“The Great Real Estate Boom Is Dead”: California
The Daily Bulletin reports from California. “Residents hoping to incorporate Eastvale might have to wait longer for land on which their future civic center and fire station can be built. Developer D.R. Horton, which had planned to build a housing development called Riverdale and set aside 20 acres for Eastvale’s civic center, has walked away from the project.”
“‘It’s indicative of the housing market slowing down,’ Riverside County Second District Supervisor John Tavaglione said.”
“D.R. Horton’s decision to not go forward with the project, however, is nothing new, said Steve Johnson, director of Southern California Metro Study. The developer has walked away in the last six months from an estimated 22,000 proposed homes throughout the U.S., he said.”
“Booming growth in the unincorporated community of Eastvale has not been immune to the present housing market decline, Johnson said. ‘In Eastvale, the price reduction is 12 percent and buyer traffic is down 50 percent from this time last year,’ Johnson said. ‘Eastvale continues to see some growth, but it’s slowed down with the rest of the housing market.’”
The LA Times. “The great real estate boom is dead. Buyers can check out dozens of houses without dreading that they suddenly will be priced out of a delirious market. Sellers are eager, sometimes desperate, to make a deal.”
“But not in a narrow strip of land across from San Francisco. Although the house hadn’t been updated in decades, Jimmy and Elaina Chan’s agent warned that a three-bedroom contemporary would definitely go for more than the asking price of $699,000.”
“The Chans wrote a letter to the owner, expressing the hope ‘that you could consider us as the future stewards of your home.’ They mentioned they had grown up nearby and wanted to return to start a family. They promised to ‘nourish and preserve’ the garden. The letter and $720,000 bid weren’t enough.”
“As the home market in California has contracted, sales volume has fallen less in the in-demand East Bay towns than elsewhere in the state, according to DataQuick. The price data are more equivocal. When DataQuick measured changes in the median price per square foot for single-family houses the best market in the state is hundreds of miles away, in San Bernardino County.”
“But the raw numbers might not tell the whole story. Agents in the Inland Empire confirmed that the market there was visibly in decline. ‘The average home is on the market 50 or 52 days,’ said (realtor) John Bernardi in San Bernardino.”
“As for letters designed to sweet-talk sellers, ‘No one’s writing them,’ he said. ‘No one needs to.’”
The New York Times. “As the red-hot California real estate market sizzled in recent years, National Consumer Mortgage looked like just another residential mortgage company successfully riding the boom.”
“N.C.M. ran an investment arm that offered high-yielding notes to preferred clients, promising to use customers’ funds to make short-term, high-interest loans to individuals and companies that needed money quickly. For customers like Bryan Downey, it was a tantalizing pitch. Mr. Downey had a $125,000 inheritance that he wanted to put to work, and his younger brother had already invested his inheritance with N.C.M.”
“Earlier this spring, Mr. Downey, along with more than 200 others living mostly in California and Colorado, found out they were victims of a long-running Ponzi scheme that pulled in about $30 million before N.C.M. sought bankruptcy this spring.”
“The N.C.M. scheme bears all the hallmarks that have made financial scams possible for generations: naïve trust, a speculative market offering seemingly easy riches, and gilded lures hitched to people’s unending desire to keep up with the Joneses.”
“Experts say that for those caught up in financial scams, the early stages are exhilarating and therefore magnetic. Indeed, until the moment investors finally absorb the fact that they may have been duped and their money gone forever, speculating on a ’sure thing’ has all of the warm and fuzzy benefits of a freewheeling joy ride.”
“‘You’re experiencing the ride, singing, ‘Yo ho ho! It’s a pirate’s life for me,’ but you never see any of the trappings of the ride itself,’ said Anthony Pratkanis, a psychology professor at the University of California, Santa Cruz. ‘Criminals call it, ‘putting the victim under the ether.’”
“‘I lost a lot of faith in human beings,’ said Mr. Downey, who regrets losing his father’s money. ‘He worked hard to become middle class, he left us a nice home that we sold, and we all got taken in by a clown in Orange County.’”
“‘People believe their next-door neighbor is investing in property, flipping it and getting rich quick,’ said James H. Burrus, assistant director with the Federal Bureau of Investigation in Washington. ‘Everybody seems to be doing it. Fraudsters take advantage of those types of cycles.’”
‘The California Legislative Analyst’s Office reports that K-12 public school enrollment — or average daily attendance — will drop next year by 6,000 students from a total of more than 6 million statewide. Although seemingly modest, the drop signals considerable challenges for schools as statewide enrollment is expected to continue falling through 2010.’
‘The statewide numbers may seem insignificant because they balance fast-growing suburban districts against steady enrollment declines in California’s cities and older suburbs. But don’t tell that to Richard Launey, a trustee for the San Juan Unified School District, where K-12 enrollment has dropped from 53,000 to 46,000 over the past eight years. The district has been forced to shut eight elementary schools since 2003. ‘It’s just a slippery slope,’ Launey said. ‘When enrollment declines, ultimately you have to begin to close facilities.’
Wow, this is happening in California, too? I thought the declining enrollment was unique to Florida. Now I’m wondering a couple of things. First, does anyone have data on any states where enrollment is rising? This would show where the population has shifted to. Secondly, could declining enrollment be due in part to the fact that more and more parents are not pleased with the public school system and are either home-schooling or making arrangements to send their children to private or parochial schools? Just wondering.
I think the problem may be that population is declining when compared to what their projections were. Of course they based those projections on phony demand for houses.
No, this has been the trend in many parts of California.
Are private school enrollments expanding? Are more kids being home taught? And yes, what states are still seeing significant public school enrollment increases?
Bill,
Those things might play some role, but the overall population projections for California are trending downwards for at least high-school graduates (17-18 year olds). I checked the California Department of Finance projection numbers.
And in many parts not the trend:”Half of the districts in the state are declining and other districts are growing like gangbusters.”
The wealth divide grew while the bubble got bigger. Families moved away from places like San Diego, LA, etc. Those not suckered in to buying will probably move back due to commute times when the bubble has run its course.
People here in West LA just aren’t having kids anymore. Gets in the way of nightly $35 sushi dinners, $300 Religion jeans, BMWs, expensive yoga lessons, life coaches, organic foods, annual ski trips, etc. They have one kid at age 42, maybe, and call it a day. Or, the ones that really wait to long seem to import a kid from Nepal or some such place. I’ve even noticed that Mexican immigrants seem to be having fewer children lately - I know several immigrants who are one of eight to eleven children, who “only” have had two or three of their own. One had none. Hard to fit 11 kids into a one bedroom apartment, I guess, even with food stamps and seccion ocho. Personally, my kids’ private school campus was purchased from the public school system within the past 10 years, after declining enrollment made it no longer worthwhile to keep operating the place. Gorgeous campus, too.
No worries about schools here…
Nero fiddles while Rome burns.
http://www.nytimes.com/2006/11/27/business/27richer.html?ei=5065&en=2a8cfcbd2df7e6b0&ex=1165294800&partner=MYWAY&pagewanted=print
I have 3 older sisters. Only the oldest had kids. The oldest is 53 and I’m 47. Harry Dent warned about the baby bust. He had many wrong predictions, especially about this decade. But I think he will get this one right - depression starting in 2009 or 2010 for the United States. But if you are a world citizen, you will note 67% of equities are in other countries. China and India should continue to do well. Smart money should be diversified overseas, in U.S. short term bonds, even gold. I read a lot that gold is good to have in a depression because government will try to inflate its way out of one. Our national spirit is too week and we are too multicultural to have a war to unite us into a strong ethical society for quite awhile. Just like this war against religious terrorists is a losing battle because a religion that respects religion is leading the battle. Illogical.
