“A Day Of Reckoning For Thousands Of Home Buyers”
The California realtors have their December numbers out. “Home sales decreased 15.3 percent in December in California compared with the same period a year ago, CAR reported today.”
“‘Year-over-year sales declined in most regions last month,’ said C.A.R. Chief Economist Leslie Appleton-Young. ‘The price picture across the state continues to be mixed. Increases were strongest in urban areas that experienced relatively less new home building or strong economic growth in recent years. Prices were weakest where there has been robust home building activity or in those areas of the state that were popular with second-home buyers.’”
The Press Democrat. “The number of default notices lenders sent to Sonoma County homeowners more than doubled in the fourth quarter of 2006, compared with the same period in 2005, and was the highest in nearly a decade, according to DataQuick.”
“‘We’re in the midst of an adjusting market right now, and we won’t know until spring or summer if this is ominous or not,’ said Marshall Prentice, DataQuick’s president.”
“Just over half of the loans that went into default statewide during the fourth quarter were made between January 2005 and February 2006. So those loans were made to buyers purchasing homes around the time the market was peaking in summer 2005, DataQuick analyst John Karevoll said.”
“‘Just because of the higher-priced homes, that is the product that is in demand in order to qualify,’ said Colleen Oller, real estate loan officer for Exchange Bank. ‘But now we’re seeing a downside to that, especially if they’re needing to sell. The value of those homes is not what they paid for them and they’ve got no equity built up.’”
The Contra Costa Times. “In the last quarter of 2006, about 1,000 more mortgage default notices than last year went out to Contra Costa County homeowners, a 179 percent increase.”
“An additional 700 showed up in Alameda County (a 157 percent uptick) and 500 more (or 163 percent) went out in Solano County, signaling the highest rate of foreclosure activity ever for Solano County and the highest since 1998 for Alameda County, DataQuick reported.”
“Ed Jeffry, a loan consultant in Walnut Creek said that in the past few months four lenders he has used have stopped providing home loans. The quality of applicants has deteriorated, and he is referring many of his clients to bankruptcy attorneys, he said.”
“Many succumbed to the lure of easy home equity or low payments. ‘For so long people have relied on the advice of the guy who used to sell shoes at Payless who now sells loans,’ Jeffry said.”
The Santa Cruz Sentinel. “Mortgage defaults in Santa Cruz County jumped 36 percent last year, part of a statewide trend. ‘It’s crazy out there,’ said Liese Varenkamp, publisher of the Santa Cruz Record. In the first two weeks of the new year, 16 foreclosures have already taken place, up from two last year.”
“‘Look at that difference,’ Varenkamp said, adding the 80 percent of the homes go back to the bank that made the loan.”
“The 37,273 default notices mailed between October and December was up 145 percent compared to 15,196 in the same period in 2005. Most of the default notices were sent to Southern California addresses, with homeowners in Los Angeles County receiving the largest number of notices.”
“About 32 percent of homeowners who had previously been in default lost their homes to foreclosure in the fourth quarter, up from 8 percent in the same quarter of 2005, DataQuick said.”
“The number of foreclosed homes last quarter was 6,078, compared with 874 in the fourth quarter of 2005 and 3,435 in the third quarter of 2006, the firm said.”
Inside Bay Area. “In San Joaquin County, default notices hit a record high. Some 1,293 homeowners received default notices, compared with 464 a year earlier. San Joaquin County’s increase in foreclosure notices is partly linked to speculators who are finding it difficult to sell homes in today’s slowing market, said broker Renee Becker.”
“‘The market has turned, so maybe (speculators) have not been able to sell the homes,’ she said. ‘They are stuck with them.’”
The Sacramento Bee. “Hundreds of Sacramento-area homeowners who missed their first mortgage payments early last year fueled the region’s most dramatic rise in home foreclosures since the 1990s during the fourth quarter of 2006.”
“The 865 fourth-quarter foreclosures compare to 63 the same time last year in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties. ‘What’s the old saying? ‘The chickens are coming home to roost,’ said John Arvanitis, president of Sunrise Vista Mortgage Corp.”
The Merced Sun Star. “In Merced County, homeowners received 466 notices last quarter, up from 118. That’s a rise of 294 percent, second highest in the state. Lenders also warned a record 909 Stanislaus County homeowners in the last three months of 2006 that they are at risk of foreclosure. That’s an increase of 471 percent, highest in the state.”
“Rick Seymour, House Mart branch manager in Merced, said the rush among homeowners to buy into the housing market before they were priced out is a major cause of the foreclosure rate doubling. ‘The problem was that the market turned,’ he said. ‘When they paid top dollar, and then turn around and it’s $30, $40, $50,000 less, they aren’t going to be too motivated to make those payments.’”
“‘If you are making $5,000 a month, you don’t want a $3,000-a-month house payment,’ he said. ‘I knew three years ago that this would happen based on the people who were buying.’”
“Merced County Association of Realtors President Scott Oliver said many Bay Area families already stretched thin invested in Merced County homes and took out questionable loans. ‘I believe that a lot of loans went into place that should not have happened,’ he said. ‘It was inevitable that with the market exploding the way it did that you’d see a high rate of foreclosure.’”
The Fresno Bee. “Foreclosures in Fresno County more than quadrupled in the fourth quarter from last year, a sign, analysts say, that a day of reckoning is coming for thousands of home buyers who used unconventional loans.”
“‘This is just the first wave,’ said Shannon Martin of Mid-State Realty in Fresno. ‘Within the next few years, you’ll see more foreclosures coming.’”
“Locally, real estate agents and credit counselors have seen huge jumps in foreclosure-related activity. Martin, who specializes in selling foreclosed properties for lenders, said such listings he handles climbed from 10 to 70 in the past six months.”
“‘People who bought their houses within the last year or two with zero down are at the high-water mark,’ he said. ‘As the values have decreased, they owe more than the house is worth.’”
“Martin said he has foreclosure listings in all price ranges and geographic areas. ‘I’ve got them from $640,000 to $120,000. They are all over,’ he said.”
“‘It’s no surprise,” said Martha Lucey, VP of a nonprofit credit counseling organization in Fresno. The number of phone calls to her housing credit counselors has increased threefold over the past six months.”
“Many of those families are first-time home buyers who have little or no equity in their houses. Many should have thought twice about buying the house they did, she said. ‘It is wishful thinking,’ she said.”
The Daily News. “In Los Angeles County, 7,445 property owners received default notices, up an annual 113.9 percent. In Ventura County, 794 property owners received notices, up an annual 204.2 percent.”
“Most of the loans that went into default in the 2006 fourth quarter were made from January 2005 to February 2006. The median age for the loans was 15 months. On primary mortgages, homeowners were a median five months behind on their payments when the lender started the default process. And they owed a median $10,555 on a median $324,000 mortgage.”
“‘It’s what we expected,’ said Jack Kyser, vice president and chief economist at the Los Angeles County Economic Development Corp.”
The Press Enterprise. “Riverside County saw a nearly 182 percent increase in mortgage defaults compared to the fourth quarter of 2005, while San Bernardino County saw a year-to-year increase of 140 percent. In the fourth quarter, Riverside County recorded 4,631 notices of default. San Bernardino County recorded 3,538 notices.”
“Nancy Herrera, a broker-associate with Corona Mortgage, said she gets requests from people who want to refinance, but who have borrowed to the hilt against the properties and don’t have enough equity.”
“Herrera said in recent years lenders relaxed qualifying guidelines to the point that people with relatively low credit scores could buy a house with 100 percent financing and without documenting their income. She said although lenders have recently begun to tighten their requirements, ‘people are still buying homes they can’t afford.’”
“A nonprofit credit-counseling agency in Riverside handled 10,000 calls about mortgage defaults in 2006, said the organization’s president Dianne Wilkman. ‘And the phone is ringing off the hook this year,’ Wilkman said. Wilkman said nontraditional loans, especially those that originated last year, are driving much of the activity.”
My only comment is that this post has the potential to hit the blog record for responses. Check tomorrow a.m. and see!
i will add my nickle worth of comment.
you know, most of the predictions we made of this blog are coming true. but with hind sight it was pretty obvious. that makes me think how stupid the human mind really is. we tend to ignore facts until the bitter end. how wondrous that we even managed to survive this long. the coming pain in re market will focus the mind like nothing before.
posted ” that makes me think how stupid the human mind really is. we tend to ignore facts until the bitter end.”
Like…. Von Paulas in Stalingrad.
That’s what happens when you are an arrogant bastard like Hitler or ????? any politician or stupid flipper. No difference. Stupidity yes but a lot of arrogance.
posted ” That’s what happens when you are an arrogant bastard like Hitler or ????? any politician or stupid flipper. No difference. Stupidity yes but a lot of arrogance. ”
Hitler has been dead for near 62 years now. However you might have some issues with GWBush…. In fact you do!
No, no…
Hans Guderian’s SS armoured division drove within 12 miles of the entrapped 6th Army for a break-out.
However, Hitler informed VonPalus if anybody left their posts, including him, they would be rounded up and shot for desertion.
So the 6th Army stayed put.
Either way they were all dead men.
…kinda like all these FB’ers with their declining home values and $500-$800k toxic loans.
posted “Hans Guderian’s SS armoured division drove within 12 miles of the entrapped 6th Army for a break-out.”
You are quite correct. Add the fact had Von Palus’s 6th massed on any point of the line it’s weight would have broken thru and linked up.
But like you said No, no…
Back to housing it is the same mindset. Von Palus should have taken the hit and saved his Army….Hitler never would have killed them.
But there will be may silent Stalingrads to come….
I am not as familiar with the details of Stalingrad/Russian Campaigns as other WWII theaters but didn’t the Russian achieve a breaktrough farther back along the German extended Perimeters, a sort of double envelopment or two pinchers, an inner stalingrad pincher and an outer thrust across the Don which threatened army groupS Don AND GROUP A still in the caucasian salient. Han’s guderian’s armored thrust had it NOT PULLED AWAY FROM IT’S ATTEMPT TO RESCUE THE TRAPPED 6TH ARMY MIGHT HAVE BEEN TRAPPED AS WELL.
Yes, peter m, the encirclement of Stalingrad began on the German’s left flank in an area to the north and west of the city that had been entrusted to allied troops of the Germans - Bulgarian, Romanian, Italian and some Spanish volunteers I believe. And the breakout attempt was under the command of a General Hoth and did indeed get within earshot of the encircled troops.
Sorry, could not resist the opportunity to get some mileage out of my undergrad in history, I’ll go back to selling my apples and pencils now, thank you.
Van Poulas was ordered to stay. He had no choice but death. Flippers on the other hand have a choice. I think the result will be financial death, however.
Didn’t the Soviets do a propaganda broadcast with a ticking clock and a voice saying something like “Every ten seconds, another German soldier dies at Stalingrad….”
“tick….tick….tick…..every ten seconds another House Flipper….”
“tick….tick….tick…..every ten seconds another House Flipper”
….cries himself to sleep.
…in the fetal position no less.
No, like Hitler in regard to Stalingrad.
…most of the predictions we made of this blog are coming true.
Not just most predictions; the most dire predictions. We’re going to be leading the MSM by at least a year all the way to the bottom.
“Rick Seymour, House Mart branch manager in Merced, said the rush among homeowners to buy into the housing market before they were priced out is a major cause of the foreclosure rate doubling. ‘The problem was that the market turned,’ he said. ‘When they paid top dollar, and then turn around and it’s $30, $40, $50,000 less, they aren’t going to be too motivated to make those payments.’”
oh, I thought the problem was that they put people into homes/mortgages that they could not afford, and when the Ponzi Scheme ran out of gas, the last ones’ holding the loans were in deep #@$@#!!!!
Anyone who couldn’t reason themselves through the “priced out forever” BS deserves the “over-the-barrel” action they’re about to receive. Lube free, of course.
I concur with you 110%. It didn’t take a genius to realize this was all a fantasy.
I don’t know guys. It does take some degree of sophistication in your understanding of financial markets. There were some very bright people who got caught up in this mess.
Yeah, and Marx was a genious (seriously). There’s a small wallnut sized lump of brain somewhere behind the ear devoted to making rational decisions. Then there’s the rest of the brain.
That lump in geniuses is the size of a nectarine. (* potentially not scientifically accurate)
posted ” The Daily News. “In Los Angeles County, 7,445 property owners received default notices, up an annual 113.9 percent. In Ventura County, 794 property owners received notices, up an annual 204.2 percent.”
Where is Robert Cote when you need him…. come on Bobster hit it with both barrles!
posted from thread “‘It’s what we expected,’ said Jack Kyser, vice president and chief economist at the Los Angeles County Economic Development Corp.”
What? A wipe out of defaulted loans? Who the hell would have made them? Who the hell would have signed them? Who would want to take this miserable journy and screw - up thier lives?
If you wise guys “knew” something why didn’t you say anything?
This Blog is about people voting with thier wallets. In my case I sold my place when things were “Great guns!” and I was the big dummy…. I am still a dummy but really after 3 cycles I don’t have to block them all with my face!
People in power or position should have said something other than “we knew it would happen” one last slap in the face or rub of salt in the wound.
“People in power or position should have said something other than “we knew it would happen” one last slap in the face or rub of salt in the wound.”
Agreed.
“Yeah, we knew it would happen, but we decided to screw you over anyways. Maybe I can help you try to work out a short sale now?”
Disgusting, but so typical.
It’s always about money.Think. Who really made the big money? Even today many bloggers, hp , still don’t see the big picture.
“Even today many bloggers, hp , still don’t see the big picture.”
The second-act begins when people who didn’t even buy into this housing bubble find out that their 401k account is holding MBS instruments that are worthless.
“The second-act begins when people who didn’t even buy into this housing bubble find out that their 401k account is holding MBS instruments that are worthless. ”
What should one avoid? Thanks!
I may not have much interest income to show for it, but all my IRAs are in cds, except for $4000 in a mutual fund which is not supposed to be straying into the bond market. Call me cconservative, but at least I haven’t lost any of it.
Shark has just bitten off a guy’s face, he is in shock, and state’s….”no big deal, I expected this”….yea, right.
