“The Market Dips Down” In California
The Voice of San Diego reports from California. “A larger number of homeowners find themselves upside-down in their homes, owing more than their home could sell for, than in previous years. And the number of them hoping to execute a short sale is also increasing.”
“There were 1,065 San Diego County homeowners in some level of foreclosure in February, according to a recent report. By comparison, 881 homeowners were in that category in the same month a year ago, and 299 in February 2005.”
“Jim Supples is a Realtor focusing mostly in the neighborhoods from Scripps Ranch to Escondido. He said short sales are growing in prevalence’- not because they’re the ideal situation for buyer or seller, but because they’re becoming a necessity. Buyers who banked on the housing market continuing to increase are now unable to refinance loans while their payments balloon out of reach.”
“‘People got into these situations, and then the market dips down,’ he said. ‘People are just getting squeezed out. Last year, it was negligible,’ Supples said of the short-sale phenomenon. ‘Two years ago? Nothing.’”
“But Tuesday, when Supples reviewed the database used by Realtors to list and search for homes for sale, he found more than 700 combinations of the phrase ’short sale’ among the 16,000 active listings in the Sandicor database.”
“Without the cushion of a personal investment in the property, the road to becoming upside-down in the house moves quickly when a market starts to decline.”
“Short sales usually mean a smaller loss of value in that neighborhood than a foreclosure auction would. And as the banks become deluged with consumers in trouble and loans in default, they’ll become more likely to accept the offers from willing buyers in a short sale scenario.”
“‘If you have a huge increase in the volume of properties, you’re going to be a little more inclined to take a reasonable offer on a property and cut your losses there,’ said Rick Sharga of RealtyTrac.”
The North County Times. “Blame it on the sky-high housing prices. In all but one year of this decade, more people have moved out of San Diego County than have moved in from other parts of the state and nation. And, not surprisingly, say analysts, the trend accelerated during the last three years, with homes never more out of reach of the typical area family.”
“The total number of fleeing San Diego County residents reached a peak of 42,034 last year. That exodus, focusing on the 12 months that ended July 1, came on the coattails of a net domestic migration loss of 37,666 residents the previous year and a loss of 32,140 the year before that.”
“‘A lot of people are moving to Texas from here,’ said Darius Khoshnevis, owner of the U-Haul on Ninth Avenue in Escondido. ‘I think it’s because of the housing market. They can buy a house there for less than half of what they would pay for one for here.’”
“Texas isn’t the only place they’re headed, Khoshnevis said. Many are going to Arizona, Nevada and Utah as well, he said.”
“The major coastal counties of San Diego, Orange and Los Angeles have been posting net domestic migration losses for years, and Riverside County has been capturing a large chunk of the movers.”
“Meanwhile, the ratio of people moving out of San Diego County to those moving in has reached such a feverish pace that truck rental companies are scrambling to keep up. Jerry Mitchell, who owns the land that a Vista U-Haul business sits on, said, ‘We will be scrounging for one-way trucks this summer because there just aren’t that many people moving in.’”
“‘I don’t think we’ll ever have housing costs that look like Kansas,’ said Ed Schafer, senior demographer for the San Diego Association of Governments. ‘But you know, if we lost like 25 percent of the value of homes, then the area would be competitive again in terms of housing.’”
The Modesto Bee. “MortgageTree Lending Corp., a Modesto-based mortgage company with 390 employees in 32 states, is being acquired by W.J. Bradley Company Merchant Partners of Denver. About 25 employees at its Modesto headquarters were laid off last week, according to spokesman Bill Campbell.”
“The company reported originating about $1 billion a year in residential mortgage loans. Its business declined significantly by 2006, however, originating fewer loans from fewer branches. Some closed, including one in Turlock.”
The Merced Sun Star. “Merced homeowners are among the most likely in the country to have subprime mortgages according to a survey published recently in the Wall Street Journal. Merced ranked seventh on a nationwide list that calculated the percentage of subprime loans among homeowners in 331 cities. Subprime loans made up 21 percent of Merced’s mortgages as of December 2006.”
“In January and February of this year, 410 homes in Merced County entered the foreclosure process, according to RealtyTrac. During the same period in 2006, that number was 43; in 2005 it was 49.”
“Cindy Pulliam, branch underwriter at a Merced mortgage banker and broker, said the jump in delinquency activity coincides with interest rate increases on loans homeowners took out during the 2005 housing boom.”
“Back then, as out-of-town investors pushed prices sky-high, some buyers may have felt pressured to accept risky loans, Pulliam said.”
“‘Our prices were increasing rapidly,’ Pulliam said. ‘People felt like if they didn’t jump in right then and do whatever it took to get a home they weren’t going to be able to afford a home down the road.’”
“Many of those mortgages had fixed interest rates in place for a two-year period that expire now, Pulliam said.”
“But with home prices plunging from their 2005 heights, borrowers can’t refinance to get out of their existing mortgages. ‘In most cases they’re ending up with more due on the home than what they can get on the loan,’ Pulliam said.”
“While some experts have pointed fingers at borrowers who may have exaggerated their incomes on loan applications, Pulliam noted that inexperienced people inside the mortgage industry played a role in the subprime meltdown as well.”
“‘We have to put some of the responsibility on some of the rookie brand new loan officers who got into the industry to make a quick buck and didn’t necessarily look out for the best interest of the home buyers,’ Pulliam said.”
“As more and more mortgages default, some subprime lenders are being forced to close up shop. New Century Mortgage, one of the biggest subprime players in Merced’s market, filed for Chapter 11 bankruptcy Tuesday and cut 3,200 jobs.”
“This isn’t the first time Merced has been featured on the pages of the Wall Street Journal. A 2005 article listed Merced as the least affordable housing market nationwide. In 2006, the newspaper projected that Merced’s home prices were 77 percent over-valued.”
‘Clamping down on Los Angeles’ spending, Mayor Antonio Villaraigosa is expected to warn today that he will squeeze the city budget for a second consecutive year as he seeks to reduce the deficit by an additional $60 million.’
‘The city is not going to be getting as much (from residential housing), and the retail sales tax is down also,’ said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp.’