Yea, I’ve wondered the same thing about the private/parochial school effect. I had also forgot about the home-schooling aspect. I have no hard data on it but know a quite a few folks taking this route. Prefering to leave the subpar at best public system to others.
I home school. In fact between these two posts my 11 month old and I were playing “find the word”. A game in which she looks for a match to the word I hold among those hidden around the room.
I wouldn’t want to put any children in the public school system, at least not in Florida. I’m sure there are good public schools somewhere, but not here. Children shouldn’t have to worry about gang recruitment, pervert teachers and an animalpharm environment. I also know a number of people taking the private/home schooling approach. Their children appear to thrive on it. Personally, I think the public school system is on life support, having been co-opted by various special interest groups. If the housing bubble shows up the vast holes in the system, that’s a good thing.
I know a lot of parents that I wouldn’t want to leave kids with day in and day out. It isn’t just the public schools that produce mindless little robots that have no clue how to function in society. Home schooling is no panacea if the parent is a nut.
I agree. A lot of parents are motivated to home school because they are anti-social. They don’t want to deal with other parents, teachers, etc. Also, parents who abuse their children and don’t want others to see the marks. Then there are parents who are racist and don’t want their children among other races. There are also parents who aren’t coping well with modern society and wish it was Little House on the Prairy again. I say, the world is what it is, let your kids go forth and face it.
You are forgetting the largest group, religious zealots. They don’t want their kids straying from the oh-so-narrow path of the righteous.
Josh
Was it the “animalpharm” part that hit a nerve?
Gotta put in my two cents here…”Animalpharn”? Get a crip. You don’t honestly think that private schools are fair and unbiased do you? Drug and Gang free?? C’mon! After raising four kids and dealing with both private and public schools, I’ll take public ANYDAY over private. (Home schooling, well I have to agree, there are some very paranoid parents opting for this option.) I found private schools across the board are socially & academically isolating and will only take the creme de la creme of the potenial ‘crop’ of students. Oh no, no students that have learning disabilities or behavior problems for them. Makes you wonder why the heck the rates of graduation from COLLEGE aren’t much higher than for public school kids. All that chasing around for the ‘best’ schools and car pooling and pulling the kids out of one school for another…
The truth is, in the end, it dosen’t really make THAT MUCH OF A DIFFERENCE for the AVERAGE American student. Schools, whether public or private, are what you as a parent and a family put into it. Quite frankly I’d rather have a system where ALL children are welcome, not just “some”.
Many moons ago, I went to private school.
Hands down the most screwed up people that had been kicked out of public schools.
“You are forgetting the largest group, religious zealots. They don’t want their kids straying from the oh-so-narrow path of the righteous.”
Here’s a photo of children sending messages to their middle east neighbors with adult encouragement.
We homeschool.
Wow, I didn’t know we were quite so insane, paranoid, and anti-social. LOL
I don’t know - I think for every paranoid nutter trying to “protect” their kids, there are as many and more families like ours that would are simply trying to give our kids the best education possible by exposing them to “real life” through homeschooling.
By homeschooling, my kids can participate in our household affairs, travel, and observe my business in way that would be impossible if we sent them away for their best waking hours. How many of us know academic-types who seem totally lost when it comes to practical matters? I’m not sure time in academia at any level ever counted as exposure to the “real world”.
I also 100% agree with a comment above: families only get out of an education what they put into it. For many families, homeschooling is a way to maximize the return on the effort put into that education.
As for enrollment, from my own experience locally I have a hard time believing that homeschooling has a significant impact on the numbers. The vast majority of local families I know send their kids to public school.
…”Animalpharn”? Get a crip.”
ROTFLMAO!
Maybe yours works but I’ve always been made nervous by the Middle America madrassa movement.
Hey Vermonter,
I with you. When you actually look at a public school day, so much time is wasted in mindless crowd control efforts that there is very little time left for learning.
Agree, waaahoo. Looking at Campbell’s post above, he just labelled parents who homeschool as anti-social, racist child abusers. LMAO! But listen up, because that’s probably part of the propaganda coming soon to a theater near you from the animalpharm nanny-state.
If I don’t want my children learning from that nuts children, does that make me anti-social?
Of course you are not anti-social. I’m saying that’s the propaganda, put out by the “professionals” who have a vested interest in the public school system. Parents should be able to do what they feel is right for their children in matters of education. The nanny state would like to co-opt this right. However, my original question was answered by LILLL below. It seems the population shift is to the Carolinas, where school enrollments are up.
That last was a late night baby on the attempt at humour. I got your point.
Homeschoolers are maddrassas now? You public school zealots are the real nutjobs.
“baby on the lap” that is.
My kids are in public school, but we play routinely in a park that is taken over on Tues and Thursdays at lunchtime by a large homeschooling association. I’m an antiwar activist and an atheist so I always avoid large groups that have little fishies or Bu$h bumper stickers on their cars, but hadn’t noticed that with this group. However, several parents I know have stopped bringing their kids to that park during those days and times, commenting on how rough and rude the homeschooled kids were on the playground, often riding their bikes at high speed through the play area where toddlers are running. At one point, some of the home schooled kids very rudely told one of my daughter’s friends to get out of the slide, making her cry. The girls’ mother grabbed her and scolded the rude kids but they talked back to her. She was dumbfounded and left. The homeschooler parents were about 100 feet away sitting in a circle, completely oblivious to the behavior as they discussed the bible.
Vermonter,
just curious, how are your kids going to do when they have to compete with their peers–whether it’s getting into college or graduate school, or in getting a job, or even on the sports field? Do they compete at all–even in team sports? And for those who homeschool, by default, your child is exposed to only your point of view–at some age, don’t you feel this might be limiting?–whether at middle school, or high school? Do you think it might make it harder for them to separate from you and become independent thinkers?
Anyone who thinks homeschooling is bad should send their kids to a public school in Newark, Detroit, Atlanta, DC, Dallas or Chicago. You’ll see how well the public school system works.
There are some very good public schools, but there are also some very bad public schools. If your child was being sent to an aweful school, the proper thing to do is to homeschool or private school. Most of the white people in urban areas do not send their children to public schools because of the violence and gangs and other distractions. I know this is true in most of Dallas.
In response to spike66 -
Wow - those are great questions.
First, my kids are already independent thinkers - LOL. My job is to herd the cats of our household.
Homeschooling is not keeping our kids “sheltered” at home with us but rather a way to expose them to life in age appropriate doses. My kids go to after school sports and group piano lessons as a way to be in a group and with other kids.
Through outside coaches and tutors, my kids will have exposure to “other” teachers. The thing is that there is not the variety of viewpoints that we hoped or imagine there might be any school. Having dealt with the local public school system as an adult, I found that the culture actively discourages competitiveness and debate. Other than to advocate for my son, I knew better than to challenge the current educational “wisdom”. I have grave doubts that worrying about “self-esteem” in kids furthers their education or prepares them for life after they walk out the schoolhouse doors.