Data from WSJ on 30day delinquencies in major metro areas (US average is 2.5%)
Metro Area Loan Payments Overdue
————- —————————–
Dallas 4.10%
Detroit 3.90%
Atlanta 3.80%
Las Vegas 3.30%
Nashville 3.20%
Houston 3.20%
Denver 3.10%
Charlotte, N.C. 3.10%
St. Louis 2.90%
Jacksonville, Fla. 2.80%
Sacramento 2.70%
Miami 2.70%
Orlando 2.60%
Tampa 2.50%
Chicago 2.50%
Philadelphia 2.40%
New York 2.40%
Minneapolis 2.30%
Boston 2.30%
San Diego 2.20%
Phoenix 2%
Los Angeles 1.90%
Washington, D.C. 1.70%
Seattle 1.50%
Orange County 1.50%
San Francisco 1.30%
Portland, Ore. 1.30%
Raleigh-Durham, N.C. N/A
Stop chuckling, txchick.
Charlotte? Nashville? St Louis?
Did anyone see THAT coming?
You have a growing wealth divide at the same time you saw a run up. It’s like inflation adjusting, even though home prices didn’t rise in say Detroit, they were still overpriced because they didn’t go down as jobs were fleeing.
Dallas higher than Detroit? Oh wait. No one lives in Detroit anymore.
Only a localized bubble where appreciation was the greatest….
txchick: I think you may be right. I haven’t been able to read the blog until just now, and this is a staggering amount of bad news for the bulls. Pretty much covers the entire state of CA. The game is on. I just hope that all the fools who overleveraged themselves will remember the RE agents and loan brokers who offered them encouragement to buy before they got priced out FOREVER. If I was a broker with alot of subprime clients, I would start packing heat from now on. There are going to be alot of angry and depressed people out there.
I wish it would be overnight event. But the powers to be like DL do command lots of power in Washington DC and the Media.
Yes TXChick, a record in the making.
This one is a doozy. The California chickens are returning to roost with a bad case of Liareah!! Look out below….!!!
I can hear an awful clucking sound all the way up here in Oregon.
Mr. Fester:
What part of OR are you in? With relatives in southern OR, I am of the mind that their region is going to be crushed, way worse than CA although we will get hammered too. Tons of people from Northern CA went speculating up there in and around Jackson County. I saw spec homes up there this winter that have been on the market for well over a year. Whoever the builder is, he decided to stop after a few units and just leave the other sites vacant. I feel for my relatives though because their economy is going to be hard up.
Hi CA Guy,
I am in Ashland, a bedroom community of the Bay Area. In any case, I think you are right. We have an interesting local pattern. Ashland prices are propped up almost entirely by equity nomads from California, with Jacksonville close behind, and prices took off here first and went highest. Other areas in Southern Oregon have also seen huge increases, which started later and seem to be deflating quicker. I think the speculation has been both out of staters and local folks. In the latter case, I agree that most of the local yokels have the mojo to weather major depreciation. I think Reno/Tahoe may be the best parallel to the Medford/Ashland pattern.
Here in Ashland, our chief employer,the University, is going through severe budget cuts and will likely lay off some recently tenured faculty this year, but it is of little consequence to real estate in town because the professors can no longer afford to live in town!
Oops, I meant:
“In the latter case, I agree that most of the local yokels DO NOT HAVE have the mojo to weather major depreciation.
I hail from Portland. We didn’t see the big price runup until last year. I’m seeing prices go down about 10% from the peak if someone really wants to sell; if not, they leave the price alone and the property just sits. Local developers think Portland will be slow, but not a boom/bust, that Salem and environs are healthy. I say we’re 10-20% overvalued. The job market isn’t what it is in the Bay Area.
Now, as to Jackson County - and Bend/Deschutes County - I think they’ll fall back to where they were 4-5 years ago. The old saying was, “When Portland catches a cold, Bend gets pneumonia.” There are 1700 properties on the market at least, in Bend, for a population of less than 100K people.
Txchick, if that’s your ONLY comment how can we expect to hit the record. BTW, what is the record?
Have you noticed the change in tone among the comments? Remember when there was actually some debate as to whether or not there was a bubble? Remember when all the predictions were just that: predictions? Remember when the data and market anecdotes didn’t confirm the bear narrative?
I feel there is a sense of collective realization that this board was right, totally right. The ideas shaped and refined here formed a collective intelligence that predicted this end with remarkable accuracy. I detect a shared sense of accomplishment for seeing past the mass hysteria and keeping your wits when others were losing theirs. This board preserved the old paradigm of fiscal sanity: saving money, and minimizing debt. These old style values will return to vogue, painfully for some, but they will return.
I haven’t been posting here as long as many of you, but I commend each of you. You were right.
Which doesn’t bode well for the “soft landing” experts.
Man, I started reading this blog about 2 years ago, and we had regulars like lvlandlord who swore up and down that we were crazy — the housing bull market was going to continue forever and trees really did grow to the sky. When we decided to rent instead of buy in VA in 2004, people looked at us like we just told them we collected shrunken heads for a hobby. Did not compute. My wife friends were baffled that we weren’t tripping all over ourselves to fork over NINE HUNDRED THOUSAND for a crappy tract house on a tiny lot in Loudoun County. Tried to remind them that nine hundred thousand dollars is actually a lot of money, but to most people, it seemed to be a random collection of digits. Sure, the place sold for six hundred the year before, but what the hell — it would sell for a million five next year, so why hesitate?
I still have friends here in Irvine who tell me I should “buy the dip” because double digit appreciation is coming back next year. Crazy!
What ever happened to that Las Vegas chick investor real estate bull? I can’t remember her username but the small lingers…..
I miss LVLandlord. I think I officially scared her off. As things became more and more obvious to most of us here, she sure did get mean and nasty.
It was the same way here in San Diego. Our friends thought we were stupid for not buying. The incredulous reactions, the constant defending ourselves with basic reasoning and hearing over and over “it’s different here, this is San Diego!”. Now, those same people (who bought in ‘02 though ‘04)are talking about getting the hell out and moving to TX or any-where-else-but-here wince when I ask about their ARM or how long they think their home might be on the market.
So how long til the Chargers move to L.A.?
yea….where’s auction heaven in ‘07?…his moniker embodies the piece ben posted
He or she changed the name, into something with hero or so …
The Anti Fraud Hero Wearing A Bicyclist Costume
…. or some such
This is going to make the 89-90 “crash” look like a mere “correction”.
I started reading this in Spring of 2004. There were some rough times when this blog made me feel better about my position.
That’s a cute trick, since the blog didn’t exist back then.
Wow, looking at my old blogger account that I started up for the original blog, I’ve been reading this thing since July ‘05.
It’s ironic — despite all of the foreclosures, bankruptcies, and lost life savings, I heard just today an ad on an Atlanta radio station pitching toxic mortgages. Something to the effect of, “If you have a $150,000 loan and you’re paying more than $375/mo, you need to call us.” Sadly, there are still some poor schmucks left out there who will make that call, and even more sadly, no banking regulator has yet stepped in to stop this obscene scam. Makes you wonder why the hell we even bother having banking regulators in the first place, if not to stop this kind of thing.
“banking regulator”? What are those?
http://patrick.net/wp/?p=388
Still blasting out crap like “we specialize in bad credit” and “oh by the way we are nice people too”……it is enough to make you gag.
Evidently the game will go on until there is literally no GF left breathing on the continent.
In my worst Jamacian Accent
Feerst Republic Mortgage Bankers, do you understand they tell eveeryone else to get into reelestate but us….balh blah blah.
A bunch of islanders suckering their own, most of who are not money savy. Kalf the programming is paid avertisements, we will flye you down to Flordida for 75 dollas to get started…it all starts with your first 1/4 acre lot.
Now mind you if a POS 1/8 acre in a swamp with a shed on it counts as having your legal residence there so I can get FL plates and insurance and some of the tax breaks, sure 5Gs Ill shell out for that Ill make it back in 3-5 years on my collision.
People are pretty stupid! I know here in LA I constantly hear people like Westly Hogland(?) and Barney Eldridge (They sound like real idiots) on the radio advertising PULLING CASH out of your home (like an ATM) and refinancing or buying a home. I am so sick of hearing that moron say - “It’s a no brainer!”. The guy sounds like a high school dropout huckster! I am so sick of hearing all this!! No matter where I go, AM, FM streaming I hear it!! I don’t want to pay for satelite radio, but I think that is the only way to get away from these fools!!!
I have been noticing how the blog is starting to really blow up lately. Financial mayhem as a result of greed and excess is just darn entertaining! Let the bad times roll!!
Burn baby, burn. It was 426 posts at 8:30 am CST today. What a spring this is going to be, we’re witnessing history here.
txchick…good call. This post is sort of like the “hard proof” that the UFO folks always seek but never get. Well, we longtime bubble bears are finally getting our “hard proof”.
Anybody know what the current record is for posts on a blog coz this one is headed to over 400….
Only Ben knows for sure, but I’ve seen 420+.
OK- In the rear view mirror we all are prophets. It’s here and now. Last Friday 3 clients and 6 houses going back in San Diego. Sit tight. It’s gonna be 3-10 (or more) years before this thing plays out. You guys in commercial RE also take notice b/c this will bleed over. Here in San Diego the naysayers have blamed us for higher rents. Wait until the condo conversions come back on the market as rentals!! Rents will drop as you try and rent your Clan. . .err Santee condo for rent amidst trashy apartments. The rents may be up now but will shortly plunge as the speculative properties that can’t be sold come on the market as rentals. This thing is a WAITING game.
Ben, I got to hand it to ya’. I know you are in AZ, but sometimes the way you write, I think you love to stick it to us here in CA. What I love most, since I really don’y know where to begin on this one, is with these all the clowns saying we knew this would happen years ago.
THEN WHERE THE HELL WHERE YOU WHEN YOU WERE WRITING THESE PIECE ‘O CRAP LOANS UP, EINSTEIN?
That’s just what I was thinking.
Because he wanted the commission, and didn’t care about the ethics. Reading this blog (and contributing) is making me think about becoming a mortgage broker some time in the future, as a backup to my normal business (accounting, for a manufacturer). I don’t aspire to be rich; I do aspire to help others. One CAN do both.
They’re basically saying, “We knew exactly what we were doing as we shoehorned these idiots into these loans”. Talk about predatory lending. This stuff is incredibly sleazy. No sympathy for the FB’s from me though. Let the whole sh!thouse collapse.
But look at it from the prospective of the mortgage broker during the height of the bubble (2004 - Spring 2006). You’re honest and you want to “do the right thing” so you tell the sheeple that walk into your office that they are getting in over their heads. The sheeple don’t like to hear your negative energy since everyone around is telling them “buy now or get priced out forever” and “real estate always goes up”. So the angry sheeple walk out of your office and go to the next guy who gives them whatever loan it takes to get them into their dream house. So your conscience is clear, but you’re not making any money because most of the clients are people with no business buying an overpriced house. Basically you have two choices: find another line of work or “get with the program” and give the customers what they want. I think the most you can expect from a loan officer is that he/she explains in detail what is going to happen with these loans and if the stupid sheeple still want them then so be it.
Plus, you’ve got the race-commissars running around slamming you for not handing out candy-loans at low rates to minorities, who I will guarantee you make up a lot of these loans. You’ve got the Community Banking Act. You’ve got the FDIC talking about how much diversity they have, and being ON RECORD as saying they see no problem with loaning money to illegal aliens.
Yeah, these guys may have seen this coming from miles away, but they really did have no choice; if they didn’t lend, they’d look like racists. Not that there’s anything wrong with that…
Followup: The two ‘reports’ into mortgage lending over the past couple years (one by Federal Reserve, other by some independent commissars) both found that there ‘must’ be some kind of discrimination in mortgage lending, because after they accounted for income,credit rating, and other factors, they were left with a discrepancy they can’t explain. If race is the only remaining factor, it must be the reason, and that ‘just isn’t fair.’ The Fed said greater scrutiny will have to be given to mortgage lenders until they can figure out how the ‘racism’ is being perpetrated.
The assumption behind this reasoning is that there is no connection between race and income, credit report, or other factors. If there is a connection, and you adjust for all those factors, but then look at two sets of data grouped by race, you will still see a difference. And you won’t be able to explain it because you have taken out all the obvious factors, and you refuse to accept the remaining factor.
The mortgage guys were fighting a rigged game. The same problem exists in the No Child Left Behind Act. There is no consideration given to the idea that races have different capacities for education. The schools are screaming that the Act ‘isn’t fair,’ but none of them have the balls to say why.
“The same problem exists in the No Child Left Behind Act. There is no consideration given to the idea that races have different capacities for education.”
LOL. Are you serious? If you honestly believe this, I pity you.
“races have different capacities for education”
Sad. I was hoping that these silly notions had disappeared. I guess Jesse Jackson and Al Sharpton are right after all.
I only hope there are not too amny of you dinosaurs left.
Okay, as one of the few minority regulars on this blog, I gotta chime in. I think I am sharp as anyone so I don’t think race has any bearing on much. Here in Phoenix area, Steve Nash proves that a White guy can play b-ball. There are people of all walks who are sharp and there are people of all races who are idiots.
As far as the discrimination goes. I am a third generation r.e. investor, have been an appraiser (when they were still honest), have managed a mortgage office, have flipped properties, have done commercial underwiting for one of the top three highest-earning apartment sales guys in Socal; so I can honestly say that there was plenty of discrimination in lending prior to FICO scores and/or 1995 or so. There was a great deal of latitude given underwriters of FNMA/FHLMC paper to approve or decline based on race/zip code, etc.
However, I do agree with you in that there have been some programs put into place that were obviously designed for nothing more than wholesale financial genocide, but I dont think it was race-specific, just a large transfer of wealth to which others here have alluded.
By the way, I didn’t need special consideration to get into college. I got in like most everybody else, I earned it.
Hate to say it but foreclose_me is right. Races are NOT equal in intelligence, character, etc. Individual exceptions merely prove the general rule. This unpleasant issue of race is actually the driving force of history. The reason Rome disappeared is because the Romans disappeared, submerged in the genes of the people’s they conquired and assimilated. Same thing is happening today.
That’s totally absurd. I can’t believe there are still people left that subscribe to these silly notions. Are there any other ghosts that haunt you at night?
National median home price was $222,000 meaning yet another positive YOY. The U.S. is still looking for its first negative year since modern recordkeeping. Individual markets get creamed, but never the nation as a whole.
