Ripple Leaves “Staggering Losses” In California
The Union reports from California. “Grass Valley’s median home price fell to $350,000 in December, down 20 percent from $439,000 a year earlier. The local market is in a normal downward side of the latest upward cycle, said Skip Lusk, executive director of the Nevada County Board of Realtors.”
“‘The bubble doesn’t burst,’ Lusk said. ‘It just kind of deflates gradually.’”
“Medians in neighboring counties are dropping more steeply. The Placer County median dropped nearly 16 percent to $430,000 from $510,250 the year before. Sacramento County’s median dropped 9 percent to $352,168 from $387,000 a year before, DataQuick reported.”
“‘It’s my opinion that, probably, our median price is not going to go down significantly,’ said Joan Lehman, broker in Grass Valley. ‘Our area is different from other areas down there. They have so many new homes, and when they don’t sell, builders give all kinds of incentives.’”
From CBS 5. “The ripple from a slow housing market consumes a different victim almost daily. In the Belavida subdivision in Elk Grove, brand new homes sit for months. Desperate to avoid still more losses, home builder Standard Pacific sent upgraded model homes to auction last Saturday with a bargain price tage.”
“‘These homes are priced well below anything in Elk Grove,’ said Keith McLane of West Coast Home Auctions. ‘The seller is looking to sell 6-homes very quickly.’”
“They sold alright: a 4 bedroom home went for $440,000, a good $150,000 less than it sold for 18 months ago.”
“Manuel Dizon and his neighbors are now worried about their property values. ‘It hurts because if you bought it for 580 (thousand dollars); what are you going to do in 2-years?,’ Dizon said. ‘If you have a 2-year fixed on your house and you to refinance your house and you don’t have value in the house.’”
“With so many homes on the market, it’s almost impossible to sell your way out of a crisis like that. Consequently a record number of homeowners are going into foreclosure.”
“Appraiser Amy Perkins says that ripple has left major banks and mortgage lenders with staggering losses. ‘There weren’t any short sales, very few for the last 3 years in a row,’ Perkins said. ‘And within a 20 mile radius I’ve been seeing 300 or more.’”
The Contra Costa Times. “The East Bay’s employment market remains the Bay Area’s star performer, but the relentless erosion of the housing market could tarnish the region’s economic luster and darken the job outlook, a new report warns.”
“Economist Ryan Ratcliff of the Anderson Forecast suggested real estate will impede the East Bay economy this year. ‘We’ve only seen the beginning of the East Bay real estate slowdown,’ Ratcliff wrote in his report.”
“‘Like many other regions in California, real estate has gone from pulling the economy forward to actually holding it back, it’s just taken longer to happen in the East Bay than in most other parts of the state,’ Ratcliff wrote in his study.”
“‘Since Contra Costa County has been the center of gravity for the building boom, this suggests that we’ve only seen the beginning of the East Bay real estate slowdown,’ Ratcliff warned.”
“Still, some economists such as Sean Snaith, a consultant with the Stockton-based Business Forecasting Center at University of the Pacific, say the fallout from the housing slump, as well as the slump’s extent, has been overplayed by economists such as those with the Anderson Forecast.”
“‘It was not a housing bubble, but a housing soufflé,’ Snaith said. ‘If some of the key ingredients in the soufflé were missing, it would go flat. But it was not a bubble.’”
The Press Democrat. “By next year, the Third Street Cinema theaters in the heart of downtown Santa Rosa may give way to a 14-story condominium called the Comstock. Sales prices for the 116 units will run from the ‘high 300s to $1 million for some of the penthouse suites,’ said Mike Marovich, a spokesman for West Bay Builders.”
“Marovich said the Comstock will house about 200 people in one- to three-bedroom units ranging from 600 to 2,000 square feet. He said there is trepidation about spending upward of $60 million in a city with an untested high-rise market.”
“‘Our gut and intuition, however, tells us there is a there, there,’ Marovich said.”
“California’s housing slump resulted in part from conflicting expectations of buyers holding out for better deals and sellers still seeking a premium for their homes, a state Realtors group concluded.”
“Association President Colleen Badagliacco said the role of real estate agents during that period was to try to educate sellers that the market had changed. But it took from two to six months for that message to sink in.”
“‘They remember that their neighbor sold their house, just to pick a number, for $800,000 four months ago,’ Badagliacco said. ‘In their mind then, the house is worth $800,000. The agent has to be the voice of reason.’”
“‘The bubble doesn’t burst,’ Lusk said. ‘It just kind of deflates gradually.’”
Gradually and continually. That’s why a soft landing is on the way — in maybe five years or so.
Funny. Acknowledged existence of a bubble. A slip though — No reference to a balloon this time. The NAR will be reviewing his credentials and perhaps take action.
REPEAT AFTER DL - THERE ARE NO BUBBLES IN RE!!!
This is the big one!!! Finally some reality is beginning to prevail. Look for rapid acceleration of reality acceptance. I feel like we as a group have prevailed and actually gained a victory of sorts over David Lereah and the NAR and all of the craziness that promoted the bubble. Congratulations fellow bloggers. Mission Accomplished!!!
Not so fast…Gary Watts is still on the loose and spewing/foaming….
“spewing/foaming….”
fantasizing/halucinating
He is just one of a few frothy spouts around the country.
We have something they could have had, but foolishly decided to destroy: CREDIBILITY.
Congratulations fellow bloggers. Mission Accomplished!!!
Not so fast. Remember the last Bozo who stood on an aircraft carrier deck in 2003 to announce “Mission Accomplished!”? The tide has turned decisively against the RE shills, but sanity is just now starting to impose itself, and we’re still a long way from the bottom.
The carrier had accomplished it’s mission. That bozo had nothing to do with the banner.
God I can’t stand the war but I’m tired of misinformation too.
That and “Al Gore invented the internet” too.
And you know what the carrier’s mission was?? Please inform me, must have missed that in the Bozo’s acceptance speach.
It had a six month mission to the gulf and was returning to the US. For the guys on the ship their mission was indeed accomplished.
There is enough to bag on without discrediting yourself by inventing things.
I guess we will see what happens with the resale inventory this season. If it is anthing like last year in the Sacramente region, watch out below.
“Still, some economists such as Sean Snaith, a consultant with the Stockton-based Business Forecasting Center at University of the Pacific, say the fallout from the housing slump, as well as the slump’s extent, has been overplayed by economists such as those with the Anderson Forecast.”
“‘It was not a housing bubble, but a housing soufflé,’ Snaith said. ‘If some of the key ingredients in the soufflé were missing, it would go flat. But it was not a bubble.’”
And here we go with the souffle again. They are killing me.
Sheesh!
BayQT~
University of the Pacific? Now there’s a school where people should be writing on the toilet paper dispensers, “University of the Pacific diplomas, take one.”
Agree (based on personal experience).
“Housing soufflé”! He must have been in a coma for the last 6 months? All his buddies stopped using that term a long time ago.
Why is he even arguing about it ? Everyone else in REIC has moved on and trying to tune their predictions in as little pessimistic voice as possible.
