“The Paradigm Has Shifted” In California
The Tribune News reports from California. “Those looking to buy a house in San Luis Obispo County in 2007 are expected to have a lot to choose from, while those trying to sell may have to lower their prices to stay competitive. The softening housing market of 2006 is expected to continue into 2007, real estate experts say.”
“In 2006, homes took longer to sell than in previous years, leading to a large number of homes on the market. In San Luis Obispo County, 216 homes sold in November, a drop of 38 percent from the previous year when 351 homes sold, according to DataQuick.”
“The high inventory may have led to the median home price dropping for the first time in eight years. September marked the first time it had dropped since December 1998. It decreased again in October and November.”
“The median home price in November was $512,000, according to DataQuick. That’s a decline of 8.4 percent from November 2005 and down from October’s median price of $545,000.”
“‘Buyers should be able to negotiate a little harder to what they think is a good price,’ (realtor) Lenny Jones said. ‘Sellers can expect a lot of competition. Put it on the market at a good price, not a pie-in-the-sky price.’”
“That’s not to say prices are expected to drop drastically. ‘I don’t think we’re going to see huge price reductions,’ agent Richard Watkins said. ‘It’s sort of a nontraditional market.’”
“‘Generally, 2006 was not a banner year,’ Watkins said. ‘But if you go back and look at the last 10 years, it wasn’t that bad.’”
The Sacramento Bee. “We did OK in our predictions for local business doings in 2006. Here’s the report card: Prediction: Developers offer a new proposal for housing and retail at 10th and K streets. Reality: Retail, yes. Housing, no. Prediction: A proposed 21-story project combining lofts, office and retail gets under way at Eighth and I streets. Reality: Nope. Homebuilder D.R. Horton pulled out of the project.”
The Daily Bulletin. “The for-sale signs are up longer now and there are many more of them. You don’t have to be an expert to know that the Inland Valley’s phenomenal housing boom is over.”
“‘There’s no question the boom is over,’ said Jack Kyser, chief economist with the Los Angeles County Economic Development Corp.”
From the Reporter. “The nation’s house party ended with a thud in 2006. The sudden stall in home sales, home construction and home prices was voted the top business story of the year by U.S. newspaper and broadcast editors surveyed by The Associated Press.”
“In 2006, home builders scuttled projects, would-be buyers canceled orders, and the re-sale market hit landmark lows.”
“‘The experienced agents are telling me this is one of the worst markets they’ve seen,’ (broker) Sue Kappel told The Reporter. ‘It used to be get listings, get listings, get listings. Now it’s find buyers, find buyers, find buyers. The paradigm has shifted.’”
“In Solano County, home prices are falling, and sales are now taking an average of nearly three months. Meanwhile, short sales, when a home is purchased for an amount less than the debt owed by the seller, are reportedly on the rise.”
“Bob Solomon, of Vacaville’s Solomon & Associates Real Estate, noted that of his company’s four listings in mid-December, three were short sales. It’s an increasingly common phenomenon, he said, given current market conditions and depending on when home owners purchased their house, what type of mortgage they chose, and whether they’ve spent their equity.”
“‘It could be the best of times or the worst of times, depending on where you are in the game,’ Solomon said. ‘If you bought your house two years ago and you bought it with 100 percent financing and you didn’t see any appreciation, you’re going to be upside down by the time you try to sell the house.’”
“That’s not to say prices are expected to drop drastically. ‘I don’t think we’re going to see huge price reductions,’ agent Richard Watkins said. ‘It’s sort of a nontraditional market.’”
It never ceases to amaze me the phrases that are used to describe the current market. Could save a lot of ink by just saying “it’s f*cked” end of story.
Incomestream, I think you are right. The market is like Jody Foster, up on that pinball machine, in The Accused. This is not going to be a quick romp either. The line has formed.
Ewww…Nasty analogy…. I disagree. The FBs were not raped. They were consenting adults. They signed the escrow contracts. Nobody forced them to spend more than they earned and therefore contribute to an historic runup in RE prices. They may have been misled by the REIC…but they were dumb enough to jump. Stupid sheeple. Screwed it up for the rest of us. I don’t want to move to Austin or N.C.!!! But I won’t buy ever again in Cali unless prices fall at least 25%!!
Fair enuff — FBs were not raped. But I think the point of the analogy is that they are about as well off at this point as Jody Foster’s character on the pinball machine, regardless of how they got into that position…
Yes, they certainly are screwed. I just don’t think of them as victims. If you are not part of the solution…then you are part of the problem…and without all those FBs…RE could’ve never tripled here in just a few years.
Me? I hope the bottom falls out of this f@cked up market ASAP!