Too much Darwin here. Chrisusc: Any experience with shared appreciation mortgages? Seems like they could be lucky…
if you two guys really believe about race having to do with intelligence, you better start preparing for the eventual takeover of the top educational institutions in this country by the indians and chinese. scared now.
Read a book called “The Bell Curve”….and make your own conclusions.
Call me a bigot, but I will not let my Daughter bring home a Flipper.
“Hate to say it but foreclose_me is right. Races are NOT equal in intelligence, character, etc. ”
The Subject regarding possible differences in intelligence among difference races is taboo in the PC climate of the US. Not so in 19th century europe, where there was a vough in studying racial differences, even skull sizes, among difference races. This lead to Darwinian theory of the survival of the fittest, the belief that the human species through the struggle to survive and adapt winnows out the weak and unintelligent, and thus emerges only the fittest most intelligent and adaptable. This theory was extended to include races, and the British and Germans in particular took up this theory to justify colonization and the concept of an Aryan race fitted to rule over all other peoples.
BTW, you can observe this process taking place in the gang-infested hoods of LA, where it is indeed ‘nature red in tooth and claw’ as one famous Darwinian proponent once said.
Just for what it’s worth, those on the bottom of the social/financial heap, especially if kept there by prejuidice and limited opportunities, tend to go “nature red in tooth and claw”.
No Irish Need Apply–famous signs in 19th c NYC and Boston.
Result–Irish Gangs in NYC in the 5 Points were more violent and vicious than any in NY’s history, up to and including today. Teddy Roosevelt broke the gangs up by hiring them to be the city’s first municipal police force–NYPD still heavily Gaelic in symbolism, including bagpipers. Irish gangs controlled the underworld in NYC and Chicago until Capone beat them in Chicago and Jewish gangs from the lower east side knocked them out in NYC.
Chinese gangs in NYC heavily involved in heroin trade, snake-heading immigrants and kidnapping. The flip side of the “model minority”.
For anyone who thinks there’s a racial component to gangs and gangsterism–history and ongoing crime stats says not so much Whether bootlegging or drugs, protection rackets or vice rackets–there have been lots of players.
Japan has the highest average national IQ at 108. Blacks make up 12% of the US popualtion, yet they make over 80% of NBA players. Nearly all agricultural field workers are Hispanic. Most of the graduate school engineering and computer science students are Indian or Chinese. Hispanics have a much higher average birthrate than whites. Nearly all the major marathons the past decade are won by East African males even though they are 1% of the population. The average Asian is smaller in stature than the average caucasian. The Germans are great at engineering. The French make great wine. The Italians make great pasta. All of the heavyweight boxing champions the past 40 years have been black. Nearly all of the major technological advances and breakthroughs the past 300 years have come from white males from Europe or the United States.
There are absolutely no differences in the races and ethnic groups.
“Okay, as one of the few minority regulars on this blog”
How do you know which of us is a “minority” and which of us is not?
Your claims have nothing to do with race differences at least with what regards intelligence. Those who are doing good in, say, engineering is not necessarily becuase of any racial superiority. A more significant factor will be cultural differences. People are good at what their environment has forced them to. Further, IQ tests are rigged and useless and say nothing about intellectual capacity.
Hell, we’re all minorities on this blog. We’re the only ones on the planet who think real estate is a bad deal right now.
Rob
Wow, I surely missed out on this one!
What a waste of collective time.
It ain’t race, folks - it’s culture. Today, IN GENERAL (do you understand what that means?), Japanese study, while Mexicans do not. It’d be VERY difficult to prove that some sort of genetic preference has selected higher intelligence in two to three generations of the modern Japanese person. I wouldn’t argue against the notion that it is happening slowly, mind you - it’s very difficult for a person earning a low wage (hence, likely of lesser than average IQ) to have many children in Japan today. In Mexico? Possibly not the case. But, this would take a considerably longer time than what we see when comparing these cultures over the past century.
“winnows out the weak and unintelligent.” Wrong, all Darwin says is that nature winnows out these least receptive to change. Sometimes the intelligent animals are slower to change than dumb but cunning ones. Intelligence is only one factor, and it has never been proven that one race is more intelligent than another. In fact that our highly mobile society is quickly breaking down racial barriers, we are all of far more mixed race than we were even a few generations ago.
Josh
“nature winnows out these least receptive to change” Wrong, what does ’survival of the fittest’ mean? Per Darwin, in the final analysis, it means those with the most offspring that survive survive.
Which, in hindsight, is kind of obvious. Which makes it a truism, which makes it a tautology, another way of saying ‘those who survive survive.’
> All of the heavyweight boxing champions the past 40 years have been black.
You must not have been following the game - it’s nothing but Russians these days. The main criteria for success is being hungry, able to take a beating, and more than willing to hand one out.
It’s not black and hispanic peoples fault you people married your sisters. I get my feelings of superiority by mocking flippers and GFs, but hey I’m not an inbred hokie from Appalachia.
I lean heavily towards culture. Give some of these groups enough time in the US and you WILL see the culture absorb some of the youth and that some of the youth therefore will not pass on the culture specific ideals and you will see their children fall in line with the norm. Coming from a multi-cultural family, there’s intelligent and stupid people from every single race.
regarding culture vs. genetics: genetics determine the road one CAN go down, not necessarily the one a person WILL go down. studies have been done on this (such as twin studies) and have shown that genetics is more important than environment. the test score gap between different races remains roughly the same even if socio-economic backgrounds are changed. while there is plenty of scientific evidence to back up my position, i only need everyday experience and common sense.
question for the egalitarian crowd: where does a lazy, drug infested, crime-prone “culture” come from? some say poverty, but what causes poverty? the evil white man? but if we’re all equal how could some of us end up getting the best of others on such a large scale? perhaps we’re all equal except the white man has the “evil” gene?
let’s assume poverty were something caused by an outside force. it still wouldn’t be a sufficient explanation for a low culture. poor asians have immigrated to the west and quickly risen to a socio-economic (cultural) level far beyond that of other minorities who have been in the same lands for generations.
“there are intelligent and stupid members of all races” - duh. it’s the *average* intelligence difference that counts. intelligence is not the only thing that matters either. we must also consider capacity for pity and self-sacrifice, a sense of justice and honor, cleanliness, manners, etc. often these qualities are sorely lacking in the hordes of third world peoples we whites are suppossed to accept (without question or quibble) into what were once our countries.
i realize this is an emotional subject. and a fairly dangerous subject for whitey too. i admit it’s safer and feels better to say we’re all the same, or that with the same enviornment we COULD be, but i’d lose my self-respect pretending to believe something which is simply not true.
Further, IQ tests are rigged and useless and say nothing about intellectual capacity.
———————————————————————-
IQ tests are rigged to favor the Japanese? LOL
Why would white people rig IQ tests to make the Japanese look smarter than everyone else? Are you a Realtor?
You must not have been following the game - it’s nothing but Russians these days.
———————————————————————
…..but no Chinese or Pakistanis or Central African Pigmies, who are also very hungry.
Grant I agree with what you are saying, but the problem I have is when you say negative energy. The problem I have is not with you, but that no one wants bad news anymore in this country. Everyone wants a yes man/women in their life. Don’t get me started on this. Too much self esteem/feel good about yourself sh&t in this country over the last 30 years, which has translated into people not wanting to hear bad/negative news. Crap, there is no shame in making 50K a year, putting food on our family’s table, keeping a roof over your head a renting. However, people believe they need a house so bad that they are willing to find someone who let them go broke doing it. I know I usually go off on the debt problems this country has, but the self esteem club is right after that.
Don’t get me wrong, there is no reason ot be negative for no reason, but NO LO should be loaning 500K to a family earning 50K a year. Not in ‘03 or ‘04 or ‘05 or ever for that matter. BUT NO…..I gotta keep my job and J6P doesn’t ant to hear that it is financially impossible to ever repay this debt under all circumstances, unless the house sky rockets in value and he sells at or near the top.
Sorry for the rant, but I can’t stand the fru-fru, feel good about yourself 24/7/365 crowd. I want to puke. People need to be slapped upsaide the head and told when applicable, “You stick, your performance sucks, your useless, get off your butt.” Whatever, the case we just don’t hear it anymore. I am sure it has also grown due to all the PC bullsh&t of the last 30 years, as well.
Anyway, just my $000.02. Sorry, I need that change back. I gott pay the i/o right now!
OCDan, right on as usual.
Crap, there is no shame in making 50K a year,
LMAO…Guess you haven’t been doin’ time on any i-net dating sites lately.
50K? Your’re a fookin’ piker.
All these horrid, gold-diggin’, US women want is a six figure income, million dollar digs, a bankroll to take’em globe trottin’ and eventual delivery of a 2 karat ring or else your regarded as an “unmotivated” chump.
Yes, I agree that White’s capacities were limited from the time they migrated from African continent several thousand years ago. Who will leave a real estate (the land) like Africa… .
“Sorry for the rant, but I can’t stand the fru-fru, feel good about yourself 24/7/365 crowd. I want to puke. ”
OCDan nails it, as usual. I am so with you sir. By not calling it like it is, we often wind up in a worse situation than the one we began with. This goes for all aspects of life: personal, business, war, real estate, etc. When I got out of the Marines and started going to college, I could not believe how lame so many of the students and professors were. Everybody is a winner! Sorry, that is b.s., just like the crap still being spouted by the NAR. What people just need to accept is that housing is and will continue to tank.
And the most ridiculous thing about all that crap is that the self esteem hucksters keep people from figuring out that sometimes you got to figure another way…like in high school when I figured out that it was better to learn to shoot from 3 point land than try to compete with 6′6″ centers in the lane. It sucks to be told you suck, and lots of hours in the gym, but if you suck inside, learn to shoot outside.
OCDan…..you are correct. Being PC is just another “good intention” embedded in the road to hell.
Race doesn’t matter, but class certainly does. Kids who grow up speaking something close to standard written english in the home tend to do better in school than those who don’t. Kids who are read to at an early age and live in a house with books tend to do better in school. None of these neccessarily mean that the kids in question are more intelligent, but intelligence is probably not as importatant as doing better in school.
hd74man wrote:
“All these horrid, gold-diggin’, US women want is a six figure income, million dollar digs, a bankroll to take’em globe trottin’ and eventual delivery of a 2 karat ring or else your regarded as an “unmotivated” chump.”
I’m so unmotivated it ain’t even funny. Please consider adding to your list that some many of these same dames have tens upon tens of thousands of dollars of student loans and credit card debt that they expect to disappear. No, I will not pay for you art history degree or for 1999’s gotta have fashions.
Can anyone actively dating in the 25-40 age range back that up? Dispute it?
Thank god breathing is an involuntary activity.
The ignorance is breathtaking in its depth and breadth.
Those white pillowcases are pointy at the top for a reason folks….and it isn’t because black people are dumber than you.
Wow, my original post sure got redirected….. I think a better reason for Rome’s eventual downfall was 400 years of almost constant civil war that steadily weakened and depleted the empire. Read “The Roman Emperors” by Michael Grant for more info. Almost every time a new emperor was acclaimed a rival from somewhere else in the empire would march his armies to some convenient meeting point and the two sides would fight it out. Very few emperors died of natural causes.
Re: race and intelligence, it’s a controversial topic, with some people actually saying that even to conduct research into it is unethical.
No person of any “race” (the word being a sloppy shorthand for “a group of people sharing a substantial number of unique genes, who historically have interbred nearly exclusively”) can be confident that he’s more intelligent than a person of any other race. But there is powerful evidence that, at least using IQ as a measurement of intelligence, not all “races” have the same average intelligence.
Some groups have higher average IQs than others. That is not a matter of dispute. Since IQ tends to be correlated with heredity — that is, smart parents tend to have smart kids, on average — it’s reasonable to question whether heredity plays a part in this racial disparity.
I know that this runs against the American egalitarian presumption that everybody has an absolutely equal potential, but science is science. It’s interesting to see how politics, ideology, and religion can affect people’s willingness to accept even sound scientific conclusions.
What has to be emphasized over and over again — since most people, regardless of race, are incapable of grasping the concepts of averages and medians — is that just because, in a group of fifty East Asians, there are likely to be a few more high-IQ people than in a group of fifty people of European ancestry, it does not follow that any particular Asian will invariably be smarter than any particular European. And it also does not follow that the smartest Asian in the group will be smarter than the smartest European in the group. The differences are around the margins.
This isn’t “pointy-hat’ stuff or “ignorant.” The willful ignorance is on the other side, that refuses to even consider these things no matter how much evidence is presented.
Well said, Thomas.
“WHERE THE HELL WHERE YOU”
Why, at the bank depositing my commision… Why?
Where was I at that exact moment? Putting gas in my Hummer H2.
TX, anytime Ben puts up anything with CA we go over 200. Yesterday, Ben had that one at the end of day and this morning I look and it is at 383. This one might hit 400 or 500.
posted “TX, anytime Ben puts up anything with CA we go over 200.”
Of course when we (here in Calif.) go belly -up…. so goes the country my friend. We are over 10% of the population and close to 20% of the GDP…. when we lay a rotten egg we will stink-up the whole country.
NYC is still the $$$ cap of the USA….But LA is the cutural cap… when Hollywood starts making “Falling down II ” watch out.
CA is what, the 7th largest GDP in the world, if counted by itself? AE you are so right. When we go belly up, kiss everyone else goodbye.
There is life outside of california folks.
There is life outside of CA. However, too many toxic mortgages, too much debt, too many people in over their head, and too many clownifornians who screwed up other states. Also, look at how many noodle-head sub-prime and regular lenders are in CA. I am not trying to brag on CA. Far from that. But with Hawaii, AZ, NV, FL, NJ, and CO having their RE problems combined w/CA, how do you thnk the rest of the country will fair? Sure, Alaska might survive, but what about Texas? CA is NOT the cause of all the problems, however with our input combined with other states’ problems, we sure won’t be helping this problem.
yea, if your gonna get cornholed might as well be while your looking out at the Pacific Ocean
Is that’s known as the Big Kahuna ?
Actually we are 8th… behind Spain.
I wouldnt put too much on the largest economy ranking.
If it wasnt for cheaper labor elsewhere we would be toast.
Much of Silicon Valley moved over to the Far East with Semiconductor/Harddrive/other HT production. This is continuing with software design and support services.
Lets see whats left we can ship out ?
posted ” There is life outside of california folks.”
That is not true. I have been there and there is nothing…. just like the moon but no green cheese. Take my advice Live and Die in LA.
