Housing Data “Unequivocally Bad”
Some housing bubble news from Wall Street and Washington. Paul Muolo, “You know loan volumes must be slow when lenders start doing stuff like this: Ditech.com said it is offering homeowners the opportunity to win a year’s worth of mortgage payments (up to $25,000) in its 2006 ditech.com ‘Home Mortgage Sweepstakes.’ Ditech.com is part of the GMAC Mortgage family of companies…’”
“Friedman Billings Ramsey on Washington Mutual’s third-quarter numbers: ‘Earnings were clearly a disappointment. However, our primary concern is the fact that the expected margin expansion did not materialize while net charge-offs moved higher.’”
The Wall Street Journal. “Mortgage lenders are making it easier to get loans even as the housing market cools, and as the number of borrowers struggling to make their payments continues to rise, new studies show.”
“‘We’re seeing rises in delinquencies and loan losses that are unrelated to what’s going on in the job market,’ says economist Mark Zandi. Among the areas that saw the biggest jump in the delinquency rate since the end of last year were Stockton and Merced, Calif., and Las Vegas-Paradise, Nev. Delinquency rates were highest in McAllen-Edinburg-Mission, Texas; Brownsville-Harlingen, Texas; and Detroit-Livonia-Dearborn, Mich.”
“David M. Crosby, a Las Vegas bankruptcy attorney, says he has seen a ’surge’ in borrowers with mortgage problems. ‘Most of it is [tied to] the end of the housing boom, but I do see a good percentage of clients who got caught by a change in their mortgage rates.’ In addition, some clients ‘bought a number of speculative homes,’ he says. ‘The market turned on them, and now they are in a real financial mess.’”
“Some homeowners are calling it quits. ‘A surprising number of people are walking away from their homes rather than trying to save them,’ says Mr. Crosby, either because the rate on their loan has jumped or because they owe more than the home is worth.”
From Bloomberg. “The slumping U.S. housing market is about to get a lot worse, according to traders of mortgage-backed securities and the so-called derivatives on which they are based.”
“The ABX index, which measures the risk of owning bonds backed by home-loans to people with poor credit, rose 30 percent since Aug. 9 to the highest since January. There are more than $500 billion of such notes outstanding.”
“‘Delinquency trends and home prices’ show a weakening real estate market, said Scott Eichel, head of credit trading for New York-based Bear Stearns & Co., the biggest underwriter of bonds backed by mortgages. ‘A lot of investors that have concerns about the housing market’are using the ABX index to speculate on a continued drop, he said.”
“‘The unequivocally bad housing data we’ve seen’ is prompting investors to seek to profit from potential declines in mortgage-backed securities, said Greg Lippmann, the head of asset-backed trading at Deutsche Bank in New York who helped create the ABX indexes in January.”
“The default rate for subprime loans rose to 7.35 percent in July from 5.51 percent a year earlier, according to investment bank Friedman Billings Ramsey Group Inc. in Arlington Virginia. Nine percent of all subprime loans made in 2006 may default within five years, the worst performance since at least 1998, said Glenn Schultz, head of asset-backed securities at Wachovia Corp.”
From Money Magazine. “How would you like a $10,000 gift certificate for Pottery Barn? A $30,000 in-ground swimming pool, installed? These and many other fabulous prizes can be yours if…you buy a house!”
“That’s right, Bob Barker. After years of soaring prices, in the past few months the real estate market has dropped faster than most people thought it would, even in markets where most people thought it wouldn’t.”
“Home inventories have gone skyward in the past year. In August there were 4 million homes on the market in the United States, a million more than at the same point in 2005. Combine that with the boost in interest rates and you have a lot of nervous sellers.”
“‘Until now sellers didn’t want to cut their prices. They were much more willing to provide an incentive, anything but cut the price,” says Zandi. That’s because incentives are cheaper for the seller in most cases. Right now, however, there’s enough inventory that sellers are starting to do both: lower prices and provide incentives.”
“Another finding from the NAHB survey: In order to help move inventory, more than a third of today’s home builders have increased their use of brokers over a year ago, often paying them higher-than-average commissions.”
“And there’s more. ‘Owners and builders are inviting us to cocktail parties, and they’re giving bonuses and increased commissions,’ says Diane Saatchi of the Corcoran Group. Most buyers don’t realize that the agent is getting an incentive, and there’s no legal obligation to tell them. ‘But you can flat out ask a broker, ‘Are you getting an incentive?’ Then the broker has to tell,’ says Saatchi.”
“If a broker is getting an extra 2%, you will know that her ‘This house is perfect for you!’ declarations might not be heartfelt. You’ll also know that the seller is desperate, so ask for a lower price. These days you just might get it.”
There has been a lot of guessing about this note put out by KB Homes:
‘Form 8-K for KB HOME 23-Oct-2006 Other Events, Financial Statements and Exhibits Item 8.01 Other Events.’
‘On October 20, 2006, KB Home issued a press release announcing that it received a letter purporting to be a notice of default under the indenture related to its 6-1/4% Senior Notes due 2015. A copy of the press release is attached as Exhibit 99.1 to this report and is incorporated by reference herein.’
I still say technically due to late SEC fillings.
*technicality
I believe it is because of the cowsay.
Pulte Home stock started tumbling down Thursady 10/19 then Fri 10/20 and today in a very up market, Pulte is down again. Do you think somebody had advance info on this press release. My Pulte PUTZ of Jan 2008 are suddenily making me smile again. This is the deep, dark crash of the HB stocks that should have happened months ago, except Crammer kep telling CBNC goof heads it was a “Strong Buy”. Would somebody call Crammer and tell him he was wrong again, and again, and again.
I don’t have access to a Reuters trade terminal (maybe a fixed income guy could check out the activity) but per Yahoo bond screener the bonds are priced at 92.55. If KB has busted a covenant they may be forced to redeem them at par. The bond offering took place this past June. LOL.
http://reports.finance.yahoo.com/z1?b=1&is=KB%20Home&sf=p&so=a
Yeah it’s been a thriving trade in hedge fund land, you find some bonds trading at a discount of a firm that is late on SEC filings. Buy them and try to have a judge declare default and collect par.
“‘A surprising number of people are walking away from their homes rather than trying to save them,’ says Mr. Crosby, either because the rate on their loan has jumped or because they owe more than the home is worth.”
Why is this “surprising?” We have been talking about this scenario for at least a year by now…
The comments in the Bloomberg story are particulary comforting to bears. The rest of this garbage you read in the dead tree papers is fluff.
the only thing surprising about it is that the guy is surprised about it. Hmmm, none of my own money down, I’m 100K under water, 2K cash flow negative per month, yeah I’ll hold for another 5 years and wait for the rebound.