Rape isn’t the right analogy. They are more like that fellow who had to go to the emergency room after he shoved a jam jar and a potato into his ass and found that he couldn’t get them out. (Pictures on http://poetry.rotten.com/potatoes-n-jelly/ for those with inquisitive minds.)
Sooooo, you’re saying Jody had it comin’ to her?
There are a bunch of posters on this blog that should just change their name to MisterLiteral since they take everything so literally. I notice how many times sarcasm is taken so literally and how every word is read into to the tiniest degree.
No, I did not mean to start a debate on rape and what role any woman plays in it. I meant that the FBs were going to get gangbanged while a bunch of guys were chanting “1, 2, 3, 4 stick that FB until he’s sore”.
Dude, I’m bustin’ up right now ’cause that was said totally tongue-in-cheek. (I imagine I should be a little ashamed of myself, but whatever) If Jody is the metaphor for most FB’s, then she surely had it comin’ to her.
YOU are exactly right, tongue in cheek or not.
These buyers have it coming. Jody as the character did not adn she is not the metaphor for FB’s. PLEEEZZZZZZZZZZZZZ
LiLLL: Nice comeback to a far out analogy.
NYCityBoy
These shoppers and buyers of homes were not held against their will and gang raped, something you call “a quick romp”. YUK.
Just you wait - it seems there is only about 10 people (including me, SLO Renter, and Arroyo Grande) that see the tsunami of inventory that will hit the Central Coast this spring.
EVERY SINGLE PERSON I talk to wants to list their house in the spring and they ALL think the market is going to take right off.
I just don’t think the psychology here is going to change until people start having themselves or friends lose their homes.
The RE bulls really believe that every retiree from San Francisco or Los Angeles wants to live here. The funny thing is … this county only had a net total of 2,000 new residents for 2006 - the whole freaking county!
The stupidity is endless - bring on the pain, we need it.
SLO Bear,
I agree. The local psychology just has not changed yet, and even though there is general acknowledgement that the market is slow and that it is difficult to sell right now, I, too, hear a widespread conviction that things will improve come spring.
Why do you think it is so hard for people to believe that prices could come down here, given that this happened in the 90s?
Why you ask? I believe it’s wishful thinking. People that live here love it, but … it’s not for everybody. I describe it as cows, grapes, and the ocean. There are no restaurants (to speak of), no shopping, limited cultural activities, and most importantly, NO INDUSTRY outside of agriculture and real estate.
People in SLO County know that if the bottom falls out (and it will), they are f’d. The floor in pricing here (based on rents) could be as low as 70% off June 2005 prices. That web would snare alot of people.
SLO Bear,
Funny you should describe it as “cows, grapes, and the ocean”. I grew up in Iowa (”cows” and more recently, attempts at “grapes”), and when I moved out here, it seemed a lot like Iowa to me (rural, rolling hills, slow-paced, conservative), except for warmer winters and ocean proximity. Kind of “Iowa on the sea”, but with no snow and better restaurants.
You just described Northern Nevada, except it’s cows, gaming, and desert. Same thing here too - everyone’s banking on the Spring recovery that’s based on nothing but a Hail Mary.
When you live in LA, and go up there for a weekend getaway, cows, grapes and ocean look pretty good, heavenly actually, and you’re just like, uh, I want to buy something here.
When you live up here and see all the career opportunities in LA and the Bay Area, you’re like, uh, I’d sure rather work there. I guess the grass is greener despite presence or absence of cows.
I’ve always wondered how hard it would be to hire software engineers in or around SLO. ALso wonder what it would take to get people to move there.
“You just described Northern Nevada, except it’s cows, gaming, and desert.”
You’ve just described most of rural Pennsylvania, minus the gaming and desert. It’s just cows.
LOL. Those f***ing cows are everywhere!
Haven’t you heard? Everyone wants to move everywhere, and rich boomer retirees are going to retire everywhere, driving prices up forever.
I think the next demographic for the REIC to target as buyers will be cows.
Um, if the psychology hadn’t changed why would they be in such a hurry to sell? Methinks they all know the turn’s acoming.
Well, the current real estate run-up hasn’t been due to a buy-and-hold philosophy … more like buy and flip.
These people aren’t necessarily selling their primary residences, but their “investments” - trust me - there are alot of “investors”.
The RE agent that I rent my house from just had to close her office and work out of her house because the sales volume was too low. And by the way, she “owns” five houses.
Wow. I remember Getstucco talking about a Santa Barbara realtor who had purchased 14 houses down there using IO loans. Kinda like the loan officer we talked to at the Mortgage house who was trying to talk us into the IO option ARM that she had herself (because she had ‘better things to do with my money’ than pay down the mortgage). Unbelievable.