Why worry. Grand Ave. will save us!
Villaraigosa supports the right of illegals to live in the U.S. Remember a year ago, when 200,000 Mexican nationals, waving Mexican flags, filled the streets of downtown L.A? Villaraigosa was right there, shouting his support. I can still hear his battle cry:
“you need us! We clean your toilets!”
That’s an exact quote.
Now, millions of well educated Americans, of all creeds and colors, are fleeing Cali. They are being replaced by uneducated, unskilled illegals. God help California. God help the U.S.A.
“”Villaraigosa was right there, shouting his support. I can still hear his battle cry:
“you need us! We clean your toilets!”
That’s an exact quote. “”
He’ll be the one cleaning toilets when his term is up. One and done. It has already been decided.
–
“Now, millions of well educated Americans, of all creeds and colors, are fleeing Cali. They are being replaced by uneducated, unskilled illegals. God help California. God help the U.S.A.”
Largest groups, % wise, leaving California, as per census data, are Non-Hispanic Whites, blacks and Native Americans and the fastest growing group(s) are Asians. I seriously doubt that as many “well educated” people are leaving CA as they are coming in .
It is true that we are also getting lot of people to do the least desirable and lowest paying jobs, mostly illegally. There is lot of dirty work that doesn’t require much of skills. No? Maybe the CA economy is getting the kind of work force that is needed. Free Market in action except for the illegal entry part.
Jas
I’ve read your post three times and it makes no sense. You admit that white non-Hispanic people are leaving the state, and you admit that most of the jobs being created are being taken by unskilled illegals. You then state “I seriously doubt that as many well educated people are leaving CA as they are coming in”.
Can you please clarify your position?
Hi point is that Asians, many of the very well educated, are also flooding into Cali.
Not sure I agree with his premise, but that’s the one he’s trying to make, anyway.
And that premise, for urban coastal California at least, would be wrong.
Asians are still coming, but not in the numbers they used to - they are staying home for the opportunities there. Others are returning to Asia.
And domestically, the out-of-state plates (indicative of newcomers) are down dramatically from dotbomb days.
Unless one is young or has no family, it doesn’t make sense financially to move here unless one is a senior executive type or makes crazy money otherwise.
Or is a trustafarian. Seen a lot of that lately.
They’re going to have to get by cleaning each others toilets, cause I’m long gone.
For the record, I cleaned my own toilets when I lived in CA and washed my own car and blah blah blah.
Ex-Cali resident here also long gone, and I too cleaned my own toilets, house, car, and clothes. I don’t need this guy (or anyone else for that matter) to clean my toilet.
And even if I DID hire someone to clean my toilet, it sure as hell wouldn’t be an illegal immigrant.
i clean my own toilet… I wash my own car, I do my own laundry…
And a ROOMBA automatically vacuums my rented appartment.
Robotics and automation rule!!! The rest is DIY. I don’t want the preying hands of a “cleaner” on my personal stuff at home!!!!
“Mayor Antonio Villaraigosa”
Former HBB poster (and one of the nastiest, I might add…)
GS, is that a joke? Are you saying Villaraigosa posted on this blog at one time?
Someone with that handle was a resourceful and nasty troll.
Back when Ben’s blog was on blogspot, the troll AV went and created thehousingbubbleblog3 with the same outlook and attempted to parody Ben’s blog.
Ben’s filtering software eventually got rid of him.
You would have to get Ben to divulge whether troll AV was the LA mayor (I have no way to corroborate!).
Wow, thanks for the info. Probably a troll using the mayor’s handle, but it is an interesting piece of HBB history.
Oh come on, he’s too busy cleaning toilets to post on blogs.
It doesnt pay to be responsible. Especially when banks will do anything to keep you in a house. http://biz.yahoo.com/ap/070404/mortgage_modifications.html?.v=5
These ****ing pukes want to keep the FB’s in the house instead of foreclosing because house prices are declining and they cannot recoup the funds, or better yet, make a little dough on the deal. Should it be the other way around, they’d take those homes in a heartbeat. Scum of the earth.
In the words of an old wise man:
“A banker is a fellow who lends you his umbrella when the sun is shining and wants it back the minute it begins to rain.”
They want to keep the FB’s paying on those mortgages like serfs shackled to the land. The problem for the FB’s is that it’s just throwing good money after bad. Their delaying the inevatable as they throw more hard earned money out the window.
Only fools get fooled.
Vmaxer, never truer words spoken. While I agree with Bantering above about the banks worrying about the loss of value, bottom line is that these FBs will be slaves all their lives. That 50 year mortgage will truly become reality for many of thee people is these deals work out. Good luck if you ever have to move.
“The investor in securitized loans often dictates how much a loan can be modified, and Litton said his company has demanded more flexible terms from securitizers, which lets it modify problem loans with lower interest rates or extended terms. For instance, a home owner whose adjustable rate mortgage “resets” to a higher interest rate on May 1, 2007 might get a 24-month extension, putting the adjustment off until May 1, 2009.”
Sh#t like this will just compound the situation, so that ALL the foreclosures will happen at once. So instead of monthly bombing raids for 3 years, they’ll end up creating a Atomic Blast around 2010.
Everyone should read this article….
Perfectly put: an atomic blast. Brilliant! I thought this wasn’t going to happen because Wall Street and other financiers had created all these models and hedging instruments?
Won’t the MBS investors push back on the lender and say no way?
I’m getting so sick of these damn financial cowboys, out running wild and free with not the least bit of regard for common sense.
“So instead of monthly bombing raids for 3 years, they’ll end up creating a Atomic Blast around 2010.”
Instead of Dresden they get Hiroshima. That seems fair to me.
What is so funny is to read about all these so-called experts now trying to come up with solutions. He!!, if you guys hadn’t lent 800K to people earning 50K a year you wouldn’t now have to come up with solutions. If these schmucks are the best and brightest are schools have to offer, once again I will say it, we are truly sunk as a nation!
Kind of incredible, they are scrambling to save the rats on a sinking ship. When people say the real estate market corrects slowly, it is because of $hit like this.
When people say the real estate market corrects slowly, it is because of $hit like this.
