A Gradual Loosening Naturally Results In Higher Foreclosures
A report from The Real Deal. “New home foreclosure filings nationwide inched up in July, signaling the first year-over-year rise after three consecutive years of decreases. The report from Attom Data Solutions is an indication the U.S. housing market may be nearing the end of the cycle, and that home prices will begun to fall, experts say. In L.A., foreclosures jumped 20 percent last month to 1,190; and in Miami they rose 29 percent to 1,119. In both cities, home foreclosures increase for the third consecutive month.”
“A total of 96 out of 219 metropolitan areas analyzed in the report, or 44 percent, posted year-over-year increases in foreclosure starts in July. Daren Blomquist with Attom Data Solutions said ‘the widespread trend reflects a gradual loosening of lending over the past few years.’ That loosening, he added, ‘is naturally resulting in higher foreclosure numbers across a diverse set of housing markets.’”
“Houston, Detroit, Indianapolis and Jacksonville, Florida, saw the biggest rise in foreclosure filings. In those cities, foreclosure starts all increased more than 70 percent.”
The Orlando Sentinel in Florida. “Foreclosures on Metro Orlando homes are up 23 percent from July 2017, according to a real estate data analyst, though the numbers are still well below the peak of the recession, and local sales agents say there’s not much impact in the market yet. Last month’s 773 foreclosures included 376 starts – up 41 percent from July 2017, the third straight month foreclosure starts were on the rise.”
“‘It’s very small compared to the kind of numbers we had before,’ said Barbara Hampden, a Realtor with Re/Max 200 in Winter Park. ‘A 23 percent uptick seems like a lot, but … if it continues for another [three months], then maybe I’d say things are getting away from us.’”
“Among the possible reasons for the rise could be pent-up cases from a foreclosure moratorium imposed after Hurricane Irma, said Attom senior vice president Daren Blomquist. But other factors also exist. ‘Most of this increase is likely lenders catching up from the foreclosure moratorium, but we are also seeing similar trends in some other markets that did not have hurricane-induced foreclosure moratoriums,’ said Blomquist, ‘indicating there may be more widespread distress seeping back into the housing market.’”
“For bargain-seeking home shoppers wondering if the foreclosures will create buying opportunities, Hampden said that’s unlikely. ‘Just because a property goes into foreclosure doesn’t mean the value has gone down – it’s just that the owner can’t make the payments,’ she said. ‘The value may still be above water,’ or more than the owner owes on the home.”
“And it often takes an all-cash purchase to secure a foreclosure or a short sale amid heavy competition for values. ‘Otherwise you can be left standing on the sidelines with offers going nowhere,’ Hampden said.”
From Fox 4 Now in Florida. “Stunning new numbers released Tuesday morning show a huge increase in the number of foreclosures in Southwest Florida. Attom Data Solutions says the number of home owners who have started the foreclosure process in Cape Coral and Fort Myers, has gone up 59% since last July. The year over year number from June, was an increase of 64%.”
“The report says for the first time in 3 years, foreclosures are up nationwide and some of the biggest increases are in Southwest Florida. According to Trulia, more than 300 homes in the Cape and more than 400 homes in Fort Myers have started the foreclosure process. Attom says the government has loosened some Obama era lending standards for banks leading more people to take risks with their home loans, causing the spike in foreclosures.”
From Attom Data Solutions. “Twenty-one states posted a year-over-year increase in foreclosure starts in July, including Florida (up 35 percent); California (up 3 percent); Texas (up 7 percent); Illinois (up 7 percent); and Ohio (up 2 percent). Metro areas posting year-over-year increases in foreclosure starts in July included Los Angeles, California (up 20 percent); Houston, Texas (up 76 percent); Philadelphia, Pennsylvania (up 10 percent); Miami, Florida (up 29 percent); and San Francisco, California (up 10 percent).”
“‘The increase in foreclosure starts is not just a one-month anomaly in many local markets given that July represented the third consecutive month with a year-over-year increase in 33 metro areas, including Los Angeles, Miami, Houston, Detroit, San Diego and Austin,’ said Daren Blomquist, senior vice president with ATTOM Data Solutions. ‘Gradually loosening lending standards over the past few years have introduced a modicum of risk back into the housing market, and that additional risk is resulting in rising foreclosure starts in a diverse set of markets across the country.’”