California Uber Alles
“Take my advice Live and Die in LA.”
That is one kick=ass movie, though it was made in the 80’s. That movie is exactly what LA is about, Con men, deals made under trashed out underpasses in San Pedro, drug deals in the hood,money laundering,fast-living chicks. Much of the scenes Shot in SAn pedro/LA port harbor area, including that scene in a now-closed up stripbar, location Wilmington.
imploder—”It’s the suede denim secret police - they’ve come for your uncool niece…”
You Californians have an ego bigger than your RE bubble. Japan has the 2nd largest GDP in the world. When they went into a recession all during the 1990’s, the world still hummed along just fine. The financial health of the USA won’t be decided by California RE.
California is not the cultural capital of anything. If Hollywood disappeared from the face of the earth, I wouldn’t give a rat’s ass. They haven’t produced anything but garbage the past 3 decades. Maybe one out of fifty movies comes out half decent.
…and usually that one is a sequel.
So originality died a long time ago.
I’m originally from Tulsa, now live in San Diego. Went to a Christmas party in San Diego last year (maybe 60 people there), and two couples were talking about rental properties they just bought in Oklahoma. One bought two houses in Oklahoma City, the other a SFH in Norman. One couple had been to OKC once (just to look at homes), the other had never set foot in the state. I guess they just couldn’t believe it when they heard you could get a nice new 3 bed 2 bath for $140,000. Went to OKC for Christmas, saw two homes in my parents’ neighborhood for rent. Looked up the owners, both were Californians.
This is the same thing I heard in the early ’90s. Might I suggest you take a look at the stock market averages during the ‘91-’96 time frame. Just as CA was enduring the worst RE slump in their history, much of the rest of the country was humming along barely noticing.
This bust will be bigger though, in scale and distribution, so I would anticipate a nice stock market reaction… but don’t assume that CA had too much to do with it.
I will take the middle road. California doesn’t a country make, but it is definitely the primary engine for extreme speculation and bubbling in the western U.S. But the effect was mixed. Sure a lot of Realtwhores and construction jocks bought lipstick and “Power Stroke” trucks, but most of us just got hosed by the run up. I think when RE falls back down in line with historical averages it will be an improvement in many areas. The RE/builder parasites can go back to being beauticians and seasonal fire fighters.
“Many succumbed to the lure of easy home equity or low payments. ‘For so long people have relied on the advice of the guy who used to sell shoes at Payless who now sells loans,’ Jeffry said.”
Payless LMFAO!!!!!!!
“but it is definitely the primary engine for extreme speculation and bubbling in the western U.S.”
CA is ground zero for the dreaded “equity locust”…..R.I.P.
During that same time, we also saw many Native born California move north to Or,Wash, NV, and Utah!
I do hear it even today! “Everyone wants to live here (Ca),
I try to explain some reoccuring exodus of natives over several decades and they just dont seem to undertand or believe it.
“Of course when we (here in Calif.) go belly -up…. so goes the country my friend. We are over 10% of the population and close to 20% of the GDP”
I have read that California comprises 25% of the RE wealth of the US(paper wealth as i like to call it) So if RE tanks in CA, it would certainly have some effect upon the overall US economy.
and dont you forget it that NYC has the budget of California… I just love that fact. Also our mayor saved money so we wouldnt have a deficit nor go bankrupt …
False. NYC budget ~$57B. CA state budget ~$100B.
Yeah but half of CA’s budget is funded by debt
Maybe all of us bubble bloggers should pool our money and buy this place
http://today.reuters.com/news/articlenews.aspx?type=domesticNews&storyid=2007-01-25T211639Z_01_N25460726_RTRUKOC_0_US-LIFE-HOME.xml&src=rss&rpc=22
I got dibs on the gondola!
I got your gondola right here.
I’ll bet there’s $20MM of pure profit built into that.
Mac, I bet he has at least 50Mil built into that and I wouldn’t be surprised if it was more.
“I’ll bet there’s $20MM of pure profit built into that.”
“Mac, I bet he has at least 50Mil built into that and I wouldn’t be surprised if it was more.”
Hey you guys, stop talkin’ ’bout my “Gondola”.
There is probably in excess of $75 million of fluff built into that price. If a sale is made, he needs room to negotiate. The $155M is an attention getter, but not the likely sales price.
There is a $75 million house in Corona Del Mar that has been on the market for a couple of years. They will be lucky to get half that number.
People never cease to amaze me. This guy is one of the richest people in the world, yet he brings some boneheaded plan like this to the table. I mean wow, what an impressive and original idea. Is that really all he could come up with? What a clown.
Sure, I’m in for 6 suicide mortgage loans! oh, can you just pencil me in for now. I’m trying to unload my 10 other properties. Oops, where did the time go, i can’t miss my work shift at Mc Dees again. I’ll be fired for sure, and I won’t be able to consult with my real estate agent during our work breaks……….
TX, let’s see…At $6K/month for interest/prin. only on a 30-year fixed @ 6%, if we all went in at 100% financing, we could get that thing for $930,000 per month. Damn, let’s buy that right now! I get dibs on the pool and big screen for the Super Bowl.
Can anyone say jumbo loan? Better yet, super size my loan!
How about an option arm with a 0.000001% teaser rate.
I’ll bet it made The Donald’s brown eyes blue when he read about this.
I can hear him now, “How DARE he build and sell the most expensive home in the world.”
Get over yourself, DT.
BayQT~
You accept Canadian dollars ?
posted ” You accept Canadian dollars ? ”
Yes, when I want to wipe my ass or blow my nose.
wasn’t this guy just in the news about getting a “friendly” divorce.
It would be really cool would be to buy that place, then burn it down and bury the wreckage as a social statement about affluence or whatever.
“‘We’re in the midst of an adjusting market right now, and we won’t know until spring or summer if this is ominous or not,’ said Marshall Prentice, DataQuick’s president.”
Sounds pretty dang ominous to me? Does this mean Marshall will change his stance in August? Let’s hope that is the case!
“‘This is just the first wave,’ said Shannon Martin of Mid-State Realty in Fresno. ‘Within the next few years, you’ll see more foreclosures coming.’”
The first wave is never the biggest wave of the set. For those of you that have never surfed, the first wave is just a “hello” to the pounding your about to take, and all these FB’s are caught on the inside.
Well said and that option arm is the equivalent of a tombstoning surfboard keeping your nose and mouth just ever so slightly underwater, all the while knowing the next wave is bigger and just 10 seconds away.
With your leash wrapped around both ankles (happened to me!).
Bring out the gimp!
Remember the tsunami of 2004? By the time the third wave hit, people were wishing for the first wave.
Think this ****?! market has topped yet?
Tis merely a flesh wound….. to a piece of flesh known as the carotid artery
Not… quite… yet. Just a little foreshock announcing the imminent arrival of “the big one”.
1.5 trillion $ of adjustable mortgages are due for reset this year, 2007. The financial tsunami is coming.
I know that FB is 251 in hexadecimal… what does it mean here?
Exponential foreclosure rates.
FB == F*cked Borrower
There should be a permanent page with translations for all the site acronyms:
FB, HELOC, ARM, REO, REIC, YOY, NAR, OC, etc.
“There should be a permanent page with translations for all the site acronyms:”
We had a pretty good list posted about a year ago…
*Ahem*. “We” (meaning yours truly) have kept a pretty good list since August, 2005:
Housing Bubble Glossary
“The first wave is never the biggest wave of the set.”
What a great analogy. So true. Learning to surf as a kid, I quickly learned to never take the first wave. I can see this going down like a set of waves. This story sounds pretty heavy, but it will get killer for those who have patience.
I’ve spent some time in the water (surfing, bodysurfing, bodyboarding) and I don’t know if I buy this analogy. Is there a physics theory on this? In my experience, I typically don’t take the first wave of set because I’m paddling my ass off to get outside and I think there will be a better wave outside. Sometimes there is, sometimes not. And when the first wave is the biggest, you often get caught in the soup. Discuss …
Kook
Agreed with Premature. On awful blown-out days, you couldn’t tell what was behind the wave and when then one facing you was pinner, you prayed you weren’t going to wish you had taken it when you saw nothing but chop.
Glassy days, you could see the sets roll in. However, big waves were always random. The one constant: Getting caught inside and knowing your &%$#%’ed. That was never, ever a pleasant feeling.
Ok, I will gladly add one post.
With the foreclosures picking up sharply, it makes NO sense that DL and the REIC have called a bottom sometime this year. Common sense and basic economics/finance point to lower prices and even more distress(foreclosures). The REO’s will push down prices and make it even harder for some recent buyers that need to sell. This will cause a downward cycle for serveral years, the opposite of the positive cycle we had the last 5 years.
Don’t see much effect on prices in the SF Bay Area yet though as sellers are hanging tough. Maybe 5 to 8% down in some areas.
“With the foreclosures picking up sharply, it makes NO sense that DL and the REIC have called a bottom sometime this year.”
You’re right, Ray…
Since when did these clowns use any sense??
It’s like watching a Monty Python marathon when these guys talk to reportors and issue press releases.
Speaking of foerclosures, don’t know if this has been posted yet, but take a look over at the Sonoma County Housing Bubble blogspot and see Athena’s Monday (Jan. 22) post about how DataQuick includes foreclosures in current sales.
http://www.sonomahousingbubble.blogspot.com/
Can you believe that chit? Good thing we know how to add and subtract. We can just pop in our county in foreclosure.com or realtytrac.com and subtract the foreclosure numbers from DataQuick’s.
In the 89-95 “correction” the RE whores yelled “bottom” like parrots the whole time. By the time the real bottom was reached 90% of them had been “retrained” to be WalMart greeters.
Everyone needs to think about what the NAR’s main function is: to sell as many homes as possible. Period. So of course it makes sense for him to call a bottom every month. Lereah doesn’t care if he’s right, he only cares about “persuading” people to buy.
That is true, but what is infuriating is lazy a$$ reporters quote them as if they are any different than the American Plastics Council.
I couldn’t agree more, journalists are pathetic. Practically every article I read that pertains to my industry has at least a couple completely inaccurate statements in it.
> it makes sense for him to call a bottom every month
Even if it wouldn’t, Liareah is paid to do everything to push up the numbers of housing transactions that Realtors are processing. He is doing his job, and if this involves lying to the media, then so be it: it’s not a crime.
Ben needs to request an interview with Liareah every month and then post “They declined an interview”
actually, it’s very clever. If he keeps calling the bottom every month, one of these years or 10, he may be right, and then he can write he’s next book “How I called the bottom in the real estate market, and why you should buy now, or forever be priced out of homeownership”
I think Lereah statements have gone way past Ludicrous and have now officially hit Plaid!
NAR’s main function is: to sell as many homes as possible.
Really, they are in the business of cultivating as many realtors as they can to collect DUES. It’s like Amway’s multi-level marketing, without the brains.
“Don’t see much effect on prices in the SF Bay Area yet though as sellers are hanging tough. Maybe 5 to 8% down in some areas. ”
Parts of the outer Bay are starting to crumble, for sure. In the city of SF, I think prices are back to September ‘05 levels already. Any gains in 2006 have been pretty much erased. Again, this is only the stuff that’s selling, as most of it is just sitting with wishing prices. Meanwhile, they just keep on building…..
In the posting above by PDX Renter (2007-01-25 15:17:54), the SF Metro area has one of the lowest 30 day dq rates….
Yep, noticed that. Still a lot of people with $$$.
I think (hope) that’s temporary. SF metro area also has a disproportionately high number of people with ARMs and I/Os, moreso even than the rest of the state. Prices here aren’t down that much yet, so the incentive to mail the keys in is not as high yet.
I am starting to see REO’s undercut the prices here in LA area.
This one condo complex a guy has a place listed for 530k. The exact same model is listed at 492k as and REO and the REO is an awsome remodel - its a 2004 pergraniteel standard flip. niiiiice. These are in Oak Park, CA. Neither unit is sold yet.
That is a nice area! If this is the same place Oak park south of santa monica then the beginning of a decline is long awaited.
” Maybe 5 to 8% down in some areas”
Agreed! I havent seen much for declines in Bay Area. Fact is prices seemed to leaped forward again. In the South Bay we are seeing 1400 sq ft condos going for 650K. 2000 ft TH were 660K 6 months back. Same TH now 800K(?). What gives!!!!
That makes it close to 300% inflation on codos and over 350% inflation on TH over the last 8-9 years…. Seems like 50-60% decline is now on order to get back to the mean. Rents did drop around 30% from top of 2000. Commercial dropped from $3/sq ft nnn to $1/Sq Ft since 2000.
OC DOWN YOY -
Not in the bag.
Yeah, where’s Gary W? What does he say NOW?
he had some excuse about overtightening, just like everyone on this blog predicted 18 months ago.
Yea, 5.25% Historically stupid low Funds Rate
Rates are at historical lows and home sales are still sucking, what are these idiots going to do when we have a modest up tick in rates. Screw the bastards!
True story…
We made our first offer on a house here on the central coast today.
The listing is for a house that has been on the market for about a year. The listing stated “bring all offers”. So we did. It was a real offer, and not us just “fooling around with the buyers”. We told our agent that the bid would be really really really low, is that OK? He said, “I have no problem with presenting low ball offers”.
I told him our offer…30% off the asking price. It is a cosmetic fixer, and require some work to look nice, but it had good “bones”, moving a some walls would modernize it, and it had a big (for this area) backyard that could look really nice if properly landscaped.
He said “hah hah! There’s no way they will accept THAT offer!”
Oh well, it’s not like I HAVE to buy…
(PS A 30% reduction on this house would put us NEAR the cost of renting, if you don’t consider maintenance, and me having to do the gardening).
Neil, pass me the popcorn.
arroyogrande -
Thats the right way to do it. 30% off!
Of course if they tell you there are other offers coming in (fake bids), I hope you stare them down and ask… “Prove It!”
“fake bids”
We mostly get this on the browsing/shopping trips…
Me: “Nice house”
RE Agent: “Yes, and if you want it, you had better put in a bid today…there just happen to be 3 other bids on it today, just by chance, even though the house has been on the market for 200 days.”
Me: “You are off your meds again, aren’t you?”
How can you tell?
Require verification of bidders.