Very logical. I imagine people are willing to trade a crap credit score for a lot less than a $100k.
especially when their credit score was crap to begin with.
No suprise here.
And its only started. We’re getting rid of 2006 investors right now. As it drops, do you really think 2005 Option Arm buyers with zero down will stick around?
This isn’t suprising. Its just the start of a long chain of dominos.
Neil
Its totally shocking that industry professionals are “Shocked” by what’s happening. If they are really shocked, they are idiots and need to move on to another line of work. If not, they are liars, and are probably in the right business; although government may be a better fit for that particular skillset.
Why do you think that downpayments were a requirement? Why do you think that fixed rate loans 30 year loans were the only instrument for many people for the past 100 years? Do you think that we are just stupid, and IO, or negative am loans were really the way “things should have been”. Of course not idiot, just to prevent situations like we are in now.
Thirty year loans are, in fact, a comparatively recent anomaly on account of the previously stable and prosperous US economy.
Many other nations (and the US as recently as the 1920’s 1930’s) has much shorter loans.
In Argentina you can’t get a loan for much longer than 1 or 2 years.
No kidding. Until post-WW2 baby boom, most home loans were 5 or 10 years (15 tops) with a balloon payment requiring full repayment of principal at end of loan period. Imagine how much cheaper houses would be today if this were the norm vs. 40/50 year $0-down neg-ams?
De facto, this is no different from a 5 or 10 year fixed interest rate. The balance may have technically become due but there was no reason for the lender not to continue to carry at the going rate for another term, if there were no problems with the borrower.
Based on my years working at the corp HQ of a very large mortgage lender, most are not “shocked.” Most are liars, hoping to squeeze a few more loans out of the tapped out pool of FBs before they retire.
“Mortgage lenders are making it easier to get loans even as the housing market cools”
They’re making the inevitable historic collapse even bigger. They know it. They don’t care. It’s a short term, greedy, short sighted approach to doing business. It jibes perfectly with the rethuglican rule we’ve seen since the coup in 2000.
Bubble Rubble posts “Based on my years working at the corp HQ of a very large mortgage lender, most are not “shocked.” Most are liars, hoping to squeeze a few more loans out of the tapped out pool of FBs before they retire.”
Dude you were in the Biz! That was refreshing clean clear facts that make simple sence!
Keep posting you have an open ear here. Keep up the truth! Many of us, atleast me don’t really know what is happining on the “lender”side of this deal…. Dumbell me alway thought they would like to be repaid. I still have a hard time gettig over that one!
Imagine how low your taxes would be if payroll withholding of taxes were abolished. Vote Libertarian.
Who will pay for firefighters, police, schools, and highways?
“Who will pay for firefighters, police, schools, and highways?”
Property taxes pay for firefighters, police, and schools, and fuel taxes pay for the highways. Payroll withholding taxes are for FICA (social security), and medicare, etc., mostly federal welfare programs. I guess you just pay your taxes and don’t bother checking where they go, right?
Chip posts “Vote Libertarian.”
same as pissing up a rope.
rms,
Some of your federal taxes do end up going to municipal govts, as do state taxes.
Seems the majority of federal taxes go to the military and health care costs.
If we don’t tax income, from what source would we get adequate revenues to fund #1. military expenses #2. healthcare and #3. capital projects, among other expenses?
http://www.askquestions.org/details.php?id=158
Dumbell me alway thought they would like to be repaid.
Dumbell is right. As everyone reading this blog (except you) seems to understand, they are not lending their own money. If they were this bubble would never had happened.
That was the quote that stuck out in my mind too. Surprising? This is what happens when you give people no-down loans that negatively amortize with payments that reset within a few years.
And away we go!
Who’d have thought there’d be this level of financial distress this early in the game? We’re only about a year past peak and already we’re seeing not only home owners but also home builders in default? I don’t know about the rest of you guys but this is pretty shocking. Oh, and just look at the KB notes’ yield! All of that risk for a 6 1/4 % return? Sheesh, what a mess.
This is the part of the show where the “weak hands” are shaken out of the game, either through foreclosure, short sales, or simply selling for a loss–thus lowering the comps for future appraisals, making it more difficult for other speculators to sell at a profit and setting us all up for the second act:
The quiet desperation of the “stronger hands” who will hold onto their alligators as long as they can, hoping for a turnaround. The “stronger hands” will either a) hold on until break even for as long as it takes, b) choose to sell in the next 5 after simply giving up, or c) run out of money and become tomorrow’s “weak hand”, selling via foreclosure or short sale.
That’s been my amazment too. Very little real stress on the market and the whole pile of dominoes tips over? What does that tell you about the structural integrity of the whole situation?
“structural integrity” NONE
Txchick posts ” . Very little real stress on the market and the whole pile of dominoes tips over?”
I pulled out too early, but like the guy said nobody went broke taking a profit.
Txchick as a market player (very small time) over the last 35 years every fiber in my being says this will not turn out happy on “wall street” …. “main street” is in for a world class butt whoopin’ ….so many thing comming to a point very soon, might as well say it in Nov. and the elections…. I think enough is enough …. the table cloth will be grabbed and yanked!
My 77 year old mother a retired school teacher flat told me she is voteing every incumbunt out! Dear old Mom blistered my ears…. no prisoner’s…… shoot the wounded etc. Never saw her so mad in theses matters!
If you are lucky, you will break even, but I know little about
Wall Street
“If you are lucky, you will break even, but I know little about
Wall Street”
Same here, so I don’t let them play with my money.
“All of that risk for a 6 1/4 % return?”
Quite a conundrum there…
Slowing volume is rippling devastatingly across the entire spectrum of housing industry players and supporting cast members… it’s the end of the line… credit expansion is going to rapidly reverse and crunch everything within its path…
“You know loan volumes must be slow when lenders start doing stuff like this: Ditech.com said it is offering homeowners the opportunity to win a year’s worth of mortgage payments (up to $25,000) in its 2006 ditech.com ‘Home Mortgage Sweepstakes.’ Ditech.com is part of the GMAC Mortgage family of companies…’”
And in this environment you can bet the rubber-stamp appraiser’s are thriving and punching in the EXACT number they are instructed to do by their sleazebag mortgage taskmasters to make the game run a little longer.
ALOT of hot money purchased 2nd, 3rd, and sometimes 10 or so “investment ” properties, often sight unseen.
I ran a post on my site about a year ago on how many retirees bought “investment” properties sight unseen in Florida. Many were not going to occupy or even rent out these units for years!
I predicted September would be the beginning of the end, as the ARM resets kick in. I do agree that the velocity of the implosion is faster than expected. Remember folks, we have only started to see the $600 billion in ARMS reset this year. We still have 1 trillion in 2007 and in 2008 to endure. By then I expect the pain to be overwhelming and the losses rather profound for those FB’s.
