“The High Cost Of Low Interest” In California
The Ventura County Star reports from California. “Home prices and sales continued to slide last month. The county’s median price for existing single-family homes was $664,400 in January, down 2.6 percent from the same month last year, the California Association of Realtors reported. January sales were down 18.3 percent year-over-year, CAR said, continuing a year of monthly double-digit declines. December’s sales were down 24 percent from the same month in 2006.”
“Oxnard Agent Carolina Alvarez said she has started offering $1,000 ‘referral gift certificates’ to boost sales. ‘The market is kind of stable right now,’ said Alvarez. “Sales have gone up a little bit, especially if a buyer is willing to take $5,000 to $10,000 less than their asking price.’”
“The real estate market traditionally picks up in the spring, but broker Joe Virnig, president of the Ventura County Coastal Association of Realtors. said waiting until then to put up a ‘For Sale’ sign might not be the best strategy.”
“‘I always think if you’re a seller, it doesn’t really matter. You can wait for a busier time,’ he said, ‘but there are going to be more buyers and sellers out there. It’s not like there’s going to be a bunch more buyers out there and the same number of sellers.’”
The San Francisco Chronicle. “California housing prices barely edged up as the number of homes sold fell last month, signs of a sputtering real estate market, according to a report released Tuesday.”
“Economists said reports point to a stagnating housing market. ‘The important thing to recognize is that prices are basically at a zero-percent growth rate,’ said economist Christopher Thornberg. ‘Whether it bumped up or down, it’s all within the range of noise for this kind of data.’”
“‘The resale market is going to take longer as sellers hold on and hold on,’ Leamer said. ‘They don’t have the same kind of pressure that builders have.’”
From KCRA 3. “With interest rates on the rise and the real estate market in a slump, adjustable mortgage rates are skyrocketing, and the high cost of low interest is turning the American dream into a nightmare for some.”
“After five years of an adjustable rate mortgage, one couple sold their home and wound up owing $15,000 after they sold. The couple’s real estate agent said they were paying the lowest option every month.”
“Agent Mike Toste said families are drawn in by the low payment option, not realizing they’re only paying interest on their loan. ‘They get into these loans and they end up falling delinquent because they just can’t afford them anymore. They’re not going up $200 to $300, but $800 to $900, sometimes $1,000 a month,’ Toste said.”
“Real estate records in Sacramento County show more than 7,000 foreclosures in 2006 alone.”
“‘Out of about 310 active homes for sale in Antelope, there are 57 homeowners that have their properties listed as short sales,’ said Toste.”
“‘The unfortunate thing about that is people are borrowing from retirement accounts and exhausting every last penny they have to try and keep this mortgage current. They’re just running right into the wall because eventually…they’re forced to sell their home,’ Toste said.”
“Borrowers are not the only ones facing financial hardships. Several large lenders who specialized in sub-prime loans are also facing tough times.”
The LA Times. “Several other of these sub-prime lenders have seen their shares hammered after disclosing heavy losses this month, including New Century Financial Corp. of Irvine. Others have filed for bankruptcy protection, including Ownit Mortgage Solutions of Agoura Hills and ResMae Mortgage Corp. of Brea. And a host of mortgage companies, including No. 1 lender Countrywide Financial Corp., have announced layoffs.”
“All mortgage lenders will ‘have to reduce their workforces even further to adjust to the slower volume of loans and reducing their losses,’ said Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University in Orange. ‘This industry was the major engine of growth in Orange County and unfortunately will be a big drag on the overall job growth in 2007 and 2008.’”
“ACC Capital Holdings Inc., the Orange-based holding company for Ameriquest and Argent Mortgage Co., is an example of the heavy damage sustained over the last two years by sub-prime lenders. As the market boomed, the Ameriquest companies had become the biggest sub-prime lenders of all.”
“Last year, after it paid $325 million to settle predatory lending charges in 49 states, it had fallen to seventh place among sub-prime lenders.”
“Its most recent financial statements couldn’t be obtained. But analyst Matthew Howlett of Fox-Pitt Kelton said he had spoken with potential buyers who were put off by what they termed huge recent losses and the potential for more deficits.”
The Orange County Register. “About three years ago, Bob Ralston got the urge to make his own marketing decisions and go after real estate deals wherever he could find them. With a booming housing market and a new broker’s license under his belt, he launched Ralston Realty on the Whittier-La Habra line.”
“Then, things got tougher when the housing market slipped into a deep slump. At the end of last year, Ralston Realty shut down, and Ralston went back to being a salesman in Brea.”
“‘The slowdown made me realize how much I missed being part of a larger group of people,’ said Ralston of La Mirada. ‘To open the door and be the only one in there (made) it hard to be motivated all the time.’”
“The demise of Ralston Realty is just the latest fallout from a downsized housing market that’s seen home sales fall 27 percent and commissions decrease about 20 percent last year. As a result, some real estate offices are closing. Some offices are being combined. And some independents, like Ralston, went back to work for someone else.”
“Office mergers and shutdowns have been occurring across the region and throughout the nation as well. Los Angeles County saw the closure of at least six residential brokerages in the spring and summer, from Agoura Hills to Rodeo Drive, the Los Angeles Business Journal reported.”
“Belt-tightening became necessary only when the market slowdown began cutting into company revenues, said leaders for both the Coldwell Banker and Prudential chains. ‘When the market is really good, you overlook the fact that it’s not efficient,’ said Betty Graham, president (of) Coldwell Banker Residential Brokerage of Greater Los Angeles and Orange County. ‘But when business goes a little flatter, you have a duty (to be more efficient).’”
“After weathering a 50 percent drop in sales in the past 12 to 18 months, broker Jerry Kelly in Westminster says he may have to refinance rental properties he owns to keep his business going. ‘You have to pay your bills whether you have income or not,’ Kelly said.”
Rich Toscano takes on the local paper:
‘The San Diego Union-Tribune’s latest housing editorial, Rickety Market, is so misleading that I just can’t resist taking a few shots at it. ‘But recently a genuine threat has emerged. Lenders around the world have been burned by rising numbers of Americans who can’t make their mortgage payments.’
‘This is the type of permabull revisionism that we can expect a lot more of in the months and years ahead. It goes something like this: ‘We were right to predict infinitely rising home prices, but who could have foreseen Factor X?’ Factor X might be further mortgage defaults, employment weakness, a consumer slowdown, outmigration, or any number of other problems. It will be discussed as if it was some entirely unpredictable exogenous shock, and that the bullish analysts’ predictions would have been spot on had the X-Factor not come into play.’
‘The truth is that the X-Factor will not be some external shock as they’d have us believe, but a likely if not inevitable result of the excesses of the housing bubble.’
I really enjoy Rich Toscano’s writing. He is a voice of reason and common sense up against a chorus of shills.
http://piggington.com/
http://www.voiceofsandiego.org/toscano/
It is good to see Rich mixing it up with a bit of a harder edge of calling BS.
Outright CYA going on here.
This is all part and parcel of the current society/generational tendency to place blame for our problems on others instead of taking responsibility for our own actions.
How about being real and truthful instead? Something like “Fed made a mistake keeping prime rate so low, and for so long. Mortgage rules were bent to cash in and prop up the bull run to unsustainable valuations, which were not noticed until the gravy line ran out. Speculators and get-rich-quick types dove in to the catch the new gold rush. And, except for all the new, large Wal-Marts and sub-divisions out there, the general population (particularly those not owning a home) are worse off due to the inflationary effect.”
Admitting mistakes is deeply un-American, if only because it exposes one to liability, lawsuits, and public excoriation. Far better to blame the other guy.
Let me see if I understand the situation
1. De-regulate everything (check)
2. Everybody runs amok, lies cheats, steals…goes bankrupt (check–happening right now)
3. We all pay. I think we all see this coming down the pike.
Hmmmmm I wonder how we can prevent 2 and 3 hmmmm a little help here somebody
brrrrp Wrong answer Libby, it is not Free Market.
The correct answer boys and girls is good solid enforced regulation….this is how we end up NOT paying for the greed and stupidity of others.
Now Libby it is okay to make a mistake…it is not okay to keep making the same mistake over and over again.
Class what is the definition of repeating the same exact action over and over again and expecting a different result????
Thank you Denny you are correct, the answer is Insanity.
This has been todays installment of simple answers to simple questions.
If the federal government wasn’t providing cheap and easy money for mortgages, this mess wouldn’t have happened.
The federal government is not…..Also bonus information “THE FED” is not a government entity.
No, you fool. This was all Florida’s fault.
Ben and this guy (Toscano) should be Knighted for their public service. But wait that is for rich Brits….Anyway, it seems like we are always falling over ourselves to pay homage to someone for having good cheekbones or being obscenely rich, but we really need to honor those who try to inform the public. Unfortunately Ben and Toscano are fighting an information war against a sea of hired slimeballs.
If this was the litmus test, wouldn’t Sir Ralph Nader be our President?
Ralph Nader LMAO clueless socialist
amen
opps the amen was for President Nadar, not the bitter anti-socialist
That’s ok, I’ll give the amen to jerry from richardson
I’ll go with Ben, Rich & Ralph against any 3.
