The Days Of Overpaying Are Over
A report from the Orange County Register in California. “What’s up with mortgage rates? Jeff Lazerson of Mortgage Grader in Laguna Niguel gives us his take. Last weekend, I spent four hours sitting an open house with a Realtor on a cute entry-level condo in La Habra selling for $400,000. About 15 groups came through. Six months earlier, there were 50 groups coming through. One of my mortgage loan originators sat a similarly priced property in beachy Oceanside and had a similarly sparse attendance.”
“Are we seeing an emerging buyers’ market? If so, how should buyers and sellers react? Here are some signs of a slowdown and even rising mortgage defaults. According to Steven Thomas of Reports on Housing, every week somewhere between 11 and 15 percent of Orange County homes in the multiple listing service reduced their asking prices. That compares to about 7 percent last year.”
“Average days on market in 2018 is 43 compared to 33 last year. Listing cancellations are 13 percent higher this year than last year. Earlier this week, the National Association of Realtors announced U.S. home sales subsided for four straight months and are at their slowest pace in two years. A report out earlier this week from Irvine-based Attom Data Solutions indicated notices of default jumped 20 percent from last year in July in the Los Angeles-Orange County metro area as well as in San Diego County.”
“Cowering homebuyers should recover their backbone. In other words, stand your ground. Do not chase overpriced properties. Walk away from unreasonable sellers who won’t fix the more expensive property repair items. Sellers, decide just how badly you want to sell your palace. If you are not serious, don’t list. Other than the Brady Bunch house, the days of overpaying are over.”
The Sacramento Bee in California. “Wells Fargo Bank announced Thursday that 190 employees have been cut from its Rancho Cordova mortgage loan division as part of a nationwide staff reduction. The local cutbacks were just a portion of the 683 mortgage lending employees who were laid off nationally. All of those employees received 60-day notices on Thursday, Wells Fargo spokeswoman Yahaira Garcia-Perea said, adding that some may be offered other positions within Wells Fargo Home Mortgage.”
“The layoffs coincide with a nationwide slowdown in housing sales, a drop in the number of people who can afford a median-priced home in California and rising interest rates on mortgages.”
The Colorado Springs Gazette. “Wells Fargo & Co. is laying off 55 employees from its home mortgage call center in the Briargate area as part of nationwide cutback that is eliminating 683 jobs, the company said Thursday. In an email statement from Denver- based spokeswoman Nicole Schwab, the San Francisco-based financial giant attributed the cutbacks to ‘continuing market changes’ that have resulted in ’several team member staff reductions in various markets since the beginning of 2018. We continue to adjust capacity within our lines of business to meet customer needs — and to ensure we’re operating as efficiently and effectively as possible.’”
“Schwab declined further comment on the layoff, but said the move came after ‘carefully evaluating market conditions and consumer needs.’ Wells Fargo’s center in the Springs focused mostly on home-equity lending, employing underwriters, processors and others to help borrowers tap the equity in their homes.”
“The Orlando Sentinel reported Thursday that 137 of the layoffs are planned at the company’s call center in Orlando, Fla. Wells Fargo told the paper it was providing 60 days of notice and was working with employees for other opportunities in the company.”
‘Sellers, decide just how badly you want to sell your palace. If you are not serious, don’t list’
Well that’s a big change in tone. Watch out Jeff, the trolls will accuse you of being a shack hater.
‘notices of default jumped 20 percent from last year in July in the Los Angeles-Orange County metro area as well as in San Diego County’
I think they are still in stunned silence. I haven’t seen any California media really address it directly. And I’ve looked.
‘notices of default jumped 20 percent from last year in July in the Los Angeles-Orange County metro area as well as in San Diego County’
That shows up loud and clear on the foreclosure heat map someone posted a couple of days ago.
“I think they are still in stunned silence. I haven’t seen any California media really address it directly. And I’ve looked.”
Seems fully consistent with the denial stage of the Housing Bubble stages of grief. I frankly am having a hard time myself believing that foreclosures are surging against the backdrop of a booming San Diego economy. Makes you wonder how ugly the next downturn is going to turn out if people are already unable to keep up with the monthly alligator.
Housing bubbles always produce booming economies, for a while.
Their aftermaths always produce stunned silence, for a while. Rather like the point after Wile E. Coyote runs off the cliff and his legs are spinning in mid-air, up until when Roadrunner hands him the anvil.
“Housing bubbles always produce booming economies, for a while.”
And there it is. Chalk up these booming economies to the creation and the extraction and the spending of …
(ta da)
… EQUITY WEALTH, that magical money stuff that when spent makes an economy BOOM!