IMHO it will be reminiscent of the early 90’s when you could buy nearly any property you wanted at the terms you dictated from distressed owners.
“‘Owners and builders are inviting us to cocktail parties, and they’re giving bonuses and increased commissions,’ says Diane Saatchi of the Corcoran Group. Most buyers don’t realize that the agent is getting an incentive, and there’s no legal obligation to tell them.”
There is however an obligation in the code of ethics as an agent to act in your client’s best interests. This rule is obviously being broken or these agent commisions would not work! When an agent acts for their own self-interest they are setting themselves up for some legal headaches. Sue the bastards!
The seller is the client, unless you specifically hire a buying agent which requires you paying them separately from the 6% commission.
in california you had better disclose,or be prepared to buy your lawyer’s mistress a boxster.
under 750ml un true
This is probably not a very constructive rant, but I truly feel like our nation is suffering some mass delusion that has caused IQs to plummet, while our tolerance for corruption has skyrocketed. Is it finally the fluoride in the water rotting people’s brains? Is it television? Perhaps cell phones do cause brain tumors …
I don’t want to get political, but just spare a moment and look at our present leadership (both Republican and Democrat). We just voted to suspend habeas corpus and to approve the use of torture. Our national spending deficit would make Reagan cry like a baby. Our Congressional leaders harbored a pedophile for years in the halls of the Capitol building.
Is there any wonder that over the past six years corruption and predatory lending has run rampant? Is this why millions of normally hard-working Americans would throw common sense out the door and sign up for toxic time-bomb mortgages in their effort to emulate Donald Trump? Has there ever been a time of war where instead of the populace sacrificing to support the troops, they attended get-rich-quick seminars and bought Humvees?
Who knows? Maybe I’m the one suffering the delusion. I thought our nation was the smartest, most innovative, empathetic nation on earth. I thought we had good old fashioned common sense, street smarts, and credibility. Is that just a fond memory, or just another delusion?
Sorry for the rant, but as the DOW skyrockets, the casualties in Iraq mount, and we head toward elections where pedophilia seems to be the main topic of conversation, I guess I’m feeling ready to be checked into an insane asylum.
Read our weekend thread about other places to go.
I think about it every day and one day, I’m going to chuck this whole shooting match and just bail out.
Speaking of shooting matches, Smith & Wesson stock up 250% this year. Great year for violence.
Smith & Wesson stock up 250% this year
Damn…
Do you think it’s been better at any other time in history? Or (more likely) do you think that we’re older/wiser now and see thru the BS?
I strongly argue it’s the latter. That’s not to excuse it, just explain it.
So once you realize that it’s always been a weird, wild and corrupt system, you can either work within the system or work to make the world a better place during our short time here.
I strongly advocate the latter.
Do you think it’s been better at any other time in history?
Well yes. Let’s see now - saving the world from both Nazism and Communism, and balancing the budget most of the time, that’s not doing too badly. And the US actually used to make things that the rest of the world wanted.
And now the US can’t even win a totally unnecessary war in Iraq, or capture Osama Bin Laden. And it buys everything from China.
See the link to Mencken below. Every period has it’s problems, and it’s curmudgeons to point them out.
“Our Congressional leaders harbored a pedophile for years in the halls of the Capitol building.”
It’s not polite to speak of the dead thusly.
Heh.
Get real. You are being lured in by the MEDIA, who have a special slant to every story.
The “pedophile” was a HOMOSEXUAL, of which Washington is full of them, particularly congressional aides and pages.
The Members of Congress could not have done anything to this protected class of person without the media being all over them for their insensitivity. It was a no-win situation.
Barney Frank, as I recall, had male prostitutes in his Washington pad on a regular basis and is was no big deal.
But his activities were on the other side of the aisle.
When I mentioned “the dead”, I was referring to Studds, who was harbored in Congress for another 2-3 terms after admitting to having sex with an underage page (quite a bit different from Foley, but of course that doesn’t matter to Dems).
“Who knows? Maybe I’m the one suffering the delusion. I thought our nation was the smartest, most innovative, empathetic nation on earth. I thought we had good old fashioned common sense, street smarts, and credibility. Is that just a fond memory, or just another delusion?”
Nothing new under the sun. You have not read enough of what Mencken had to say a while back…
http://www.io.com/~gibbonsb/mencken.html
There must be something in the air today as this you have just captured my musings for this day. I can not believe the lack of critical thinking that is evident everywhere. Is incapacity or denial? Today I had a conversation with two people who could not belive how some people are spending money to which I responded by saying that things are changing and fast, the response that came back to me was that one side is not better than other which made me realize that my comment was taken for some sort of indirect party affiliation declaration. My comment then was that I am talking about economy, economy is math and has no sides. There is no way of getting around cause and effect. I believe that americans as a whole are far removed from having that understanding. This blog is not the forum for other than bubble related comments but one that we all should be concerned about is the slow eradication of freedom of speech in all areas of american life.
I agree 100%. We are drugged and Hypnotized! We are acting like a bunch lmmings headed for a cliff!
Will we wake up in time?
I hope so, but am not betting on it!
vioviv, I would argue that yours is a very constructive rant. Your comments go right along with the recent Rolling Stone article about Congress, a bunch of bloated perverts, thieves and liars. Unfortunately we pay the price for electing these scum, because Bush and this Congress are what the rest of the world sees, not we the people, most of whom are decent and trying to get along.
One interesting thing about politics is that the faction out of power tries to paint the economy as bad as possible, while the party in power tries to argue everything’s fine. Economics being a complicated business, both sides can find some ammunition. I do not, however, want the housing bear case to be perceived as just another case of partisan “talking down the economy” (remember the Gore campaign’s complaint about the Bush campaign’s warnings about the slowing/tech-bubble-bursting economy in 2000?) The malinvestment of capital into nonproductive residential real estate and the dangerous relaxation of lending standards are capable of doing real damage to everyone, Republican or Democrat.
And people who are rightly irked at the real estate industry’s shameless spin, ought to take a look at their amped-up political comments and make sure they’re not engaging in similar “terminological inexactitudes.” Saying we’ve just suspending the writ of habeas corpus and legalized torture and are destroying freedom of speech and that Congress “harbors pedophiles” leaves an awful lot of context unsaid, doesn’t it? I mean, this is not a case of something obvious just going unrecognized by the ignorant mass of humanity. There is another side to the argument, and believe it or not, some people equally intelligent, or more so, than you actually take that side.
First rule of political intelligence: Take anything in a campaign direct mail with a large grain of salt.
Saying we’ve just suspending the writ of habeas corpus and legalized torture and are destroying freedom of speech and that Congress “harbors pedophiles” leaves an awful lot of context unsaid, doesn’t it?
