“Buyers Expect To Be Wooed” In California
The Press Democrat reports from California. “To counteract sluggish sales, home builders in the Bay Area and Sonoma County increasingly have been forced to whack prices and offer incentives to lure buyers. Through November, new homes sales were down 32 percent in the Bay Area, compared to the same period last year, according to the Ryness Report.”
“As a result, buyers are more in control, in some cases paying roughly $100,000 less than what they would have paid for the same new house a little more than a year ago.”
“The median sales price of a new home also is down compared to a year ago. In November, it was $560,000 in Sonoma County, 15 percent less than the $655,000 in November of 2005, according to Dataquick, which lumps both new houses and condominiums.”
“Buyers expect to be wooed. ‘People walk in the door and say ‘What are you giving away?’ They don’t want to see models, or floor plans,’ said Josh Armstrong, a sales associate at Turnberry.”
“One high-end model that initially listed for $840,000 is now offered for $790,000. Homes that sold in the mid-$700,000s are now in the high-$600,000s.”
“Average weekly traffic, or the number of potential buyers in the Bay Area visiting new home projects, has declined 36 percent this year compared to last year.”
“‘Buyers are starting to come out. They’re skittish, like deer coming out of brush. They want rock-bottom prices,’ said Greg Anderson, sales manager for a 149-home project under construction in Santa Rosa.”
“‘Two years ago, there were more buyers than available homes,’ said Maurice Lockwood, a vice president for Cobblestone Homes. ‘Now it’s the inverse. Inventory is there and buyers have a choice.’”
The Record Searchlight. “What’s up with Sun City Tehama? People calling a toll-free number for Del Webb Corp. are being told that it’s ‘not going forward’ or that it’s ‘been delayed for an indefinite amount of time.’”
“But that’s wrong, Del Webb spokeswoman Judy Bennett said Friday. In light of the national housing slowdown, Webb’s parent company, Pulte Homes, is evaluating the timetables of all of its projects, she said. The timeline for Sun City Tehama ‘has been decelerated, but not suspended.’”
“Bennett said she was ‘very disappointed’ by reports that Webb’s customer communication call center in the Phoenix area was telling prospective buyers that Sun City Tehama was in limbo or that it had been scrapped.”
“‘That’s very concerning to me. We don’t know where they’re getting their information from,’ Bennett said. ‘From our perspective, we’re still working.’”
“The California Association of Mortgage Brokers today issued its annual Mortgage Forecast projecting that interest rates will remain favorable in 2007.”
“‘The first six months of 2007 will probably be the ideal time for consumers to purchase a home,’ said Williams. ‘During that period, there will be fewer buyers, more housing inventory, low interest rates, and more motivated sellers. It is important for consumers to be aware of these factors.’”
“Survey highlights include the following: Thirty-eight percent of members believe that home prices will decrease slightly (less than five percent), while 26 percent believe there will be a slight increase (up to five percent). Other projections included a significant decrease (19 percent).”
The North County Times. “More than one-third of California mortgage brokers believe that interest-only loans will be the most viable loans for borrowers because of the continued high cost of housing in the state, according to a survey taken by the California Association of Mortgage Brokers of 400 members.”
“Ed Smith, director of the association and a San Diego mortgage broker, said that interest-only loans were not necessarily desirable, but were a product of the market.”
“‘Most people can’t afford a ‘real’ payment on their house,’ he said. ‘They’re hoping for an increase in income or a windfall. A lot of people got in on the frenzy and made an emotional decision.’”
“Smith said that he has seen a number of homeowners having trouble making their mortgage payments. ‘I’m doing short sales every day now,’ he said.”
“One high-end model that initially listed for $840,000 is now offered for $790,000. Homes that sold in the mid-$700,000s are now in the high-$600,000s.”
“‘Buyers are starting to come out. They’re skittish, like deer coming out of brush. They want rock-bottom prices,’ said Greg Anderson, sales manager for a 149-home project under construction in Santa Rosa.”
Ok, can anyone spot the disconnect here?
Harm you beat me to it! Yeah, that drop form 840K to 790K has got me jumping in the car heading for that financial disaster. How about this. We go back to the original models and oh, say, you drop from 840K to, oh, I don’t know. HOW ABOUT 300K! May be you get some real sales going on. Stop jobbing us all around. 790K! What a joke. At 6% for 30 years with nothing down you are looking at a shade under $4800/month. Add in insurance, HOA, taxes, and utilites, maintenance/upgrading, well, now you are at $6K a month. Just who are these idiots builders kidding. Yeah, a drop from 840K to 790K has me drooling to own. NOOOOOOOOOOOOOOOOOOOOOT!
Add..“‘The first six months of 2007 will probably be the ideal time for consumers to purchase a home,’ said Williams…to…“‘Most people can’t afford a ‘real’ payment on their house,’ he said. …and you get stupid stew - 1/2 lies, 1/2 obvious truth, all rot-gut!
Ah! The first six months of 2007 will be the ideal tie to purchase a home! Thank God I have the Calif Assn of Realtors to let me in on this well-kept secret. All of their past statements about the ideal time to purchase a home smelled wrong, but THIS time they’re telling the truth, right?
840K to 790K. Like my friend used to say in college, BFD (Big F__king Deal).
we still say it!
Dearest Ed Smith and the CAMB,
Your prediction of percentage decreases in home prices are not enough.
Please be so kind as to inform me through this Blog when home prices have made a return to historical averages based upon a 3% per year value increase (from 1997). When people (like me) make 6 figures and cannot afford anything other than a shack, then I must regretfully conclude that your proposals are (*insert expletive of choice here*).
Sorry for such a short note, but I’ve got a date to read R.Shiller’s chapter on “Amplification Mechanisms.”
Love (as always),
~Misstrial
If people have any fear that prices are still coming down, they will not buy with aggressive mortgages, and they’ll compare to their rental prices.
Pain will continue.
Skittish? Like deer coming out of brush? Yeah, in his wildest dreams. Suuuuure… they’re coming out of the bushes, but they’re afraid of the big, bad Realtor!
Good analogy comparing buyers of his homes, to deer coming out of the brush. Most all of them are going to get killed.
Spoken like a resident of the North State.
Probably one of the few locations in CA to have a bunch of deer hunters.
yeah– great analogy— skittish deer pokes his head out of the brush, WHAM. 180 grain .30-06 and Bambi’s venison sausage before the day is out.
$840,000 down to $790,000, big friggin deal. Thats like when our local furniture store advertises “This weekend only we pay you sales tax!!” wooHoo I save a whole 7.5%. I say knock off 20% of that list then were talking.
Can anyone from Santa Rosa tell me if these are those new 0 lot line crap boxes behind the fair grounds? If so they were going for the 800k mentioned,and regardless will get creamed. Anyone paying 800k for opportunity to smell horse poop ,and have your car burgled by the illegals there deserve everything they get…..
These are on Hwy 12, east of farmers lane. The big sign out front used to say “from the low 600s” Then it said “from the low 500s” Now it says “from 496″. They are duplexes. There is no parking there except for the garages. They’ll be falling further.
” Now it says “from 496″”
Should say mid 200’s. Period End of Story!
$840k down to $790k? Umm…I’ll just buy another $1,000 three month T-bill. Thanks anyway!
Report Reveals 2.2 Million Borrowers Face Foreclosure on Subprime Home Loans
Tuesday December 19, 1:30 pm ET
Billions of Home Ownership Wealth to be Lost by Minority Americans; Chart Contains Detailed MSA-Specific Projections of Home Foreclosure Impacts
http://biz.yahoo.com/prnews/061219/dctu021.html?.v=78
WASHINGTON, Dec. 19 /PRNewswire/ — A new Center for Responsible Lending (CRL) study reveals that 2.2 million American households will lose their homes and as much as $164 billion due to foreclosures in the subprime mortgage market. Titled, “Losing Ground: Foreclosures in the Subprime Market and Their Cost to Homeowners,” the CRL study is the first comprehensive, nationwide review of millions of subprime mortgages originated from 1998 through the third quarter of 2006.
The Devil has the same strategies.
“Buyers expect to be wooed. ‘People walk in the door and say ‘What are you giving away?’ They don’t want to see models, or floor plans,’ said Josh Armstrong, a sales associate at Turnberry.”
