“It’s A Buyers-With-Great-Credit Market”
It’s Friday desk clearing time. “2007 is expected to be a year of transition,, according the National Association of Home Builders’ Regional Housing Starts Forecast. The earlier boom in housing can be attributed largely to excess demand generated by historically low interest rates coupled with aggressive mortgage lending practices, a combination that made homeownership more affordable but also attracted investors and speculators into many markets.”
“‘Because the boom and correction cycle has largely been driven by national rather than local factors, most regions have experienced some degree of over-heating and correction,’ said NAHB Chief Economist David Seiders.”
“Once upon a time, would-be home buyers had to outbid each other and forgo inspections to get the place of their dreams. Now, sellers are the ones making concessions. ‘The buyers are in the driver’s seat,’ said John Eric, a real estate in Arlington, VA.”
“With foreclosures now at a record high, banks are once again getting picky. ‘It’s not just a buyer’s market,’ said Leon Bailey, a real estate agent in Prince George’s County. ‘It’s a buyers-with-great-credit market.’”
“Louisville-area homebuilders didn’t accept the idea last year that the market for new homes had slowed, but they’re true believers now. Last month, builders took out 55 percent fewer permits for single-family homes in Jefferson County than in February 2006.”
“‘We’ve got a lot of people tightening their belts and holding on,’ said Chuck Kavanaugh, executive director of the Home Builders Association of Louisville.”
“Vacation home prices in Spain, a leading indicator of Europe’s property market, may face a slump that’s worse than the real estate decline in the U.S., based on the loan terms banks are imposing on developers.”
“‘Banks are imposing terms on real-estate firms similar to those for defaulted loans,’ said David Malpica, who helps manage $5.6 billion of real-estate and distressed debt assets in Europe and the U.S. ‘It reflects the high volatility of real-estate assets.’”
“A survey of realtors found condominiums to be a more popular choice for housing in markets where prices have gone up most, such as Edmonton, Calgary, Saskatoon and Kelowna. ‘Especially since January, the good product [sells] right away, reealtor Aaron Best said. ‘The prices are already high and they have to over-bid. There’s general frustration with that as well.’”
“Donald Trump almost lost his shirt 15 years ago when the North American real estate bubble burst. The 2007 version of that disaster will be much more benign, the real estate magnate predicts, although there is softness in some urban markets, such as Toronto and San Francisco.”
“‘We’re talking very minor [problems] compared with the depression of the early 1990s,’ Mr. Trump said. He said that two years ago, when the market was at an all-time high, he was telling people not to buy real estate. ‘Now I’m telling them to do it.’”
“Just two days before Shari Scott and her family were supposed to move into their new home, her loan officer at New Century Financial Corp. called her with some bad news: The company wasn’t going to be able to lend her the money for her mortgage after all.”
“‘I literally stopped the car and threw up,’ says the 30-year-old accountant from Burleson, Texas, who got the news on her cellphone while driving home from work this month. By that point, she was supposed to close on the loan the next day. ‘Homeless was the first thing that went through my mind,’ she says.”
“Large national investment funds are starting to shy away from financing condo projects, instead turning their focus to apartments. Portland saw the trend for the first time Thursday when the developers of Ladd Tower, a planned $85 million condo high-rise, changed course. They announced they will build luxury apartments.”
“Developer Opus Northwest, based in Minneapolis, said it changed plans for the Ladd Tower because the world changed around it in the past year. Also, Opus Northwest’s John Bartell said condos weren’t selling as quickly as he hoped.”
“The possibility that Katherine Gwinn will lose her St. Louis home has unfolded like a nightmare. The 53-year-old resident of the Hill is among a rapidly increasing number of Americans swept into a maelstrom of foreclosures created by subprime mortgages.”
“‘We are not even hitting the crest yet. We are standing here waiting to be knocked over,’ said Chris Krehmeyer, executive director of a St. Louis based nonprofit. ‘What is astounding is the scope and scale of it.’”
“‘There was no subprime market 15 years ago. If you didn’t meet the qualifications you couldn’t get a loan,’ said Dennis Norman, president of the St. Louis Association of Realtors. ‘Over the last few years it has become big business. To get more market share, more business and greater volume, lenders kept lowering their standards, and that’s why so many of them are now in trouble.’”
“Congress is making noises about doing something to help homeowners who can’t meet their mortgage payments hold on to their slice of the American Dream. As a sideshow, our elected representatives will probably spank regulators for not doing more to curb deceptive lending practices and hang executives of subprime lenders out to dry for presiding over the boom-bust cycle.”
“While lawmakers’ intentions may be noble, it’s a pretty safe bet that, left to their own devices, they will muck things up even more.”
“The percentage of loans entering foreclosure rose to a record 0.54 percent in the fourth quarter. Delinquency rates rose for all major loan categories, with subprime loans at a four-year high of 13.33 percent. That’s creating a ‘political firestorm,’ says Andy Laperriere, at the ISI Group in Washington. ‘Congress may be forced into action in the same way they were forced to do something about accounting issues after (the scandals at) WorldCom and Enron.’”
“Housing is already a tax-advantaged asset. The folks who write the tax laws have decided that it should be. When these incentives are compounded by easy money and loose lending standards, it’s not hard to understand how solid economic fundamentals translated into perhaps the biggest residential real estate boom in history.”
“When transactions go well, no one complains,’ says Jacob Frenkel, a former federal prosecutor. ‘When they go sour, fingers point in every possible direction.’ Early indications from Congress are that fingers will be pointed at everyone except constituents.”
Wow, what a week! My thanks to those who support this blog. Please check back this weekend for news, your market observations and topics.
Note: this blogs server will be off-line for maintenance from midnight tonight until possibly as late as 8AM PST tomorrow.
Hopefully we (all of us bears) are not getting overconfident? Could the tide turn on us?
> Could the tide turn on us?
1. The price decreases could be dragged out by congress - they want to be seen as doing something.
2. The dollar could be allowed to fall versus other currencies, importing inflation, by lowering FED rate despite CPI over 2%.
3. Anything else?
The FED could purchase defaulted mortgages and refuse to foreclose on the occupants. They could arrange for interest only payments forever, or until the occupant dies.
Never underestimate the power of the crowd. The constitution, personal responsibility and personal property rights are becoming very unpopular lately.
Wow, like being a renter. Except you’re also a slave. That’s brutal. All because you didn’t want to be a renter. Now who’s throwing their money away…b!tch?!
You’re second paragraph is an important point. If people can’t be made to learn from this, all rules other than physical harm to another are null and void.
So the Fed purchase clearly dead properties. Somehow I doubt an extreme (but possible) action like that would not sustain high prices.
In fact, it could easily be consider SO desperate that the market would interpret housing to be REALLY toasted.
Until housing falls back to reasonably affordable prices, under near conventional lending conditions, the housing market will languish.
my apologies…..meant to say….I doubt the Fed buying properties would sustain market prices.
I would legislate that every last homeowner, receive a pint of Stephen Colbert’s Americone Dream ice cream.
Watch out, now. First Dodd, now Obama’s gotten into the act on a bailout.
http://rawstory.com/news/2007/Growing_home_foreclosure_crisis_could_seep_0322.html
So the government owns your house. So it’s like living in a housing project. Except that people in projects don’t have to pay anything.