Exactly what context could there be to excuse these facts? By the way, I have no horse in this race; I’m neither a Repugnican nor a Democrap. But the Repugs have outdone themselves this time; they almost make the Dems look good by comparison.
Well, for one thing, they’re not “facts.” Congress didn’t “harbor a pedophile.” All the congressional leadership had notice of was some e-mails that, though not sexually explicit, were overly familiar given the relationship of the parties. You can argue one way or the other what the proper response by the leadership should have been. I don’t believe their response — a warning to Foley to watch himself — was enough, but that error in judgement isn’t a resigning offense, and it certainly isn’t a “coverup.”
Lightly-informed people are conflating the explicit text messages Foley wrote to a page, which weren’t known until recently, with the prior e-mails, which might account for some of the confusion. Or partisan double-standards might, too. Y’all on the other side didn’t whine too much when one of your own actually went and buggered a page a few years back. Foley, though a perv, apparently limited himself to talking dirty to the underage guys and waiting until they turned 18 to actually get down with them.
I’m actually more annoyed with Denny Hastert for going to bat on behalf of “congressional privilege” when Rep. William Jefferson, on the other side of the aisle, was caught with a couple hundred grand in cold hard bribes hidden in his freezer.
Moving on to “suspension of habeas corpus,” to hear some people say, you’d think Abraham Lincoln had returned and suspended it wholesale. Not true — any American citizen not captured on a foreign battlefield where he was in arms against the United States has an absolute right to petition for a habeas writ. The precedent for the exception for American citizens fighting on behalf of a foreign power goes back to World War II and beyond to the Civil War.
For what it’s worth, I think the administration may have gone too far in its initial position (since abandoned) that it could detain Jose Padilla (an American citizen arrested upon entering the country from Pakistan, where it is alleged he was training with a terrorist group) as an unlawful enemy combatant, even though the World War II case of Ex parte Quirin provides a precedent for it. (I think Quirin is distinguishable, in that although the German saboteur who was tried by a military commission and ultimately hanged as a spy had American citizenship, it was uncontested that he had entered the country by the instrumentality of a foreign military (he was landed by a U-boat on Long Island). Padilla, on the other hand, entered the U.S. through the ordinary channels of civilian transportation, which is a lot less unambiguously evidence of service on behalf of a foreign power.) With that one exception (which, as noted above, is a position the administration has abandoned), my considered opinion is that most if not all of the ghost stories about lost liberties don’t stand up to scrutiny.
Finally, “torture.” No, the United States has not authorized torture. What has happened is that the opposition is trying to redefine as “torture” practices that haven’t traditionally been so considered, like sleep deprivation and turning up the AC. I wouldn’t even classify “waterboarding” as torture, but the present policy forbids even it, even though it’s pretty clear that that’s what it took to get Khalid Sheikh Mohammed to spill his lentils.
You see? Context is everything. Obviously, the Democratic position can’t be fairly simplied as “they want us to lose,” as some idiots on the right are wont to do, but fairness has to go both ways.
“…fairness has to go both ways.”
Wow, you impeach a president over a blowjob and NOW you want fairness? Payback’s a bitch, bitch.
Well said. I have not been satisfied with the GOP leadership recently, but some of the rheotoric being thrown around recently is totally misleading and disingenous.
Suspending habeus corpus? For who? Terrorists caught in a foreign country. That little part is left out of course. Although most people would define Christina Aguilera turned up to “11″ is torture, myself included, in the literal sense I’m not about to label it so.
As for the economy and the housing bubble, I doubt that people all over California, Florida, Massachusetts, Arizona, etc. listened to Bush talk about the “ownership society” and then ran out the next day to start a career in flipping houses. These manias can occur on anyone’s watch, and the just-as-ridiculous dot.com bubble struck while Clinton was in power.
With that said, the GOP had the opportunity to push through entitlement reform, tort reform, energy policy reform and immigration reform amongst other things and totally failed on all counts. Of course the democrats did play a part in it with their scorched earth policy, but what do you expect the minority party to do under such circumstances?
Fact is, you have a two guys at the top (Bush and Hastert) that don’t how to get the message out and lead. Reagan got his tax cuts through a democratic house by the sheer force of his popularity and PR skills. The American people have not been given generous choices the last two election cycles- Kerry, Gore, and Bush are not the cream of the crop. But given the current political process, I don’t see it attracting this any time soon.
So you’re admitting the unfairness of your propaganda campaign? An honest man at last…
BTW, the circumstances that placed Bill Clinton in a position where he chose to commit perjury were a joke, but (1) our side didn’t create the hostile-work-environment law that Clinton found himself entangled with, and (2) perjury’s a big deal, whether it’s about hummers, stock sales, or whatever. Bill Clinton committed a felony, for which he was disbarred. People can differ as to whether the felony was an impeachable offense, but politics has gotten so tough that you can’t serve your opponents a big fat softball like *an admitted felony* and expect nothing to come of it.
It does look to me that with each political cycle, the brawling gets more vicious. Investigations are a basic weapon of political combat now. I don’t much like that — the impulse to have your political opponents thrown in jail isn’t a sign of healthy government systems. The law has gotten so prolix that virtually everybody risks an eventual misstep, giving his political opponents, who couldn’t beat him at the polling place, the chance to ruin him with massive legal bills.
>>I wouldn’t even classify “waterboarding” as torture,
I wouldn’t even classify “waterboarding” as torture,
Heheheh…I bet I could get you to refute that within 5 minutes with a little “water boarding” and admit that there is no housing bubble!
Thank you Thomas. You should not forget that for most on the far left politics is a religion. Everything is political, real estate bubble included. If you dare disagree with them, you will incur a wrath not unlike what we see from the more extreme followers of Islam.
” If you dare disagree with them, you will incur a wrath not unlike what we see from the more extreme followers of Islam.” So you’re suggesting that Democrats will be using suicide bombers to further their agenda? Hijacking planes and slamming them into buildings? Bombing subways?? This sort of brain-dead hyperbole earns repubs the contempt they currently enjoy.
“You should not forget that for most on the far left politics is a religion.”
And you should realize that morons like you, Thomas, DWR, Pismobear and the rest are no longer going to go unchallenged. We’ve had enough of your idiodic policies and we are not going to go away. Get used to it.
I bet all you guys fight at your children’s soccer games, too.
Us vs. Them. That’s all you know.
What a waste of perfectly good brains.
Skip: You’re probably right. I understand that waterboarding can get pretty much any information out of anyone, without causing any actual harm. I’d kind of like to try it and see what it’s like. It’s been described to me as wrapping a person’s head in a plastic bag and pouring water over it. The person can still breathe, but the sensation supposedly causes an irresistible panic/gag reflex that makes the person think he’s drowning, even though he’s not.