The key strategy in playing a game of hot potato is to make sure you hold the potato for as short a time as possible. Those who don’t catch on get burned.
GetStucco - I always tried to avoid that game. Guess that’s how I ended up a JBR (for which I am very greatful at the moment . . . .)
I was kind of surprised in Morro Bay a few weeks back to find that the properties available for long-term rental (as opposed to vacation rental) were apparently commanding (or at least asking for) rents that would’ve been somewhat more than half of the expense of “owning” comparable properties. Thus, my expectation for that town, at least, is that prices might ultimately come down 30%-40% but probably not 70%. Well, what do I know. You guys live around there.
az_lender:
70% would definitely be an over-correction, and you need to take into account: 1) that prices already have dropped 15% from the peak, and 2) inflation. I have also noticed people ‘pushing the envelope’ on the asking price for rents in North and South county - most of these especially high rents appear to be for recently purchased ‘investment’ properties, and I doubt that they are able to get what they are asking. Rents in San Luis and Los Osos don’t seem to have gone up much in the past 3-4 years. I haven’t been following Morro Bay, so I can’t really comment on this town.
Rents are more realistically limited here by the average income. People just don’t make the same amounts of money that they do in the big city. The upper end rental market is soft, and always has been. We rent 1/2 block off of the beach, and our landlord LOWERED the rent to keep us here.
RE prices in Tokyo dropped 85%, over 14 years.
I think all you folks are unrealistic as to how far this market will drop, and how long it will drag down.
I have been monitoring the inventory on my blog for the past year. It is slightly down for seasonal reasons, but it will be picking up shortly. We are still at 1000 more homes in the general area than one year ago. The psychology is starting to turn, but it is very slow. The 2006 prices were 2005 peak +10 to 20%. They have now just come down to 2005 peak. I want 2002 or 2003 prices before I buy. I made a low ball offer (250K below asking) on a property in AG on an acre, but was turned down. The property had been on the market for 15 months!
There are several properties that have been on the market for nearly a year in Ventura, one I just looked at 333 days…are there any realtor types that can explain this? Wouldn’t a seller lower the price, at some point, or just take it off the market? Are these people just testing the waters to see if there’s any fool that will pay these prices, and are otherwise unmotivated to sell? That’s the only explanation I can come up with.
Back to the old story again. They can list their houses for big bucks but the days of, “If you have a pulse here’s the money,” have gone or, at least, gasping for breath. That means $70,000 a year income (and a lot less for many) are not going to buy those $650,000 over-priced corn flake boxes. It’sd interesting watching these mortgage broker boiler room operations biting the dust as the finance screws tighten.
Mike posts ” That means $70,000 a year income (and a lot less for many) are not going to buy those $650,000 over-priced corn flake boxes”
70k is nearly twice the national income in the USA. To top that nobody that makes 70k per year could ever pay back a 650k loan with 20% down at a fixed rate 30 year loan.
Yet this is the Ca. real estate story for the last 6 years. This mess is ripe to blow-up big time.
A lot of houses have been taking off the market that is why inventory has been down, they are all waiting for Spring, and the sellers are going to raise price.
Been tracking the market since 2004, still cannot beleive it.
I think plenty of us see it. Many have laughed and commented about the spring bounce over the past few days.
If the market is going to take right off, why do they want to sell?
The RE bulls really believe that every retiree from San Francisco or Los Angeles wants to live here.
Everyone wants to live downwind from a big honking nuclear power plant!
‘It’s sort of a nontraditional market.’ = It’s different here = BS.
The key is that people need to start seeing the real estate industry for what it really is. It is the most corrupt and filthy industry in the United States. The level of wrongdoing is beyond anything we could dream of in another industry. People rail against big pharma and oil. Those industries are choir boys compared to the real estate industry.
Once people have lost complete faith in the Real Estate Industrial Complex then the damage will be overwhelming.
I’m sorry but RE folks are amateurs compared to Wall Street. Now those are some truly wicked hustlers.
You’ve missed the point. Wall Street is central to the Real Estate Industrial Complex. It goes from Joe6Pack, winds its way through the realtors, shady mortgage brokers, appraisers, local governments and winds up right here on Wall Street. It is dirty from top to bottom.
Just think what the average folks around you have been willing to do to try to cash in on the real estate riches. It’s filthy beyond comparison. There are so many components and millions of accomplices.
Are you kidding me? Real Estate the most corrupt? You need to venture off this blog a little bit. Is there corruption in Real Estate? Of course… No industry is without it. But to say the most corrupt… I highly disagree.
