Bits Bucket And Craigslist Finds For March 24, 2007
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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LA Times is talking about Housing Bubble Bloggers today:
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.”
Finally, they get it.
“Most real estate agents “will always say it’s a great time to buy,” said Adam Rappoport, who reads the blogs and owns a small real estate brokerage in San Diego. Bloggers “see the statistics that we all see, but they interpret them differently,” he said.”
…
“Leslie Appleton-Young, chief economist with the California Assn. of Realtors, said the group did its best to provide accurate forecasts but no one could foresee the future with any certainty.
And although bloggers might provide valuable information, she said, Realtors deal with questions on a personal basis.”
—
Ah Leslie, Realtors can give buyers the “warm and fuzzies” that us bloggers can’t, right?
Leslie Appleton-Young, chief economist with the California Assn. of Realtors, said the group did its best to provide accurate forecasts but no one could foresee the future with any certainty.
Sure, Leslie, no one saw this coming - except a certain kook and conspiracy theorist who was warning of a housing bubble back in June 2002.
http://www.larouchepub.com/other/2002/2924fannie_mae.html
Rule #1 of buying stuff: The person selling the stuff does NOT care about you, ever — only the commission you will generate.
LA Times does—Syracuse Post Std ran an editorial making fun of blogs and saying if the newspapers shut down all the blogs would have nothing to talk about.
http://tinyurl.com/yvhqur
Guess the guy is worried about his paycheck.
No newspapers for one day? I’d look forward to that. The problem that a lack of news; the problem is an EXCESS of stuff that doesn’t matter masquerading as news. That is, the media overreports rather than underreports. I’d greatly prefer better access to raw data (not just relating to RE) at the expense of what passes for “news” in our society.
should say: “The problem isn’t a lack of news; the problem is an EXCESS of stuff that doesn’t matter masquerading as news”
“Some of these scribes have earned the respect of mainstream industry observers who credit them with being ahead of the curve.”
That is ahead of the curve on residential real estate, ahead of the curve on the homebuilders and their stock buy-back shenanigans, ahead of the curve on mortgage and appraisal fraud, and most recently ahead of the curve on subprime and alt-a lending.
OC Register’s blog is running a 3 part series on Ben,
Rich and Patrick.
Here is this weeks installment. The previous one was one week ago.
Looks like OCR is beating LA Times in coverage of the housing bubble. LA Times is in CYA mode just check out OCRenter’s bubbletracking blog.
http://blogs.ocregister.com/lansner/
All the MSM is in CYA mode. What the heck are they going to do for advertising $$$ next year?
They should have had good reporting (and thus a loyal audience).
However, I give Kudos to the LA times for their reporting on the bubble blogs this morning. It was as honest of an appraisal of the market as people are ready to take right now. In fact, I might have written a similar tone article (if I was a bit better writer). So better late than never.
But after you leave port and hit that iceberg… its the wrong time to note that the ship’s junior architect specified 3X as many lifeboats as it was built with. (Don’t take an offense Ben, but you built your phenomenal over the last two years.)
Water 1 degree below freezing has a bite…
Got popcorn?
Neil
Patrick’s blog? That place is the Wild West. 300 post topics that have absolutely nothing to do with housing after post 10 or so.
It is a social blog as much as housing blog, but many of their housing postings are spot on. They are focused on the Bay Area though, that’s why I am here.
True. And it’s this blog’s being ahead of the curve on subprime that convinced me to short NEW, LEND, and FMT on 2/9/07. I covered last week for a nice profit. Thank you all!!! : )
… And just way ahead of the curve on the conflict of interest presented by Realtors.
It’s not that bloggers are “touting themselves as independent sources in a field crowded with vested interests.” It’s a verifiable fact, which more and more people are realizing. Contrast the credibility of Ben Jones and other like-minded bloggers over the past couple of years - the voices in the wilderness back in 2005 - with the universal snarkiness and deceit of the RE industry and their media border collies.
‘Most real estate agents “will always say it’s a great time to buy,” said Adam Rappoport, who reads the blogs and owns a small real estate brokerage in San Diego. Bloggers “see the statistics that we all see, but they interpret them differently,” he said.’
Bloggers have learned to read between the lies.
Kudos to Ben!
Getting some well deserved street cred this morning. Gotta love it.
You’re back up. Awwright!
I found one:
Single Mom going in Forclosure (pittsburg / antioch)
>Iam Desperately in need of someone to buy my home before it goes into forclosure. I have a 3 Bedroom 2 Bath large corner lot, 1180 s.q. Ft. In Beautiful Oakley, Ca. $415,00. is the asking price. call (925)xxx-zzzz, or (925)xxx-zzzz. Its a great investment and you would become a stress reliever.