Why do I think that’s not torture? Because I would no way, no how volunteer to have my fingernails pulled out, or broom handles rolled up and down my shinbones, or all the other wonderful things sadistic people have devised over the years. On the other hand, I’m curious enough to how waterboarding works that I’d give it a try if I could find someone who knew how to do it right. I’ll have to ask my Navy-pilot cousin if waterboarding was part of the E&E training regimen he was put through — it sounds like that training involved much worse.
And if sleep deprivation counts as “torture,” then my four, two, and one-year-olds are some sick little b*****ds, and should be tried at the Hague forthwith.
And Weiner — Fair enough, though you’ve been challenging our idiotic policies for some time now, and since your challenges consist mostly of half-truths and namecalling, you’re going to have to do a lot better than that if you want to substitute *your* idiotic policies.
Now back to housing bubbles, and quick. I have a kids-soccer-game fight to get to.
Right on Thomas!
soon peole will vote for FREE healthcare-” it’s a right”
J Kerry
‘…peole…’
Please get some help soon.
“‘…peole…’
Please get some help soon.”
Pay no mind to flatffplan. He’s been playing the dumb kid in the corner on this blog for as long as I can remember.
LMAO…
imploder thinks you so smart soo smart, tn q please mo my lawn
Vio you are oh so right.
What really frustrates me is not people who see the same set of facts and draw different conclusions. I may not agree with those people but at least I can understand where they’re coming from and try to have a dialogue with them. We might even come to some points of agreement, who knows.
No, what frustrates me is people who are operating from a completely different set of facts. And these days, it seems like more and more people have no concept of baseline factual information, nor do they want to. Here’s an example:
This weekend I was browsing some websites and happened across an article on one site that started with a comment about Iraq and then transitioned into a rant about how evil the Federal Reserve was and how so much of what’s going on today was the Fed’s fault. As proof of this assertion, the author linked to two websites which made a lot of wide eyed speculation involving that ever-popular canard - the international conspiracy of bankers - and how the assassinations of both Lincoln and Kennedy were somehow connected to this cabal, which also runs the Federal Reserve. There’s more but I’ll spare you the details.
At any rate, I made an effort to try to engage the author in some dialogue and tried to point him/her to some less-dubious resources about basic economic theory and the role of the Federal Reserve. No dice. The author wasn’t rude to me, but s/he clearly preferred to hold onto a warped reality rather than recognize that s/he had been misled.
*sigh*
Do you not remenber Greenspan saying two years ago, adjustable loans are a great way for homeowners to buy homes”. Tell me this was not a set up. Who sets the interest rates? Show me where our members of congress and president has the power to sets rates? The federal reserve, private 10 banks, tells the government when and what the interest rates will be. Explain why the US dollar has lost 98% value since 1913 or 30% the last 10 years? Inflation, printing worthless paper. It’s that simple.
Vioviv,
The Inmates are running the asylum.
yes
ahh, come on…it’s not as bad as 1863 yet
…
Well stated, vioviv. I think many of us feel this way. These blogs are where I escape a few minutes every day to feel that I’m not insane, that not everyone is some braindead fox news idiot fixated by celebrity scandals or some other such titillation and oblivious to the wheels coming off our national bus.
You mean you don’t find the Pretty Missing Chick show (aka the Greta van Sustren program) intellectually stimulating?
The Money Magazine piece is the second MSM report this week outside the financial press; Brian Williams had a piece on NBC nightly news earlier this week; the word is truly out now; Main Street will soon awaken to ‘the great housing bubble unraveling.’
Anyone have a link to the NBC story, I would love to see it!
Thx.
ITS TONIGHT ON THE NIGHTLY NEWS
This may be off topic, but does anybody have any insight into what might happen with the prices/sales of second homes compared to regular residential. I’m interested in getting something around the ski areas in North Carolina in the mountains. Condo prices have doubled / tripled in about 4 years like a lot of other places. Just looking at the last 6 months, it seems like the market there has topped out and perhaps declined just a bit. I see a lot more stuff for sale, but prices are stubborn. But for the first time, I see maybe 20 units for sale where there used to be 2, and a few even marked “reduced’. This is an area where prices on some things increase 10% a month for part of 2005. Is there a chance prices might go back to say 2002-2004 there? Or are these areas “immune”?
I wouldn’t say that anywhere is immune to big price drops, but I bet that there will be certain places that don’t feel this as badly as the country as a whole. I’d guess that smaller places with less land to build on, which have that “paradise premium” built into their prices will fall less. If there is still a fair amount of truly wealthy people who want to buy vacation homes/condos there, then it might help their prices a bit.
If you look at Maui, the places that are above 1.2 million are still selling - not as well as they were last year, but still not badly at all - and with much less price depreciation. But if you look at the places from 400-800k, they aren’t moving at all.
Per the article: “But you can flat out ask a broker…are you getting an incentive?”
In Wisconsin where I sell real estate (very few flippers or investment types here, by the way) area realtors are REQUIRED to put on their listing sheets what the buyers’ commission rate is and, if not disclosed, the fines are stiff. So fortunately that information is readily available to buyers who elect to read the listing sheet or ask the buyer or seller’s realtors that specific question.
YOU’RE A REAL ESTATE AGENT!?!?!?
Susan I don’t know if you saw this post of Ben’s over the weekend but being a Realtor “(TM)” and all could you explain what is going on and how this scam works? Is this type of activity more prevalent than reported? Seems like a lot of these type of activities involve people from the mid west area for some reason? What’s your take on that? Not enough local flipping opportunites? Just curious.
http://www.tbo.com/news/metro/MGBXTU3SKTE.html
Realtor (TM)
You can clearly see who was the lynchpin who greased the skids in the whole scam…the appraiser. Notice it was always the same ONE-never anybody else.
Who then proceeded to f*ck up the entire market with the bogus comp’s!!!
The story corroborates my postings where I’ve noted 1 crooked appraiser can control and distort an entire market
FL state licensing bureau is the entity utimately responsible for allowing these sleazebags out on the street.
‘…read the listing sheet or ask the buyer or seller’s realtors that specific question.’
Always good advice. Thanks Susan. You are brave posting here.
Or stupid.
Unfortunately, there are costs to such a system. It allows all realtors to identify any “unprofessional” price cutter and impose social pressures immediately. Posted prices have tended to be a mark of price fixing conspiracies. Secret price cutting which grows in a market tends to undermine conspiracies–note OPEC for eg.
Susan Jacobson posts “In Wisconsin where I sell real estate ”
How many people have you hung?
Excuse me, Mr. Newman, but I don’t understand the question.