I would have thought it was apparent that I meant legal industry. Is dealing crack and meth more corrupt? Sure. Is running guns more corrupt? I would say it is. But I meant of the industries that are considered legitimate businesses. Geez, I wouldn’t think that this would have to be explained.
Wall Street is highly organized and the rules were made for the elite who operate it. Learn the inside rules from Richard NEY and James E. Sinclair. There’s not comparison to a RE boiler room of some uneducated agents.
The hustle for RE was propagated by Alan Greenspan, puppet for the Ruling Class of private elite bankers aka The Federal Reserve of which it is neither.
“It is the most corrupt and filthy industry in the United States.”
That seems a bit heavy-handed. What about prostitution, organized crime, the drug trade, etc?
Obviously, you’ve never worked in the movie industry…
Full of nepatistic scumsuckers.
GS at least you know what you are getting with those professions. Hell, organized crime at least gets you to pay down the loans you take out with them (at least until you don’t pay, then they break legs, or worse), but the point is well taken.
Also, I think the REIC is dirty. Look at how much fraud has gone on and been overlooked. That one poster, Paladin, has been going after what, 10 homes, in his/her area with very little luck until just recently.
Anyway, i think the dirt is the worst because so many were in on it and so many want to keep the market up no matter what. People know it is unsustainable, but still play into it.
When this bubble really picks up steam and pops, the crap is really going to hit the fan.
-J6P will get foreclosed, like never before
-Appraisers will wind up in jail and/or fined, lose license
-Loan/Mortgage officers, see above
-Banks will fail
-Realtwhores will lose what little trust/confidence they had to begin with
-Hundreds of thousands lose jobs within and related to housing
-Hundreds of thousands upside down on house with no way out (The thought of owing 500K on a 250K home is very sad, indeed)
-Savers will get dinged on this if we have to bail out anyone anywhere in this cycle
Bottom line
Not the American Dream, but the
AMERICAN NIGHTMARE for many!
And don’t forget that most of the work is performed by illegals at wages that are far below what an honest market would require.
Do I need to mention the name Bruce Karatz here?
“-Hundreds of thousands upside down on house with no way out (The thought of owing 500K on a 250K home is very sad, indeed)”
Actually, the figure getting tossed around these days is 2.2m subprime borrowers at risk of foreclosure in the next few years. Of course, this probably does not take into consideration what would happen with further price declines…
I would have to say the federal gov’t and its utopian, doomed social programs is the biggest, most corrupt ponzi scheme in the country.
I’ll second that!
and that’s saying a lot with competition like the insurance industry!
Yeah — traditionally cab drivers and hair dressers did not have sidelines flipping real estate.
” Meanwhile, short sales, when a home is purchased for an amount less than the debt owed by the seller, are reportedly on the rise”
What a shocking revelation. How could this have happened? And who could have seen it coming? 2007 will be the year when the housing bears finally come out of hibernation, with more to feast on than perhaps ever. What will be interesting to see is whether the bears even begin to nibble in ‘07. They may just window shop and wait until lenders are swamped and are willing to take anything to unload their albatrosses… or better yet, perhaps the 21st Century RTC gets unveiled.
2007 and beyond the bears get their chance to roar.
Errr….I think 2007 is too soon. The tip of the iceburg….Perhaps 2008…
Oh no,
The bear will roar in 2007. Maybe not in January or February… But by July, the bear will roar. People will cower.
Oh, the bottom *will not* be in 2007. That is true. But the bear will enter the state next year.
Happy new year (Hey, I’m a renter…)
Neil
The a$$ falls out when the spring get sprung.
Agreed. I think the spring flop will be the final nail for enough FBs to get the steep drop rolling. By the beginning of Q4 ‘07 lenders won’t know where to keep all their returned keys, and regulators might have their own ideas…
I’ll keep window shoping till prices get to 2001( + maybe inflation ~ 2-3%).
my sentiments, exactly. 2001 was the beginning of the 20-30% real estate bubble scam……….fraud beyond belief, and the market followed the flips up the hill.
Now we stand atop a slush covered mountain, with lots of rocks and no safety line………..I feel my footing giving way already……………………………..farewell appreciation.
I hardly knew you…………bu-bye.
See, the real estate bubble rescued the U.S. from an economic collapse due to the stock market bubble burst. There is nothing to rescue the burst from this real estate bubble. I expect the Dow to drop substantially as the RE prices fall. RE is the last of the bubbles - until the next bubble (LOL). Well the last for at least the next ten years, I think.
We need to stop being irrationally exuberant, going from one exgtreme to another!
“The nation’s house party ended with a thud in 2006.”
Not really.
The party ended in the Fall of 2005.
It is only being belatedly recognized now.