Posted in Rants and Raves no less
http://sfbay.craigslist.org/eby/rnr/299622642.html
I found one:
Single Mom going in Forclosure (pittsburg / antioch)
>Iam Desperately in need of someone to buy my home before it goes into forclosure. I have a 3 Bedroom 2 Bath large corner lot, 1180 s.q. Ft. In Beautiful Oakley, Ca. $415,00. is the asking price. call (925)xxx-zzzz, or (925)xxx-zzzz. Its a great investment and you would become a stress reliever.
Posted in Rants and Raves no less
http://sfbay.craigslist.org/eby/rnr/299622642.html
400K for that?
Where I live 400K is a house on 2 acres, 3000 sq foot, almost new, brick, safe neighborhood.
Welcome to the out reaches of the SF Bay Area!
I just think of all those who “spend” a million or more around here on a crackerbox house in a “good” neighborhood.
And then have to pay for private school.
brianb - where are you?
(by the way, welcome back Ben!)
Thanks, it was one of those things where something was off on two different ends, at the same time. Very confusing.
Sounds just like the home lending business!
POTD
Yeah bud, glad to see you up again; the bubble withdrawals can be extremely harsh. Thanks for the heads up, however.
Sounds like Wall Street versus homebuilder CEO comments to the MSM.
Just came back from an open house in Astoria, Queens, NY.
A stand alone “two family” (You could cram an apartment into the basement). Built in 1919 and in need of A LOT of work inside.
Asking price $1,149,000!!!
WTF!
This thing probably sold for around $350,000 five years ago.
Why would anyone with a million dollars want to buy this thing?
My wife and I are very frustrated.
http://links.mlslirealtor.com/mlsphotos/full/1/971/1925971.jpg
Man, what a dump. In other parts of the country that would be going for $100k, assuming it’s in good shape.
Check out this link. It’s a 1990 NYTimes story about condo auctions in Brooklyn neighborhoods that are similar to Astoria.
Sorry, here’s the link:
http://query.nytimes.com/gst/fullpage.html?res=9C0CEFDD1131F933A25755C0A966958260
move it upstate and you’d be hardpressed to sell it for $40K
I think it’s time to forget about buying for 3-5 years. It’s obvious that it will take quite some time to get back to reasonable pricing. Looking for any deals right now is an exercise in futility. While looking for distressed properties in WA and OR, I have come to the conclusion that even ones which seem like a “deal” in todays market, are horribly overpriced.
I’m waiting as well in the pacific NW. I’m hoping mortgage lending returns to “normal”, what ever that is, with a 10-20% downpayment required. I’d guess 25% of the buyers in my area would be gone with just this, let alone the liar loans, etc. We shall see.
BTW, the local paper had some stats, median 2 income family is $40K. The median house price sold in the last 2 months, $318K, nearly 8x income. What a joke. I can’t imagine Calf…
I think the only deals coming soon in Seattle will be the downtown condos, after the overbuilding brings too many new ones to market in the next 18 months. Reading how they’re marketing the buildings in the weekend newspaper adverts is a hoot–they’re all “exciting” or “vibrant” or “the most unique on the hill.”
Speaking of Seattle…..has anyone heard from the supreme F*cked Flipper, Seattle Eric?
“Speaking of Seattle…..has anyone heard from the supreme F*cked Flipper, Seattle Eric?”
I did notice his last flip is under contract. Not sure of the agreed price, but it’s listed at $539k. Though Erics exuberance was grotesquely immoderate, I will give him one thing; he was able to lower his prices to get the sales done. I am sure he lost major moolah on the last two deals since he used contractors and not his own labor.
Think You Have really got it right in spades. One really needs to remember that what has gone on in the RE markets (globally) over the past 4 or 5 years has been such a true textbook mania like the South Sea/ Mississippi Land Bubbles of the 1700’s or the Tulip Bulb Mania of the 1600’s and the likely real outcome of all of this ought to astound even the most bearish of bears over a few years time. In the meantime “They” may try to bring out the bandaid brigade to try to save FB’s from themselves and new FB’s that are catching the falling knives everywhere and this may slow the descent but one really really needs to respect the outcomes of prior MANIAS that history has dealt us in the past. Anyone read the great book “The Extraordinary Popular Delusions and the Madness of Crowds” by Charles McKay in the 1830’s? That one is a true eye opener and one i am using as a guide going forward. It makes a great read with all the Peak Oil scenarios that seem also to be in play at this time.
One really needs to remember that what has gone on in the RE markets (globally) over the past 4 or 5 years has been such a true textbook mania like the South Sea/ Mississippi Land Bubbles of the 1700’s or the Tulip Bulb Mania of the 1600’s and the likely real outcome of all of this ought to astound even the most bearish of bears over a few years time.
I don’t think it will astound me. I’m expecting a full-scale depression, probably of the hyperinflationary type.
Do they have off streeet parking for 2-3 cars??? My landlord as a 1 1/2 car garage…which means one caddylack, or 2 ford escorts…
Yes cant forget the ILLEGAL damp moldy basement apartment, with your “ac” blowing a fuse everytime the landlord turns on his microwave. Since Con Ed wont install a meter in an Illegal apartment.