The truth is that most homeschoolers do better in college, sports, and in life than many of their public school counterparts. I can google it, but most studies I’ve read about show better levels of academic achievement, employment rates, and college participation for homeschooled adults. It makes sense - homeschooled kids been privately tutored for part or all of their academic lives and in many aspects that type education reflects the world outside.
For instance, I don’t grade my son - I expect his best every single time. Mistakes are okay, fluffing off is not. My expectations match the expectations of an employer to T. Noone grades you at work, you need to deliver your best everyday in order to get ahead.
Another thought: If you are worried about the socially conservative religious movement in the US, you may want to start pushing for much higher public school standards or homeschool yourself.
(I’m agnostic, socially liberal, and a financial conservative, by the way. ) Homeschoolers tend to have far higher academic standards than the public school system. The net future effect of current trend of homeschooling maybe that the most socially conservative groups are producing the best educated and articulate adults in the US.
“Correlation doesn’t imply causation” isn’t taught at your home school apparently
There’s also the possibility that smart people tend to home-school more and smart people tend to have smart kids, regardless of where they’re schooled.
““Correlation doesn’t imply causation” isn’t taught at your home school apparently
There’s also the possibility that smart people tend to home-school more and smart people tend to have smart kids, regardless of where they’re schooled.”
We teach it with breakfast every morning.
Actually, I agree with above statement - but what I’m talking about in general is that a smart kid in a homeschool will get probably get a better education than when left alone in a public school environment. My son is already ahead in some areas as compared to public school and we aren’t trying that hard.
In part, it’s because we can tackle subjects in a way that public schools can’t due to lack of time, resources, and expectations.
Vermonter,
Thanks for your reply…I wish you and your kids all the best.
I do think that many of those who homeschool may not be well educated, and that their children may pay the price as adults. For those families who are highly educated, my concern was really about removing kids from the rough and tumble of childhood competition..and from meeting kids from all sorts of backgrounds. The blog has reinforced my thought about widespread math illiteracy, and as for the creationists with their anti-science stance…children homeschooled in these environments are only going to be able to compete for whatever minimum wage jobs exist in the future.
Don’t forget no child left behind so we must dumb it down to the lowest common denominator.
Although I have what borders on utter contempt for creationists, Spike, you’re absolutely wrong that people who follow its “anti-science” creed will only be qualified for minimum wage jobs. Creationists are only selectively anti-science, and are capable of amazing compartmentalization. Since plenty of high-paying jobs — even science-intensive ones — have nothing to do with biology, the creationists’ rejection of the fundamental organizing principle of biology can have remarkably little effect.
Interestingly, plenty of creationists in SoCal tend to be engineers — which is logical enough, since engineering (as opposed to physics or “pure” science) basically involves knowing some general principles that can be taught by rote, and knowing where the tables of information are to look things up. You don’t have to know the ins and outs of punctuated equilibrium to know the tensile strength of structural steel.
I know some really sharp, well-adjusted people who’ve been homeschooled, like Abraham Lincoln was. Correlation may indeed not equal causation, but get enough correlative data points, and you’ve got a strong circumstantial case, and the burden is on the person arguing coincidence to show that when other factors are controlled for, the home-school advantage (if any) disappears.
Serious question for “home school parents”. How do you teach computer skills? All the 10, 11, 12 year olds I know blow me away with their knowledge of computers and the internet, and I have 10 years and make my living on the computer. They are so far advanced, I find it hard to believe anyone could teach this needed ability without being a specialist in the subject. Please inform me how you approach this?
In N Carolina they keep having to re-district yearly because of the huge influx of school aged children. This is true is The Raleigh-Durham area, Charlotte, and Wilmington NC. Tons of building…they don’t seem to run out of land there!
Thanks, LILLL. That’s what I was wondering. I had a feeling that the shift in population is to the Carolinas, which I think are going to become the new California.
Really? damn. NC has been my desination for years when I relocate. Most blue state folks are terrified of red states. NC (besides just being beautiful) has a nice blue core in the research triangle.
I grew up in OC (private schooled since w’re on the topic) and left OC because it became a cesspit classisism. In 93′ I found Sacramento reminded me of OC of my childhood. Now it’s reminding me more and more of OC - specifically the rocklin, granite bay, folsom areas. Maybe KY and TN are still in good shape?
“blue state folks are terrified of red states” LMAO!
You need to get out more often. Most states are purple states.
This blue state/red state thing is so devoid of, and divorced from reality. I have lived all over the country. It does not matter in which state you live. If what it offers you meets your criteria, go there. There are great areas and great people along with horrible areas and horrible people where ever you go.
Jobs, economic base, climate, taxes, access to services and amenities, crime, and comparative cost of living are things to look for. The other things are too micro to account for from a distance.
I recall a post about some wacko neighbors who made life hell for the poster. Now that terrifies me! How do you account for that?
“blue state folks are terrified of red states” LMAO!
Personally, as someone from TN living in California, I’d rather people from CA, NY, MA, and other ” blue” states believe the negative hype about the “red” states. Since living here for 7 years, I hear so many different things about these red areas. In many ways it is fascinating. I’ve been to expensive cocktail parties and heard educated people say some of the most amazingly uneducated things about states and regions I know they’ve never been to. They just KNOW that where I’m from is full of crazy christian folk that are gonna’ force them at gunpoint to attend their service, or that somehow the entire South has yet to realize that the cival war ended in 1865. I can go on and on.
Unfortunatly I think that the word is out that the SE is indeed a terrific place to live and raise a family without all the silliness Californians torture themselves with in order to get something as simple as a stupid house. There are 38 million Californians and 9 million North Carolinians. Just keep that in kind next time you happen to be at a party.
From now on I am on a mission to reinforce the notion that the SE is really a TERRIBLE place to live, and that anyone living in CA should count their lucky stars that they can pay to live here. Meanwhile, we few who know the truth can sit back in our comfort and know that there are extreme alternatives out there.
“or that somehow the entire South has yet to realize that the cival war ended in 1865.”
Um…what?
The Civil War is not over. Haven’t you seen the bumper sticker?
North 1, South 0 - Halftime.
Signed, native Tarheel.
My sister, who is a public school teacher here in Northern CA, forbids us to send our kids to public school. We are still deciding between private and home school. Seems the public schools here are more interested in social engineering than education.
Sending children to a public school is child abuse.
To think that all public schools are bad and the same is ignorance. It’s like saying all white people are racist.
You send your child to the schoolmaster, but ’tis the schoolboys who educate him. ~Ralph Waldo Emerson
“Seems the public schools here are more interested in social engineering than education.”
AMEN!
I see the social engineering problem here too in upstate NY.
Also public school 4th grade curriculum has my son on a field trip almost EVERY week so far this year. Even when they are in the school, there are Nutcracker performances, shirt day where the highschool atheletes come over and by lottery the 4th graders get to wear their shirts (his paid for violin lessons were cancelled for that one), religion classes—yes the public buses and public school time are used to send the kids over to the churches. Supposedly they are so worried about the big 4th grade state tests yet I’m not sure when the kids are supposed to be learning. They’re never in the classroom.
Interestingly enough, my son hasn’t had a better year, all As except reading which is funny because he was reading in 1st grade. (Damn Harry Potter has him bogged down. LOL)
In constrast my daughter is working her behind off in 3rd grade with tons of homework. She never seems to understand the concepts until we get home and work on them together. I have the feeling I break down the processes for her in a way that other children understand intuitively. Funny though, once she gets it, she flies! (As/Bs) They both have high IQs professionally tested. But both have learning issues. It’s amazing the system threw away all those dislexics as being unteachable before the 70s many of whom were brilliant…and yet many public school systems still cling to the “one teaching style fits all” stategy for these kids. Lots of potential going to waste.