And what is it that is the root of the creation of all of this equity wealth? Is it not price increases? Yes indeedy, it is price increases.
And (pay attention, this is important) just what is it that DRIVES these price increases? Is it not DEBT? Yes indeedy, it is debt that drives, that finances, these price increases which in turn causes equity wealth to be magically created, and it is the spending of this equity wealth that causes an economy to … to BOOM!
But … but … what happens when this (nonsense?) miracle comes to a halt and (shudder) reverses itself? What then?
Stay tuned (and perhaps pop up a batch of popcorn). Or, better yet, take out a HELOC while you still can.
😁
Map of August 2018 foreclosure start heatwave
‘Wells Fargo Bank announced Thursday that 190 employees have been cut from its Rancho Cordova mortgage loan division as part of a nationwide staff reduction’
Gosh, I hope they didn’t just buy a shack!
‘Wells Fargo & Co. is laying off 55 employees from its home mortgage call center in the Briargate area as part of nationwide cutback that is eliminating 683 jobs’
‘Wells Fargo’s center in the Springs focused mostly on home-equity lending, employing underwriters, processors and others to help borrowers tap the equity in their homes’
Man there’s some poetic mojo in that. And it’s telling. Equity already dried up? Milked the cow dry?
But…but…the Colorado Springs Gazette just informed me that we rank #6 in the survey of hot housing markets.
If mortgage underwriting jobs are getting axed here, what does that say about the non-hot housing markets?
Oh dear….
https://gazette.com/business/colorado-springs-ranks-no-in-national-survey-of-hot-housing/article_a4082ff0-a17a-11e8-9337-ab7d32c3f18d.html
‘Wells Fargo’s center in the Springs focused mostly on home-equity lending, employing underwriters, processors and others to help borrowers tap the equity in their homes’
And now, as shack values plunge, that borrowed equity is going to have to be paid back.
Oh dear…somebody’s not going to be doing much consuming when they have to pay the piper.
“… that borrowed equity is going to have to be paid back.”
A blast from the past …
“It was my equity that I cashed out. I don’t see why I have to pay it back.”
1. Dumb ‘em down.
2. Profit.
😁
I’m repeating this for the benefit of new readers: cash out refinancing is speculation. It only makes sense if you believe prices will continue to go up making it free money.
No appraisal cash out refi’s are/were ubiquitous. It’s how everyone has been meeting their monthly mortgage obligation for the last decade and a half.
Now there’s nothing left but the crying.
They killed the golden goose or cash cow 🐮
https://youtu.be/2Ko9TpduOhE
It’s all over but the crying
And nobody’s crying but me
Friends all over know I’m trying
To forget about how much I care for you
It’s all over but the dreaming
Poor little dreams that keep trying to come true
It’s all over but the crying
And I can’t get over crying over you
It’s all over but the crying
And nobody’s crying but me
Friends all over know I’m trying
To forget about how much I care for you
It’s all over but the dreaming
Poor little dreams that keep trying to come true
It’s all over but the crying
And I can’t get over crying over you
“…if you believe prices will continue to go up making it free money.”
What’s to stop prices from continuing to go up, providing a bounty of free money forever?
If incomes don’t increase at something close to the housing price increases, at some point that will place a lid on the latter.
The only way to cash out equity and not pay it back is to … wait for it… SELL.
The only way to cash out equity and not pay it back is to … wait for it… SELL.
Or default in a non-recourse state, while there’s a moratorium on taxing forgiven debt as income!
The only way to cash out equity and not pay it back is to … wait for it… SELL.
And if you couldn’t afford to buy your house at it’s current price…you also can’t afford to pay the original mortgage AND a second. You’re living on borrowed time as soon as you do that…it’s no longer “your” house…you already sold it to the bank and they’re just letting you live there temporarily.
“Equity already dried up? Milked the cow dry?”
Dry cleaner effect?
In an email statement from Denver-based spokeswoman Nicole Schwab, the San Francisco-based financial giant attributed the cutbacks to ‘continuing market changes’ that have resulted in ’several team member staff reductions in various markets since the beginning of 2018.
In other words, the bursting housing bubble means mortgage underwriting is plummeting and these “team members” are going to have to find something else to do.
Hey, maybe they can form cleaning crews to tidy up after enraged FBs have trashed “their” shacks before getting evicted from foreclosures.
“Cowering homebuyers should recover their backbone. In other words, stand your ground. Do not chase overpriced properties. Walk away from unreasonable sellers who won’t fix the more expensive property repair items.
Do not chase overpriced properties, indeed. That means sitting tight and letting this bursting housing bubble play out in all its horrible glory. Don’t just walk away from greedhead sellers: wait until they’ve been foreclosed on and their shacks are being auctioned off at the courthouse steps.