Its not about rock bottom prices its about the free stuff.
IE the stuff you’re going to be paying on for the rest of your life.
Buy a house, get a free car.
WOW! Two depreciating assets for the price of one!
All for very low, rock bottom price of YOUR LIFE. I’m sorry, meant to say 790K. Might as well have said your life.
“WOW! Two depreciating assets for the price of one!”
No, two depreciating assets for the price of two. The FB failed to notice that the fraudulent appraisal allowed him to finance the full market value of the house plus the car plus all closing costs on his 100%-financed mortgage loan.
Since most FBs are dead financially, let’s just throw in the casket and funeral arrangements. That done, you can finance your car, education, home, toys, vacations, and ultimately, death, through an i/o, no-money down, neg. am. ARM. How swell.
I wonder if any people will jump off buildings….they certainly are stupid enough, as proven on this blog
Nothing like financing a car for 30 years, huh……oh wait, what was I thinking….. what I meant to say is; Nothing financing financing a car indefinately on an interest only loan.
Yeah, talk about owing your life to the company store. This is sounding more and more like the lot of a an Appalachian coal miner a century ago - work your whole life and never really own anything. Only they freshened things up a bit and the “company store” is a heck of a lot bigger - and sells bright shiny things like iPods, Hummers, etc.
Shop. Spawn. Die.
From Ben’s post:
“They don’t want to see models, or floor plans,…”
Yes, floor plans are so…2005
**sniff*
Yaw. I want free - FREE. Gimme a pergo floor upgrade. gimme a granite countertop. gimme a chandelier. Yaw, thats beeeeuuuutiful. I’ll pay 700k. and x-cite-ted to do so.
trailer trash…
“More than one-third of California mortgage brokers believe that interest-only loans will be the most viable loans for borrowers…”
This kinda conflicts with the “guidance” wherein borrowers should be qualified to actually buy the home, doesn’t it?
But this is California!
Remember the billboard reference, “Buy the home you want, not the one you can afford.”
It’s those mortgage brokers’ HOPE that’s the case. However, there are only so many payment buyers out there, and when more and more people find themselves under water, well, Houston, we have a problem. After all, wasn’t a home supposed to be an investment, also? Doesn’t “investment” imply paying some principal?
Nobody seems to see this yet, but they’re all so focused on “building equity.”
OK, you buy a house for X and put nothing down, financed with interest-only debt. Let’s, for the sake of argument, assume 2007 appreciation is over 0% (which it won’t be). But let’s say it’s 1-2%.
After closing costs, maintenance, moving expenses, etc., how much equity do you have in your “investment”? Answer: None.
Now the more likely scenario: any decline in value = NEGATIVE EQUITY.
People who don’t have all the facts will always make bad decisions. But I’m amazed that lending professionals, especially senior execs at mortgage shops, allow this kind of nonsense to continue. Or that end-holders of this toxic waste paper keep buying it.
“But I’m amazed that lending professionals, especially senior execs at mortgage shops, allow this kind of nonsense to continue”
I’m not. They allow it, so it can drive their compensation.
I’m surprised that the buyers of the mtges allow it. I would have thought by now, that the fixed income investment community would have closed the easy money spigot.
I do not see the difference between this and, say, a solicitation in the mail that tells you that you won a lottery, but you need to send in $20 to get the winnings.
Now, nobody SMART does this. But people still do it.
Law enforcement goes after this kind of thing. This is not in dispute.
But I do not understand why the gubmint or the law has not tried to shut this whole thing down- toxic loans. Why go after the $20 fraud? Hurts nobody other than the fool.
However, this RE debacle will completely have ramifications for people who were NOT fools..
I’m not all that surprised that the notes are continuing to be bought, for 2 reasons:
1. Where else are they going to put the money? Pension funds and institutions worldwide NEED yield. Where are they going to get it? For the same reason brokers convince buyers to buy, those making decisions feel that there is some cya inherent in buying US mortgage notes.
2. If there is a blowup and principal is lost on a mortgage note investment, the person actually buying the loan on the behalf of the institution loses none of his/her own money, but if that same person doesn’t put the money out, they are likely to lose their job.
There is incentive to get the money to work regardless of actual risk, especially if the perceived risk is fairly low.
I think that Interest Only Loans should be view stictly as a Lease…since the owner is only servicing the debt and not actually paying down the principle balance isn’t it really more like a differnt version of leasing that actually owning? Granted the “owner” gets any potential return on appreciation but there is not real vested interest in it since with each payment no principle is payed down.
“I think that Interest Only Loans should be view stictly as a Lease”
You are in some good company with this misconception (Thomas Sowell comes to mind). I/O Loans are worse than a lease when prices are falling, because you own the asset price risk.
yes, i agree with you. i would take a lease anyday. apples and oranges…
It’s like leasing . . . FOREVER!
its like renting but being charged interest
and taxes, and HOA, and repairs
The actual benefit is often overstated and doesn’t come close to completely compensating for the money lost in a declining market, but its worth noting the tax advantage to paying mortgage interest over a lease.
Except when the mortgage interes + prop taxes + insurance costs are 30%+ more than the cost to rent.
IO isn’t like leasing at all.
The key part of living in the house is “WHO OWNS THE EQUITY (positive or negative). Renting and leasing means you don’t. The owner does. IO loan or no IO loan, you own it. So if it goes down, you get stuck with it and if it goes up you get the appreciation.
But you’re not building equity! So it’s like owning but not slowly paying down the mortgage, but keeping it constant. Not necessarily a dumb thing to do. Suppose you can earn 10% after tax on investments and have a 4% after tax mortgage? Why not keep it as big as you can?
“But, but, it’s a scam! You won’t ever “own” it!” I suppose, in that you’ll be paying interest forever, theoretically, but if you can earn more on other investments it’s still smart. If you have no other investments it still MAY be smart if the value of teh house rises faster than your after tax cost of financing, then it’s a winner. Of course the rush to take advantage of this made house prices so expensive in the first place.
But the decision to buy or not buy a house should be independent of your financing. Ignoring the risk of being overextended. It doesn’t make sense to buy a house using a conventional mortgage but not buy the same house for the same amount of money using an IO “because you’ll never build equity”. It’s a financing issue, completely separate from the decision to buy the asset.
Interest only loan is as close to renting that you can get, except that the renter can pick up and move, no strings attached, and you are stuck with taxes, a depreciating and fixed asset that you can’t move when the neighborhood turns to pot.
Not to mention, the only way you can ever pay it off, even with appreciation, is to move or refinance into a fixed rate loan and watch that payment skyrocket. I bet these wannabe “equity builders” never thought of that when they were counting their future wealth. Debt is truly the new wealth for these idiots.
Right and leesees or renters don’t get appreciation / depreciation.
So it’s not like renting at all.
It’s like borrowing a constant amount of money instead of borrowing a decreasing amount of money.
Looks like someone missed the memo…
high-cost home loans look headed for foreclosure
http://www.sacbee.com/103/story/95150.html
I like this one:
“‘Two years ago, there were more buyers than available homes,’ said Maurice Lockwood, a vice president for Cobblestone Homes. ‘Now it’s the inverse. Inventory is there and buyers have a choice.’”
Right… The Biggest Fools …er, I mean buyers have a choice. They can choose which falling knife they want to catch. That’s all.
:-/
Speaking of recent fools- here’s one hot off the presses. Just took an app from a guy in Nowhere, Montana. Paid 240k for his home 8months ago using an i/o loan. His verifiable income is 4000/month at best. He was looking for a second mortgage so that he could….and i quote,”finish my basement and double the value of my home”. I have seen thousands of appraisals in my life and generally it adds between 5-25k to the value of a home in this price range, most often about 10k. Wait there is more…has to vehicle loans in excess of 500/month each and started his own business 1.5 years ago in addition to his fulltime job. Amazing that when you talk to people like this they carry on as if nothing is wrong and want to know how i can EARN their business. I had no intention of doing so. I am not going to put my employers money square in front of this train wreck.
Nowhere, Montana for 240k? You would probably have to be more specific. At the Yellowstone Club near Big Sky, Montana, you have to have 3 million liquid just to be considered for membership in order to have the opportunity to build (and have Bill Gates as one of your neighbors….when he is there).