This is nothing more than the lenders keeping the FB’s right between the sights.
How do you like your “No”, fast or slow?
I see this only working for those that want to “live” in their homes. All the investors be damned.
guess it’s time to roll out mymortgagesucks.com. contracts mean nothing anymore. a sea of victims in search of a perp.
Yeah, now that the myassisraw.com domain is already taken the FBs need to go to Plan B.
You guys kill me. LOL. This blog is so awesome.
JRinUT,
This program won’t save anyone. These loans are so massive to begn with that you might be able to make the monthly nut if the mortgage was a hundred years long. HUMMMMMM, now what country tried that program already? Yeah, that’s right Japan. Really worked out well for them, didn’t it?
“Especially when banks will do anything to keep you in a house.”
A parasite that kills its host kills itself, too.
Banks will do anything to keep you in the house….. private federal reserve “prints money out of thin air” and spreads it out to the bankers who with smiles on their faces “loans” this paper money to anyone. Yes, they are starting to tighten up their loan requirements but the damage has been done to the economy and it will be years before we recovery.
Strictly speaking what the banks are doing is doing everything they can to make sure you don’t walk away from your debt.
You know - the money you owe them - they really don’t CARE if you get foreclosed on other than that debt.
You can be sure they banks are also doing everything they can to ensure that they are not writing more loans that are going to go bad - it’s that credit implosion that’s going to take this thing down hard - enough people don’t qualify any more for the suicide loans that volume will drop off the face of the earth.
It’s all a matter of how deep and how fast from there.
A governement or a system who robs Peter to pay Paul can always count on the support of Paul.
- Mark Twain
There’s an old saying, “you can’t get blood out of a stone” and I think this will apply here when the resets occur. Some of these people are toast and when these MOD Squad people see the finances of the FB’s they’ll be scratching their heads…
Well, California is in better shape than Florida. At least California has an economy, and check out this latest property insurance increase that Nationwide is imposing on Florida:
Nationwide customers in Florida might get a shock when their next homeowners-insurance bill arrives.
An independent arbitration panel in that state approved an average 54 percent rate increase for Nationwide’s homeowners-insurance customers there.
The actual increase for customers will depend on where they live. Costs will be higher in coastal areas.
“The risk for catastrophic weather in Florida is very real, and we have to have the financial surplus” to handle claims when disaster strikes, Nationwide spokesman Eric Hardgrove said.
“This (rate) approval helps Nationwide maintain financial stability for customers, not only in Florida but across the country.”
The Columbus-based insurer originally sought an average increase of about 71 percent, but Florida regulators rejected it in October. Nationwide then requested an arbitration hearing to challenge that decision.
Florida insurance regulators were not surprised by the decision, spokesman Jonathon Kees said.
The arbitration process historically hasn’t been very successful at keeping rate increases down, he said. “This is another example of why the Office of Insurance Regulation is opposed to arbitration and why we’re thankful that the (state) legislature suspended arbitration until January 2009.”
The panel said it approved the increase because it was “not excessive, inadequate or unfairly discriminatory.”
The 54 percent rate increase is in line with those granted to other insurance companies in Florida. State Farm was granted a rate increase of about 52 percent last year.
Double-digit price increases in Florida most likely will continue in coming years, said Robert Hartwig, president and chief economist with the Insurance Information Institute in New York.
“Florida is the most hazardous place to locate and insure property,” Hartwig said. “Rates were suppressed for so long that insurers still have to do quite a bit of catch-up.”
Even after back-to-back years of increases, insurance rates still aren’t an accurate reflection of the risk insurers face in Florida, he said.
This is not the first time Nationwide has been granted a substantial rate increase since hurricanes ripped through Florida in 2004 and 2005.
In 2005, Nationwide raised insurance rates there by about 21 percent.
Soon after, the company said it would not write any new homeowners-insurance policies in the state and would not renew 25,000 homeowners-insurance policies and 4,800 mobile-home policies.
Nationwide has about 253,000 homeowners-insurance policies in Florida.
i am sorry noone is imposing anything insurance is a risk reducing mechanism if u do not want to play that is up to u… but 5 hurricanes going through florida every 3-4 years do not make it a great place to insure it SHOULD NOT cost the same as pensylvania or michigan… you want to live in florida u pay hurrican premiums
We have people who move into Sacramento and buy a new home on a flood plain and then complain about flood ins. FL isn’t alone. You can’t save people from themselves.
We had people back in Minnesota that bitched about winter. I hate people!
LOL
Like my father used to say, “I am not racist, I hate everyone.”
Also, this world would be so much better if it weren’t for all the people.
LOL!
Good man, your father. I picked up from an old drinking buddy: “I’m not racist, I have everyone equally.”
hate. Darn spell check. Oh, that wouldn’t have caught it. Shucks. Back to work.
I once asked this crusty old dude if he was a hunter. “I wouldn’t kill an animal” he says, and after a pause, he half says to himself “humans are a diiferent story, though”. I was soon on my way.
–
“You can’t save people from themselves.”
If that were true we wouldn’t need 80% of the govt. at various levels. This means that we have got a govt. that the majority deserves.
Jas
“Nationwide customers in Florida might get a shock when their next homeowners-insurance bill arrives.”
Nothing could be finer than to be in (Western) Carolina (and not Sarasota) in the morrrrning!
“morrrrning”? Is that the Ricky Ricardo version?
A bad hurricane season in Florida’s gonna bring that state to its knees.
NOAA has reported that we will be experiencing La Nina conditions over the next few months. Doesn’t this portend higher traffic of hurricanes? (Much like El Nino from late last summer helped suppress hurricanes.)
Yep, yesterday CNN showed the new report that gives a 74% chance of a landfall of at least one hurricane this year.
IIRC the data were 19 named tropical storms, 9 hurricanes of which 3-5 will be larger than cat.3
Yeah, but hurricane estimates are more like WAG’s. Last year the “experts” predicted something like 17 major hurricanes and there were only one or two. The reality is that Gulf of Mexico weather patterns are too complex to accurately predict and we won’t know until we’re in it to find out what kind of hurricane season it will be.
last year that had a weather effect that pushed hurricanes away from the atlantic. this year that isn’t going to happen. it’s a good bet the forecasters are right this year.
