“The Buyers Dictate What’s Going To Happen” In California
The Orange County Register reports from California. “For the first time in a decade, the median price of an Orange County home failed to post a gain from the year before, falling to $600,000 in January, DataQuick reported. It also was the sixth month-to-month price drop since the median hit a record high of $642,500 in June, and was the lowest median in a year.”
“‘It could have been worse,’ added Jan Brueckner, professor of economics at UC Irvine. ‘We could be San Diego.’”
“Chapman University economist Esmael Adibi believes Orange County is on the verge of seeing negative annual price appreciation. Indeed, prices may already be in negative territory since DataQuick’s figures don’t reflect the concessions homebuilders are offering new home buyers in lieu of cutting their recorded prices.”
“‘The median is not really reflecting what’s going on because of that,’ said Adibi.”
“For example, Irvine home shopper Wally Welter reported seeing a $1 million William Lyon Homes model selling at the former Tustin air base for $160,000 less than it was in August, not counting the $25,000 floor allowance.”
“It took five months and three price reductions to find someone to buy Michael and Elizabeth Ploppert’s Ladera Ranch home after Michael accepted a job transfer to Idaho. The Plopperts even showed their three-bedroom, two-story house on Christmas Eve and New Year’s Eve.”
“‘It wasn’t fun,’ Michael Ploppert, said, noting that more than 300 homes were for sale in Ladera Ranch at the time. Around mid-January, they found a buyer. Escrow was set to close Wednesday. ‘The buyers in the market dictate what’s going to happen,’ he said.”
“Banks sent out more tardy notices in January to Orange County borrowers who are behind on their mortgage payments, marking the sixth consecutive monthly increase in such notices. They mailed 847 notices of default last month, up 23 percent from December and 121 percent from a year ago, DataQuick said today. It was the highest monthly total since March 1999.”
“And more owners lost their home to the bank last month. Banks foreclosed on 153 homes in January, up 26 percent from December and 512 percent from a year ago.”
The Union Tribune. “San Diego County housing prices slid a bit further last month, returning to mid-2004 levels, as buyers pressed for more concessions from builders and discounts from sellers.”
“It was in the new-housing sector that the biggest price fluctuations occurred. Analyst Tim Sullivan, said what’s at work in the new-housing category is a buildup of finished homes sitting empty in subdivisions and condo projects. ‘Inventory (of unsold homes) is the bugaboo everyone is focused on,’ Sullivan said.”
“Sharon Hanley, who publishes a weekly bulletin on local new-home sales, reported that the inventory of unsold homes stood at 5,095 at the end of January, a 36-week supply, with 871 detached and 4,224 attached homes available. At the same time five years ago, the inventory was 2,378 homes.”
The Ventura County Star. “Ventura County’s median price for new and existing homes and condominiums fell 6.5 percent to $565,000 in January, the fifth consecutive month of year-over-year declines. The number of sales countywide also was down, 14.3 percent from January 2006 with only 689 properties changing hands, according to DataQuick.”
“While he still expects Ventura County’s real estate market to be fairly flat this year, economist Mark Schniepp said it could improve if sellers are competitive on price. Much of that, he added, will depend on the way builders price new homes and condominiums.”
“‘A bounce may be coming,’ said Schniepp. ‘But the only way it would be coming is if a lot of the new-home product, which is slated to come on line this year, is priced accordingly by builders. If it’s not, then I don’t think you’ll see the bounce that we are projecting.’”
The Thousand Oaks Acorn. “Home prices up, home prices down. But the experts agree on one thing: Residential real estate isn’t the safe haven it used to be. ‘No major collapse is being forecast,’ economist Mark Schniepp said, but warned, ‘It doesn’t really look like we’ve hit a plateau yet at the bottom.’”
“‘The real estate bubble has effectively burst as sales have collapsed and price appreciation has subsided,’ Schniepp’s forecast said.”
“Howard Roth, chief economist for the California Department of Finance, thinks the housing turnaround will be slow in arriving. ‘The California and national housing sector downturns are not yet over,’ Roth said.”
The Press Enterprise. “Inland homebuyers and sellers continued their standoff of the past several months, with January sales counts dropping by nearly a third from year-ago levels.”
“DataQuick analyst John Karevoll said Southern California continues to have a glut of unsold homes, created in large part by sellers still trying to capitalize on a market peak that has passed. ‘Half are unrealistically priced,’ said Karevoll. ‘The people who are really serious about selling are getting serious about their prices.’”
“Robert Kleinhenz, deputy chief economist for the California Association of Realtors, said Wednesday that the Inland region’s rising unsold inventory is an indication that prices will likely be softening in the coming months. According to association figures, the region had about 4.7 months’ worth of unsold inventory as of July 2006, but that had risen to 9.2 months by December 2006.”
The Sacramento Bee. “Developer John Saca Wednesday said he has defaulted on a $22 million loan he used to buy the downtown land where he broke ground last year for two 53-story condominium and hotel towers.”
“Construction on the prominent site stopped in January, leaving a hole in the ground, studded with piles, a few blocks down from the Capitol. Contractors and professionals on the project have filed about $13 million worth of liens, bringing the project’s total unpaid debts, including the land loan, to about $35 million, Saca said in a prepared statement.”
The Record.net. “One hundred employees of Washington Mutual Bank’s downtown administrative center were notified Tuesday their jobs will be eliminated by the end of the year. he Seattle-based bank’s Stockton center is downtown’s largest private employer, with 703 administrative workers and another 50 working in bank branches throughout Stockton.”
“It’s Washington Mutual’s second 100-person layoff announcement in a year. It wasn’t good news to those who promote the downtown economy. ‘Our goal is to promote economic growth in downtown Stockton. It obviously isn’t pleasing to us,’ said Steve Stevenson, president of the Downtown Stockton Alliance.”
“Fifty of the affected employees work for Washington Mutual subsidiary Long Beach Mortgage. Their back-office, loan-fulfillment jobs will end on a staggered schedule until the office is shut down sometime in April.”
“‘Our decision is a reflection of the weakening overall of the subprime mortgage market,’ corporate spokesman Tim McGarry said.”
“McGarry said another 50 Washington Mutual employees working in custodial operations within the loan servicing department were informed Tuesday their jobs will end this year, with half ceasing July 31 and the remainder at the end of the year.”
“‘By early 2008, we will be consolidating this function in Florence, S.C., on a staggered basis for continuity’s sake,’ McGarry said.”
Sweet! my bud in Santa Barbara was bragging their foreclosures are up like 200% couple weeks ago. We got him beat in thee OC! 512% Go Team!
I read that it was up 360% in SB.
in my math, 200% is like 360%. maybe i could be Fed Chairman someday…
You could EASILY be NAR’s Chief Economist.
You can only be fed chairman if you beleive a 200% increase in forclosures means that we’ve hit bottom.
Yes you could. The M3 is going gangbuster.
NOD’s are up 298% YOY 4th quarter 06-07 in Santa Barbara County. I don’t know about Santa Barbara City proper.
I’m sorry. That’s YOY 4th quarter 05-06.
i am still holding my breath for the $1 trillion dollar subprime readjustment due toward the end of 2007. and the effects of bank tightening. this summer will be interesting.
You have to remember. Even if the subprimes reset. The homeowners still can go a year or two, by renting rooms, using credit cards, run through savings, before finally capitulation into selling their homes. The worst is only going to get really going in 08′ to 09′ lasting through 2010-2015….
“Even if the subprimes reset. The homeowners still can go a year or two, by renting rooms, using credit cards, run through savings, before finally capitulation into selling their homes.”
I don’t agree with this statement. While each situation is unique, I believe it is only a matter of months, after the reset, until most fold. To “run through savings” implies they have some. Most don’t have any, hence their zero down payment (also reflected in the negative savings rate). I do agree with you that 08′-09′ will be worse than 07′.
Let me clarify…..I didn’t mean their own savings but savings of their parents, relatives, children’s eductions fund, 401k…basically anywhere and anyone they can borrow from….
Only if they really want to keep their home which has dropped in value by a couple hundred grand (if youre talking CA) from where they bought. Most wont want to wait it out and will leave the keys at the bank.
some people actually would choose to fold alot faster than you think. simple reason is that they figure out that to drag on would only deplete whatever money they have. because the home price is not appreciating. so to give up the house right away is the best thing to do, instead of trying to pay for another six months to a year, and then losing the house; this would amount to the same end.
“Let me clarify…..I didn’t mean their own savings but savings of their parents, relatives, children’s eductions fund, 401k…basically anywhere and anyone they can borrow from…. ”
I agree, most will do anything they can to try to save the house. Only after all sources are exhausted will they give up the keys when the sherrif comes knocking.
Ahhh… but you’re discounting the emotional aspect of owning their home. Do you honestly think that any of these “real housewives” are going to let go of their beautiful homes without a big fight? They LOVE their homes and what they stand for, depending on where exactly they are. PLus, you’re making the assumption that these people think logically when it comes to finances. Clearly, if they’re in this sitch, they don’t.
Which is a bummer. I’ve got mad amounts of money saved for a DP, but I’m waiting until Christmas ‘08. It’s going to be the best Christmas ever.
Their loss. My gain.
well so much for jingle mail or leavin the keys on the counter
The resets are going to be DEADLY. All of the FBs were counting on certain appreciation to sell out or refi. Selling (OR LEAVING THE PROPERTY) was already factored into the “plan”. Without the appreciation and no prospects of any in the short term (WHICH IS ALL THEY USE FOR PLANNING IF THEY DO ANY AT ALL) they have no incentive at all to fight the lender. Remember, subprime borrowers have that label for a reason. They have defaulted of demonstrated a lack of willingness to honor financial commitments. There are going to be a lot of white flags of surrender waving, this summer…
Why the heck would a subprimer go through all of that to try to keep that house?
It’s not like you are going to hurt their credit score by foreclosure. They had a 560 FICO to begin with.
And don’t forget that these are not motivated or responsible people to begin with. Let’s be honest. The lenders loaned money to the world’s biggest $hitheads and they are going to find out that $hitheads just don’t give a $hit about anything but themselves.
Good luck Countrywide, Wamu, HSBC and the rest of you dip$hit lenders. Enjoy your dip$hit convention. I recommend Vegas, Phoenix or OC for the 2007 convention.
OT, but these are the same dipsh!t lenders who are forcing me to pay for TERRORISM insurance for my slum apartment buildings. Like Al Queada wants to bomb my freaking cockroach infested units in the hood?
dipS**t lender (moi) hoping for the best. Current clientele really no worse than the ones who gave me my first ten years of zero foreclosures. I did force two repo’s in 2003 and lost a bit of money on both. Nobody that bad on the current books. Saving grace was my ability to say “no” to almost everyone for the past 12 months, just had to settle for a certain amt of bond interest. Since I make all my money on interest, not FEES, things are about the same as usual. No rash of prepayments now. Bracing for shakeout, even in low-end mobile home market. Getting ready to re-structure for any client who feels like an FB. Hope there are none.