Pretty sure if you throw a dart at a map of MT, 99.9% of the time it lands in nowhereville. No offense to those that live there, it is beautiful but the population/acreage ratio is tiny. As financially savy as the customer i described comes across, im pretty sure he is not anywhere near the community that you described.
lol
I know one of the guys that did the tile in the master bedroom suite. Had to be re-done a couple of times “too get the look just right”.
“His verifiable income is 4000/month at best. “
For Montana he’s easily in the 3+STDEV of the Bell Curve!
“‘The first six months of 2007 will probably be the ideal time for consumers to purchase a home,’ said Williams.
Ummm… no, Slick Willie. The first six months of 2007 will be when all the would-be sellers put their homes back on the market for “Silent Spring: The Sequel”, only to find nothing is selling at their absurd Wishing Prices. That’s when the panicked rush for the exits BEGINS. Soon to be made worse by successive tidal waves of option-ARM resets that cannot be refi’d into FRMs.
That’s pretty much the scenario I see shaping up in my area…I’d like to hear other bloggers’ thoughts about how the price “ahem” correctionwill play out in their locale.
Actually, I’ve already seen a couple listings show up on the MLS that my hunch tells me are sellers attempting to beat the Spring Rush.
C’mon, who lists their home the last two weeks of December?
Harm you forgot to add in all the new inventory that builders will want to dump. And don’t forget, they have more room to lowball, then FBs.
Therefore, we have builders, sellers, and mortgage resets coming in Spring ‘07. I think we shall call this one: Day of the
Dead, Part IV!
Day of the Dead, Part IV
The release date got pushed back to 2008. The funding dried up.
I’m going to start weekly tracking the number of listings in a fixed area this week to see what happens. Everyone else here should do the same and report the results.
Finman, how do you do that?
Cassiopeia-
Realtor.com is one site that allows you to enter a zip code, and then limit the parameters to just SFH, or condo/townhouse, or both. That’s what I use to look at the listing volume changes in my area. Probably not the best site, but it should give a fairly accurate % change of the MLS, as the number of properties “not listed” here I should think would be proportional.
Thanks, lefantome, I’m going to start tracking a couple of zip codes.
And then add in the inventory from the FSBO sites…you know, BuyOwner, FSBO.com…and then try and scrounge up some “street” info:
e.g. a couple Cali posters in thread below talking about “under the radar” tidbits.
add in: transactions that never even made it to the MLS… this you’d need to get from having your ear to the ground:
my examples -
1. Multi-use building in a “hot” area of Phila, originally listed for $749K…no takers, reduced to $649K (smart seller) - finally under contract for $600K. And the buyers already have cold feet, making noises about backing out.
If the deal goes through, that’s a 25% haircut.
2. Amateur flipper, told he could get $180k for rehabbed house, finally sold for $127K. Broke even and was damned happy to. The neighborhood he sold out of now has 200% the inventory it did last year, this figure NOT from the MLS or housingtracker.net, but straight from the lips of his realtor.
In other words, what ever data you find on the MLS, add to it:
a) inventory pulled off in hopes of Spring selling fricking bust-out (this you’d need to guesstimate, but probably would do better than any so-called expert)
b) info from the trenches,
c) and FSBO houses.
IMO it’s this hidden inventory and these “under the radar” transactions that tell the real story of this HA HA FUNNY Buyers’ Market.
Wow, phillygal, I have a lot to do…
OK, phillygal, I figured out which properties I can follow easily around my area. If Realtor is correct, there are a lot more properties for sale around here than I suspected. This is the snapshot for today 12/19/06. I promise to follow up and see what happens. All the properties are in the same zip code (90024), some within less than two blocks of each other, and all of them inside the area defined by Wilshire/Santa Monica/Beverly Glen/Westwood Blvd.
Property #1: MLS 104082 $1,900,000
#2: MLS 06-134035 $1,899,000
#3: MLS 06-140267 $1,150,000
#4: MLS 06-126225 $1,369,000
#5: MLS 06-144099 $1,299,000
#6: MLS 06-117955 $1,395,000
#7: MLS 06-138321 $1,450,000
#8: MLS 06-113385 $1,375,000
Finnman. Here’s my first posted data point.
Morro Bay houses & condos under $600K.
39 listed, has been in the high 30’s for months now.
All the same old ones every week, nothing moving.
Average asking price $468 per square foot.
93552 at 263% of listings YOY.
Median asking has not fallen substantially since peaking in March ‘06.
Currently at 9.4 mo inventory down from 12.1 mo this time last month.
YOY median sales price still positive at 4.1% increase, but dollars/sq.ft. is only up $1 YOY and down 3.7% from peak in July ‘06.
I have been doing this for the Chico CA MLS for over a year. This week we have 633 listings. Last week had 730. One month ago it was 800. Last year it was 320. I suspect that we have had a radical reduction in the past week due to Christmass. I think after Jan 1 we will again have over 730 perhaps more.
I have been keeping tabs on the Richmond, VA area market for the last year. Does anyone know how I can post an Excel spreadsheet on here?
Ok-Land-Lord,
Please email me your Richmond xls to edmad@aol.com
Very interested in seeing the data on Richmond VA.
Thx
you can’t.
Go to blogspot, register for your own blog hosted on their server and you can paste screen shots of excel.
I did that with realtor.com for awhile. My favorite zips include 90254 and 90277 (Hermosa Beach and S. Redondo Beach). I also look at the northern California coast and occasionally SLO. I have seen a few places drop around 5% over the course of one year in those areas. Most of these places doubled in price in 5 years while incomes went up single digit. So T-bills are a far better deal. One should put as much money into T-bills as possible. They will earn roughly 5% per year. Over four years compounded that will be more than 20% before the federal tax. But I figure California RE will tumble 10% per year during the next four years. That is a relative 60% advantage of T-bills versus RE.
Merced, CA. 1100+/- inventory with 70 home sales in November. About 400 inventory this time last year w/130 sales. I’m expecting 2000+ homes for sale by April Fools Day, which would equal the total annual sales for 2006. There is no bottom in Merced!
No bottom! Hell, no bottom. Those numbers indicate a block hole from which no one will come out alive except the very very very very patient.
OCDan,
I have to agree. In the past, homeowner equity being traded for a larger home has really help insulate California from returning to normal price to income ratios. But this time… that equity has been HELOC’d out except by the same 35% who own their home outright (and will probably be in that home until they die).
I’m trying to convince my fiancee this has a long way to go. She thinks it will only drop 20%. Me? 30% to 60% with risk to the downside (but not much, if homes get too cheap in California, fly over Country will move back home).
Neil
Yes that is quite true. Those in the know will try and beat the spring fling. Those sellers that have lived in their homes for more than 10 years will be able to smell the coffee and head for the exits. Those that don’t will list their POS’s say at $400k, deny an offer of $320k then sit and watch as comps start to move below the 300’s. Good Lord I bought my first home in 1991 a 1414 sq footer for $103,900. Lived there until 1998 and sold for $106,500. I’m just thankful that I got out on the positive. I’f I were selling today I’d have to take a really good look around and notice that a very large percentage of available buyers can not truly afford a home over $240,000.
Not missing it,
Nor should most of us WANT one over 240K! My wife and I can afford to live just about anywhere we choose in the state but at these prices where’s the value? Besides when you add in the bloated taxes, HOA’s and maint. you had best hope that sucker appreciates b/c there won’t be much left to feed your retirement accounts.
Dude, most people don’t have retirement accounts that they are feeding. Either they truly DON’T or they have something like 25,000. To me that is like not having one.
M.B.A. –
I think DinOR’s point was that if you HAVE the means to invest money, a retirement account is certainly the place to begin, rather than struggling to obtain one of these depreciating (at least at this time) assets. You’re right, 25k is nothing. Take that great tax advantage of deferring income that would otherwise go toward the stucco box purchase, and take comfort in knowing your purchase position will be soooo much stronger in just a few short years. And always remember, when you take the plunge and the value of your property begins going up, YOU AREN’T MAKING MONEY EITHER !!!!!!
Forgot to add the
How true. Even 12 years ago when I lived in Santa Cruz, CA, almost none of my homeowning friends had any retirement account - the house was it, and they planned to cash in and move elsewhere. They had nothing left over even then (when prices were 1/2 of the recent peak). Here in OR, yes we have a $280K mortgage, but we also put away 15% in our 401(k)s without fail. In the Bay Area we could not do that.