Naw, still going on— Lereah throwing up in the toilet—Appleton/white passed out on the lawn, half nekkit, Suzanne upstairs with the football team.
Ooops, phone rang. Parents coming home early….neighbors yelling across the street that they called the cops….
The hangover’s gonna be hell.
Agreed. The peak of the housing index was August 2005, when Ben sold. Perfect timing. Perfect.
Momentum slowed when the overbidding stopped. Then RE still surged in price (in CA at least) in a classic “blow off top”, but the game was clearly finished.
I kept telling my brother to sell his apt. building in SF, since July 2005. He still owns it.
Ben…Why aren’t my posts showing up?
Nevermind…They are!
Locally I have seen several houses that have been on the market since last spring take down the for sale signs starting in late November. I don’t know if these people have decided to ride it out in place, or if they are going to surge back onto the MLS sometime in the spring.
Does anyone else think there is going to be a tidal wave of new listings this spring, topping our last high water mark last year? Will it be enough for the more motivated sellers to start to cut prices?
I made the mistake of looking through the notices of default for San Diego county last night. The stories you can figure out by looking at the NODs, the sales information on Zillow and other things you can find through Google does not make for a healthy picture. There are some $1M+ 100% financing that are defaulting on the first payment. There are some other mortgages that have been running for about 3 years that are defaulting (payment reset shock?). San Diego county has a pretty healthy population, but there were hundreds of NOD just for the second half of December.
When I dig for just a couple of hours, then compare to the baloney stories that you see from the NAR, I realize that no amount of spin is going to work. At this point they are trying to spin in the face of some very powerful math. I learned in Physics class that you should not stand against math, no matter what you believe. The existing rate of change implies that this whole process is going to grind away for years, crushing everything in its path. Is the happy talk from the REIC simply serving to keep the greedy in place? I agree with the notion of “Don’t panic, but if you are going to panic do it early”. Shouldn’t the RE Shills be warning folks to dump now if you are going to?
It is about Income to Serviceable Debt Ratio…..if their income is 50k - they have no business in a 300k house.
The delta between debt and income MUST come back into balance. Housing has nowhere to rebound too except a homeowners true income ratio to debt. No amount of “New Age’ math will change that.
No amount of happy talk can change the fundamentals of a sustainable home mortgage.
Use me for instance, I have run the numbers several times and told my wife that there is no way we can afford anything beyond 300K, and that is only because we have a nice down payment that we can make. I can’t believe how many people would even want to pay back 7-8-900K. That is 7-20 years of nothing but annual gross income, dep. on your pay, applied to just the principal of the debt. That is just wack!
OCDan,
You are not being sensible here. They are not wanting to pay the money back. That was never their intent. The intent was to “get in the game” so they wouldn’t be priced out forever……………….the idea is to flip it to someone else to let them pay it back.
One small problem……………we have run out of greater fools.
diogenes
That’s a classic.
Wait! When they come out with the 10,000 year mortgauge then everyone will be able to afford a $1M home. Don’t you get it, GEEZ!! (just joking)
Sobay “The delta between debt and income MUST come back into balance.”
Here! Here! Buy that man a pint!
Thank you for your sanity.
“Housing has nowhere to rebound too except a homeowners true income ratio to debt”
Unless… INFLATION, including wage inflation, starts to tear. I realize it’s unlikely but, it’s out there as a possibility. It’s almost certainly too late to prevent a RE bust but might provide for a bounce earlier than some, especially here, might expect.
The median home price in November was $512,000, according to DataQuick. That’s a decline of 8.4 percent from November 2005 and down from October’s median price of $545,000.”
6% median home price decline last month in San Luis Obispo County. I would think that should be the headline. When do they start to ask how far home prices will crash? Why oh why would anyone buy a home when it is just beginning to get interesting?
And we are 15% down from the peak of 602 achieved in September of 2005 . . . .
Even if the median rises to Watson’s predicted level by 2008 (which I do not believe will happen), this would represent an annual increase of 1% from 2005-2008 (i.e. a significant loss in inflation-adjusted dollars).
BTW, I wouldn’t live in anything around here that lists for 512K. I can’t even imagine the 50% of houses below that.
Centralcoastbear:
I think they are including condos in this? There are lots of condos in the area for
Once I built a condo, towards the sun,
With a crane in the sky.
Once I built McMansions, now it’s done –
Thanks to this new paradigm.
Hey GetStucco - SLO Bear’s comment about a SLO realtor who owns 5 houses reminded me of the SB realtor you knew who had purchased 14. Have you seen this type of thing going on in the Seattle area?
Don’t live in Seattle and have only visited twice in the past thirty years, so I can’t say I have seen it…
GetStucco - I thought you had moved to Washington state. My bad. Nice poem, though.