“now Obama’s gotten into the act on a bailout”
palmetto, I dont’ see a call for a bailout. Mostly regulation of lenders, counseling, etc. An excerp from Obama’s letter (linked from the article):
“The summit should consider best practice loan marketing, underwriting, and origination practices consistent with the recent (and overdue) regulators’ Proposed Statement on Subprime Mortgage Lending. The summit participants should also evaluate options for independent loan counseling, voluntary loan restructuring, limited forbearance, and other possible workout strategies. I would also urge you to facilitate a serious conversation about the following:
· What standards investors should require of lenders, particularly with regard to verification of income and assets and the underwriting of borrowers based on fully indexed and fully amortized rates.
· How to facilitate and encourage appropriate intervention by loan servicing companies at the earliest signs of borrower difficulty.
· How to support independent community-based-organizations to provide counseling and work-out services to prevent foreclosure and preserve homeownership where practical.
· How to provide more effective information disclosure and financial education to ensure that borrowers are treated fairly and that deception is never a source of competitive advantage.
· How to adopt principles of fair competition that promote affordability, transparency, non-discrimination, genuine consumer value, and competitive returns.
· How to ensure adequate liquidity across all mortgage markets without exacerbating consumer and housing market vulnerability.
Of course, the adoption of voluntary industry reforms will not preempt government action to crack down on predatory lending practices, or to style new restrictions on subprime lending or short-term post-purchase interventions in certain cases. My colleagues on the Senate Committee on Banking, Housing and Urban Affairs have held important hearings on mortgage market turmoil and I expect the Committee will develop legislation. “
Don’t worry — Dodd, Hillary and Obama all have one thing in common: They are all unelectable. The bailout proposals will all come back to haunt them, as they will either fail to pass, or if they do manage to get one of them through, open up an opportunity for Republicans to shift blame for the housing bust on the Dems who were “meddling with the free market.”
GS, if you think Hillary and Obama are unelectable, I’d hate to see what you think about a 3-time-divorcee who dresses in drag, a Mormon liberal, or an 80-year-old.
“by lowering FED rate”
I personally don’t foresee this until when and if a hard landing takes hold (think post 9/11 & tech stock bust). Otherwise, the Fed runs the risk of creating a runaway speculative mania in commodities (like a doubling of the price of gold and a negative national savings rate, for instance). Oops — this already happened…
One thing (given there are 150+ replies, I will post this in the FL tread for more response later) that might throw a real wrench in the adjustment is what FL is considering.
Eliminate all property tax, and the prices will immediatly jump, as FL will then be 2nd home (which the owner will call 1st home to get the tax cut) heaven. I anticipate if that bill passed, prices would immediately jump 5-10% to make up the difference, and then climb again for quite awhile. It will drastically lower the carrying costs on a home; and as well all know, how-much-a-month is very powerful.
It has.
The National Association of Realtors reported Friday that existing home sales climbed 3.9 percent last month, pushed up by a milder-than-normal winter that boosted sales in areas of the country such as the Northeast.
ADVERTISEMENT
It was the biggest one-month gain since March 2004 and left sales at an annual rate of 6.69 million units, a pace that was still 3.6 percent below a year ago.
http://biz.yahoo.com/ap/070323/economy.html?.v=9
Troll Alert!!
YOY Sales were down 3% and Prices were down YOY!
This month to month means zero you moron.
One month does not a trend make, but clearly this thing is bottoming out and will likely not be anywhere near as severe as past downcycles.
NAR says “the upturn in sales will be sustainable and the data will show that housing hit bottom in September last year and is now in a period of rebounding”.
I believe they are overly bullish and that we won’t get a meaningful upturn for 2-3 years. But I agree that bottom has been reached. You’ll see certain movement here and there to suggest greater declines and also upward surges, but we will be at bottom for awhile. Inflation will do its work during the upcoming flat 1,000 days or so and knock down prices in real terms.
Obviously some places will hurt a bit a lot more than others.
Yeah, the bottom is in. The President of Century 21 said on CNBC today that even though many Californians were underwater, they saw it as an opportunity to take a small loss and get a good bargain on a “move up”
Realtors are such geniuses.
How about taking a BIG loss and even MORE of a bargan on a move UP??? hehehehehehe
“But I agree that bottom has been reached.”
This thing hasn’t even started. We are no where near the bottom. H&ll we ain’t even near the ‘taint.
“but clearly this thing is bottoming out……”
And this from beehive?!
That’s the thing you hit with a stick as a kid, and then were told to stand still or you’d get stung. My suggestion; run like hell and don’t look back.
This question was asked of people who are not morons (you) to see if there are any signs to look for IN THE FUTURE for changes in the market!
Ok, I repent all my scepiticsm and will rush out to buy 10 houses tomorrow. There are lies, damned lies and statistics (and Realtors).
Take a look at bottom graph on Russ Winter’s blog. http://wallstreetexaminer.com/blogs/winter/?p=548
which has # ARMs reset schedule by ARM flavor. To decode it, Jan 07 = 1.
It is saying ARM resets will spike up in May 07 from ~25B to ~38B and peak in Nov 07 @ ~50B. Nov will also be peak in subprime ARMs.
After that it ramps down to 1Q2009 to get an echo reset in ~2Q2009 to get a surge of lesser$ peak but bigger breadth. I guess +3 years doesn’t take into account any near term activity.
PS: Don’t ask me any questions on this. It is not my data.
And 17% below 2 years ago!
While I think it is a no brainer that prices will drop, I sometimes worry it will take many, many years. Like a prolonged 15 year period of small declines and stagnation, with inflation helping to bridge the gap.
“I sometimes worry it will take many, many years.”
From time to time I would think about that, but I always conclude that the pressure of adjusting mortgage rates will flush out just about everyone who bought a home they really can’t afford; tightened lending standards and a possible return of real out of pocket down payment requirements will reduce the number of first time buyers and drop the price assumptions of others; and rising gasoline prices and general inflation elsewhere, combined with noticeably lower employment in the housing sector will leave much of the country feeling poorer or at least at risk of becoming poorer. None of these auger for a turnaround from the ongoing decline in prices, IMO.
That was an incomplete answer. Bottom line is that I think the price declines over the next 2-3 years will be at least as rapid as they have been in the past year and that it will not take anywhere near 10-12 years to revert to the mean.
“You will find that the truth is often unpopular and the contest between agreeable fancy and disagreeable fact is unequal. For, in the vernacular, we Americans are suckers for good news.”
Name the quotee, w/o resorting to google, please.
Bill Clinton?
Upton Sinclair?
Bonus mystery quote from the same person:
“There was a time when a fool and his money were soon parted, but now it happens to everybody.”
Richard Nixon?
Dan Rather?
“The body is a house of many windows: there we all sit, showing ourselves and crying on the passers-by to come and love us.”
H.L. Mencken?
Will Rogers? HE certainly knew a depression when he saw it.
extra”
“Every age needs men who will redeem the time by living with a vision of the things that are to be.”
Adlai Stevenson.
Do I get bonus points if I’m in barely 30, and from a foreign country originally?