Well, suzy, if they borrowed 400K and only have to pay a few percent of it back, that seems like coming out ahead to me.
This is the money quote of the bubble, IMO:
Gumbinger said no one should be surprised that subprime customers are defaulting on loans: ‘They got that way for not paying their bills in the first place.’
So lainvestorgirl is a slumlord.
“…my freaking cockroach infested units in the hood?”
Might be in your best interests to clean them up.
“my freaking cockroach infested units”
Wow, that really gives me the shivers, I’m really glad my landlord has an exterminator come over once a month to prevent that…
“Do you honestly think that any of these “real housewives” are going to let go of their beautiful homes without a big fight? They LOVE their homes and what they stand for, depending on where exactly they are.”
So supply and demand would dictate that desperation will drive up the quality of the “live entertainment” in the OC as desperate housewives turn to [fill in blank] for extra cash.
I’m not a slumlord, I just have slum tenants.
With US divorce rates @ 50% in a society which now requires dual incomes for a simple middle-class lifestyle , I just cannot for the life of me understand how the system is surviving.
Ha! We spend ~40-45K a year, if that.
Of course, we live like college students on 20 year old furniture.
You know you would think that people felt some sort of compulsion to try to find a way to meet their obligations for their home loans but this is just not the case these days. Here’s FIVE examples. Three are in the Phoenix area and two in the No. San Diego area: They are all friends/relatives/aquintances of my middle son. Starting with his sister-in-law, his friend and his friend’s brother (the clown mortgage broker who some them these crap loans) in the Phoenix area. Then there are two friends in O’side condos. They have all rec’d only one or two late notices for Dec. and/orJan. None of them beleive they can sell the place fro what they owe. They are ALL planning on not paying anymore mortgage payments and saving this money for moving expenses. They are all aware that they have at least four months, if not six months before they have to move. All but one used HELOC loans in the past two years to buy cars and/or pay off credit cards. Most of them believe came out ahead since they own a car outright and paid off credit cards!! They don’t seem to have ANY guilt over walking out on these loans. They aren’t even taking it on as far as what their credit will look like for next serveral years. Unbelievable!!!!!! Personally I think they don’t even know how stressful this will get in the coming months.
There are so many of these irresponsible types. I heard a story of a guy who remodeled his whole place on credit cards, homesteaded it, then filed BK. With credit card debt erased, he went out and bought a new car and enjoys his home.
For all the huge amount of posts on this blog I can’t believe that there are posters who have not gone through a foreclosure. Let’s hear from them!!!
This is why we need to bring back debtors prison. Only that will make the problem truly go away long-term. I’m not kidding. Force someone who goes bankrupt to work a $40k per year job and only spend $20k per year until loans are paid off.
That sounds great to me but you know what happens once the ACLU gets wind of it.
My loser brother in law, a commercial RE lender no less, went Bk and lost his house about 5 years ago. He and his wife borrowed every last dime of equity from their house, and ended up doing a short sale. I have no idea what they spent all that home equity on, but I know they always had the latest air purifier, big screen TV, computer games for the kids, large exotic fish tanks, etc. Then when my mother in law bailed them out, his wife’s sense of entitlement was unbelievable: she demanded a totally remodelled kitchen, granite counter tops, newly installed hardwood floors, etc., throughout the new house my in-law bought her. Last year, the wifey mentioned they were refinancing again. Sheesh, I really, really hope my in-laws don’t bail them out again…
– posted to show the incredible sense of entitlement, lack of remorse, and unlimited supply of self-gratification of the typical FB, as personified by my loser brother and sister in law.
lainvestorgirl….
A question for you- do you think there is more of this line of thinking in California than there is in the rest of the country?
I’ve lived almost my entire life in the eastern time zone, and I’m wondering if Californians are just plain different than people who live in other parts of the country.
Thanks.
“bankrupt to work a $40k per year job and only spend $20k per year until loans are paid off”
Sounds like the IMF and their austerity program for 3rd world debt. LOL!
It’s hard to say, I don’t spend too much time outside of CA, I admit, so I don’t really know what’s going on elsewhere. Seems to me that people have a sense of entitlement about all sorts of things now, free healthcare being one example.
Here in CA, I do think there are certain “bells and whistles” that, if you don’t have them in your house, you are considered to be, how do you say this, like living in poverty. For example, a tiled kitchen sink, which was perfectly acceptable not too many years ago, now wins you stares of pity when friends and neighbors come over. My sister in law also happens to have a severe case of Munchausen’s Syndrome, and spends money like water on child psychologists, ritalin, “shadows” to follow the kids around their classes, etc. This is not too uncommon either in So. Cal., unfortunately, everyone thinks their kid is autistic these days…
Force someone who goes bankrupt to work a $40k per year job and only spend $20k per year until loans are paid off.
“Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.” - 13th amendment, US Constitution
Borrowing more money than you can repay, except under false pretences, is not a crime. It is the repsonsibility of the lender as much as the borrower to ensure that the latter has the means to repay.
Oh BTW the ACLU did not write the Constitution.
It is the repsonsibility of the lender as much as the borrower to ensure that the latter has the means to repay.
——————————–
Amen!
“everyone thinks their kid is autistic these days…”
Who’s the comedian who has a bit on this? Something like “back in the day, your kid wasn’t autistic, he was just stupid. What happened to kids just being stupid?”
“This is why we need to bring back debtors prison.”
You are ignoring the lender’s responsibility in loaning the money. I would feel much harsher towards borrowers if the lenders were doing any type of due diligence before lending other people’s money. Lots of fraud out there and not a small part of it due to slimey mortgage brokers, etc., who did anything they had to to get a loan processed. I have no problem with bk getting tougher (taking into account severe health or other crisis) and with people having to repay their debt. But the lenders have to take responsibility too. And they haven’t. And they deserve what is coming. Nope, corporations should not be able to have people thrown in jail because of bad lending practices. There is enough debt slavery out there. And be very careful about the power you want to give the government/corporations - history shows it really goes back to the people. I say tighten lending standards and NEVER loan to a deadbeat again. But don’t use my tax dollars to give them food, shelter, medical care and entertainment, even in an unpleasant setting.
“The real violence hasn’t even started yet!!!”
The Bubble Cycle
(1) Optimism (2) Excitement (3) Thrill (4) Euphoria (5) Anxiety (6) Denial
You forgot (7) terror and (8) bloodletting.
But for whom? The F’Borrowers or the FLenders?
both
borrowers will have withdrawals like addicts and prehaps remissions into spending addiction
creditors will miss the good times with no write offs and constantly growing loan portfolios, some will be forced to shop their bank before the fdic closes them down and sells them for pennies on the dollar to someone else.
I THOUGHT it was the end this year. I saw that on a chart somewhere, but can no longer find it.
“Chapman University economist Esmael Adibi believes Orange County is on the verge of seeing negative annual price appreciation.”
“negative annual price appreciation” That’s a mouth full. I think the word you’re looking for is depreciation.
Saying with four words what is easily communicated with one is the root of the art of obfuscation.
Yes, but even though it’s negative, it’s still “appreciation!” Wait, no it’s not. Umm… gosh, now I’m COMPLETELY confused…
In Other Words:
4 Words = Obfuscation
1 Word = Reality
I guess the opposite of “negative appreciation” is “positive depreciation”?
So, in that case, the FB’s are hoping for some positive depreciation to bail them out…
I think they’re looking for negative depreciation. -1 x -1 = 1
**I guess the opposite of “negative appreciation” is “positive depreciation”?**
Nah, that’s really the same thing - both mean prices are going down like a $20 realtwhore. Home prices nationwide are experiencing negative ascention and positive declination. I better buy now or be priced in for never.
Rob
It’s like a taboo. Nobody can seem to say “losing money” or depreciation. Argh.
Try saying, Wealth Destruction. I bet you can’t, and nor can they.
Well, translating into commoner’s terms: The housing situation is SNAFU, going full pedal into FUBAR.
SNAFUBAR.
You heard it here first.
“SNAFUBAR.”
Don’t think I won’t use it. Brilliant.
No its not depreciation! Wrong word to use if your finance.
Depreciation is a non-cash charge, nothing to do with market value….
What we will see are “price or market declines”. Plain and Simple! Its gets to the cold hard point of the matter.
Doesn’t the words, Wealth Destruction, even cross your minds?
In true Liarreah-speak. Even better yet would be if he could say it in Spanish, where a double-negative is allowed, i.e., “We don’t have no appreciation.” Then people could be really confused.
Yes, we appreciate no bananas
Eschew Obfuscation!
Immanentize the Eschaton!
that’s mother-freakin hilarious!
CNN Headline
“Home prices take record dive”
but Dave Lereah its going to be better in spring
Not to worry he got his Bonus from the NAR this past year.
“The Buyers Dictate What’s Going To Happen” In California
Buyers always had the power to walk away from a deal. For a few years many buyers seemed to forget this. Those who bought out of fear rather than empowerment may be starting to regret it.
The Plopperts even showed their three-bedroom, two-story house on Christmas Eve and New Year’s Eve.”
“‘It wasn’t fun,’ Michael Ploppert, said, noting that more than 300 homes were for sale in Ladera Ranch at the time.
Oh I dunno, anytime I had a Ring In the New Year/ Try to Unload POS party, we all had a rip-roaring old time! What, they never heard of party hats…and Dom Perignon?
I just think Mike and Liz Ploppert don’t know how to have any, y’know - FUN!
how awesome is that name, though? Ploppert- sounds like it should be an adjective.
“The housing market went Ploppert before we knew what happend”
I have to go take a Ploppert.
“I have to go take a Ploppert.”
Make sure you wipe your Lehrear or you will end up with Leslie Appleton-Dingleberries all over it…
STOP IT! I almost laughed my dinner back up!
righteous death by laughter
and if you’re not quick to the loo you’ll have some Gary Watts that on the floor.
Really mentally down from a bad day at work. Nothing was pulling me out of my funk. But then I came upon this thread….
You aint joking when you said that. Part of that is many people from the east coast moving to California. Somehow they really did believe it cost more to live here. They actually did believe in having to pay for ‘The Sun Tax’. They proved it by paying more and getting into a ton of debt. Heaven forbid you tell someone from the east coast prices of homes in the prior decades was cheaper in California than say in New Jersey.
How in gods sake did us Cali natives ever manage to make it on low cost housing back in the 70’s and 80’s…
why do people always make it sound like there is a hoarde of a million people trampling from state to state making housing prices jump in crazyness. its’ marginal very marginal not all of us East Coasters want to live in California or Florida, I like the sun but at a reasonable price
also most New Yorkers bought in Florida because they could afford the 50k apartment in the Orange state before it became 500k…
Probably because so few California residents are actually from California.