‘‘A 23 percent uptick seems like a lot, but … if it continues for another [three months], then maybe I’d say things are getting away from us.’
In which case you guys are all fooked, right Barbara? Oh well, foam the runways and all that. It was worth it, right? A few years of fat checks and easy living.
Sun Valley, ID Housing Prices Crater 19% YOY As Boise Foreclosure Rate Skyrockets
https://www.movoto.com/sun-valley-id/market-trends/
“For bargain-seeking home shoppers wondering if the foreclosures will create buying opportunities, Hampden said that’s unlikely. ‘Just because a property goes into foreclosure doesn’t mean the value has gone down – it’s just that the owner can’t make the payments,’ she said. ‘The value may still be above water,’ or more than the owner owes on the home.”
Then why on earth would the strapped owner not simply sell? I mean if cash buyers are waiting in the wings, then why destroy your credit and even make a little $ if it is above water? I mean, this may be the award winner for most delusional statement I’ve ever seen.
August 11, 2018
“Are you having trouble selling your home in Sarasota or Bradenton? One Sarasota realtor said she gets hundreds of calls every week from people who can’t sell their homes. Alan Schwambach has lived at the Greyhawk Landing development in Bradenton for 15 years. He said when he listed his home, he didn’t expect to have any problems selling it for more than he bought it for. But here it is now, two months and three price drops later, with still no bites. ‘This whole thing right now is just, it’s just discouraging,’ Schwambach explained.”
“It was easy to hear the frustration in his voice. He sees the worth in every one of the $749,000 his home is listed for. ‘We paid like $568,000 and then we had $105,000 on the lot, so we’re over almost $700,000,’ Schwambach explained. ‘Well with $700,000 and we can’t even get $600,000? There’s something wrong with that picture.’”
“But it’s not just him. There are 20 other homes listed for sale in his community. ‘Most of them are $500,000 and $400,000 and they’re not selling,’ said Dawn Cohen. ‘And the last four sales in the last 30 days were all under $400,000.’ Dawn Cohen is the realtor with Premier Plus Realty who has agreed to sell the Schwambach’s home, but she said she isn’t surprised that there hasn’t been any interest.”
“This is a story she hears hundreds of times a week. ‘All I can say is the supply and demand is causing the pricing to go up and the new construction is more popular,’ Cohen explained. ‘So the more people that want to buy and the more people that choose new construction, choose not to buy resales.’”
“Cohen said the majority of her calls come from baby boomers who also preferred to buy new without planning ahead. Five years later, their spouse passes away or needs to move to a nursing home and they can no longer afford the brand new home. ‘They can’t even sell it for what they paid for it,’ Cohen explained. Cohen also added that this is the peak of the housing market, so anyone who would like to sell their homes should list it at market value.”
http://thehousingbubbleblog.com/?p=10534
I just love these ‘broke FB Boomer’ stories. Something tells me we will see much more of this in the future.
There are a lot of idiot cohorts of every generation, but I am amazed at how many boomers are in for a rude awakening when they realize they will not be able to sell their $500k+ place to the next generation of impoverished millennials who are up to their eyeballs in debt. Then these boomers realize that 90% of their net worth is tied up in their equity, and that vanishes real fast when a $600k house goes to $300k.
“Then these boomers realize that 90% of their net worth is tied up in their equity, and that vanishes real fast when a $600k house goes to $300k.”
As for me this spells …
(ta da)
Opportunity!
(Finding someone who is down opens up an excellent opportunity to kick them.)
i feel sorry for those in the ‘broke’ stories. They made bad decision but …
The malicious ones were the real estate agents, mortgage brokers, ‘investors’ and others that were supposed to help people not be on a razors edge. They did not care about their obligations
I enjoy crediting our educational system for doing such an excellent job of totally dumbing-down such large sections of the general population.
Without their efforts and dedication people such as myself would be relegated to seeking real jobs.