Which makes my point. When the “experts” made their dire predictions last year they didn’t account for the weather effect you speak of. When the hurricanes didn’t happen they come up with “weather effect” to explain why their predictions were wrong. What’s happening is the scientists are covering their a$$es with dire predictions. If the reality is dire, they can say “I told you so”. If their predictions don’t come true, everyone is relieved because their house hasn’t been flattened and the scientists can come up with a convenient explanation for their models not working properly.
Well maybe there weren’t too many hurricanes but it seemed like a super typhoon was spinning up every week.
Maybe the weather forecasters are ex economists.
Ahh, reminds me of my college days. As a computer science student I made the unfortunate mistake of signing up for a class called “numerical methods.” You see, when getting into the kind of complex number crunching that weather modeling requires, computers just aren’t accurate enough. The class was all about figuring out how to maximize the accuracy of a flawed system (yes all computers are flawed if you dig deep enough). Oh man that class was hard. I don’t think anyone got better than a B, and keep in mind that I went to a very highly regarded University. I’m not sure that class is even around anymore for lack of people willing to destroy their GPA on it.
Just makes me wonder why I don’t hear weather forecasters blaming crap on the computers. Perhaps nobody would believe them.
Me too Brian - I did applied maths as a degree in the UK, and had the pleasure of calculating heat diffusion using differential equations - just calculating temperature changes on a hotplate over time took an amazing amount of number crunching….apply the same kind of calcualtions to our weather sysytems, and the calculations become almost impossible without a ‘brain the size of a planet’, to quote Marvin from Hitchhkier’s Guide.
Yes, the “Experts” often get it wrong - as someone pointed out, they didn’t take into account the El Nino effect last year, and their predictions were way off.
But at least they’re trying.
I have always found that the weather is like a woman. Predicting anything more than a day or two out becomes very difficult.
Well, that was true until El Nino was recognized (ENSO). Predicting trends months in advance became possible for the first time with this acknowledgment.
Kinda like knowing when a woman’s period is going to be allows you to predict personality trends just before it.
PMS -> More emotional outbreaks.
La Nina -> More hurricanes
We clownifornias may get laid low by an earthquake.
Exactly, James. Almost every state has some sort of risk. California could get “the big one” any day now. Not to mention mudslides, and fires. Florida is just now entering its wildfire season and this year is not going to be pretty, considering the state is extremely dry at the moment. The over-development might really show up if a few subdivisions get wiped out.
Wild fires not-withstanding, major devastating earthquakes are a once in a life time event. You can have the tornados and cyclonic storms.
“major devastating earthquakes are a once in a life time event.”
Strange… I’ve been through 2
“major devastating earthquakes are a once in a life time event.”
Strange… I’ve been through 2
———–
Comes down to the definition of “devastating”.
The only one in memory for No Cal was Loma Prieta. So Cal had Northridge. That would be considered 2 in my book. However, No Cal and So Cal are far, far away from one another, so you only really experienced both if you were unlucky enough to be in No Cal and then moved to So Cal in time for Northridge.
Am I missing another So Cal quake?
But that’s better than not getting laid at all…
Well that depends. Kinda like that saying “no muff too tuff”. Oh, I beg to differ.
Sounds like someone is speaking from experience…
I can only hope for a big earthquake. Maybe that will speed up the outmigration in turn with dropping the home prices.
Hey why not pray for H5N1 to evolve into a Stephen King “super flu” so you can live off canned goods and walk the streets of a dead world?
Great. Move over everyone, step aside. Make room for more bubble refugees are on their way over here to cross our sad little picket line of stubborn renters. Maybe you can’t afford a $350k 1700 sf sh**box on a $60k salary, but they can, and will happily take that stucco cookie cutter off the market.
I thought there was no one left to clear the bar that the locusts raised, and that the bar would have to go back down for the rest of us. Guess not. Hey, at least the influx of Californians to our area might liven the place up. It’s quiet here. And homogenous. Hope they don’t lose their minds of boredom.
Ok, little violin playing me a sad song…I know the rest of you have been stung a lot harder than this. In fact, this blog has for the most part made me grateful it’s not as bad in Utah. I’ll quit whining now. You are right to hate me.
And, alas, some of them will be heading to AZ as well. That’s what we get for being right next to CA. Sigh…
Yep, us too. It’s been like a mass exodus the last few years. I guess why should it stop now?
I lived in Reno for one year just before going to grad school. I lived in an old ranch foremans house off the 395 (Steamboat springs area). We were on the edge of the Diamond L? ranch land. We had our own geo vent on the property (and no arsenic) which meant we didn’t have break ice in the winter for the horses. It was common to see a few heads of cattle wander down our street. I met some of the nicest, salt of the earth type people there and I go back visit them when I can.
The amount of sprawl there now is insane and they have one huge factor to contend with - water. When I lived there, Washoe lake was still a lake. Last time I drove down the 395, it was completely gone.
Say - do they still get the cave ins in Virginia City?
Reno?!? Really? Just how many Greyhound stations does that city have?
I don’t know about cave ins in Virginia City, but I do love to go ride the train up there and visit the overlook on the way up 341.
Greyhound stations - I think only one in downtown, but there are a few other stops along 80.
The majority of VC was dug out using the honeycomb mining method. Every once in a while a sink hole would show up as the timbers below rotted. They’ve been trying to back fill for decades.
Slim,
I don’t know, it’s beginning to look like this rolling bubble thing is running out of steam. I see houses around me that have been for sale for 2 or more years! Slowly cutting the prices, drip by drip. After all, this isn’t a perpetual motion machine, and having run up the AZ prices, many are underwater just as lending gets tough.
I’d be willing to bet many of those Phoenix NOD’s are mailed to Californian addresses. Will out of state defaults force sales on the west coast?