Agreed, N.M.I. The disconnect between actual wages and lifestyles is the 800 lb. gorilla no one dares talk about. It is just not fashionable to a realist (or have any humility) anymore. To question the logic of buying into the largest lifestyle possible has become downright unAmerican - ask just about anyone nowadays.
C’mon, who lists their home the last two weeks of December?
i am sure there will be some open house’s on sun dec 24th
maybe they should put a large red bow on it like that lexus i got for the wife in the garage
IIRC, we had open houses on Christmas Eve last year. We are in San Diego County, and I believe others were posting here from other locations with the same thing.
““‘Most people can’t afford a ‘real’ payment on their house,’ he said. ‘They’re hoping for an increase in income or a windfall. A lot of people got in on the frenzy and made an emotional decision.’””
All I could think of when I read this part is:
“But Susan researched this”
too bad so many people can’t think for themselves
How many times have we referenced the emotional part of the decision here on this blog. Largest money deal 98.5% of Americans will ever make and the base the decision on emotion, rather than as much FACTUAL information as possible. It is safe to safe, with my tinfoil hat on, that we as a society are royally SCREWED! If the majority of the population is heading in this direction, I said heading since many old timers and younguns still show some wisdom beyond the rest, you might as well call the undertaker for this economy and country because it ain’t ever gonna get better.
Are you kidding me… Iraq was also an emotional decision. Kind of “let’s go in because we already have 300,000 men massed in Kuwait and see what happens!” kind of logic.
Wait until the ARM for that resets in 2007!!!
The North County Times. “More than one-third of California mortgage brokers believe that interest-only loans will be the most viable loans for borrowers because of the continued high cost of housing in the state, according to a survey taken by the California Association of Mortgage Brokers of 400 members.”
“Ed Smith, director of the association and a San Diego mortgage broker, said that interest-only loans were not necessarily desirable, but were a product of the market.”
“‘Most people can’t afford a ‘real’ payment on their house,’ he said. ‘They’re hoping for an increase in income or a windfall. A lot of people got in on the frenzy and made an emotional decision.’”
Wow. I’m awed by the sheer volume of cognitive dissonance in this post. Keep ‘em coming, Ben!
Can anyone comment on the downtown San Diego market near the ballpark particularly as it deals with Condo sales and inventory….?? Thanks for any help….
There was a local Realtor who used to post the San Diego MLS sales & inventory data at http://www.92101.info/graph.html, but unfortunately stopped when things started to crater there.
Sorry SCDave - I don’t know anyone tracking that particular region. However, drive around that area at night sometime if you want to see lots and lots of condos with no lights on. You might do what was recommended above - go to realtor.com, select the best zip code for that area, limit the search to condos and see how the numbers change over time. That should also give you a good idea of wishing prices which will probably change (downward) in the springtime.
However, with SD downtown condos be very careful. I’ve heard many of those condos have outrageous ($1,000+/month) HOA fees.
If you decide to track this area (or find someone who does) many of us would be happy to hear the results. Some other sites that may have others tracking downtown:
http://www.piggington.com/
http://sandiegomarketmonitor.blogspot.com/
And for general SD info:
http://rereport.com/sdc/main_ncc.html
http://www.housingtracker.net/old_housingtracker/location/California/SanDiego/?state=California&city=SanDiego
Mortgage broker’s dictionary:
viable [adv.]: Capable of generating a commission for a mortgage broker.
LOL
That one got me too. An increase in income to cover the surge in payment for a lot of option-ARM FBs of $2000/mo seems at the very least unlikely.
So then, what does, “Hoping for a windfall”, mean. Does it mean those FBs are hoping to win the lottery? Is that now their only hope?
Becoming more obvious by the day now. Dire times in store for FBs in ‘07…
Man, this shit is killing me. Truely, i have tears in my eyes.
I sold my two rentals in 2002 and my primary residense, which i now rent for $400/mo less than my previous payment.
Painful it was watching the properties go up a collective $400+k till 05′. This shit is pure vindication for running against the tidal wave of people doing the opposite and appearing to make a killing.
The people that bought my stuff (all investors) are all losing big money/mo on each one and they have all refinanced into a second adj rate crap loan for more than they paid me for them, so they can lose even more money per month!!
No problem at all seeing these properties fall back to pre 02′ levels.
so I heard in Sonoma that a realtor was telling someone that the market is going to rebound in the spring because they have been telling everyone with equity in their home to take it off the market and just refi if they need money. They are telling them if only the people who HAVE to sell have their houses on the market buyers won’t have too much choice and the prices will stay up, because the buyer who has to sell won’t be able to cut their prices drastically from what they owe. their advice to people who don’t have to sell is to wait until next spring if they want to get close to their price, and let the current inventory burn off. (eyes are stuck from rolling them constantly as I wrote this)
they are also suggesting some of the high end homes list them on the mls for other agents but not put signs in the yard so that way the neighborhood doesn’t look like it is for sale.
Anyone know where Bay Area pricing is relative to 2003/2004/2005?
The city of San Francisco is falling, but slowly. After peaking in summer of this year, median prices are down like 1-2% per delayed, published numbers. But anecdotally, they’re down much more. There is no real “median” property here because of so many types of buildings, but the best metric is $/sq. ft. After peaking around $800 - $1,000/sq. ft., on average, properties are going for $600 - $800 now. This is vs. $400 - $500/sq. ft. in 20003, so still up double digits.
I think the outer Bay areas have fallen more, but I’m not that familiar with those areas and will let someone else address.
Can only speak for Santa Clara (South Bay Area) but things have remained very strong here….
My friend in Cupertino who can’t seem to sell her house will be happy to hear that.
No, I think nobody knows…
One word: REALTWHORES! No wonder many on this blog have no respect for the profession as a whole, despsite the fact that there are some good ones. Some that even frequent this blog.
Also, that realtwhore doesn’t have to worry about the neighborhood being for sale. In another 2 years the entire country will be for sale.
“they are also suggesting some of the high end homes list them on the mls for other agents but not put signs in the yard so that way the neighborhood doesn’t look like it is for sale.”
Athena, I know for a fact there is a lot of this “under the radar” stuff going on in LA too, at least in high-end areas. Just from observing what’s moving and what’s not, it looks as if those are the only deals that are actually holding. The really savvy realtors are working find to find the right buyer (or GF) for a house, and in some cases they do succeed. The other stuff is just sitting on the market at obscene prices or being pulled off. Sales are down, prices are not…yet. You guys have made me look at things so differently that one of my new year’s resolutions is to finally have my video camera fixed so I can chronicle things around my neighborhood come spring.
Oh Cass you are totally right! I am in Santa Monica right now and have received listings for a neighborhood that I am staying in… and guess what? no sign in front of those houses. I drive past them every day and look. There is a building on the corner on the same street as me and it has at last count 7 units for sale… one sign in front of the building. :-/
In Sonoma Armstrong Estates is the place where I have seen just a total lack of signage. There are multiple listings in this overpriced mcmansion tacky ass neighborhood yet the signs are invisible. hmm… I have half a mind to photograph the neigborhood as it is… and photoshop the for sale signs in front of the appropriate houses.
I have half a mind to photograph the neigborhood as it is… and photoshop the for sale signs in front of the appropriate houses
athena, that would be VERY interesting. Just for the record, 3 anecdotes that I didn’t get to post this weekend. It took so long to read through all the commments that I never got round to it.
1. This past weekend I thought I’d go check out a condo on Idaho, which was advertised as “open”. When I got there the open house was cancelled, but there wasn’t any info on whether they had received offers. I walked down that street and there were at least 3 other condos being offered, one of them “by owner”. The photos of the condo looked nice, but when I got there the street itself left a lot to be desired, although the general area is still good. Smells like there is either one lucky seller (asking was over 900K) or the place was pulled from the market in view of all the competition.
2. For the first time since I’ve started sniffing the market again, I saw on the paper two houses for sale exactly side by side (3118 and 3114 number on the same street in the Mar Vista area). One was open, the other was ‘by appt’, but there was a 200K price difference. It gives you a good sense of how weird things are, but it’s one of those rare chances you have of comparing “apples with apples” in the SFH market.