““The High Cost Of Low Interest” In California”
What a great title….was the double meaning intentional?
(low interest = no buyers = high holding costs)
Nice catch. I didn’t get it until I saw your explanation.
it could be that the *high cost* could be California as we know it. Present sequential meltdowns and migrations seem to indicate that a severe housing >> economic >> socioeconomic shock could make hardest hit areas into ghost towns.
Not ghost towns - there’s far too large a population needing cheap housing for that to happen.
A more likely outcome is that we’ll create a bunch of new Palmdale/Lancasters - newish housing tracts built in the least desirable locations during a bubble, inevitably turning into low-income slums after the boom ends and anyone in a position to move somewhere better does so.
“anyone in a position to move somewhere better, does so…..”
The boomers can. I think this has been happening, which is why the formerly “more affordable” places in California like Grass Valley, Redding, Eureka, Reno (East Truckee) have seen dramatic price increases. The IE and Sacramento are too close to becoming that Palmdale scenario so they are avoided by the locust. Unfortunately, many will find out that these places do not provide the lifestyle activities they have become accustomed to, and realize (like me) all they got was a cheap house.
Sorry….. my point being they are fleeing to a rural Lancaster, which it was before you showed up thinking it was Mayberry.
Ha, ha, ha….I used to live up in Ridgecrest, CA (yeah, look it up….I worked for the Navy in the middle of nowhere after the tech bust). Anyway, we would drive 1.5 hours south to go shopping in Lancaster because it was the closest place with any stores. Definitely a step up, if you can believe it.
Hey, but how ’bout those Trona Pinnacles? Whenever someone from the East came to visit me in LA, straight up to Ridgecrest we went, and into the God scene of Star Trek V.
After weathering a 50 percent drop in sales in the past 12 to 18 months, broker Jerry Kelly in Westminster says he may have to refinance rental properties he owns to keep his business going. ‘You have to pay your bills whether you have income or not,’ Kelly said.”
Kelly, let me save you the suspense…..you’re hosed!
Talk about being leveraged. What a dolt.
Interesting paradigm: borrow your way to prosperity. Works great until the loan comes due.
Even now, I don’t think most people and their elected reps get the real source of the problem - too much debt and prices no one can really afford. They’re so used to perpetual inflation making every price “reasonable” they just don’t understand.
Bingo, climber. I have yet to read an article that states a lack of affordability as the cause of the housing meltdown. It’s always those pesky high interest rates. Then I turn on the TV and I see a Ditech commercial that begins with, “with rates still at historical lows”. Could it be that they are lying to me? No!!!!
Closely related to the “productivity gains will save us so deficits don’t matter,” meme IMHO.
Maybe we could start a special bank card for this and call it “PayPaul”.
“PayPaul” - very clever!
LOL!!!!
Do you make the payments with your HELOC at the bank of Peter?
It would be really interesting to see how many individuals must extract equity to meet debt service, especially in California.
I heard this on the radio…….
“interest rates are going up, foreclosure are going up so you better unlock that equity so you don’t lose your home”
something to that effect. socal radio station
Many already have. Several people took out large HELOC’s, spent some, and saved the rest (at least temporarily until they find something to spend it on). What will be really interesting is seeing how many people will dip into unspent HELOC proceeds to make mortgage payments when the house value has dropped below their loan balance. Once they are underwater will they continue to put good money after bad?
Good Money? Once the value of the house drops below what they own on it that HELOC money is “bad” money as it now belongs to the bank anyway. They should at least use all of it to pay the mortgage payments. The time that buys in the house I would call “Freeloading.”
I can’t wait to buy Kelly’s properties from the bank.
Why stop at just the house. How about buying his boat, car, motorcycle etc.
Agreed, but he can keep the brokerage. It’s interesting that the very thing he’s so intent on saving is the very thing that will bleed him dry.
I can’t wait to buy properties from DSL, FED, NDE, FMT… paid for by the $$$$$$ I made shorting their stocks. Poetic justice.
Woo Hoo! I got puts on all these suckers too.
Aw, darn. I thought I only had to pay bills when I had income.
Stay debt-free, keep the utilities and housing at a minimum, don’t shop ’til ‘ya drop, and eat/life frugally. Yes, you can do it. SInce we sold the home and got rid of the debt, I enjoy only getting 6 bills per month, inc. the rent. 1.5 bills per week or just 1 every 5-6 days. I like it and it can be done.
I agree. I have cash in the bank, don’t miss the house, sleep very well (too well, in fact), and can come and go or move as I please.
Or….that could be because I’m single.
lol
the bills keep coming month after month go figure!
Remember back when “refinance” used to mean something benign, i.e., trading a high interest rate for a low one without increasing your loan balance?
Now it has become a euphemism for taking a cash loan with the house as collateral, and in the worst cases using the proceeds to make payments on the now-larger mortgage! Exactly the same as taking a cash advance on your credit card in order to afford to make the minimum payments.
“As home prices soften and lenders adopt more stringent standards, consumers who once used “serial refinancings” to extract cash and get new low “teaser” rates are finding themselves stuck with loan payments that will soon shoot higher. With foreclosure rates on the rise, some analysts warn that woes in the sub-prime industry could spread to the prime market and affect the entire economy.”
There it is in the LA Times. That is the first time I have seen the MSM state what posters on this board have been saying all along.
“”More people who already own their homes and can’t refinance are likely to lose them,” said analyst Zach Gast, who has studied the lending scene for the Center for Financial Research and Analysis, a forensic accounting and due diligence firm.
“Think how that’s going to ripple through the economy,” he said. “It could really affect home prices.”"
You think?
‘The setbacks that continue to plague the housing market could imperil both California and the East Bay, despite the robust revival of the economy in the two regions, a report released on Thursday warned. Why? In recent years, jobs related to home building have propelled a sharply rising share of the employment growth in the East Bay and the state.’
‘More than half of the new jobs created in the East Bay from 2001 through 2006 were produced by industries closely tied to home building. Residential building construction, specialty residential contracting, and real estate jobs produced 54 percent of the 24,000 jobs added in the East Bay over the five years.’
‘California was even more housing dependent from 2000 through 2005. About 62 percent of the new jobs created in the state over that period were produced by that trio of housing-linked industries.’
‘We know that people in California, particularly those in the Bay Area, were refinancing their houses repeatedly and taking money out of the house,’ Ross said. ‘They were using their house as a second job.’
‘They were using their house as a second job.’
I never could get my head around the idea that home appreciation was income. Somebody pass me the kool-aid.
“Third job to fund luxury consumption spending,” but then who is counting?
All I can do is sit back, watch, and laugh. I know it’s wrong to laugh at others’ misery, but as a “bitter renter,” I’ve been laughed at/scorned by family and acquaintances for 2+ years now for calling this a bubble. Because we all know “it’s different” in California, and especially the Bay Area. Turnabout is now fair play.
If anyone else out there gets soft and starts feeling bad for the FB’s they know, think about how things would look if the market was still going up, and the flippers were laughing in your face and insufferably flaunting their wealth.
Maybe we can buy their Hummer at auction… and run them over with it…
SFer: I’m with you my friend. I’m in Alameda Co. and am frustrated with all the bulls running loose and proclaiming how great our local economy is, blah, blah, blah. Stevie Wonder could see that this area is stupidly dependent upon this housing bubble. Are there any commercial centers here without a RE office or mortgage company? I’ll tell you, it is hard to find one. I will never feel pity for all these serial FBs. I’ve got my popcorn and am ready for the show.
I hear you CA GUY and SFer ! Im down in the South Bay!
CA Guy, I often at work do talk about the Bubble. Just love to see people turn green and purple. Some get defensive… I just remind them … Either your home price goes down or your job leaves… which one will it be.
News Flash!
Google just opened a R&D Center in Singpore.
Why ? Cheaper labor( Engineers) and plenty of tax breaks from the goverment. There are some people who turned green at in my company when they read that and didnt understand the meaning.
I hadn’t heard the news about Google. Thanks for sharing. Indeed, Silicon Valley business leaders are well aware of what you stated: “Either your home price goes down or your job leaves… which one will it be.” The clones can’t comprehend it though. A year or so ago I got to hear the head of the Silicon Valley Leadership Group speak to this very topic. Area CEOs are looking elsewhere, to be sure.
Louie Louie,
I find strange how people don’t understand how the cost of living is tried to the cost of doing business. It’s like they think each happens independantly of each other.
My personal favorite is how most californians don’t understand the connection between RE and the cost of education. Everyone want expensive RE but cheap education - talk about living in fantasyland.
RE: Google in Singapore
What? The Dalles, Oregon wasn’t cheap enough for them?
(Yes, that really is the city’s name, “The Dalles”)
Yes Google did actually set up 200 new jobs in North Carolina as well. Recent news regarding Singapore is todays San Jose Mercury News.
Why are they doing this… All they do is advertising! In a recession advertising dies out really fast…People buy only the essentials. And that is low margins.