Actually I was quoting a song, written back in 1932… (Once I built a railroad, now it’s done — brother can you spare a dime?)
Okay here is the anecdotal review for the week. For those keeping score or reading my update on this guy here goes. I work with a guy who has been trying to sell his overpriced PoS for 600K, here in the RSM area of South OC. Well, today makes 75 days and still no offers at his price. He even complained that he got an insulting offer of 560K. He should have taken that first one weeks ago that 575K. BUT NOOOOOOO! Anyway, he is telling me that to live in his ‘hood you have to pay the piper. Those were his words exactly. I couldn’t believe his arrogance. He still thinks he will make it out by March 15th! BWAAAAAAAH!!!!
Anyway, he also said that no one has their house up for sale in his area, so that means it is valuable. What garbage. I wanted to tell him everyone is waiting until spring, but sometimes discretion is the better part of valor and so I kept my mouth shut.
Needless to say he can keep wishing. I like him a lot. We have some great sports talks and we are both from Joisey originally, so we know the old haunts. But that still doesn’t mean he isn’t going to get taken to the woodshed on this one. Oh well, I keep shut and don’t even ask how it is going anymore. I just let him share. Every day, his equity nest egg is getting a little smaller.
Well, he doesn’t want to give it away.
I would guess this guy has computed the difference between 600K and what he paid and believes this is “his” money. Sellers were probably that arrogant when he bought, so he figures it’s his turn. His attachment to what he believes is his money coupled with the arrogance of the seller’s market mentality is going to cost him plenty.
The first offer is often the best offer…
I’m sure he loves his home. Buyers aparently don’t love it at 600k.
My observation is that homes in southern California are losing $500 to $1,000 dollars a day in equity. Its just “evaporating.” So in 75 days, his property has lost a minimum $37,500 in value. Coincidently, about the value of the current low ball bid. If by “weeks ago” the $575k offer was 15 to 30 days ago… my depreciation timeline is on track.
I’m not planning to bid until the prevalence of the comment “insulting offer” isn’t so common.
I also want to wait until inventory has passed 10 months and is on its way down (but still above 5 months). I figure fall of 2008 is the absolute earliest that a “window of buying oportunity” will open. Yes, it might not be until 2010. I’m patient, but I do place a utilization value on having one’s own home.
Neil
“Anyway, he is telling me that to live in his ‘hood you have to pay the piper. Those were his words exactly.”
And paying the piper is exactlywhat he is doing to live in his ‘hood.
LOL
Keep us posted.
This was in the Santa Barbara paper, but I don’t have a link:
‘The median price of a South Coast condo fell by 16 percent in November to $590,000. In November 2005, the median condo price was $705,000.’
‘In the North County, the Santa Maria housing market showed slight improvement in November. Sales of existing homes rose by almost 4 percent last month, possibly sweetened by an 11 percent drop in the median price. Santa Maria’s recent median price was $419,000, compared with $473,000 in November one year ago.’
‘In nearby Lompoc Valley, although home sales dropped by 33 percent last month, the median price fell only 9 percent from $424,500 a year ago to $385,000.’
‘The Santa Ynez Valley median price last month was $809,500, down 6 percent from last year. Sales declined by 50 percent.’
Wasn’t there someone on here saying Coastal Ca. was safe. P.V Manhattan now this. LOL
Count me as one seeing the tusnami of things to come, not only in the Central Coast, but most of California as well as many other places. Bring on the entertainment. Get out the popcorn. The spring massacre is going to be fun.
Here in OC the psychology has changed i think. Common variety back-yard wine-drinking middle-class people who a year ago looked at me like alien creature for saying housing is going to tank, now say o yes housing market is dead here. Now that that idea is common knowledge among the booboisie, I bet everybody will try to get a jump selling on spring market. Maybe there is something to post-Super Bowl idea? And if the spring buying frenzy fails to materialize, then the fun starts.
I don’t know who’s left to buy a 600k house tho. Not I for sure. Chinese hordes I guess, shopping from buses. My psychology has also turned, from bitter renter to Sage of Costa Mesa, happy to hunker in cheap SFR in best part of town. My landlord was just here, said he hasn’t financially recovered from my new bathroom yet (and the roof is not looking so hot either). In fact he’s one of the people who just told me he thinks the market is dead. I told him to sell last year, when he could’ve got 800k. He didn’t, because he loves my weiner dogs and didn’t think we would find another place. Great guy really. Sad thing is good people will be hurt in this as well. Already have been, lots of them.
http://www.4panda.com/special/house/property-tour.htm
Link to China RE investors tour. Many overseas Chinese have bought in China already….while mainland Chinese are scouting for US RE investments. Still kicking myself in the head for not buying way back in the 1980’s in Szechen or Shanghai in the 1990s and putting everything into JDSU.