Seriously. I once heard that fewer than 33% of CA residents are actually native. Based on what I’ve experienced here, I’d say that’s about right (if not conservative). We are totally being driven out by people from other states & countries.
I’m a native Californian living in Toronto, and all the time people tell me they want to move to California. I want to move to upstate NY, my husband wants to move back to California. He’s originally from upstate NY.
I met someone the other day who has plans to move to Los Angeles and didn’t realize that you need a car to get around LA, that it’s not like Toronto. Duh.
I know you can technically live there without a car but it’s very, very hard.
Burn baby, burn !
What’s the 80’s party song.
We don’t need no water, let the MF-er burn.
Burn MF-er
Burn ….
its not 80’s its the BloodhoundGang
there also another cool song by them called “I hope you die”
The Bloodhound gang alluded to it but we were singing that when I was in middle school in the mid-80s. I have no idea where the original comes from.
I thought it had something to do with the MOVE fire in Philadelphia. Revolutionary bunch of asshas. Philly PD had been shorting the millitary of plastic explosives durring training exercises. Got the idea to throw a 1lb charge on the roof to blow up a bunker. Got stupid through the chain of command and crept up to the entire 5lb charge. Blast killed everyone in the house (almost… someone surrvived to sue)… FD couldn’t get close due to burning ammo… let the entire block burn down.
North Philly… Rizzo’s Raiders… Ahhhh… good times…
Mayor was Wilson Goode…. black so no riots ensued.
Bunch of nuts in the ghetto there but way WAY to much force
posted - I have no idea where the original comes from.
Rock Master Scott and the Dynamic 3
(released 1984)
“‘It could have been worse,’ added Jan Brueckner, professor of economics at UC Irvine. ‘We could be San Diego.’”
Someone please save this quote in the blog quote roll of honor.
I spit diet Pepsi onto my laptop as I read this.
Got popcorn?
Neil
Me too!!! Add that to the best quote, until San Diego gets the come back quote.
Same - that has to be the best line of the month easily!
The OC will be San Diego in 1 year’s time. Maybe less.
Yup. OC walking in San Diego’s footsteps.
San Diego is currently in the quiksand.
So true.
And yet John Q public doesn’t realize a thing. Yet we’re into deflation already…
Got popcorn?
Neil
FYI,
Two new posts on my blog:
http://recomments.blogspot.com/
One on my guess in peak inventory (national). The other a continuation of my “real estate emotions” series. Basically, we’re still on track to where Fall of 2008 is the earliest good buying opportunity.
Got pocorn?
Neil
OC is dead man walking
see chart of Foreclosures on my blog.
Nice chart.
About GenYers and some GenXers not being afraid of massive debt. It’s a generalization to be sure, but you’ll have to admit, they took a lot of debt on that their incomes couldn’t support, so the generalization about no fear of debt isn’t a stretch. The proof is on the lenders’ balance sheets and soon to be a non-performing asset….
I hope the program “Housewives” will show all those obnoxious people from OC, like that “suave” wannabe character “Slade” (whatta made up name), going down in flames. I’ve never seen such pretentious and arrogant people in my life. And I lived in LA for 10 years!
My wife likes to watch that show as an observation in human stupidity. That turd burglar “Slade” is a mortgage guy. Wonder how business is these days? He drives a Hummer and he got his young girlfriend a Mercedes. She works for his “company.” It would be so awesome to see him get foreclosed on with the cameras rolling! Their gated community is so funny, a bunch of shoddy McMansions all crammed together. WTF? The pretentiousness is sickening, I agree. I know people with true $ wealth, and they do not behave like those OC fools.
I would rather draw in the dirt with a stick, than ever watch such garbage.
I think Bantering Bear’s comment is funny.
I admit to having been sucked in on occaision to that show.
I actually sold a solar power system to a homeowner in Coto de Caza. Overall, if you don’t mind guarded and gated homes it ain’t that bad.
I am all for schadenfreude but I feel guilty as I root for total destruction of every cast member of that stupid F-ing show.
Here are 3 headlines from CNN Money…
“Record Home Price Slump”
“Manufacturing: Biggest Drop in 16 Months”
“Dow Hits Fresh All-Time High”
Somehow they just don’t fit together all that well… Where is the logic?
Don’t you know - It’s the goldilocks economy… Logic is for losers in this new age of never-ending prosperity
sesame street: “one of these things is not like the other….”
Have we forgotten-
Economy was doing well in Late 90’s Check
Dot Cot stocks flying high Check
Old Economy stocks not doing well Check
Economy is slow … 2.5% growth.
everyone wants to know the next bubble.
check the headlines….it aint about logic
http://www.dqnews.com/ZIPSDUT.shtm
Can someone please explain this?:
Ocean Beach 92107
Number of sales, Median Price, Change
SFH 13 $865,000 -21.2%
Condos 9 $422,500 -24.1%
New Constr. 1 $450,000 36.8%
Total 23 $670,000 -6.9%
If the median for 22 sales is down app 22% how can ONE sale (New constr.) reduce the total to 6.9% down?
PB and Point Loma show the same weird pattern…..
You’re forgetting what the median means. If there was a larger reduction in the number of condos sold, since they are lower priced, the median won’t move down as much.
Adding one home at the low end could reduce the median by 6.9% if the value of the next-highest-priced home below the previous median were sufficiently less than the original median. For a concrete example, start with this list of numbers
1, 8, x, 50, 90
then add 7 to the list. By what percent did your median drop?
Old median = x
New median = (x +
/ 2 = x/2 + 4
(New median) / (Old median) = (x/2 + 4) / x = 4/x +1/2 = 93.1% if
x = 4 / 0.431 = 9.2807.
New median = x
Sorry
— try
New median = ( x + 8 ) / 2 = x/2 + 4
This is a matter of convenience to the REIC and as such, doesn’t require any explanation.
Conversely however, the REIC immedaitely and fiercely defends a large YoY price decline as a statistical anomaly, digging theough the numbers and them dismissing them as totally useless.
Median is the middle price, half are more and half are less. Getstuccos explanation was way confusing and sounded like something you would hear at a corporate board meeting.
Hey, sorry. I haven’t felt the need to dumb down my posts since Gekko and HFA left the blog, but I will try harder going forward…
Totally simple-minded example:
Last year: 9 SFH sold at $1097700, 4 SFH sold at 719650, 9 condos sold at 556650, 1 new house sold at 328950.
This year: 9 SFH sold at $865000, 4 SFH sold at 670000, 9 condos sold at 422500, 1 new house sold at 450000.
This satisfies all the details given by OB_Tom without even changing the mix of SFH & condos, and without any decline in sales volume (so of course it’s not what really happened) - just shows how little info we get from “medians”
“Fifty of the affected employees work for Washington Mutual subsidiary Long Beach Mortgage. Their back-office, loan-fulfillment jobs will end on a staggered schedule until the office is shut down sometime in April.”
Weekend topic. When will the MSM start talking about how layoffs are impacting the economy? I bet about August.
Got popcorn?
Neil
“‘By early 2008, we will be consolidating this function in Florence, S.C., on a staggered basis for continuity’s sake,’ McGarry said.”
(sorry to reply to my own post)
But anyone else notice the trend is to relocate jobs out of bubble markets?
Got popcorn?
Neil
Well of course it is. If you were WAMU, would you want to pay admin assistants enough to be able to afford the payments on $400K condos?? I sure as hell wouldn’t.
And that right there is why I keep preaching about economic fundamentals. Folks in CA keep staying they are different. I used to get angry but now I just roll my eyes.
The old model for the CA economy is the worm Ouroboros - it sustained it’sself by feeding on it’s self. Our new model is Saturn, sustaining it’sself by consuming it’s children.
I’m scheduling interview in April in KY and TN.
RE: TN & KY…
Good choices.
I’d be gettin’ down near that big Toyota plant. Gonna be lots of economic prosperity in that area.
No income tax in TN either.
“And that right there is why I keep preaching about economic fundamentals. Folks in CA keep staying they are different.”
Those people are right! I’m also sure they don’t know how right they are.
With the crushing taxes, suffocating cost of living burden, and immense overhead of government over-regulation it really is different. They are going to find out how different it is, in short order.
Ahhhhh that’s why I’m seeing home values higher in TN. My first choice is U of K were my salary would actually increase 8k a year from what UC pays. It’s kind of hard to believe since we’ve all been brainwashed into thinking that CA jobs always pay more.
Just to continue,
I know quite a few big companies looking to get employees out of LaLa land due to housing price issues.
This downslide is going to last for years here.
Saturn is a good example of what CA is doing. Eating the young…
and yet the big layoffs are still a few months away.
tick… tick… tick…
I feel like I’m watching a demolition derby. One being raced by a bunch of California wanna bees.
Got popcorn?
Neil
Another point: Isnt Long Beach Mtg the subprime unit of WAMU?
Anyone want to guess how long until LBM shuts it’s doors and shows up on Implode-o-meter?
Expect jobs to end up in Banglore, even though they have their own bubble
The only layoffs that matter are on Wall Street.
Hershey announced today it is laying off 1,500 …”outsourcing low value-added items and the construction of a production facility in Monterrey, Mexico.” Chrysler announced 13,000 layoffs yesterday, Masco plans to cut 8,000 workers by the end of the quarter…yeah, it’s a good thing layoffs will be confined to the subprime sector, while the rest of the economy continues to go great guns. (Well, except for Eastman Kodak, job cuts of up to 30,000…Nortel to cut 2,900 jobs…and of course,Pfizer, Motorola, even MTV (250). Oh, and those lumber mills being shut down…
http://www.marketwatch.com/news/story/dj-hershey-cut-1500-jobs/story.aspx?guid=%7B226C51AA%2D843B%2D4795%2DB427%2D9AAB0303FCB7%7D&sid=2384&symb=
You forgot to mention the 40,000 at Ford. And how many at GM…? About 80,000 wasn’t it?
I found a mention of GM In this article.
Wow, they mention 113,000 workers for GM and 17,000 at Delphi offered money to retire early.
I did my part eating all those bags of Reeses.
Was in WaMu this week and they asked if I wanted to open a CD with rates around 5.35% or there abouts. I said ‘No thanks’ but was wondering if this is their way to raise their reserves. I’m sure the little ole retirees will be jumping at the chance to get the CD’s.
“…was wondering if this is their way to raise their reserves.”
—————————————
Exactly correct. They are forced to do the same thing at HSBC. They are offering 6.00% APR on new money till Apr. 30th for their REGULAR online savings account (Not even a CD).
my company-largest hr co– has a cobranding with HSBC, they sent an email to 40K+ employees about new deposits touting 6%(?) interest
Probably not a bad deal. HSBC = Hong Hong and Shanghai Banking Corporation, #1 bank in the UK. Despite the name, HQ is in Britain where they took over Midland bank a few years back. They are a serious player despite they aquisition of a subprime mortgage issuer.