Google up Fake Bids from Australia RE markets and you will find a nation wide epidemic which the goverment had to pass laws to protect consumers. Aussie RE is only sold at open auctions where bidders are present. Some Realtors employeed fake bidders to drive prices up. Once the laws were passed fake bids dissappeared overnight and prices started to decline in a major way.
Exactly! Get up close and ask …
“Please repeat that into the microphone!”
Biggest fraud ever put on home buyers was the fake bidders trick by realtors.
Or just tell the realtor, “you better sell it to them fast before they withdraw their offer.”
Or simply congratulate them on finding a buyer and walk away.
I’ve done that.
Thats the right way to do it. 30% off!
Well I would think 30% off the 2005 peak, not off the 2006 wishing price…
Are you saying he didn’t present your offer?
Is that allowed in their “code of ethics”?
Unfortunately, the CA Dept or R.E. will do nothing about it if they file a complaint.
Nope. You’ve got me chuckling, though. You just said “code of ethics”. Beauty comedy, aye.
the clown is obligated by law to present your offer, no matter what. You should contact the seller directly.
Worthless! Several of my co-workers sold their homes and they only were given one offer from the realtor. That offer was nearly 10% above asking. I asked ! “What kind of person would overbid if there was one offer”.
Ethics went out the window long ago!
Its all about Bling Bling today!
Nnvmtgbrkr, good catch.
No, after talking to him for about half an hour about all things real estate (the current market conditions, commercial real estate, land values now vs. 3 years ago), I kind of talked myself out of even forcing the issue. In other words, even at 30% off today’s price, I had not convinced myself that I really wanted to buy that house vs. continuing to rent. The main reasons I had for buying it were:
1. My wife really really wants to nest, so she can make changes…however, she knows the current market, and doesn’t want to overpay, so at least that’s good.
2. The house is on a flat cul-de-sac in a quiet neighborhood, so my kids could ride bikes out front, without me having to drive them to the park (the rental we are in right now is on a hill).
3. My offering price would keep us NEAR the price of renting, so I could keep stashing away cash each month (for investments, replenish our rainy day fund, college savings for the kids, vacations, etc.)
I guess what I’m saying is that I didn’t REALLY have to have that particular house (other fish in the sea), so rather than force the issue, I just thought “forget it”.
Maybe let it marinade another year or two as the owner chases the market down…
you evil, bitter renter, get the hell off the sidelines and BUY.
I say put in the offer. Nothing like rattling the confidence of these dreamers in their fantasy prices.
and i bet in a few months that “ridiculous offer” may seem like a good one
screw these idiots let them ride this tothe bottom
not liariahs bottom the real bottom!
I agree with Bantering Bear. Put in the offer, but write that the offer is good for only a few days. If they come back in 5 months, you can revise your offer downward…
Top price should be no more than 1997 price plus 3%/year appreciation plus any major improvements (i.e. not the cosmetic “Flip This House” ilk…).
Hey arroyogrande, what we on the blog SHOULD be doing is making even LOWER offers so that it looks like you are outbidding everyone.
Get yourself a new realtor for the house you do buy.
“Get yourself a new realtor for the house you do buy.”
Yup. I may have to get a license myself. There has been one and only one Realtor ™ I have ever worked with that I would consider knowledgeable, professional, and trustworthy, and she is in SoCal, not up here.
Forget Realtor and get a Real Estate Attorney who actually has a law (contracts) degree and will cost you 200-300 per hour to sign a contract. He will know more about contract laws than any ding headed realtor. They work for you and not the commission. They wont misrepresent like realtors will. They work for flat fee!
What else do you need to have a realtor for? Walk you around ? Heck you can browse the internet and get the sellers realtor give you an open house.
In this kind of situoation, what would the commissions be? (3% to the sellers agent paid by the seller, or?)
No it will be 5 or 6% full commission to the sellers agent. The buyer will pay lawyers fees on top of closing costs+downpayment. I couldn’t imagine here in L.A. that service costing less than $1,500-$2,500.00 vs. finding a selling agent that you don’t have to pay. Thats something that a lot of folks leave out when they suggest this strategy. When someone has saved (yea yea I know but for sake of argument)for years to get into a house they tend to look at spending that kind of money differently. You would be surprised at how many balk at paying $500.00 dollar for an inspection fee.
Wow,
That bid deserves not just popcorn, but a good drink to go with it. Let us know how it goes getting the realtor license.
I see below Implosion recommends contacting the buyer… I second that. They deserve to know the offer wasn’t presented.
Got popcorn?
Neil
I wish you luck!
Neil
I’m unclear on whether this is the listing agent or a second agent you are talking to?
If it’s the listing agent, put in the offer through another agent. On the chance that it is accepted, the LA just boned himself out of half the commission.
I agree with go to the owner as well. Just call and say you wanted to make an offer, the agent(s) refused to deliver it, you’ve moved on, just thought he’d like to know.
“I agree with go to the owner as well”
I may do that.
arroyogrande, I am surprised no one told you that the house will be worth 15% more than what you paid for in about a year….
cass,
No one can get away with that kind of talk here…this place wasn’t “special” enough to hold off a 10% YOY median decline along with a 10%-20% REAL decline. I think it pisses some people off that we have YOY declines here and LA has not (”but it’s so much nicer here, and all of the retirees come here, and I like the house, plus the schools”).
However, there are many that say that prices have finished correcting, and that prices will go up 5% a year for the next, well, ever.
Me, I’m thinking of getting that Notice of Default graph from the LA Times framed and mounted for my wall.
That’s why I haven’t bothered yet. Why deal with the novice, idiot realtors who know nothing about R.E. I prefer to wait until RTC gets the properties and then either buy from them or from wholesalers with a slight mark up from REO price.
And if I ever did buy from either a seller or the RTC, if there is a real estate agent involved, they will get only .5% commission. Just like with FHA REO’s you can negotiate the agent’s commission. There will be so many homes for sale that if this agent doesn’t go for it the next one will. “Which one of you needs to eat the most today?”
And as Robert Cote’ has advised, wait until the end of the quarter and hammer the bank/RTC 2.1 as the bank examiners pressure them to clean up their books at the end of every reporting period.
Speaking of REO’s, I have been watching a bank-owned property which is just languishing on the mls as they try to get the amount owed on the loan. This thing has been for sale for months. The amount owed is a little better than $530k but, realistically, the place should sell for no more than $275k as it is hammered.
What’s worse is when banks try and play the flipping game. I can’t tell you how many REOs I’ve seen on the MLS where the wishing price is 5-25% higher than the last sale price just 3-4 months ago. 5-25% higher for a REO that last sold and foreclosed in 10/2006??! WTF?
That practice won’t last long as the regulators start to tighten and make regular visits. It just takes a certain number to push to the loan-loass reserve threshold and then list prices become very soft.
The prices only become very soft for the REO managers brother-in-law, sister, cousins, uncles, nephews. Worked the REO’s heavily in the 90’s, unless you know how to negotiate with bank REO managers, the listing prices will be close to market. There are definitly ways to buy below market, but it won’t happen at the listing price.
Only the late nite TV infomercials promote that pennies on the dollar. Please don’t repeat that hype here. It is not the real world.
david-
Gotta disagree I too worked heavily in the REO industry during the last downturn. Depending on the lender the prices can get very soft. No matter who you are. Especially in suspect or close to suspect areas. Relatives can only buy so much. Pennies on the dollar may be a stretch but 10 to 25 cents on the dollar is not. Especially when you’re talking about non-performing paper. When the Fed start breathing heavy the banks get real flexible.
Have you posted about your experiences over on Ben’s foreclosure blog? How to best exploit the bust will be the next vital phase of education for HBBers.
My post goes for david cee, mrIS, and anyone else who can and is willing to contribute. It’d be great to have this knowledge aggregated somewhere.
Hadn’t thought of that, thanks for the info.
Two years hence, the seller’s will be cryin’ they didn’t take your offer, while values continually adjust downward by 50% or more.
RE sayin’-First offer is ususally the best offer.
Plus there are so many time bombs out there in the world today.
Sure the fook I’m a renter at the moment.
What price mobility!
That guy will wish he accepted it after spring.
AG - Do you have the MLS link?
http://tinyurl.com/2dduz4
MLS ID#: 121603
Not even knowing anything about the area it would appear that 30% off the current list price was quite generous on your part.
Posted, but I think Ben has to clear posts that have URL links.
Sacramento area foreclosures are up 1,273% in one year. Sacramento County foreclosures are up 1,832% in one year.
Sacramento County foreclosures are just 43 below the the Q2 1997 record.
No bubble here, move along.
LOL.
Han Solo: Uh, everything’s under control. Situation normal.
Voice: What happened?
Han Solo: Uh, we had a slight weapons malfunction, but uh… everything’s perfectly all right now. We’re fine. We’re all fine here now, thank you. How are you?
you left out the best part, when he’s asked for his ID number and blows up the communications module.
Maybe I’m crazy but 150% increases in foreclosures, 30% declines in sales volumes, 40% cancelation rates and declines in the “median” price now (finally) being reported from 5-20% down constitute numbers that are just too big for the media to ignore.
Oh and throw in the closing of 15 subprimes and it seems like a tsunami of bad news is begining to flow. I predict this is the last “were at the bottom” forecast by ANYONE. Even the stupidest reporter can’t ignore all of these numbers. They’re going to have to start asking tough questions like:
“In the face of rising foreclosures, inaffordibility, rampant fraud, declining sales and rising inventories what DATA can you SHOW to BASE your forecast of a “bottom”?
Go read the headlines from 1990-1994, they called a bottom practically every month. What makes you think it’ll be any different this time?
Because this time we have supercomputers the size of a Tic Tac Box! Geez
Joe Six Pack wants to ask you what a supercomputer is…as soon as he’s done watching a Jerry Springer rerun.
“Because this time we have supercomputers the size of a Tic Tac Box! Geez ”
But computers (or supercomputers) only propagate ideas more rapidly around the world now than they did in the early nineties. To the extent that “industry experts” are still relied upon for most of the content, we’ll just hear more and more pablum on the way down than we did a decade ago. Fortunately, this blog is an oasis in a somewhat bland media coverage of RE.
THIS TIME we have the blogosphere, media and actual information distribution is no longer controlled by the few. I have no doubt the LA Times “Real Estate” section will be filled with happy talk every Sunday, but those will be in a position to buy after nonsensically low lending standards are regulated after existence now know how to google, zillow, and get real data.
There is a “phase lag” between all the bad news you see now (skyrocketing inventory, foreclosures, etc.) and actual price declines. This spring you will see price drops accelerate and then it will start to be self-perpetuating….with negative overshoot even below what most bears on this board anticipate.
Sonoma County Foreclosures up 125% in a quarter… But it’s different here. Everyone wants to live here. Prices won’t fall here. No Bubble! Eyes Front! Eyes Front!
;-D
Sonoma County had 143 foreclosures 4th Quarter 2005 and by 4th Quarter 2006 we are up to 323. 125.9%
Nothing to see here…
Sonoma County sucks. Most of the people there that own homes have to rent out rooms to pay the mortgage. You’ll usually see four or five cars parked on in front of each house and some even convert the garage into another room. Kids can’t move out of their parents houses, so they end up moving to more affordable areas or living with mom and pop. Illegal immigrants, hippy, and bums are all over the place. It’s a joke.
Subprime meltdowns, foreclosures up the ying-yang, and sales volumes dropping faster than paris hiltons pants.
If inventory continues to build the wipeout will be here sooner than I thought…
Ahhh, but it gets better !
Today foreign investors signalled that they are losing faith in our economy and BOND YIELDS ROSE ! Bonds have been quietly climbing for the last few months. Nobody has been talking about it, but as the chances of a Fed cut have evaporated, bond yields have been going up. The 10 year is sitting just under 4.9%.
Not only are the yields rising, but the number of bidders is falling.
http://www.bloomberg.com/apps/news?pid=20601009&sid
=at2fPRyhpmm4&refer=bond
So what we have here is the start of a death spiral. Housing is bad, bond yields rise. Bond yields rise = higher mortgage rates. Higher mortgage rates = poorer housing market. Repeat.
See ?
We aren’t anywhere near the bottom of this baby. No way.
More popcorn, please !
I need some more salt and a napkin…. thanks…
I go nuts for that kettle corn.
that’s it im buying stock in orville redenbocker!!!
this is great news on the hbb today and we are still 10 days from the superbowl!!!
ROTFL
This to me signaled that money was leaving both the stock and bond markets. Or… more precisely, the inflow of funds wasn’t sufficient to keep up the momentum. Any slowdown will cause a trip…
I’m curious as to tomorrow’s market. Up? Down? Level? I could be anything tomorrow… but not for much longer.
Got popcorn?
Neil
How about a vomit bucket. The front car of the roller coaster is staring down an awfully big drop!
The recent comments by ‘e-con-omists’ and the REIC are just amazing. I read them and look around, wondering what am I missing? Anything? No, I’m not - foreclosures just starting up, sales dropping…the complete lack of analysis on these issues is so damn 2000 NASDAQ…how can everyone miss these signs? WHO ARE THESE GUYS?
They’re busily crossing their toes and counting to 1.5T.
Really if you think about it these NODs and foreclosures are the result of the 600-800 B of resets in 2006.
those that couldn’t refi.
So NODs and foreclosures should be 2-3 times as many this year? 1.5Trillion/6-8Billion.
“So NODs and foreclosures should be 2-3 times as many this year”
No, should be much much higher. The earlier borrowers still, in some cases, had some prospect for appreciation to make a sale or short sale possible. Appreciation has been replaced with declines so expect a lot more defaults and a higher proportion of defaults to go to REO.
The bond bubble is also popping ?
The conundrum may work itself out? Greenspan was confused that after so many rate hikes the 10 year treasury stayed so low in yield…… a conundrum he called it.
Which is funny, because in another story they say this:
Ten-year notes headed for a third weekly decline with yields at the highest since August, on evidence a housing-market slump is ending and investor demand waned at an auction of $13 billion of five-year securities. Durable goods orders last month probably rose by the most since September, showed a Bloomberg News survey.
So what is going on? Now what I see on foreclosure.com and hear what friends are telling me back in LA, things are different.
Wierd….
So the rate on the 10 year bond is the same as on the 11 years left on my mortgage. There really isn’t a reason to pay it off early.