I still say it was Bill Clinton. The guy knows a “sucker” when he sees one.
I’ve thought about that too but housing prices have out-stripped income way too much. Too many in this country are use to having everything now and sacrifice is not built into their character. Even the slightest hint of financial difficulty can dissolve a marriage when the partners find themselves strapped to a mortgage and forced to sit at home. Job losses and medical emergencies only compound the problem.
Maybe someone should chart a time line of events using internet hits on certain key words like: there is no bubble, housing problem local not national and progressing to fraud, victimology, subprime implosion, congressional hearings, etc.
I believe prices will gap down 10%, soon after the Forth of July.
“I sometimes worry it (price drops) will take many, many years. Like a prolonged 15 year period of small declines and stagnation”
So??? Screw it. I’ve got (and many others on this blog) the resolve to just keep budgeting, saving and waiting. Will have a nice chunk of $$ invested and saved in 15 years if that’ the case. Beter than the death of a thousand cuts MANY buyers experiencing right now–which may continue for a long, nasty ride.
DOC
It depends, the main risk, is high inflation. In that case, the the number of hours needed to pay off a debt declines. Conversely for the savers who are in US dollar denominated debt–bonds, CDs, savings accounts, etc the number of hours required to accumulate savings also declines, while rents rise.
I agree. The War on Savers may still pan out for the Fed, if they stay the course.
That’s only if wages rise to keep up with inflation. Which they won’t. Also inflation will result in higher mortgage rates.
Inflation will not save house prices.
Buy FXA to and put your savings there. You get 5% and it’s invested in the Aussie $, so when the US$ inflates, your money is protected.
The tide could turn, if the central planning agency’s propaganda campaign and behind-the-scenes bailout scheme are jointly successful. But in that case, this time would be different, and it is almost never different. The problem they face is that as long as they keep confidence high, people will keep doing stupid things like trying as hard as they can to buy homes they cannot afford (in the case of households) or to build more really big homes than we collectively need (in the case of builders).
“Congress is making noises about doing something to help homeowners who can’t meet their mortgage payments hold on to their slice of the American Dream. As a sideshow, our elected representatives will probably spank regulators for not doing more to curb deceptive lending practices and hang executives of subprime lenders out to dry for presiding over the boom-bust cycle.”
Ok, seriously… this PISSES me off!!!! People enter the financial services profession. They are expected to be professionals. They are expected to perform to the expectations of the profession.
Who doesn’t effing know that when you lend money, you should do basic diligence to determine reasonable repayment ability?
Why do overeducated fat pig dipchits who entered the profession get an effing free pass from performing to the expectations of the profession?
Why do the freaking regulators have to tell them to verify the effing incomes of the people walking in with their big box of stupid for brains asking for buckets of money?
The regulators aren’t there as pre-emptive hall monitors. They only seem to be there AFTER there has been abuse when an industry has proven themselves incapable of self regulation.
So now really… we really need to tell fat pig effing lenders with regulation that they can’t hand out buckets of money without some sort of proof of repayment?
You have got to be effing kidding me!!!!!
rant off
It wasn’t their money. Wall street gave it to them and told them to give it away… for a commission.
Anyone catch this article…
http://money.cnn.com/blogs/generationrisk/2007/03/real-estate-can-only-fall-10-to-20.html
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‘There was no subprime market 15 years ago. If you didn’t meet the qualifications you couldn’t get a loan,’ said Dennis Norman, president of the St. Louis Association of Realtors.
What?! That’s blasphemy! That’s like saying, “if you don’t have the money, don’t buy it.”
“‘I literally stopped the car and threw up,’ says the 30-year-old accountant from Burleson, Texas, who got the news on her cellphone while driving home from work this month.
That’s one lucky gal, getting saved from a future foreclosure.
got cash?
an accountant- wow ,scary
I was thinking the same thing, accountants are suppose to be good with money yet this one is using a subprime lender? Now thats an accountant I want working for me…not
she probably just does data entry in a large corporation for the payroll
Liar loan, liar occupation.
Watch it Suzanne, there are plenty of us accountants who saw this bubble years ago. The liars in Enron were sales people, no wonder selling real estate today.
“Liar loan, liar occupation.”
Real Payments….
Further down in the article: Scott was able to arrange a new subprime mortgage, but the monthly payment was several hundred dollars more than the New Century loan.
Not so lucky.
Any mystery as to why this moron is a subprime borrower? Who in their right mind would let this “accountant” handle their money?
maybe she could invest it into real estate those condos in florida look cheap. (sarcasm)
Homeless was the first thing that went through my mind,’ she says.”
At least she stopped the car in time. Otherwise the windshield would have been the first thing that went through her mind.
Either that or she has Bulemia.
Buyers market with a great credit score
Lets see I’m renting, have better than 20% saved up and my credit score is 823. I believe that would put me in the cat-bird-seat
As long as your savings is in some kind of default proof institution, and as long as we don’t get a hyperinflation by the FED.
I wonder why some readers want to see a complete melt down. That would take them out too. If not then they’re not earning much more than the rate of inflation - 4%.
I too have a great credit score. Let me see, I could run out and pay way more for a house than I can afford on my software engineering salary, and end up with a butt ugly credit score after my foreclosure … or wait till I CAN afford to buy, which here in SD either means my hourly rate is raised to $120 or prices come way down. Either way I am good with it. Of course if there were too many bearish folk like me around this bubble would have never made first base.
Moral of the story - Those of us waiting on the sidelines may not be buying either - for one thing, we have a lot more to lose.
This is really weird it seems like every housing bear I meet is somehow tied into software. It’s almost like they’ve been through a speculative bubble before and instinctively know how bad it can get.
hmm….
I was out of NASDAQ way too early to make or lose much. At some point, I started asking questions like What is this company really worth? and what does this company do? Is this dot com really worth a billion dollars? Is Google really worth 100 - 200 Billion bubbles? - Sorry I digress
Google was worth it.
Noun.com or verb.com was not.
No, it’s because software is the occupation with the largest number of (comparatively) high IQ people.
Oh really… thats more of a myth.
Did you ever even spend 10 minutes with SW dev in SV.
I doubt it. I spend 20 years here and it just isnt true.
You might not want to buy in an area with a relatively high percentage of people bailed out by Congress.
Fire sweeps through unfinished luxury condos: Arson investigators are trying to determine what sparked the overnight fire at the Village on Oak complex in Torrance, CA
http://www.dailybreeze.com/news/articles/6664827.html
freak accident
my ass
Not in the i.e., means nothing to me.
My rotiserie league pick
“Torrance police officals are attempting to determine if an empty 5 gallon gasoline can, a box of road flares and a downloaded copy of thehousingbubbleblog found at the scene are connected to the fire”.
“Further investigation revealed the blog printout was in fact from the iamfacingforeclosure Web site, and was accompanied by the current issue of The Economist.”
Market reality rubbed up against cash flow and sparked a fire.
“Officials warn that with the drying up of the subprime mortgage market, and the arid conditions in Alt-A it is now fire season and many more of these reality vs. cash flow fires are to be expected.”
I wanted to get this into the CA thread, but Ben had just updated with this, so will ask the question here.