92 bil+ aobut in deposits in U.S. mostly northeast
In the 1990s Hong Kong (a British colony then) trade reserves were mostly held by HSBC. At that time more than a quarter of England’s foreign reserves was held by the HSBC.
LOL! I Think it was North Carolina that attracted Google to set up new offices and staffing 250+ employees and not in California. Nothing much but than again these offices grow due to low cost savings over time. This has been a long term trend of local employers expanding to lost cost states. North Carolina also threw in lower property tax and other incentives. This will never happen in California.
Asking for a any tax break in CA is just a dream.
Louie: CA is just shooting itself in the head, IMO. How can we be so incredibly naive? Unless there are 180 degree turnarounds in our local and state governments, we are $CREWED in so many ways, especially loss of employers.
Florence, SC?????
Funny! If you want to talk about a place that is mostly a $hithole, Florence is it. There are several sides of town and most of them seemed to be bad. Obviously they are going for the low wage meccas.
California = so screwed (you’ve priced yourselves out of EVERY market)
Funny… They even priced themselves out of the internet. If you buy a product from an internet site based in CA the site has to charge CA Sales tax, at 8%+. Charity from residents of other states. Everyone wants to live in and contribute to CA LOL!
Guess how many CA retail internet sites are going to make it?
When you talk of Tech Employers in California your pretty much talking about deflationary production of goods and services employers. This has always been the case. Every employer in CA wants to have pricing power in their markets like MicroSoft but due to competition from Asia and Europe, they are forced to drop prices and come out with lower costing goods. Cant do that in CA with home prices skyrocking and employees taking up bigger loans.
Low wage meccas in 1980s were Singpore, Thailand, Philipines. That came from CA employers . Thats where most of the chips, harddrives, and other hardware are being made (IPOD). No longer in CA.
Its not that CA is so screwed or the employers screwed the employees, its like the Auto Union employees in Detroit that screwed themself by insisting on higher wages and benefits and pretty much killed off the whole US auto industry. What happened in Detroit will happen to CA unless prices drop fast. You cant milk the corporate bank account forever!
It doesn’t matter because there are plenty of people there that will be happy to have these jobs.
to clearify
“It doesn’t matter because there are plenty of out of state employees there that will be happy to have these Californian jobs.”
And every state from Washington to Maine to Florida wants the piece of the Californian pie. The other state goverments are doing some smart things to attract business.
Kudos to them. In the end, Million Dollar CA homes dont make sense. I seen some Hollywood starts moved to low or no state income tax.
Early 2005 my company relocated 55 positions from my area (Wisconsin) to San Leandro, CA. Only 11 positions were offered relo packages (sales and product development). The rest of us were given severances. I actually felt bad for the 11 who transferred because I felt they were transferring into a bubble housing market, and felt most of them would get burned.
One of the guys who gladly relo’d to CA, had come to WI from San Diego only a year earlier, and had made a couple hundred thousand on his house when he left SD. He was all excited about going back to CA, thought he was going to make another big score on RE. I could hear him talking on the phone to his realtors, mortgage brokers in CA all the time about ARM loan options, etc. I wonder if he ended up making his big score…
“McGarry said another 50 Washington Mutual employees working in custodial operations within the loan servicing department were informed Tuesday their jobs will end this year”
At first I read this I thought they were saying the janitors would be servicing the loans after the layoffs.
And you probably wouldn’t notice the difference if they did !
Ya, and the loans probably will get a lot dirtier with no janitors to keep them clean.
But who is going to empty the shredders?
‘Half are unrealistically priced,’ said Karevoll. ‘The people who are really serious about selling are getting serious about their prices.’”
Problem is the sellers can’t put a serious price on a house they purchased for a ridiculous price. I’m not paying $500,000 (or more!)for a fixer.
“‘It could have been worse,’ added Jan Brueckner, professor of economics at UC Irvine. ‘We could be San Diego.’”
Read the handwriting on the wall: You will be San Diego.
Yeah, that’s ironic isn’t it? OC is the next on the Trillion$ Reset train.
By the time the OC is San Diego, San Diego will be Phoenix, Phoenix will be Miami, and Miami will be a smoking hole in the ground.
Miami will be Cuba, especially after Castro’s death.
If this clown had been on the Titanic as it was sinking she would have been the first class passenger saying, “It could have been worse, we could be on the bottom of the ship.”
Doh!
Blue Shield fires back at Realtors
http://tinyurl.com/3bl38q
Taking one quote (from a NAR-ite) out of that article about Blue Shield threatening to pull health care coverage from Realtors:
“A lot of our members are very sick individuals who can’t get coverage anywhere else,” Ferrier said. ” … They will be coverless.”
A lot of sick individuals - check. Coverless? WTF? How about without coverage?
Oh, I forgot that they are all in bed together!
Karma for the realt-whores!
This makes my day. As Chris Rock says, everyone is gonna die but if you got coverage at least you’ll die on a mattress.
“The Realtors are trying to sell their story without anyone looking too closely at the details,” he said. “But this case just isn’t going to pass a reasonable inspection.”
Gee, sound familiar? I guess that is the CARs standard operting procedure for all numbers it releases.
That is one funny article: Statistics has never been CAR’s strong suit…
“There’s only one way to count,” said Steve Madison, an attorney representing the insurance company. “CAR’s lawyers are spinning novel theories concerning the requirement that 75% of participating members sign up for a Blue Shield plan. But the law and the contract are crystal clear. … On that basis, CAR is at less than 75% participation with us, and in violation of the contract.”
“Howard Roth, chief economist for the California Department of Finance, thinks the housing turnaround will be slow in arriving. ‘The California and national housing sector downturns are not yet over,’ Roth said.”
But the NAR said the worst is behind us?
Irvine Co. buying 17 buildings in San Diego
The Irvine Co. said Thursday it’s buying 17 buildings in San Diego from Blackstone Group.
The Orange County Register
The Irvine Co. said today it is buying 17 office buildings totaling 2.1 million square feet in San Diego from New York-based private investor The Blackstone Group.
The deal will greatly enhance the Newport Beach-based land developer’s presence in San Diego, where it owns more than half of the office towers downtown. The sale price was not disclosed.
Fifteen of the office buildings are in the University Town Center area of La Jolla, one is in Del Mar, and one is in Mission Valley.
Blackstone, which holds a stake in Freedom Communications, parent of the Orange County Register, got the buildings as part of its $39 billion acquisition of Chicago’s Equity Office Properties Trust. It was the largest private property owner in the country at the time of the sale, with more than 600 office buildings in 16 states.
Many of its holdings are now being sold off in key markets from New York to San Diego. It’s not yet clear what Blackstone intends for Equity’s buildings in Orange County, which are concentrated in Orange and Anaheim.
WOW, I just went to CNN dot com and the main article, Picture front and center is titled, “Home Prices Take Record Dive”.
Pretty hard to ignore that if you are a FB, or a FB wanttobe.
I though Home Prices NEVER go down. They aren’t making anymore land. Hold and it will always go up. If you can live long enough to outway the declines that will happen for the next 10 years in Clownifornia….
I thought Home Prices NEVER go down. They aren’t making anymore land. Hold and it will always go up. If you can live long enough to outway the declines that will happen for the next 10 years in Clownifornia….
I don’t think a lot of FB’s even read or watch the news.Many of these people couldn’t even tell you who the president is. Some even think “Chicken of the Sea” is chicken. But, on the other hand, they could name the 5 guys Paris Hilton banged last week.
Unlike Paris Hilton, RE has only been going down for the last seven months.
That’s true. Paris Hilton has been going down a lot longer than 7 months.
When you have 14 to choose from, it isn’t too difficult to name but 5.
That’s hot.
“Inventory (of unsold homes) is the bugaboo everyone is focused on,’”
Ben’s new webaddress:
http://thehousingbugabooblog.com
Sorry, don’t click the (non)link.
Even while the cracks in housing are obviously starting to show more and more, the last of the suckers are still buying.
Not much on TV today so I spent most of the day switching between all the “paid programming” channels. There were at least three home lending infomercials cycling on those channels.
All the infomercials for home lending are still pushing Option Arms, Stated Income and 50 year mortgages. One of them called Flexpoint, appear to only offer Option Arms where the payment they quote is for the first month only and then it adjusts upward. Of course, the fine print states that the loans are negative amortization when the lowest payment is made.
The bottom line is that the current closing prices for homes are still around 50% more than most people can really afford. And even now, in order to get in they must also use the “toxic mortgage”.
I was initially giddy when I saw the mess that has started to unfold. Now, I am afraid, very afraid!
I think you’re confusing Lagging Indicators (MSM) and Leading Indicators (Subprime Implosions). Those commercials were probably planned and shot sometime ago before the shitstorm started.
Agreed. Afraid. I told wifey to quick talking about the bubble to avoid possible angry repercussions.
quick = quit
“Not much on TV today so I spent most of the day switching between all the “paid programming” channels.”
Dude, you really need to invest in the Spice Channel.
Doh!
Blue Shield fires back at Realtors
http://tinyurl.com/3bl38q
Couldn’t happen to a nicer group of people.
That article makes my day!
sunset, I know it’s kind of ironic…on top of the world driving fancy cars one day…the next day can’t make a sale therefore can’t pay health insurance…
Doh!
Urbanization of California farmland increases
TULARE, CALIF. — In just two years, more than 18,800 acres of farmland in several San Joaquin Valley counties became subdivisions, shopping malls or other developments, setting a state record for loss of farmland, according to newly released state data.
A healthy real estate and construction market spurred farmers in Fresno, Kings, Madera, Tulare and Merced counties to sell 18,801 acres from June 2002 to June 2004, said Molly Penberth, manager of the Farmland Mapping and Monitoring Program of the California Department of Conservation.
Preliminary data from the program that tracks land development found about 26 acres of farmland were removed from production each day in the two-year period, Penberth said.
Fresno County, the nation’s No. 1 agriculture county in production value, lost the most farmland as parking lots at Cal State Fresno, new schools and 100 acres of new homes in Selma replaced crops, Penberth said.
“A couple of generations ago, Los Angeles County was the leading agriculture county in the nation. Not anymore,” said Bridgett Luther, director of the Department of Conservation. “One generation ago, Silicon Valley was known as ‘The Valley of Heart’s Delights’ because of all the agriculture production.”
Farm groups are working with the Great Valley Center in Modesto on a plan for growth in the valley, funded by the state and the San Joaquin Valley Air Pollution Control District.