Everyone I talk to about housing is very interested in bearish opinions.
Even people previously in denial are considering it.
One guy in my office complimented us as renters saying that we will come out well.
To the person asking:
Shouldn’t the RE Shills be warning folks to dump now if you are going to?
No. They are dumping their property, if they have the means to do so.
On a side note, I saw a commercial for insurance on the tv today. They were showing drivers licenses of “people who had switched and saved”. The state DL’s shown? California and Michigan. That wasn’t by chance. …lol
“The nation’s house party ended with a thud in 2006. The sudden stall in home sales, home construction and home prices was voted the top business story of the year by U.S. newspaper and broadcast editors surveyed by The Associated Press.”
Congratulations to Ben and other posters on this blog who scooped all the newspaper and broadcast editors on the AP’s top business story of the year!
Congrats to you GS……………
your posts always on the money……..
Who was that guy talking about “THE OWNERSHIP SOCIETY”
“The bear will roar” for certain but is the bear also freaked out by what shape the US will be in when this all topples? Does the bear worry about being in the soup line after all his money saved in rent is worthless due to a devalued, blown currency? Anyway…I am a renter that is happily seeing all this flipping and greed face itself but I am also completely freaked out by what the full capacity of this tumble might mean for everybody.Not that I am going to feel sorry for some RE agent, mind you.
i rent in pismo beach calif for the past 2 years after selling my overpriced bubble home in the san fernando valley.prices in san luis obispo counnty are so high,with no jobs to support the 600k entry fee.its nice to finally see the inventory swelling,prices have dropped very little.everyone says its different here a beach resort area will be sheilded from the downturn.i think there wrong…
More MLN News:
To everyone I see here that I recognize as a business partner. Josh Etterman at CCS, and A-Z. I am/was a senior PC at MLN’s Connecticut Wholesale Prime office. More of you on this forum may know me. I watched my entire division walk out of the office yesterday with tears and goodbyes. There will be an official announcement made on Tuesday on the dissolution of the company. Some divisions may survive but the potential is bleak. I’m truly sorry for everything that MLN has done to you, to me, and to everything that we all work for. I know that I’ll be looking for other opportunities moving forward, as will all of my colleagues. For those of you in the MA, CT area looking for one heck of a mortgage expert, I’ve got my resume updated.
December 29, 2006
Re: Mortgage Lenders Network USA, Inc. Notification Letter
VIA EMAIL/FACSIMILE
To Whom It May Concern:
Please be advised that this communication is submitted to your attention in order to alert you to the fact that effective immediately Mortgage Lenders Network USA, Inc. (“MLN”) will regrettably no longer fund residential mortgage loans. This course of action has been necessitated as a result of a lack of available warehouse funds.
MLN will immediately take all steps necessary to attempt to place the loan transactions that were scheduled to fund with MLN as lender, with another properly licensed lender. Additionally, MLN will (a) ensure that all remaining loans in its pipeline that are scheduled to close will be transferred to another properly licensed lender to minimize any potential inconvenience to the Borrowers and (b) not take further loan origination applications at this time.
In order to provide its customers with the level of service expected from MLN, MLN will focus its efforts towards its residential mortgage servicing platform.
While we regret submitting this notification to you, we feel it is in the best interests of the customers and MLN to focus on the servicing platform at this time.
Mortgage Lenders Network USA, Inc.
Man… everything I want to say sounds so trite. First James Brown, then old man Ford and now your job goes down in flames. My motto for this year is to find a happy place and get my head back in the sand. Good luck to you crispy and a prosperous New Year to all.
LOL. Not me - I missed the link, it was from brokers outpost. Sorry for the confusion.
Woo Hoo! That’s one more chance that my Jan puts of mortgage companies will pay off.
I’ve got my eye on CFC, LEND, TMA, NEW, NCC, and NFI. I haven’t pulled the (short) trigger yet. I’d imagine you’ve bought the puts of at least some of these?
FWIW I shorted CFC last week. Even a cursory reading of their recent 10K is not good. Recent research reports all seem to rely on the idea that CFC is a market leader and the market itself will “stabilize” in ‘07 - I regard these as faulty premises to say the least.
I purchased the “Jan ‘08 35 PUTS at what I considered to be a great price - 1.95.
This is pure speculation on my part, after all, what do I know compared to those experts at S&P and Moody’s?
IMHO CFC wil struggle very badly next year, not least of all because of all the sub-prime loan-buy-backs they are on the hook for. Add to that the cliff-style drop off of prime and subprime originations and HEL’s and you have a crater in this overpriced stock.