On top of rent or mtg payment, what do y’all pay for other monthly housing expenses?
heat/air > electric/gas
insurance
telephone
Internet connection
cable/dish tv
This all adds up and when I listen to some of you, in certain areas, paying as much for your rent or see the prices paid for mtg, taxes, etc. I don’t understand how you have anything left at the end of the month. Just wondering. Sorry for being so OT for the end of the week.
Rent: $1400 for 2/2 (View of Sail Bay in Mission Bay)
Electric: $20 - 30 (Triple that for the one month we need to turn the heat on.)
Insurance: I pay about $70/month for car and renters (not sure what the roommate pays.)
Telephone: $40 for 700 anytime minutes on the cell phone
Internet - $40
Cable - $0 (Better things to do and I can see everything I want to free online from channels that I would watch if I had it.)
I am the divorced boomer that y’all talk about. Haven’t worked since I was downsized in 1997. Grown kids. Renting now. Enough cash. When I owned and the kids at home, between all utilities and insurance (3 teenage drivers), the nut was well over $2,500 a month with no mtg after paying cash for the house.
The reasons that I asked the question:
Unless you earn huge money, the monthly cost of paying a mtg on a $600K loan and the extras (how about private schools/vacations) has to be a .45 caliber to the head every month. Glad, that you and my adult sons, are responsible and keeping your expenses down.
I am amazed that people do it.
Termite, and you are not even counting health insurance. We pay about $500 a month for that, plus $1950 rent. If you count all the other stuff you actually have to pay for every month (utilities, cell phone car payments, insurance, groceries), it becomes very difficult to spend less than 3500 just for the basics every month if you live in LA. Now, imagine what it would be like if we had a $6000 mortgage. It’s no wonder some people put their groceries on the credit card.
Monthly expenses are about $2700 total, including $1300 rent for a brand-new four bedroom house in a nice neighborhood. We are hardly frugal, yet save about 35% of our one income between the ESOP, 401k, 529’s, IRA’s, and good ol’ emergency savings. It’s a good life!
$1300 rent for a brand-new four bedroom house in a nice neighborhood
Where is that?
Yes, redhead, I want to live where you live…
I pay $1700 per month for health insurance alone — crappy HMO, too. It covers the wife and two kids, though.
Mortgage+property taxes+house insurance = $1200/month
No TV
Internet+Phone = $75/month
Oil heat, probably a couple of thousand over the year (it is COLD here)
“The possibility that Katherine Gwinn will lose her St. Louis home has unfolded like a nightmare. The 53-year-old resident of the Hill is among a rapidly increasing number of Americans swept into a maelstrom of foreclosures created by subprime mortgages.”
This woman owes less than $65k on the home and is still bound to lose it. I can only imagine what is in store for the extremely poor folks in rural WA who paid over $200k for a lousy trailer. The real bagholders are the lenders who will never be able to sell them come foreclosure.
She is one of the famous boomers you like to bash.
LOL, I’m a boomer basher?
heh. not a personal comment, i meant you plural.
I guess I should have said ‘ya’ll’.
LOL, np. I can be a little surly at times, but am an equal opportunity basher!
“Donald Trump almost lost his shirt 15 years ago when the North American real estate bubble burst. The 2007 version of that disaster will be much more benign, the real estate magnate predicts, although there is softness in some urban markets, such as Toronto and San Francisco.”
ROTFL “2007 version of the disaster” is very appropriate.
Some softness in San Francisco? That breaks sacred tradition.
Trump is starting to get worried… that’s interesting.
Got popcorn?
Neil
Turns out that Trump is on par with Carleton Sheets and Don Lupree.
Trump losing his shirt . . . bad visual! I’m guessing his chest and back hair look even worse than that dead animal on his dome.
Getting way off topic here, but he has GOT to get rid of that orange combover. That thing is BAD news.
What happened to Trump’s Mortgage company? Heard they were “approved” in MA (at the perfect top of the market) but nothing since.
I want to know when the humane society will free the beaver stapled to his head.
I’ve seen orangutans with better hair than the Donald. Which, come to think of it, is what his orange comb over looks like to me.
old school.
Dave Del Dotto.
Older school:
Tom Vu
I was working at County Club…
“Young man, your finger is in my soup!
“Tat not my finger!”
Now I own tat Country Club!
He combs forward his chest and back hair.
The 53-year-old resident of the Hill is among a rapidly increasing number of Americans swept into a maelstrom of foreclosures created by subprime mortgages.”
Wow, swept away just like that through no fault of their own. Forces utterly beyond their control. Kind of glosses over the inconvenient issue of PERSONAL RESPONSIBILITY.
Let’s rewrite this tale of woe, shall we? Something like this: “Katherine Gwinn is reaping the logical consquences of her own stupidity and fiscal irresponsibility. While some unscruplous realtor-skank and morally bankrupt mortage broker escorted this herd creature down the primrose path to ruin, the overiding principle of “caveat emptor” still applies. It was her own previous poor credit record - likely caused by previous fiscal mismanagement - that caused Ms. Gwinn to turn to a subprime lender. It was her responsibility to fully understand the terms and implications of the loan paperwork she was signing. It goes without saying that people who have a vested interest in selling you something, can be assumed to have their own best interest, not yours, at heart. Ms. Gwinn is the victim of her own poor judgement and failure to responsibly handle her financial affairs.
On a bright note, however, we have noticed the arrival of a new bird species in town. Casa Bubbleous Vulturus have been observed circling above the slowly expiring FBs, in anticipation of a truly gluttonous feast once the greed and excesses of the past five years are flushed out of the market. Another near-extinct species, the rare High-FICO Creditworthy Smug Renterbird, has also been noted swooping down on open houses, chirping gleefully at the prospect of the Great 2008 FB Migration.
Oops, I forgot. Bubble-sitters and smug renters don’t pay for advertising in the local fishwrap. Lucidity returns….
‘While some unscruplous realtor-skank and morally bankrupt mortage broker escorted this herd creature down the primrose path to ruin, the overiding principle of “caveat emptor” still applies.’
That is a rich sentence, Sammy!
“Casa Bubbleous Vulturus have been observed circling above the slowly expiring FBs”
Perhaps FB’s are not good eating. They have been eating mostly Top Ramen and stressed out to no end. So the feast will be vitamin deficient bodies, rickets, ulcers, diabetes, etc. Pass…
My plan is to start low balling bank owned and motivated sellers this time next year here in Las Vegas. Still early???
Too hard to tell, but at least get your name in front of several banks now . . . let them know what you want and what you’ll pay. As their unwanted inventory piles up, they’ll call.
good luck
low ball them and when they call back, cut your offer again…..repeat at least three times. Friend did this in 90 and made a killing abusing an increasingly desperate seller.
Tell them you are planning on making money renting the place out, and will pay accordingly.
Waayyyy too early. LV has no industry outside of tourism (i.e. casinos) and construction. Everything else is consumer oriented — healthcare, professional services, retail, etc. A few years from now you’ll be given your own subdivision provided you agree to maintain it.
Hold out for a nice one, too. For example, Aliante is way too far out and will likely be turned over to Nellis for urban air assault training.
Hey, maybe that is the highest and best use for a failed exurban development - urban air assault training. Or maybe urban guerilla tactics training first (there are Air Commandos, you know).