Ben,
There was a classic post on the HGTV boards several weeks back from a CA transplant who bought a house in Chandler and it hadn’t sold in 2 yrs. I can’t remember if they had moved back to CA or not. I do remember that they were eating the entire mortgage payment each month because they couldn’t rent it for the entire PITI but they were ok with letting it sit empty and not paying the taxes on it. Do people think adding a tax lien is like adding salt to recipe at the end to enhance the flavor?
Slim here.
In central Tucson’s Sam Hughes neighborhood, there are two “for sale” houses right next to each other. Both have been on the market since 2005.
And what’s this? Right next to the two two-fers! It’s a plot of land that just went up for sale! Which makes three little “for sale” signs in a row.
Mind you, all three properties are in the oh-so-desirable Sam Hughes neighborhood, which lies directly east of the University of Arizona.
I’m not in Tucson anymore - are these over by Arizona Inn? That area was pricey in 1995, can’t imagine what they’re asking over there now. Any idea of asking prices or price / sqft?
I was a bubble refugee x 2. From SF to SD in 1999. Then SD to Minneapolis in 2002, finally severing all Californian ties in 2005.
Back home, everybody was spewing this “everybody wants to live in San Francisco/San Diego/California” nonsense.
Perhaps everybody does want to live there. But most can’t afford it.
When I moved to MN I cried at first. And resolved I’d go back to CA as soon as possible. Now the thought of going back makes me giggle.
Sure, I may go back someday, but it’s unlikely. It sure was hard to break the umbilical cord, but now that it’s broken I can’t believe I ever thought a starter home in working class neighborhood could be “worth” $750,000. (in 2003 dollars).
I’m about to write to some of the comanies in which I invest, and demand that they relocate out of California as their operating expenses are too high there with the high COL and the high cost of commercial RE.
People forget that high RE prices => higher operating expenses => lower profits => uncompetitve businesses.
Congrats - MN is a highly underrated state.
I seriously considered moving to Minneapolis for a man in 98′. I should have just moved. The only reason I didn’t was because people smoked everywhere and I have bad asthma. I could never go out.
MN is great if you’re an ice cube. I’m not much of a cold weather person.
“People forget that high RE prices => higher operating expenses => lower profits => uncompetitve businesses.”
Truer words were never spoken. I try my best to explain this to people when I hear their wild prognostications about a neverending increase in land prices. Once a certain threshold is reached, there is no more profit.
Clouseau: A sledgehammer couldn’t beat that kind of common sense into the brain of the average Californian. This state is just writing its own death warrant. I consider moving out every day, but where? I don’t do snow, and AZ is freaking hot!
Grow some balls and get the hell out of there. There are so many nice places in this country, outside of California. If you can’t find one then enjoy the high cost of living. No offense intended!
CA Guy,
Phoenix isn’t CA, but there are a lot of jobs in many industries including high tech, we have relatively cheap housing, and our state isn’t going bankrupt. I know it’s hard to believe, but after you stay here a while, it doesn’t seem unbearable until it hits 110 deg. Then we all flee to the mountains or to CA.
Lip
Grow some balls and get the hell out of there. There are so many nice places in this country, outside of California. If you can’t find one then enjoy the high cost of living. No offense intended!
Kind of ironic coming from someone living in New York City, the only place in America that is more expensive than California!
Back home, everybody was spewing this “everybody wants to live in San Francisco/San Diego/California” nonsense.
But the employers arent hiring here. they are hiring outside the state. The only growth has been goverment and retail jobs. Im in SF Bay area.
I’m a native Californian and I don’t want to go back there at all. This morning my husband was talking about how he just can’t wait to get back there and it made me feel sick. I’d much rather live in upstate NY or somewhere like that. But he is the one with the big money job so he gets to decide where we live.
It’s not just you. Every state that is seeing a large inmigration of CA refugees has it’s share of hate for them. I’m a 3rd gen CA native. After having met some of the shallowest people on the planet here, I can’t say I blame them.
I had been predicting a reverse dustbowl effect since 2001. I’m still surprised everyday that the numbers aren’t larger.
I still wish the census would give us the data pre-baked. With inflation, we get a variety of indexes (CPI, Core, CPI-U, CPI-W, etc) but population data they seem to want very quiet. I suppose I should be happy we still get numbers. At least census estimates haven’t gone the way of the M3.
“Every state that is seeing a large inmigration of CA refugees has it’s share of hate for them”
The problem with this logic is that all the equity locusts/refugees are the same. California suffers/suffered for decades as it got invaded. now it’s too expensive for multigenerational Californians. So many moved to Oregon, Washington, Nevada, Arizona.
But don’t forget, OR, WA, NV, and AZ sent their fare share of equity locusts to California to begin with!
IN the end, we’re all Americans. Doesn’t matter how long our family has been in a certain area IMO.
Sure, my family was Californian for a few generations. But before that they came from Georgia and Wisconsin. Now I’m in MN. Americans are pretty portable. (unless they’re stuck in a house that’s upside down in value!)
Half the Californian equity locusts that are invading surrounding states were born in yet a different state!
The only way Californians have much blame, is that they are very shortsighted and provoked the onslaught of their state by saying and believing that their sh*t doesn’t stink. (how many times have I heard about “flyover” states and what not).
Similarly, the Arizonans and Washingtonians and Nevadans etc have nobody to blame but themselves. As soon as the infestation from California began, they had newsmedia at the forefront explaining why “it’s different here” and why “everybody wants to move to XXX”
They used the influx of Californians to justify their existence. They WELCOMED the onslaught by feeling rich and superior for finding the “next greatest place” early. Now when the problems come they want to blame others.
“But don’t forget, OR, WA, NV, and AZ sent their fare share of equity locusts to California to begin with!”
So very true
Not every area welcomed them. I have relatives in NC and they’ve been blasting my ears about folks from CA moving in for 10 yrs.
I’m in Sacramento and the only people welcoming the BA transplants where big business and the newspapers. People who were living here before 96′ pretty much could do without them.
Hear, hear. I am SO FRACKIN’ TIRED of people on this blog painting all 30 million+ people in my state with the same brush. Come on, do we REALLY need to have this argument?
There are Clownifornian types in every state.