3.A house two blocks down from us came in the market a while ago and has been pulled. It’s funny the realtor’s sign has been taken away, but the pedestal itself is still there. When houses sell, they are usually quick to post an “in escrow” sign. This looks different.
Thanks, Cass. I was wondering why I wasn’t seeing a lot of listings in SM. (That is very much my hood, as my “office” is the Peet’s Coffee on Montana.) Anecdotally, I was talking to a friend whose neighbor recently delisted his Pac Pal condo, which he was trying to sell/unload at 1 mill.
You guys are both spot on. I live in Santa Monica and my friend is ready to sell her home. She had 3 realtors tell her not to list it! I couldn’t figure out why, and now it all makes sense. They told her to wait until prices come back up. This is crazy.
Sounds like REaltors in your area are looking down a barrel at the Mother of all Smackdowns.
Icouldbewrong, OMG if that is true, then it would mean that things might get interesting soon in the Westside. THREE realtors advised her not to list???? In Santa Monica???? That doesn’t make any sense unless they are absolutely certain that nothing is going to sell (they need to pay their bills too, remember?). It sounds like they are desperate to keep a lid on inventory. Come to think of it, it’s going to be very instructive to watch how Santa Monica does. Although it is part of the Westside, SM is also like an entity in and of itself, and many santamonicans won’t even consider moving this side of 26th. It’s going to be like a microcosmos.
These realtor suggesting people NOT put their property on the market kill me. Apparently the hope is that, by limiting the visible supply, pricing will be maintained and the market will remain “stable”.
But they, better than anyone else, has to understand the volume that is going to be unleashed, one way or another.
Why not go with the flow? Tell people the truth, the market stinks, is getting worse and won’t improve for the forseeable future. All these idiotic games aren’t going to do them any good in the long run, they’re just going to alienate the people who hire them and lose whatever minimal reputation they might have in the process.
DUMB
jag, my guess is realtors are in “esprit de corps” mode right now. They are trying to keep the cash cow going as a group. Next up is the “each man for himself” stage, only then will we find the ones who tell the truth…
I don’t think that realtors worry about their reputations. In a stable market, you’d probably never deal with a realtor more than once because you’d probably make only a single home purchase in your lifetime (maybe two, but if you move to a different area then you’d probably have a different realtor, anyway).
This goes for all salespeople, especially realtors: they’re not your friends. I can’t figure out what makes people trust a realtor, someone with whom they might only ever do one business deal. If you operate a business and buy lines of equipment from a salesperson, I can understand the tendency to trust some salesmen as you become familiar with them and their practices, after they establish a reputation, but when you buy a home, you’re making one purchase for which the realtor is just an agent.
The first thing that you should do when you meet your realtor is take their card and draw horns on their picture to remind yourself of their relationship to you. They want something from you, and that’s the end of the relationship. When will people learn?
(All of this reminds me of “Glengarry, Glen Ross.” “ABC: Always Be Closing.” “Put the coffee down! Coffee is for closers.)
Here’s another (I typing from memory, so you’ll have to forgive me if it’s not exactly right):
Marge: Mr. Hutz, I thought that our motto was “The right house for the right buyer!”
Mr. Hutz: Marge, let me let you in on a little secret: the right house is the one that’s for sale, and the right buyer is anyone.
I love that movie. Straight to the point.
To Neverbought:
“This goes for all salespeople, especially realtors: they’re not your friends.”
Thank you so much for making that point. What is it about people nowadays that makes them want to be so trusting of such folks? It’s especially befuddling when viewed in the context that the average person goes to great lengths to show their capacity for free thinking nad individualism by selecting just the right vehicle, or the right color iPod. Yet, they turn around and put blind trust in the last people they should.
“not put signs in the yard”, “find the right buyer”
Yup, that is exactly how my housein Maine was sold last June. No signs, no listing, no nada. Just a sales agent who is a REAL friend and who happened to know the right GF.
I find it amusing that a few realtors think they can corner the housing market in any area! There is always somebody who bought in 1975 and wants to retire to New Zealand etc. These individuals are going to be the only transactions that occur by the fall of 2007. The realtors, if they are doing this, are working against their own best interests - which is to cause housing to change hands.
I wouldnt mind working in NZ while the housing fallout happens. Hell im renting anway. But it turns out US citizens still must pay federal taxes on all income earned overseas. So you are double taxed, this is the freedom our guys are fight for?!
Plus most western countries have higher taxes than here and pay less.
No wonder I don’t know ANYONE who went to work overseas, you make less $ and pay more taxes.
There’s a much larger standard deduction when working overseas, though the IRS calls it something else, IIRC. Something like $75K, $80K, plus a deduction for foreign taxes and housing expense. It’s not as bad as it sounds on the surface.
It’s not really double taxation if you’re working in a country that has a tax treaty with the US. I forget the particulars but in some cases, if you’re paying local income taxes, you don’t have to pay US taxes.
And, I would never advise anyone to commit tax evasion. But I will say that you have… more options, if your money never enters the US.
Interesting. thanks for the tips.
Maybe I’ll go flip houses in UK until thier bubble pops! hehe
UK, well, unless you live in California or New York, you probably will pay more taxes there. Dunno about New Zealand.
In any case, if you earn under $80+k per year in salary overseas, and you actually live there, you can exclude that income from US taxes. If you pay (for example) as much on the rest in New Zealand income taxes that you’d pay in the US, you don’t pay the US; if you pay less, then you get a credit for the NZ tax and pay the US the difference.
It doesn’t suck, but it’s not great, either, since you’re always on the hook to the USA. Almost no other country in the world tethers their “free citizens” that way; in fact, no other developed country does that I know of. Shameful, in my opinion, since besides the moral points, you’d thin we’d be HAPPY to have our unemployed/ underemployed people go off to get jobs anywhere without discouraging them.
You can deduct taxes paid to foreign governments, so you aren’t really taxed twice.
They won’t have to worry about the nighborhood for sale. By fall next year the entire country will be for sale!
Realtors have controlled the market for 5 years by lying and getting people to buy homes they can not afford. They were never concerned about the big picture and this crazy tactic in Santa Monica is going to backfire just like the inability for anyone to buy a home here unless they have a million dollars. There are no starter homes in Santa Monica. This makes me sick.
“There are no starter homes in Santa Monica.”
Sure there are! It’s just that you need to start with a down payment of $200K and get a $800K mortgage! There are quite a few condos that can be had for about $1 million
Hehehe….I’m keeping track of existing SFRs with 2+ beds in Santa Monica, and the lowest asking price I’ve seen do far is 680K.
This is 680K for an 800 sq ft house on a 2000 sq ft lot.
Bargain…..not!!
That is a shack. I would take a condo first. You wouldn’t believe some of the pure garbage that passes for SFHs in SM. A friend of mine owns one of those as an investment, and it is a complete piece of junk - hard to even keep it rented, no way to ever sell it, complete garbage.
That is a shack. I would take a condo first. You wouldn’t believe some of the pure garbage that passes for SFHs in SM. A friend of mine owns one of those as an investment, and it is a complete piece of junk - hard to even keep it rented, no way to ever sell it, complete garbage.
Yeah, Santa Monica is my own personal Poster Child for the housing bubble. Even though both the husband and I actually work in Santa Monica, we’ve pretty much been priced out since we came to LA in 2000.
I remember being horrified when a work colleague told me he’d bought a SFR on a double lot on 23rd/Pico for 500K, back in 2001. I wouldn’t even hazard a guess what the comps for his place are now - not that he’s thinking of selling.
Outside of Manhatten and parts of San Francisco, Santa Monica must be one of the most expensive places in the country.
This must the the epitome of disconnect:
http://www.tiny.cc/0vi3D
For those that can’t be bothered - its been on the market for 450 days, 1500 sq ft on a 5000 sq ft lot. Its a sweet turn-of-the -century bungalow squished in between two 4-floor apartment units - so no nude sunbathing - and they’re asking 3.3 million dollars for it, and no reductions in the 18 months its been listed. Unf$%king believeable.
Oh, and the property I mentioned as being the cheapest SFR in Santa Monica - sorry - I oversold it!
Its worse that I remembered…..read 550 sq ft house on a 1450 sq ft lot. Yours for just under 700K.