Souffles. Geez, that is one of the lamest terms coined during this BUBBLE. I’ve seen this Sean Snaith guy’s work before, and I’d almost guarantee he is a paid hack for the industry. He should get together with David Lereah and have a love fest. Both are idiots.
Real circle jerk stuff. Unfortunately, they would likely spawn a love child together… not pretty.
Semantics are the last refuge. Down is down, no matter how you say it.
“The local market is in a normal downward side of the latest upward cycle, said Skip Lusk, executive director of the Nevada County Board of Realtors.”
Nope, down is up. Skip said so.
…and what does the souffle do when it’s cooking? It bubbles up! Then as it cools, it deflates (rapidly). Then it’s ready. I love it — fits perfectly (unless you want to re-inflate the souffle; that dog ain’t gonna hunt).
Snaith left UoP to take up a job in Florida, I wonder why he is still commenting on Real Estate in Stockton. Probably hasn’t been able to sell his house yet and is still trying to pump the market. Put a few letters behind someone’s name and all of the sudden everything they say is gospel and the MSM eats it up. Funny thing about that is REALITY does care about experts it just keeps slapping people upside the head like a 50 lb tuna.
does = doesn’t
Need more caffeine
Wow, the University of the Pacific consultant talking trash about Anderson School economists. Hmmm…UCLA versus UP. That is like comparing apples and some fruit that I never heard of.
“Grass Valley’s median home price rose fell to $350,000 in December, down 20 percent from $439,000 a year earlier. The local market is in a normal downward side of the latest upward cycle, said Skip Lusk, executive director of the Nevada County Board of Realtors.”
I missed Mr. Jones’ wry juxtaposition of incompatible factoids. Two more years’ worth of “gradual deflation” at 20% YOY will result in a cumulative loss of 49%.
Where the heck is Grass Valley? Where are any of these places in CA for that matter?
There’s this really great web site. No doubt you probably never heard of it:
Google
You can research all sorts of things there. They even have a “map” section.
That’s funny.
I’ve heard that contrary to poplular SoCal opinion, there is a state of California north of the grapvine that doesn’t include San Fransisco or something like that.
That’s pure propaganda.
North of the grapevine there is Santa-Barbara, “the bay area”, and a little city claiming to be the capitol. That’s it.
Got popcorn?
Neil
“I’ve heard that contrary to poplular SoCal opinion, there is a state of California north of the grapvine that doesn’t include San Fransisco or something like that”
Back in the mid to late 1800’s The northern part of Cal, especially the San Franciscans, derisively called Scal ‘the cow counties’. Scal was settled later than NCal and was for a long time simply an agricultural backwater. Los angeles up to the 1870’s was a wild hick filthy frontier town, complete with daily hangings, saloon brawls, and a ragged population of poor indians and mexicans living in squalid tenements amd hovels along the LA river.
That is why city of LA even today has nasty slum areas which surround the dwtn area. It simply grew up rather late and too quickly to allow for orderly town planning and development. The entire LA greater metro region exibits signs of disorganized nasty urban/suburban sprawl patterns, with nasty decaying inner slum zones intermixed with isolated middle class pockets here and there, which are in turn becoming the new slum zones as the middle class elements take flight further away from LA city areas.
Such former solidly middle class communities as Gardena, Inglewood, Sgate, bell, East SV valley,bellflower, Norwalk,South whittier, East Torrance,North Long Beach,Monterrey park, Alhambra, ect are degenerating, reverse-gentrifying into decaying immigrant-overrun slumburbs.
Oroville…..?
Second largest city in Kali “Back in The Day” has to count for something….
It’s a place that actually has beauty, unlike the neck of the woods you’re living in.
Dirty little secret is that Santa Barbara is west of Los Angeles, north.
OMG, but he said the word “bubble” without saying there isn’t one???? “it’s the big one” a la Sanford and sons…
“‘The bubble doesn’t burst,’ Lusk said. ‘It just kind of deflates gradually.’”
20% in a year is “gradual?” …. bet it doesn’t seem “gradual” to someone who needs to sell….
I mean, “how do you like your “no”….. fast or slow…
If I’m not mistaken, the Titanic went down gradually too and had a nice “soft landing”.
There was some froth in some areas too….
Really? When I watch bubbles pop they do actually pop and then disintegrate. If they hit the ground they eventually burst and dissolve like there was nothing ever there.
oh my… what a coincidence… that is what will happen to the faux price increases for housing for the past 5 years. This bubble will burst as if it had never been there at all… yet the lemmings will have their eyes stuck to the sky waiting for the Great Pumpkin to rain down more bubble.
also… balloons don’t really deflate all nice and easy either. I like the way they fffffppphhhtttttttttttttt all around the room zig zagging… fffppphhhhhttttttttt….. before the rippled piece of rubber flops on the ground completely devoid of life, air, energy.
just like this balloon….
Athena, you made me laugh so loud that I probably startled my over-leveraged neighbors.
“… yet the lemmings will have their eyes stuck to the sky waiting for the Great Pumpkin to rain down more bubble.”
en.wikipedia.org/wiki/Cargo_cult
As brought out here so many times, due to the illiquid nature of housing, as opposed to stocks, housing bubbles do deflate relatively slowly. Doesn’t make it any less a bubble. As far as 20% decline in a year goes, that’s about as bubblicious as it gets.
When is 20% in a year not gradual?
Q. “When is 20% in a year not gradual?”
A. When it’s YOUR 20%.
Holy Crap,
Your market is down 20% YOY and you call that a gradual deflation!! I’d hate to see what a bubble bursting would look like in this guy’s mind. 80% YOY down?
“It’s just a flesh wound”
Hahahaha. “It’s just a flesh wound.” hahahaha. That’s perfect!
Down 20%.. no its not bursting…. wait a while for the 2nd tide to wash away another 20-30% on top of that… I will wait because I can…
Just like a Tsunami, the 2nd wave will take out more than the first.
And just like a tsunami, its the greedy and stupid who will be smashed and washed out to sea.
I’ll wait.
Got popcorn?
Neil
It’s a worst-last storm — first the western sky turns green and everything gets very still. Next come the wind gusts, the deluge of rain so heavy that you cannot see across your front yard and the pounding of hail on your roof. Finally it all calms down for a few moments, until the freight-train roar of a twister bears down on your home…
http://www.ipgbook.com/showbook.cfm?bookid=0968153747
cool a realwhore telling you to rent for the next 2-3 years- finally some honest advice
Do you really think it will last that long? I mean all it’s going to take is for the MSM to hear a rumor that someone paid one dollar more than they should have and away we go again. The MSM gets fired up about one thing then every single network sends their guy in to get the story cause they’re going to miss it. Look at the Lacy and Scott Peterson story. They were no better or worse than anyone else that dies every single day but yet the networks camped out on the street. My point is there are too many sheeple. We as a society think what we watch, read, or hear is the gospel. Humankind is quite gullible, don’t believe me, just watch the crowd at a WWF event. Somehow someway I’m afraid our policy makers will make this all work out with little fallout. In my opinion the housing should have stopped it’s runaway gains in 2002 and mellowed with 5 to 8 percent gains therafter. I can’t help but believe this whole thing is going to end quite badly for USofA. I suffered through the 90’s downturn and to compare the two would be the difference between getting shot by a Daisy BB gun or a .44.
