Thornberg said. “But when that goes flat, suddenly, oh geez, the house isn’t going to be this big boom of new wealth. Boy, I’m going to have to be a bit more careful with my dollar.
Is this guy for real?
I think many people feel that way. I think they call it the “wealth effect.”
I guess he is merely describing an observed phenomena not suggesting that this is a good way to conduct your day to day business. However, like many have already stated, it isn’t really wealth until they sell.
All I’m hearing today on the news is Israel and $4.00 gas. If that’s the national number, then places like San Diego should go to what, 6 bucks?
I know, an extra buck or two for gas is nothing compared to a few more million in principle and interest. Still, in a “Never mind the price, what’s the monthly payment?” world, this might beat ‘07 rate adjustments to breaking FB’s backs?
Read about National Association of REALTORS® Membership Statistics, 1908 - Present.
“A series of shootings that wounded 13 California Realtors® statewide during the past two months may be linked to an earlier set of assaults, slayings and the reckless speculative mania that killed four San Diego agents, police said Tuesday.”
“According to a self described “debunker of Realt-Whore propaganda” who spoke on condition of anonymity, the killers may also be targeting high-profile Realtors®, such as NAR chief economist and media whore David Lereah. “After he wrote that execrable book, Liar-realtor basically signed his own death warrant,” says our source. “He’s going to catch a bullet eventually –it’s ‘in the bag’. And speaking of ‘in the bag’, I’m convinced Gary Watts may be next in line, and possibly Leslie ‘equity liberation‘ Appleton-Young.”
LOL! Total Funny… its a spoof…
It is totally funny. Gary Watts and Lereah are next… hehehehe
Here’s the link… in case you guys are wondering, from patrick.net:
http://patrick.net/wp/?p=264
My link worked, I just didn’t title it correctly
Hey, it’s Friday
It’s spoof… just to be humorous.
And I didn’t change the link title. I haven’t had a drink yet… that’s it…. guess I need one
I dint read far enuf i gess. mo beer!
I knew dat it was a spoof.
before long: homeowners walk out, leaving the keys on the kitchen counter. Hummer and Expedition drivers leave them on the side of the road out of gas.
Keys on the counter happened not so long ago, during the RTC days. What amazed me is how almost everyone seems to forget something like that so easily - like it never happened. Oh well, time for a real world reminder in history.
I just read as well that the SC city council approved a new 18 unit condo complex on Mission Street (aka HWY 1). This will be a 45 foot tall building with retail space on the ground floor and the units stacked above. This building is gonna stick out so badly as there are no buildings taller than two stories along the entire length of that road. Even though it was approved by our *cough* esteemed *cough* council I have the feeling that this project will not have a single shovel turned on site for many many years. LOL a condo on Mission Street in Santa Cruz is absolutely hilarious. A great view of the Safeway and Longs drugs parking lots and the plus of having a main traffic atery right outside your STAIRWAY!
I can’t stop laughing at this one.
“Westside condos, commercial space OK’d
A 45-foot building with 18 condominiums and space for commercial businesses on the ground floor will be constructed on Mission Street next to Papa Murphy’s near Baldwin and Berkshire streets.
The City Council unanimously approved the project proposed by resident Joe Quigg at its meeting Tuesday.
At least 10 neighbors spoke against the project, saying it’s too tall, doesn’t provide enough parking and would likely bring too much traffic to the area.
The council required Quigg to reduce the building three feet to 45 feet, put skylights in the top floor studios, limit business hours at the commercial space from 8 a.m. to 9 p.m., contribute toward the cost of traffic calming measures in the area and limit commercial uses.”
IMO the next step will be the RE pundits proclaiming that the bust in RE was gas price increases and fear created by tensions in the middle east i.e. Israel and Lebanon-Iran.This will be their face saving out.
I agree with you. I just know David Learah will start blaming the Fed for raising rates and destroying housing…Any excuse for pawning off his previous ridiculous statements about the new housing “paridigm.”
Check out No. 2 from the top. $227K loss in 7 months
http://sandiegomarketmonitor.blogspot.com/
Ouch!!
Bring your offers asap before you miss this great deal.
So I guess it must be a “great deal” if they are losing all that money on it. Yeah, right! Don’t call us, we’ll call you.
That’s gotta hurt!!!
Hey, Carlsbad Jim!
A tad overpriced for something that looks like a frat house, dontcha think?
http://sandiego.craigslist.org/rfs/181768594.html
Looks like a hunting lodge on the inside.
I find your comment insulting. My frat house was a gazillion times nicer than this! This place is a dump!
that house makes me ill. Half a million, they want me to pay THEM to live THERE? WTF are they smoking?
by the looks of the house, crack
PLAGIARISM ALERT!
This article was “adapted” from a similar Detroit RE article called “Fewer Buyers Than There Was”.
Really? Stylistically, this article is identical to all of Ben’s other posts. Plagiarism is usually indicated by differences in the author’s style (that’s how I pick it up from my students).
What reason do you have to believe that Ben is the plagiarist here?
“Fewer Buyers than there *was*” English as a second language anyone?
Well, SeattleMoose *did* say that the similar article was out of Detroit.
Nina at Sitting Pretty apparently has sold the Palm Springs “fixer” for 618K. She claims it to be a “break even” investment after 75K of remodeling and 31K in commissions (purchase price 475K). It was on the market 9 months. I don’t see how she can claim she broke even with nine months of payments and taxes but of course, it is necessary for her self-image as some kind of financial guru that she save face.
So she finally sold that thing. When she talked about it, she protrayed that she wouldn’t mind keeping as a vacation home with her co-investors…. guess they wanted out.