Current CEO is from SUN… and as you can see SUNW learned a lesson …they never forsaw prices of hardware declining until many other competitors made similar products cheaper. Lesson learned.
GetStucco you make a good point about 3 incomes. This is what will kill people. House no longer ATM, which leaves just a dual income. Mom or dad loses job and/or can’t move the Tupperware, leaving just 1 income.
OUCH!!!!!
Those who mocked the bubble…
Are about to get a lesson. I’m going to have one attitude:
“Borrowing to prosperity only works for so long!”
Sadly, the whole economy will pay for this.
Got popcorn?
Neil
All I can do is sit back, watch, and laugh. I know it’s wrong to laugh at others’ misery, but as a “bitter renter,” I’ve been laughed at/scorned by family and acquaintances for 2+ years now for calling this a bubble. Because we all know “it’s different” in California, and especially the Bay Area. Turnabout is now fair play.
Indeed. Ever since a few years ago when we were subjected to stories about bidding wars, squirrel-feeding demands, and suggestions for what to say in your letter to sellers explaining why you should be the lucky one chosen to buy their property, I have been waiting very patiently for the day when I can take such a house off the hands of one of these formerly smug bastards for fifty cents on the dollar. That day is not all that far away, the way things are going.
“Maybe we can buy their Hummer at auction… and run them over with it…”
I thought Hummer’s were beheamoth POS’s when they hit the scene–and now they’re a joke. Was reading one of those uber-rich toy magazines called “Robbe Report”at my hair cut yesterday…title was “top 150 luxury cars.” They rated Hummers as “dying in fad popularity quicker than bell-bottom pants.” Gee, ya think??? Stupid, overpriced, oversized pieces of crap. I get embarrased for the dolts driving those big turds. 9 miles per gallon you say? What a dumb f**kin waste of money. Pretty soon, owning a Hummer will give it’s owner the same sensation as hanging out in the 120 degree Mojave desert in July–slowly shoving hot pebbles up their butt.
Doc
I passed a 30 foot long Hummer limo yesterday. This Is The Definition Of Excess.
My 67’ Dodge PU with a 440 gets 8 miles to the gallon. It sets at work. I may not be able to retire, because I have no where to park it at home. Tried to sell it on Craig’s List two years ago when I sold the McMansion, but no takers.
Those pebbles are hot, but after the scar tissue forms, not nearly as painful……
Can’t you donate it to the Calif Association for the Blind, and get a tax write-off?
It’s kind of a hot-rod….. and my friends keep telling me to take it to the “Good Guys” show (Pleasanton, CA) ….. “should fetch 8k-10k”.
That’s their view. 5k on Craig’s List….. it’s still mine. In reality, it will probably take someone blind to buy it, so they don’t see the gas gauge needle dropping as they pull away from the station (91 octane too, the “large pebble” burn).
I can’t wait until the Hummer joins the nationwide scorn of the members only jacket and Star Trek as the ultimate source of embarassment to be associated with.
Thanks for the friggin “heads up” there, Zach! Might have been a bit more timely say, oh, about 3 fu*king years ago? When it might have made a difference to someone, perhaps? Thanks again for NOW stating the obvious.
“All mortgage lenders will “have to reduce their workforces even further to adjust to the slower volume of loans and reducing their losses,” said Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University in Orange. “This industry was the major engine of growth in Orange County and unfortunately will be a big drag on the overall job growth in 2007 and 2008.”"
This doesn’t bode well…
As Thornberg said, OC is different, it is going to get hammered.
Hmm, some lenders (moi) are experiencing more loan demand than ever. Perhaps I can find a mortgage clerk who Will Work For Food.
Hmmmmmmm….define “work”.
clerical
Though a little desensitized after reading about this stuff for a few years, I still cringe at the thought of being an FB, upside down in my house, in this market. I would never elect to be a slave to a house payment, ESPECIALLY in some crappy neighborhood with smog, no land, surrounded by stucco sh!tboxes. It gives me chills just thinking about it. I will pay a little more to have acreage, clean air and water, and peace and quiet, but will not mortgage my future away. I like to be able to enjoy vacations and activities, without worrying about some monthly payment taking over my whole life. I couldn’t sleep at night with that sort of debt hanging over me. Going to bed praying the refi goes through to buy a little more time?? No thanks.
Some people might actually be going postal over this… so add “random violence and mayhem” to the possibilities.
to people who are debt slaves:
“Debt is worrying throughout the day and staying up most of the night”
thankfully my equity helps me sleep at night
Looks like Citi just inked a deal with ACC to provide funding (with an option to purchase the mortgage origination and mortgage servicing portfolios). Here’s a link to the press release:
http://tinyurl.com/339d2a
WTF is Citi thinking?
It could be a couple of things: a market share, short, or swap maneuver.
“Sales have gone up a little bit, especially if a buyer is willing to take $5,000 to $10,000 less than their asking price.’”
As a buyer, I am always willing to close for less than I offered. What do you make of her little misstatement? Freudian?
Ok, let’s see…..last year at this time LA County inventory at 29K, it currently sits at 41K….OC inventory at this time last year was 10K, currently sits at almost 14K….Riverside County this time last year at 18K, now the IE is just about at last summers high of 26K. Now add this little fact to the heap; Spring is still a month away.
Hmmmmm, I wonder if So Cal is going to rebound? I’m looking forward to seeing the mushroom cloud from where I sit 500 miles away.
Oh, you won’t have to wait a month for Spring. If you need a hobby for the month of March, try inventory watching. Grab some of Neil’s popcorn and enjoy the show. To the moon Alice!
munch munch munch
The inventory here in “greater LA” is about ready to form that mushroom cloud. What I’m wondering is when will companies start to move people out in mass? Its already too late in the decision process to stop some employment transfers.
Just be a safe distance from the implosion. If you look closely into the cloud you’ll find its full of “open house” signs and yellow hummers.
Discussion: I’m thinking of picking up a pickup cheap in the next year. (For work around my future house.) Hmmm… A real cheap one (used). Hmmm…
Got popcorn?
Neil
I’ve noticed in Ventura County, especially Simi Valley, that a lot of the properties that were taken off the market in late November have suddenly appeared again, and they’ve brought friends.
In the last 2-3 weeks the increase in for sale, open house, and price reduced signs is pretty staggering. I guess that everyone had the same idea to put their houses on the market now before everyone else does…oops!
Then sea of “for rent” signs that occupied the lawns of the properties owned by investors seeking some kind of relief are now again being replaced by “for sale”. Almost none in my area found renters over the winter. It will be a painful Spring indeed.
“It will be a painful Spring indeed.”
Not for me or you. Bwahahahahahahaha.
I was laughing at all of the stupid FBs. Bwahahahaha, losers. How smart are you now?
I still have a ton of people trying to get me to commit financial suicide. My annoyance at these idiots grows.
I have a special gift for anybody that wants it. Yesterday I received 2 VIP passes to see….drum roll please…..Donald Trump Jr. speak. “Donald J. Trupm invites you to learn the Trump family’s most successful wealth generation secrets from his son.”
Please let me know if you want the tickets. Did I mention that they are free? You even get a complimentary edition of “Trump, Think Like a Billionaire”. I need some Jack Daniels.
I hope they all smoke turds in hell!
They may be free, but you have to call and “Reserve Your Spot” at this once in a lifetime presentation, coming to a hotel near you.
“Reserve Your Spot”
Better get on that reservation. Otherwise, they’ll turn you back at the door, right?
is it Save a Trump foundation? where you agree to support one the orphaned condos in return for ego gratification? IF YOU! do not buy a Trump condo poor Bianca will not be able to shop at Tiffany’s, Donald will have to sell his wig and his gf will leave him, and maybe just maybe every time you pass him in his Real Estate holding on the street (read Refrigirator Carton Box) you could say “Your Fired!”
Same here in Ventura…Neighbors house went up For Sale 2 weeks ago at 100,000 less than what they paid in 05.
do they have to sell because of a relocation? Or are they forced into it financially.
“do they have to sell because of a relocation? Or are they forced into it financially.”
Nope, none of the above. They just actually want to sell the house and not watch it rot for weeks with a fantansy number attached to it. If you start to see major reductions in oncoming listings, I wouldn’t be quick to assume a distressed property. Rather, be quick to recognize a prudent seller (and a soon to be successful one.)
I’m noticing the same thing, Andy, in my Westside/SFV search.
I posted a few days ago that I’d seen an overnight jump in listings from around 1900 to 2300 (2+ beds, SFRs) - the overwhelming majority of them either townhouses/condos misallocated to the Single Family Residence list, properties that were pulled late last year and relisted, or already listed properties with double,triple and quadruple listings.
Natch, all the ‘new’ listings have asking prices in 6 figures…
I’m going to need a bucket of popcorn the size of Coney Island, while waiting for prices to drop to sensible levels in Sherman Oaks.
Yep…. right after superbowl.