This is serious stuff. When we wipe out farmland for stucco shitboxes, then begin to rely upon countries like China for a large portion of our fresh fruits and vegetables (are they really fresh when shipped frozen?) we are digging our grave. There has not been enough legislation to protect farmland in CA, OR, and WA. They have been allowing developers to carve it up all too often these days. As we lose these farms, we lose sustainability. This country is making really bad decisions, starting at the local level, and reaching all the way to the federal government. This is why my long term plan includes growing most of my own fruits and vegetables. I don’t trust that China is looking out for my health when they ammend their soils and spray their crops.
China cannot produce food… it has 1.5 billion people.
Peak Oil and the fact we nourish 4 times more people using 80 times as much (oil-based) energy for transport and fertilizers means 5 out of 6 will have to die within 50 years. We just can’t feed that population bubble once oil production plummets… and the later will happen.
“China cannot produce food… it has 1.5 billion people.”
Huh? China produces more than 1/3 of the worlds vegetable exports. Check your facts before making such outlandish statements.
I hate to disagree with both of you but China has 1.3B…and domestic food production is absolutely essential to the Party. Only 10% of their land can produce crops and are losing more and more to development. Regardless of what some pundit says about China food exports…..at the first sign of a problem, they will eliminate all exports.
Brazil has plenty of food to export. Plus methanol from sugar cane so we can give the finger to the Saudis…and to the Bush family.
Furthermore, I find your second paragraph unitelligible.
lol
Bingo! Going to check out homes around Lexington and one of my requirements is that there is enough acreage to go my own. I can’t wait. Affordable housing and fertile soil, it doesn’t get much better.
“Fresno County, the nation’s No. 1 agriculture county in production value, lost the most farmland as parking lots at Cal State Fresno, new schools and 100 acres of new homes in Selma replaced crops, Penberth said.”
They paved Paradise and they put up a parking lot.
I know. Paving over “God’s Country”…somebody’s gonna get hit by a lightning bolt…
They paved something, but it wasn’t paradise.
Soft landing for economy? Maybe Not!
http://biz.yahoo.com/ap/070215/economy.html?.v=11
The Federal Reserve reported Thursday that output at the nation’s factories, mines and utilities was down 0.5 percent in January, the biggest setback since Hurricane Katrina disrupted activity in the fall of 2005.
Half of last month’s decline reflected a drop of 6 percent in output at auto and auto parts factories with smaller setbacks occurring in housing-related industries such as furniture, appliances and carpeting.
Overall, manufacturing fell by 0.7 percent, with analysts predicting continued weakness in coming months reflecting the problems in autos and the slumping housing industry.
“Automakers are working off a lot of unsold vehicles and they can’t offer discounts as they have in years past because of their poor financial conditions,” said Mark Zandi, chief economist at Moody’s Economy.com.
In other economic news, the number of newly laid off workers filing claims for unemployment benefits jumped by 44,000 to 357,000 last week. It was the largest one-week increase since September 2005 after Hurricane Katrina.
The Labor Department reported that the four-week moving average for claims rose to 326,250 last week, the highest level in nine weeks and an indication that conditions in the job market have softened.
Part of the increase in jobless claims last week was due to a blast of cold in the Midwest and Northeast, which triggered higher layoffs in such industries as construction.
Many analysts believe the unemployment rate, which edged up from 4.5 percent to 4.6 percent in January, will keep rising to perhaps a peak of 5 percent later this year as the economy slows under the impact of previous credit-tightening by the Federal Reserve.
The 0.5 percent drop in industrial production was much worse than the unchanged performance that had been expected. But economists said part of the decline reflected a payback for December, when unusually warm weather boosted output. Industrial output had risen 0.5 percent in December.
The January drop would have been even larger but output at utilities increased by 2.3 percent, reflecting increased electricity generation due to the return of colder weather. Output in mining, which includes oil production, fell by 1.2 percent.
Analysts said industrial production will likely slow this year, reflecting the slowdown in the overall economy following the Federal Reserve’s two-year campaign to raise interest rates enough to combat rising inflation pressures.
Fed Chairman Ben Bernanke, delivering the central bank’s latest economic forecast to Congress this week, indicated the Fed is likely to hold rates steady as the slowing economy lowers inflation pressures.
Many analysts believe the Fed is on the verge of achieving its hoped-for soft landing in which growth slows enough to lower inflation pressures without triggering a recession.
Soft landing, my arse. There they are, Secret Society’s agents peeing on the backs of sheeps, and saying that’s raining.
Watch Larry Kuntblow today, for an update on the GDP and trade deficit. He’ll blow the bulls guests after the program. I wonder what the out-takes from his garbage program look like…
Pudblow and his boyfriend Creamer have absolutely zero credibility. That’s why they’re on TV.
I put Larry Pukeblow right up there with James C. Cooper from BusinessWeek. That disinformation agent is a trip: one week the low unemployment rate is good for the economy, the next week high unemployment rate is also good for the economy. They think that everyone is a sheep. It’s always rosy no matter what.
“plateau yet at the bottom”
Hillarious non sequitur.
I caught that too. On the bottom it’s called a valley floor.
We just took the first step off the cliff, and it’s a long way down to the valley floor. I don’t know if the floor is above or below sea level…
“It could have been worse,” added Jan Brueckner, professor of economics at UC Irvine. “We could be San Diego, with falling prices. … Demand pressure is strong enough to keep prices up.”
Um, hello? The median price in January was $600k compared with $642k in June. Under what new mathematical system is that not “falling prices”? Using conventional arithmetic, I calculate a 6.6% decrease in seven months, which warms the cockles of my heart, if not the heart of my cockle.
How could anyone be in a house in SLO for 15 years and be in trouble?
http://slo.craigslist.org/wan/279272644.html
Maybe the equity is in the media room, driveway, and on a boat trailer…..gotta be one helluva HELOC
Lend money to someone who has missed payments ? Sign me up !
Ahhh, denial. Best to spend the time packing rather than messing around on Craigslist. Some people just don’t get it.
“Can’t quality now with a convention lender. Need help ASAP! Want to stay in my home! contact”
Too F’ing bad you POS FB. What happened to all your equity? Just sell the Hummer or Escalade.
Santa Maria is south of SLO and poorer or at least was a few years ago. Its an Agricultural Area. Like Oxnard was.
speaking of party still going on, is it just my yahoo or everybody’s where 90% of the ads are for cheap mortgages?
I see them too. All the f’ing dancing a-hole ads.
I hope they file BK soon.
My fave is the sheep getting clipped. Kind of a double meaning there, huh!
Ads? If you’re seeing Internet ads, you’re not doing it right. Let me help.
Firefox
—–
http://www.mozilla.com/en-US/
Adblock
——
https://addons.mozilla.org/firefox/1865/
Thank me later.
Doesn’t work on those annoying dancing-prick-guy ads. It only works on still-picture ads, from what I can tell. I was hoping.
+ filterset G for adblock.
You’ll never see another yahoo ad.
Thank you! I just installed all that. I thought I’d go nuts looking at that obnoxious cupid ad on Yahoo yesterday!
I used to think that it was because I read housing bubble blogs all the time, the activity was being tracked, and it was just targeted advertising. But I asked some friends who do no such thing, and sure enough, nothing but mortgage and refi advertising.
Makes you wonder what will happen to the stocks being supported by all that ad revenue when it dries up. What are they going to push next? What will be left?
I’m thinking gambling, as that will be the last desperate act before total FB meltdown.
1. Default notice arrives.
2. Max out cc with cash advances
3. Go for 1000 - 1 shot on some internet gambling site
4. Lose
5. Jump out window.
Anyone else getting sick of those Benchmark Lending/Barney Aldridge” ads?..
The worst is when he says “and guess what, we’re nice people too”…
Makes me want to take a shower after I hear this slime-ball.
BURN BABY, BURN!!!
Ok- We need some advice. My husband and I are renters in San Francisco, CA. We need to relocate to the suburbs by late summer due to the arrival of our first child. We will be moving North to Sonoma County and we’ll need a 3brm/2bath home in a nice family neighborhood. Do you think we should buy something for around $550K, or rent something similar for $1800-1900? We plan to stay in this home for about 5-7 years. We currently earn $180k per year and can make a 20% down payment. We are uncomfortable with the current market conditions, but we also feel that rents are high and my husband does not want to relocate unless we BUY something. He feels that if we rent something larger, why not just rent in SF? But if we did that we would not be near family to help with childcare and that would significantly impact our income. HELP!!!!
Prices are flat or falling. In order for buying to be a better deal, your monthly carrying costs would have to be substantially less than the cost of renting an equivalent place - otherwise there is no way you would be able to compensate for the depreciating value of the house.
Assuming a 20% downpayment and 6.5% 30 year fixed rate mortgage, a $550k place would cost you $2781 per month just for the mortgage. Property tax would be another $600 to $700 per month. Insurance and maintenance would easily push your costs to twice the cost of renting a similar place for $1800 to $1900.
Given those calculations, why on earth would you buy?
One more thing: if you live in a rent-controlled place in SF, and your rent is below the current market rate, you should factor that into your decision.
Not that I’m advocating that it’s the right time to buy –
but if you’re going to compare monthly costs of rent vs. buy…..
your calculations forget to count back the benefit from the mortgage interest deduction ($28K) & the property tax deduction ($6k) — (but subtracting the $10K deduction the gov’t would give you if you rented & didn’t itemize deductions) — the benefit of deducting that incremental $24K is real money when your income is $180K, as is the principal payments made ($5K in the first year).
on the other hand, there’s the opportunity cost of locking up that $110K down payment when you could just park it in the bank ($5,500 interest per year @ 5%)
am I missing anything else?
Your income may be too high, but look at renter’s credit on the state. My stepdad reminded me of this and it was a nice find. It took off $120 bucks from the tax. Not much more than a nice dinner outing, but still, it came as a credit, better than a deduction. See if you can use that and then factor that in.
heloc_jock,
Be careful with that mortgage interest deduction and property tax deduction. With the way the AMT is going and at there annual income there is a very good chance they would get hit with the AMT and wipe out those deduction along with every other deduction. Little talked about fact that is biting people as we speak….
Thanks for the input. But there is one point that I don’t think I fully made clear. My husband does not want to leave SF if we don’t BUY something in Sonoma County, so this will impact our income significantly. He’d have to cut down to part-time and this would cost us 30k per year, which is likely to be more than we’re saving through renting. If we relocate to the suburbs, my family will watch the baby on the two days a week that we will both be at work currently. It just feels like the wrong time to buy a home due to the fundementals being out of whack, but we are really at a point where we will probably just about break even either way.
Tell ‘im that you’re moving to Sonoma AND renting and that you’ll divorce him if he won’t.
Sorry, couldn’t resist after all the posts on the opposite situation the other day…..
Take the income hit, have hubby watch the kid and work part time, and stay in SF for now. Take the time to research rentals near your relatives…maybe he’ll se something you both like for 1/2 the monthly cost of buying. Try it for six months, then re-evaluate.