Seriously, though, LV is not the only place that depends on importing wealth for its growth - I plan to visit Copperopolis, CA, soon, to see if I can figure out what the developers were thinking when they built a second/retirement home paradise for urban baby boomers (i.e., people like me).
crime infested rat hole. I thought that wife and I could perhaps retire in LV…buy a small house or condo. Then I looked into the crime rate. No thanks…
Don’t you worry a bit. My buddy, a LV realtor, is putting his application in for the LV Metro force. See, he thinks that it’d be cool to strap on a gun and badge, and push people around.
I guess screwing them the realtor way was just too subtle.
LOL
Paul
“‘We’re talking very minor [problems] compared with the depression of the early 1990s,’ Mr. Trump said. He said that two years ago, when the market was at an all-time high, he was telling people not to buy real estate. ‘Now I’m telling them to do it.’”
Any truth to this, about him telling people to avoid real estate? All I can recall about Trump and RE anytime recently is when he was pimping ‘luxury’ properties in Mexico and Florida with his name on them. It didn’t sound like he was waving people away from them…
Yeah, I call bullshit. Trump has been a RE promoter for years, and this notion that he was “telling people not to buy” is revisionism BS at its finest.
White man speak with forked tongue.
Is Trump related to Cramer?
Trump in a major ahole. The guy hires fancy lawyers to figure out how he can screw anyone that does business with him. If I saw carpet head Trump near anything I was buying I would run screaming.
He is the poster child for AHOLE.
I think Trump’s getting ready to dump some property on the market. He wants to soften up the bubble sitters.
“I think Trump’s getting ready to dump some property on the market.”
I don’t know if you are joking, but I actually think this could be true. He’ll snow someone, he always does.
Translation of Trumps words:
“I never saw the downturn coming in the early 1990s and I went bankrupt. I don’t see a major downturn coming now either.”
Two years ago, he was pushing Trump Tower in Tampa, so the statement is a falsehood.
At least if his business is in free fall, it is better that he is in RE and no longer in Air Trump.
Simple: 2 years ago Trump wanted fewer buyers since he was buying; now he wants more buyers since he is selling.
“Now I’m telling them to do it”.
Really Donald? I’m telling you to marry Barry Manilow, how do you like that?
http://www.sptimes.com/2007/03/14/Business/Judge_rules_against_T.shtml
And why is it no one calls Trump on his lies? This story (thanks for the link, RJ!) says that the so-called Trump Tower Tampa was started “with fanfare in February 2005″…
The following was written last year at the “Trump University” site:
Articles and news stories everywhere today are reporting the grim newsthat huge numbers of houses are sitting on the market unsold. And the problem exists virtually everywhere in America.
Make no mistake about it. Itis much harder to sell a house today than it was a year ago.
http://www.trumpuniversity.com/blog/index.cfm?blogpost_id=724
Just took a tour around the “Trump University” site. No indication whatsover in how much it will cost for their “educuation programs” but I bet it is $$$$ and not worth $.
Trump is a scumball sleeze. I hope his Pen1s rots off after all this. Tosser.
Well, well… it’s starting to catch up to Portland. Sure, they’ll be raising rents soon… NOT! Sure, job growth in the REGION (including Seattle, perchance?) may lead the nation - but that party is done, stick a fork in it. Lots of condos (including some I drive by every day) may well repartment themselves. And Central Oregon - Bend et.al… well, the layoffs are starting over there. The old saying there is, “when Portland catches a cold, Bend gets pneumonia.” I feel a sniffle coming on…
How is Bend doing? I have a business associate there who claims Bend is growing and will go on for some time?
He constantly talks about some Fortune magazine article that claimed that was the #1 place to move to?
This guy has mucho dinero and I wouldn’t mind seeing him setback a few million!
Well, then, encourage him to buy more RE in Bend
Would that be the same Fortune that ranked Enron the best company in America 6 years in a row?
LMAO!!!
I will mention that to him.
It’s actually worse than I thought CC. On top of being named the most innovative company 6 years in a row BEFORE going BK…
Readers of the latest Fortune 500 (Year 2002) might have been surprised, however, to find bankrupt energy trader Enron weighing in at number five, up two places from last year’s ranking.
You go BK and actually move up on the Fortune 500 list?
Fortune said Enron’s achievement came amid “a year of accounting weirdness”.
“To begin with,” says Fortune’s Carol Loomis, “Enron, going by the restated financials it issued for the first nine months of the year, inarguably was a large company.”
She also says Enron’s December bankruptcy filing does not disqualify it from appearing on the Fortune 500.
If I was her boss and saw this i would FIRE her today…..30 yo accountant with a sub prime loan. Things that make you go hmmmmmmmmm!
—————————————————-
Shari Scott and her family were supposed to move into their new home, her loan officer at New Century Financial Corp. called her with some bad news: The company wasn’t going to be able to lend her the money for her mortgage after all.”………“‘I literally stopped the car and threw up,’ says the 30-year-old accountant from
Imagine this: Commonsense returning to this country. Housing & the war
House Speaker Nancy Pelosi, a California Democrat, called the war a “grotesque mistake.
“Rather than sending more troops into the chaos that is the Iraqi civil war, we must focus on bringing the war to an end,”
The vote today has guaranteed the end to the war, now we can turn our attention to the domestic agenda.
AFFORDABLE Housing
AFFORDABLE healthcare
How about the obscene recruits who willing join to get shot at??????
Sorry if we didnt DUMB DOWN America, who would be left to volunteer? ……. NOT ME!
We could have PAID the Iraiqs Like we do Indians on a Reservation to stop killing, turn in your guns, and try and live peacefully, for FAR LESS then we already spent on this “war”, and have 2350 more americas still alive…
Just remember when selling your oil ….who’s your daddy!
For the bottom rung choices are flip burgers & compete with illegals
Sign up go see the world (Afghanistan A war we must win) or A ROC
Afgahanistan Scorecard:
The Taliban= NO HEROIN
Americans= Biggest poppy Crops ever
We are winning the war on what?
I thought like that until recently but came across a viewpoint that made me re-open my position on what is “truth” here wrt ‘Taliban’.
The info input was that when in power in Afghanistan, the Talban clamped down on Poppy crop not through altruism or religion, but they had stockpilled supplies to sell at higher prices to the drug market that serviced the Western infadels.
Just like British Opium trade in China in late 1800’s Who cares about the consequence: just give me the cash.
learn to spell please
that’s asking WAY too much
Please, no politics…
Dude everything is connected. Be patriotic buy 5 houses.
“Because the boom and correction cycle…”
I first read that as “boom and corruption cycle”
Heh-heh.
“Because the boom and correction cycle has largely been driven by national rather than local factors”
WHAT EVER HAPPENED TO “THERE IS NO BUBBLE, REAL ESTATE IS LOCAL, NOT NATIONAL”? [Arroyogrande smacks opturned palm onto forehead ala Homer Simpson and lets out a loud "Doh!"]
Did you see the MASSIVE YOY decline in arroyogrande??
Down 38%!
Crispers,
Yup…some argument can be made that some of it is casued by the MIX of what is selling, as opposed to price declines. However, it’s NOT because of a lack of houses way above the median (currently around $495K) becasue about 50% of the houses for sale are above $650K.