So even with 3 rentals you are so negative each month, even at $500-600K you are barely breaking even.
“Just came back from an open house in Astoria, Queens, NY…
My wife and I are very frustrated.”
I’m beginning to realize It’s not so different in NYC, after all. Speculation runs rampant even in Manhattan coops which are traditionally considered “conservative” option, with minimum 20% downpayment and other hurdles.
I was researching open houses to attend tomorrow… One coop on Upper East Side is offered for $579,000 - the seller bought it in November 2004 for $410,000. The other coop on Upper West Side is offered for $360,000, it was bought less than two years ago for $220,000.
Far as I’m concerned, 2005 was the height of the market and there’s much less frenzy now… Yet the sellers still expect 40-65% appreciation in two years?
I’m dissapointed like hell. I want to buy. But to pony up $450-600K for a glorified shoebox, so that a seller can make a killing at my expense? NFW.
If worst comes to worst, if Manhattan prices never fall and are once again completely beyond my reach - I’ll just move to California. Always loved it, always wanted to live there… With things going downhill everywhere which is not Manhattan, I’ll be able to buy a nice house in California instead of a tiny unlivable apartment here.
PLEASE TELL ME WHY YOU ARE SO DESPERATE TO BUY?
ARE YOU PREGNANT?
Just learn to throw your money away on rent like me……a 2bdroom in Queens for $1150….i’ll throw money away like this for the next 10 years……rather then “own” at double or more per month! You have so much more freedom. And with your good paying day job, how can you not pay off all your credit cards and save money…
So this DESPERATION to buy is what is YOUR problem…maybe a shrink could help you.
Eh, no, I’m not pregnant, thank you for asking… LOL!
Am I desperate to buy? Maybe. I’m very much afraid the dollar will tank. If the dollar tanks, there will be high inflation. If there’s high inflation, my hard earned six-figure cash downpayment will evaporate.
I lived through currency devaluation and hyper-inflation once. I never want to repeat the experience. RE was the only port in the storm…
NYChick…there is TXchic57 on here alot maybe you too can talk high finance.
Well what about gold PM, silver stocks?
Where did you go throught that experince, hyperinflation? what was the local economy like…..we’d love to hear the juicy or gruesome details.
The problem with that notion is that in this case RE is the storm that will tank the economy. I seriously doubt RE will experience any inflation at all regardless of the international value of the dollar. The biggest problem with potential price inflation ( which is an effect of inflation - not inflation in itself) is simply that wages are not going up and indeed once this storm really gets going wages are going to drop. You cannot raise prices on something that is available in abundance when the income is no there to support it.
Which brings to mind another issue people are not really understanding is that the overhang of vacant housing in the US is enormous. (you must include all forms rental and owned as available housing units because the market will) From what I’m seeing here in the Treasure Valley in Idaho, the builders spent the Winter taking hallucinogenics and have embarked on a renewed building spree in spite of large numbers of both new and resale homes on the market. I don’t think any of them anticipated the sudden tightening of lending which by my back of the envelope figuring may well have taken away 50% of the potential buyers. RE here is still way overvalued on an income to price basis. The amount of hope reflected in bare land (which we have tons and tons of) and home prices is still off the charts. I expect a reality check in this market may well be only a few months away.
” I seriously doubt RE will experience any inflation at all regardless of the international value of the dollar. ”
I agree. But I also suspect the rates (the mortgage rates) are going up. Even if Fed lowers, the long term rates will still go up…. And the falling dollar may provide a cushion for RE prices, in Manhattan. If there’s inflation and RE prices stay the same, RE will have fallen in real terms. But if later I have to pay the same RE price PLUS a much higher interest rate, then isn’t it better to buy sooner? Again, this is just for Manhattan.
“hyperinflation? what was the local economy like…..we’d love to hear the juicy or gruesome details. ”
Basically, people were trying to spend spend spend all the cash they had. It didn’t matter on what, just turn the completely worthless cash into any tangible goods.
Say,
Let’s connect the dots a little bit more…
I can offhand name 1/2 a dozen bank robbers from the 1930’s (John Dillinger, Pretty Boy Floyd, Ma Barker, Machine Gun Kelly, et al)
But, I can’t name any bank robbers from the 1940’s, 50’s, 60’s, 70’s,(Patty Hearst, ok I lied)80’s or 90’s.
Bad times breed crime.
Almost nobody had handguns, back in the 1930’s.
Guns were all about rifles and shotguns. People treated one another, with respect.
Have any of you ever looked at old photos from say the 1950’s and earlier?
One common thread, is that everybody is well dressed, no matter their income level.
My wife was down in Beverly Hills a few weeks ago and brought back good news: She saw a full sized billboard for laser tattoo removal. It would appear our brief fling, with looking like sailors, might be over?
Connect the dots with me…
Come on, play outside the box~
All the babes who got “tramp stamps” in their early 20s are cleaning up their act now that a future of minivans and soccer moms beckons. Soon tatoos on women will seem what they traditionally have been: trashy, not to mention passe.