Agreed. I am the only regular here who finds redeeming qualities in every city. I like Phoenix as much as I like Los Angeles, having lived in LA 3 years recently. Tortius insulted the whole population of Arizonans. That include Ben Jones, doesn’t it? I won’t forget that.
“They used the influx of Californians to justify their existence. They WELCOMED the onslaught by feeling rich and superior for finding the “next greatest place” early. Now when the problems come they want to blame others.”
You make a very valid point. In the peripheral bubble states like AZ, NV, ID, OR, etc. a lot of locals could not unload their 1200-1500 sq ft starter homes to “investors” from Cali at a fast enough pace. These same locals then upgraded to slicked up McMansions and bragged about their financial prowess as equity gains allowed them to yank every last penny from their new McMansion to finance their new lifestyle. Yeah, the equity locusts from Cali caused a lot of trouble, but they had a willing partner.
“These same locals then upgraded to slicked up McMansions and bragged about their financial prowess as equity gains allowed them to yank every last penny from their new McMansion to finance their new lifestyle.”
I can’t tell you how many people I know here that fit this profile, it’s absoulutely amazing. Some of these people got burned in the last year though, moving up to the mcmansion without selling their starter homes first believing the game would never end and the investors would come forever. People were helocing their new homes before construction was even complete and buying new furnishings, etc. The problem is, you eventually have nobody left that can afford the starter homes when you have a median home price of 379,000 and median area income of 45,000.
Yep the plankton is swallowing the whales {wall street}.
New home buyers {the plankton} are closed out of affordable housing and qualifying finance, soon after that the merry go round stops and swallows all the whales. Whales must feed off the larger fish that fish that eat the plankton.
A friendly tip to Californians that move out of State. Do not start any sentences with “Well in California we did (or didn’t) ………………………”.
It works the same way in California but in reverse. Don’t move here and say…
“Well in (insert state) we did (or didn’t) ………………………”.
I think people just dislike know-it-alls.
In my experience (including relatives who live there), Californians take smugness to “A….whole….nother….level!!!”
Especially those that confuse good fortune, with some innate intellectual superiority that only Californians possess.
I don’t agree. I think that Californians are much less obsessed about their intellectual superiority than east-coasters are. In academia at least, Californians are pretty laid-back, maybe too much so, compared to midwesterners and easterners.
“I don’t agree. I think that Californians are much less obsessed about their intellectual superiority than east-coasters are. In academia at least, Californians are pretty laid-back, maybe too much so, compared to midwesterners and easterners.”
Absolutely true. I’ve lived on both coasts (SF & DC), and I agree completely.
OK, I’m IN academia, I have been for 20 years with a whole heck of a lot of cosmopolitan experience and I guaran-F’IN-tee you that Californians are more laid back and less uptight than just about anyone else in the civilized world.
Here in Cambridge, MA I work with a bunch of folks from MIT. They have quite high opinions of themselves and therefore have a hard time facing reality. I feel sorry for them in some ways and think of them as “idiot savants” or something along those lines. They are definitely interesting folks to be around. Intelligence , yes. Wisdom ???
I just hope that the silicon valley bank doesn’t pull the plug and end all the fun… I expect the magic to run out very soon… hee haw…
Brief anecdote illustrating the point:
I went to a very recognizeable west coast school for my undergrad and grad degree and recall doing enough work on a group project to get a solid B+/A- and felt at the time that I understood the material and that it would take way too much time to push that B+/A- to an A (damn curves). The return on my group’s time wasn’t worth it, so my group, who all went to the same west coast school undergrad decided to call it good and be done. I said aloud something to the effect “it’s good enough for a B+/A-, let’s go play some basketball and grab a beer.”
A woman heard me and asked “Where did you go to undergrad?”, I replied “Here”. Her response–”pffft…figures.” and turned back to her computer. I asked, “Why, where did you go to undergrad?”. She said “Johns Hopkins”. My reply–”pffft…figures.”, and walked out to go enjoy the weather while she continued to work.
I don’t regret making those kind of time allocation decisions one bit. I sometimes wonder if folks like her now do…
All Your Cr@pbox Are Belong to Us!
‘Someone set us up the bomb!’
You have no chance to survive, make your time
All your homes are belong to us.
at least the influx of Californians to our area might liven the place up. It’s quiet here. And homogenous. Hope they don’t lose their minds of boredom.
LOL. Reminds me of my time in the military. All the eastcostaners would ask me where I’m from and when I said California they’d reply “Cool man so you live by the beach?” People should watch less Tv and read more.
It’s quiet, homogenous, and with a huge purplish pancake of filthy air hanging over Utah Valley for most of the year. Cough, cough, cough… I grew up in southern Utah and I can remember when you could actually see landscape features up there, as well as some farms and orchards. It wasn’t that long ago. Now it’s ticky tacky subdivisions as far as the eye can see. Which actually isn’t that far–cough, cough.
Rode my motorcycle over to a new development near Sand Hollow resevoir (SoUtah). A friend flew me over it a few days ago and I wanted to see it from the ground.
Unbelievable. The area I went to had the roads (miles and miles) and infrastructer in place. There isn’t a house in sight ( a lot of reality signs) but it appeared that the plan is for several hundred homes. Up the road two other huge areas under way with bulldozers and loaders.
I came to find out that the plan is to build a few thousand homes in this “resort”. This area was blank when I was last there, several months ago. Maybe the reason for the hurry is because the whole area will be directly under the flight path ( think the flightpath over Inglewood with LAX, but lower) of the new commercial airport.
We were disappointed in the Moab area…
It seemed pretty much out of control, in a lot of ways. I hadn’t been there in about 10 years and a beautiful place sure got ugly.
Another poster child town gone wrong, would be Oakhurst, Ca.
It was so beautiful 25 years ago.
Hey, at least the influx of Californians to our area might liven the place up.
That’s not necessarily a good thing.
Wish that the slowdown would start hitting Silicon Valley—the listing prices are still high, and people are snatching ‘em up (particularly in Santa Clara, Sunnyvale, and Google-rich Mountain View).
I concur I still think Southern Cali and Northern Cali is still overprice. I just came back from Cupertino and I thought everything is expensive there. I just don’t understand if people see the inflation or not. Four dollar gas, million dollar homes in ghetto areas and a weak dollar, if that isn’t a recipe for disaster I don’t know what is?