So one is left to the conclusion that “high end” houses are not selling as well, or that prices are coming down, or both.
From spending time on the ground, I know that there HAVE been price drops, but how much is uncertain.
Still, 38% is amazing, and the median sales price change has been going progressively negative since about 5 months ago.
Talked to my realtor relative….Still think the Spring Bounce is going to happen in Atlanta…..Per the realtor, it will pick up after the final NCAA tournament which is being played here in Atlanta. The inventory is massive in some areas in Cobb county. Some street corners are inudated with realtor signs, Hud signs, Countrywide signs (bank owned properties), Desperation signs (no banks needed), Stop foreclosure, I buy houses, Repair credit, installation of granite, all housing related. All builder signs have 12,000 to 40,000 incentives…However, prices have not retreated….I am still sitting out on the sidelines…..still saving…although my rental in another state is vacant. But the best thing about that, is I bought many moons ago…so mortgage is very small and high amount of equity I never extracted. This tanking housing market is affecting me in different ways also. I am somewhat impatient to buy due to my teenager wanting space along with my fiance wanting me to buy now….It is hard and this site gives me strength everyday to hold out…. ugh…. Anybody in Atlanta? Any feelings on the housing environment here? Maybe I just need a pep talk…..in order to stand my ground against teenager and fiance.
Ummm, since the Super Bowl excuse (for sales being slow in February) didn’t work, is the REIC now blaming March Madness? What will it be next month? The Easter Bunny?
LMAO! Don’t forget, all you f’d Floridians and Arizonans: Spring training ends soon! Time to get the house ready for that flood of eager buyers!
It’s Atlanta — the Masters, of course. Then there’ll be a lull, then things will pick up in October in preparation for the Braves’ annual postseason collapse.
Lose the fiance or see if she can buy you a home - if she is pressuring you like this and you aren’t even married - it will get worse after the noose is tied
Tell them if they’re in a hurry you’ll happily buy……if they will pay you any difference a continuing decline in prices inflicts upon you.
You should have them agree to pay you AS the price declines occur……I’m sure they are totally confident the worst is over and will be happy to put THEIR money on the line………
Of course it might be tough to come up with 5 or 10,000 every quarter or so.
Atlanta,
Female boomer here. Don’t worry about the teenager. Just be the parent and tell him/her to chill unless they have a money tree hidden in their closet. I remember when my folks bought a house in the late 60s, I was shocked to find out that my sister and I had to share a bedroom….we were 14 and 16. But as I got older I realized it was a VERY smart move. They knew we’d be moving out in short order and they didn’t need extra/empty rooms to heat, cool, etc. Of course, we had a full basement (my Dad and friends “finished” it over time) and we had a place to “hang out” if we didn’t want to be upstairs with the folks. Besides, when I was growing up, it was a no-brainer that the kids had nothing to say about how the parents spent the household money.
As far as your fiance goes, some people are just stuck on the traditional no matter what, and MANY of us were brainwashed to think that that is just what you do as a right of passage. BUT, it only makes sense if and only if the numbers work. This boom/bust is about the numbers NOT working and policies loosening. This is NOT normal by any means. For the bears, the lightbulb came on and, wow, we knew this was all wrong. For the bulls (and many of those who are/were “all in”, like the RE agents, builders, developers, appraisers, specuvestors, and so on), their cataracts wouldn’t (or couldn’t) allow them to see what was happening. I suspect your fiance is one of them. I say just try to stick to your guns. At this point, you are the most sane person in your home with regards to understanding this current market. Tell your fiance that from what you are learning, if you make the wrong move now you could very well wind up financially devastated, and then where would you be. It is totally not worth it to be house poor and can’t do anything else nor save for your future.
Hang in there.
BayQT~
“While lawmakers’ intentions may be noble, it’s a pretty safe bet that, left to their own devices, they will muck things up even more.”
Short of reesablishing some semblance of banking regulatory oversight, almost any government action to “fix” the problem is sure to backfire. The market needs to be cleansed of excess liquidity and the disabused of the notion that the government will bail out speculators whenever they overextend themselves. This mess is partially the result of the legacy of government intervention over the past two decades — the S&L crisis, LTCM, Russia, Thailand, you name it. All of this has served to inure speculators to the risks they’re taking; the famous “Greenspan put”.
A bailout of individual homeowners is a spectacularly bad idea. In fact, it would compound the foreclosure problem by an order of magnitude. Why would any strapped borrower make another mortgage payment when they knew the U.S. Cavalry was on the way with bags of bailout money? The calculus is simple: I can A) make my payment out of my own pocket and eat Top Ramen this week, or B) let Chris Dodd make my payment for me with taxpayer funds and go out partying on Friday night.
No bailout coming in housing. The most that will happen is:
1. Tighter lending standards = less buyers = falling prices
2. Forcing lenders and investors to restructure FB’s loans = chill on Wall Street as fleecing machine takes a bath = less liquidity = falling prices
Even a bailout will hurt prices.
Both Hillary and Obama are making noise about “saving homeowners”. And the repugs…well…nuf said.
Like usual…voting for a president will boil down to voting for (what we hope) the lesser of two evils.
God save us if politicians try to “save homeowners”.
All they need to do is return to 10 years ago when you actually had to QUALIFY for a loan.
Of course I would also like to see the NAR, FED, and most of the Mortgage Industry bosses all thrown in jail…..of course it will never happen.
John , you make very good points about why a bail out of any kind would not work . I was thinking for a while that some of these loans could be rewritten but your points about borrowers taking advantage of any kind of relief along these lines is very valid .Human nature is the way human nature is and I expect any sort of bail-out would have the results you mentioned .
So the only recourse a borrower might have if they felt they were really abused loan wise would be the lawsuit route whereby they would have to prove they were cheated .
One of the things that most of the US blog followers don’t see is the utter stupidity of the Canadian market. Houses are selling in markets like Edmonton (which used to be very affordable, under $180k for a 3 bedroom 2 bath full detached) for $600k and more. And the article from the Vancouver Sun says why:
* They empty out their RRSPs (equivalent to US 401(k))
* They borrow from family
* They’re resorting to buying condos instead of houses
* They resort to 35 and 40 year mortgages (and the real joke here is that you can’t deduct mortgage interest, property taxes or school taxes from your mortgage!). And this was DESPITE Bank of Canada governor David Dodge criticizing the CMHC (like Fannie/Freddie) for putting out BS mortgage products.
Couple this with double-digit percentage increases in rents, and you’ve got the makings of a housing bubble that WILL collapse. It won’t be as bad as in the US because of stricter mortgage rules and proof of income requirements, but it’ll be bad enough. Sadly, Canadian hubris says that bad things only happen to Americans.
Well said fellow Canuck, Where you at?
Southern Ontario, grew up in Edmonton, worked in the US for a few years so I’ve lived under both systems and believe I’m qualified to speak about both. Yourself?
And as an aside, I remember when $60k back in 1994 bought you a 2/2 apartment condo with $120 fees per month for everything. Same things are over $200k now too!
Sly is enumerating the usual factors - exhaustion of future demand, which will lead to an inevitable bust.