Speedingpullet, I’m deeply offended. How can you not see the incredible investment potential you’ve got here. Go on and finance 125% of it. You will be OK because the price will go up….
Seriously, I guess your little postage stamp of a house costs that much because it’s on the beach. You have to calculate the pricelessness of the location and add it to the bubble inflated price. It can get steep, of course, but’s that’s the price of Santa Monica living, unless you are a bum and sleep in the alleys off 3rd st…
If I ever become homeless, I am moving to Santa Monica….
Are there enough “first time buyers” to purchase these “deals” with the continued low “rates”????
I hope not
Low rates don’t matter anymore, now that virtually every first-time buyer is using an interest-only loan with a teaser or option rate in the 1%. The actual interest rate is 6%? 9%? Who cares? All he pays out of pocket is 1%, and The Appreciation Which Always Goes Up takes care of the negative amortization, and then some. Except when it doesn’t.
It has literally gotten to the point where the typical first-time buyer is maxed out with his monthly payment on even the teaser or option rate. So in order to save these people from exotic loan re-sets, the interest rate would have to drop down to near the level of these doomed guys’ teaser rates — in the neighborhood of 2% or below. That’s not going to happen. All that lower interest rates will do, assuming they fall, will be to allow those few who actually make “real” interest payments on their houses (typically people trading up slightly) a slightly better deal.
Plus, assuming rates stay at the relatively low levels, like they did in 1993-1997, those of us who’ve kept our powder dry may be able to enjoy the double benefit of post-correction prices plus a low interest rate — in other words, the same heavenly deal the buyer class of 1997 got.
I was jealous beyond belief to learn that my neighbor on my previous street in east Costa Mesa was paying a $1,300 per month mortgage, on a house he’d bought in 1999 for $365,000, in a neighborhood where comparable houses were then listed for $900,000 and even my rent ws $2,500. Lucky [bleep].
I agree with you on all points. However somehow ‘they’, meaning the moronic masses who always live beyond their means, always seem to win lately. The smart, sensible people with a shred of common sense such as the bubble-sitters seem to get the shaft. I am just kind of skeptical that sanity will actually prevail here. Does anyone else share this fear????
Unfortunately, yes.
Been waiting for years for this bubble to pop. There have been more than enough “events” which should have had some effect on the mortgage financing, but it keeps chugging along.
If I were a tinfoil hat-type, I’d suspect the govt is printing money to buy these MBSs and CDSs. But I’m trying to think of another reason the money supply for this garbage seems to come endlessly, irrespective of any risk.
I too think that. It is called negative reinforcement and I have not seen one little bit of it for these idiots - yet. They are skating and it infuriates me
“Survey highlights include the following: Thirty-eight percent of members believe that home prices will decrease slightly (less than five percent), while 26 percent believe there will be a slight increase (up to five percent). Other projections included a significant decrease (19 percent).”
The other 17% are holding out for pink unicorns.
Ed, 46.3432143456% of South OC believe that pigs can fly, which is down from last month’s 48.6758462352436%, but still higher YOY!
OC, lol
Good thing I wasn’t drinking anything, Dan. I would have spit it all over my keyboard.
Now, I’m going to drink some water. Please hold the mathematical jokes until I’m finished.
Good one OC… good one.
The other 17%, being fresh new members consisting of former mechanics, short order cooks, hand models, and garbage men, insist that housing will appreciate 25% this year, because housing never goes down.
hand models…lol
Preditions about the market say much more about the person making the prediction than it does about the direction of the market.
True … but that may also be true ot US ! We all hope for quick results in the unfolding bust, but it is slow, slow, slow.
Used house salesmen and toxic mortgage brokers are vermin. Prices are coming down, and they are counting on buyers to keep buying homes they cannot afford, and the only remote way they can support the mortgage is wild inflation of prices.
This thread is the one that finally did it- I now comprehend that so many - TOO MANY folks just swallowed the line that prices are at a permanently high plateau, hmm, or maybe just 10% shy of that lofty height, and NOW is the time to jump in with both feet and compete with each other for “free” stuff, yes that’s the way to outsmart the builder - and while so doing overextend themselves all the way to the the BK atty’s office.
“. . . interest-only loans were not necessarily desirable, but were a product of the market.”
I love that line. Reminds me of the trailers for “Mystery Science Theater 3000:”
“Every year Hollywood makes thousands of movies! THIS is one of them . . .”
“Buyers expect to be wooed. ‘People walk in the door and say ‘What are you giving away?’ They don’t want to see models, or floor plans,’ said Josh Armstrong, a sales associate at Turnberry.”
I expect to have my @$$ kissed. And I expect to be fed barbecued squirrel meat caught fresh out of the seller’s back yard.
Evidently, you belong to PETA.
People Eating Tasty Animals
Squirrels in most neighborhoods are already gone. Sparrows are getting sparse. Drove through an exurban neighborhood the other day and saw two families fighting over a prarie dog roadkill. Threw my unwanted pickles from my cheeseburger to the children. They thought I was a god. People getting hungry out there. Hide the pets.
Where do you live ,my neck of the woods isn’t at this level yet .
It all makes sense to me now. The sellers of the past few years saw all this coming. They asked the buyers to feed the squirrels for one day, when all the cash from refi and heloc runs out, they still have meat on their tables. Man, brilliant, just brilliant…
Oh, man… flashback!
GS, who was it that did that brilliant little piece sometime last year on living in the IE and having to grab the AK just to get the mail? “Honey, cover me…”
Maybe the flippers could start giving away George Foreman grills as an incentive.
Now I understand the attraction of houses in Marin and Sonoma: Mmmm, Venison!
How long till the housing bubble bust reaches Medieval levels and realtors are roasted on spits over nrely sodded lawns?
‘People walk in the door and say ‘What are you giving away?’ They don’t want to see models, or floor plans,’ said Josh Armstrong, a sales associate at Turnberry.”
OMG… FBs are more Foolish than even the stories on this blog could have convinced me…
First of all, Mr. and Mrs. FB, nobody’s giving anything away, YOU STILL HAVE TO PAY FOR IT………
Secondly, you don’t want to see models or floor plans?…YOU’RE BUYING A STINKIN’ HOUSE YOU NITWIT………..!
I get this feeling that these FBs woke up one morning and thought they were living on a blanking game show set, as in “WTF is behind Door Number 2 Bob?????”
OK enough.
Never mind.
Going home now.
> First of all, Mr. and Mrs. FB, nobody’s giving anything away, YOU STILL HAVE TO PAY FOR IT………
Will they have to pay for it, if they receive the free incentives, pay the low teaser rate for a year and then let the lender foreclose on the house? Such behaviour might be still give an economical advantage.
You know Pete, I don’t even think most of them are thinking that far ahead…it sounds like it’s more about the “windfall” mentality that was mentioned in the article…
But undoubtedly, there will be the playas who will exploit this focacta (sp?) situation.
“The median sales price of a new home also is down compared to a year ago. In November, it was $560,000 in Sonoma County, 15 percent less than the $655,000 in November of 2005, according to Dataquick, which lumps both new houses and condominiums.”
This in a county where the median HH income is $53K…good to see that median prices are now ONLY 10X median incomes.
http://en.wikipedia.org/wiki/California_locations_by_per_capita_income
Tell that to the bulls at OCR’s RE blog that claim the real median income in OC is $200K.
It just so happens that all of the income measures miss all of the insane income. (eg, income taxes, census surveys, bank surveys, etc.)
it is quite silly.
That’s pretty funny. Why doesn’t Lansner censor those posts?
Sunset, I can’t believe you even read that blog anymore…I thought you retired from it????
Yeah, I was kinda pissed off for a while.
I mostly lurk over there and am leaning towards more lurking here.
Work is absolutely crazy right now.
Maybe I should just cave in and help out the economy and reatwhores. I saw this little 1bed/1bath shack in Compton going for 600K. I think I will bid 1.5 million, just to help everyone out.
NOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOT!
Buyers expect to be wooed.
Of course, even GF’s expect to be bought dinner before they get f***ed.
That’s exactly right - just as long as someone is saying “I love you”, while they are being boinked up the you-know-where.
Time to close down this Blog
Bush White House declares housing slump behind us!
http://www.signonsandiego.com/news/business/20061219-1157-bush-economy.html
Did he anounce that major home price declines have ended?
announce…
It is not over until the fat woman sings…I don’t think my wife will be singing anytime soon.