Centreville, VA Housing Prices Crater 7% YOY As Fairfax County Housing Bust Deepens
https://www.movoto.com/centreville-va/market-trends/
Inventory unchanged since a year ago, $/sqft up. Days on the market lower than 1 yr ago. Headline not supported by the quoted data, but kudos for the link.
How about all this crater I post hour after hour John? Nothing to say? Outlier?
You don’t really have anything to add to the blog except trolling.
Outliar
Look I am reading the link, the link doesn’t support the headline. Your currency is your credibility. I too believe the market is slowing, I expect rising interest rates and tax law changes and situation in China to make RE a way less attractive investment. I don’t think the situation is the same as last time. Do we have “liar loans” for example? I am advising people I know to sell now rather than wait. I think however you are exaggerating.
My good friend… $/sq ft valuation is a poor performer as it excludes all items in the transaction except for the structure and the area of dirt directly under it.
Arcadia, CA Housing Prices Crater 10% YOY As California Mortgage Fraud Epidemic Worsens
https://www.zillow.com/arcadia-ca/home-values/
‘the days of overpaying are over’
It just occurred to me that if one bought an Orange County shack last month, the days of overpaying are far from over. 30 years times 12 months, hmm that’s 360 overpaying payments! Some people might get sick of that crap and…
Just Walk Away
https://www.youtube.com/watch?v=7ttKJwvFIgw
“Keep paying until prices come back?! LOL!”
Cortland Manor, NY Housing Prices Crater 9% YOY As Westchester County Homeowners Slash Prices
https://www.zillow.com/cortlandt-manor-ny/home-values/
*Select price from dropdown menu on first chart
Oh bugger. Wasn’t Wall Street’s most recent rally in risk assets predicated in part on the predicted resolution of China trade tensions?
The Financial Times
US-China trade dispute
US-China trade talks end with little progress
White House enforces $16bn in tariffs while Nafta discussions with Mexico are extended
updated an hour ago
“Cowering homebuyers should recover their backbone.”
Damn right! Harden up!
“In other words, stand your ground.”
Don’t run off seeking a safe space like you you used to do in college.
“Do not chase overpriced properties.”
Make the a$$hole sellers meet you on your own terms.
“Walk away from unreasonable sellers who won’t fix the more expensive property repair items.”
Make ‘em fix ALL THE repairs!
“Sellers, decide just how badly you want to sell your palace.”
Write a letter to the buyers telling them how grateful you are that they selected your home and they only have to feed the squirrels if they want to.
“If you are not serious, don’t list.”
“List”. Such a word. Keep in mind just how it was when the Titanic listed.
“Other than the Brady Bunch house …
… or Jeffery Dalhmer’s house …
“the days of overpaying are over.”
I like the strategic use of the word “palace.”
‘every week somewhere between 11 and 15 percent of Orange County homes in the multiple listing service reduced their asking prices. That compares to about 7 percent last year.’
So it started last year. And:
‘every week somewhere between 11 and 15 percent of Orange County homes in the multiple listing service reduced their asking prices’
What does that add up to for a month? Gosh,some are probably cutting prices more than once a month! Sacre bleu!
‘Average days on market in 2018 is 43 compared to 33 last year.’
Why would anyone cut their price if they can sell in 40 days?
‘Listing cancellations are 13 percent higher this year than last year…notices of default jumped 20 percent from last year in July in the Los Angeles-Orange County metro area as well as in San Diego County’
Why would anyone cancel their listing if they could sell in 40 days? Why would anyone default on a loan if they could sell in 40 days?
‘Average days on market in 2018 is 43 compared to 33 last year.’
Is that for the final time they relist after taking a house off the market and relisting any number of times? (I’m guessing this commonly employed deceptive sales practice may explain the moniker Multiple Listing Service?)
‘a cute entry-level condo in La Habra selling for $400,000′
You guys are so fooked.
How about a mansion for 1/2 off, well almost half the insane price these bag holders hoped for about a year ago. https://www.zillow.com/homedetails/2920-Granite-Creek-Rd-Scotts-Valley-CA-95066/16122806_zpid/
Date Event Price $/sqft Source
7/26/2018 Listing removed $2,498,000
6/30/2018 Pending sale $2,498,000 – $531
5/29/2018 Price change $2,498,000 -7.4% $531
4/15/2018 Price change $2,698,000 -10% $573
3/6/2018 Listed for sale $2,998,000 -25% $63
1/23/2018 Listing removed $3,999,000 – $849
11/20/2017 Price change $3,999,000 -10.7% $849
11/4/2017 Listed for sale $4,479,000 124% $951
8/27/2004 Sold $2,000,000 185.7% $425
3/28/1996 Sold $700,000 -2.8% $149
11/6/1995 Sold $720,000 – $153
“3/6/2018 Listed for sale $2,998,000 -25% $63
1/23/2018 Listing removed $3,999,000 – $849″
Multiple Listings?