Susan posts “Excuse me, Mr. Newman, but I don’t understand the question.”
Yes you do, you know damm well what I said, and what I what I was refering too.
I will break it down for you, one how many people did you do deals with that used “stated income loans”. How many people did you use ARM loans that would bust them out … when they flipped? How many ‘tocix loans” did you use to make a deal?
What happened to you? to go from a reporter…. to a realtor? ….. small leap.
I read that article in the Tampa Tribune over the weekend and was amazed at how the checks and balances broke down with those transactions. I honestly don’t understand how it could have unfolded in that way. Where I live the house must appraise at the contract price and, if not, the price is adjusted accordingly and then the buyers and sellers decide if they want to go forward or not. At my office we have been warned that a lot of buyers around the country are now asking for large credits (given back to them by the sellers at closing)– which seems like fraud to everyone in my office. I have sought out longtime mortgage brokers in our area for their take on this, and they say that this can be illegal, although not necessarily so. However, If I encounter such requests from buyers in the future, I will certainly advise sellers not to go down that path. Smells too rotten to me.
Susan posts “Smells too rotten to me.”
Dear it’s in your syntanx, it drips in your writting…… you should have stated a reporter…. Too bad you sold out! Enjoy your 40 coins you made in the last 5 years of salad days, Failed writer, reporter face the truth…. 7 lean years of a common realtor…. what a joke!
Mr. Newman: Why don’t you tell me what you really think of me? And have a good day!
yes 2nd homes will get slaughtered- although Ashevill etc are strong bounce back markets as folks leave FL
Our monthly community newspaper announces new arrivals to our “retirement community”, including where they’re from. About 20% are arriving here from Florida.
Real carnage will begin after the election. If current crowd keeps control they will let things unwind quickly before 2008.
If new crowd wins they need to lower bar for 2008 by lets thing unwind quickly.
Either way, we will unwind.
“How would you like a $10,000 gift certificate”
If someone is stupid to think they are getting $10K free and not realizing they are overpay paying $100K’s over market… such fools.
From the Wall Street Journal Article: “While the number of bad loans remains manageable, higher loan losses could force lenders to cut back on credit, making it more difficult for some borrowers to get a loan. A spike in foreclosures could also help push home prices downward in some markets if lenders were forced to sell significant numbers of homes at a loss.”
If the leanders actually make people qualify by the rule that no more than 33% of gross income goes to housing and (gasp) actually pay a down payment - then we ain’t seen nothing yet! In Austin, about 40% of first time buyers are zero down zero move in types. Take away the speculators along with these folks and it’s going to get really ulgy.
No this is not the OCDan who has been trolling! Vioviv, I couldn’t agree more. I know every generation seems to believe that it gets worse as time goes on, but I really think, like you, that we are really living through it. The insanity in this country is unparalleled. It seems that everything is going in the opposite direction of how it should be.
OT: Went to 2 open houses in Rancho Santa Margarita and near Lake Mission Viejo. These people selling are on crack. The RSM house, which is just a glorified condo without shared walls, although technically a house, was asking 605K. WT@#@#@? At that rate, this house will still cost me 4K a month with all the costs. The Mission Viejo was even better, 835K. I almost passed out. Who would shell out 6K a month for these things. Needless to say, but even the wife was appalled by these prices. Anyway, the family was treated one of my rants about the economy after seeing these prices. All I can say is we are in for a lot of pain in the very near future. As TXChick pointed out above, is it any wonder why Smith & Wesson is up 250%. Damn, wish I had put some money into that company. Better yet, better actually go get me one because when the sheit hits the fan this time, things are going to get bad. As I have said a million and one times, when the depression hits this time, well… the poor will always be poor and many will get through, the rich will probably be able to get through as well, with some trouble, but the middle class will not be told that there are no more Boston Markets and daddy will only get a baloney sandwich for lunch, if he lucky. When that happens the real shooting match will begin!
” The insanity in this country is unparalleled” Yeah, and the leader sets the tone. The dumbest president in the history of the world
Au contraire… crackheads are usually willing to give away things at a terrific bargain
RSM, out in the middle of nowhere, and MV, mostly Brady Bunch houses and lots of senior citizens…what’s interesting to me is the “Irvine premium” that so many people talk about is just not apparent to me. Pricing is all over the place, and there are as many stupidly priced POSs in MV and RSM and Lake Forest as there are in irvine!
I would pay a premium NOT to live in Irvine or any other Communist-style centrally planned hellhole.
Here’s a question wrt/ foreclosures:
If the underlying mortgages have been bundled and sold on the MBS market, who takes ownership of the property after the current owner walks? How are the associated MBS securities affected?
Each mortgage identifies a so-called “trustee” who would petition the court for a foreclosure judgment, and who would then take over the property.
Does the trustee change when the mortgage is bundled and sold? If not, what is the obligation of the trustee to the owners of the associated MBS?
From the Bloomberg article:
Bill Gross, manager of the world’s biggest bond fund at Pacific Investment Management Co. in Newport Beach, California, forecasts the housing slump will cause the economy to slow and force the Fed to lower interest rates to 4.5 percent next year. The central bank’s target for overnight loans between banks is 5.25 percent.
Why on earth would a 3/4 point drop in 2007 be beneficial to this economic mess? Wouldn’t that just throw fuel onto fire by encouraging scores of refinancing to households that can barely meet their interest only payments? The damage is already done in my opinion. Home prices will continue to drop next year and the equity that these FBs were depending on will have dried up. Refinancing to a 2004 rate will not solve any problems. You can’t get a girl half pregnant….
Agreed. Lower interest rates are only part of the equation.
If interest rates start to drop…say goodbye the the US Dollar and say hello to the next great drpression!
Is it time to start shopping for long term CD’s Already ? I would have guessed it would be a while before rates declined based on our collective debt problems.
If you’re concered about looking up good longterm returns and the stability of the US monetary system, are domestic CDs (in USD) really your best investment option?
If you look at Fed rate changes in 1990-92, you’ll see that lowering the short term rates dramatically, far more than they can possibly be lowered now, did not mitigate the bubble’s collapse. That was also a much smaller bubble: http://graphics8.nytimes.com/images/2006/08/26/weekinreview/27leon_graph2.large.gif
Something tells me that the FED slashing rates won’t help if the intent is to drive down long term rates. Even if long term rates went down, I think that by then the mass psychology will have started to sink in, and that tide will be hard to turn back the other way.
Raise short term rates to drive long term rates down!
If a depression is coming, we’ll see 4% mortgage rates for 30 year loans…but you’ll need 20% down or equity and good credit to get one.
New Mass numbers are out today and are bad.
From boston.com:
Massachusetts home sales fell for the sixth consecutive month in September, the Massachusetts Association of Realtors reported today.