LMFAO
and he is going after the ‘evil-doers’ who drove down real estate prices.
He has been so right about so many things, he must know what he is talking about. Or not.
In a gruesome way, he may BE right. He says “most of the action has already played out” . Yup, it is already too late to find a FB-GF anywhere. Just happens most sellers don’t know it yet, and most lenders haven’t gotten around to dropping the guillotine.
“Mission Accomplished”
C&C you are right; the mission IS accomplished. The tide has turned from the euphoric stage to the “uh oh” stage, and now we just have to endure the fallout and “unintended” consequences, which just as in Iraq, will last years.
lol crispy
This whole debacle is like a fvcking slo-mo train wreck…..
Does this announcement signify an end to the War on Savers? Or just the beginning?
Just the beginning.
Well, he is the decider….
Mission accomplished….”the worst is over” …..
God help us all…….
MISSION ACCOMPLISHED!
Not to get political, but in November of 2008, it is possible that we could still be in Iraq, and potentially at the point that many here believe will be maximum pain for many homeowners–two more dead spring seasons, and $2+ Trillion of ARM resets will have happened.
People aren’t going to be all that happy with the status quo at that point. A Republican in the White House could be a tall order.
Waiting for someone to offer: “Take over my payments, and I will give you my car…and furniture, wife, mistress.” Just get me out of this hungry turd!
I saw an ad for a yacht, where the seller was offering $50,000 to anyone that would take over the pmts..
Pen - do you have a link to that? I have a friend who wants to buy a yacht with what I suspect will be serious HELOC money. I would love to be able to provide a real world example, of exactly what that would entail. You seem to have found it.
2 happiest days of a boat owner’s life.
The day they buy the boat AND the day they sell the boat.
Or another classic from this blogs archives.
If it flies, floats or fornicates, rent it.
Thai officials just caved: Bloomberg reports stocks are exempt from new regulation after investor revolt. Ooooooh! This is going to be interesting.
http://tinyurl.com/ycgmuj
“Thai Central Bank Backs Down as Investors Stage Coup Over Baht
By Lee J. Miller
Dec. 20 (Bloomberg) — Thailand’s military-backed government, three months after replacing Prime Minister Thaksin Shinawatra following a bloodless coup, took on the stock market and lost.
Bank of Thailand Governor Tarisa Watanagase, 57, imposed capital controls on Dec. 18 she said would slow the baht’s rise against the dollar and stoke exports. Yesterday, her central bank predecessor, Pridiyathorn Devakula — now the finance minister — told reporters in Bangkok that stocks would be exempted from the rules after an investor revolt.”
See above link for rest of the story.
“Foreclosure Factories:”
http://yahoo.businessweek.com/magazine/content/06_52/b4015147.htm
Grim.
Beyond scary. imagine making 19 mortgage payments that were never credited to your account.
Oh hey, sorry dude. Yeah, we sold your loan and never told you. But when you kept paying us we just kept the money. What, the new guys foreclosed? Sorry dude. Oh, and we are really, really hard to sue. Later dude.
WTF? They were in that house for 24 years and got foreclosed that quickly? There is something else going on here. Minnetonka is a wealthy suburb of Minneapolis. Lake Minnetonka is for the really wealthy. I think Prince has a house on Lake Minnetonka. It was on Lake Minnetonka that the Vikings had the infamous “Love Boat” cruise.
These articles suck because they never dig enough to see the real truth. They need to tell us about the Rimstads’ multiple HELOCs they took out so they could put a Volvo and a Mercedes in the driveway. They probably also had to send their kids to Carleton College (Karl Marx University at $40,000 per annum) to get degrees in sociology.
Here’s some advice for the MSM. Print the real story or don’t print any.
Read the article again and think about it this way:
So I have the wherewithall to set up a loan servicing organization. I see houses in COMPTON seling for a half a mil. I’m evil, so I buy the service right on old loans with low valuations. I set up a system to encourage foreclosures. I sell the foreclosed properties at a 400% markup. I profit.
Sharks aren’t dumb, they can smell opportunities like this miles away. What do you think it takes to set up a servicing company? Not much, and the potential payoff is huge.
Pretty astute observation there sm_landlord.
We need to socialize housing. I mean, these idiots are just victims. It’s not fair for them to lose there house just because they were dumb enough to capitalize future interest and give it to the seller, or to buy stuff.
Everyone is entitled to stuff. I want stuff.
Who could take themselves seriously living in a place called “Minnetonka”?
This stuff happens all the time even outside the mortgage industry. I once had my phone service disconnected due to one ‘missed’ monthly payment. Sprint apparently cashed my check but credited the amount to another customers’ account. Despite having the cancelled check in hand, it took several weeks and a number of hours writing, faxing, and calling on my part to resolve this. Needless to say, I no longer will do business with them.
I had a similar situation. My business account payments were being applied to a closed five year old personal account and they were threatening to disconnect saying my business acount was overdue. They would not reapply the credit to the right account because it was not in the business name. And they would not refund the money to me personally because it was paid by my business.
Nice catch 22. Did they not see the irony? I hope you fired them once it was straightened out. Companies that can’t keep their books straight deserve to go out of business.
Weekly Foreclosure Update. 93 more homes going BYE BYE.
LMAO - Some sucker from Loma Linda, CA - bought 3 homes in 3 months. Looks like she is going to be giving these back. Nice Investment and where were the Underwriters on these deals?
I spoke to a realtor here in Fresno, CA this past week and she has 37 bank owned properties that she needs buyers for. She mentioned how bad the market conditions are and the foreclosures are really starting to pile up.
The White House predicts US housing market in 2007 “Won’t be anywhere near as bad as Chernobyl.”
Right. The houses won’t be radioactive.
I’m glad they left some wiggle room.
Hey, lets face it, if one of us *had* to put a possitive spin on housing, that wouldn’t be too far off of what I’d say.
I wonder how much it cost the RE lobby to get White House to parrot their message?
“Survey highlights include the following: Thirty-eight percent of members believe that home prices will decrease slightly (less than five percent), while 26 percent believe there will be a slight increase (up to five percent). Other projections included a significant decrease (19 percent).”
0-5% up 26%
0-5% down 38%
5%+ down 36%
Median forecast for a bunch of normally-bullish REIC insiders = 2.8% drop, based on linear interpolation of the 50th percentile assuming uniform distribution on the range from -5% to 5%. In actuality, the median is lower, as the upper tale likely thins somewhere between 0%-5%.
Yep — never been a better time to buy!
Ed Smith of the San Diego Mortgage Brokers said that more people will be using interest only loans in the future. Bzzzz! Wrong answer, Ed! Once the interest only mortgages are fully understood and the exotic loan tsunami has run it’s course, would be buyers will be so shell shocked at the constant stream of sad stories in the media of bankruptcy, broken families, foreclosures, divorces, etc, created by these exotic loans, most would be buyers will not touch them with a ten foot pole AND, here’s a 100% guarantee, when this mess is finally over, legislation will be in place which INCLUDES labels on these loans. “WARNING! THIS IS A TOXIC LOAN WHICH CAN SERIOUSLY DAMAGE YOUR FINANCIAL STATUS. THE GOVERNMENT OF XXXXX HAS DETERMINED THESE LOANS CAUSE BANKRUPTCIES AND FORECLOSURES FAR MORE THAN OTHER LOANS.” Like my old (now long departed) mom used to say “When poverty flies in the window - love flies out of the door.”
Or, as Groucho Marx said, “Love flies out the door when money comes innuendo.”
and people still smoke
dummies wont care, they will still ask, how mucha month?
Don’t worry, be happy, housing slump’s coming to an end, LOL:
By JEANNINE AVERSA, AP Economics Writer
Tue Dec 19, 3:06 PM ET
WASHINGTON - The worst of the housing slump might be over, although some pain is likely to linger, an adviser to President Bush suggested Tuesday.
Oops, nevermind, looks like this was already posted…
Bush ans his cornies have lost credibility with “Mission Asscomplished”
“Cut and Run”
He is trying everything to leave a legacy behind which doesn’t paint him as the worst president ever.
He needs to push housing and Iraq to the next prez.