Started at $951 sq/ft. Gave up at $531 sq/ft. Fooked indeed.
looks like they bought it for 2M and are trying to sell it for 2.5M 15 years later. Not exactly a spectacular investment. The wishing price, how did it move the Zillow zestimate?
If a valuation changed due to an individual seller changing their asking price, wouldn’t you suspect a flawed methodology?
They probably put in $150K to glam it up. It’s a fix/flip that will be lucky to break even.
Any new buyer must absolutely love all the varied shades of beige.
How about this one bubbleville?
https://www.zillow.com/homes/for_sale/_type/16100191_zpid/globalrelevanceex_sort/37.000393,-122.002273,36.971495,-122.048407_rect/14_zm/
Great location right near the homeless center. Fantastic neighbors down there on Coral street. Santa Cruz county was my old stomping grounds from 89-07. The early 90’s were pretty good but it was already starting to go to hell back then. The 89 earthquake ran a good bunch of freeloaders off for a bit.
I can only imagine how bad it is now.
Zillow predicts 95060 home values will rise 11.4% next year, compared to a 8.7% increase for Santa Cruz as a whole.
it’s the tannery
A hidden gem in the middle of the epicenter of the main homeless shelter. I know this property well, it was used as an office for a local trades company. Constant thefts and the problems with the neighbors (homeless) prompted the sale. Seems like an ideal nesting spot
LOL, an old school wall-mounted gas heater.
I also love (not) the exposed vent pipe for the oven hood.
I love the his and hers computer built in desks overlooking the terrain…..an added bonus skinny dipping in complete privacy.
Downtown Los Angeles, CA Housing Prices Crater 10% YOY On Resetting Adjustable Rate Mortgages
https://www.zillow.com/downtown-los-angeles-ca/home-values/
*Select price from dropdown menu on first chart
UK mortgage lending slumps, credit card debt jumps.
I think I see where this is heading.
https://www.independent.co.uk/news/business/news/mortgage-approvals-july-fall-uk-housing-market-slowdown-finance-report-a8506206.html
God…Bank of England still sitting at .75% interest rate?
How many of these donks are paying their mortgage with their CC? Or alternately, buying basic essentials on the CC to free up cash to pay the mortgage?
rising rates? 10yr 2.86%
Hong Kong’s “unaffordable” home prices could fall by double digits.
Say, do you suppose that all these other “unaffordable” housing markets could drop by double digits?
https://www.cnbc.com/2018/08/23/hong-kong-home-prices-are-expected-to-fall.html
Hong Kong’s high-flying residential property market is showing signs of serious strain, with home prices seen falling by double digits over the next 12 months as a mix of domestic and international factors slam the sector.
Property is a central to the economy of Hong Kong, a densely populated territory spread over numerous small and hilly islands and a narrow peninsula in southern China.
Hong Kong is perennially ranked as one of the world’s most expensive real-estate sectors and is closely watched along with the local stock market as an indicator of the health of the broader economy.
But after years of steady increases, prices are set for a sharp decline with sentiment on a knife-edge, according to investment group CLSA.
A quick illustration as to how stupid people are and why it is so easy to be rich. In the recent Foreclosures are Up! headlines, my city of Jacksonville was prominently mentioned with an increase of over 70%. This surprised me so I did something crazy and actually looked at the source data since it is public records. Yes, July activity had a huge increase but mainly due to June being so low compared to last year (may have just been timing with notices). Total activity this year is virtually identical to last year. In fact, the first half was lower which is more of what I expected.
So you have one group screaming see….foreclosures way up!The other group, thinking they have to spin it, says well…it must be hurricane related! All based upon a headline without looking at the actual data. People are lazy and dumb. So easy to exploit.
So for those that care…nothing to see in Jacksonville July foreclosure activity. Our rate is higher than average(as usual…we are loser heavy). I expect pain in the near future and more pain than average just like the last bubble. Just not yet.
Remember, Greed is good.
“People are lazy and dumb. So easy to exploit.”
Yep. These pukes provide me an easy living.
“Unaffordability” keeps cropping up as the reason shack sales are falling bigly. Hmm. I’m sure there must be some solution to that, but it’s just not coming to me.
https://www.businessinsider.com/housing-affordability-slowing-market-sales-2018-8