She did not break even. It’s like when people go gambling and say they won…. well how much did you lose? Most won’t admit how much they really lost.
It’s within the realm of possiblity that she broke even, if on one of the commissions she negotiated down to 5% or less rather than the full 6 or had some sort of low introductory rate arm, I come up with a loss of $20,000 assuming she paid 1% property taxes and had a 5% mortgage for nine months and 6% commissions on each side of the transaction. A lower commission and one year ARM taken out at last fall’s interest rates would have been enough to push her to profitability.
Good for her in not losing her shirt and knowing when to walk away.
Any idea what other property Miss Nina and her band of merry diddlers own?
‘Over the past five years, most San Diego homeowners have made more money owning their home than they’ve made at work.’
If even halfway true, does this strike anyone else as one of the most fantastic aberrations in the history of finance?
One of the best signs of the magnitude of this mania there is.
Help!!! Did the St. Louis Fed just publish an article claiming that the U.S. is under imminent threat of bankruptcy?
http://research.stlouisfed.org/publications/review/06/07/Kotlikoff.pdf
This is part of Kotlikoff’s excellent work on generational accounting. In this case, they calculate the difference between what the government is expected to pay out in SS, Medicare, etc. and what the government is expected to receive in income/sales/property taxes, etc. The fiscal gap is $65.9 trillion dollars. Basically, we are in for a world of hurt, and there is nothing but nothing that will prevent taxes from rising and benefits from falling over the next few decades. Can anyone say Roth IRA?
Can you say “Government changes the damn rules mid-game.”? I love my Roth IRA but am certain that it will be an increasingly tempting target for greedy pols.
Or how about this one: Forced IRA / 401K -> Roth IRA conversions.
After getting over my initial “and this article was published with the SANCTION and under the AUSPICES of the Federal Reserve?” incredulity, I took a closer look. Anybody zip over there and notice the concluding recommendations? - nothing much, just a 33% NATIONAL SALES TAX…
Yeah, betcha didn’t expect THAT one. Gotta go, I’ve got this strange RINGING in my ears…
I don’t know what they’re talking about. Houses are still selling for ridiculous prices here in LA, and not only that, rents are going up too. I’m seeing reductions and more inventory in Ventura, but LA seems to be really hot. Especially around here (Venic/SM). Not a troll, I just call it like I see it.
Venice is a fascinating area to go thru. It must be one of the most densely populated, and most rapidly gentrifying communites in LA. Lots of Gentry have swooped in and done complete teardowns/ remodels of tiny, 60-80 yr old shacks, and venice is well -favored by the hip trendy well-heeled hollywood crowd. Small tiny streets, units which have allys as street frontages, the older industrial gray zone along electric ave becoming a site for art-deco lofts, the artsy, beatnic eateries and shops along Abbot Kinney, all give Venice a unique vibrant culture.
There have been recurring problems with the low-life dregs and gangs which inhabit the oakwood section of Venice, but that is another story.
Dennis Hopper has his Famous Metal-riveted home in Venice.
I meant “Venice”
Just wait lainvestorgirl, the market in LA will crash as well. I am suprised that San Diego is so far ahead of the LA market. I talk to people from LA and they seem clueless, but people here in SD are catching on quick.
You’re surprised someone LA LA land is the last to catch onto anything?
SF and LA battle for the gold in the stupid-lympics.
I know that “stupid” is in the eye of the beholder, but just FYI: San Francisco has one of the highest, if not the highest, percentage of residents with a 4-year college degree.
Here a nomination for stupidist place in LA county to put up a housing development. In Santa Clarita/newhall they just built a large housing complex
on top of a barren ridge/slope off the Golden Valley rd about 2-3 miles north of the 14 fwy. The entire area is practically barren , without trees nor even scrubby oak grassland-just dry,sun-baked ground all around.
Rents could fall as new condos become apartments
In Las Vegas, Phoenix, San Diego, Washington, D.C., and much of Florida, an estimated 25% to 40% of condos under development or apartments that were converted into condos for sale will be put back on the market as rentals, says Marcus & Millichap, an investment brokerage firm.
http://www.usatoday.com/money/economy/housing/2006-07-13-condos-usat_x.htm?csp=26
Wouldn’t that be nice if rents fell in our big cities. That would be awesome!!!! This would mean that real estate would have to fall with it… eventually.
To the extant that bubble pricing has resulted not just in conversions but the construction of new housing at a rate that exceeds that of household formation, it has created an oversupply of housing and that will inexorably lead to lower rents.
the townhall on oil was useless. barely any discussion about peak oil. it didn’t even get what peak oil is. it’s not about running out of oil, it’s about not being able to produce enough to meet demand.
Positive shrinkage in home values.
This thread was way too funny. Just landed back in California from New Mexico. And CA still sucks. And still way overpriced. Someone earlier mentioned a deck of cards like the Iraq. The ace of spades should be the person most responsible. Alan Greenspam Mess
Where do we apply for the job of ‘price counselor’ - although FBers wouldn’t like my answers.
“Add price decreases to the large number of exotic loans out and mix in any sort of additional stress on incomes, and Karevoll said the results could be disastrous for California and elsewhere. ‘There could be a bloodbath,’ he said.”
Thank you very much for the advanced warning, John.
That Karevoll is a regular freakin’ genius! I love how these idiots are starting to fess up to what they’ve known all along: the housing bubble is bursting and it is going to have catastrophic results on this nation’s economy, among other things. Of course, they’re still using “may” and “could” instead of “is” and “will”. People are idiots.