Yea gotta love that 800K 1000sq ft condos…LOL… dont worry we saw this before many took big loses. Prices declined by 35-40%
Oh the misery I saw…
We moved from Vista CA to the DFW area in March 2005. The quality of the schools, diverse economy and reasonable housing costs are the main reasons people are leaving San Diego for the Dallas area.
I also saw that once the bubble popped in Southern California that Underwriting jobs would be few and far between.
My first mortgage job was in Loss Mitigation, back in 1993 for Wells Fargo Bank.
Don’t be fooled: the banks will require some form of documented hardship before they approve any modifications or short payoffs.
“We moved from Vista CA to the DFW area in March 2005. The quality of the schools…(etc)…are the main reasons people are leaving San Diego for the Dallas area.”
Merlot makes pretty sparkles on an LCD screen.
My wife came into the den to see why I was laughing so loud between coughs.
When we moved there in mid-80s, our kids came home from first day of school (early January) and showed us textbooks they had used the previous year in NoVA. We had to put ‘em in private school the 2-1/2 years we lived there.
Either Texas schools have gotten a lot better, or Cali schools are really the pits.
Either Texas schools have gotten a lot better, or Cali schools are really the pits.
Both
Also, why didn’t you have them accelerated a grade if they were repeating?
Got popcorn?
Neil
Sadly, it’s the latter.
I work with a young business major in a nearby college. She is in her third yr. She can not do fractions.
“I work with a young business major in a nearby college. She is in her third yr. She can not do fractions.”
Sacramento State, by chance? I hate to say it, but when I was a student there I was shocked to discover how many people really had no business being in college. Last year I discovered that Gary Watts (It’s in the bag!) went there. Makes my diploma lower than toilet paper. All that being said, I don’t think “elite” colleges produce anything special either. An engineer I know once managed a guy from MIT who basically had to have his hand held each time he stepped out of his cubicle. He could no doubt do fractions but he was a social retard. Not good when dealing with important clients.
CA schools are the pits. It has a lot to do with huge immigrant subpopulations that do not speak English (i.e, Asian and Latin), and a state budget that is perpetually broken.
CA has a voter initiative system whereby any nutcase group can get a law passed if they make it sound good. They pass lots of tax cuts and lots of feel good spending plans, while the elected officials start utopian plans in Sacramento but never have money to follow through.
A big reason for crazy CA real estate prices is “Proposition 13″ of the late 70s. It locked in property tax rates for owners with only inflation adjusted increases over time. Grandma pays $500 per year on taxes for her house while her Boomer son next door pays $2,000 and the grandkids across the street pay $6,000. The older generation can’t afford to sell unless they move out of state, but radically distorts the market.
Real fair. Real sane.
Don’t start a Prop-13 war.
I’ll just note that CA schools have plenty of money - about $10K per student per year. They suck because they’re a public monopoly.
Schools don’t have a lot of money - that’s just an uninformed excuse.
It’s 7.7k per student and Cali ranks 25th but it’s got a very high cost of living. It spends as much as MT and I lived in MT where cost of living is far less than in CA.
UT is last with 5k and NY spends 13k per student.
I’ll tackle this “Prop 13 caused housing prices to rise” myth again…
Exactly where would the elderly people move, even if their taxes wouldn’t change (BTW, the Prop 13-protected amount IS portable for seniors)? If they move from one CA house to another CA house, there is no net gain or loss.
Additionally, if new buyers would take prop taxes into consideration when buying (PITI payments), then they should not buy if the total payment is too high. That would cause the prices to eventually come down, which would also lower the prop taxes.
Personally, we could well afford a house in So Cal, but are RENTING because the prop taxes are too high. If everyone else took the same approach, in which direction would prices & prop taxes go? Buyers cause their own grief if they CHOOSE to buy an over-priced asset.
Not true - it’s only portable within the county you live in, and only once in your lifetime - both of which, when combined with the raise in prices it brings, keeps people put. And thus raises prices more.
Actually, if you’re older than, I think, 55 in California, you can take your property tax basis with you if you downsize in your same area. That helps some.
> It locked in property tax rates for owners with only inflation adjusted increases over time.
It’s not inflation, it’s 2%. Inflation is more than that, so they’re gaining.
Yeah, if it was CPI indexed, then it wouldn’t be so bad.
Here’s my simple prop 13 solution:
Restrict the application ONLY to primary residences.
That’s it–very simple. Protect grandma, grandpa, teachers, policemen and firemen, but Warren Buffet with his vacation home, and other Californians with vacation homes also in CA, tough luck. Less market distortion as far as I’m concerned.
But changing prop 13 for primary residence is the third rail.
In LA, only about 50% ever graduate and over 80% are on some kind of subsidized lunch program.
And one wonders why kindergarden costs up to $30K a year here. They can’t BUILD the private schools fast enough here!!
I admit it. I went to private schools my entire school career, the exception being UCI. I think my mother for that every time we talk.
LOL thank my mother - there was money well spent
I sent my kids to a public high school with a 40% dropout rate. But there were plenty of AP classes. The thing I love about California is the diversity. They have friends from every walk of life and appreciate what they have. And it didn’t hurt them academically.
Your mother deserves all the praise, but for a different reason - for raising such a motivated person. I have a feeling the whole private school thing is a fad, kinda like granite countertops. Nothing against having a choice, and there are plenty of good independent schools, but studies show that aside all the noise factors, there isn’t much difference in academic success between private and public schools. The public schools are at an inherent disadvantage statistically, because they have to take everyone.
The problem isn’t the schools, but the values that we instill in our children.
Very true, Max.
In many cases, private schools require high IQs in order to attend. They can also toss the behavioral problems out, as they should.
If public schools could require screen students and eliminate behavioral problems, like the private schools do, you’d be surprised how well they’d perform.
Public school teachers are far more qualified and under much more scrutiny than private school teachers.
Most private school teachers are those who could not be hired by public schools.
edit button…
The public school system I attended in Indiana (in a city with a population of 35,000) had a night/alternative high school as well as a vocational campus for 11th and 12th grade students.