Here you go, truck or aircraft delivery, you pick the yield for a choice of cities.
http://www.fas.org/main/content.jsp?formAction=297&contentId=367
nnvmtgbrkr: where do you find the stats for inventory, as I’d like to track these (especially for OC), too? TIA
I’ve been Zip’n
http://www.ziprealty.com
ocrenter has been tracking inventory for some time in these areas and keeps the numbers from last year. Look for the links on the left side of the page.
http://bubbletracking.blogspot.com/
“I wonder if So Cal is going to rebound?”
Heck yes it will! Suzanne researched it!
Seriously though, you have to wonder how the bulls can be so delusional. As you infer with your inventory numbers, the market has only one way to go: down. 40% off is my guesstimate.
Exactly matching what James H. Lowell II told me over the weekend. (He’s the father of the Jim Lowell who sometimes writes in WSJ, very different investment philosophy.) Anyway JHL II said go ahead and offer to buy anything you want, just make sure your offer is 40% below last year’s asking price.
They’re delusional because such behavior deludes buyers into buying. Realtors gotta look out for #1.
The prices in West Los Angeles are 4x to 7x their pre-bubble prices.
When this sucker crashes, Los Angeles will essentially be flattened and will be a different city afterward.
“‘I always think if you’re a seller, it doesn’t really matter. You can wait for a busier time,’ he said, ‘but there are going to be more buyers and sellers out there. It’s not like there’s going to be a bunch more buyers out there and the same number of sellers.’”
WTF? Can someone translate this gobbledygook for me?
I’ll give it a shot.
“I haven’t had a commission check for 3 months and my ARM is adjusting. My “investment” properties are killing me too. Therefore I am living on PB&J sandwiches. This has lead to decreased brain function. What was your question again?”
CA Guy, I didn’t yours before I wrote mine (below) but I think they both are pretty close to an accurate translation.
Nice! I like it. Yep, they are so screwed that they can’t even think straight. I wonder if any of them saved $ at all. I imagine there will be some good deals out there on luxury cars and Rolex watches.
Rolex watches are imported from Tijuana and sold as previously owned by a FB. You can always find a GF for the watch.
I think he meant to say “I always think if you’re a real estate broker, you are scared sh**less. You cannot wait for a busier time,” he said, ‘there are not going to be more buyers out there. It’s not like there’s going to a bunch more commissions out there and, how the hell am I going to pay my bills since I’ve already extracted all my home equity and my “investment” properties are worthless than I paid for them?”
Well, trying for a moment to translate it straightforwardly, I think he is saying, there is no point in a seller’s awaiting a more lively season, because the listings in general will increase during what other sellers think is a more lively season. I.e., the imbalance between buyers and sellers will persist.
A new translation:
“If I don’t get a buyer soon my new roomate will be Bubba!”
Ever since Phillygal started calling flippers “Club Casey” I just haven’t been able to think of their misery without smiling.
Ahhh… Schadenfreude.
Got popcorn?
Neil
“Team Casey”, Neil.
But speaking of clubs, I do believe I am going to join Neil’s Club Popcorn. Today I drove around my TH community, and counted nine for sale signs. This is about 10% of the development for sale. Not including the ones who intend to relist next month.
I chuckled to myself, anticipating the drama about to ensue.
My name is phillygal, and I am a (future) popcorn muncher.
Ahhhh…
Team Casey. ROTFL.
Its scary what is about to happen. But after reading about this for months… I’ve become detached. Unworried. My concern has shifted from primarily “when can I buy” to when will I not be killed for bearish talk.
The drama will become huge.
A friend of mine just bought another property yesterday.
(Ok, contract to buy in Costa Rica.) How do you tell someone 4 properties is probably a few too many…
I decided to bite my tongue. (There is nothing I can do but step aside to avoid the blast from the impact of the falling RE prices.)
Got popcorn?
Neil
Neil, do you own stock in ConAgra? (parent co of Orville R.)
Want Schadenfreude?
try this:
http://boards.hgtv.com/eve/forums/a/tpc/f/9384011632/m/2851063803
Lots of the people who drank the koolaid and can’t their homes. The ones that bought a new place and haven’t been able to sell their sold their old home for months and months are my favorite >; )
I think there is a housing bear or two baiting the locals - much fun to watch.
this is awesome!! lot of collective hugs and kumbaya’s…
I enjoyed reading the thoughtful posts from authors such as catiecupcake, who just wants to scream over the lack of interest in her house.
And this is from poster KallyQ, who sounds utterly frightening:
“My house has been on market for 6 months, no offers. We had been with our first agent for 4 months with 3-4 showings. Our second agent has brought in A LOT more people. Most like it but nothing. We have lowered the price again, but as other Wisconsin people know, the weather here has been awful.
I’m closing on my new house tomorrow so in one month will be paying 2 mortgages. I do have help so am not too desperate. I just want this over because I broke up with my boyfriend 6 months ago and would like to not live with him any more!
This has been the most stressful thing I have ever gone though. This is worse than writing my dissertation, passing my licensing exam, and getting through graduate school. I specialize in working with suicidal people and selling my house is more stressful even than that!!!
Can I join in in the group yelling?”
part of the 9%+ RE employment of 05 going back to 6%
hhhhhhhmmm wonder how much office space that work out to ?
Also figure in the 2 million square feet of office space currently under construction in OC, and you have a real vacancy problem coming up.
Where are all the businesses going to be coming from that all this commercial real estate is necessary? Not the mortgage/home building related industries that’s for sure.
I think people here are the only ones who can put two and two together. I have been blabbing about the commercial office bubble to all my friends and family, and all they do is look at me like I have a tin foil hat on my head. I’m sure there is nothing to worry about though. After all, Bernanke came out today and said everything will be o.k.
CA Guy I would agree with Bernanke’s comment this week that to have ‘economic growth requires stability and low inflation’.
But as we know neither of the two have been present in the Bay Area economy. We have more instabiltiy and price inflation (due to RE) than ever before.
“neither of the two have been present in the Bay Area economy. We have more instabiltiy and price inflation (due to RE) than ever before.”
Agree 100%. We will pay for being so foolhardy. Had to travel on Interstate 5 last week, and when I first merged, all I saw were billboards for new homes. 5 of the first 6 billboards were builders! Alot of that has been driven by the bay area. I’m keeping my hip waders handy because the sh*t is going to be pretty deep around these parts.
“Also figure in the 2 million square feet of office space currently under construction in OC, and you have a real vacancy problem coming up”
During most of 2006 my job asignments took me all over the south OC. The amt of ongoing commercial construction
in the Irvine/Costa mesa commercial hub district is amazing. Jamboree rd off the 405 both north and south is a hot spot. Corner Michelson/Jamboree is proceeding with a large mixed use project. Another really large cleared/graded site at jamboree/alton. Still more construction at Barranca/Jamboree at the old Tustin Air base. The projects often combine Commercial/residential/shopping plazas into one overall master-planned mixed use develoment which is the current trend in Urban planning.
There is more construction activity farther south at the 5/405/133 junction(El Toro Y), around the Irvine spectrum.
yes, quite a few of the tenants in the S OC/Irvine industrial-commercial belt are still RE/banking/lending operations. The Big cahuna is New Century Mort at 3337 michelson, Irvine 92612, which is located in a big mega-sized whale-like blue building the size of an aircraft assembly plant off Jamboree/michelson.
Yet at the same time i also saw plenty of vacated commmercial blds with for-lease signs in virtually all the commercial parks in the S OC. See this also all over the IE: developers putting up new commercial bldgs and entire parks while vacated/partially vacated empty warehouses/plants/office bldgs sprout up everywhere.
http://www.laweekly.com/general/features/the-town-the-law-forgot/15731/
“It’s small, so everything is close by. But it’s ugly, and there are shootings.”
You want me to believe that with all those state laws there could be an infestation of crime in CA? Laws solve all problems whether enforced or not, the politicians say so all the time.
That’s the future of California….it’s spreading from the border.
A couple of comments. First, I am familiar with that area since I used to announce high school sports for the local cable tv station in South Gate. In the 80s and 90s it wasn’t that bad. However after the riots it seemed that the entire ‘hood went down the tubes.
Second, with that kind of corruption the authorities should just take these jokers out back and take care of the problem. I realize that as a conservative liberatarian it goes against much of the philosophy. However, I think these city officials need a serious lesson. These gusy are literally getting away with everything short of murder and no one can stop it. Well I for one am against waiting for the deity or karma. I would like to see some good old fashioned Mexican politics played out on these guys by our guys.
Third, tarvos, you make an excellent point. If you don’t see this as a reason for curbing illegal immigration, I don’t know what it would take. If you don’t think these a$$holes want to increase their size and influence, you are nuts. Guess I’ll be moving to Alaska pretty soon.
Russia clamped down on illigal immigration took 3 months…
Simply speaking 2 million Chinese got rounded up cough…
Corruption there is bad too but loozing Siberia is not an option too much wealth diamonds, gold, oil, iron ore, etc…
Also they shoot people coming across the border from China unless its an authorized junction. Ergo If mexicans were running into russia somewhere other than the border control point with necessary documents there would be a very dead group of people.
is there still a border or has cali merged with mexico?