In my opinion the housing should have stopped it’s runaway gains in 2002 and mellowed with 5 to 8 percent gains therafter.
———————-
I think 2001 prices were already too high and set to go **down** from there — at least in So Cal.
Oh, it will be years IMHO. Not until the last of the teaser rate ARMs that have been repossed by the banks are resold at market will we have seen bottom. Just as a whiff of rum will make the hung over guy want to vomit, there will be a large number of people who never want to think about buying real esate for a long time. The people who bought at the top will be unable and unwilling to buy when the market hits bottom. This will depress demand for on the order of a decade IMHO.
posted ” “‘The bubble doesn’t burst,’ Lusk said. ‘It just kind of deflates gradually.’”
Just like farts…. and they stink up the place! Usually I would stop at that but…. I know I am simple, but for God’s sake who would have made that statement?
From Orange County
‘ Home prices look to have started the year in a worse-than-traditional slump, DataQuick reports.’
By how much are they going to go up this year, according to Gary Watts? More than zero, right?
Yep, I think he called for 6-8% appreciation for OC in 2007. Of course, 15% was in the bag last year, what with the inverted year and all that. His reports are such a joke - they look like they were written by C- student in high school, and they are about as accurate as a monkey throwing darts.
I think someone needs to tie Lasner down and go “Jack Bauer” on him to find out what he really is - bull or bear?
and give ‘em some of that “truth serum”….he he
Don’t worry Mr. Bauer’s gonna treat you like your his own brother….
Lansner is a bear, he admitted it here in March 2006. Check the archives.
So far he is the only journalist that has openly been on the HBB.
That counts for something even though he dodged most of the interesting questions.
At this point his job is to foment disagreement to drive newspaper subscriptions and web page views.
That is exactly what he is doing on his blog.
posted From Orange County
Home prices look to have started the year in a worse-than-traditional slump, DataQuick reports.’
You really should spend more time reading Gary Watts.
“Association President Colleen Badagliacco said the role of real estate agents during that period was to try to educate sellers that the market had changed. But it took from two to six months for that message to sink in.”
Ummmm, Yeah, sure!
” But it took from two to six months for that message to sink in.”
Yes, thankfully ‘that message’ has gained some traction and has now ’sunk in’…..it’s all behind now and order has been restored to the market. Colleen is an idiot.
The role of the real estate agent is always to collect a commission. That seems to be the only role of most real estate agents. (allowing that there still may be a few who actually have brains and apply them to the best interest of their client)
I’m all for the starve the agents, feed the lawyers plan.
Get yourself a real estate attorney when you buy or sell. Cheaper, smarter. good gawd… did I just say that out loud?
I’ve never trusted the “education” I’ve gotten from commissioned salespeople. I prefer to educate myself.
BTW, there’s this really great self-education service called the public library. I highly recommend it.
There’s another great self education program called the “pull-your-head-outta-your-ass-and-think-for-yourself” method. I think more Americans should employ it.
“Pop” goes the weasel!
Excellent choice! Personally, I’m also partial to the “Don’t-just-listen-to-people-who-tell-you-what-you-want-to-hear” program.
“Manuel Dizon and his neighbors are now worried about their property values. ‘It hurts because if you bought it for 580 (thousand dollars); what are you going to do in 2-years?,’ Dizon said. ‘If you have a 2-year fixed on your house and you to refinance your house and you don’t have value in the house.’”
This guy still doesn’t realize what he’s done. He’s not in trouble because he overpaid, he’s in trouble because he borrowed too much.
I’ve overpaid on a couple of houses too, cost me a lot of money, but I was able to take the hit on resale and I like big yards. I’m willing to waste some money to get what I want and not have to haggle excessively. Money is a means not and end.
Your statement makes no sense to me.
He paid too much cause of a frenzied speculative market and that IS a problem. The value is now lower and he can neither refi or sell the home. If he had a lower cost basis he could still do either.
I assume he means that, if he had the money, then overpaying is not a problem. He has just lost capital. The problem is now that he is upside down — he owes more than he can hope to repay. It is unclear to me which is worse. Certainly before the new bankruptcy laws it was probably easier to play with money that wasn’t yours.
Sure. If money is no object, then none of what we’re discussing is a problem.
“I’m willing to waste some money to get what I want and not have to haggle excessively.”
Wasn’t that Ben Franklin’s motto?
I like to buy high, sell low and NEVER negotiate the price. It’s the patrician thing to do.
So you’ve never bought a car and sold for less than you paid? What’s the big deal with houses? If you don’t clear a profit on every transaction you’re a loser? I didn’t say I don’t negotiate, but I don’t haggle every last detail either, it’s not worth it to me.
Buy low, sell high - sorry I’m not playing this game for money. If I can afford it I’ll buy, if I can’t I’ll rent or move to where I can.
Don’t count on the bust playing out just right for you, there are a lot of folks in power who have a vested interest in the outcome. Gold would have been a great investment in 1932 except for the fact it was outlawed in 1933. Having a lot of savings didn’t pay off in Argentina, they froze the accounts and devalued the currency 75%. Sometimes life just sucks, so why not enjoy it now? I’m not saying to be stupid, just don’t be obsessed.
No hard feelings. As those serving in Iraq like to say, I choose to “embrace the suck”.
http://www.embracethesuck.com/
My interests are being served overseas by a group of “Killas” who are embracing the suck. At least I know where my tax money went. I think I’ll stick with obsessed. None of this needed to happen, war and bubble both.
Ok ok, I meant no offense. Obsessed it is.
http://tinyurl.com/2oxjz9
posted by imploder : I like to buy high, sell low and NEVER negotiate the price.
That sounds rational. I see you are one of the type investors…. you come from the “by low, sell high” …. you must have gone to Harvard or Yale…. poor me I drove around with a crazy man who takled in parables to get my education…. but not a half bad one!
The idiot is in trouble because of the “two year fixed.”
His loan (fixed for 2 years) is going to readjust and he planned on refinancing.
‘No problem, you’ll just refinance before the loan readjusts. Your ‘home’ will be worth much more and you can cash out at the same time. Sign right here moron..er Manuel.’
But he can’t refinance now - the value of the house has dropped.
Oopsie!
Two years ago this yahoo should have been able to get a rippin’ 30yrfxd rate. Why the 2/28 ARM? He couldn’t afford the house, that’s why.
“He couldn’t afford the house, that’s why.”
- This is so true. The larger percentage of sales will one day be attributed to these folks who went ‘all in’ on the gamble of the refinance option in one or two years.