It won’t be as bad as in the US
It will in BC and Alberta. Prices in Vancouver are as high as in SF and LA, with lower incomes, and Calgary and Edmonton are surrounded by an infinite supply of buildable land (think Dallas or Houston).
They also saw severe crashes (40%+) in the 1980’s. About overdue for another one.
It’s a buyers-with-good-credit-20-pct-down-and-a-poor-sense-of-timing market.
“The earlier boom in housing can be attributed largely to excess demand generated by historically low interest rates coupled with aggressive mortgage lending practices….”
Someone really capped the glue they’ve been sniffing at the NAHB.
I am happy that the pet food company finally figured out that rat poison was killing off the animals and did a massive recall.
I’d hate to feed my little housing TROLLS the Wrong thing and have them all die off. They have been SO entertaining with their tricks and antics lately and I would sorely miss them.
Pass the popcorn Neil …and HOLD the rat poison please.
The rat poison bit is going to kill the product differentiation marketing. What brand of pet food wasn’t going through that place?
One problem with outsourcing is you share in the pain of quality slips.
Supposedly the rat poison was in a filler imported from China, where the stuff, banned in America, is evidently used in manufacturing plants and warehouses. Here again we have a huge North American (Canadian) company buying cheap Chinese crap, with horrible results. Doesn’t anybody test ingredients anymore before dumping them in?
The company is even worse, however, that it first appears. To determine the effect of its tainted food, it fed it to test dogs and cats, and one in six died. The number harmed, possibly permanently, or was not disclosed. Acute kidney failure can often be reversed if immediately treated, so I gather the execs just let the test animals suffer and languish, with no medical treatment. This alone makes me doubt the gushing advertising of Iams, Eukanuba, and Purina–all of whom were clients.
For those with dogs, the Whole Dog Journal, like Consumer Reports, accepts no advertising and lists the best foods, available on line. not one of the foods they rec’d was on the list of 50 plus poisoned.
“Whole Dog Journal”
As opposed to what, The Part Dog Journal?
(Which I’ve been accused off)
“The rat poison bit is going to kill the product differentiation marketing. What brand of pet food wasn’t going through that place?”
My dogs food. I don’t skimp on my pooch!
You have no choice.
Outsource to make your margins higher
or die…
Menu Foods did not figure anything out. NY State Dept. of Ag together with Cornell University did the analysis. Those Menu jerks acknowledged that in their press conference. Where was the FDA on this… probably out to lunch with the mortgage regulators.
Holy smokes! What about all the FBs who were reduced to eating catfood!?!?!
LOL.
Menu Foods is in Canada.
Still, our government should be inspecting everything that some into this country. Since the filler was from China, one has to wonder what other crap is getting through directly.
I hope the price declines are rapid… the longer it takes, the more time our blunderful government has to come up with a “solution” that will both crush the life out of current house-slaves (while making them happy for the crushing) and at the same time destroying the efforts of the remaining savers and responsible people in this nation (those of us who refuse to do as we’re told and consume beyond our means.)
Here in Maryland, it is just getting so tiresome to watch. Massive amounts of inventory being sold at insane prices… Old, small houses that were about $100K at most a couple of years ago now trying to be foisted off onto the unsuspecting public for well over $200K. New McMansions with sales prices over $500K in towns where the median income is about 1/10th of that… and nobody who could actually afford one of those McMansions would live in such a forgotten blue-collar town. And whenever anything about housing comes up, I have to listen to the “true believers” telling me how “it is different here” because of Washington D.C., the BRAC, or whatever, yet none of them can explain how somebody on the median salary of about $60K for most areas not next to DC can afford the median house of over $200K for a starter home and well over $300 to $400 for a typical family-sized house. It is as if the world has gone mad and everyone is just fine with it.
When is it going to be MY HOUR, dang it! I’ve got a good job (knock on wood!) and saved and invested wisely for years. But, thanks to the greed and stupidity of the masses, we have to wait and wait and wait some more until the players are done looting the system and the hogs have been sent out to slaughter. Bring on the price reductions, already! Argh!
I hear ya. But this thing is so massive, with so many players, that it is like trying to kill a grizzly bear with a BB gun. It’s going to take a while.
“‘Because the boom and correction cycle has largely been driven by national rather than local factors, most regions have experienced some degree of over-heating and correction,’ said NAHB Chief Economist David Seiders.”
How can that be. The MSM has been telling us all along that it was a local problem.
“Once upon a time, would-be home buyers had to outbid each other and forgo inspections to get the place of their dreams.”
More BS. These were never ‘a place of their dreams’. They just bought the line ‘buy now or be priced out forever’ and were overcome by greed.
“‘Homeless was the first thing that went through my mind,’ she says.”
Lady you’ll know what ‘homeless’ is when you and your family are wrapped in rags pushing all your earthly belongings in a grocery cart.
Thought this was a funny post on a thread — from a fishing forum:
“I’ve read the response by those in the business, and appreciate your honesty and candor, but it leaves me with one nagging question….
I remember my first home purchase. I had to save and mind my credit, before I could afford a conventional loan, but I knew my financial liability and obligation (in the purchase) and thus, I could plan my resources accordingly. It seems all the new vehicles, or should we say, creative financing, has allowed those who could not afford a home, into the market, and in doing so have created more uncertainty in a financial market that was labeled “real”, because it was, and as such, every prudent home investor now shares in the upheavals and eruptions of a volatile market.
Was this “new way(s) to fund” a good thing?”
http://www.allcoastsportfishing.com/forum/dcboard.php?az=show_topic&forum=312&topic_id=218732&mesg_id=218732&page=&topic_page=4
Is history any guide to how this current housing bubble will turn out? How long did the bubble in the early 90’s take to bottom out?
In Northern VA, it bottomed around 1995/1996 and started to pick up slightly in 1997. Trivia: our own local Doug Duncan, Chief Economist for the Mortgage Bankers Association, decided to wait out that bubble and bought a foreclosure in the early 1990’s.
I can’t imagine, though, that this national/global bubble completely compares. There were issues related to the economy in various regions that contributed to falling real estate prices. NY - stock market crash 1987; CA - defense cuts, Japanese investors out; TX - oil bust.
“2007 is expected to be a year of transition,, according the National Association of Home Builders’ Regional Housing Starts Forecast.”
A transition from bad to worse.
The shadow knows.
Rick
Robert Toll went from
“Pinch me, I must be dreaming” to
“Who Knows? The Shadow Knows”.
He’s hilarious. The builders have been pithy lately.
Wow - I found my first 50% off sale in Fairfax County, VA!
12000 MARKET ST #448
RESTON, VA 20190
List Price: $324,900
Prior Sale: $530,628 11/07/2006 BANK OF NEW YORK
Prior Sale: $634,900 04/18/2005
-49%
http://novabubblefallout.blogspot.com/
And I heard countless times at the Washington Post Real Estate discussion board (pretty much a dead board at this point) that that would *never* happen, or else it’d be the next Great Depression.
From today’s Reno Gazette Journal:
“The Reno-Sparks Association of Realtors is now releasing housing numbers quarterly for Reno-Sparks instead of monthly and won’t be available until April.