“That’s the future of California….it’s spreading from the border.”
Yes, there has been rampant civic corruption, Tijuana-style in that grimy, immigrant=packed slum ghetto pocket area of LA which includes Cudahy, bell, maywood,SGate, Huntington park. Thing is, no one, even our vaunted LA Civic leaders, cares. Cudahy is such a tiny forgotten wasted industrial pocket that is goes largely unnoticed. These areas i mentioned are virtually 100 immigrant hispanic, and Huntington Park is a virtual 100% Mexican neighborhood, with a lively Hispanic ambience along pacific ave.
The movement of drugs and other assorted crimimal activites in these immigrant rotten boroughs, and the infiltration of, and even gang influence in the body politics of Cudahy, is the inevitable outcome of 30 yrs of open unimpeded immigration into LA.
Unfortunately the efforts of the DEA,FBI, LAPD,and other law-enforement agencies to stop this festering corruption is like swatting flies in a landfill.
TX Chick:
Did read that article by laWeekly. Not in the least surprized, as This S*it was building up over last 25-30 yrs with the massive waves of immigrants into LA. Hell, virtually every immigrant in the 80’s/90’s could get stolen/forged ID’s in MacArthur Park within spitting distance of LA CITY hall. Yet, the LA City leaders simply allowed the immigrants and Gangs to sprout anf flourish in LA.
I suspect there is a lot more gang influence and infiltration in a lot more places that just Cudahy. Gangs indeed have become a real serious issue in LA City as evidenced by recent pronouncements from the the mayor and LAPD. Fat chance. The LA gangs are firmly enconced, and even the Mayor of the little rotten borough of Cudahy is best buddies with some 18th st gang members.
“The real estate market traditionally picks up in the spring, but broker Joe Virnig, president of the Ventura County Coastal Association of Realtors. said waiting until then to put up a ‘For Sale’ sign might not be the best strategy.”\
This year is different. The sellers will show up same as always, but the buyers who are willing to pay last year’s prices won’t be able to get loans.
Demand = buyers who are ready, willing and able: oops nobody is able, thanks a lot sub-prime.
Buyers who are willing to borrow last year’s prices aren’t able to. Buyers haven’t been able to pay for the last few years.
“Buyers haven’t been able to pay for the last few years.”
Right — they have been “enabled to pay…”
Much of the subprime damage will be contained within the lousy neighborhoods. The poor get poorer.
You would think so, but you would be wrong. The poor were enabled (through the magic of 0% down, I/O payment option ARM financing) to buy in neighborhoods where their incomes would otherwise not have allowed.
You’re right - I should not have used as strong a word as “contained”. But I believe the lousier places will be hit disproportionately hard.
Our society’s economic centrifuge has really made the gap between rich and poor incredibly pronounced pronounced.
You’re right - I should not have used as strong a word as “contained”. But I believe the lousier places will be hit disproportionately hard.
Maybe, but let’s say prices tank very hard in the crappier areas. This will then have a domino effect on prices in the slightly less crappier areas, then the OK areas, then finally the good areas.
Or to put it in more concrete terms, there’s no way that bad areas like the Inland Empire will see their prices decline by 50% while the coast remains unscathed. At some point the price disparity would become so big that very few would be willing to pay the coastal premium anymore, then *poof* demand falls and so must prices.
That’s a myth anyhow. The middle class may be joining the poor soon as our incomes are inflated to nothingness, but being poor is by definition having almost nothing. Having done some charity work I can say that many of today’s “poor” and “disadvantaged” live far above the standards my grandparents considered well off. I don’t see them using rain water to wash their clothes or loading the coal furnace every morning, or heating their bath water over a wood stove.
Sure the rich are gaming the system and abusing us all, that’s a different matter. Next time vote for someone less corrupt.
The poor game the system too. If a person is gaming to get welfare and other support when they are able bodied, they deserve their mediocre life. And while they may not have to use rainwater, your grandparents probably had safer streets and less heroin addicts in their families.
The gap between the middle class and the rich is gargantuan today.
And you can add that there will be more “sellers” as FBs with loans re-setting can’t refi, so they will be forced to try to sell. But they’ll only be able to sell if they are ready and willing to price the house below comps. Those with I/O and neg am loans are, for the most part, hosed since they won’t be able to price their houses at a low enough price to get a buyer.
And, I wonder how many trade-up/trade-down folks will be buying a new home before selling theirs first. This was common before, but with all of the MSM stories out there about folks getting caught with two mortgages, I think fewer will be making that move this year.
I can think of a two-mortgage couple whose now-vacant house is in its six month on the market.
Right before they listed last September, they went up to the Denver area to visit her parents. And, instead of flying and getting the trip over with in a couple of hours, they rode the bus. Which took two days.
And why did they subject themselves to such abuse? Because they were carrying two mortgages and money was tight. I’d hate to see what their money situation looks like now.
Two days on a Greyhound; brutal.
Better than 2 days at a real estate seminar.
“Better than 2 days at a real estate seminar.”
LOL. Best comeback I’ve read today! Thanks.
Exactly!! So many people bought here in Ventura with no skin in the game that it was getting pathetic!!! Take my neighbor who is already losing the house after only 16 months…
When I collectively read today’s articles by Ben it’s amazing to realize that they could have been ripped right outta this blog circa late 2005, early 2006. The sub-prime lay-offs, the collateral economic fallout and unemployment tied to RE, plummeting prices, ARM resets, foreclosures, spring bounce absentia etc..
The squirrel lady did surprise me however…never saw that one coming.
Isn’t it time for Bubbles to make a cameo appearance?
it’s been a while, so there’s got to be a doozy brewin’
I’m touched txchick, I never knew you cared
Lemme see if I can smoke Bubbles out of his hiding place and get him to work…
We will all remember the squirrel story with steely glee.
Seriously though, the one thing that does surprise me is that even with the constant drumbeat of bad news, every news item contains some version of the following: X was down __%, far worse than the EXPERTS predicted.
Rainman, this is taken off of the nni.nikkei.co.jp website. It’s their lead headline.
TOKYO (Nikkei)–The panic-driven selling that spread across global stock markets Tuesday should serve as a reminder to Japanese investors that the biggest risk they face is a U.S. economic slowdown.
I think Stucco is moonlighting as a writer for the Nikkei.
“‘The resale market is going to take longer as sellers hold on and hold on,’ Leamer said. ‘They don’t have the same kind of pressure that builders have.’”
Explain that to the flipper eating negative cash flow who bought ten investment properties, on the assumption he would earn ten times the flip profits…
“‘They don’t have the same kind of pressure that builders have.”
HA! What kind of dope is this guy on? Record numbers of vacant homes for re-sale? I’m sure all the owners are flush with $ and can rest easy. We are going to see some interesting perceptions of reality as this continues to unfold.
Unless a seller is realistic he is in denial. HB’s are never in denial they may be two faced liars but thats a different story. For unoccupied RE to be on the market for months the seller is in denial.
As OCRenter has recently documented, the hypothesized distress of those that Heloced or Refied out their equity is no longer just a “But what if” scenario.
Or a prime borrower that Heloced or Refied out the equity, then spent the proceeds, and can no longer meet debt service.
OCRenter has recently documented this is no longer a hypothetical scenario.
““Economists said reports point to a stagnating housing market. ‘The important thing to recognize is that prices are basically at a zero-percent growth rate,’ said economist Christopher Thornberg. ‘Whether it bumped up or down, it’s all within the range of noise for this kind of data.’”
“‘The resale market is going to take longer as sellers hold on and hold on,’ Leamer said. ‘They don’t have the same kind of pressure that builders have.’””
I think there is another unforseen trend going on now that will force sellers to lower prices simply because less and less people are going to be living here. I spent some time browsing a few city-data web sites. In just about every Southeastern and otherwise non-bubble regions, the forums are chock-full of people from California, New York, and yes- the bubble areas asking about what it is like there.We’re talking thousands of people. Their main reason: ” the prices in California are too high.” I think there are way, way more people either moving out of here or making plans to do so soon. Simple mathematics: Less buyers means less demand. Less demand… lower prices.
Here some data to support your claim !
http://www.viewfromsiliconvalley.com/id134.html
Jan 2005 Labor Force 820K Employment 770K Unemployment 50K Rate 6.1%
Jan 2001 Labor Force 1,011K Employment 994K Unemployment Rate 1.7%
Jan 1990 Labor Force 855K Employment 826K Unemployment Rate 3.4%
There will always be people who like the California coast, but it sounds like IE is going to turn into the real New Mexico.
And what’s it like in the Southeast? Gorgeous. The only thing that surprises me is that it wasn’t overrun sooner.
WTF, then I must be living in the unreal New Mexico.
Because it’s full of Southerners.
Also the weather sucks.
Yes! Most people want/dream about the beach view.
If your house was on the “Coast, overseeing the ocean in Daly City/Pacifica” it is more likely has or will be falling over the cliff due to erosion. No I will pass on that.