So true. It was all fueled by greed, and even the dopes that didn’t know exactly what they were doing, knew why. They knew to risk as much as they could leverage because on the way up leverage does favors for you, overtime. Their view of the unlikely downturn was… an unquantified acceptable risk.
They get what they deserve for being stupid and greedy.
And the bank is going to take it back soon. He can’t sell it (has no money to bring to closing) and can’t refi it (LTV too high and he has no money to bring that down). Leverage is a bitch on the way down.
The only one worse off than the FB is the FL. REOs will follow the HB’s all the way to the bottom. Look at the subprimes the past two days. NEW went from $30 to $18. FED dropped $8. LEND dropped 15%.
The only people more stupid than the FB’s are the investors in these subprimes. What did they think would happen to these companies that keep lending 100% LTV to borrowers with credit scores under 560?
“Two years ago this yahoo should have been able to get a rippin’ 30yrfxd rate.”
You are 100% correct….
I a world of Greed and Stupidity it is no wonder we have idiots blowing tons of money and the wealthy prevail by all of this stupidity. If we took all of the wealth in the world and divided it among all of the people it would not be long before we had a division of wealth and poverty all over again as KNOWLEDGE will win out every time in the redistribution of assets. You cannot legislate stupidity out of society as the sheople march on to their ultimate position in life. That is the way it will always be. EDUCATE your self about what you want in life or be a slave to it.
I have little simpathy for those who make decissions that bite them in the ASS!!!!
This man who paid $580,000 in a neighborhood where prices of new models are now selling for more than $150,000 less should have done the math about the employment and wage picture. Did wage increases in his area justify him paying $580,000 for a house in some far off foothill area away from Sacramento? Does Grass Valley have more appeal than, say, foothill towns that are situated at perhaps 1,000 feet higher up (above the fog and above the smog and maybe slightly less hot summers). If the answer is “yes” to both questions he should be thinking he made the right move. If the answer is undecided or “no” then it was his foolish mistake and he should not be bailed out for the negative consequences of his obvious greed.
Booms generally produce busts - its a simple rule of logic
Newton’s Third law of Real Estate can pack a real punch
Gwynster, stop that. You’re making me laugh. And that scares the neighbors. Especially the over-leveraged ones.
posted “Newton’s Third law of Real Estate can pack a real punch”
It can pack a pooper too!
posted ” Booms generally produce busts - its a simple rule of logic ”
Harry I am going to write that down. I think you just saved me 80,000 dollard at Harvard.
The Union reports from California. “Grass Valley’s median home price rose fell to $350,000 in December, down 20 percent from $439,000 a year earlier. The local market is in a normal downward side of the latest upward cycle, said Skip Lusk, executive director of the Nevada County Board of Realtors.”
“‘The bubble doesn’t burst,’ Lusk said. ‘It just kind of deflates gradually.’”
“Medians in neighboring counties are dropping more steeply. The Placer County median dropped nearly 16 percent to $430,000 from $510,250 the year before. Sacramento County’s median dropped 9 percent to $352,168 from $387,000 a year before, DataQuick reported.”
“‘It’s my opinion that, probably, our median price is not going to go down significantly,’ said Joan Lehman, broker in Grass Valley. ‘Our area is different from other areas down there. They have so many new homes, and when they don’t sell, builders give all kinds of incentives.’”
Joan, do the math. The median just dropped 20%, it has already dropped. Is she referring to future drops? I think there are more drops ahead. What kind of math is she doing?
“The local market is in a normal downward side of the latest upward cycle”.
Huh?
Perhaps a better question, what the hell are they smoking in Grass Valley?
“The local market is in a normal downward side of the latest upward cycle”.
Huh?
Repeat it six times quickly and it will make perfect sense.
You just don’t know The Method.
Learn The Method, please.
Another broker claiming their area is different/special/unique, and will not be decimated. Grass Valley? You have got to be kidding me lady, that is pretty much nowhere. You are going to be pounded deep and hard.
“You are going to be pounded deep and hard.”
I’ll have to try this one as an opening line sometime.
Where is auger-inn when you need him?
I’m still reading but only have a few minutes each day (Skiing in Purgatory, CO this week) so not doing much “pounding” commentary. Nice to be missed though!
change that “a” to an “e” and this sentence makes more sense.
Think “sweeping the driveway at 3 AM.”
–Shannon
It is about TIME that the east bay’s impending implosion is described, forecast, and clearly in process. I can’t wait–I live there (usually) and have been waiting to buy. I’ve been delaying the purchase, with friends and family growing more and more concerned that I will never buy. Now, with what is happening, I actually might decide to NOT buy. But, now, at least there will be affordable rental and purchase options, just as I expected and all of you predicted. It’s about time!
Pass the popcorn (and butter, too)!
East bayer here as well. I think you are wise to continue waiting and/or not buy all together. As I’m sure you know, our region has been massively propped up by all the home building. BART stations and billboards all plastered with homebuilder ads, title and mortgage offices in every strip center, as well as granite and marble manufacturers, not to mention it seems like every other car on the freeway seems to be a contractor or Hummer. People who bought here in late ‘05 are underwater and I think it will get MUCH worse. In the end it is for the best that this happens. You bring the popcorn and I’ll bring the beer!
Yikes!!!
I used to live in the SF Bay Area; and I don’t remember seening those type of ads at BART stations. Well, we left in 1998 could not stand the fact that our income could cover everything (even though having a very high income).
All I can say is that I am very glad that we left, now we can travel a lot, have money for everything our kids wants, etc…
‘It was not a housing bubble, but a housing soufflé,’ Snaith said.
Free upgrade of meaningless metaphor.
Snaith is a good dumbass foot soldier, following the NAR talking points word by word. The NAR needs mindless dolts to regurgitate their drivel. It helps reinforce the image of the bozo stooge in yellow & brown Century21 suit, the same idiot composing contracts for $1M+ sh!tholes…
and the oven door was just slammed;-)
All right, people, that’s ENOUGH. I just had to close my front door because you keep making me laugh. Loudly. And that could scare my over-leveraged neighbors.
Where’s the beef?
Souffle = bubble. It’s from the Latin word meaning, “blow up”.
Maybe he’d prefer we call it the Housing Blow Up?
What does a blow up leave?
A Crater!
“Grass Valley’s median home price rose fell to $350,000 in December, down 20 percent”
That is a conditioned response. They’re trained to type “rose” after “home price”. Reminds me of that Russian guy with some dogs and a bell.
That’s a just a minor typo from copying the article and not in the original article.
Pavlov.
Now, is it possible to get an RE agent to drool?
“Reminds me of that Russian guy with some dogs and a bell.”
LOL. Haven’t seen that analogy before, but it sure is appropriate!
You mean “Popov’s Dog” (damn this conditioning… is it 5:00 yet?)
No, Pavlov, it is NOT 5:00 yet…
But it’s always after 5:00 somewhere in the world…
I vaguely recall that we used that theory in the Navy…
–Shannon
“Manuel Dizon and his neighbors are now worried about their property values. ‘It hurts because if you bought it for 580 (thousand dollars); what are you going to do in 2-years?,’ Dizon said. ‘If you have a 2-year fixed on your house and you to refinance your house and you don’t have value in the house.’”