😁
I don’t feel bad whatsoever. For 15 years Ol’ Alan was probably wagging his finger at younger folks and shaming them for not buying a home. Sitting on his throne of equity and preaching for anyone to hear about how he was just a real estate genius. My Boomer relatives and in laws were the same way. They still don’t understand that I have no desire to buy an overpriced liability. To them, I’m poor since I don’t have a fancy McMansion to show off. Boomers are much more materialistic than us Xers. Boomers NEED to feel validated with their things, which leads us to Alan and his shack. Good luck Alan. You’re gonna need it.
‘Alan Schwambach has lived at the Greyhawk Landing development in Bradenton for 15 years. He said when he listed his home, he didn’t expect to have any problems selling it for more than he bought it for. But here it is now, two months and three price drops later, with still no bites. ‘This whole thing right now is just, it’s just discouraging,’ Schwambach explained.’
After 15 years you should have a lot of this paid off. Wa happened?
Judging from the house pix (see post below), they bought furniture. Lots and lots of furniture.
“After 15 years you should have a lot of this paid off. Wa happened?”
My Dotted Line Special happened.
😁
The malicious ones were the real estate agents, mortgage brokers, ‘investors’ and others that were supposed to help people not be on a razors edge. They did not care about their obligations
I don’t disagree that “malicious” applies here. But why on earth would anybody think that all those people were really trying to help them?
Lots of clothes, too. How many different polo shirts does a retiree in Florida need?
Yeah, I dont feel bad either - some of these same boomers were buying multiple homes and rentals and then gouging the younger generations. F them - they can live under a bridge. Greedheads get what they deserve, trying to maintain an illusion of prosperity many of them didnt earn.
(I’m posting this again, so it may show up twice)
Heh, here’s the Schwambach house. Check out those wishing prices, the terrible floor plan, and tacky interior!
https://www.zillow.com/homedetails/13019-Magpie-Pl-Bradenton-FL-34212/80407111_zpid/?fullpage=true
Still no bites, 10 days after this article was published. He’s not gonna give it away!!
7/28/2018 Price change $749,000 -16.7%
7/1/2018 Price change $899,000 -9.2%
6/13/2018 Price change $989,900 -17.5%
6/9/2018 Listed for sale $1,200,000 1042.9%
1/8/2004 Sold $105,000
A $451,000 price cut within 50 days of listing! Wow!
And a similar, bigger, much nicer home in the same neighborhood is selling for $589K. 127 days on market. Good luck Alan!
It’s hard to sell a house for $750k when the houses two doors down have only sold for $500k recently. Sounds like the old “you made your house the most expensive house in the hood”. That doesn’t generally work as no one wants to buy a 750 house in a 500 hood.
It’s hard to sell any structure for 5x the cost to build it.
Remember….. If you’re paying more than construction cost ($50/sq ft for lot, labor, materials and profit) for a used house, you’re paying too much.
Wow, just wow! When I look at all the stuff in that place I start to get a little bit anxious. It’s just so much stuff! Way too much stuff.
Seriously makes me anxious
That’s a hell of a Dutch auction he has underway!
q: in the 2006-2009 housing debacle — how long did the bank keep many of the foreclosures - 3,4,5 years.
Is there something (mark-to-market) in banking regulations now that prevent them from pulling that stunt again?
Whatever the banking regulations are currently in place I most assure you that these are the best regulations that money can buy.
In the first link, they mention New York is still swamped with “legacy” foreclosures, meaning dating back 10 years or more. And now a bunch more on the way. It’s been several months since most foreclosures were on loans from 2014 and forward.
Ouch for NYC. Given all the banking $s that have flown in during the past 8 years - you think they could have gotten off their horses and cleared some of this out.
July 13, 2018
“ATTOM Data Solutions, on Thursday reported foreclosure filings for the first half of 2018. Counter to the national trend, 26 of the 219 metropolitan statistical areas analyzed in the report posted a year-over-year increase in foreclosure activity in the first six months of 2018, including Houston, Texas (up 10%); Dallas-Fort Worth, Texas (up 11%); Cleveland, Ohio (up 4%); Phoenix, Arizona (up 5%). ‘Localized foreclosure flare-ups in the first half of 2018 can no longer be blamed on legacy distress left over from the last housing bubble given that nearly half of all active foreclosures are now tied to loans originated in 2009 or later and given that the average time to foreclose plummeted in the first two quarters of the year,’ said Daren Blomquist, senior vice president with ATTOM Data Solutions. ‘Instead these local foreclosure increases are typically the result of more recent distress triggers in those markets.’”