There are truly a few habitable places that sit within yards of the beach. Sounds great but its unsafe due to natural forces, the Pacific Ocean has killed and destroyed plenty of property. And its open to strangers/robbers too easily. Fact is the beach at night is pitch dark like a black hole. Very unsafe. Too many crazy/street people hang on the beach.. just look at Santa Cruz. Better off half-mile to mile inland. Less costly and safer!
We had friends of ours move out of state recently because they gave up on every owning a house. I also know anecdotally, of employers who have been unable to fill certain jobs due to the high cost of housing. It is hurting everyone.
BTW, where did you come up with jetson_boy. Wasn’t that Elroy? Meet George Jetson, his boy Elroy, daughter Judy, Jane his wife… I can’t get that theme song out of my head.
Ha ha! I don’t remember why I came up with Jetson_boy. It just happened to be the 1st thing that popped in my head and wasn’t already taken. Brain fart I guess.
Actually, I am from the Southeast originally, and yes- it is still a pretty well-kept secret. I just hope it stays that way.
i was thinking about changing my posting name to
“fussy renter”
Irvine,
This is endemic within CA college systems and I’m waiting for it to hit the k-12 educators.
Various UCs have resorted to building their own housing development as a last ditch effort to attract talent that would otherwise go elsewhere.
Yea,
Low salary to effort, combined with low mobility, tremendous competition, and high risk. Those are the main things that have kept me from going into academia. Virtually every UC city and most Cal-State cities are obscenely overpriced. Here in Ashland,OR it is no better. The median home price is kissing $500k and Professors at the University make $40-60k/yr. Slave seven years for tenure for garbage man pay, then run the risk of getting flushed, and not be able to afford a starter home, a difficult way to support a family.
Sound’s like a situation we have in my line of work right now. We’ve exhausted every semi-qualified candidate there is in SoCal. We’ve looked outside the area for people as well, but no one is willing to move here due to the astronomical housing prices.
This has been a problem for a while. Out of state candidates just cannot (will not) move here except for fresh out of school (who just want to have fun renting in “LA”).
Hence why, except at entry level positions, my company now has a So-cal wide hiring freeze (with a few positions excempted). We keep selling off buildings, warehouses, and what little raw land we still own. I know of thousands of condos, townhomes, and SFR’s going up on land my company once held onto for future business expansion… no more. We seem ready to move out of state.
When the flood gates open, which is probably this summer… get out of the way. It will happen fast.
Got popcorn?
Neil
I moved to Orange County from Chicago as an entry level candidate in Fall of 2005. Had I already been established there, there’s no way in hell I would have moved out here. I would have never been able to afford it. But being relatively young (26 then) and fresh out of school, I went for it since I was in no position to buy RE at any time soon anyway.
I work for a Civil Engineering firm with offices all over the the US and world. Speaking for my office alone, we’ve got over 40 positions open… Most for senior level people. As you can guess, they aren’t filling up very fast.
This is a real massive problem. In the community college system, there are 30 open president positions, and more than 120 open dean positions that are just not getting action from out of state. And these generally pay 100K + wages.
the security guards on the campus will make more than the dean with overtime… so the salary is a joke. is they tripple it they might get takers supply x demand.
lol
fyi GL wasn’t laughing at your post…laughing at Irvine Renter’s Jetson comment…now I can’t get the damn song out of my head!
Sorry, mind worms are contagious, aren’t they?
I had a crush on Judy…she was hot.
I never understood that stupid robot-maid that ran around going ” Brrrring!” She was freaky.
I remember someone on this board quoting Astro: “Ruh-roh!”
I thought that was Scooby-Doo.
Trivia time!
Anybody know what Astro’s real name was?
“The family dog Astro could mumble, just as Scooby-Doo and Muttley later on could (voice actor Don Messick played all). Astro’s catch phrases were “Ruh-roh!” and “Right, Reorge!”
Tralfax Gotrocket!
Astro’s real name, Tralfaz
I know Ben has been beating the CA outmigration drum for quite a while. But it’s going to be far worse then even we can imagine. Large portions of the hispanic population began moving out of CA at the beginning of the decade. We’re just now begining to see the trend appearing in the big datasets. Expect more stories on population shifts within the nation for here on out.
Someone coined the term “reverse dustbowl” awhile back. That is exactly what we are in for.
“reverse dustbowl”
Tom Joad: “Screw this place Ma, I’m movin’ back to Oklahoma!”
It has already begun and been going on. When I visited my parents awhile back, there seemed to be a noticeably large amount of new people there. Tons and tons of new housing, new freeways with new ones being proposed. Lots and lots off out of state license plates from every state imaginable- CA, NY, MA, VA, FL… all people who had obviously fled.
Many of the small cities that were sleepy and somewhat economically depressed are now being fixed up. Some forms of gentrification and yuppification taking hold in areas like Asheville and Nashville. The most striking thing to me was the level of younger people. It seemed like the avg age was 20-30something. Later research backed up my observations.
In essence, what’s happening is that partss of the country that are overpriced are getting old fast while the less expensive areas, minus the rust belt, are gaining an infusion of young people. Lots of young families especially.
My question would be is this good or bad? To me when you fill an area with bright young people, you generally get new ideas and fresh economies. Perhaps that is far-fetched, but who knows? could happen.
…or a bubble.
“California housing prices barely edged up as the number of homes sold fell last month, signs of a sputtering real estate market, according to a report released Tuesday.”
Interesting to note prices edged up, but without more info, it’s more useless info. You could have dead flat prices and if a higher % of upper end homes sold, you’ll hear statements like prices edged up.
Where can one get data on true comparable % changes within price brackets. Once you have these I suppose you could weight average.
Use the numbers directionally. Real Estate purchasing can be informed by numbers but it will always remain a bit murky. As long as you don’t have to steal the house you want, once you have a gut feel that prices work for you, then find a house you want to live in for at least 7 years, make a low but reasonable offer and see what happens. Try to time the market and be sure to have your flame retardant suit on, lest you get burnt.
‘Try to time the market and be sure to have your flame retardant suit on, lest you get burnt.’
Oh sure, after an unprecedented 10 plus year run up, prices are about to take off again any time. Maybe you are a troll.
Thank you, Ben, you beat me to it. That is troll talk. A more accurate statement would be “buy now and be sure to have your flame retardant suit on, lest you get burnt.”
Stoutmaster always pushes buying via “you don’t know the risk of waiting.”
He’s a troll.
Prices are dropping and dropping fast. As credit tightens and ARMs reset… more price drops.
Got popcorn?
Neil
the stoutmaster must be a realtor or broker
how are those commision checks coming?
i know you saved for a rainy day because it is pouring now
The trolls here used to be more direct in their assessments. Now they just kinda’ “snark” about.
Don’t underestimate Helicopter Ben, though. A massive currency devaluation could, however unlikely it seems, make house prices stabilze or even go up. The FED has total control of our money value they have promised to make it approach zero, if you’ve studied limits one you know you need to study the derivative of both the numerator and the denominator to know which way a divide by zero or infinity problem will fall.
Sure house “values” are high, but the dollar could still drop faster. In fact, most house “appreciation” is merely the death spiral of the dollar. What’s new is both look risky now. Housing used to be a decent bet.
So where would you invest your money?
brazilian bonds
Massive curency devaluation would only support RE in certain places, like where people have dollars to convert to RE, Gold, whatever. The working class will just starve and their neighborhoods will turn into 3rd world slums.
“So where would you invest your money?”
Certainly not in an asset class that is so far removed from its traditional underlying fundamentals it cannot help but go through a drastic decline. And if you don’t think price to rent and price to median income are important than you don’t understand investments. Can you tell me why the graphs showing a deviation from the mean that mirrors the NASDAQ in January, 2000 is not a crystal ball into the future? And if your argument is that “its differnt this time,” “not making anymore land,” “everyone wants to live here,” or some other useless “analysis,” then don’t bother.
(During tax season one does not have time to waste on trolls.) And if you think real estate is so great - go buy a bunch of homes (a guy named Casey can tell you how) and come back in a year with your millions and rub it in our faces. But if you are ever going to “time the market” well, honey this is it.
“So where would you invest your money?”
Im thinking fake tits for a Thai stripper.
What is the definition of troll?
http://en.wikipedia.org/wiki/Internet_troll
Specifically on this blog it is someone who attempts to pump real estate through fear tactics like “buy now or be priced our forever” or related nonsense.
By devaluing the currency places like India for outsourcing and places like China for products and Japan for the money would be screwed. In turn the rich people of the planet would be screwed.
Helicopter Ben has a choice save the FB or screw the rich.
“Oh sure, after an unprecedented 10 plus year run up, prices are about to take off again any time. Maybe you are a troll.”
Maybe? I would bet a month’s worth of Jack Daniels that the Troutmaster is a troll. “It’s a great time to fry” should be his motto. Because that’s what you’ll do if you listen to him.
Troutmaster!!! too funny…..That is as funny as what we called Greenhorns on the Crab boats in Alaska, master baiters.
Yup. stoutmaster is going to have to change his screen name AND do a better job of disguising his pro-REIC rhetoric, if he wants to make any impression at all around here.
master baiters.