Well Manuel buddy, you are screwed! Sounds like you had already planned to REFI and the shit is hitting the fan, sucks having a 2 year fixed ay. May as well plan on leaving the keys on the kitchens granite counter top and hit the road. Oh and don’t bother to lock up, some squaters will be in shortly.
‘If you have a 2-year fixed on your house and you to refinance your house and you don’t have value in the house.’
Ah, so it if doesn’t adjust for two years, it’s a “fixed?” When do adjustables adjust, every week?
I got a 15 year adjustable mortgage when I bought my house. After 15 years, the payment adjusted to zero.
Yeah, see when you start to question these brainstems about what kind of loan they have, they will answer that it’s fixed.
That IS how the loan brokers sold them.
You want a fixed at this low rate? No problem! …..
Now, do you want a 1yr, 2yr, or 3yr “fixed”.
This is exactly what the builders did in the early 1990’s. I still remember the same kind of local news reports in LA. Interviews with recent purchasers in Antelope Valley. Builders suddenly dropped prices….
These kinda stories were the early warnings of what was sweeping into the San Fernando Valley and LA proper. Strangely familiar……
Mr. Dizon is effed six ways from Sunday! If he thinks he is hurting now, wait until that ADJUSTABLE loan starts arriving in the mail. Manuel should start using his brain more often. Sounds like the typical bubble buyer: little to zero skin in the game, banking on unrealistic appreciation to support his deserved lifestyle. I say reap the whirlwind a$$ hat!
more like “undeserved” lifestyle
What would be interesting is to see what his loan adjusts to, exactly. I’ve read a number of these recent mortgage documents lately - ARMs specifically.
Most will adjust (these days, upwards) by max 2% per year, which seems to be the standard. Some go faster than that, hitting the FB with an increase every 6 months.
Many will have a reasonable margin above LIBOR (or a similar index), something like 2% or 2.5%. With LIBOR at 5.35% or so, these will be floating to 7.5% or so. Painful, but not a disaster unless Manuel overbought based on his income.
But some of these ARMs have an insane margin of 5% or more above LIBOR! How about floating to 10.5% my friend Manuel? Sounds very painful. You should have looked at the documents you were signing.
Yes –and it’s not just the sub-prime high-margin borrowers that are going to get “reset shock”. Most option-ARMs sold today don’t even charge you FULL interest during the 1-10 year “fixed” period Most of them allow the FB to choose the 1-2% “teaser”, while the rest negatively amortizes on the lender’s balance sheets.
Forget about what happens when the loan payments actually start to amortize (require repayment of principal). Imagine going from 1% to 7.5% overnight? Oh, and regardless of whatever pick-a-payment “fixed” period their loan has, once the FB hits the maxmimum ceiling allowed for negative equity (typically 115-125%), they MUST begin making “real” full-interest amortizing payments. You can have a 10-year fixed/teaser lock period on your option-ARM, but if you hit the magiv LTV number well before that, your loan resets. Game over.
Harm: do you (or others) know if the value (for determining when the LTV hits its ceiling) is “fixed” at the value at the time the loan was taken out or can the lender appraise the property at any time to see if the value has gone down?
From the limited loan docs that I have seen lately from FB clients (CPA firm), I think most loan docs state it is 115% of the initial loan balance.
WaitingInOC,
That is an excellent question. My own limited non-insider understanding is, LTV cost basis is probably fixed to the principal borrowed to buy the house, regardless of fluctuating appraised value. However, I’m not certain. Perhaps a blog insider can enlighten us?
I can beat that:
Initial interest rate of 8.99% for two years (I guess that would be a “two year fixed”).
After that, adjusts monthly by adding 7.625% to LIBOR.
But, no worries - the interest rate will never be above 15.49% (or less than 8.99%).
I have to say I appreciate these moments of humor on a Friday provided by the good folks in RE.
Yes, doesn’t it seem that the best material comes out on Fridays…
1) bubbles that aren’t bubbles but really flat souffles;
2) downward slopes of upward cycles that contribute to the GENTLE INCREASE IN APPRECIATION
3) Fixed mortgages that adjust after only 2 years…
Could you make this stuff up?
‘It hurts because if you bought it for 580 (thousand dollars); what are you going to do in 2-years?,’ Dizon said. ‘If you have a 2-year fixed on your house and you to refinance your house and you don’t have value in the house.’”
/rant on
What the H3LL are these people missing? Haven’t they heard of “risk exposure”? Who takes a 580K loan out that is fixed for 2 yrs, and then it floats? What an astronomical nimwit. He (and his wife, spouse or whatever) should have done some simply old economic household risk analysis…..ie: what happens in 2 years if rates go up and real estate goes flat? Hmm…..can we afford the new payment? How much will we need to earn to cover our expenses…hmmmm….gee that sure is a big number…..maybe we shouldn’t buy this house for almost 600k.
Good god these people are stupid. It doesn’t “hurt” because in 2 years his loan adjusts, it “hurts” because he made a STUPID decision.
/rant off
No, he made a greedy decision.
No, he made a stupid greedy decision based on the ABSOLUTE FACT-BASED RULE OF Residential RE - That prices always go up, forever. Remove that inoput from the decision and it goes KAPUT.
But they get to live in California and that makes it all worth it. Even if you commit suicide. As long as it is in California everyone else the country will be envious because you did it in California!
This morning in my favorite chair I sat and read the quoted article in the CC Times and chuckled. It was the same chuckle I chuckled when I read the median price of homes in Pleasanton (Alameda County) CA dropped 8.1% from December 05 to December 06. I’m thinking those folks who bought their little 1200 sqft house in Valley Trails on the drained swamp ground are finally realizing maybe $750,000 was a little too much to pay…..ahhhhhh aint that too bad!
Ray: No sympathy from me for the dumb a$$es who overpaid in Pleasanton. That is one community that needs a dose of reality. They are more than happy to accomodate businesses, but they fight every new housing proposal tooth and nail. They think they need to protect their “special” community and more importantly, their home values. Well guess what Pleasanton? You are going to find out you’re not that special after all. Suck on it.
“Suck on it.”
And yet another get opener. Who are you, James Bond or something? LOL
James Bond? No, just someone getting fed up with all these extremely idiotic quotes in the articles. It just reminds me of why I generally dislike to socialize with so much of the general population. They are either liars or dunces.
BTW, loved your Google reply above. I love sarcasm.
The shorthand reply for imploder’s post is.
GFE
Google F’ing Exists.
gentlemen, my credo:
imploder™…”I’m here to help”
Yes, the city of Pleasanton does need to get a reality check. One is on the way. One of our fine citizens along with a housing advocacy group has filed a lawsuit against Pleasanton seeking to:
1. Over-turn the voter approved housing cap.
2. Force the city to live up to its regional obligation for moderate priced housing.
3. Stop any further construction of office or commercial space until the city agrees to #2.
I have refererred to Pleasanton in many ways…NIMBYville, the Wonderbread City(a thin brown layer supporting a white center which lacks substance) and a few other things. In my opinion Pleasanton is a city of affluent white people practicing housing discrimination based on price.