What ever you do, don’t obsess about which decission is “more right”…enjoy your first kid, you never get those moments back again.
I can certainly see leaving SF to be closer to family while raising your family. That seems to be common now - the family flight from SF. But with the way Sonoma is tanking, why on earth would you buy? Also, rental rates are coming down due to vacant housing stock.
Tell your husband to quit pulling a Suzanne and get over it >; )
Buying is suicide for the forseeable future and if you buy now and have to sell in 5-7 years you WILL LOSE A LOT OF MONEY as that timeframe is probably the bottom of the crash….which is just now getting underway.
Talk him out of it. You two will NEVER regret it.
There is also the commute to consider. Less time with family.
Wait for the big quake to hit first, which according to the Bible Code should happen sometime this year.
http://en.wikipedia.org/wiki/Bible_code
Seriously, calculate the Cap Rate and the ROE, and if things look swell, use the OPP…”for you and me”!!! (everybody singing along now) Gosh, I love that song.
rent
because 1,800 rent is less than P&I on 550K 30 yr mortgage, and prices are deflating and… blah blah blah
If you need more reason why, just read the approximately quadrillion or so entries over the last two years or so on this blog
This may not be responsive to your question, but we rent in San Francisco and had our first child two years ago. We were faced with a similar situation and ultimately opted to stay put in San Francisco (albeit in a very very nice rent-controlled apartment). Honestly, for the first year or two not having our own back yard was completely irrelevant (after all, he couldn’t even walk for the first year, and spent half of his time asleep). By staying in the city we avoided long commutes (as we couldn’t afford to buy anything near the city that we’d actually want to live in, both in terms of the house and the neighborhood. And we found a great daycare setup that was really much cheaper than we had thought it would be (I can walk to work and drop the little guy off on my way…).
Obviously, everyone on this blog is going to tell you not to buy (as the consensus here is that prices are falling and will continue to do so, and I agree particularly for the range of home you are considering). As a person who has been faced with pretty much the same situation you are facing, with similar economics, we opted to stay in the city and have never regretted it. The real test will come when he gets a bit bigger, but right now we’re happy as clams.
I should add, however, that if your family and friends hear that you are staying in the city, they will act is if you have decided to raise your children in a slum in Rio…
What the hell! Get pregnant, have a kid, but you don’t want to spend dollars on child care and at the same time you’d buy a $550K house! You remind me of one of the losers on the Real House Wives of OC. You’re like the guy with his hand stuck in a grate because he won’t let loose of a $50 bill before the truck hits him.
A little harsh, but I agree with your point. Messed up priorities. People will buy the Hummer and the McMansion, yet are miserly when it comes to their child. They got it bass ackwards.
It’s really harsh, and it ignores what she said, which was: if they rent in SF, they won’t be near their family. All things equal, I’d rather put my money into my home and let Grandma take the kid, but maybe that would be different if I knew the house was going to decline in value.
Also, I don’t know anyone who actually LIKES sending their baby to day care, regardless of the cost. Kids belong in families, not in pens with 20 other kids, so let’s not accuse people of being “miserly” for considering the indirect fixed costs involved in finding a place to live.
Hey, easy trigger. I was generalizing, and not insinuating Amanda is one of those people I speak of. And I DO know of people (definitely not personal friends) who meet my description flawlessly. And you’re preaching to the choir about childcare.
easy man, the lady (which is pregnant, btw), made a legit question.
“Do you think we should buy something for around $550K, or rent something similar for $1800-1900? We plan to stay in this home for about 5-7 years.”
Serious Troll alert. Nobody who has been on this blog for more than 5 minutes would ask such a stupid question. And yes it is a really stupid question. I think Amanda is just looking for attention.
Here’s my advice. Buy the house and go try to get attention some other place.
I used to be quick on the Troll Trigger too, but I’m not so sure in this case. Unfortunately, there are a lot of clueless people still out there (or sheople as we like to call them) who really don’t understand what’s going on. For them, this site is probably extremely overwhelming and they really don’t know what to make of all the cognitive dissonance they see in the media and with their co-workers. I’ve learned this the hard way by having to explain and re-explain time and again what the issues are with buying RE in San diego right now. It always happens after one of her clueless colleagues tells her that they are buying a house because they don’t want to rent.
Yep, an FAQ or Primer would help.
The best one is here:
http://piggington.com/bubble
“the cognitive dissonance they see in the media and with their co-workers”
A coworker’s husband is a Realtor and at the conferences they told him, home prices will rise this year.
That’s funny, because I see that
* owning is more expensive than renting
* 8+ months supply of inventory
* many condos in the pipeline
* foreclosures are rising
* credit from mortgage banks is dryingup
* 1+ trillion in loans are resetting this year
But hey some jackass at a conference said this Spring, prices are rising.
Sure there are plenty of clueless people still out there, but how does one manage to land on a housing bubble blog without any apparent awareness that there might be a housing bubble going on? The charitable answer is that the poster is trying to delude himself, the uncharitable answer is that he is a troll.
easy guys, the lady is pregnant and looking for some info. Let’s be a little friendlier.
Don’t be so RUDE! Who do you think you are…. there is nothing wrong with someone asking a question. The person just might not know that much about real estate. She could be a brain surgeon but just not know anything about RE. You might know about RE and be a dumb-fuk in all other situtations in your life!
So don’t be rude!
Why do you assume she’s not new to the blog?
Just cuz many of us endlessly steep our brains in the bear mantra doesn’t mean Amanda has been doing the same. I heard her query as an honest post.
Since you’re renting now you don’t have the gains to protect from uncle SAM, which IMO is something that I would jump at taking off the table anyhow, since the exclusion is something that might vanish before I get an opportunity to cash in on.
This is the absolute worst time to buy RE. What’s the rush? Stay where you are for a year or so and do a lender a favor (for a price of course when you have them in a corner) and take a property off their books when the time comes…
I say, stay where you are. You won’t exactly need a house in the suburbs the minute the baby plops out. Besides, he’ll have a lot more fun toddling (supervised) around SF than some boring suburb.
Save your nesting instincts for when the kid turns five.
“the minute the baby plops out”….LOL…generated a VERY funny mental picture.
I’ve done the suburbs and the city with little kids, and the suburbs are highly overrated. Generally, if you as an adult are really bored somewhere, kids aren’t stupid, they’ll be just as bored.
I would agree with that statement 100% Investor Girl.
if you’re having a baby MAKE NO PLANS !
things will change
For once, I sort of have to agree with flat.
Think about NOT committing to anything when you are about to have a baby.
Even if grandma is willing to take care of the baby, you might have other ideas once the baby arrives. Not sure what your maternity leave is, but have you ever held a six week old child? How about **your own** six week old? My guess is, no matter who can watch him/her (grandma is definitely #1 choice if parents aren’t available, IMHO), you will not want to leave your young baby.
Hormones (or whatever it is) do weird things to a parent. It’s almost like you’d be willing to give up anything (including a good income/job) just to take care of your baby.
I’d suggest you continue renting where you are. It’s best to keep all of your options open when you are about to have a baby. If your combined income is $180K, someone’s making enough money to allow the other to stay home and take care of the baby.
Just a thought. Good luck!
Look at Tol, WCI, FMT, DHI. All the homebuilder stocks are up big time. I guess all these “investors” see lots of value or are banking on the market turning around as Cramer and Lereah keep saying.
TxChic, are you back to shorting again?
No. I’m not doing a damn thing except scalping and watching my summer puts get sold down to nothing.
Lots of pumping going on.
Mark Schniepp is a shill for the California Economic Forecast. Check out their “sponsors”:
http://www.californiaforecast.com/Sponsor%20Main.html
Its a who’s-who of banks and real estate interests in California.
Some outfit called LendAmerica is running infomercials around 5:00 p.m. on PAX network. In a faux news show, they tout the benefits of FHA Loans for those with resetting adjustables (up to 95% LTV). For the additonal 5% they say their partner “Nehemiah” has down payment grants available. Have a pre-payment penalty? Don’t worry because they will get you out of the “pre-payment penalty box.”
They also used the infamous “why pay your landlord’s mortgage?” line.
The line is less compelling when you say “why pay a third to a half of your landlord’s mortgage?”
Local Home Sales Slide
so sayeth the San Francisco Chronicle:
http://sfgate.com/cgi-bin/article.cgif=/c/a/2007/02/15/BUGRRO5D624.DTL
Still way overpiced and the declines need to speed up. I zillow several places and can see that prices need 50% off to get to the mean. Its no different from San Diego.
“‘It could have been worse,’ added Jan Brueckner, professor of economics at UC Irvine. ‘We could be San Diego.’”
Once again, a phony assumption that higher, less affordable prices are better and lower, more affordable prices are worse. Lets’ say Downtown San Diego really tanks, and as a result not only wealthy people but also cops, teachers, small store owners, even store employees can live there. In the long run, will that be “worse?” Only for those who were planning to sell and leave.
Well, it depends if you are willing to wait, while your net worth keeps declining (assuming your house is your biggest asset) until that rosy scenario unfolds after a decade or so.
Interesting article at CNNMoney right underneath their “housing slump” headline.
“Living in the Anxiety Economy”
http://money.cnn.com/2007/02/15/pf/anxiety_economy/index.htm?postversion=2007021516
It just made me think how many problems could be solved if married couples with two salaries would live as though they only had one.
Let’s look at the top 10 reasons why I hate this family.
1 - 6) They named their kids Brittany, Michayla and Jayden
7) They have 3 kids and are not even 30. Hello, this is not 1962.
9) She has no business wearing that dress, regardless of who picked it out.
10) “A year earlier at Christmas, there were XBoxes and iPods under the tree.” Good thing you didn’t save anything during the “good times”, you Entitlement Generation losers. Have fun at the foreclosure.
Maybe little Brittany, Michayla and Jayden will learn something and come out of this with stronger character than their parents.
Knuckledraggers basically. The kids’ names are the first clue.
This reminds me of why “professionals” are often a worse credit risk than hourly workers.
After a lay off.
Professionals wait around until they get a job offer that is career enhancing; usually they refuse stop gap positions or positions that “back-slide” as this bozo is doing. Engineers after the 1990’s aerospace downturn were a great example of this. Some sat in their homes for 3 to 5 years after being laid off waiting to be recalled… off course after 12 months of unemployment they weren’t such a hot commodity…
Hourly: They get two jobs to keep the income coming in until a buddy hooks them up with another “cushy gig.” Example, a coworkers buddy just was laid off from Sony’s San Deigo TV line. He’s already turning wrenches for another company despite a 20% pay and benefit cut. This is before his severance package even ran dry.
But doesn’t “logistics manager” sound like an overpaid shipping clerk?
Corey’s savings are “depleted,” he admitted. Yet, the expenses just keep rolling in.