“‘We’re also seeing early evidence of gradually loosening lending standards starting in 2014, specifically for FHA-backed loans,’ Blomquist added. ‘The foreclosure rate on FHA loans originated in 2014 and 2015 has now jumped above the average FHA foreclosure rate for all loan vintages — the only two post-recession vintages with foreclosure rates above that overall average.’”
“Counter to the national trend, foreclosures were on the rise in the Phoenix area in the first half of the year. But it’s no reason to worry. There were more than 5,000 foreclosure filings — default notices, scheduled auctions or bank repossessions — in the Valley through June, a 5 percent increase from a year ago, according to ATTOM Data Solutions. The good news? That’s just a fraction of the 74,000 foreclosures in the area during the worst times of the housing crisis a decade ago.”
“A decade ago, you’d see foreclosure signs across most Southwest Florida, which became the sign of a troubled economy and housing market. And now, despite a building boom across our area and a robust jobs market, we’re once again starting to see the number of foreclosures climb. A sight reminiscent of years past is once again popping up in Cape Coral and across the rest of SWFL. Cape Coral homeowner Jacob Rico says he notices fewer people in his neighborhood, ‘I see many houses like this – empty. Over there a couple houses is empty.’”
“More homeowners in Southwest Florida are struggling to pay their mortgages on time, an apparent lingering effect from Hurricane Irma. In the Sarasota-Manatee region, 4.4 percent of mortgages were at least 30 days overdue in May, up from 3 percent one year earlier, CoreLogic said. Charlotte County also posted a 4.4 percent mortgage delinquency rate, higher than the 3.5 percent last year. In Florida, the 30-day delinquency rate averaged 6.7 percent, ahead of the year-ago 5.5 percent. The rates of homes already in the foreclosure process are holding below year-ago levels, a sign that lenders may be postponing taking struggling homeowners to court.”
“‘The percent of loans 90 days or more delinquent or in foreclosure are more than double what they were before last autumn’s hurricanes in Houston, Texas, and Naples, Florida,’ said Frank Martell, CEO at CoreLogic.”
“Connecticut entered July with the fifth-highest rate of residential mortgages under foreclosure in the nation, according to a study of more than 360,000 foreclosures nationally over the first six months of the year. As of the most recent records posted by the Connecticut state courts, Bridgeport had the largest number of pending foreclosure sales in the coming month at 30 properties, followed by the cities of Stamford, New Haven and Hartford with 18 each. But affluent towns are seeing activity, as well, with a half-dozen foreclosure sales under way in Westport, five in Ridgefield and a pair of properties in Greenwich.”
“According to PropertyShark, Queens had 881 properties go into new foreclosure proceedings in this year’s second quarter, running from April to June. Queens — particularly the Southeast section of the borough — continues to be ground zero in terms of an ongoing mortgage crisis. Those numbers did not likely take leaders at Community Board 12 by surprise. ‘District 12 is still a hotbed for foreclosures,’ said CB 12 District Manager Yvonne Reddick.”
“Reddick’s oft-repeated advice is that dealing with the problem early in the process is far preferable to what can result if people as a matter of pride or other reasons choose to ignore notices and the ability to reach out for help. ‘When the marshal shows up to evict you, people are going to know,’ Reddick said.”
“President Donald Trump’s new tax cut plan may have created a shift in the Westchester housing market. According to appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate, home sales in Westchester plunged 18 percent in the second quarter from a year earlier. That is the highest amount since 2011. ‘When they look at a property, they are concerned about the amount of taxes they’ll have to pay,’ says Michele Silverman Bedell, broker/owner of Silverson’s Realty. ‘The taxes could be $20,000 $30,000, $40,000 on a house.’”
“Bedell says this could discourage buyers and convince potential sellers to downsize. It could also flood the market with inventory and force price reductions.”
“Both startling and subtle evidence is emerging that our housing market is changing course. Let me count the ways: 1) California notice of default filings (step one of the foreclosure process) were up a staggering 24 percent (4,144) in June compared with one year ago. And, the state has experienced three straight months (April, May and June) of increased foreclosure activity according, to Daren Blomquist, Attom Data Solutions senior vice president.”