Of course, now I’ve said all this, watch it surge to 60 by July…..
“Of course, now I’ve said all this, watch it surge to 60 by July…..”
In that case, you’ll be glad that you bought the puts instead of shorting the stock.
Thanks for the tip regarding those puts (which last sold for 2.10, btw). I thought the premium would be fatter. Now I’m actually eyeing the jan ‘09 35 Puts at 3.50. That way, I get an extra year in case the dead-cat bounce in RE does occur.
Hocus Pocus
Let’s say, for example, that to carry out its legitimate functions, the United States needs $300 billion in credit and $100 million in currency :
1. The U.S. Bureau of Printing and Engraving at the U.S. Treasury is instructed to print $100 million in Federal Reserve Notes, as currency for the privately owned Federal Reserve.
2. The privately owned Federal Reserve System pays the U.S. Bureau of Printing and Engraving $20.60 per 1000 bills it prints! That is approximately two and a half cents for each bill, regardless of their face denomination, ie. $1, $5, $10, $20, $50, $100 bill. WHAT A DEAL!!
3. Next, the United States orders the same U.S. Bureau of Printing and Engraving to print $300 billion, $100 million worth of U.S. Treasury Bonds.
4. The privately owned Federal Reserve then purchases $100 million of U.S. Treasury Bonds (redeemable at full face value plus interest) from the United States. To pay for these, the Fed uses the privately owned Federal Reserve Notes that they just purchased for two and a half cents per bill! Next, the privately owned Federal Reserve purchases the other $300 billion in U.S. Bonds with a simple ten second computer entry that transfers $300 billion in “credit” into the United States’ Treasury account. Where did the privately owned Federal Reserve System get the $300 billion? It created it from NOTHING.
The People are then obligated to repay the privately owned Federal Reserve, with their tax dollars, at full face value, plus interest (which is converted to gold at par, through the International Monetary Fund). The privately owned Federal Reserve Notes and federal government credits were created for virtually nothing.
Conversely, the repayment of just the interest on these bonds requires a Citizens’ physical labor from approximately January 1st until May 1st and giving 100% of their substance to the privately owned Federal Reserve. What does the privately owned Federal Reserve or the federal government give back to We the People in exchange for the sweat of our brow? NOTHING! ZIP! NADA! That constitutes servitude without just compensation.
COST TO WE THE PEOPLE: $300 Billion, $100 Million, plus continuously compounding interest.
COST TO THE PRIVATELY OWNED FEDERAL RESERVE: About $26,000.
hocus pocus
(sorry if this posts twice, can’t find what I submitted)
Let’s say, for example, that to carry out its legitimate functions, the United States needs $300 billion in credit and $100 million in currency :
1. The U.S. Bureau of Printing and Engraving at the U.S. Treasury is instructed to print $100 million in Federal Reserve Notes, as currency for the privately owned Federal Reserve.
2. The privately owned Federal Reserve System pays the U.S. Bureau of Printing and Engraving $20.60 per 1000 bills it prints! That is approximately two and a half cents for each bill, regardless of their face denomination, ie. $1, $5, $10, $20, $50, $100 bill. WHAT A DEAL!!
3. Next, the United States orders the same U.S. Bureau of Printing and Engraving to print $300 billion, $100 million worth of U.S. Treasury Bonds.
4. The privately owned Federal Reserve then purchases $100 million of U.S. Treasury Bonds (redeemable at full face value plus interest) from the United States. To pay for these, the Fed uses the privately owned Federal Reserve Notes that they just purchased for two and a half cents per bill! Next, the privately owned Federal Reserve purchases the other $300 billion in U.S. Bonds with a simple ten second computer entry that transfers $300 billion in “credit” into the United States’ Treasury account. Where did the privately owned Federal Reserve System get the $300 billion? It created it from NOTHING.
The People are then obligated to repay the privately owned Federal Reserve, with their tax dollars, at full face value, plus interest (which is converted to gold at par, through the International Monetary Fund). The privately owned Federal Reserve Notes and federal government credits were created for virtually nothing.
Conversely, the repayment of just the interest on these bonds requires a Citizens’ physical labor from approximately January 1st until May 1st and giving 100% of their substance to the privately owned Federal Reserve. What does the privately owned Federal Reserve or the federal government give back to We the People in exchange for the sweat of our brow? NOTHING! ZIP! NADA! That constitutes servitude without just compensation.
COST TO WE THE PEOPLE: $300 Billion, $100 Million, plus continuously compounding interest.
COST TO THE PRIVATELY OWNED FEDERAL RESERVE: About $26,000.