Would the private schools do any better by them? Plenty of the locals have tried the private route. There is one school I wish I could afford but at $15k a year it won’t happen. The others….I’m not sure they’re doing anything any differently. I went to a private school until 6th grade. I credit that place as well as a few other public school teachers and professors for developing an intellectual curiosity that only increases with age. It wasn’t about being a robot that blurts out the right memorized multiple choice answer. We were encouraged to consider the nuances of the material. Maybe we were just lucky enough to get the right Mother Superior calling the shots.
Different leaders (superintendents/school boards) create different environments and I don’t think its a one size fits all situation. Each family has to look at their towns school system, their childrens’ needs, what’s available for other options and then make their own personal decision. This is not a black and white situation.
Recent studies find that public schools perform favorably with private schools when students’ income and socio-economic status are taken into account.
Yet sister works for the public school system……
Data on school aged children is available from the census bureau. The url for the 2004 data is http://www.census.gov/Press-Release/www/releases/archives/population/001703.html. The following quote will be of interest:
“Only 14 states experienced an increase in their elementary school-age population between 2000 and 2003. Texas (125,000), Florida (88,000) and Arizona (66,000) — the latter two, traditionally, thought of as retirement havens — led the way. North Carolina (36,000) and Nevada (35,000) followed. Nationally, the total of elementary school-age children declined by 274,000.”
Steven,
I nominate you as MVP for this thread. The census site says that nationally elementary school aged population declined 1%. In Southern California blue ribbon school districts where many people move when they have kids of Las Virgenes and Conejo Valley Unified School Districts, enrollment has been declining at several times that rate in recent years. It declined by 9% at my daughter’s elementary school this year and the administration says this is not atypical of the district and, in a letter to parents, blamed housing prices. There was also a bit posted a while back here or on the South Bay Beaches bubble blog about Hawthorne (not a blue ribbon district, but fairly typical of LA) district facing a 10% decline this year. Many districts in So Cal are losing teachers and resources due to declining enrollment now. Those states like TX and NC seem to be destinations of young families.
Mesa Union School District reporting in. Bow, now, it wasn’t really “home prices” as much as they were blaming SOAR and other growth regulations. Home prices in the Conejo and Las Posas Valleys have always been high. LV & Conejo administrations are addicted to a growth model to expand their empires.
do illegals count?
I believe illegals do count. In the wake of Prop 187, one of the first blowback items was that the Supremes had long since found that the right to a public education is not nullified by the crimes of the parents.
I think you are right on that point, az_lender.
A great many of the children are illwgal as well and not only do they get better educations but they are treated better than legal immigrants at the college level.
Posted “The Great Real Estate Boom Is Dead”: California”
It is good to be toast, if you rent and want to buy….later!
Not the first time enrollment declined. Many middle and high schools actual were shut down in early 80’s. Part due to budget cut backs Prop 13 and declining enrollment. I havent seen new schools being built. Now days we call this the Huge Lump of the population moving to retirement.
Nothing you say here is true except that some districts saw declining enrollment in the 80’s.
This is happening not only in the San Juan district (in Sacramento) but in other districts throughout the area. A large percentage of non-tenured teachers are pink slip’ed at the end of each year because the district doesn’t know if it will have the enrollment (or money) to determine how many teachers it can bring on for the following year.
My wife is in this exact position. Crappy pay and she has to look for a new job at the end of the year, every year for the forseeable future if she wants to work and live in this area.
“‘I lost a lot of faith in human beings,’ said Mr. Downey, who regrets losing his father’s money. ‘He worked hard to become middle class, he left us a nice home that we sold, and we all got taken in by a clown in Orange County.’”
God can you imagine what that gut punch felt like. Bad enough to lose all that money but, to have to also live with the guilt of it being your fathers life savings. Why do people put their names in the paper after such humliation?
“God can you imagine what that gut punch felt like.”
This reminds me of a VHS movie starring Ed Harris and Vince Vaughn called, “The Prime Gig.” It’s a dark piece of cold-callers, greed, and male ego baited with delicious serving of lean pink.
Steve Garvey was involved. LMAO. How many times has this former Dodger hero been involved in some scam or paternity suit? GREED!
Once again - Steve Garvery. LMAO. What a total joke. He is a stiff and has screwed soo many people. I hope the last shreds of his repuation are destroyed by this mess!
Is it because he is so cheap for public appearances or what?? His name does tend to come up quite a bit in SoCal’s slimiest dealings.
Wondering when one of the developments hawked by Eric Estrada will also go the same route.
He sucked as a baseball player too. Never came through at the plate when you really needed it.
Signed
the world’s biggest Dodger fan
And I think he and his wife are on the Bravo show Housewives of Orange County or something repulsive like that.
so true he choked alot.Wheres the penguin?
TX chick and I finally disagree on something - Go Giants >; )
And Garvey kept the Cubs out of the World Series in 1984.
Hang him!
Thank you for dredging up that awful memory kpom. As a kid in high school in ‘84 I won’t even mention the horrors we wished on Mr. Garvey.
It would provide so much satisfaction if he went down as being part of a RE scam. The wheel is big - awfully big - but it still goes ’round and ’round.
Steve Garvey was one of the first baseball players to charge $20 for an autograph. A real trailblazer!
“‘I lost a lot of faith in human beings,’ said Mr. Downey, who regrets losing his father’s money. ‘He worked hard to become middle class, he left us a nice home that we sold, and we all got taken in by a clown in Orange County.’”
So you got taken in by a clown, Mr. Downey — what does that say about you?
I lost my faith in human beings also Mr Downey - They are still suckers for scams beacause they are GREEDY fools!
That’s right, Mr. Downey. It’s the fault of human beings and clowns that you got taken in, not yours. Right?
A fool and his money…
A greater fool and his money (and box of stupid).
They promised to ‘nourish and preserve’ the garden. The letter and $720,000 bid weren’t enough.”
The Chans blew it, they missed one key issue they did not promise to feed the squirrels. I hope they learned their lesson, now they are priced out forever! DA’s
I couldn’t put my name on a letter like that. I’d be afraid someone would find it sometime in the future when I was running for office or something.
Like a mortgage fraud-busting district attorney?
LMAO — you beat me to the line about the Chan’s omitted promise to feed the squirrels!
I think I’ll go down to the local Mercedes dealer and promise to wash, wax and lovingly care for a new car if they will reduce the price far below what they want to take for it. Maybe it will work.
(sarcasm off)
rotflmao. That squirrel contingency is the gift that keeps on giving.
Despite the headline, the Times still goes out of it’s way to dwell on those few exclusive areas where bidding wars are still occurring. Sheesh. Will they even write a story when they can’t find something pro-RE?
The Times article is a joke! I was in SLO this weekend. Prices are down. They are shills for the REIC and has probably received some pressure to write a positive spin piece.