?
Greenhorns on King crab boats in Alaska were given the worst job of baiting the pots with cut up Cod and ground up Herring in bait jars. Hence the Master baiters, masturbators.
Lame!
Perhaps you are a newbie at RE?
You are suggesting a mortgage broker is a RE newbie? Surely you jest?
The Troutmaster was trolling last weekend. His message was even more real estate “rah rah” than today. But make no mistake about it, he wants you to buy.
Once again, very lame!!
But make no mistake about it, he wants you to buy.
Why does he give a shit if I buy or not? He reminds me of a religious zealot who feels the need to convert everyone else.
Seems to me that the Master of Trout sounds just like some San Francisco realtors!
Speaking of those who like to proselytize…
beehive, just yesterday I was reading some material (where?? sigh…) about the latest Case-Shiller index results, where resales of the same homes are the numbers used to determine the direction of RE prices. Seems to me prices in the majority of the metropolitan markets they cover did decline in 2006.
“‘The slowdown made me realize how much I missed being part of a larger group of people,’ said Ralston of La Mirada. ‘To open the door and be the only one in there (made) it hard to be motivated all the time.’”
LOL! Another bubble example of how misery loves company.
Perhaps, but I suspect he really meant: “The slowdown made me realize how much I missed a regular paycheck…”
Six months ago he was rolling around naked in his office over his piles of money, now he’s lonely.
but he can always lived in that leased luxury car
until that gets repo’d
Wednesday, February 28, 2007
Correa backs bill to eliminate “private” tax on homes
The measure seeks to ban a provision allowing developers to impose “private transfer taxes” on the sale of homes.
By JEFF COLLINS
The Orange County Register
State Sen. Lou Correa, D-Santa Ana, has teamed up with the California Association of Realtors in sponsoring a bill that would ban developers from passing on development costs to future homeowners through a “private transfer tax,” the state association announced today.
Correa introduced the bill on Friday, seeking to declare such taxes as “repugnant to the interest created in the property.”
If it passes, the measure still would allow transfer taxes to be charged by such entities as governments, homeowners associations, lenders and those seeking payment through mechanics liens.
CAR called the private transfer tax a burden that negatively affects a home’s affordability.
“This is an alarming trend in California, one that gives non-government entities like developers the power to tax,” association President Colleen Badagliacco said in a prepared statement.
Predatory taxes is one of my pet peeves, and CA is high on the list of culprits. What’s it called? mello roos?
I don’t know what good this law would do. Either the developer charges the “private” tax or raises the price of the home(s) accordingly. Or, like you mentioned, local governments will levy the Mello Roos taxes on property owners to make up the shortfall.
OCkurt good call. As usual if this were to pass, the little guys, i.e. us will be left to foot the bill through higher prices or something else. These developers and local authorities will get their money one way or another. Heck, it is just so depressing. I know there is no free lunch in the universe, but does everyone have to have their hand in my paycheck before I even get it into the bank?
Mello roos and HOA’s - two more reasons to buy used in older established neighborhoods.
I am wondering if things will play out slightly different.
Perhaps the market starting to drop in China is recognition that they are selling at a loss due to currency issues with the US. So they have a lot of risky debt issues and they have a credit contraction. Suddenly they have to raise their prices. Consumer prices will suddenly begin to shoot up and the Fed will not be able to deny the inflation.
It may flag that we are in a recession and BB sounds like a loose money guy…. So, we might get heavy inflation to keep prices high.
So perhaps the shock wave isn’t starting in the US… Perhaps we will see a carry trade in other currencies soon. So capital might flow back into the US.
OK… I’m way over my head in this discussion but the market movenments are strange and confusing. Could be China has already corrupted their currency so much that they are in trouble.
The FED could pull a cornered cat move and surprise us all. That’s why I’m not making any firm bets either way. The Itupip.com Ka-poom theory is as good as any.
The general public is trying to get in on the inflation scam, will the FED cartel allow it or pull the rug? Who can tell? What do they want more happy voters or a crisis to stimulate “change”? Whatever happens there are a lot of well “insulated” people who won’t suffer much and they’re the ones calling the shots.
I was reading about true speculators. Singapore people who mortgage their house (leverage) then buy stocks on margin. With “leverage squared,” it’s not surprising that any drop gains momentum fast.
prices will not shoot up because the factories in china will be moved to vietnam or indonesia to reduce labor costs.
they are already selling at a loss to marginal profit. Avg profit of crap China sells to us is about 3% or lower most factories run at a loss just to keep people happy working. The profitable companies are all american corporations that export 60-80% of the stuff into U.S. ergo the massive surplus china is running is not really china but those corporations.
Also inflation won’t happen because we need it low to keep refinancing the debt and inflation would necessitate higher rates to keep investors happy.
Capital will flow to US because many of the MBS investors like the Chinese Central Bank will realize losses… once they get hurt they will try to compensate by using blunt instruments at home to compensate for revenue loss thus making capital flight a priority for US/International corps.
From JL’s blog.
February 28, 2007
Laguna Niguel home prices on the ‘rebound’
Interesting gem from California Realtors’ latest price report:
Statewide, the 10 cities and communities with the greatest median home price increases in January 2007, compared with the same period a year ago, were: Laguna Niguel, 55.9 percent; Santa Clarita, 30.8 percent; Los Gatos, 30.2 percent; Grass Valley, 17.1 percent; Rancho Mirage, 16.7 percent; Glendale, 14.2 percent; La Mesa, 13.6 percent; Santa Monica, 13.5 percent; Carson, 13 percent; Yucaipa, 12.7 percent.
Laguna Niguel? In a county where home prices fell 1.5 percent?
Well, a year ago, the town saw a rare surge of lower-priced condo sales, primarily one project ’s worth of conversions/sales from apartments. Around that time I fielded numerous calls from folks complaining that the reported Laguna Niguel median sales price – for all residences – was too low. Most didn’t care for my condo-mix explanation.
A year later, nobody’s calling me to express doubts that their home really appreciated 55.9 percent in a year.
P.S.: Another nugget from Realtors’ report is that fact that 57.7 percent of major California communities had no gain in their median price in the year ended in January. That’s up from 6.8 percent a year ago.
home appreciation: the mirage of the masses.
How many communities saw price declines? I know Pleasanton where I live saw the median price drop over 8% from Dec 05 to Dec 06. It’s only the beginning of a long slow burn. Prices will be flat for falling for the next 3 to 5 years.
Greed has a way of turning around and biting people in the ass. The deadly part is nobody wants to suck out the venom.
Accordinly to DQNEWS.com
down 5-7% two zips in Jan07 yoy…
meltdown continues… dont expect Pleasanton
to stop declining anytime soon. Place has lots of
land development last time I drove by.
Wednesday, February 28, 2007
CSUF economic indicator suggests growth
Southern California Leading Economic Indicator rose 0.42 percent in the fourth quarter.
By ANDREW GALVIN
The Orange County Register
A regional economic indicator compiled by a professor at Cal State Fullerton suggests that there will be an increase in economic activity in Southern California over the next three to six months.
Adrian Fleissig’s Southern California Leading Economic Indicator increased by 0.42 percent in the fourth quarter of 2006. A positive reading implies economic growth.
The fourth-quarter increase follows two consecutive quarters in which the indicator declined, suggesting a reduction in economic activity. Employment growth in the six-county region during the fourth quarter contributed to the increase.
Other components that had a positive impact on the index during the fourth quarter included the Standard & Poor’s 500 stock index, Pacific region consumer confidence index, real money supply, and regional unemployment. Components that had a negative impact included a decrease in building permits and a rise in interest rates.
The index includes Los Angeles, Orange, San Bernardino, Riverside, Ventura and Imperial counties.
Even if “fleissig” means “diligent” and “studious” I think this guy is out to lunch.
I know several families who live in the Inland Empire (CA) who are sweating bullets because of their rate resets. Their plan is to sell their houses asap and head for the hills, I mean Texas.
Any person who buys now is simply, most often than not, bailing out some speculator or some fool who did not know what he was getting into. Buyers: wait!
Yes… wait.
Wait through 2007 and well into 2008 AT A MINIMUM.
We can argue about when its going to be good to buy… but before fall of 2008… shear stupidity.
Got popcorn?
Neil
I would count not when
but how much a decline we need
before I would buy.
I will buy when 50% haircut
is made in SF SouthBay.
That may be sooner !
I’ve got my eye on a condo that sold for $350 in 2004 . . . on the market for $420 wishing now, would probably move at $395 . . . minus the speculative premium, this units pencils out as better than my current rent with a sales price at $275. . . 30% depreciation. I think that’s the max the South Bay market is going to go down. (With minimal 2% home price appreciation, $340 would be in equilibrium with my present rent). All bets are off if rents also go down tho.
Bear in mind TH 2000 sq ft went for 200K max in 1997 new and old… now 660K I dare say at max they would be around 325-350K good appreciation adjusted for inflation. Thats why 50%… as such we are back to 1990-93 workforce and there is more inventory around. Im seeing 1300 sq ft condos well over 400K… but these were only 150K or so back 10 years even at 100% in 10 years would mack it 300K…
the extra 90K to get to your number would be dicy for me.