Sales of detached single-family homes fell 24 percent from September 2005 to 3,435, and median selling price declined 5 percent to $341,000, the group said.
September condo sales fell 28 percent to 1,546 units, and the median selling price was unchanged at $270,000.
All of the sales numbers do sound bad, but I am surprised prices have not given in yet. A 28% decline in condo sales, and yet the median price is unchanged? That doesn’t sound right. It almost sounds like the numbers are being manipulated and kept artificially high.
When you sell a $750,000 house with a $50k car given to you, to my understanding, it still counts as $750k, not $700k on the records.
Smoke and mirrors are keeping the median up.
Price reaction tends to lag sales trends, because it’s pretty much cause-and-effect. A high rate of sales causes people to realize they can make money in this biz, thus driving up demand with price following. Likewise the same with falling sales & prices.
Here in NoVa sales started lowering YoY during the late summer of ‘05, but prices didn’t start declining YoY until one year mid summer ‘06.
You know I mentioned Maritime Canada on the weekend as a place you can still get a good deal and it’s nice up there . . . . try this. Needs a little work obviously but probably everyone here could write a check for this.
http://www.mls.ca/PropertyDetails.aspx?vd=&SearchURL=%3fMode%3d0%26Page%3d1%26vs%3d1%26rlt%3d%26cp%3d%26pt%3d0%26mp%3d50000-100000-0%26mrt%3d-1-0-0%26Beds%3d0-0%26Baths%3d0-0%26f%3d%26ft%3dall%26o%3dD%26of%3d1%26ps%3d50%26ptgid%3d1%26pro%3d6%26ci%3dstanl%20y%26st%3d%26zip%3d&Mode=0&PropertyID=4940773
txchick57,
aren’t the property taxes there also fairly low?
So, before I comment, I need to explain that I live in San Diego.
That said, that listing really makes me angry! I can’t believe how nice a home is available for so reasonable a price. It just makes the stupidy I observe here daily that much more unbearable. So, do you know anything about the job market in that area?
Can you tell I find that listing . . . . tempting?
Tempting indeed. I’m having a VERY bad day following a VERY bad weekend and the only thought in my head is emptying my bank accounts and running away. This would be a nice place to run to.
Amen. I moved to SD from Chicago right at the height of the insanity (Sept 04) and was completely baffled by what was happening there. I’m much less irritible about now that I understand what’s happening, but my stomach still turns whenever I see some realtor douchbag in an Escalade or Hummer with their mandatory magnetic realtor sign.
I’ve been here since Spring 05, I didn’t buy right away - I couldn’t understand the disparity between the rent / own costs. I moved from the east coast where (at the time) owning was cheaper than renting. That money savings was the only reason I bought there. In SD, I can’t make the numbers work.
No matter how I look at it - it’s far cheaper to rent. I can rent a SFH is a very nice neighborhood or buy a condo in the hood for the same price - that’s not a tough decision as far as I can tell. Perhaps this correction will change the equation, but it would have to be a very significant correction.
My person prediction is that we will have a slow decline over several years while the rest of the economy catches up. SD is becoming the new Japan.
But that’s just my opinion, I could be wrong.
Option “B” would be serious inflation to accelerate the salary catch-up - but the fed won’t go for that - so slow and painful is my prediction.
Sold my over valued house, July 05 and bought a 5 acre farm. After living in San Diego for 30 years and watching the city deteriorate with traffic, illegals out of control, corrupt city government, taxes out of control; it was time to move. California will be bankrupt in less then 10 years if not sooner and the middle class will struggle to survive.
Why does ANYONE live in Terminator land? Go to realtor.com and look at what you can buy in Raleigh or Charlotte, NC or Greenville, SC for $250 - 275k.
So, do you know anything about the job market in that area?
Canada’s east coast has the highest unemployment in the country (double digits) and a static population. Good recipe for reasonable RE prices. Although it is the poorest part of Canada it also has the lowest crime and social problems. Stable, homogeneous population.
Fredericton is the capital of New Brunswick, a nice little city, and probably has lower unemployment than the rest of the province, but jobs are still hard to come by. Stanley is probably a small town not too far away.
I do hope for the sake of the locals that the locusts stay away. Given how late we are in the cycle that wish may be granted. Canada’s bubble land is way out on the West Coast and the economic problems of the East Coast are so well known nobody thinks you can win fllipping there.
Four hours northeast of Bangor, Maine. Methinks thoust might find it a tad more chilly than San Diego.
(Personally I hate the lack of real weather and especially good electrical storms in sunny socal, but this might be a bit much in the other extreme. On the other hand the sunshine tax has been replaced by a snowshovel rebate.)
That’s just amazing. How did you find this?
I have a house up there myself plus a good friend at a hedge fund (can you believe it? In NB??) who lives there. He sends me these things.
I’ll take it… if you throw in a $50,000 MBZ and help me move it to San Diego!
txchick57 all kidding aside, keep those things coming. I just got back from lunch and I am ready to buy. I love the USofA, but to get something like that and live house payments-free. I am just about ready to call the realtor. Besides, I am sure that rate is negotiableand if not that is still a steal. Hell, I ‘ll do some work on that. At 100 years old, it is probably in better condition that most of the crap that passes in this country that is being built right now! One question, is that price Canadian? Just asking because if it is, look out! Even against the dollar, if that is local currency, I may be gone right now. Even if that is US I still make pull the trigger. That is a style of home I have always wanted. Thanks and keep the good ones like coming. Def. and appreciative blogger.
“I just got back from lunch and I am ready to buy.”
Man, your lunch must have been waaay better than mine! Or you got a nooner.
Only ready to buy that house, not any house (sorry for that way I wrote that). After seeing that I would seriously consider that one!
Yeah, that price is in Canadian dollars.
Come in winter before you buy!!!
Snow belt Baby!!!
That place is gorgeous.
Better yet, those are Canadian dollars.
All the bad news about housing sure hasn’t slowed the consumer. The consumer is the main reason the stock market is at new highs. This leads me to think, is the consumer having one last hurrah before the fall or is the housing slow down over blown?
Nothing short of bankruptcy is going to slow down U.S. consumer’s addiction to shopping and spending.
Capital is sacrificed so that civilizations can progress–John Train. I’ve been reading this trend for a long time, I’ve been following the real estate market for a while. I do agree with most of the posters here-price drops will happen, some areas as much as %50. With that said, WM, PULTE, and others that have been destroyed on this blog will thrive as stocks. WM doesn’t own the paper they’ve lent out, and the the contrarians all say Pulte is trading at %50 intrinsic value. The sky isn’t gonna fall. I believe the housing bubble will burst, but the gov’t has the ability, know how, and passed experience to handle economic collapse. Pls. don’t infer more than what the data on homes suggests. I’ve put my money where my mouth is and have sold our residence and invested the proceeds into a talent whom in some circles regard as another WEB. Money managers’ reputation has been hurt because there are so many that are mediocre. But the good ones are worth their weight in gold.