“Twenty-two states posted year-over-year increases in foreclosure starts for the first half of 2018. Normally solid metro areas like Las Vegas, Dallas-Fort Worth and Minneapolis-St. Paul experienced increases, also according to Blomquist. Thirteen percent of Orange County home sellers reduced their asking prices in recent weeks, according to Steve Thomas of Reports On Housing. Orange County’s home-listing inventory hit 5,983 this time last year, Thomas reported. This week, there were 6,501 homes listed for sale, a 9 percent increase over this time last year.”
“Sellers would be best served by prudence. ‘We’ve hit the top of the market. Anybody new to the market better price their property at market rate or below,’ said Dan Keller of EXP Realty in San Clemente. In this current market, I see many buyers playing a fools game by way overbidding based upon actual closed comparable sales. You’ve got to get rid of that ‘got to have it no matter what’ mentality.”
“June’s home sales numbers for North Texas made me do a double take. Preowned home sales in the area were down by the biggest year-over-year percentage in four years. Okay, it wasn’t down by much — just a 3 percent drop from June 2017’s record high preowned home buys. But for the last few years, the only direction Dallas-Fort Worth’s housing market has known is ‘up.’”
“All good things must come to an end. And there are more signs that our runaway housing market is hitting a ceiling. ‘Maybe we are seeing the beginning of the slowdown of the hyper growth Dallas has had for the last six or seven years,’ said Dr. James Gaines, chief economist at the Real Estate Center at Texas A&M University. ‘We’ve been kind of expecting it for almost a year now. It’s going to slow down eventually,’ he said. ‘The eventually may be getting here.’”
“Another telling sign of where the D-FW home market is headed this year is the rise in homes on the market. The almost 25,000 houses with ‘for sale’ signs in the front yard is the largest local inventory since 2012. ‘It’s not necessarily that the market is gong to go bad,’ Gaines said. ‘But the almost double digit price increases and increases in sales volume are going to slow down we think. You are going to start seeing some small negatives on a year-over-year basis.’”
http://thehousingbubbleblog.com/?p=10491
Falls Church VA Housing Prices Crater 8% YOY As Subprime Mortgage Default Rate Triples
https://www.movoto.com/falls-church-va/market-trends/
‘And it often takes an all-cash purchase to secure a foreclosure or a short sale amid heavy competition for values. ‘Otherwise you can be left standing on the sidelines with offers going nowhere’
You can’t buy a foreclosure with a loan. That’s one reason why lenders take an a$$pounding at auctions. When it comes time to lay down actual tons of cash, people are a little more stingy.
“Among the possible reasons for the rise could be pent-up cases from a foreclosure moratorium imposed after Hurricane Irma, said Attom senior vice president Daren Blomquist.”
Why is everything “pent-up”?
This was in the email I got from Attom:
See below for some notable examples of where the July increase was the continuation of a multi-month trend:
· Los Angeles, California
o 14 percent increase in May
o 2 percent increase in June
o 20 percent increase in July
· Miami, Florida
o 4 percent increase in May
o 35 percent increase in June
o 29 percent increase in July
· Houston, Texas
o 153 percent increase in May
o 62 percent increase in June
o 76 percent increase in July
· Jacksonville, Florida
o 22 percent increase in May
o 22 percent increase in June
o 81 percent increase in July
· Orlando, Florida
o 12 percent increase in May
o 22 percent increase in June
o 41 percent increase in July
· Detroit, Michigan
o 31 percent increase in May
o 32 percent increase in June
o 71 percent increase in July
· Minneapolis-St. Paul
o 47 percent increase in May
o 107 percent increase in June
o 32 percent increase in July
· San Diego, California
o 20 percent increase in May
o 7 percent increase in June
o 20 percent increase in July
· Indianapolis, Indiana
o 94 percent increase in May
o 12 percent increase in June
o 107 percent increase in July
· Austin, Texas
o 65 percent increase in May
o 44 percent increase in June
o 29 percent increase in July
· Cape Coral-Fort Myers, Florida
o 11 percent increase in May
o 64 percent increase in June
o 59 percent increase in July
Is this an increase in foreclosures or listings?