LOL Rents will be going down.
If a recession hits expect Yahoo and Google to have layoffs.
Yahoo had a 25% riff in 2001. I expect a similar number in Goog due to lower consumer spending and thus advertising.
I just dont see more people more employment in South Bay compared to 1990 and we employed a heck more in 1980-89.
Shocking for some to believe that.
Fact is we are seeing more construction in Sunnyvale and Mt View. HB’s are still putting up more constructions in Cupertino and all the way down to San Jose Downtown. I expect new homes inventory to increase. More in the past 5 years than anytime in the decade of the 80’s. Dont be surprised to see old structures like Moffet field and Westinghouse plant disappear an new development going up.
It will happen!
This just out…sorry if someone else already posted this:
U.S. banking regulators plan to issue eagerly awaited guidance on the subprime mortgage market as early as Thursday
http://biz.yahoo.com/rb/070228/usa_subprime_government1.html?.v=2
Only about 3 or 4 years too late.
Unbelievable.
Remember the old days when realtwhores would come-out with those stupid selling catch-phrases?. You know, suddenly a roof wasn’t “5 years old” anymore. It was “five years NEW”. Old windows also became ‘newer windows’, etc. etc.
Back then it was “won’t last”, “better hurry”, “jump on this one”.
Well, guess what realtwhores; why doncha jump on THIS one !.
I absolutely LOVE the new adjectives being used when refering to the RE market nowadays; ’slump’, ’slowdown’, ‘huge recent losses’, ‘foreclosures’, ‘fraud investigations’, ‘mergers and shutdowns’.
And now to top it off; the stock market teeters. All I can say is “It’s about fucking time ..and God Bless China!”.
Or the “55 or better” communities. I hate that one, and I still can’t figure out how they discriminate based on age.
This is a riot.
“The only difference between the rich and the poor is what they put in their heads”
I wouldn’t disagree with that !
http://fortlauderdale.craigslist.org/com/286315540.html
We are also a college accredited association where you can actually transfer your credits from us to universities such as FIU and University of Miami or even Harvard!!!
wow - Harvard even accept credits from U of inwiththenew.com!
Guess we can’t call them Ivy League elitists anymore.
Go to the inthenew website. The name of the “university” couldn’t be more appropriate.
NRU - Home of the Subprime Student Loan !!!
Ask us about our revolutionary homework/study-option program. You can study and go to class every week during the semester - or, with the homework/study-option, you can crack your books for the first time the night before the exam.
Sweet Lord - if I hadn’t clicked through that whole site, I would have swore it was a joke.
Neil,
I was in the wait ’till 2008 camp,but I’m beginning to think this thing will unravel a lot faster, especially if the mortgage market freezes up. If it continues to develop this fast, we may even have a cash only RE market by October ‘07
If that happens, it’s safe to say that prices won’t be going up for a long time to come, so still no reason on earth to buy this year unless you like wasting money.
Uh-oh, could it be that the seemingless endless supply of CA equity locusts is drying up. Lots of bubblehoods sprouting “For Sale” signs…..
Where are those @#$% locusts?
C’mon guys, it is a buyer’s market because….because….you can still buy before prices go even higher as the rush for RE this spring creates a lack of supply…
The Seattle media is still quoting “experts” whose mantra is “we’re different”…….ad nauseum.
Here is a possible future. In one year there will tens of thousands unemployed RE industry “experts”….why not ship them off to Iraq, or Iran, or N. Korea, or Afghanistan? I mean the Army is willing to train them in a “useful occupation”.
They could be decoys in Half ganistan, the half we don’t control. They stand up to pee and the UNIT snipers (like the TV series) protect them. Bit like a video game.
“Its most recent financial statements couldn’t be obtained. But analyst Matthew Howlett of Fox-Pitt Kelton said he had spoken with potential buyers who were put off by what they termed huge recent losses and the potential for more deficits.”
I’m not the sharpest tool in the shed, but I don’t get this. This company has losses and such and we’ve only just begun ! I mean house prices have only fallen a little bit and home owners are still gainfully employed and the economy is doing not too bad.
What happens when things really fall apart, like massive layoffs, recession, etc ? What will their profitability look like then ? You can’t have a good business model if you only make money during the boom and as soon as it turns down a bit you have to pack it in !
In the end, when faced with a purchase, you have to ask yourself if you are happy with the purchase as is, i.e. whether or not you will be happy with the item you’re buying even if you can’t sell it to someone else in the future.
As goes with housing, so it goes with stocks and many other things. To take stocks as an example, if you are happy with the returns and your view of what the returns will be over the long haul, then it doesn’t matter what the price of that stock does over time, because you’re getting your earnings/dividends.
The mistake that people make is they price in and focus on their expectations of selling the item for a profit in the future, rather than focus on what that item produces for you. For stocks it’s earnings. For housing, it’s the roof over your head. It’s a mistake to disconnect yourself from these things, which are the basis of value.
Another important question you have to ask yourself, in the case of housing, is can you afford it? A ton of people bought into the frenzy RE market without giving a second to this tought. They all thought it was money in the bank. Many got lucky, but many more will take a financial beating.
In So Cal the great majority of workers can’t afford the current housing prices. And since significantly appreciation in the short term is no longer a sure thing, why would anyone buy right now?
No-one should buy right now, and no-one should be in a hurry to buy ever. Will be interesting though if the market freezes up and only cash buyers can buy. That would be a huge opportunity for those with cash in hand. Otherwise, its a long painful way down. Reasonable prices in late 2008, bottom not till 2012 or later. In the telecom/Internet bubble fortunes were made in the 2002 and 2003 when assets went on fire sale. Anyone already in and loaded with debt was screwed because they couldn’t act.
Will be interesting though if the market freezes up and only cash buyers can buy. That would be a huge opportunity for those with cash in hand.
Given that the average American would have trouble accumulating $50k in cash by 2012, such a scenario would result in a striking effect on house prices.
The national RE market over the next 5-7 years will become a series of rolling foreclosures and massive NOD.
Kinda like the electrical brown outs. The 100% LTV loans whether prime or subprime will create huge numbers of stranded homeowners upside down LTV.
Once homeowners become upside down LTV then foreclosure or short sales become the only way out.
Went to a party over the weekend. Birthday girl has been talking about selling her house for two or three years so they can rent closer to husband’s work in Santa Monica. The house is about 1,200 whole square feet in Northridge (San Fernando Valley), OK neighborhood, not much of an area. She says she plans to put it on the market in the spring, and will only sell if she gets Six Hundred Thousand Dollars for it-no misprint. Her friend tells me that she has so much money in stocks that she is thinking about getting some rental property in Tennesse or some non bubble area, because real estate is always a good investment. I didn’t say too much. I may have mentioned something like: uh, gold.
Funny how the US doesn’t reveal that the Chinese government forced the state owned companies to buy Chinese stocks in order to create the illusion that the Shanghai Stock Exchange was up yesterday. And Bernanke said that the financial markets are working well. Another example how the financial markets keeps peeing on the sheeple’s back and saying that’s raining. I get my news from outside the US, because in here everything is manipulated.
I don’t know if anyone remembers that I predicted that banks and savings and loans would raise checking account fees soon . I just got a notice from one of my banks that on my free checking account they are raising the fee to 12 bucks a month if you don’t keep a $1,500.00 balance and they listed other fees they would charge also . Now what does this tell you ?
Gotta start getting that “bad loan” back somehow. I prefer this to a massive government bail-out of the FBs and GFs…but you almost can see something along those lines coming soon to a tax form near you.
Yep
The Ventura Star piece was shameless REIC cheerleading. It in no way reflects the reality we see on the ground here. It should have included a link to the Public Notices section which now includes about 20-25 trustee sale notices per day (there were 2-3 per day a year ago when the market peaked here). The median house price is still about 10X median income for many zip codes and this ratio will correct to 5, as it always does, and probably even over correct to midwestern levels for a time.
Isn’t that the truth!! I have noticed the same thing going in the Star since about Jan. Ventura, Camarillo and Oxnard are in for a huge hit. Homes on Ziprealty, some are priced under purchase price.
Hey Implodometer: Here is another fallen angel:
Ivanhoe Mortgage Closes doors
Ivanhoe Mortgage, a $2 billion-a-year conventional/government lender based in Orlando, Fla., has closed its doors, according to industry officials familiar with the company
From http://www.nationalmortgagenews.com/
check out these 4 articles. They will blow you away. The US economy and housing is so doomed.
(1) US Recession in 2007 - Third Leg of the Bear Market Likely
http://www.marketoracle.co.uk/Article307.html
(2) US Housing Market Crash to result in the Second Great Depression
http://www.marketoracle.co.uk/Article383.html
(3) Greenspans Cheap Money role in the US Housing Crash of 2007
http://www.marketoracle.co.uk/Article320.html
(4) US Housing Market- The Mother of All Bubbles
http://www.marketoracle.co.uk/Article303.html