“Have any of you ever looked at old photos from say the 1950’s and earlier? One common thread, is that everybody is well dressed, no matter their income level.”
People regularly appear in public wearing clothes that should only be worn while cleaning one’s house. Worse, the more the person weighs the tighter the clothes, so that they resemble sausages encased in cheap polyester.
Tattoos, scraggly hair, ill-fitting/mismatched/ unkempt/stained/cheap clothes…
Another thing to watch for is people aging beyond their years as the HELOC money dries up for plastic surgery repair of their abused faces and bodies (for the food they put inside is as cheap and low quality as the clothes on the outside).
Depends on location. In San Francisco, Seattle, and Portland, where the temperatures are like Phoenix in January, but all year, it is sensible to wear nice clothing. In Phoenix in the summer, khaki’s and ironed button downed short sleeved shirts are fine for me. No one wears jackets in Phoenix outdoors from April through October.
Another consideration: Many people are working longer hours now than they did in the 1950s and 1960s. Some of us have to work two jobs. Others work the same job and are expected to work extra hours. No time to fuss about clothes. Most fellow engineers wear shorts or blue jeans in the summer and just blue jeans in winter. Ever iron jeans? There you go!
I’m with Bill on this one.
Also, there are those of us who actually do clean houses, take care of kids, maintain the yards, etc. on a daily basis. Exactly when are we supposed to be dressing up? I’m not changing my clothes just to go to Target.
Another thing I’ve noticed…the better people dress, the more likely they have nothing else to offer — especially in business. Just “flash & dazzle” so nobody notices they aren’t very intelligent and are afraid of hard work.
17 homes on the market within one mile, almost all priced WAY over all the 2007 comps.
I normally don’t pump my blog here but this is the quintessential example of what is happening all over my area.
http://tinyurl.com/2bm56m
Great post well worth a look.
Holy Craps! Baltimore metro is way cheaper than DC metro!
Uh, yes, why do you think people were moving up here from DC? But if I lived down there, I’d rather rent then deal with that commute. I went down to Rockville one morning and it took me 3 hours to go 40 miles.
I meant to say “If I worked down there”…
And that development is well north of Baltimore, about 20 miles.
Nice blog, nice work.
Nice work Nikki! I was wondering if the mile you mention is one square mile, 1/2 mile in either direction from your home or a 1 mile circumference or radius? Just curious. You made me think if I used a 1 mile radius from my house that I could probably come up with that many too. So many sat all winter.
My street is looking a little bubbly. I thought it may be time to break out the camera or even try to do a poor copy of the famous Lou Minatti videos. Maybe a bit longer. The “added this week” section of our real estate web site was over double its usual listings. I think things are heating up.
It is within the same subdivision.
I’ve been thinking about what house prices did in one’s locale in 2004.
And by that, specifically, I mean tracking with Zillow (not the best option, but probably the easiest for now) what prices did after Easy Al Greenspan issued his “ARMs are OK” talk in late February of that year.
For example, in my very average San Francisco neighborhood (using the zip code), I noticed that home prices were rising at a slow rate through 2003 and into early 2004. However, beginning just after Easy Al’s statement, they zoomed upward like nobody’s business. And kept that rate of appreciation well after the FED began raising the FFR up from 1% in June of 2004… (in my zip code, prices went from $550K in Q1 of 2004 to $900K by Q2 2005).
So I suppose I’m thinking Easy Al’s “ARMs are OK” statement encouraged behavior that showed up in the market. Is that a tenuous link in this case?
Others have said that most buyers at the time had no knowledge of him or what he said. I suppose that’s true. However, it’s my belief that nearly everyone in the local REIC acted aggressively, based partly on that statement…
Further, wondering about his claimed “two weeks later” retraction of “ARMs are OK” - did that in time impact the market? It seems unlikely.
You’re probably on the right track. Part of the Fed’s duty is to regulate lenders. Al and his gang turned a blind eye to the subprime market shenanigans.
I would say they were not paying close attention to lending generally, when rates were at 40 year lows and due to rise (no less), not just the “subprime market shenanigans.”
You’re probably on the right track. Part of the Fed’s duty is to regulate lenders. Al and his gang turned a blind eye to the subprime market shenanigans.
You’re probably on the right track. Part of the Fed’s duty is to regulate lenders. Al and his gang turned a blind eye to the subprime market shenanigans.
Sorry about the multi post:-{
Most of you strike me as being fiscally astute…
Are aware are you, of your surroundings?
Last summer, it was dreadfully hot here (117 for days) and I remember reading how the electrical grid very nearly went down, as everybody was cranking their a/c.
All across the country.
There are a few ways to beat the heat.
I’m going for a walk, but i’ll leave you a clue~
You’d be ok in Phoenix, Las Vegas and Los Angeles
Not so ok in San Francisco and certainly not ok in Florida.
ta ta for now.