Foreclosure starts rose in the U.S. in July for the first time in three years, as 44% of markets across the country saw increases.
Real-estate data firm Attom Data Solutions on Tuesday said 30,187 U.S. properties started the foreclosure process for the first time in July, up 1% from June and up less than 1% from a year ago, ending a streak of 36 months of year-over-year decreases.
Attom Data said foreclosure starts rose in 96 of the 219 metropolitan statistical areas it analyzes, with 33 of those areas posting their third straight monthly increase.
https://www.wsj.com/articles/u-s-foreclosure-starts-rise-for-first-time-in-three-years-1534852128
*foreclosures or NOD’s? (what i meant to type)
“A total of 96 out of 219 metropolitan statistical areas analyzed in the report (44 percent) posted year-over-year increases in foreclosure starts in July, and in many of those markets the July increase was not just a one-month anomaly.”
Looking at that list, it’s noticeable that these aren’t economically depressed areas. Most of them are formerly white hot! markets for flipping, etc. So what comes to my mind is when are the “sound lending” posters gonna EAT THEIR CROW?
Yep…this time around its different markets than the bust of 2008.
Austin - ouch - 65% increase in foreclosures!
Map of August 2018 foreclosure start heatwave
There seems to be at least some correlation between that map and places that unexpectedly voted for Trump.
In a nutshell, ebola has infected the Great Lakes, Appalachia, Florida, Texas, and SoCal. San Diego County included.
Bellevue, WA Housing Prices Crater 11% YOY As Seattle Foreclosure Epidemic Drives Market Off The Rails
https://www.movoto.com/bellevue-wa/market-trends/
why do you people want homeowners to suffer?
Homeowners don’t truly suffer. I’m a home owner and the only suffering I face is the constant drain of money it takes to maintain one. I didn’t buy for price appreciation. I didn’t buy assuming I could sell it for more than I paid for it. I bought a house because I found a place where I wanted to live and the cost differential at the time was skewed towards buying.
Speculators sometimes suffer. I like to gamble too. Nobody cries for me when I lose.
“Homeowners don’t truly suffer.”
Not in the same way homebuyers do.
If you need an explanation of the difference between “homeowner” and “homebuyer” then perhaps you are ripe for a … a productive discussion with me at my bank over a (free!) cup of coffee.
Ha! I know a little about your devious games Mr. Banker. That’s why I’m paying off my 15 year mortgage in 12 instead. Now you’ll probably say I have all this equity just doing nothing, and want me to come down and sign on some dotted line! Oooh you’re a tricky one aren’t ya.
If you paid your mortgage off, it means you probably did not manage your funds efficiently over the years. It’s as if you had 500,000 dollar bills stuffed in your mattress.
why do you people want homeowners to suffer?
I don’t want anybody to suffer. But I do want everybody to learn…if they don’t we are doomed. The problem is when people don’t learn without suffering.
I don’t want homeowners to suffer.
What I want is an end to the practice of using homes as speculative vehicles. Homes are not stocks, they’re places for people to live.
Personally, I’m kind of pissed because it feels like absolutely nothing was learned from the Great Recession. Things are just so obviously broken and it’s all about money.
People just have to gorge apparently. In the modern world it’s fiat currency. It reminds me of Carl Sagan towards the end of Cosmos where he talks about our shortcomings as a species and the primitive lizard brain that still rules over a significant portion of our behaviors.
Personally, I’m kind of pissed because it feels like absolutely nothing was learned from the Great Recession.
That was intentional. Those in line to do the most learning in 2008 had enough political connections to avoid having to learn anything but “buy the dip” and “it pays to have friends in high places”. And the rest have suffered for it.
I do feel bad for those who bought a place simply because they wanted geographic stability for their family. Not everybody is driven by greed. I almost jumped in last year due to a horrendous landlord situation and I want my kids to stay in one school district.
Home sales are way down because affordability is so bad right now. So there are people that want to buy homes that can’t or won’t. If prices correct, there will be a lot of new homeowners that won’t need to sacrifice their retirements for home ownership.
I want prices to go down so I can buy a modest home to actually live in. Not in hopes of getting rich flipping, or to cash out equity, etc.
I want the kids to be able to buy or at least rent so they won’t come back home!