And yet I received this e-mailer from KB homes for yet another toxic home offer here in Sacramento.
http://tinyurl.com/2zqbda
http://tinyurl.com/2fld4p
Sweet! You better run down and get your KB $hit box before they’re all gone! Thanks for sharing that, Gwynster, you made me laugh.
So in the past two years we’ve gone from builders using new home lotteries to comic book graphics advertising begging new FBs to take their inventory at zero down. This is going to get messy.
Anybody remember schoolhouse rock: Zero is My Hero
http://www.school-house-rock.com/0.html
posted “And yet I received this e-mailer from KB homes”
I love it “Zero is my Hero”…. What dude your IQ?
What kills me about this is on the Sac Landing blog, someone pointed out that this tactic is meant to appeal to renters who can’t afford because they don’t have a down payment. But wouldn’t not having a downpayment make the place that much more expensive on a continuing basis? I’d answer the bull back but nyquil, typing skills, and critical thought don’t mix well in my case.
“The 37,273 default notices mailed between October and December was up 145 percent compared to 15,196 in the same period in 2005.”
At what point will the media pick up on this…
another 100% increase to 90K in 2007 or 225K in 2008. These numbers maybe on the low side considering toxic loans which will switch over. May even top over 500K in 2008.
I knew I’d see this here today. I was minding my own business this morning, waiting for an order at a local cafe and saw the headline for the Valley Times (I’m in Tri-Valley area, Dublin, Ca). My mouth dropped open..not in disbelief but where it appeared in the newspaper. Up front and VERY personal for those who may be affected by this info. It certainly canNOT be denied by the naysayers. Here it is, in black and white.
All I can say is, ‘wow!”.
BayQT~
Yeah, same thing in most Central Valley papers. Front and center, and coming at the rate of two FB’d stories a week. Pucker time.
Ain’t that amazing ? I am a bit shocked too. Many people in BA (renters, homedebtors) are still in denial. “There are too many high income people here” is a common expression. I don’t disagree with that comment, but the prices are STILL completely detached from the fundamentals.
I was wondering when the news will hit MSM and it seems to be happening. Too many rich people ? Then why the dramatic increase in foreclosures ? Why the deteriorating credit quality ?
Now as the news says, some lenders have stopped giving loans even to BA people .. gasp. With the rising bond yields, both would-be buyers (yes, there are still enough sheeple here) and people with ARM resets are not going to be too happy.
1. Increased foreclosures and rising.
2. Beginning of ARM resets.
3. Increasing bond yields.
And we are at bottom ? Of what ?
The news hits the MSM and conveniently stop asking questions after the first “experts” they interview. These experts are DQ and the NAR.
The tactic is to ignore bad news and hope it’ll fade away and then insert a couple of sound bites that won’t upset the FBs.
Rinse and repeat.
Heaven forbid they divulge the facts and some meaningful analysis with real likely projections/outcomes.
MANIPULATION! The NAR needs to be brough up on collusion charges and monopolistic business practices.
Some day you will think back on vinyl LPs, gas station attendants, and RE agents. Well 2 out of 3 ain’t bad.
“I Love The NAR” buttons will someday fetch $5 on ebay….ah nostalgia.
NIM! –the cry of those who wore their Whip Inflation Now Buttons upside down.
you hear the same crap in nyc, too many wealthy people
for this market to crash.
yeah sure everybody works on wall street
denial is not just a river in egypt
So true. Hell, the way some people talk and live in this country you would think everyone in the US makes $250K a year, drives and Benz and goes to Bora Bora twice a year. However, those of us on this board know this is just not true.
I like how people say that about OC (”we have high incomes here!”) and then someone posts the census data. I laugh. The real numbers are never as high as people think. Higher than other places, sure, but not enough to really afford the houses here.
Sonoma County
Population, 2005 estimate 466,477
Population, 2000 458,614
Living in same house in 1995 and 2000, 52.0%
Housing units, 2005 193,353
Homeownership rate, 2000 64.1%
Median value of owner-occupied housing units, 2000 $273,200
Median household income, 2003 $52,034
Persons per household, 2.60
Per capita money income, $25,724
Persons below poverty, percent, 2003 8.8%
“Just over half of the loans that went into default statewide during the fourth quarter were made between January 2005 and February 2006. So those loans were made to buyers purchasing homes around the time the market was peaking in summer 2005, DataQuick analyst John Karevoll said.”
And why should that matter? Oh, that’s right…. They weren’t “buyers purchasing homes”, they were “flippers flipping homes” with no skin in the game. I don’t know if I would even consider this a default. More like a defraud.
That includes people who refi’d between 1/05 and 2/06, right?
Right. A refi is essentially repurchasing your home again. And nothing wrong with that IMO, and long as it was for a sound financial purpose. But “mortgage flipping” to get cash back is eventually headed down the same road…..
The key here is that, while you always have your hardship cases (divorce, sickness, job loss), they normally occur rather independent of when one gets a mortgage (although one can reasonably argue that the first two may, in part, be due to the mortgage). To have over half of the defaults happening just as their ARMs reset means that these people are likely way over their heads, or flippers with no intent of paying the adjusted amount.
In any case, this represents a new class of people not covered by the present-day economic models, which explains why many, otherwise savy people, cannot see the train about to mow them down - rather, they see good job numbers and WRONGLY assume that as long as these people remain employed, they can service their debts.
GotRocks- well said.
“divorce, sickness, job loss, they normally occur rather independent of when one gets a mortgage…”
And they should typically be a constant (proportional to the number of loans). So, what else explains this massive increased percentage of default?
“And assume that as long as these people remain employed, they can service their debts….”
Even if they can, and many will….. this financial drain on their disposable income will certainly lead us into a recession by…… 2008?
‘For so long people have relied on the advice of the guy who used to sell shoes at Payless who now sells loans,’
Rollin’ Rollin’ Rollin’
Keep movin’, movin’, movin’,
Though they’re disapprovin’,
Keep them doggies movin’ Rawhide!
Don’t try to understand ‘em,
Just rope and throw and grab ‘em,
Soon we’ll be living high and wide.
Boy my heart’s calculatin’
My true love will be waitin’, be waiting at the end of my ride.
Move ‘em on, head ‘em up,
Head ‘em up, move ‘em out,
Move ‘em on, head ‘em out Rawhide!
Set ‘em out, ride ‘em in
Ride ‘em in, let ‘em out,
Cut ‘em out, ride ‘em in Rawhide.
—whipcrack—
Oooh! And I REMEMBER that TV show. Somebody’s dating themselves, Pazuzu.
(I know, I know….I am, too.)
BayQT~
John Belushi and Dan Aykroyd re-introduced it to a whole new generation. Still pretty damn old, though.
Well, one look at Clint Eastwood’s face will tell you that. He was 25 when he was Rowdy Yates, the young hard-edged buckeroo.
posted ” one look at Clint Eastwood’s face will tell you that.”
Yes Sir, Mr. Favior….
Gil Favor (the trail boss for those who don’t know what the HELL we are talking about).
TV Show: Rawhide, circa 1959-1966. DAMN! That WAS a long time ago. ROFL!!
BayQT~
I still remember ma and pa kettle in black and white tv.Filmed in the 40s i believe.
I still remember watching The Fugitive, Mission Impossible, along with Star Trek, Man From Uncle and WW West in the 60s. I also have a vague recollection of going to see Deep Throat and Behind the Green Door in a movie theater in the early 70s when I was in HS - place was packed.
Hollywood today is pathatic in recreating these classics and then asking the public to spend $50-60 to see a 3rd class reproduction.
As a kid, I was forced to watch a half hour of Hee-Haw at least once a week.
Should I ever have to defend myself in court, I plan on using the Hee-Haw victim argument.
I liked “Captain Nice”…….
Captain not-so-nice was pretty good too
Hehehee! well I had yet to start kindergarten and this show was deemed too “adult” for me to watch but I dug listening to that song from the other room.
http://www.kfcplainfield.com/sound/rawhide.wav
Old or not, a great song, at least when Belushi and Ackroyd sang it. That wav file sounded like the chipmunks or something…
I think it’s Clint Eastwood singing. Seriously.
posted ” I think it’s Clint Eastwood singing. Seriously. ”
Clint only sang one song it was it “Paint your wagons” with Lee Marvin.
It is interesting that throughout all the news about foreclosures, even in more respectable venues such as WSJ, nobody mentioned the obvious, the loose lending standards, no-doc, stated income loans and the clowns who took them were not in any position to pay it back. And this has nothing to do with bubble or not, as soon as you purchased your home, you are locked in, you need to pay the damn mortgage whether your home goes up 20% a year or declines 20% a year. The only event or the appreciation or depreciation plays a role is if you need to sell because you cannot service the mortgage. People make me laugh when they talk appreciation for 12-18 months loan. Leave alone the ARM or IO or negative IO, in 12 months time for a 30-year mortgage, you will not scratch even the closing costs that were added to the purchase cost.
“Merced County Association of Realtors President Scott Oliver said many Bay Area families already stretched thin invested in Merced County homes and took out questionable loans. ‘I believe that a lot of loans went into place that should not have happened,’ he said. ‘It was inevitable that with the market exploding the way it did that you’d see a high rate of foreclosure.’”
Now that is a freakin’ understatement of the decade. For a quote like that, for ANY overvalued market, these reporters could have visited any housing bubble blog over the last 2-3 years.
Spare me.
(Geez, I’m still reading the topic. I may have more to say later. LOL!)
BayQT~
“It was inevitable” that realtors were pushing people into far more house than they could afford and telling everyone RE never goes down? So they’re not to blame for their own behavior?
At the exact point in which prices went beyond affordable ,the lenders should of said “no” to the unqualified ,the demand would of gone down and prices would not of inflated this fast in the last 4 years .
Instead we got from the REIC the logic of going on a loan you can’t afford so you won’t be priced out forever .The problem with this logic of” buy now or be priced out forever”, is that it’s based on a premise that real estate always goes up (regardless of market conditions or demand or affordability )
The buyers had the total power to stop the mania market a long time ago ,but they bought the REIC hype instead and went for the toxic low down killer loans .
Statements from the REIC like ,”You can’t afford not to buy when property is going up 20% a year ” is also a false statement . Who ever said that just because property was going up that you should buy a house you can’t afford ,and who ever said that property can’t crash or correct .
With all this excess inventory that needs to be sold one can’t call a bottom to the market like the NAR is attempting to do now .
During the 89-95 “correction” the RE “professionals” parroted “bottom” periodically throughout the whole time. By the time the real bottom occurred 90% of them were “retrained” to be greeters at WalMart. That TRULY was the bottom…for them.
No mention yet by the CAR about the NoD and foreclosure tidal wave. And, we still have $1.5T in ARM resetting this year, presumably a lot of it in CA.
This will make the early 90s look like noise on the charts.
I agree. I wouldn’t be surprised to see foreclosures at 3 or 4 times the previous highs.
“The quality of applicants has deteriorated”
Huh ? What’s wrong ? Do their hands fall off while they are being propped up to sign the loan forms ? Does the mirror no longer fog ? Geez these loans guys sure got picky all of a sudden.
Missing first mortgage payment means that they planned to sell before the first payment was necessary……Looks like Flippers caught in the Tuna Net!
Either that or just outright fraud…
“(Price) Increases were strongest in urban areas that experienced relatively less new home building or strong economic growth in recent years.”
Bullsht! The only reason urban areas saw price growth is because of rampant mortgage fraud. In 12 months those ‘urban areas’ will be return to the worthless wastelands they were before the fraudsters showed up.
“(Price) Increases were strongest in urban areas that experienced relatively less new home building or strong economic growth in recent years.”
This is a real quandry! How do you expain 10-30% yoy %increases in such LA gang-infested trashed out dump zones as Wilmington, Compton, Bell,South Gate,East LA,Huntington Park. Maywood, Iglewood, all Scentral LA zips off the 110 fwy? And prices for these dilapilated crackshacks in graffiti-scrawled sewers selling for $400,000-$500,000? These areas are heavily immigrant-impacted, low income, rundown third-world slums, with deteriorated trashed out streets and schools,pre-WWII decrepit victorians and craftsmans housing 10 or more illegals, run-down salvage trucks and junk autos parked on lawns and spilled motor oil/radiator fluid running into the streets.
And there are no hi-payng jobs anywhere in these inner LA barrio ghettos, just a lot of poor working class and poor latina moms pushing strollers brimming with babies/kids, all of them getting free public assistance, courtesy of The Big ATM cash machine for illegals which is Cal.
No, the price runup in these third-world LA ghettos stems from one thing-MORTGAGE FRAUD. The LA inner city ghettos are simply being overappraised by shyster realtors, brokers and lenders,just like all over the country apparantly, but here it never get reported because the barrio is a tough place to investigate. Imagine some white pauchy cubicle Gov’t investigator going into these ghettos: He/she might end up an ‘accidental’ victim of some stray bullets issuing from the loco homeys, or end up getting carjacked or ‘roughed’ over for easy cash.
From DailyNews link:
“Karevoll said it is impossible to tell which direction this foreclosure activity will head right now. It could level off sometime this summer, and I think the level off scenario is more likely right now.”
Level off likely? What is this chump smoking? $1.5T in ARM resets coming and foreclosures lag NoD by a quarter or more. Given the rate at which NoD translate to Foreclosures we are only seeing the tip of the iceberg that’s right in front of us - 37K NoD => 12K foreclosures.
What a total idiot this DQ shill is. Panic this spring after the Q1 numbers are out.
Me too. My gut is screaming ‘blood in the water!’ about April 20th. The Fed meets in March (another cold bath for bonds), 3 more months of crappy sales numbers and inventory heading to a permanant plateau…way too much timing here, but I’m out March 1st. Hold it in cash and take whatever beating comes.
April fool’s day or February 14th in remembrance of
St-Valentine massacre by Al Capone. It could come sooner than that.
For anyone who remembers, everyone on this blog was labeling early September 2006 the “Labor Day Massacre” since it was the “end” of the summer selling season. It didn’t quite happen like that though, did it? This bubble has more of an annoying slow leak. The comps are still way too stubbornly high.
Apropos though somewhat anecdotal, my 3 month rolling average for NODs in 93552 has gone from 15 in Oct. to 26 in Nov. to 61 in Dec. Annualized those monthly increases in Nov. and Dec. are 880% and 2815%.
January thus far shows no sign of slowing. This market is toast by tax time.