You’re talking about going to a higher elevation to beat the heat.
However, in San Francisco, you don’t have to go anywhere… as our air conditioning is called the Pacific Ocean (~56F temps year ’round).
Some of our neighbors run the heat on summer nights in July and August.
Right you are…
In the summertime, every 1,000 feet of altitude gain = 3.5 degrees less, in temp., thus, 129 in Lodi= low 90’s @ Tioga Pass
For a San Franciscan, to be sure against the potential wrath of Mother Nature, (always bat’s last) Tioga Pass, would be the cat’s meow.
There are 2 ways to beat the heat, what’s the other way?
“I’m trying to get some air circulating under the roof,” said Tom fanatically.
> There are 2 ways to beat the heat
If one is altitude, I guess the other is evaporative cooling, which works well in dry areas but not in humid areas.
The other way…
Caves.
Most caves have a constant temp of around 55 degrees and never vary, winter or summer.
Finding a cave to go hang out in, isn’t the easiest of tasks for mere mortals and you’ve never seen dark, until you’ve been in the recesses of a wild cave and turn your headlamp off.
Inky Black
But, it’s a legitimate Plan B
I don’t remember reading about the retraction. Does anyone?
Missed you Ben…
You are the morning methadone, for my brain.
The Greater Fool’s Club
Not to hijack the thread, but …
Arroyo Grande - would you be interested in getting a Central Coast bubble blog together? I’m not sure how it would work, but I would love to have a place to post some very local and specific info for us and our fellow bloggers on the Central Coast.
I’d be happy to contribute; however, I don’t have a lot of free time right now (so how come I’m always on this blog, eh?) If someone put one together, I’d be happy to help out with data, stories, etc.
I know there are a lot of central coasters on this blog, so maybe you can get their help as well. Just let me know.
I *would* like to get together for a beer/wine/diet pepsi with central coast bubble bloggers after the next bubble event happens (inventory pile-up/lack of spring selling season, fall of alt-a/prime, whatever).
I’d like to follow the Los Osos, CA scene as the septic to sewer issue might help to pull prices downward.
Yech, that whole Los Osos issue is such a mess $$$ wise. I’d be willing to bet you are right.
There is a blog at slobubble.blogspot.com that is rather empty…maybe you guys could help him out?
That sounds like a good idea. Thanks!
Ben, when did you first start the blog?
Ben started this blog very close to the absolute tippy-top of the housing market.
Would that be around the summer of 2005? That was when I absolutely gave up on the idea of buying a house. I didn’t get to this blog until the end of 2006 though. I wish I had found it sooner.
Some time around March 2005. I remember spending several months posting here at my old job, which I left in Sep 2005.
Ben, when did you first start the blog? I remember it around October 2004.
I thought it was December 2004.
Here is the link to Ben’s original, deleted and restored and now frozen blog.
Check it out for yourself.
My first post was in April 2005.
http://thehousingbubble.blogspot.com/
I found my first post, too, in April 2005 (aka ‘Melissa’). I’m amazed at how Ben kept blogging away to an echo chamber for the first few months, and now there are hundreds of comments a day.
I believe Ben started posting in February of 2005. It was so slow that you’d have to come back & refresh after a few **hours**, sometimes, to see a new post in the comments section (from a poster).
What a difference a couple of years makes!!
Thank you, Ben!!!!!
Stop me if you’ve heard this before…
When the neo kons came for my health care benefits,
I remained silent,
Health, who needs it?
When the neo kons came for my pension,
I remained silent,
Wealth, who needs it?
And few still realize that the value of a currency, is in relation to it’s standing in the world, and our standing is on a continous down cycle, a ride, that because usual Presidential term protocol rules apply, we cannot get off, for another 20+ months. A standstill, as you are seeing now.
Both sides of the political spectrum, fiddling over nothing, as Rome burns, for the Democrats, they are getting their just deserts in, on sticking the knife into the looking older all the time carcass, that is the current occupant.
A horrible stalemate.
We saw a dumpy 3/2 a few days ago, new on the market here in Pullman, WA at $240k . This same house sold last summer for $212k, and we had to laugh at the audacity of the seller.
But… word from our agent is that a vet student from out of town made an offer near asking price–to be paid by daddy as an “investment”. “better than throwing money away on rent” was our agent’s response!
REally…?
Rent value: $1000/mo
PITI (assuming interest only) : $1600/mo
Net monthly loss: $600
Selling cost: 7.5% here in PUllman due to Realtor fees and transaction taxes (plus $5k closing costs when buying).
Break even selling price in 4 years: $300k, requires 6% annual appreciation, and DOESN’T include maintenance costs or time value of money.
There are still an awful lot of greater fools out there not bothering to run the numbers. If the market appreciates at a more “normal” 3%, papa loses a minimum of $30k. If the market reverts to fundamentals (lots of vacancies, and rents are actually dropping) then Papa stands to lose $100-$150k.