Ray: wonder bread is perfect for Pleasanton. I too am closely following the lawsuit, and personally I hope the City finally gets put in their place. When you look up the word NIMBY in the planning dictionary, it says: see Pleasanton CA.
I especially love how the council members want to hold discussions on Iraq war. I doubt even SF does that. Great schools, nice little downtown, good location, but the people (for the most part) are atrociously snooty, ignorant fools. When the big one hits, I look forward to hearing them bitch and moan about how they can’t get emergency services because all the off duty personnel are stuck in their homes over the Altamont Pass. Sorry your house burned to the ground, but we just did not have enough firemen able to respond!
I lived in the valley when the Livermore earthquake hit in 1979 or 80. The Altamont Pass was closed for a period of time because the ground built up to the freeway bridges right at the base of the grade at Greenville Road dropped about 2 feet so the roadway didn’t meet the foot of the bridge. Next time you drive that way look at the asphalt they used to raise the road up to the bridge. Never fixed it beyond that and it is still pretty much the same as it was back then. When either the Hayward or Calavares fault goes the valley will become isolated again. I agree with you 100%. No emergency services because the people will all be stuck in Tracy, Modesto or Patterson.
Pleasanton may become the poster city for the courts and state coming down on a no-growth city and forcing it to change. Couldn’t happen to a more deserving group of snobby white folks.
Similar situation with me. Renting in Foster City. Waiting to buy in San Mateo/Foster City. 2 reasonable incomes (by IT standards, at least). Kid in school in FC. Hence the desire to stay put in this area.
Been reading this blog for about a year now and holding off taking the plunge.
Any advice from the Gurus in this blog on where SF peninsula is headed? I still see 1500 sq ft SFH listed for 900k+. Frustrating, to say the least!
Median for resale houses is creeping downward in San Mateo county:
12/28 $805K
1/3 $800K
1/10 $800K
1/17 $792.5K
1/24 $787K
1/31 $775K
(those are dates of publication in SJ Mercury, trailing sales by 2-3 weeks)
That’s almost 4% in a month, but I would not bet on that becoming 48% in a year. My saved search on Zip realty ($800K-$1.2M between Sunnyvale and Belmont, 5000+ sq ft lot) shows a steady stream of new listings and sales; no inventory piling up.
http://www.viewfromsiliconvalley.com/id157.html
There MUST be some equity left. I bet they paid at least 30% down.
Why only 30%? I’m confident it was closer to 50%…BWHAHAHAHAH Yeah Right.
Now I’m pissed. Santa Barbara News-Press, February 9, 2007. Business section, page B-6 ” Analyst: Cooling-down housing market to appreciate slowly”.
” THE NEXT COUPLE OF YEARS WE’LL SEE MORE OF A PLATEAU
IN THE MARKET WITH GENTLE INCREASES IN APPRECIATION.
WE’RE ADJUSTING TO THE STEAM COMING OUT OF THE
SOUFFLE” - LESLIE APPLETON-YOUNG, VICE PRESIDENT AND
CHIEF ECONOMIST FOR THE CALIFORNIA ASSOCIATION OF
REALTORS, SPEAKING AT THE MONTECITO COUNTRY CLUB
BEFORE 250 PEOPLE AT AN EVENT HOSTED BY RE/MAX
SANTA BARBARA.
God help me get through the rest of this day.
The only “gentle” “steam coming out” are her statements… which are nothing more than “noxious gas passing”.
I love it… can’t wait until we see real quotes depicting the housing bubble as a great big fart!
When that happens we can start referring to Liareah as Chief Wind in his pants
Way too funny. That one brought tears to my eyes, I laughed out loud.
Speaking of wind in their pants (love that metaphor), I’m finding a lot of that. I was internet shopping for houses and signed in with my email at some real estate web sites — WOW — the vultures formed a tight circle and each are dropping an email a minute! “Now is a wonderful time to buy .. give me a call.” The market is fine — sales take a little longer but there are plenty of them. However, when they spy a buyer with cash their behavior looks is desperate and very hungry. I subscribe to: Behavior is believable … not rhetoric. Say what they will from NAR on down the behavior tells the real tale.
They must have been at some RE pow-wow where they decided to take the souffle out again? I’m cool with that, if you’re not careful when you take a souffle out of the oven, it can drop at least 50%.
By next year, the Third Street Cinema theaters in the heart of downtown Santa Rosa may give way to a 14-story condominium called the Comstock. Sales prices for the 116 units will run from the ‘high 300s to $1 million for some of the penthouse suites,’ said Mike Marovich, a spokesman for West Bay Builders.”
“Marovich said the Comstock will house about 200 people in one- to three-bedroom units ranging from 600 to 2,000 square feet. He said there is trepidation about spending upward of $60 million in a city with an untested high-rise market.”
“‘Our gut and intuition, however, tells us there is a there, there,’ Marovich said.”
Common sense prediction on this project. The project wil be a future BK for the developer and a REO for the bank. Why should people in Santa Rosa want to live in a high rise? This isn’t San Francisco.
I was thinking about this earlier… 116 units from 300k to 1 mil. Let’s say they sell them all at an average of 550k. That’s gross proceeds of 63.8 mil. Minus the 60 mil to build it leaves 3.8 mil, for a whopping 6.3% ROI.
Really? There’s nothing else they can do with that 60 mil that will net them better than 6.3%?
And this assumes they actually build the thing for 60 mil with no overruns.
Add in there some dumbasses waiting to plonk down a deposit and cost of borrowing goes down/ROI increases.
That is not to say, it is a good business venture as timing and other sales pricing assumptions are flawed.
Who knows. maybe it is a scheme afterall to take the money and run.
“‘Our gut and intuition, however, tells us there is a there, there,’ Marovich said.”
Guts and intuition, rather than prudent fiscal and market analysis. There is a there, there? My gawd, what a stupid comment!
Don’t forget to cross your fingers and toes, Mr. Marovich!
The “there there” comment is a takeoff on Gertrude Stein, who compared Oakland to SF, by saying ‘There is not “there” there.’ in Oakland.
nothing to worry about in Santa Rosa…once those new Alaska nonstops from LA and Seattle start flying into Santa Rosa airport in the spring, they’ll bring airport conveyor belts full of new FB’s…..:)
So it’s a nonstop that stops??
“Grass Valley’s median home price rose fell to $350,000 in December, down 20 percent from $439,000 a year earlier. The local market is in a normal downward side of the latest upward cycle, said Skip Lusk, executive director of the Nevada County Board of Realtors.”
Funny, in previous down cycles in RE, wasn’t 20% considered a hard crash? Even as recently as last summer, the “experts” were saying, “Well, prices may drop by 1%, but we’ll never see a crash of 20% or so…..”
So 20% off is now “normal”, eh?