Check out this fluff piece. I love the line where they admit that they were down 20% for the year. BTW: they are still down for the year, but they spin it like it’s pie in the sky.
https://money.cnn.com/2018/08/21/news/companies/toll-brothers-housing-market/index.html
Yesterday I went to the bank and, for no reason, they offered me a $50k business line of credit with no startup fees and no need to review financials.
O.K, now I’m really getting worried!
“… for no reason …”
Oh, there was a reason. Drop by my bank for an explanation. Be sure to bring some ID.
That’s what you strive for, Mr. Banker…someone to bring only their ID, not their Ego or Super-Ego.
hopefully, it is mostly relief that the housing bubble is beginning to deflate.
Those with bubble assets have benefited from QE while prudent savers were savaged. Some asset owners have mistaken happenstance (owning assets during money printing episodes) for intelligence and shown arrogance. That might account for some of the schadenfreude that you are picking up on
Keep in mind that this deflation of the housing bubble is going to take a lot of home equity out with it.
If you make a living by depending on constant increases in this home equity and the spending associated with the constant increases in this home equity then the current schadenfreude you are beginning to enjoy may be a bit short lived.
Slightly OT (foreclosures), but related:
More details from your post yesterday.
“More housing does not lead to affordability”
Financial Times, Letters
From Niccolo Caldararo, San Francisco State University, US
August 20th, 2018
excerpts here:
“there is a lack of neither housing nor building. There is an oversupply and huge supply of vacant units held off the market. But this is due to the commodification and financialisation of the housing industry.”
“building more housing does not result in affordability in the market. Since dwellings are seen by investors as assets they are no longer homes.”
“A solution is obvious: pass a law so that no one and no corporation or partnership could own more than one dwelling unit. Then dwellings could again become homes.”
Bingo! This is the crux of the matter, and why residential real estate is doomed to be just another asset of bubble-nomics. Such is global economics today.
Related quote on REIC:
“It is difficult to get a man to understand something when his salary depends on his not understanding it.” - Upton Sinclair
May 25, 2018
“In his corner of American finance, where hard selling meets hard luck, Angelo Christian is a star. Each time Christian sells a home loan, the company he works for, American Financial Network Inc., takes as much as 5 percent. Many of Christian’s customers have no savings, poor credit, or low income—sometimes all three. Some are like Joseph Taylor, a corrections officer who saw Christian’s roadside billboard touting zero-down mortgages. Taylor had recently filed for bankruptcy because of his $25,000 in credit card debt. But he just bought his first home for $120,000 with a zero-down loan from Christian’s company. Monthly debt payments now eat up half his take-home pay. ‘If he can help me, he can help anyone,’ Taylor says. ‘My credit history was just horrible.’”
“Christian can do this kind of deal because he is, in effect, making the loan on behalf of the federal government through its most important affordable housing program. It’s a sweet deal: He gets his nearly risk-free commission. Taylor puts no money down. If things go south, the government ultimately bears the risk. Many borrowers ‘are living paycheck to paycheck and, if they lose their jobs, they go into default immediately,’ says John Burns, a housing consultant.”
http://thehousingbubbleblog.com/?p=10443
‘Monthly debt payments now eat up half his take-home pay.’
I wouldn’t rent to someone who was in this situation, much less loan them 120k. Why? I’ve learned that life happens. Car breaks down, back gets sprained, divorce, death in the family. The ways it can go wrong are more than you can imagine.
I’ve been following this drip drip lending insanity since 2014. That’s when they really turned it on to keep prices from falling (and they were falling all across the country). Last month Freddie Mac announced a no income restriction loan. Available also with no limit to where you live. I see 100% cash out refi ads all the time now.
“I see 100% cash out refi ads all the time now.”
No appraisal cash out refi’s are ubiquitous and have been since 2010.
“Monthly debt payments now eat up half his take-home pay.”
I like to think of this as a good start.
So. Now a days a LOT of people pay 50% of their income in rent.
Better than paying 50% of both incomes for a rapidly depreciating asset like a house.