You know…
The saddest thing about the ongoing bubble is, many are just a few years away from getting their first social security check, (i’m 17 years away, I have as much luck seeing Dollar 1, as the hopes of me self propulsioning myself to the moon) and if it isn’t painfully obvious by now, the rot has set in…
We buy a lot of oranges, as they just about give them away here, ($5 for a 25 pound box) and if we aren’t careful, just one orange rotting, will set off a chain reaction, ruining them all.
There’s more than a few rotting oranges, in Washington D.C. now. And they’ve been there for over 6 years.
To give you an idea of how quickly the rot can set in, a few times, we’ve gone away, for a 3 day trip and came back to a dozen oranges, beyond hope.
“(i’m 17 years away, I have as much luck seeing Dollar 1, as the hopes of me self propulsioning myself to the moon)”
I have good news and bad news for you.
The good news is that you will see dollars of SS checks.
The bad news is they will not be worth anywhere near $2007.
As the realtor for this $1,427 per square foot listing in Menlo Park states, “A wonderful opportunity for the savy investor…”
I’m not even savvy enough to know how to spell “savy”, let alone savvy enough to appreciate what a wonderful opportunity this place is.
http://tinyurl.com/2hke2d
Me, too. I’m waaaay to stupid for this kind of deal. I wouldn’t know how to make any money on it. See how dumb I am?
Roidy
Update on Bozeman, MT home I’ve been tracking:
MLS# 138658
Bought in summer of 2002 for ~$275k
Refinanced in summer of 2003 (don’t know how much pulled out) Lot of superficial remodeling, hard wood floors, new bathrooms, bedrooms, etc..
Vacant in March, 2006 as owners (young assistant professor and family) bought a much larger home with land in the mountains.
Originally FSBO at $600k
MLS listing in late May of 2006 at near $600k, gradually came down to $525k over the next 5 months.
Went off the MLS for a month, then came back with new Realtor at $450k
Pending sale in Feb, contingent with offers wanted
Flipped back to active this week, still at $450k.
Can you say, chasing the market down! You have to wonder what the break even point is, given the likely bridge loan, remodeling, transaction costs, etc… Depending upon how much they took out of the house, probably $350-$400k. And I’m guessing that they were counting on some equity to “move up” to the bigger house. Ouch!
THe Bozeman MLS now has 960 residential listings, most are vacant, and almost none have pending offers. This is a town of perhaps 30,000 permanent residents.
“THe Bozeman MLS now has 960 residential listings, most are vacant, and almost none have pending offers. This is a town of perhaps 30,000 permanent residents.”
That’s not a good sign. I smell bagholders.
Thanks for the update on Bozeman! I’d love to hear more info as this plays out…..am looking to bottom feed at some point in the future. We’ve always loved that area but won’t jump in until the suckers have bit the dust.
It is all about fundamentals. If a house (like the one I described above) rents for $1500/mo, then it is fundamentally a $200k house. When 30-year fixed mortage payments are equivalent or less than rent, you have a good buy.
In 2000, Bozeman home prices were right at 120 x rent. Few in Bozeman believe this (everyone wants to live there after all), but home prices will eventually return to 120 x rent … or perhaps even below if the market overcorrects. Given the glut in vacant rentals, I don’t see rents rising very rapidly. So unless Uncle Ben does the helicopter money drop, housing prices will fall on the order of 50%.
Lemme guess, they’re running out of land in montana.
LOL….yep, it’s just about all developed. I hope, in a few years, to move there (Bozeman area). All in all, it’s pretty spectacular.
That is 25% off the list price in less than one year. We have not seen anything similar in San Diego just yet, but there is a huge glut of SFRs listed in the $600K+ range for a county with a median income in the mid-$60K range. Considering that prices are falling, subprime lending is imploding and underwriting standards (like downpayment requirements and income documentation) are making a comeback, I would not be surprised to see 25% off this year’s list prices by this time next year.
P.S. I have already seen 25% off comparable sales, but that is different, because it is only a trickle of bank REO where these show up. I am eagerly awaiting the flood when the SD investers’ negative cash flow dam breaks.
Instead of “list price” we need to call prices like that something like “pretend price.” “Wishing price” isn’t forceful enough.
25% off pretend price is irrelevant. They could’ve listed it for $1m, then knocked it down to $500k. Hey, what are you complaining about? It’s 50% off list!
Step this way and the Snearys point out the places where they never could find the cash to hang a ceiling fan, install a hot tub, replace the siding … a long list of abandoned ambitions that seem almost too big to squeeze into the modest four-bedroom tri-level.
Owning a home is all about finding humor in unfinished projects. But in the house set back from a bend at 11030 Eudora Circle, the Snearys never had the luxury.