Dennis Wilson, president of the RSAR, is optimistic that the residential real estate market is about to turn.
“I’ve been in multiple offer situations representing the buyer already this year,” said Wilson, who is also broker/owner of Best Properties in Reno. “My overall opinion is that the market has turned, although we won’t know until two or three months from now. I’m looking forward to (the quarterly numbers), because I think they will prove out that we have started to bounce back.”
http://news.rgj.com/apps/pbcs.dll/article?AID=/20070323/NEWS18/70323037&oaso=news.rgj.com/breakingnews
Maybe he should have checked out the Reno Realty blog before spewing his crap. http://dianecohn.blogs.com/reno/ “In a nutshell, the homes that sold were the best values in their neighborhoods compared to the competition. When only 10-12% of homes in the market are selling, you have to go low with the best value to be the winner that actually sells.”
Month # Homes Sold Median Sold $
February 2007 288 $291,400
January 2007 282 $287,765
December 2006 318 $295,000
November 2006 318 $300,000
October 2006 409 $299,900
September 2006 385 $299,900
August 2006 372 $306,650
July 2006 411 $322,900
“I’ve been in multiple offer situations representing the buyer already this year,”
From 2006 to 2007 volumn down and prices down.
So how can you have legit mutiple bids on sales/
prices declining?
I would say Wilson and Company were
faking multiple offers trying to get buyers to
raise their offer.
“With foreclosures now at a record high, banks are once again getting picky. ‘It’s not just a buyer’s market,’ said Leon Bailey, a real estate agent in Prince George’s County. ‘It’s a buyers-with-great-credit market.’”
Finally starting to go our way. When I’m ready, I want banks slathering over my near-perfect FICO, six-figure downpayment, and 0 debt. Sellers getting down on their knees and barking to close the deal. Realtors sending flowers. Owners pledging to feed the squirels for generations to come!
And then, just for fun … I will play hard to get.
Revenge … so, so sweet.
Yep, I am in the same boat. If the realtorwhores think that I am going to compete for a stucco crap box with some subprime punk they can wait tell hell freezes over. I have the down and the FICO, and they can all kiss my butt when the time comes.
Bubblelicious — how are you protecting your cash stash against the War on Savers?
There is no way to protect cash currently. Yes you can get 5% or a little more in an FDIC insured savings account or CD, but the real inflation rate IMO is well over that. All the financial markets are subject to massive manipulation and herd trading, and have been hyped up into bubble territory once again over the last few years. Bonds are ludicrously overpriced. I first came across the term “war on savers” on this blog, and it is completely appropriate!
True, but this is the only route we can go now … so that’s what we do. It’s not perfect, but its also not dangerous …
Plan A
FOOLS with large downpayments and good credit - that’s all this market needs to recover
Oh sorry - seems most fools don’t have any cash and tend to have lousy credit
Time for Plan B
My grandfather (b. 1902) used to say “save for the times when nobody has any money and everything’s for sale”.
Liar, liar, pants on fire.
Trump said “sell” two years ago? I can’t imagine that was what he was saying at these seminars:
Donald Trump lands million dollar a speech speaking contract
UPI News Service, 01/22/2005
The Learning Annex has announced that New York developer Donald Trump will present three classes in 2005 for $1 million for each class.
For his classes entitled “How to Succeed in Real Estate” Trump will be paid more than $16,000 a minute, according to a statement by the Leaning Annex.
And as for those who say “we’ve reached the bottom,” I would argue that the chart on page 47 tells us 2009 is the bottom at the earliest (ARM reset schedule):
http://www.billcara.com/CS%20Mar%2012%202007%20Mortgage%20and%20Housing.pdf
Ivy Zelman is the best housing analyst in the business and this research piece absolutely destroys the argument that we are anywhere near the bottom. An absolute must read piece.
Looks like a perfect storm - a super real estate bubble created to a large degree by a massive credit bubble - including a huge amount of borrowers using combination low doc/no doc/OPTION ARM (negative amort)/ zero down payment loans - with many ARMS scheduled to reset in 2007, with more reset tidal waves on the way
This is a classic Houston 1980’s style turn-in the keys/ walk-way situation - as many of these people, (most technically judgement proof with zero assets) when faced with massive spikes in their monthly payments and huge negative equity in the property -are simply going to walk away and seek rentals
Those effective foreclosures when dumped on the market could create (to some degree) the type of downward spiral we saw in Houston in the mid 1980s
Of course Houston was initially triggered by an oil bust overlayed onto zero or low down payment VA and FHA loans mostly taken out in an early 80’s boom - whereas now the nominal U.S. economy is strong, although some of that strength has itself been fueled by the real estate boom, meaning if real estate keeps unwinding the economy itself has be impacted
I had dinner with my inlaws tonight. We are renting. They were throwing stories around about how much real estate has gone up and what a great investment it is. They built a house in 1997 for $250K and they figure it could sell now for $500K. “Not too late to get in.” Numerous stories of everyone making money like crazy. “Why throw your money away renting ?” They figure the subprime thing is overblown and housing will only go up.
They bought their first house in 1970 for $40K and sold it for $85K in 1997. They figure they made a fortune. Never mind that interest was 19% in the early 1980s and they could have rented for way less than interest.
I can’t tell them nothing. Oh, stocks ? Yeah, they lost their shirt in the dot com crash and that makes them too risky. They are about to retire and they are thinking of building another house. “Easy way to make $200K”.
Your story reminds me of a comment by a co-worker: “Don’t tell me I can’t time the market - I just watch what my parents do and then do the opposite!” This kid was wise beyond his years.
I could brag about my paper gains in RE too, but that’s beside the point. I bought my two homes because they were good values (at the time, of course) and I wanted to live in them. I may never sell…
The thing is yeah we bought in ‘03, when it was cheaper to rent then buy, and sold in ‘05 cause we had to move somewhere else.
Now we rent. So what? It’s all simple economics.
I’m sure someone more articulate than myself has presented this. But its an increasing Supply (the inventory we so much about), and the decreasing Demand (the 10 to 15% of folks that can’t buy or re-fi now), that will make the prices go down for 2 plus more years.
Our lease runs out in June and I’d like to find a bigger place,
anyone use any sites in SoCal?
We are working to get the server back online. Please check back…
It looks like you’re up!
Not entirely yet.
LA Times is talking about Housing Bubble Bloggers today…I blame them
http://tinyurl.com/2zw862
“In years past, real estate agents were often the only sources people could turn to for information on the state of the market. But increasingly, bloggers are filling that role, touting themselves as independent sources in a field crowded with vested interests.”
This is so big China could not bail us out with our own money.
790 FICO+$280K cash+no hurry=Catbird Seat
“Innovation has brought about a multitude of new products, such as subprime loans and niche credit programs for immigrants… With these advances in technology, lenders have taken advantage of credit scoring models and other techniques for efficiently extending credit to a broader spectrum of consumers… Where once more marginal applicants would simply have been denied credit, lenders are now able to quite efficiently judge the risk posed by individual applicants and to price that risk appropriately. These improvements have led to rapid growth in subprime mortgage lending,… fostering constructive innovation that is both responsive to market demand and beneficial to consumers.”– Alan Greenspan, April 2005