But San Francisco fell a relatively modest 17%
________________________________________
How many businesses down 17% in sales would be ok with that?
crispy, the title company we used a few months ago,Tidor, located in Rosedale went out of business. My wife is wondering why you haven’t sold your place. Do you remember Kyle Carter and how profitable he was when he was selling brand new beautiful homes for low 100s. The local reference the increase building materials costs and increase cost of land but I don’t buy it. My brother in law bought 2 acres off of hwy 58 for 200k plus then he has to pay 80k for a well. I read somewhere that the price of an acre of lot in Bakersfield is 100k because that is the price builders are willing to pay and still have the margins they want. Too bad for my brother in law,
My home is not an investment. It is a place to live.
However, I did sell another home I had. Although, I did miss some of the recent upside, I still walked away with some $$$. Also, I had some clients sell some real estate in the last few years to lock in some profits (commerical & residential).
Which Title Co went out of business? I didn’t read that.
Thanks
What boggles my mind about the boom is that my grandma’s place in “Awldale” is Zillowed at almost $190k; it was at $33k in 2004. What further boggles me is that if you were to drop the house, as is, in Long Beach, it would be “worth” $500k.
Oh, and North High School football rules!
what do you do crispy?
CPA.
That LA Times article was a mystery to me, since I’ve been closely tracking RE in the same East Bay cities they mentioned (though not, for god’s sake, El Cerrito). Asking prices over the past few months on specific houses I’ve been watching are dropping in 5 to 10% chunks. Now it could be that the Chan’s desired house was “underpriced” to begin with to spark the bidding war the house apparently got. But that does not a trend make.
If they were only a block of so from Berkeley I could almost understand paying those kinds of prices for the East Bay, but you have to be willing to put up with some of the worst traffic in the Bay Area if you live in the East Bay. I-80 and the Bay Bridge just plain suck. There’s BART but it’s of limited use if your office is not right next to a BART station.
And location really matters in El Cerrito, because on the other side of the town line is Richmond, which along with Oakland are the two biggest pits in the area. Gangs, high crime, terrible schools, the works.
The East Bay was the last area in the Bay area to begin its skyward price appreciation. As such, prices lagged the rest of the BA. They still remain somewhat lower than SF and the peninsula, and are still moving. New house prices are being posted at asking prices lower that a year ago for similar prices, and the sales prices are showing few signs of the bidding wars that benefited us when we sold and kept us from buying again (all hail the bidding wars!).
Fiat, there are plenty of pits, Oakland and Richmond among them, but not alone.
I have seen these types of arrangements work for some pretty nice returns and when I see stories I always wonder how these guys get away with defrauding people. Then I read this-
“”“They were knowledgeable,” she added. “They had every answer to every question you could ask about this scheme.”
OR almost every answer. John P. Brincko, a management consultant advising the creditors committee in N.C.M.’s bankruptcy, said that none of the investors, to his knowledge, asked to see the deeds of trust that ostensibly backed their investments. Ms. Miller said that she asked to see them several times, but that Mr. Bryant rebuffed her with excuses: the deeds would be available after the loans had been made; he would pick up the deeds when he visited Mr. Favata next; and, just before the scheme collapsed, he said he had forgotten to bring them back from California.”"
A combined 750k on the line and you have no escrow papers or deed. How does that work? How do you convince someone with 750k on the line they can’t have a copy of the instrument or the title insurance. How does one invest 750k with someone you don’t know and not have a lawyer verify everything including the frequency of his bowel movements. I just don’t get it.
Marks like that can’t think about anything except what they’re going to get out of a “deal” like this. They’re afraid if they ask too many questions they’ll be cut out. It’s amazing how greed overcomes common sense over and over.
Remember the tax lawyer in Palm Beach who put all his money and his clients’ money into that now defunct hedge fund where the manager wouldn’t even take his phone calls? No different.
“They’re afraid if they ask too many questions they’ll be cut out.”
You nailed it 100% — Greed!
““They’re afraid if they ask too many questions they’ll be cut out.”
You nailed it 100% — Greed!”
and an amazing amount of insecurity….the need to be “in”
See graphs of the various bubble markets here.
Wow, Phoenix leads in the sheer number of homes on the MLS.
I have some news about the SHOPPING TRAFFIC in the OC. It has been reported that the freeways were wide open and two malls, Brea Mall and one other in the OC, were relatively empty. Normally you can’t find a parking spot at the Brea Mall and the freeways are hardly ever wide open on the weekend.
OC was wierd this weekend. Best Buy was so crowded, it made my friend feel sick (I didn’t go). Costco on the other hand was emptier than I have ever seen. I also went to a very upscale restaraunt in Newport Beach and it was completely empty. I have been going to this place for 20 years and have never seen it this empty before. Lastly, we went to a big park in Irvine and we had it to ourselves! I guess people in OC are only interested in staying home playing video games on their new TVs from bestbuy now.
If there was one person whom Melissa A. Miller of Parker, Colo., thought she could trust, it was Robert O. Bryant, a friend and her insurance agent for 10 years. When Ms. Miller sold her dental practice in 2005, she said, she was not sure what to do with her money.
A fairly conservative investor, she said she was skeptical when Mr. Bryant first told her about Mr. Favata’s private notes. She talked with her friends in the real estate business as well as her father, who owned rental property and had experience with similar instruments, eventually concluding that the notes were a safe bet because the properties served as collateral.
Ms. Miller, 39, and her husband, Sam, an airline pilot, who have three daughters and a son, invested $575,000 in N.C.M. notes. She recruited her father, Dennly R. Becker, and he invested $250,000. Aside from the few interest payments they received, the father and daughter believe that most of that money is lost.
“Yes, I am embarrassed,” Ms. Miller said. “I am ashamed that I got my family involved in this. But it could absolutely happen to everybody.
Yes, “everybody” who is trying to get more income than any safe investment can produce, which at this time means more than 5% or so. But of course this also illustrates the old saying, “If you have an ‘investment’ that even doctors won’t fall for, sell it to a dentist.”
“Yes, “everybody” who is trying to get more income than any safe investment can produce, which at this time means more than 5% or so”
Nah I disagree with that… The percentage of return doesn’t necessarily mean an investment is safe or not. Actually the percentage of return is irrelevant in regards to safety. The problem lies with people not doing complete due diligence on whatever vehicle they choose to invest in and upon finding rough spots when the do perform due diligence not hiring someone who is more competent than they to smooth them out for them. Contrary to popular belief not everyone is a rocket scientist on all things.
Also in my particular case anyone who presents me with an “investment” opportunity with less then a 10% return is usually met with a blank stare or hysterical laughter.
mrincome, upon making 1 million dollars would you invest that mill in t-bill to yield the %6 or 60k per yr? I think I would but only take out 30k to not eat into principal due to inflation, what say you?
I’m not an equities warrior that’s for people with more nads than me like TxChick. If I did what she does I’d have to buy a fibrillator for the office. Not to say I don’t have any because I do just mostly managed by my FA more so for my kids future than for my benefit. I really don’t have the attention span for it and my biggest fear is that I’ll become another Ken Lay-like victim.
If I made a million bucks in one lump sum Wall Street is the last place I would look too. I would bust it up in 4 parts and buy 4 more properties with no less than a 10-15% return. If I couldn’t find anything. I would run an ad looking to lend on property at a 10-15% interest rate.
Then turnover all proceeds made to my FA and have him invest it under my supervision of course.
The process works for me. I see no reason to change.
I like that, mrincomestream.
You are talking about active investments, e.g., rental property. I’m talking about passive investments, e.g., bonds. It is impossible for a passive investment to return more than the “risk-free rate” (e.g., the T-Bill rate) in the long run without commensurately more risk. This is because if any such opportunity arises, arbitrageurs will buy the higher-yielding security and sell the lower-yielding one until the yields are equal.