“normal downward side of the latest upward cycle”
Truly when I read comments on the above statement, i thought one of the regulars on the board twitsted the orginal statement.
I’m flabbergasted whatever
I dont know if Lusk does really understand what he said
It’s the sort of statement that makes you more stupid just by reading it.
Aaaahhhh!
My eyes are burning, the stupidity it burns!
20% is a big amount when you have to go out and work for it everyday. But in Goldilock’s New Economy only suckers work and pay with real money because the fake stuff is so much easier to loose.
Getting us to forget (or trivalize) the true value of our labor is the most crucial step on the pathway to making us a society of lifelong wage slaves.
You must not be familiar with the NAR disclaimer:
“All statements provided herein are subject to change, including but not limited to market and pricing conditions, and overall housing outlook”.
“Funny, in previous down cycles in RE, wasn’t 20% considered a hard crash? Even as recently as last summer, the “experts” were saying, “Well, prices may drop by 1%, but we’ll never see a crash of 20% or so…..”
Yes, this is a hard crash. I lost 20% on my house from the period of October 1990 to November 1996. That was a “souffle” (couldn’t resist), but this is certainly a crash. Up to recently I was thinking this current RE bubble could be worse than the one following the 1989 peak. Now I know it is way worse.
“Appraiser Amy Perkins says that ripple has left major banks and mortgage lenders with staggering losses. ‘There weren’t any short sales, very few for the last 3 years in a row,’ Perkins said. ‘And within a 20 mile radius I’ve been seeing 300 or more.’”
The short sales are showing up all over the market now that prices are sinking at least where I live in Fresno, CA .
Badagliacco said:
‘”The agent has to be the voice of reason .’”
Does anybody get pissed off by this statement ? How reasonable was it for the REIC to help put thousands of people into homes they couldn’t afford in recent years based on a notion they could refinance and real estate always goes up ?
No, realtors are not the voice of reason ,if they can sell you a home they will come up with a reason .
Exactly. I won’t be the least bit surprised when I read about RE agents shot or otherwise assaulted over the next couple of years as their lies and manipulation result in serious grief for sub-prime FBs. The sub-prime crowd isn’t known for their finesse or reason any more than a realtor is…
I was just playing with the home affordability calculator…I put 90K as my yearly income and 50K down on the home, 1% property tax and so on. The results said I could afford a 350K home with 50K down OR 400K with 90k down at 6.25% mortgage rate. Think about those whose family income is much less than 90k.
No matter what the news is or what any body says… if the banks stick to traditinal lending standards, that alone is enough to drag the prices waaaaaaaaaaay down.
Go play with the calculator… its interesting…
Bring it on baby.. let it crash..
Happy renter
Jenny: stop it, please. Talking like that gets me excited!
Seriously though, you hit the nail on the head. Price to incomes is way out of line, and it is unsustainable. To think otherwise is foolish. Bring it on? Let it crash? Hell yeah!
I think the government will step in with some crazed plan to save the banks - disguised as a plan to save the poor and minorities from foreclosure. I don’t know if it will help though. I hope not.
For you subprime lender watchers. I’m not sure it was posted here today but it’s a good read.
http://www.latimes.com/business/la-fi-subprime9feb09,0,2419088.story
Great story. That is awfully bearish for the LA Times.
Yes, thanks. Someone mentioned this article to me but mistakenly thought it was in todays paper. I couldn’t find it.
First time poster long time reader. The ABX indices gapped lower again today. The banks are finally seeing some selling pressure and the subs spiral continues…Next week COULD be very interesting if all of the risk free bets the past several years get re-priced. I would not be surprised if the NEW and NFI types collapse next week, nor would I be surprised if they miraculously recover as if the coast is now clear.
Inevitably they will fall to intrinsic value, and that is most probably zero.
Are you in the business?
Thanks
I am not in the business. I am and have been trying to protect myself from this madness in many different ways. One of which was being fortunate enough to buy Jan 08 puts on the sub primes. I am going to keep them as I think these companies will file bk. I think this MAY be unravelling quickly. The ABX today (like the past month) is very nasty and huge losses and the locations of them will likely come out vey soon. This could be it for the stock market and it is certainly the end of the catalyst for insane housing prices. Free money is gone, massive losses are all that is left.
The ABX-HE-BB- 06-02 derivative settled on a new low:
25 Oct-06 99.90%
29-Dec-06 95.25%
5-Jan-07 93.53%
12-Jan-07 93.41%
19-Jan-07 92.88%
26-Jan-07 90.34%
31-Jan-07 87.98%
9- Feb-07 82.68%
“‘It’s my opinion that, probably, our median price is not going to go down significantly,’ said Joan Lehman, broker in Grass Valley. ‘Our area is different from other areas down there. They have so many new homes”…
So let me get this straight… prices won’t drop BECAUSE there are so many new homes (high inventory)? How does that work?
I think someone needs to tie Lasner down and go “Jack Bauer” on him to find out what he really is - bull or bear?
—————————————————————————–
I have Lansner pegged as a “Closet Bull” - defined as one who dresses and makes noises like a bear but secretly harbors bull like tendencies. Lansner usually shows his true colors right around the time the CAR/NAR put out some cheerleading story or when Gary (”Its in the Bag”) Watts comes out with one of his economic analysis.
I think Lansner tries to stay neutral and stay away from opinion-forming statements as much as possible. So sometimes he seems to be more optimistic.
Lansner seems to contradict Bears in his intrapost “comments” more than Bulls, at least that I’ve observed
Sorry, Lasner is full of it. He generally sides with bulls. And by the way, where is it written in the newspaper publisher’s rulebook that a writer must be “neutral”. I would think he would want to alert people early on about real estate bubbles. But instead, all he ever does is knock the bubble-posters.
People!
Read this.
Lansner is a self-admitted bear. He admitted it here on Ben’s blog in March 2006.
He is the only MSM journalist to openly engage Ben’s bloggers.
Search the archives and read it for yourselves.
His job is to foment disagreement and he does that on his blog.
My point exactly he sides with the Bulls and tries contradict bears. He never takes Bulls to task for their lack of facts
Unintentional irony: I’m listening to a podcast. The current song is “Be Thankful.” Lyrics at:
http://www.oldielyrics.com/lyrics/william_devaughn/be_thankful_for_what_you_got.html
Take away the gangster references, and you have a pretty nice song about being thankful for what you have.
sorry, I’m an “old fart” 47 year old - or at least my 30 something colleagues tell me that. I don’t sanction anything that recognizes gangsters. It only encourages gangsters to think they are cool.
Wait until the walk-a-way/turn in the key/runners start happening.
This is exactly what happened in Houston in the mid 1980’s and may have been an extreme case due to the oil price collapse - however the (no down or little down VA and FHA mortgages) were actually fixed payments
California I believe has the largest concentration of adjustable type loans in the United States, and many of these reset this year - and these people are going to be looking around for an extra 500 to 1000 dollars or more they probably don’t have - to pay that mortgage
Since they usually have nothing into the deal anyways - no doubt many will be running -the quantity partly dependent upon how much they will save by renting another house or an apartment
“what are you going to do in 2-years?,’ Dizon said. ‘If you have a 2-year fixed on your house and you to refinance your house and you don’t have value in the house.’””