So are you saying we can expect two more solid years of overbuilding before somebody finally pulls the rug off of the new home inventory elephant?
I think when government officials minimize the housing bust it means one tangible thing: They know there is no rate cut in the near future, and are trying to preemptively justify that fact. So I don’t mind this kind of spin, because I personally think a rate cut would be slap-happy stupid at this point.
O.C. seen as 4th-worst big home market in ‘07
Fortune magazine asked Moody’s Economy.com and Fiserv Lending Solutions to come up with home-price projections for the largest U.S. communities over the next two years. These folks think 36 of the 100 biggest markets will see price declines. And O.C.? Down 5.4% in 2007 — fourth worst among the Top 100 markets — and down another 4.5% in 2008.
The story also says … “It’s possible that the broader housing market will firm in the next few months, that the worst is over,” says Mark Zandi, chief economist at Moody’s Economy.com. “But that to me is a dead-cat bounce.”
I dislike the wording of housing slump . The Media reports this reversal of a unjustified housing mania of inflated prices as something bad . We the home buyers of America are suppose to think that it would be good for home prices to rise further in 2007
and get out of this awful slump that is behind us .We the Homebuyers of America are suppose to love some stupid I/O loan that puts us into more debt and finally puts us in foreclosure .
Think different : A housing slump is a good thing . It is the end of the great evil that existed to long . Let’s get some positive reports on how the housing boom mania is correcting at a nice pace with prices falling .Lets get the rah rah going for the falling market that will get more people into affordable homes .
Good point –this is exactly why I prefer the term “housing correction”, or “end to speculative madness”. Far more accurate, both economically and ethically. Doesn’t win me many kudos at dinner parties, but it gets the message across.
How about housing price improvements.
The housing market is rightsizing!
Here is more reason to expect that housing prices will continue to rise in the Bay area. I am really eyeing that 2 bd 1ba patialial estate in crime-ridden Oakland, for only $600k.
BAY AREA
Violence up in big cities, FBI reports
Oakland, S.F., Hayward, Antioch top bay growth
Demian Bulwa, Chronicle Staff Writer
Tuesday, December 19, 2006
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Driven by a surge in armed robberies, violent crime rose in the Bay Area and around the country during the first six months of this year, the FBI said Monday in a report that raised concern that the drop in crime that started in the 1990s has turned around.
Oakland witnessed a 38 percent increase in reported violent crimes — homicides, rapes, robberies and assaults — from the first half of 2005, the biggest uptick among 63 California cities with populations of at least 100,000 people.
Double-digit increases were also tallied by Hayward, San Francisco and Antioch, according to the FBI’s preliminary Uniform Crime Report, which was compiled using numbers from 11,535 law enforcement agencies.
Nationally, violent crime increased 3.7 percent, with robberies up 9.7 percent. The bump in violent crime was biggest in cities with populations of 500,000 to 1 million residents, at 8.4 percent. And it followed a 2.3 percent increase nationally from 2004 to 2005.
On a positive note, nonviolent property crimes — burglary, theft and arson — were down 2.6 percent nationally, the FBI said.
“We are again encouraged by the drop in property crimes seen in most areas around the country, but we are also concerned about the increase in violent crime in some cities and some towns,” said Brian Roehrkasse, a U.S. Justice Department spokesman.
He said Attorney General Alberto Gonzales had dispatched teams to 18 cities to study recent crime increases. The Justice Department will suggest new anti-crime programs after receiving those teams’ reports, Roehrkasse said.
Roehrkasse said Justice Department officials could not explain the rise in robberies. In the Bay Area, Santa Clara recorded a jump of 82 percent, from 17 to 31, in the first half of the year. Big gains were recorded from San Francisco (37 percent) to Antioch (19 percent).
Antioch Police Chief James Hyde said his officers are seeing younger criminals as well as more women and out-of-towners committing robberies and other violent attacks.
The motive, he said, usually relates to drugs, particularly methamphetamine. Robbers rip off dealers, steal prescription drugs from pharmacies and pull off street heists to get money for a quick drug fix, he said.
“Instead of one or two, you’re seeing four to five people” in a robbery crew, Hyde said. “They tend to be parolees along with probationers learning the robbery trade, if you want to put it that way. You’re seeing a more mobile and sophisticated robbery crew.”
Hyde said the government had a hand in the problem by cutting financial support for community policing in favor of anti-terrorism grants.
“That limited our ability to work closely with neighborhoods and have a higher officer-to-citizen ratio,” Hyde said. “Many departments have become more reactive than proactive.”
Roehrkasse, however, said the increases do not appear to be related to federal spending, which he said has never totaled more than 4 percent of state and local law enforcement agencies’ budgets.
Franklin Zimring, a professor at UC Berkeley’s Boalt Hall School of Law, said criminologists are “nibbling their nails” at the new data because there were no solid answers for why crime decreased drastically in the 1990s and held relatively flat during the first half of this decade.
Zimring recently completed “The Great American Crime Decline,” a book that attacks prevailing explanations for the decline — including economic prosperity, prison expansion and a decrease in at-risk youth due to abortion legalization.
“Any indication that the arrow can turn up alerts us to the possibility that the trend can turn against us,” Zimring said. “If we had a stronger sense of what held crime down, we’d have less to worry about with small blips.”
Nationally, homicides increased 1.4 percent and aggravated assaults went up 1.2 percent in the first half of this year. Rapes decreased by less than 0.1 percent.
Oakland saw a 78 percent jump in homicides, from 37 to 66 in the six-month span, and a 48 percent increase in robberies.
“I don’t think it lends itself to a simple solution,” said Officer Roland Holmgren, a spokesman for the Oakland Police Department. “And it’s not going to take one thing to fix it.”
He said factors in Oakland’s crime increase include poverty, the greater availability of guns and a lack of problem-solving skills among young people, who increasingly settle disputes with guns rather than fists.
Fremont experienced the greatest increase in property crimes, at 13 percent, among large California cities. Many other Bay Area cities showed declines, including Antioch, where property crime dropped 24 percent.
Hyde said he believes people are “target-hardening” their homes and cars with alarms and other measures, in part because of fear that they might be victimized.
http://www.forbes.com/2006/12/19/mortgage-lenders-bust-biz-cz_ms_1219bust.html?partner=links
really great article you all will appreciate:
http://www.fool.com/news/2006/12/19/lies-danged-lies-and-housing-numbers.aspx?source=eptyholnk303100&logvisit=y&npu=y
Buyers expect to be wooed.
Are women the only ones buying these days? I don’t think any man expects to be wooed. Screwed maybe, but not wooed.
To keep the house inflation party going is a exercise in absurdism .
For the RE industry/Media/Government to search for ways of avoiding the needed correction ,with a search for illusions that support the irrationality of the mania to begin with is absurb .The fact that the realtors want to hide the excess inventory is criminal .
It was absurb to put people on loans they didn’t qualify for .
It was absurb to offer low down loans to people with no skin in the game .
It was absurb to make loans based on real estate going up .
It was absurb to base appraisal values on sub-prime low down liar loans and speculator demand .
It was absurb to think prices would continue to go up when affordability would put a cap on how high it could go .
It was absurb to think the speculators wouldn’t bail and the unqualify buyers wouldn’t bail on the increased payments is the market didn’t go up .It was absurb to tell people that real estate only goes up and it’s a no-lose investment .
A housing slump is a good thing because it’s the beginning of the end of madness .
The RE industry got ahead of themselves by 10 years in prices . It’s absurb to pay in the present for something that would only have that value 10 years from now based on normal house/wage inflation .There was no other factor other than mania demand that could push pricing into the future that far .
Paying now for future value is absurb . You either hold on to the POS for 10 years or more or you lose.
You lose even if you hold on, because you’re paying more than twice as much monthly than if you rented the same house.
Some people might want to avoid foreclosure at all costs .
A Dead-Buyers market is what we have now! All the buyers have already bought, for fear of being priced out forever, which is why we now have about a 70% home ownership rate. There are no buyers left to buy, hence; A Dead-Buyers market.
Perhaps, after the previous buyers recover from their foreclosures in about 7 years, there will be buyers again. Until then, It’s A Dead-Buyers market.
Civil war, pestilence, depression, the fabric of western civilization crumbling, “Never a better time to buy a house!!!”