What?!? You have kids. You should have two years expenses in the rainy day fund. If you don’t do without! Its pretty obvious they weren’t starving!
Anyone check the selling prices of used Xbox’s and ipods on e-bay lately? I bet the price is dropping.
Got popcorn?
Neil
What’s interesting to me is that people all want to copy some imaginary couple and name thier kids with these types of names. When you name a child, you are identifying the child. So it seems to me that people should be naming using names with history, Biblical significance, family tradition, etc. Not just some popular names being used right now. If you give your child a strong name and explain the significance of it, then the child may have a higher likelihood of living up to the name…
just my two cents
“7) They have 3 kids and are not even 30. Hello, this is not 1962.”
Actually, there are a lot of very good arguments to have the kids first— when you’re naturally fertile and apt to have healthy babies without costly medical intervention— and do the career thing later.
One such argument is that having kids young forces you to learn how to budget. You know, that thing we say would be really good for people to learn.
But I certainly agree on the name choices. My job works directly with high schools and if I see any name a certain number of times, it goes off my potential kid name list. Right now there is a blacklist on anything ending in any variant of “—lee.”
“They named their kids Brittany, Michayla and Jayden” ; “They have 3 kids and are not even 30. Hello, this is not 1962.”
hehehe, that’s funny NYCityBoy, I said the exactly same thing to my wife when I read that article earlier.
“They have 3 kids and are not even 30. Hello, this is not 1962.”
Actually in flyover land, it still is like ‘62 for many. I’ve been to a few playdates where one of the other Moms could have been my daughter. At one playdate, the denim jacket (purchased in ‘77) I had snagged from my husband’s closet was actually older than one of them.
Even among the educated, I am generally 8-10 years older when we get our families together with other kids and their parents. The “family” thing seems more like a must have here than on the coast.
This does not mean that they do not continue their education. Many still get their masters and PhD’s while commuting into the various universities with family or work-at-home hubbies assisting w/the kids at home.
BTW, that playdate was 4 years ago. So that jacket at the time was 26 years old. Our kids were 4-6 years old.
If I had a wife as fat as Casey’s, I’ll kill her and sell the blubber to a cosmetics company.
Thanks, Greenlander. I just had to clean the coffee off my monitor.
“Living in the Anxiety Economy”
Another “I want to reach into the monitor and strangle these people” moment.
Having to live on the street in a cardboard box or in a homeless shelter is anxiety. Having to move to a new area, or taking a pay cut and having to get a less expensive house is NOT.
“An immediate drastic lifestyle change.”
This is one of the reasons I get so mad. Personal story: The division I was working for was closed a month before my wife had her hours cut in half. Anxious a bit? Yes. Long lasting? NO. IT’S NOT THE END OF THE WORLD.
It probably helped that we had saved up some money as an “emergency fund”. (Pssst, the secret is to live below your means, even if your friends and neighbors aren’t). Maybe people should stop buying so many toys, and start saving just a little?
Okay, I’m going to defend this family. That being said, I agree that more families should live on one income. Also agree that having kids while young isn’t such a stupid idea, after all — seen too many of our friends reverse the kid/career thing and end up with the costly infertility treatments, bed rest, health problems, etc.
OTOH, we often complain here about the plight of the middle class in the U.S. Well, here it is, in black and white.
This family did all the “right” things. He went to college and got an engineering degree, has a stable job history, it seems they married before having kids, she tries to supplement their income by working from home, they had savings (article states savings were depleted, so they had something) and lived within their means.
Irrespective of what they named their kids (does it really matter?) or how slim/heavy they are (he’s as overweight as she is, and she doesn’t look bad to me)…they seem to be a nice family. I think he’s right to try to find a job where the income will be similar to his previous income. Do we want income deflation or what?
What we need is for more people to demand decent, middle-class wages. Folks whine on about how the govt employees have it too good, but have they thought that perhaps the private sector employees have been too quick to let the corporatists wipe their a$$es with them?
One thing I hope to see in the near future is collective bargaining and a stronger push for the unions. Unions the only things holding up the middle class. Take them away, and we’ll end up like Latin American or African countries: a handful of rich lording over the masses of poor people. In which class do you think you’re more likely to end up?
Welcome to reality, sister!
The only reason there’s an American middle-class is because America was the only industrialized nation standing after WW II.
The rest of the world has caught up, and you can no longer maintain the same unsustainable lifestyle without having specialized skills.
This “inventory manager + shipping clerk” is, most assuredly, not a “professional”.
And popping a single kid out is the single best predictor of bankruptcy. There was a study on this (which I can’t find a link to right now.)
As I said, welcome to reality! Population You!
“Chapman University economist Esmael Adibi believes Orange County is on the verge of seeing negative annual price appreciation. Indeed, prices may already be in negative territory since DataQuick’s figures don’t reflect the concessions homebuilders are offering new home buyers in lieu of cutting their recorded prices.”
A reasonable guess is that somewhere around six months ago, price hit the top of the parabola, and started falling off to give 0% appreciation YOY (not sure if the data bears this out). Anyway, I am wondering how OC can get appreciation back on track, given the sudden disappearance of so many subprime lenders?
Re Amanda:
It is difficult to answer your question, as you don’t say whether you want to lose money or not.
If you want to lose money you should buy that house.
Sonoma’s median price topped at K615 in March of 06.
According to today’s DQNews press release, Sonoma’s Jan. 07 median price is K510 ie. a -18% decline.
What’s even more alarming is how the decrease is really starting to gain speed.
Check out http://www.rereport.com/sonoma as well as the DQNews release.
Burn baby, burn
OT: One has to look in the rear view mirror once in a while:
This was Mid 2005 While AG was in charge and how the roles have changed.
http://www.msnbc.msn.com/id/8552401/
WASHINGTON - The Bush administration is closely watching the housing boom, though so far the surge appears to be driven mostly by basic market forces and not speculation that could lead to instability, Ben Bernanke, the president’s top economist, said Tuesday.
Federal Reserve Chairman Alan Greenspan and some private economists have raised concerns that the market may be getting too hot.
Speculative buying and selling seem to be cropping up in some areas, but other forces also are feeding the hot market and the surge in house prices, Bernanke suggested.
“While speculative behavior appears to be surfacing in some local markets, strong economic fundamentals are contributing importantly to the housing boom,” said Bernanke in his first speech as the new chairman of the White House’s Council of Economic Advisers.
Those fundamentals, he said, include low mortgage rates, rising employment and incomes, a growing population and a limited supply of homes or land in some areas.
“For example, states exhibiting higher rates of job growth also tend to have experienced greater appreciation in house prices,” said Bernanke, a member of the Federal Reserve Board before assuming his new post in late June.
Greenspan has said there are signs of “froth” in some local markets where house prices seem to have risen to “unsustainable levels.” It doesn’t appear likely, however, that a national housing bubble, which could pop and send prices tumbling, will develop, the Fed chief has said.
Greenspan also has raised concern that the froth in housing may have spilled over into mortgage markets with the rise of risky interest-only mortgages and the introduction of relatively exotic forms of adjustable-rate mortgages.
“The administration will continue to monitor” developments in the housing market, Bernanke said. “However, our best defenses against potential problems in housing markets are vigilant lenders and banking regulators, together with perspective and good sense on the part of borrowers.”
Bernanke’s comments on housing were contained in a broader speech delivered to the American Enterprise Institute on the need for Americans to gain economic security in a fast-changing, competitive global marketplace.
He highlighted the importance of workers refreshing job skills to remain competitive and emphasized the importance of improving education, especially in math and sciences. He also stressed the need for Americans to gain more control over their economic security — themes consistent with the Bush administration’s message.
Bernanke, 51, is frequently mentioned as a possible successor to Greenspan, who is expected to step down early next year. Before going to work at the Fed, Bernanke was a professor at Princeton University and chairman of the economics department.
A real juicy rumor on Pigginton!
http://piggington.com/wmc_going_under
“WMC is the 3rd largest subprime lender in the country.”
ml-implode.com has them at #8. We’ve already seen 17, 19 & 21 fall. It would be nice to see somebody in the Top 10 go. Of course #2 and #3 almost got knocked out last week. Cindarella is alive and well and she is beating the snot out of the tourney favorites.
2006 median home prices
Agoura Hills $805,000
Calabasas $1,397,500
Camarillo $642,714
Newbury Park $726,090
Simi Valley $569,970
Thousand Oaks $776,715
Westlake Village $993,108
You better have a nice down payment to buy in Ventura County. Or be a movie star.
Those numbers can easily come in by 65% and they would still be overpriced. The same junk was 60% less expensive in 2000. The MEGA-OVERPRICED crap will get hit the hardest, when credit tightens up sufficiently.
Ben,
Thanks for all the California articles. All good news, looks like things are finally starting to improve around here:)
Patience, LAIG, and popcorn. Just watch the show and let it play out…
It’s getting easier, now that the curtains have risen and the beginning credits have played.
Don’t forget to fart in the direction of the homedebtor in the next row!
Esmael Adibi is something of a housing bear. Saw him last night on a PBS program. I think it might have been “Inside Orange County”. He was going toe-to-toe with a reporter from the Orange County Register and a Realtwhore from Newport Beach. The realtwhore kept saying “his” zip codes (all nine of them) were doing just fine. No price drops there. I would imagine he’s in the wealthier coast ares, maybe Newport Beach. Adibi kept at him about the county as a whole, not just a few selected zip codes, and finally got the realtwhore to admit that overall, house in the county are not appreciating, and in many instances actually had declining prices. The host seemed to lean toward Adibi’s less rosy point of view.
As someone who grew up in Irvine in the 1970’s, and who lived in Mission Viejo during the last downturn (while working as a systems analyst for the escrow division of Orange Coast Title), all I can say is these people ain’t seem nothing yet. Haircuts of 35-45% back then, with some neg-am loans, creative financing. It’s much worse now. It’s gonna be a bloodbath.
Trishy-la
Liz Ann Sonders on a roll again.
http://www.schwabinsights.com/2007_02/strategy.html
Smart and Pretty!
My kind of Bear!
Latest news from Brodrick (realtor clown isnt smiling)…
I guess you can call him the Real Estate Shill of SV
Last paragraph is interesting….
http://realtytimes.com/rtcpages/20070212_worstnotover.htm
New Research: Worst Doesn’t Appear To Be Over
by Broderick Perkins
Evidence that the worst is over for the housing market can’t be found in recent reports of swelling inventories, falling prices and lost jobs, which are more indicative of a housing market not quite ready to recover.
However, now that the Super Bowl is over — often a market turning point at least on a seasonal level — attention should more fully focus on the business of buying and selling homes and the shape of this year’s housing market should become clearer.
For now, early 2007 reports reveal a continuation of last year’s downturn.