I remember reading a ‘Realtor’ quote on this blog that stated that historically, housing prices are only driven down (local markets only, mind you) by a slow/ressesion economy. Seems like we are witnessing the oposite this time (as many on this site have predicted). I wonder what the future holds for us all now that housing prices are ‘retreating’ nationally (it seems) and the economy is ’storybook’ strong (to paraphrase a political candidate quoted on NPR last week) and the DOW is at all-time highs. Is this historically unprecidented territory we are heading into?
Last week I just happened to be flipping channels and saw Cramer exclaiming that homebuilder stocks are ‘undervalued’!. WTF?
Kramer got slapped around here pretty good last week for that advice. General consensus seemed to be that he was trying to pump and dump to save his own arse. Or that he’s insane.
Remember that 1980s movie “Trading Places” where two old guys decide to swap Dan Akroyd and Eddie Murphy? I’m thinking that could make an interesting premise for a CNBC show. See if a random bum off the street can dispense better advice, and then cut to scenes of Kudlow or Cramer in a soup kitchen line. The quality of analysis couldn’t possibly be any worse.
Are you kidding? That’s a classic!
“Turn those machines back on!”
“Valentine has set the price.”
That is a great movie. Sometimes I wonder if the NAR has Mr. Beeks working for them.
“the economy is ’storybook’ strong”
I think you’ll hear that w/o much elaboration in the media… but when you look more than a quarter or two out (which pretty much means not looking at the stock market), imbalances creep in from everywhere and every honest bean counter I’ve read says we’re in for pain. Will stock prices hold up at these leves (dow 12k+) this without some serious inflationary help?
Cramer seems to be way out of touch on the homebuilder stocks. It’s hard to imagine things improving for them for at least a couple of years, and yet he thinks they have bottomed. He does say that the stocks will bottom about 6 months before housing actually bottoms but that seems wildly optimistic, still.
Indeed, the the general public seems to think big problems can be solved in hours or days rather than years and decades. Short attention spans “R” us.
According to today’s Boston Globe (10/24/06), the real estate prices are bottoming out. Yeah, right.
I like how someone put it in another post (paraphrasing”): “What are the chances of the longest and most extreme real estate boom in American history being followed by the shortest and mildest correction?”
I don’t see how prices can be bottoming out with 2 years of inventory sitting, nothing selling, and most average people priced out of the major markets. I think sellers are like deer in the headlights right now. They don’t know what to do and won’t move until it gets painful to stand there.
Are there really 2yrs of inventory?
In Miami, there is ~40000 units on the market - but what was the sales volume in the recent months?
The prices are still holding quite firm.
From the Money article:
“In addition, the survey showed that 80% are encountering buyer resistance to the price of homes, the most since the early 1990s. As a result, nearly 45% of builders are trimming prices.”
Good to hear that the Resistance Movement has finally been activated!
Builders in OC are not giving in. Went housing viewing this weekend only to see that there are people still willing to buy these overpriced condos at 450k - 700k for basic crap. I haven’t seen a price drop in OC and I don’t think I will due to there are just too many people moving into CA and not enough houses. The inventory actually dropped in the OC. I hope to see a price drop, but may never happen unless a major depression hits the OC. Just going to the local outlets and shopping malls reminds me of 1999, when everybody and their grandmother was spending like there was no tomorrow.
Remind me what happened in 2000………
Sockmarket how true. Our son plays fall ball in the area and I can’t tell you the number of SUVs that park in the lots every Sunday. Also, the church on Sunday is a little more balanced, but still a lot of high-end vehicles. It boggles my mind. As a posted above, we went to 2 open houses and my wife and I were pissed and then bummed. Who is still buying at these insane prices, let alone selling, thinking they will get the outrageous prices. Think I am going to buy the house TXChick passed along. This country can’t keep up the pace it is at. Might as well get out and start completely over!
As a posted above, we went to 2 open houses and my wife and I were pissed and then bummed. Who is still buying at these insane prices, let alone selling, thinking they will get the outrageous prices?
stupid people?
Knife catchers?
can’t-use-a-calculators?
No need to stay pissed or bummed, though it is a perfectly natural reaction by someone with a functioning cerebral cortex (like posters here). Economic reality has a way of imposing itself on even the most delusional and persistent of crowds. Too bad those folks who can recognize this are always in the minority –and probably always will be. As Keynes once said:
“The market can stay irrational longer than you can stay solvent.”
I like your name. The OC huh. I was just there on business. Lots of places to build where I stayed–in Brea. Nice people there though. IMHO not immune to huge price drops.
Oh don’t worry, it’s coming and OC will not escape either.
“too many people, not enough houses”
Repeat after me: “People” are irrelevant. What you need are “people with money.” You need a six-figure income to afford a half-million dollar house. OC has lots more half-mil houses than people with six-figure incomes. Prices will fall, Q.E.D.
Just went to Dataquick and pulled up the numbers for Orange County:
Resale houses YOY median price increase .7%
Resale houses YOY sales volume -34.6% . Sept, 06 sales 2664 units
Condo YOY median price decrease -3.3%
Condo YOY sales volume -41.8% . Sept 06 sales 693 units
New home YOY median price increase 14.2%
New home YOY sales volume -35.4% . Sept, 06 sales 276 units
The OC is going negative. With new home sales volume off 35% it won’t be long before the new home median goes south also.
24 years for Skillings.
May many of the mortgage shysters be joining him in NC.
http://www.chron.com/disp/story.mpl/front/4279719.html
I honestly believe that all of the mortgage fraud that will eventurally be exposed as the RE market sours, will make Enron and Skilling look small in comparison. There should more than a few Mortgage Lenders and Builders who will eventually join Skilling in prison.
At least Skilling gets a chance to grab a top bunk before all the RE criminals get thown in the clink. Soon Skilling will be counting the days until sweet Casey arrives!
Hmmm, kindof enjoying the image of Casey as Skilling’s bitch!
as far as toxic loans,they are only getting worse.i had a flier for a 95% “no ratio” option arm with a 1% start rate today.NINA, NIVA or SIVA,currently in default ok.etc.ANYONE considering buying a firearm for personal defense should get training,your local jc may well offer good training at low cost,when i lived in oakland they had training for civilians as an adjunct to the police academy…$35 for 11 trips to the range,1,000 rounds of .45’s and a post certified trainer.i took that course over and over,since i was managing property in the fruitvale district of oakland,i needed it.