Economist Leslie Appleton-Young. ‘The price picture across the state continues to be mixed. MIXED!! The only thing mixed up is what BS line are your bosses telling you to dustribute to the MSM. You are nothing more than a mouthpiece for the highest bidder, and I think the business schools should offer a Master in Economic-Prostitute degrees, THE MEP!
“Karevoll said it is impossible to tell which direction this foreclosure activity will head right now. It could level off sometime this summer, and I think the level off scenario is more likely right now.”
Man “gives it up” easy. This is a total WH0RE statement.
I read it and thought….. this is puke.
just a thought about being priced out forever…
You buy using some ridiculous laon program..
1 - The payment goes up
2 - the value goes down
3 - you can’t sell
4 - you can’t refi
5 - you go into foreclosure
6 - you lose all of equity (assuming you had any to begin with)
7 - your credit is detroyed
8 - you are out of money
9 - you are out of home
10 - you are all done
now, think about how difficult it will be to buy back in someday..
yes, I know banks soon forget, but I suspect this time the forgetting process will be a bit longer than the last time….
just a thought…
I think just the opposite, there will be so many people in that situation, banks will have to overlook one small foreclosure or else have no clients…provided those clients come with 20% down payments.
At least they will have clients like me! Someday I’ll be a first time buyer with excellent credit (already have) and 20% down (well on my way). I fully expect to be treated like royalty when I decide to buy.
I agree. If you get through this disaster with cash, they will worship you.
Yeah, I might even gloat a little bit remembering how many times I was told my 20% downpayment was no good if I was not willing to stretch my family’s budget and risk my husband’s health in order to “get in now or get priced out forever”….
Yup. As we near the bottom, these people will still be frozen out of the market. But when the RE market gets going again, the money will start to flow, and the thinking will be “But everyone got foreclosed on in 2007/8/9, it’s different now.”
great analogy
now if you are a bitter renter
1)you lived in a nice place for a fraction of the cost of “owning”
2)you have saved plenty of cash and gotten solid 5% or better return on your money
3)you took a vacation or 2
4)you have no debt to speak of
5)you swoop in and pick up the meat off the carcass
isn’t renting swell!
Even better, you are an owner who bought before all of this insanity began and you’re paying down your principal every month, while simultaneously building a big cash position to buy more properties.
And you forgot that we “bitter renters” sleep well at night. No worries here.
Frauds are rampant. Why not when the lenders were willing to give
money away.
Fraudsters gonna let the banks foreclose, they are walking with
pockets full of cash-back.
GW Bush will provide “pardon” all FBs and wipe their slates clean, a new bubble will start, nobody will be accountable for anything, and we will truly have a “new” economy.
The weak, stupid, and crooked have much to look forward to.
“The chickens are coming home to roost”
and
“people are still buying homes they can’t afford”
I will add another well known quote: “There is a sucker born every minute”
I’m giddy!
how about, a flipper and his money will soon part!
It is interesting that the OC Register has been failry mute on this as far as I have seen. They were quick to front page even a fart in the positive direction, but queit as a churchmouse on this side of the chart. The only thing I see there is the 2006 numbers which come from DQ News… here’s the summary for OC.
Community Median Change Sales Change
All resale houses $686,000 6.0% 21,417 -27.7%
All condominiums $455,000 4.8% 9,399 -34.0%
All new homes $697,000 -3.3% 4,912 -2.1%
All homes $627,000 5.7% 35,728 -26.9%
There is an interesting article in the OC about a practice Lennar is doing in order to save themselves. Of course at the cost of all the little men underneath them.
http://www.ocregister.com/ocregister/money/housing/article_1554350.php
Lennar Corp. is asking subcontractors to reduce charges for work they’ve already done or face a minimum six-month ban on bidding for work, a company executive said late Tuesday.
The builder, one of the biggest developers in Orange County with 8,000 to 14,000 homes on the drawing board, began circulating letters and meeting with subcontractors earlier this month, seeking cuts that reflect lower home prices, said Jeff Roos, Lennar’s Southwestern U.S. regional vice president.
“As our customers continue to pay us a lower price for our homes, we must in turn pay you a lower price for your services,” said a letter sent to subcontractors in Lennar’s Orange Coast, Corona, Temecula and Palm Springs divisions.
The letter tells subcontractors to either reduce their unpaid invoices by a set percentage or “be excluded from bidding future work for a minimum of six months.”
Subcontractors getting the letters said Lennar had asked for cuts from 5 percent to 20 percent, depending on their trade and location.
Roos said similar requests are being made of Lennar subcontractors nationally. The firm has projects in at least a dozen states.
“Every builder is doing the same thing,” added Roos, who works in the company’s Western region office in Aliso Viejo. “Everybody understands that the market has softened. … I think everybody realizes in times like this … they need to manage their business accordingly.”
That is only round 1. If they don’t lose any subs, they will do it again until the pain forces some of them to quit.
Wow. Major economic pain ahead.
Major Economic Pain….. I think this was my grandfathers Drill Sargent
Auto industry has been doing this for years. At some point, the subs go under. Subs don’t have much choice. It is work now and maybe it works out, or refuse and go under immediately.
“Lennar Corp. is asking subcontractors to reduce charges for work they’ve already done or face a minimum six-month ban on bidding for work, a company executive said late Tuesday.”
That is another blow to the IE economy and RE market, which is already in deep s**t as it is. I go out to the IE average twice a week(just did a trip out to telecula today)and I see quite a few contractors driving their big white contractor trucks or many driving late model 8-cylinder crewcab behemoths used for contracting jobs. Most of these fellows are connected in some way to the still ongoing IE RE construction boom(YES folks, they’re still putting up tons of tracts in IE). Any % drop in charges for contracted bid jobs will as you say squeeze incomes for the hoards of IE contractors, many no doubt already in hock to CC’s,MEw’s,banks. The nature of this work, being done mostly by I/C’s running their own businesses, is up and down even in a normal healthy economy, with flush times and lean periods. Much of the IE hi-paying jobs sector, what little it is, is concentrated in building and constructions trades contracting: This move by lennar to reduce charges to it’s subs just put another nail in the coffin for the IE.
BTW, they are still building like crap out in Temelcula, even in the face of dismal CA NOD’s/Foreclosues figures. For all it’s worth I saw a new townehome tract advertized for as low as the mid $200,000’s, probably for the 1-bed units.
Foreclosure activity hits highest level in 8 years in state
BUT DEFAULT NOTICE RISE NOT SEEN AS THREAT TO BAY AREA MARKET
http://www.mercurynews.com/mld/mercurynews/16541628.htm
Should be subtitled “It’s different here” by clueless reporter
“Statewide, Karevoll and other experts said, the areas to worry about are entry-level markets, where buyers normally stretch their finances to afford a home. Those who bought at the peak of the market using adjustable-rate mortgages are especially vulnerable to default, said Stuart Gabriel, director of the University of Southern California’s Lusk Center for Real Estate. The Inland Empire in Southern California, or the Central Valley, are among the places where default activity could turn serious”
What a joke. Financial distress is chornic across all housing. Everyone stretched and refi/CASH-OUT HELOC….
WHat a load of SH!T.
This morning local radio station KCBS said “people have more money and aren’t falling behind on the payments”. The urge to hold on to the Titanic makes sense when jumping into the ocean seems risky.
What has to happen to San Francisco BA is adjacent areas have to collapse and create a differential for people to realize RE can go down. This will put a damper on buying and people forced to sell will get a reality check.
All the places I check on Zillow for the Bay Area are holding up nicely.
Checking Zillow for market conditions is like checking a stopped watch for the time. It will only be right twice each cycle.
Yes, and from personal experience… DON”T trust the rhythm method….
LMAO!
The “slowdown in appreciation” can only generate NODs if the buyers could never afford their monthly payments. These were people who were using their appreciation to pay off their mortgage. Wait, I hear somebody saying that it’s because of teaser rates, not lack of appreciation. But that is what those teaser rates are. They are a highly leveraged bet that the house will appreciate faster than the loan. It is truly amazing that banks would make, and MBS purchasers would buy loans that borrowers NEVER had any hope of paying except continued 20% appreciation forever. Yeah, the extra 2-3% will completely make up for the foreclosure rate on these loans.
“we won’t know until spring or summer if this is ominous or not,’ said Marshall Prentice.
The definition of ominous “the situation became ugly”
I think we are already there.
SKB
I think we’ve finally moved into the top of the fourth inning.
and it is the first game of a double header!
and we are already deep into an already extremely overworked bullpen fresh of a red eye from the east coast
I’m looking forward to the seventh inning stretch so we can sing “Take me out to the ballgame” and then head for the parking lot. We should be ahead by about 21 runs by then and the opposing team’s catcher will be pitching.
“I think we’ve finally moved into the top of the fourth inning.”
Nope, what we’ve been through has been the warm-up. The game officially starts when the Spring Selling Season ‘07 inventory numbers come out. And it’s going to be one hell of a game!
” that makes me think how stupid the human mind really is. we tend to ignore facts until the bitter end.”
“Like…. Von Paulas in Stalingrad”
Or like Bush and the American people in Iraq.
dan posts “Or like Bush and the American people in Iraq.”
Only like GWBush in his bunker. Bush is unworthy of the selfless troops… he alone, has sent into harms way. Pray for all of them.
or like Churchill and Roosevelt sending troops to fight the Germans while they sat in their bunker.
Like 70 year old Churchill was supposed to push FDR in his wheelchair onto the beach at D-Day?
When the Bushies start bashing people of this stature, you know they’re really getting desperate.
Well, 50.7% of Americans, anyway….
http://en.wikipedia.org/wiki/U.S._presidential_election,_2004#Election_results
What makes this whole mess, er, I mean bubble, so troublesome is that w are only starting to unravel. Just wait until early ‘08 after all the resets this year. Just wait until late ‘08 when all the next wave of resets hits and all the FBs from ‘07 resets are looking for housing/jobs. This economy is going to be hit hard like it has neve been hit. Too many people, companies, banks, institutions, etc. with too much debt and not enough cash on hand to weather this. Accounting may just be another great profession in the coming years as many will need to sort out their financial messes.
That’s why I ditched r.e. for accounting. Get in on the ground floor. Plus there are only a handful of jobs that will weather the coming storm: healthcare, police, teachers, public servants, accountants, attorneys. Most of the rest are pretty much screwed, they just haven’t figured it out yet. It will be a rude awakening.
Chrisusc: I’m afraid you will be right. This implosion is going to trickle down to sectors no one is even considering. Housing really has floated the boat for the past 5 years. Best of luck to all here
Just think, I can send my wife back to work since she is an accountant, but stay at home mom right now. Then I can retire and we can pick up a nice house for cheap. Great, I stay home, she works, and we get a house. I’m all for that!
Have you ever stayed home with the kids? You might change your mind….
I retired last year and am now at home w/wife…..gotta go get a job…FAST! At least if I get a job I can get fired….she won’t fire me from all the “honey do” tasks.
“Have you ever stayed home with the kids? You might change your mind….”
Seconded…motion carried!
Must…last…until…they…get..to..full…time
…school…in…first…grade!
Bush will handle the impending melltdown by chasing the illegals out of jobs and showing that unemployment went down during his tenure. BTW employment may way well be down.
We need to have some liberal reporter press Bush about Housing bubble during a press conference.
Sorry for the double post, but I don’t want this to get lost. Ben’s blog continues to be completely wrong about housing and the economy.
How about some “analysis” from the Times in London…
“But as 2007 gets under way, that soft landing for the US economy everyone said couldn’t happen is clearly in sight.
There were two main sets of worriers a year ago. One said recession was imminent. The other said it was merely deferred. The first group cited the bursting of the housing bubble and a dollar collapse as the reasons US growth would turn negative. The second said inflation was spiralling out of control and the Fed would be forced to raise interest rates much more sharply than it had already, and then the economy would drop into recession.
So far, the housing collapse has not materialised. Residential construction spending has fallen sharply in the past year, and Fed officials acknowledge that activity in the housing sector will be a drag on GDP growth for the whole of 2007.
…Since house price increases are assumed to have been a key factor behind strong consumer spending growth over the past five years, a decline in prices was expected to lead to a retrenchment. But — again, so far — house prices have declined only a little nationwide. More importantly, new research suggests that, when prices were rising, consumers did not spend anything like as much of their housing wealth as was previously believed. As a result, they are unlikely to cut back sharply.”
http://business.timesonline.co.uk/article/0,,8210-2548673,00.html
Housing bust hasn’t materialized. WOW! Look at DQ numbers posted from last quarter. This thing has just gotten started. Yeah, we may all be off a little in the timing, here or there, but this thing has only started. Just wait until next year and then ‘09. On top of that, how many times can J6P keep paying off the Visa/mastercard, esp. when the equity is all used up? One thing BB and his bangsters don’t realize is that we are at the precipice. With the monumental debt in this country it is all but end game. Even if they can keep it going, fine, I will be the first to admit I was wrong. However, I know I will not be wrong about this…DEBT SLAVERY, HOME DEBTORSHIP/ SERFDOM, AND/OR MASSIVE BANKRUPTCIES. Bottom line is something is going to give. You cannot keep moving skyward and growing based on massive debt. There are just not enough well paying jobs to sustain this insanity.
“More importantly, new research suggests that, when prices were rising, consumers did not spend anything like as much of their housing wealth as was previously believed. As a result, they are unlikely to cut back sharply.”
This is complete BS. People spent 80% or more of the HELOC money. We have record low equity after a record increase in prices. Where did it all go if it wasn’t spent?
Of course, this completely ignores that (a) when you are screwed in your gamble, you keep throwing cash at it until you can’t any more [we're here give or take 6-12 months for the average FB] and (b) in this market, any change up or down takes time to develop, but once in place, accelerates [just turned last year, 12 months in give or take, trend down and nothing to stop it.]
Yes I hear we have a Soft Landing on CNBC. Stock market will go up etc……… What we are probably going to get is an inflation shock from having too many dollars chasing too few investments. Unless the investors decide not to invest in the US anymore, but that won’t happen its different here.
They are using “soft landing” because pundits are equating the RE market with the stock market….and it’s simply a different animal. Stocks can tank in a heartbeat because of liquidity while housing has to die a slow and miserable death. That being said, once the dam breaks, what’s going to prop it up? Institutions won’t jump in, again like stocks, and make massive purchases.
Psychology + momentum + fundamentals = Dunno?