Here’s the shape of things as they are:
Nationwide, the number of vacant homes for sale soared 34 percent to 2.1 million at the end of 2006, compared to the end of 2005 — the fastest increase ever recorded, according to the latest “U. S. Census Bureau Reports On Residential Vacancies and Homeownership” released Jan. 29.
A year ago, the number was only 1.57 million homes waiting sales.
The vacancy rate for owned units, 2.7 percent, broke another record moving from 2.0 percent a year earlier. The rate has never been above 2 percent from 1965 to 2005, with the long-term average at only 1.4 percent.
This housing market price correction/crash/bloodletting (call it whatever you want) is taking sooooooooooooooooo long to unravel. Prices are up in LA County! F _ _ K!
LA is a tough case. To keep your sanity, watch the surrounding counties.
Dallas’ prices are tanking. Texas or bust. Wait, txchick does not like Clownifornians. Where to go, where to go?
TX should be begging for MORE Californians.
or just stop chanting I want it now I want it now I want it now
What Brad said
actually it is happening quickly
YOu mean the Median is up? Come on…you know better than that.
don’t be disheartened formerlandowner….the zip charts will be out in a few days. i have a hunch the 6% yoy increase is a result in a high floor….not a high ceiling. in other words, there’s alot of subprime loans being written in l.a.’s numerous ghettos….500k for a shack…but that’s about to change IMO. My bet…..and just my bet….that you will see numerous areas like sfv, westside, beach communities all negative y-o-y and compton will show a 25% y-o-y gain. we’ll see…..just a hunch.
Patients
Im been waiting since 2003… it just looked really bad each year waiting for a turn to happen… that happened in 2005… and yea its freaking long wait. Im pretty sure we need a 50% cut off the top.
“This housing market price correction/crash/bloodletting (call it whatever you want) is taking sooooooooooooooooo long to unravel. Prices are up in LA County! F _ _ K!”
Most of the purchases of homes last several years here in LA county were/are still being made by ignorant immigrant families who simply do not have a clue about the impending RE meltdown. Look on foreclosure.com for LA county and see the foreclosures/NOD’s. 1 in 3 names are Spanish.
There is a hugh amount of shady lending ops/shady realtors/brokers here in LA still getting RE ignoramous’s into way over appraised properties. When POS 2/1, 800 sq ft, 70yr old clapboards in SCentral are going for $450,000 in such zips as 90011(the Most deteriorated third-world hovel in LA), you know there is massive mort overappraisal fraud/RE ripoffs/extreme toxic loans being pushed onto immigrants and lower-working class familes in LA.
BTW, the foreclosure rates are skyrocketing in LA County. last count:1460 foreclosures and 12260 NOD’s. Wait another month or two when LA County foreclosed listings equal 50% or more of monthly sold homes. E.G., we could see 3000 foreclosures and less than 6000 sold properties by end of march, 2007. LA County NOD’s could reach 20,000 or more by end of 1st QT 07.
The shutting down of toxic subprime loans in the LA marginal areas should result in downward price pressures in the near future, unless the Gov’t/Fed does something stupid like lower interest rates or pull out some financial bailout scheme for inner-city minority FB’s.
just re-checked foreclosure.dom feb 16th to verify above stat. Strange statistical anomaly: number of pre-foreclosures showed sharp declines for 5 SCal counties except Ventura tho the nos. of foreclosed properties did show nice increases. Very odd. Will re-check data later in day or cross-check with another foreclosure site.
How the f*k does LA county go from 12260 preforeclosures to less than 10,200 in just a few days?
The Thousand Oaks Acorn. “Home prices up, home prices down. But the experts agree on one thing: Residential real estate isn’t the safe haven it used to be. ‘No major collapse is being forecast,’ economist Mark Schniepp said, but warned, ‘It doesn’t really look like we’ve hit a plateau yet at the bottom.’”
Plateau at the bottem, Gotta love it.
OH, the humanity! And I thought that DFW was a place the Clownifornians could come to with their ill-gotten gains and be “safe.” LOL!
D-FW home prices fall
Dallas had the biggest decline among Texas cities surveyed
06:59 PM CST on Thursday, February 15, 2007
By STEVE BROWN / The Dallas Morning News
stevebrown@dallasnews.com
Dallas-Fort Worth was among the more than six dozen U.S. housing markets where home prices fell during the fourth quarter.
Pre-owned home sales prices in the D-FW area dropped by almost 4 percent in the final months of 2006, the National Association of Realtors said in its benchmark survey, which was released on Thursday.
It’s the first time that D-FW home prices have fallen in the quarterly report in more than a decade.
Oh, and may I add that this appears to be a bigger fall than California, proving once again my assertion that TX has just as far to fall, if not farther.
Look at the chart on the Schwab link originally posted above by Sunsetbeachguy . DFW had the highest percentage of loans in default, 4.05%, than any other city on the list. As they say in Texas, “Big hat, no cattle.”
http://www.schwabinsights.com/2007_02/strategy.html
Do they use the line, “They’re not making any more land” in TX too?
Sorry to burst you “bubble” but TX is going to look like noise on the chart compared to CA. Things go splat when they fall from the outer atmosphere. When they fall from the top of a a pile of cow dung they just get up and dust off their boots…
Could someone explain how the new homes median in OC which use to be in the 700’s now in the 500s could still show a 14.9% gain? This is a large drop even using the median, what am I missing. Thanks in advance…
It that fuzzy math the NAR uses.I have seen prices for new homes around here fall 30% but locals site the median price has barely dropped.You really have to keep your eyes out and make your own calculations I’m afraid.
That’s a really good question. I have no idea where they are getting those numbers from. New home prices for year-end ‘06 were close to 700k, so where they get 14.9% gain is beyond me.
Sketchy.
The Housing Boom’s Dark Side: Shoddy Construction
CNNMoney.com
http://tinyurl.com/3a6r9h
Home loan woes
Find out why it’s getting tougher to refinance your mortgage. »
http://tinyurl.com/2fjh7c
“Chapman University economist Esmael Adibi believes Orange County is on the verge of seeing negative annual price appreciation.
I am SO sick of the crap spin of “negative annual price appreciation”
It is called DEPRECIATION!!! As in LOSING VALUE.
No ‘Big hat, No cattle” for me!
Pygmy goats and popcorn is where the BIG money is. I might steal my sisters smaller tractor to play on if my RE attorney steals this farm from the agent/owner( gentrified wannabee farm flipper) who is in serious finacial doo doo.
Be NICE Neil…you NEVER know WHAT your popcorn is WATERED with
ha ha
I have never seen such a whiney bunch of losers. Do you really think that America, the land of the rich and free, the shining light of democracy and light, would ALLOW its citizens to experience the type of house deflation you all keep hoping for?
Don’t you know that you have a white house that would NEVER let you down?
Besides, I have an inside source (Gary Watts..Mission Viejo RE PROFESSIONAL) who says that 7% YOY appreciation in OC is “in the bag”.
Sheesh moose…next you’ll be saying that Ms January was a 34 yr old US Air Force Staff Sgt FOR NOTHING… but FREEDOM !
nite
She wasn’t?
yeah…she just posed and was 30 yrs old
Spring selling season is only about 30 days away and the downside selling mania once it gets going - is not going to be a pleasant sight.
Panic time on the way for many
If I hear one more time a realtwhore saying: “it has natural light, natural light, check the natural light”, I’m gonna puke! Shut uuuuup!
That means it has windows, right? As far as I know windows are actually required by law for a unit to be habitable.
Yeah…but I kinda wish the Stand Off between Buyers and Sellers would last little longer….I just love to see the RE agents passing out form Hunger
Wow, you guys are going to love this one:
http://www.theonion.com/content/node/33490
Funny, and so true!!!
That’s it in a nutshell! Our world has been turned upside down. What used to be “Form follows function” is now “function follows form”. Perception is everything to these folks, but that means that to them hard cold reality with it’s cause and effect relationships is simply off the radar. If they can create their reality and that creation has no phenomenal foundation other than percept then there is no reason for these folks to even try to understand anything beyond manipulation of percpetion. No reason to care about why hard things are hard or why when you spend more than you earn you are going to suffer. they have had no negative impact or result thus far for such behavior. Why, then, should they even expect it?
Oh my, this train wreck is going to get very very ugly.
It’s listings like this that warm my heart:
http://inlandempire.craigslist.org/rfs/279252166.html
http://inlandempire.craigslist.org/rfs/276055201.html
http://inlandempire.craigslist.org/rfs/279243718.html
Those are some fugly houses, in bad areas to boot. Wake me up when we start seeing similar listings in the same solar system as Los Angeles.
This Californian isn’t going to pay more than $280,000 for a house, since that’s what I can rent one for, figuring that over 30 years + property taxes.
So who wants my money in an area where that same house goes for $700k?
Renting is supposed to cost more than owning the same structure, because you don’t have the resources to put 20% down, have a stable job + credit, etc. This is how landlords make money after all!
Stupid people - you are going to lose everything, and will probably be forced to remain cash poor for years because of shortsightedness.
Why would anyone want to buy a home in Southern California facing its illegal immigration problem? Your house will be worthless in years to come. Californians are in denial that the housing market is tanking big time. Very few people can afford to buy a home now and its reported that median LA house price is going up?? But yet sales are going down ? What gives? I think realtors and the media are in denial about how serious the housing market is. Buyers will wait until they see prices go down, way down and that’s a fact. Sellers will continue to be greedy and keep their prices up — but in the long run the sellers will lose, and in time they will find out sadly the bubble is here and is very real.
Don’t underestimate the future buyers — they will wait it out and watch inventory grow and see the Sellers get desperate — patience is on their side.
I think there are a lot of people who believe that huge amts of debt are a “fact” of life….and they simply never fully pay it off. They view it just like a electric or phone bill. I had a friend (a boomer) who could never seem to pay off her $1100 credit card balance and would pay anywhere from $25 -$100 but never pay it off. Meantime she did have savings…but didn’t understand that 18%-20% interest just kept her spinning her wheels. At that time she made about $37K and had enough “disposable” income to go out to dinner a lot…
Some people do not understand finances.
You got that right. It is scary how little people understand finances. It amazes me how many seemingly smart people are baffled at why I’m not more anxious to buy a house so I can get the mortgage deduction.
I simply tell them that I’m trying to minimize how much I pay in combination to the government for taxes and to a bank or a landlord to have a place that I like to live. Currently, the best way for me to minimize that number is to rent.
They speak of the mortgage deduction like I’m stupid for missing something so obvious, then their eyes glaze over when I do the math showing them that I’d double (or more) my monthly housing cost to live in the same place as an owner rather than renter. I don’t even bother to try to explain the opportunity cost of putting my down payment into the house–that would really confuse them.
People also don’t understand that getting the deduction to get to a lower tax bracket doesn’t matter all that much either–it only saves you marginally more taxes paid on the last marginal dollars, not all of your income…