They ran out of money first. Then, they ran out of time. Soon, they’ll almost certainly be out of a home.
http://www.nytimes.com/aponline/business/AP-House-of-Cards.html?_r=1&oref=slogin
Northeast Los Angeles: Ready for a Close-Up
By LISA CHAMBERLAIN
With real estate prices on the rise, home buyers have been migrating to a historic hilly area that offers views from the Pacific Ocean to the Hollywood Hills.
http://www.nytimes.com/pages/realestate/index.html
Here’s an interesting quote from that article: “Ms. Bedell’s 1,200-square-foot split-level balcony — reached from different parts of the house by five sets of French doors and shaded by old-growth trees — overlooks the hills of Mount Washington, which could be mistaken for Tuscany.”
Tuscany???? Really???
Wow, if that’s true, Tuscany is VASTLY overrated. Does Tuscany get shrouded in “brown fog” during the hot summers as well?
Highland Park is kind of a sh*thole, but with high prices ($537/sq. ft.). Heavily south-of-the-border immigrant, it unfortunately has it’s share of the stereotypical East LA-like problems (graffiti, trash, sometimes dangerous at night). The geography is nice (hills with views), but it’s not a place I would want to raise my kids.
And before anyone bashes me for being a racist, I’m of (mostly) Mexican decent, so I must be “self hating”.
http://www.larouchepub.com/eiw/public/2007/2007_10-19/2007-12/pdf/04-12_712_feat.pdf
[PDF] How the US mortage-bubble implosion could trigger the collapse of the global “casino” economy. Also features “Loudoun County Waits for the Other Shoe to Drop.”
Here’s an interesting quote from that article: “Ms. Bedell’s 1,200-square-foot split-level balcony — reached from different parts of the house by five sets of French doors and shaded by old-growth trees — overlooks the hills of Mount Washington, which could be mistaken for Tuscany.”
Tuscany???? Really???
Whoops. My above post is in the wrong spot.
http://tinyurl.com/2p3soz
Oh you have got to look at this house and it’s photos. (See caption under the photo on lead page)
$800,000 in CNY and look at the Austin Power’s decor!!!!
What R they thinking?!?!?!
Try this.
http://www.cnyhomes.com/Listing/Search/info.cgi?mlnum=167661
Obama has joined the Democratic presidential candidate race to bail out the FBs. It looks like the Democratic party platform on this issue is rapidly taking shape: “Anyone who bought a house they cannot afford deserves to be allowed to retain their squatter’s rights, regardless of who else has to pay the price.”
http://www.reuters.com/article/bondsNews/idUSN2244695020070322
And so commences the true death of the Federal Reserve Note.
And so goes another Democratic bid for the White House straight down the tubes…
I think the Dems got a good chance with that line.
So much for my thought of voting for Sen. Obama. Damn I heard him speak last week and he was the first pol that I respected in decades. Lost respect after that stupidity.
Last straw. I’m going over to the Ron Paul camp. Wanna join, Hoz?
Plan B: Run out and buy a home I can’t afford IMMEDIATELY so that I can squat there for the next several years?
Be sure you buy the biggest MoFo of a McMansion that your lender will give you the suicide financing to purchase, so that you maximize your return on the Dodd subprime bailout.
I agree. This sort of talk is absolutely ignorant. Penalize the prudent folks for the mistakes of the greedy and stupid? Nobody trying to bailout the FB’s gets my vote.
“It looks like the Democratic party platform on this issue is rapidly taking shape…”
Votes have never been cheap unless one has celebrity power.
The nation’s first land speculator (but I am guessing he had to figure out how to do it without subprime loans…):
http://gwpapers.virginia.edu/articles/news/loc.html
Doing the (subprime) ‘Dead cat bounce’:
http://marketplacemoney.publicradio.org/display/web/2007/03/23/getting_in_on_the_ground_floor/
Gotta love the subtle hint offered in NPR’s choice of URLs…
Ohio will sell bonds to fund a local bailout of homeowners facing foreclosure. (Coming soon to a California neighborhood near you?)
http://www.nytimes.com/2007/03/24/us/24states.html?_r=1&n=Top%2fReference%2fTimes%20Topics%2fSubjects%2fH%2fHousing&oref=slogin
Not sure how this will help many borrowers. The bond issue is for conventional mortgages at 6.75%. Many of the borrowers can’t even afford to pay that. They originally bought with 4-5% teaser rates.
If there MUST be a buyout, at least let it be at the state level. That way those of us who live in states that really didn’t participate in the bubble (much) won’t have to pay the bills for those states that did.
I live in Wisconsin. Foreclosures are up here (slightly) this year. Prices really haven’t gone up here that much compared to other parts of the country. I think, mainly, because property taxes are so high here that most people are quickly disabused of the notion that a home is a good “investment”. Someone owning a home assessed at $425k here (a pretty big house, I might add) will be paying $7 or $8k per year in property taxes…
Maxed out on plastic
(audio icon / Listen to this story)
The country’s war with credit card debt rages on. A new documentary called “Maxed Out” takes an in-depth look at our nasty credit addiction. Tess Vigeland talks plastic with director James Scurlock.