You rolls yer dice, and you moves yer mice…but don’t get caught. Mousetrap!
I was just looking through the Real Estate section of the Boston Globe online and noticed that they list for most cities/towns the median income and median property value. So, I looked at Newton which is an affluent small city right next to Boston and it listed the median income as $79,981 and the average property value as $669,688. I know Newton has always been pricey but do these numbers make sense? Another example, is a town 45 minutes south of Boston called Mansfield and the median income is $75,190 and the avg property value is $261,688. In a correctly priced market, what should be the avg property value relative to the median income? 3X? 4X? I’m just curious…
It seems to me the people in Mansfield are more rational (I know that Newton is one of those snooty Boston suburbs, too).
3x has been a “traditional” figure from what I’ve seen.
In California in earlier cycle peaks, I think I read where the figure reached 6x. However, recently, in some Bay Area communities the median home price has been anywhere from 9x to 12x the median household income.
It will be interesting to see where it goes through this downward part of the cycle.
Sorry if this link was already posted, I haven’t had the time yet today to read all the posts and comments:
Risky Mortgage Defaults Spark Bank Concerns
From the article about HSBC: “The bank has also said it’s stopped making and buying loans where borrower income hasn’t been verified, and it’s raised the FICO scores needed for certain loans.”
As Neil noted yesterday, HSBC apparently is out of the no-doc loan business. And, they aren’t buying these loans anymore, either, putting more pressure on other subprimes to find another buyer for their no-doc loans. Thus the noose tightens a little more, leading to more foreclosures.
And just to expand:
This market cannot survive tightening credit. Heck, its at the point where people just cannot afford at today’s prices.
Oh, I bloged about an article on people moving to lower cost areas (MSM), how my department is set to stay in state, and other ramblings.
http://recomments.blogspot.com/
Got popcorn?
Neil
Send it crashing down sooner. I hope these Clownifornians don’t spread around the country and run prices up everywhere. They already ruined their state as far as affordability goes. Don’t do it to the rest of us.
Jerry from Richardson:
I’ve been thinking the same way. At first I thought global warming might be a good thing, in that our oceans would eventually swallow up the properties of all our greedy coastal and island dwellers in California, South Florida, Hawaii, Seattle (transplanted Californians and Bostonians), and the entire Northeastern seaboard. But then it occurred to me that this would only displace the vermin. Then just as you said, they’d spread around the country running prices up everywhere, and go on to ruin all fifty United States.
Oh, F*** you. Most people on this blog are smarter than to make such stupid sweeping generalizations. There are 30 million people in California. We have our share of idiots, but so does Texas, Montana, Kentucky, and Maine.
“the role of real estate agents during that period was to try to educate sellers that the market had changed.”
The next best business license from the state of California is a Haircutter. RE License is at the bottom of the list. The idea that some bozo realtor can teach or express an idea is far fatched. Some even bearly speak english. WTF! CAR is so pathic!
Where the heck was this education when realtors were saying… “buy now or be priced out forever!”
Now they are singing a different tune. What a bunch of pathic land sharks!
The role of real estate agents is to sell houses and facilitate the paperwork and financing arrangements. They only get paid of a deal happens. Of course they’re singing a different tune - it’s the blues.
Don’t bash cosmetologists.
John Doe did a post over at the So Cal Bubble site.
Cosmetologists have more training than RE agents!!!
Oh No… This is very scary news:
“With Bies’ departure, Bush will have a total of two vacancies to fill on the central bank.”
Bies to Leave Fed at End of March
An interesting proposal for downtown LA…
A grand vision for affordable housing
http://tinyurl.com/2w3wel
“tax breaks being sought by Related, which could cost as much as $66 million.”
the grand vision…… making money the good old fashion way
Ripple Leaves “Staggering Losses” In California
Staggering losses for recent buyers, but staggering gains over 5 years none-the-less.
Prices are still up well over 100% probably closer to 150% or more.
“Prices are still up well over 100% probably closer to 150% or more”.
So what’s to worry? After a 50 % drop the prices will still have gained 50-100%.
Rex, here is the math. $100,000 home appreciates 100% to $200,000. Market turns. $200,000 depreciates 50% to $100,000. The point: 100% gain = 50% loss. Fact.
yes, but in this instance I believe the current situation is something along the lines of far greater gains than any recent price drop. In other words we are still looking at solid 100% + gains in just 5 years. In the Centtral California area I believe I am mistaken at 150%. in 2000 you could buy a stucco box for around $100K vs $300K - $400K today. I lament the staggering losses of these idiots who bought thinking prices would just go up 40% a year for ever.
“California’s housing slump resulted in part from conflicting expectations of buyers holding out for better deals and sellers still seeking a premium for their homes, a state Realtors group concluded.”
I believe when the dust settles on the bubble rubble, the evidence will prove this assertion about the standoff between buyers and sellers to have been a fiction. My hunch: Tighter money delivered a knockout punch to the buyers who were willing to take on extraordinarily high risk for the pleasure to temporarily own a McMansion, and sellers never got the memo.
20% YOY decline is NOT a bubble popping?
I had to read that twice….
Any way you cut it we are into big-time denial phase right now.
I’m amazed how long denial lasts. Cest la vie.
Soon we’ll be in Fear and then desperation (ok, Florida is there already and they’ll force the sub-primes to go quickly to panic).
What everyone here is waiting for is capitulation, despondency and depression (about the market condition). Those won’t be happening in 2007 by my estimate. Cest la vie.
I’m stocked.
Got popcorn?
Neil
im getting fat on popcorn….
me too, I’ve got chocolate covered popcorn, kettle corn, butter corn … I’m corned out. Sorry Neil, but I’ll have to hit the concession stand for some milk duds or maybe just water, cool clear water.
“The agent has to be the voice of reason”
Yeah right.
An agent is a commissioned middleman (yeah, yeah and woman too) who has a vested interest in obtaining the highest selling price and will do anything to obtain it. The buyer will almost ALWAYS be at a disadvantage when dealing thru an agent; be it the sellers OR his own.
The agent can be the “voice of reason” only if they’re fookin MUTE.
The voice of reason….. ” The REASON you are signing these papers is so I, the agent, can have that commission.” “The REASON you are going to lose your house is because you can’t afford it.”
Brokers could care less about getting the highest price - their primary goal is to move the property during the exclusive period
Such things as:
1. convincing the owner to sign the exclusive agreement by suggesting the property is worth a fortune
2. once the owner is locked in - convince the owner the property is actually a piece of garbage
3. Make sure the property is sold within 90 days
While the owner might for example lose 100k over the original asking price, the broker will end up with 90% of their commission
If brokers really believed in their recommended original asking prices, they would use step-downs to in effect cut their commissions at geometrically decreasing rates - leaving only enough for the MLS fee in a worst case.
Funny you don’t see that