Went on Realtor.com this weekend and looked at houses in and around my hood which left me wondering, is it 2005 again or am I having flashbacks from that colorful paper my buddies and I put in our mouths that night at the University of Connecticut in 1979?
https://www.youtube.com/watch?v=GFSfh60ETr4
This is Seattle - i am seeing more of these ‘lower rent’ (well compared to incredibly overpriced ‘luxury’) complexes being sold. Is the smart money selling or buying?
On Monday, August 13th, the Sunrise 11 Apartments in Shoreline sold for $15.2 million, or approximately $253,333 per unit, according to public documents filed with King County. The buyer was Red Magnolia Apartment LLC, an entity affiliated with Ajit Sukesan of Northbridge Apartments LLC based in Bellevue. The seller was Sunrise Eleven Associates LLC, an entity affiliated with John Chou based in Shoreline.
The transaction was recorded on August 17th.
The six-story Sunrise 11 Apartments, located at 20015 Ballinger Way NE, was built in 2016 and contains 60 units, according to the property listing on apartments.com. The new construction apartment building offers a mix of studios, one- and two-bedroom units, according to the web site for the property. The studios are 550 square feet and rent for $1,205; the one-bedroom units are between 680 and 840 square feet and start at $1,420; and the two-bedroom units range from 950 to 1,040 square feet and have rents starting at $1,975.
The units include quartz countertops as well as individual outdoor areas (balcony, patio or deck). The apartment complex also features secure building entry and bike storage, parking stalls available for rent including electric vehicle charging stations and an exercise room.
BTW: this is between Shoreline and Mount Terrace - a working class neighbourhood
Im getting cold calls from lenders offering cash out refi’s.
Think of these cold calls as Opportunity knocking.
“Im getting cold calls from lenders offering cash out refi’s.”
MeToo
Speaking of MeToo.
Vox Sentences: #MeToo leader faces sexual assault allegations
By Ella Nilsenella.nilsen@vox.com Aug 20, 2018, 8:00pm EDT
Nearly a year after she publicly accused producer Harvey Weinstein of rape, actress Asia Argento is facing accusations of sexually assaulting a young actor. [Vanity Fair / Yohana Desta]
Argento, an Italian actress, paid a $380,000 settlement to a young actor named James Bennett, who says she sexually assaulted him in 2013 when he was 17 years old — below the age of consent in California, where the alleged encounter took place. [NYT / Kim Severson]
Bennett, now 22, said the incident with Argento impacted his mental health and his ability to work. He initially sued Argento for more than $3 million, according to legal paperwork obtained by the New York Times. [NYT / Kim Severson]
https://www.vox.com/vox-sentences/2018/8/20/17761840/vox-sentences-asia-argento-jimmy-bennett-me-too
#MuhNarrative
When I was 17 I would’ve loved to be that cougar’s ball of yarn.
“When I was 17 I would’ve loved to be that cougar’s ball of yarn.”
MeToo
Camarillo, CA Housing Prices Crater 10% YOY As Plunging China Economy Batters California
https://www.movoto.com/camarillo-ca/market-trends/
Here’s some more anecdotal evidence from Phoenix regarding loan quality. Bear in mind I’m a “millenial” and the people mentioned below are as well.
A couple I know were offered a mortgage of ~$600k while shopping for a loan. These people are straight out of college with little career foundation and savings. They purchased for much less, good for them. Still, that’s an insane amount to loan someone at that point in life.
Another couple recently purchased a home and bragged that they “put nothing down”. This is for a ~$300k new build house within spitting distance of I-17 in Glendale. It’s a bad area.
Another engaged couple are going in on a ~$300k house. The to-be man of the house has such bad credit he can’t even be on the mortgage. They have reported that they’re “putting very little down”.
Sometimes I look at savings/CD rates at one of the local credit unions I used to bank at. I strolled over to the mortgage section of the site and behold, “as low as 3% down” and “down payment may be gifted”. Amazing.
http://www.azcentralcu.org/home/loans/mortgages/conventional
It’s all subprime again. Until the banks are the bearers of the repayment risk, and .gov gets out of housing, nothing will change.
sorry about the 2008 post about helocs Ben. I should have read it more carefully. Cheers!
Ramrod Key, FL Housing Prices Crater 11% YOY As Homeowners Brace For An Unprecedented Financial Beating
https://www.movoto.com/ramrod-key-fl/market-trends/