(The interview features a nice dig at subprime from the director…)
http://marketplacemoney.publicradio.org/display/web/2007/03/23/maxed_out_on_plastic/
I believe someone on the SDCIA forum worked on that movie, IIRC.
Cognitive disconnect time at Bloomberg.com (note the apparent inconsistency of the bold passages below):
Investors Absorb Worst of Subprime Rout, Markets Show (Update4)
By Shannon D. Harrington
March 23 (Bloomberg) — Whatever scare rising defaults of subprime loans wreaked on stocks and bonds may already be on the wane.
“The troubles in the subprime market won’t affect the rest of the world,” Neil Jones, head of European hedge fund sales at Mizuho Financial Group Inc. in London, said in a March 20 interview.
While everyone from Alan Greenspan, the former chairman of the Federal Reserve, to Bill Gross, manager of the world’s largest bond fund, have acknowledged that mortgage defaults may slow the economy, Wall Street’s biggest securities firms aren’t fretting. The “subprime risk flare” will likely subside by early April, said Jack Malvey, global head of fixed-income strategy at Lehman Brothers Holdings Inc.
During the past three weeks, the Standard & Poor’s 500 index, a benchmark of corporate America’s equity, has risen 4.5 percent, recouping almost all of the past month’s losses. The damage from subprime defaults has been “contained,” said Michael Materasso, a senior portfolio manager in New York at Franklin Templeton Investments, which manages $124 billion.
“There are few signs that the disruptions in this one sector of the credit markets will have a lasting impact on credit markets as a whole,” Federal Reserve Bank of New York President Timothy Geithner said today at the Richmond Fed’s 2007 Credit Markets Symposium in Charlotte, North Carolina.
http://www.bloomberg.com/apps/news?pid=20601170&sid=atuMCA1ImLrI&refer=home
Housing sales data give lift to industry
But subprime woes keep rebound at bay
By Martin Crutsinger
ASSOCIATED PRESS
March 24, 2007
WASHINGTON – Sales of existing homes rose in February by the largest amount in nearly three years, but worsening troubles in subprime mortgages were viewed as a roadblock to a full-fledged rebound.
http://www.signonsandiego.com/uniontrib/20070324/news_1b24economy.html
Um, let me think about this slowly so I can cope with the hallucinations. Ohio is going to lend (for instance) a FB $350k fixed on their house, which by then will be appraising at $200k. They will lend to the homeowner at a fixed rate that is roughly what they are paying on the bonds. So… if none of the FB crash and burn, Ohio will have the money to cover the bonds. What are the odds of that? Why not just admit that they are going to stick it to the taxpayers?
Service jobs offset construction slump
San Diego County employment figures are up for February, but some economists have concerns about rate of growth
By Dean Calbreath
STAFF WRITER
March 24, 2007
Union-Tribune and
Associated Press file photos
A hiring spurt for waiters, dishwashers and business-service workers helped counteract the continuing slump in the construction industry last month, pushing employment higher in San Diego County and statewide, according to data released yesterday by the California Employment Development Department.
…
“There have been huge losses in construction and real estate,” said Alan Gin, economist at the University of San Diego. “It’s surprising that the rest of the economy has been able to adapt as well as it has.”
Since reaching a high point last June, the local construction industry has lost 9,900 jobs, or 10 percent of the work force. During the same period, the real estate industry lost 2,200 jobs, or 7 percent of the work force, despite a 200-job uptick last month.
Gin worries that the slowdown is spilling into other parts of the economy. He attributes the cutbacks in retail jobs, in part, to the gloomy real estate market.
“Auto dealers, furniture stores and home improvement stores are all down, and there was a big loss in department stores,” he said. “A lot of that seems to be tied to less sales of big-ticket items. What that means is that a lot of people are not taking out home-equity loans to make major purchases.”
http://www.signonsandiego.com/uniontrib/20070324/news_1b24jobs.html
Let Jon Stewart know what you think of Dodd’s bailout proposal:
http://ccinsider.comedycentral.com/cc_insider/2007/03/senator_chris_d.html
There are already some choice comments out there — join in the fun!
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I quit my job 4 years ago with a tech firm to go into real estate. I started off as a Realtor and was making a killing, then eventually starting buying and flipping condos in Miami with interest only loans. I’ve made over $3 Million in the past 3 years flipping condos, but right now I’m stuck holding 7 condos I can’t unload and my loan payments are starting to pile up. I really need to restructure my loans and really hope that Dodd considers professional real estate speculators like me in his bail-out package - we are the ones who take risks and make the economy grow, not those poor working stiffs stuck in the rat race who actually believe that work is noble.
Posted by:P-Doddy | Mar 15, 2007 10:29:24 PM
Stucco,
I hope someone left a comment and told that jackass he should LOSE the three million and we’ll call it even. It’s people like him that helped create this mess. I hope he crashes and burns….
I was pretty sure that post was fictional. It is a commedy central blog, after all…