I ain’t very smart, I know it, and won’t make predictions. I was primed and ready to jump in and buy a few months ago, but my gut tells me to park on the sidelines for now.
However, Lereah did say this is the bottom (fourth or fifth one in the past 6 months)…..LOL
Have some Kool-aid…good huh? Now go buy a house….
“The 865 fourth-quarter foreclosures compare to 63 the same time last year in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties”
1,273% increase YOY. I had to mention this again because it’s so high.
“Ed Jeffry, a loan consultant in Walnut Creek said that in the past few months four lenders he has used have stopped providing home loans. The quality of applicants has deteriorated, and he is referring many of his clients to bankruptcy attorneys, he said.”
“Hello Mark”
“Yes”
“Hey Mark,this is Ed Jeffrey over at Walnut Creek”
“Oh, great, so is our loan approved? We are so excited to get into that house!”
“Um, actually Mark, that is what I’m calling about. In kind of looking over your whole income statement and all, I am going to go ahead and recommend that you contact a bankruptcy attorney. Let me give you his number.”
Maybe Ed can get referral fees from the BK attorneys. A replacement income for loan fees.
Exactly! The new get-rich-quick scheme!!
Instead of ambulance chasing it’ll be skimming the NoD and bank records to get leads on prospective BK clients.
What did Ed think he was going to get? No one with any quality credit is going to buy. Everyone else with half a brain c ell would never buy w/a toxic loan. So who’s left? That’s right? LO gets 100 bucks, the dreg buyers, that’s who! Like this is really brain surgery.
It was like the guy yesterday who mentioned on one of Ben’s entries that he bought a car w/cash and the dealer said that no one pays cash anymore and those who finance have crappy credit, etc., etc.
That was me but it’s gal not guy. You can be a housing bear and female at the same time, I promise.
OCDan meant “guy” as in “hey, you guys”, in which “guys” can mean either guys or gals.
OCDan, you owe me one.
Off the top of my head, there’s you, TxChick, BayQT, the two PhillyGals, me… Well, there’s at least six of us!
Almost enough for a cheerleading squad.
az_l, arwen_u, cass, misstrial, woman from NY (forgot handle),…
Don’t forget deb & melody, two of the earliest (and still among the most informative) posters.
Count me in!
me too! but can we not be a cheerleading squad please, perhaps the “ladies” around the caldron, boil boil, toil etc.
I’m here daily…though I don’t post often.
seven
eight
HELLLLOOOOO LADIEEEEES…. imploder here. Mr swavewayfair…..
Yes, yes…… all the moves……
Nine - daily visitor/rare contributor…. Thanks to all of you “guys”…. fantastic work…
Me, watching from the sidelines in a country where the banks seem to remember what a) happened in the 1920s and b) what that helped bring about.
My co-worker had to put down over 40% on the house she’s building, and she has no negative items here in Germany (then again, she also didn’t have too many positives, other than her utilities records)
From what I hear, having to put down “only” about 20% for a home loan is a recent innovation here. People often start “Bausparkontos” (building savings accounts) when they’re finishing school, and it’s perfectly normal to not own a house until you’re 40 or so.
(Note to flippers: houses are still expensive here and German real estate actually depreciates a bit sometimes, because Germans hate buying “used houses”.)
Me, too.
As an aside, I live in the Bay area- I bought a practice about four years ago and for the first 3 years, lost a good maybe 10-20% of my clients annually that were cashing out and moving to other states. Last year, that just about dried out and more people were moving in, but it seems to me a bunch of them were renting. This year, I’m losing people to overseas moves (significantly, Germany)- not many, but I think it’s a significant indicator.
For my business, I keep getting in enough new clients to keep growing anyway, but the boom basically hurt my business and I hope the bust will actually help it.
I looked at condos in 1999 and didn’t like them at $150,000-$175,000 and don’t like them now at triple the price. I absolutely refused to get involved in a bidding war, which pissed off my agent. After that experience (I didn’t buy - I ended up renting a cute duplex and now an awesome apartment for less than the cost of buying) I doubt I would ever use a buyer’s agent again - they have an inherent conflict of interest because the higher the price of the house , the more they make.
Without women….I would be so depressed that I would do things like…buy a condo in Naples FL…or Phoenix…or San Diego….
And me!
Me too.
I live in Fresno, CA and there are a tremendous number of bank owned properties just sitting on the MLS. Some of the properties have been for sale since last July. The banks are really going to drag this out; however I believe sooner rather than later they will realize the the end the market is never going to rebound and the banks will start dropping the prices between $150K to $300K to jump start sales. When the banks start failing from all of these toxic mortgages they will be up on capital hill begging for help (i.e. tax payer bail out by the federal gov’t). I can see it now……………
Based on all the mortgage fraud and overextended Heloc’d to the hilt owners, this is such a true statement everywhere. This steamroller really is gaining momentum. Have you all seen how many subprime lenders are going out of business…. From implodometer’s blog we are seeing one every other day going under. Next step is to go back to traditional 20percent down for most banks.
This is getting ugly fast.
And the current bank CEO’s will exit with a golden package if it gets really bad. In comes a new bank CEO who will fire 10% of the staff to cut costs. When he is done, there will need to be a CEO that can put the bank on a new growth path and start this cycle all over again.
The moral of the story is be a CEO instead of a rank and file worker.
If the banks won’t drop the prices, the next Resolution Trust Corp will.
Yep, alot of these banks are FLs to the FBs. I’d bet alot of them will have difficulty meeting resere requirements in the next few years if they’re forced to actually SELL their REO.
I love these articles referenced to CA. It seems that some people will only see daylight when it appears in print, and the rest will get their dose of reality from family, friends, and neighbors when the moving van arrives. We know that people are walking away from the houses but what about their expensive cars. How long after defaulting on the house does the car, boat, motorcycle, etc, disappear in the middle of the night? How long before the vacation properties start showing up? I must admit that I thought it would take at least to June or July for these types of articles to break the MSM vail of silence, but then when investiments go bad public action is necessary and the vail is broken.
That’s why I’m looking to bottom fish on other stuff besides distressed proerties, such as furniture. And maybe a car, but needs to be pennies on the dollar from the repo auction.
It’s a great time to be bottom-fishing on CL for furniture. Just search the For Sale section for “move, moving”.
They will soon be foreclosing on Ford Motors and General Motors too. That’s what it also mean.
Ford probably since its current lending required it to place properties up as security for the loan (anyone want a shut down plant in a place no one wants to live?). GM maybe not….yet.
Yep. I’m trying to build up a little “pile-o-money” to buy some second-hand high end stuff in 08-09. Maybe a 1080p lcd. But I’m not the cheapest person in the world and It is hard to save big when I’m already maxing out my 401 and Roth IRA.
The L.A. beach cities are still holding tight on sales $, but inventory is rising… again, and it’s not ‘SuperbowlSunday’ yet. The feeling here among those with this esoteric bubble awareness is that it won’t be esoteric for long. Mixed among the professionals in the $500K+/yr combined income bracket are baby-boomers whose nest egg is their (highly) leveraged house. Almost everyone is tuned in at this point; bubble/mortgage defaults/rising inventory is seen in the local newspapers and talked about at parties, in the bars, curbside, wherever and whenever. The buzz is there and getting louder. Many here, including myself, thought that perhaps the beach would be, and remain, immune to a substantial drop, say 30-50%. The best guess now is that Manhattan/Hermosa/Redondo are not immune, but will be among the last to fall… and the furthest. The aging beach population whose retirement is their house have had it with the changes here. Re-zoning has contributed to the population explosion, a 10 minute drive to the mall is now 30. Hard to say what sub-prime lending has contributed, and how it will play out. The sellers aren’t blinking. The buyers have become aloof. Sounds the same as everywhere else.
posted “the beach would be, and remain, immune to a substantial drop”
I will say this, you will be the last to go down and the first to pop back up. In the Greater LA area, in fact “land” they are not making anymore holds very true, for mature at or near the beach locations, period.
It will never go away, the Valley will get nailed, the outter areas like The IE and Plamcaster are going to get smoked as usual.
From Brentwood, Westwood following the coast south it will be a case by case deal. I might add with many moneyed people ready and waiting to snap up a deal. The Coast it true Gold over time in a city as powerfull as LA. If I has a costal home and could hold on I would ….Time will heal it much quicker than you would think! Good Luck!
I owned a townhome in Huntington Beach (a mile from the pier) during the 1989-95 crash. Prices fell about 35% from top (late 88) to bottom (95). So no, “the beach” is not immune.
And that crash was small potatoes compared to what is coming.
It was possible to buy a house in Hermosa for ~200k in the mid 1990s. Redondo was only slightly more, certainly less than $300k for a typical place. Manhattan was always pricier, but over $500k was relatively uncommon.
I won’t be surprised if we get back to those prices (plus inflation) by the time this market bottoms.
Maybe I’m getting more evil as I age, but I now have a blow-up of that foreclosure graph from the LA Times up on my wall as a poster.
Take a video and post it on Utupe / Yahoo and Google Video…
Share your evil ways with the world…
It will be up there until they put out next months graph.
you must stop this behavior immediately an put your Farrah Fawcett poster back up in it’s rightful place of reverence…..
ROFLMAO, too good
Don’t feel too bad - we’ve got our own Beanie Bubble going on here in Madison, Wisconsin:
http://madisonhousingbubble.blogspot.com/
http://biz.yahoo.com/ap/070125/wall_street.html?.v=54
David Thompson, chief investment officer at Dwight Asset Management Co., said the data hinting at stability in the housing market unnerved the bond market because it could signal the economy is holding up better than expected and raise the specter of higher interest rates. He said some bond investors were surprised by the tepid response to the note auction.
“I think the market is just coming to grips with the fact that the economy is stronger than folks thought two months ago,” Thompson said.
I was really hoping to see 20 dollar bills dropping out of helicopters, this makes me sad.
Seriously next week I can cut and paste an expert claiming the economy is weak and expect rate cuts this summer.
posted ” I was really hoping to see 20 dollar bills dropping out of helicopters, this makes me sad.”
Don’t be sad. You know that will not happen. But Jimmy Carter was the best President the USA every had…. do you know why? Because he gave the people cheese… he gave our people cheese! Perhaps after the next election we will get cheese again?
We only get the cut cheese from Bush now…. one load of cut cheese after another. Oh Well, at least we are winnig the war in Iraq.
Stay off the crackpipe. LMAO
(sung to the tune of spam, spam, spam, spam)
Cheese, Cheese, Cheese, Cheese,
Cheese, Cheese, Cheese, Cheese,
Cheese, Cheese, Cheese, Cheese,
Cheese, Cheese, Cheese, Cheese,
Ironicly, course that Gubment cheese was really only good for making nachos. It had a distinctly “Velvetta-y” quality.
Or it could be the middle east has lost its taste for US assets. They can see how much debt we have and the subprime problem and everything. Its all over the Internet.
http://today.reuters.com/news/articlenews.aspx?type=
reutersEdge&storyID=2007-01-25T071650Z_01_L25459574
_RTRUKOC_0_US-DAVOS-QATAR-DIVERSIFICATION.xml&from
=business
Dropping likes flies - another one goes DOWN:
http://bakersfieldbubble.blogspot.com
Holy cow they are dropping fast!
dont forget to click on ads if you see something uyou like. Good job as always Ben.
Hmmm…Looks like there were some consequences to that “rising median” of the past year.
Seattle is exploding too. Fall ‘05 there were 40 or so foreclosures in 98105. Last week there were 295 foreclosures in same zip. I was shocked.
You’re right TXchk, this thread is so long I did the dinner dishes while it was loading.
Is Argent Mortgage Next:
http://bakersfieldbubble.blogspot.com
Crispy………It’s you and your imploding lenders that are making these threads so long………..LOL
crispy,
you rock buddy! Seems like some of the posters here are full time bloggers. I couln’t imagine how many times you hit refresh button
BTW, I check your blog regularly along with HBB. Nice job!
boy you said it all speculate speculate and be rich
I stayed up so late last weekend watching television, I actually saw 2 white guys boxing
You must be in the United Kingdom…. LMAO
Nah, it’s called hockey. It’s so rarely on TV in the states, that we sometimes forget what it looks like.
I think the next tap on the brakes is that Fannie and Freddie were given until February to stop buying exotic mortgages. After that, I am not sure what is the next big move. Maybe mass layoffs in the HBs. The Lennar thing mentioned above (sticking it to the subs) could be big as a precedent. I’d like to see a big pension fund like CalPERS start beating the corporate governance drum on the HBs and MBS generators, but I think they are a year or two away.
Anybody have thoughts on the next big steps?
I have nothing to add, just want to do my bit to jack up the thread count.
I’m kicking back and enjoying my popcorn (Orville Schadenfreude), now that the previews have finished and the main feature has started to play.
391
392
393
394
395
396
397
398
399
Comment #400 tx_chick was right.
Cheater.
Go to sleep, don’t you people have a life?
Economist Leslie Appleton-Young. ‘The price picture across the state continues to be mixed. Increases were strongest in urban areas that experienced relatively less new home building or strong economic growth in recent years. Prices were weakest where there has been robust home building activity or in those areas of the state that were popular with second-home buyers.’”
Excessive regulation constrained the supply and caused price increases. Bay area has tons of empty offices. commercial RE lease rates dropped from $8+ in bubble days to $2 or less in some cases. but regulation prevented house supply to comeup and prices rose even as rents falls and salaries stagnated. 1% interest rate courtsey easy Al led forced people to borrow and and money flew to real assets as dollar lost 1/2 its value. Dumb asian central bankers still hold treasuries yielding 4.5% when dollar is loosing its value at a faster rate. Transfer of wealth from savers and wage earners to borrowers and speculators. similar to germany in 20s which some say led to Hitler’s coming to power as people got frustrated with inflation and falling mark.
Yeah, I’ll pile on too. Did want to note that embattled local realtor Dominion Homes has a ’space for lease’ sign on the lawn next to its building here in Dublin, Ohio. The building’s barely 5-6 years old, and I believe they’re the only tenant. Will get a pic for the photo page if I can.
An old college friend of mine is a mortgage broker. When I mentioned to him the increase in foreclosure activity, he told me that all that means is that this is now a buyers market. He says I need to seriously consider buying NOW before prices start climbing again in the spring.
I didn’t want to get into it with him so I said I’d think about it. LOL