You said “safe investment” there was no distinction between active and passive. Not one that I keyed on anyway.
The original article was about people investing their savings (passive), not about people in business like you (active). I guess I should have specified that I meant passive investments, but thought it would be obvious given that context. Sorry for any inconvenience.
“”N.C.M. ran an investment arm that offered high-yielding notes to preferred clients, promising to use customers’ funds to make short-term, high-interest loans to individuals and companies that needed money quickly.”"
These loans in companies like this typically run from 6 mo’s to 2 years. I would hardly call that a passive investment. If one is looking at it that way that person is a fool. These are not 30 year fixed rate trust deeds. A 20 year annuity or a 30 year bond is a passive investment. These types of notes hardly qualify as being a passive investment. Guess that’s why I missed it.
A passive investment is simply one that doesn’t require the investor to do anything other than send in money and collect the resulting income. A 3-month T-Bill is an excellent example of a passive investment; even though the interest varies every three months, the investor doesn’t have to do anything other than roll it over every three months. A corporate bond that is held to maturity or a dividend-paying stock that is held to collect the dividend would also be a passive investment. The same is true of an “investment” such as the one that the company running this Ponzi scheme offered: even though the loans they theoretically made would have to be actively managed by the company, the investors didn’t have to do anything but send in money and share in the “profits”. This is also true of legitimate investment companies such as mutual funds; the mutual fund managers have to select and manage the investments, for which they are paid a management fee, but the investors don’t have to do anything other than send money and collect their profits (or losses, as the case may be).
Managing rental property, or any other kind of active investment, including trading either bonds or stocks, requires time and effort, not just putting money into an existing pool of investments. As such, much of the “return” isn’t return on capital so much as it is a salary for the work done by the manager (like you, I assume). Thus, you can’t compare the rate of return of an actively managed business to that of a passive investment such as those I described above.
Listen, I’m sure you’re a smart guy but again the instruments in that article hardly qualify as a passive investment and in some cases turnover more quickly than most stocks. If you think that it’s a situation where you can just send in money and the returns drip. Then you need to get in line behind the dentist and make a friend.
These are structured and move a lot quicker than your typical MBS tranche. A tranche qualifies as a passive investment by your definition. But these do not. If an individual didn’t know that before jumping in then shame on him/her.
And need it be pointed out that no active investment is “safe”, by definition. Time and chance happeneth to us all.
I know that kind of investment requires a lot of management, which entails risk, even if they aren’t fraudulent. The problem (if that’s what it is) is that the investors in the original article didn’t know that, or at least didn’t care. All they cared about was that the returns were a lot higher than, let’s say, T-bills. They should have been suspicious of the safety of such investments, but they were blinded by greed.
Wow, either these people have truly titanic portfolios or they have never, ever heard of diversification. Diversification isn’t just to gain a benefit from nonsynchronous correlations but also to diversify away alpha risk (which fraud hopefully is).
Also in my particular case anyone who presents me with an “investment” opportunity with less then a 10% return is usually met with a blank stare or hysterical laughter.
Depends on the timeframe. 5% in a months would be sweet.
I just got back from visting my parents in Moorpark, CA (Ventura County). I was surprised at how few “For Sale” signs I saw. If anything, Moorpark will benefit from the slow down. Two developments with thousands of home each, have been put on hold. Moorpark has grown rapidly in the last fifteen years and I think this give the town some time to regroup. The only cluster of “For Sale” signs that I saw were for an old condo development along Los Angeles Ave. (a very busy thorofare full of trucks). As an eastcoaster, I’d appreciate any insights on this market.
it will tank with the rest of ventura cty there definitley is nothing special about moorpark.
Moorpark (we in Ventura County prefer the backwards spelling) has some good schools, and a few tech services companies, but the second major employer in the area is Countryfried. The other major employers (that pay more than min wage for picking fruit) are the Ventura County Government Center, which will need to hire more people to run tax sales, and Amgen, which has stopped growing in the area and is shipping thousands of jobs to Longmont, CO.
Make no mistake, they are shipping the compant to Lomgmont. They just don’t have the balls to say it aloud.
Moorpark HS puts many community colleges to shame and the test scores are high even after California’s adjusting for income and race.
Moorpark’s housing problem is age. It is a really new place. THat means lots of FBs only a few years into a mortgage. These are the most vunerable.
*Moorpark backwards*
Heh.
Greed trumps everything. My $500K will be sleeping soundly in a CD or short-term bonds but this lady (dentist?) is not satisfied with the 5% plus interest on the money. Now she has to live with zero interest and negative 100% on the capital. At least her husband is a pilot making $250K a year.
“At least her husband is a pilot making $250K a year.”
Last I saw every pilot’s union was getting handed huge cuts in wages, benefits and pensions. I wouldn’t be so sure that daddy will keep coming through with those big bucks. And with the arrogance of the average pilot I would guess they are ripe for the pickings by scammers.
http://airlinepilotcentral.com/ has the pilot salaries for all airlines.
For example to see how much pilots at United get paid - http://airlinepilotcentral.com/airlines/legacy/united.html
You see that they start out at $31/hr with 65 hr/mnth guaranteed or $24,180/yr. They top out at $182 or $141,960/yr.
Conversely, Southwest tops out at $198 with 78 hr/mnt or $185,328 + 7.5% profit sharing or $199,227
They of course build in overtime in the schedules ( up to 100 hours total for the month ).
“Christopher Mayer, director of the Paul Milstein Center for Real Estate at Columbia University in New York, calls the Bay Area “the last bastion” of the boom.”
Yup. At least I can take solace in the fact that I live in a “superstar” city–HA! It would be more accurate and less pretentious if the director of the Paul Milstein Center for Real Estate at Columbia University in New York replaced “superstar” with “expensive”. It’s not Nirvana.
“Experts say that for those caught up in financial scams, the early stages are exhilarating and therefore magnetic. Indeed, until the moment investors finally absorb the fact that they may have been duped and their money gone forever, speculating on a ’sure thing’ has all of the warm and fuzzy benefits of a freewheeling joy ride. ‘You’re experiencing the ride, singing, ‘Yo ho ho! It’s a pirate’s life for me,’ but you never see any of the trappings of the ride itself,’ said Anthony Pratkanis, a psychology professor at the University of California, Santa Cruz. ‘Criminals call it, ‘putting the victim under the ether.’”
Too bad that if one substitutes the word “mania” in place of “scam” and the word “homeowner” for “investor” in the above passage, the result is a fairly accurate description of the entire US housing market for the past eight or so years. Just wait until massive numbers of high-risk borrowers figure out they can neither continue making mortgage payments (especially if they have an ARM that resets) nor sell their homes for what they paid for them…
Yay Stucco, we hope you are right.
Exactly! It is no coincidence that manias and scams look very similar; the only real difference is that manias aren’t usually started by one person, but are the result of some macroeconomic condition (here, ridiculously low interest rates and soaring money supply).
The thesis of Michael Lewis’s “Next”
when you wire money to a title company for property purchase, how can you be sure it is a real title company, and the account number is genuine.
when you have money at Schwab, Merrill, or ETrade; how do you know that firm is for real.
In these cases it most likely is, but how do you ever know for sure. When you buy property, do you check the references of the title company, the mortgage broker? or do you just go where your agent suggests?
Not to suggest that San Diego area home prices are dropping or anything, but just in case…
————————————————————————————————
THE FRONT PORCH
NEWS AND NOTES ABOUT REAL ESTATE
Time running out to appeal assessments
November 26, 2006
If you believe your house has fallen below its assessed value as of last Jan. 1, the deadline is fast approaching to begin the appeals process. If successful, homeowners and owners of other property stand to gain significant reductions in their property taxes.
To seek a lower tax bill, an Assessment Appeals Application must be filed with the clerk of the Board of Supervisors no later than the end of business Thursday. Forms can be obtained by going online at http://www.sdcounty.ca.gov/cob/aab/ or by calling (619) 531-5777. The appeal application must be turned in either at the clerk’s office in the County Administration Center, 1600 Pacific Highway, or at one of the county assessor’s satellite offices.
To find the assessed value of your property, look in the upper right corner of your current 2006 tax bill.
While the appeal process comes at no cost – a rarity these days for public filings – County Assessor Gregory J. Smith noted that substantial fees are charged by private vendors offering property-tax reduction services in direct solicitations by telephone or by mail. Of 1,225 appeals filed as of early November, about 700 were for residential properties, Smith said.
Smith said he foresaw no return to the volume of appeals filed in the early 1990s, when county officials were handling as many as 30,000 appeals annually in a sharp market downturn. “We’ve averaged 2,500 to 3,000 in the last several years.”
– CARL LARSEN
http://www.signonsandiego.com/uniontrib/20061126/news_mz1h26porch.html
What a bargain the LA Times is! It’s half the price that “Hot Asian Babes in Bondage” website, and it’s gets me just as excited. Lookit — there’s my hometown, Santa Barbara, and it’s “still reasonably hot.” Wooohooo. Gosh, Ben, I know I’m not supposed to touch myself when blogging, but when the MSM does REIC porn — well, it’s just too, too. . . oh, oh, oh, ahhhhhhhhhhhhhhhhhhhhhhhhhhhh.
Wow, I haven’t had so much fun since my wife threw out my Hustler collection . . .
I’m too sexy for this thread, too sexy for this blog . . .
Hi everyone. Like most of you, I totally believe this RE market is a house of cards. But let’s play devil’s advocate.
Is there anything that could prolong this bubble for many more years? What if more banks offer 40-year or 50-year mortgages? Heck, why not 100-year mortgages? That would lower buyers’ monthly payments without the risks of option-arms or even interest-only mortgages. (Well, at least that’s what the mortgage brokers will say.) As we know, what has driven much of this bubble is the ridiculously affordability (through financing) of homes — compared to the affordability just 10 years ago. So isn’t it possible that new mortgage products will be created to prolong this bubble?
Those numbers have been run here and elsewhere, a 50 year mortgage saves you very little off your monthly payment. If you can’t swing the 30, you can’t swing the 50.
I ran the numbers a while ago…here:
(replace the two ‘**’s with ‘uc’ in the URL)
http://anotherf**kedborrower.blogspot.com/2005/12/40yr-mortgageis-it-for-you.html
here are some quick numbers…see the whole thing for more numbers…
$400,000 loan at 7% 30yr fix = $2661.21 . . . . .total pmt = $958,035
$400,000 loan at 7% 40yr fix = $2485.72 . . . . .total pmt = $1,193145
$400,000 loan at 7% 100yr fix = $2335.50 . . . . .total pmt = $2,802,600
SoCalMtgGuy
http://www.housingbubblecasualty.com
‘What if more banks offer 40-year or 50-year mortgages? Heck, why not 100-year mortgages? That would lower buyers’ monthly payments without the risks of option-arms or even interest-only mortgages’
Some banks offer 40 year mortgages but they haven’t been too successful because the payments are not that much lower and the total amount repaid is much higher. And what exactly would be the effective difference between buying a 100 year mortgage and renting?
Your main point is valid though. This was perpetuated by the mortgage industry changing the definition of affordibility from what one can reasonably afford to what monthly payment can one afford for three years or based on stated income. They can keep screwing around like this indefinitely, but the big wave of ARM reset and suicide loan foreclosures is going to hit the comps by early 2007 ONLY from areas where declining equity has prevented owners from refinancing, and educated buyers simply won’t buy an enormous mortgage in a falling market even if the monthly payments are low this year. Uneducated buyers are tapped out, and mostly upside down already on one or more houses. The industry has taken thousands of dollars from millions of people who are by any common sense definition renters in exchange for providing them with an “I’m a homeowner” warm fuzzy that might last 3-5 years and externalized the cost. It’s a great scam while it lasts, but cannot last if prices fall, and such scams will be regulated out of existence once the subprime MBS portfolios pass a 10%-20% foreclosure rate (probably by 2008).
“The industry has taken thousands of dollars from millions of people who are by any common sense definition renters…”
Worse than renting when the bubble is deflating. Renters accept inflation risk — if rents and home prices keep going up, they can get priced out forever, as any Realtor will tell you. But owners accept asset price risk — if prices drop by 10% on a 100% LTV McMansion, the owner could suddenly find himself underwater by an amount equal to two years worth of pretax earnings.
With the 100-year mortgage, you can sell your home when the next bubble arrives and pocket the difference. It’s a sickening thought, but you know it will happen again.
I/O ARM mortgage = infinite-lived (much worse than 40-50 years) &
I/O Option ARM = worse than infinite-lived, at least until the reset w/ higher interest rate and onset of principle amortization bursts the buyer’s bubble five years into the repayment period…
OK. I gather that from what you are all are saying, it looks like there is no possible way for banks to further lower monthly payments; the I/O option-ARM was the last possible way to do so.
Therefore, the house of cards HAS been built as high as possible.
That’s pretty much it. And many sub-prime mortgages are starting to unravel. As foreclosures increase there will be more and more houses with fewer and fewer buyers. Because of the nature of the bubble, it it does not go higher, it wall fall. Once a house of cards starts to tumble, how do you stop it.
There are a few groups of people left to tap, or who could be enticed back into the markets. I’ve listed a few of them and suggestions to get them into the market.
- Sub-sub-prime borrowers: Offer $300/mo teaser rate mortgages. Prepare to own the home in 6 months.
- Investors: lower the price
- Bitter jealous renters: lower the price
If they do think of something it won’t prolong the bubble. They will need to find something in order to save their A$$.
I don’t think a 40 or 50 year loan will save them. As an example, a $100k, 30 year loan at 6% is about $600 a month. Same loan at 40 years is $550, and at 50 years $525. Cannot really see how this would help.
Especially if you live in an area with a 500k median
And the I/O Option Arm is only 500 if using the IO up until it resets/caps out… going below that… well, anyone reading here knows that the NegAm would just blow up faster.
“Residents hoping to incorporate Eastvale might have to wait longer for land on which their future civic center and fire station can be built. Developer D.R. Horton, which had planned to build a housing development called Riverdale and set aside 20 acres for Eastvale’s civic center, has walked away from the project.”
Visited the IE for Thanksgiving. I took the opportunity to see the new developments (but forgot the digicam). Eastvale is such a non-desert Palmcaster. Or Mountain House (for the East Bay folks).
I only hope that I talked an old friend out of buying right now. He has a young family and was talking up the builder discounts and freebies. I tried my best to convince him to wait a year or two. Recently, Ontario approved a couple of thousand homes near there in the former dairy preserve. KB will throttle back, but the oversupply is obvious, with Centex et al. sitting on a pile of inventory.
I particularly enjoyed the grafitti on the abandoned dairy homes and on the freeway walls. Glad to see the cream of the crop is moving from L.A. to the IE instead of all going to Palmcaster.
Is that in the area near the Hyundai Pavilion, where the 15 and the 215 meet at Cajon pass? There is a huge development going on there. Looks like 4 square miles of houses going up. They are grading and putting in roads.
Actually, south of CA-60 along I-15. But the other development is indicative of the gross oversupply that will doom all of these projects.
All of the IE is an armpit. So is Mountain House (which has no mountains anywhere near it). An abandoned dairy pit (must have a nice bovine fecal matter aroma to it). Will have to check when I go back there next weekend.
I disagree somewhat. Upland and Redlands are relatively livable, as long as you don’t need to commute. There are some other pockets that still work out. Norco if you have horses, which is adjacent to Eastvale.
“‘People believe their next-door neighbor is investing in property, flipping it and getting rich quick,’ said James H. Burrus, assistant director with the Federal Bureau of Investigation in Washington. ‘Everybody seems to be doing it. Fraudsters take advantage of those types of cycles.’”
People also assume their neighbor is rich enough to afford an $800K McMansion, especially here in San Diego. But after all I have read about subprime buyers getting into I/O Option ARMs with 0% down and NINAs (no income verification, no asset verification) used to qualify buyers of unknown credit worthiness, I know that this assumption will prove false in a large share of recent purchases.
“People also assume their neighbor is rich enough to afford an $800K McMansion…”
There’s another side to that coin. Some people have been assuming people renting are doing so because of affordability issues. My wife and I have been waiting out this insane housing market for quite a while now. While waiting we’ve been working hard, continuing our educations and receving promotions and increases from our employers. We’re now at a point of being in the top 1.5% of household incomes in the U.S. while paying a measly $1,200 per month for our apartment (utilities included). I’m just confirming your point…never make the mistake of judging one’s neighbors by what it appears they have, or don’t have.
Spending habits are also easily confused with means. I once mentioned to my boss how impressed I was with the large number of Beamers and Mercedes parked in the lot at a social function I attended. He assured me that many San Diegans lease new luxury automobiles in order to project the image of wealth…
It’s 9:53pm Pacific. Do you know what your dollars up to?
http://www.dollarcollapse.com/default.asp
Gulp… Could the PPT protect the stock market and the dollar at the same time, please?
It cannot be done unless the rest of the world is willing to take the hit and buy even more worthless US Dollars/Debt. The PPT uses the billions printed from the Treasury Dept to buy up stocks. Those billions dilute and weaken the strength of the USD and eventually lead to inflation. Asia and Europe have already said they’ve had enough of our monopoly money. Bernanke and Paulson are going to China soon to beg our masters to keep buying our debt or else our economy will collapse and hurt China too. Will the chinese be dumb enough to keep buying? The only reason they would go along…keep getting access to and stealing our technology. when they catch up to us, the spigot will be turned off and they will no longer have any use for us. We will drown in our own stupidity. What took 200 years to create will be destroyed by B1CB2 and the US Congress in a matter of 20 years.
Is this what you call a preemtive first strike?
———————————————————————————
RMB breaks 7.85 mark against US dollar
(Xinhua)
Updated: 2006-11-27 13:53
The value of the Renminbi (RMB) against the US dollar hit a new high on Monday, with the central parity rate at 7.8402 yuan to one dollar, breaking the 7.85 mark.
This signifies that RMB value has risen by 5.31 percent since July 21, 2005, when the Chinese government launched the reform of the exchange rate system to allow the yuan to float against the U.S. dollar within a daily 0.3 percent band from the official central parity rate.
The appreciation followed previous records on November 9 when the central parity rate hit 7.8697, breaking the 7.87 mark, and November 23 when it was 7.8596, breaking the 7.86 mark.
The exchange rate was set at about 8.27 yuan per US dollar before the reform.
The yuan’s appreciation is attributed to the continuous slump of the US dollar and expectation for an interest rate drop in the United States, said analysts.
http://www.chinadaily.com.cn/bizchina/2006-11/27/content_743841.htm
Here’s a vision of the past and possible future…
When I was a kid (30 years ago), the exchange rate of the Mexican Peso was rock steady @ 12 Pesos to the Dollar. It was that rate for quite a few years, until hyperinflation started doing it’s thing. It didn’t happen overnight, but from 1976 til the early 1990’s, the exchange rate went up to around 10,000 Pesos to one Dollar.
What does ruinous inflation like this do?
Imagine you were a middle to upper middle class Mexican with 100,000 Pesos in the bank in 1976, you were wealthy (over U.S. $8k ) and then, had you left the money in the bank, within 15 years, your $8,000+ would have been reduced to around $10.00.
Imagine a society where prices on everything need to be changed weekly, perhaps daily, to keep up with inflation?
They are waiting to buy call options (very cheap) on Sirius Satellite Radio due to rumors of a merger with XM. They are sitting in Gold and Silver miners and ETFs. They are holding put options on house builders and mortgage lenders. I’ve hunkered down for the apocalypse.
I have Sirius stock with an avg. of 3.76. Still, every penny is a battle on that POS.
Without comment……………………….(from the LV Review Journal) Q&A with the developer of SoHo:
Question: Like Turnberry, most of the units at SoHo are dark at night. What percentage of residents are full time?
Answer: We’ve got about 40 full-time people living in the building. I never turn on a light here. There’s so much light coming from the Strip and the city. You can see I haven’t put up blinds here. A lot of people put up black-out shades and it looks dark, but I know there’s people in there because I just talked to them. There’s going to be more (primary residents) when it gets to the end user. That’s how it starts. Investors come in first.
In between games at my son’s soccer tournament in Chino, I spent some time in the sales office at DR Horton’s initial phase of College Park. The folks in Chino did a great job putting on a nice tournament and the general area of what I will call west Chino is, in my view, one of the nicer ones in the Inland Empire (and it’s been a long season, so I’ve been everywhere from Temecula to East San Bernardino).
This particular development is not too far from a State Prison and goes by the name of College Park. At buildout, this development will produce 2,200 homes on about 700 acres. I am still rubbing my eyes after thinking I saw signs advertising homes (coming soon!) in the low $1,000,000’s! The entire area is under construction with roads and public utilities so it looks to be exquisitely timed. Further east, there are all sorts of housing projects in various stages of construction.
The prices seem to fall between $230-$250/sf which strikes me as kind of steep for a neighborhood where the smell of dairy cows is still prevalent and it takes the persistent efforts of a 13 yr old to kill off all the flies who infiltrated our vehicle during the 45 min trip home.
The sales person (the one with the stunning figure and tight sweater) was vague about incentives (need to attend a meeting with our custom home center to get any free granite or maybe a wine celler) and told me that sales were great. The little map where they put sold stickers on the plan didn’t look like it had much going on. The mood was very aggressive, kind of in your face sales tactics where you are made to feel sort of stupid for asking any questions. I was the only person in the office.
I too visited the Portola Springs development in Irvine and when visiting the sales office, I noticed the young singles would be buyers would be rushing out the door not wanting to talk to the sales person. When chatting with a sales person about the development (William Lyon) she told me that prices can would never go down around Irvine…maybe so, but to buy for about $450k for a 1-bedroom…is just outright insane…..