The “regular” high school, with about 2500 students, never hesitated to expel anyone. In fact, they would expel 250-300 kids a year. Their feeling was that you had plenty of alternative options, if you didn’t want to be at the “regular” high school then they didn’t want you there.
The night/alternative school took anyone that lived in the city (so a 40-year old dropout could always come back and eventually graduate).
The vocational campus took the kids that knew they weren’t cut out for college and shouldn’t waste their time taking college-prep style classes.
Our “regular” high school was excellent. So I tend to agree that public schools can definitely compete favorably with private school. I also believe strongly that even the “problem kids” are entitled to an education - which makes for a tough situation when you put everyone in the same building.
Incidentally, the property taxes in that city were fairly high for the area - about $4k a year on a $200,000 home. Then again, at the height of this boom $200,000 bought you a 3000 sq ft home on 1/4 acre.
This is patently false. I had the pleasure of using all of LAUSD’s student data from 1998 through 2002–countless gigabytes of sifting for my dissertation. Every student (800,000 or so) in every grade in every school in every district–along with almost every variable about them save their name. Yes, the graduation rate is around what you suggest when you look at it within the district, but there is SO much mobility out of the district that no one can track it is impossible to also count those students that graduate when la familia moves out to the Inland Empire when Jose is in 4th grade. This is a problem when citing pure cohort-based statistics. LAUSD gets a bad rap because it’s got a very mobile population. Don’t get me wrong, they’ve got huge other problems due to themselves.
We need about 10 million people to leave California. Then, finally, the freeways would clear up.
Only 10 million people? What will you do with the other half of the illegals?
You miss understand. The 10 million that will be leaving are what’s left of the Legal Citizens…
Imploder,
Until recently, I was involved in a large NIH sponsored research project on hispanic families and how they handle economic stress and drug related issues. These studies are being conducted at several institutions, the Sacramento and Phoenix study being the ones I’m most familiar with.
Actually, a large portion of the hispanic community has left the west for the midwest and this shift doesn’t look like it’s slowing down. What the census has captured are the legal residents participating in the move. What they aren’t able to show is the rest of the family that is moving with them, many of which will also be illegal.
So those out miggation numbers are bigger then what the US census can scientifically convey. Remember, we just get sampling data during estimates. The actual counts are conducted every ten yrs and even those numbers are baked in my opinion since congress relies on that data as well.
No traffic relief getting rid of 10 million illegals ……that only gets rid of 5 thousand cars……
(I apologize in advance)
I swear to god, somedays I wish the anit-immigrant fanatics would get their way and every illegal immigrant would instantly leave the US. I would have the most wonderful 5 minutes of schadenfreude right after the economy imploded. What the hell do you think would happen to a country that lost 6% of its population and 12% of its workforce????
It might actually be governed by the rule of law? Democratically created laws that reflect the will of the people might actually be enforced by those charged with doing so? The taxpayers of CA don’t have to pay to jail and imprison a great many thousands of those who aren’t supposed to be here anyway? Gangland smuggling of drugs and other contraband might be dramatically reduced? Labor laws, immigration laws, and tax laws might actually be respected? ERs across the state might not have to shut down?
Amen, Home_a_Loan, Testify! I recall the illegal immigrant walkouts and protests last spring. It was a relief not to have them around, traffic was better and the only people who missed them were the diners and bodegas that served them. So many people in the streets, but it didn’t seem to make much difference to the economy. I don’t think they contribute quite as much as the media makes out. Besides, our local clinic was jammed that day, the illegals around here took the day off for medical check-ups, etc. One of the gals who works there told me it was a real traffic jam.
No permanent harm would come from a mass removal of illegals. There would be some contraction, but the economy would settle at a new level and things would probably be better in the long run.
Yeah. Now go pick some fruit.
Gee I don’t know. Border security to start with, and a huge decrease in the traffic in forged documents and identity theft.
The deficits of federal, state and local governments would be reduced, as those illegals who are currently sucking the system dry would remove themselves and go back to wherever they legally belong. We would still be stuck with more than 1 million illegals in US jails, though, at a cost of better than a billion a year. Wages would not be depressed by illegals who work under the table, evade taxes, and collude with employers to break immigration, employment and tax laws. Hospitals would not be overrun with illegals demanding services paid for by taxpayers–47 million of whom cannot afford health insurance for themselves and their families. We might return to being a sovereign nation with a citizenry whose borders are protected and whose laws are respected.
Don’t forget the tremendous costs to our school districts to teach, feed, provide all school supplies, and provide social & psychological help to these students (the poor schools, most of them full of illegal immigrants, get money for full-time nurses, psychologists, PE teachers, etc. while the better-off public schools have to provide these things with PTA money).
In many cases, the govt feeds these children at least two meals per day.
“I swear to god, somedays I wish the anit-immigrant fanatics would get their way and every illegal immigrant would instantly leave the US.”
So do the rest of us.
“Without the cushion of a personal investment in the property, the road to becoming upside-down in the house moves quickly when a market starts to decline.”
Sounds about right. And, its only the beginning.
All the promises by the agents to the borrowers about being able to refinance before the loan resets means squat.
After the bust, the ARM loan will slowly become extinct - and thats a good thing in the long term.
Texas isn’t the only place they’re headed, Khoshnevis said. Many are going to Arizona, Nevada and Utah as well, he said.”
I hope, for their fiscal well being, they rent when they get there.
We have friends that just sold a condo in Anaheim for way more than they paid. They plan on moving here and renting for several years. They can see the writing on the wall and were smart to get out while they could.
“Texas isn’t the only place they’re headed, Khoshnevis said. Many are going to Arizona, Nevada and Utah as well, he said.”
“I hope, for their fiscal well being, they rent when they get there.”
Nope, they’re buying. They’re chasing home ownership, hell bent on it. It’s pure madness to me, but genius to them.
Alas, I have decided to no longer even speak of the housing bubble when in the company of most family and friends. I received some disappointing news that a family member of mine was secretly discrediting me, touting that housing is ALWAYS a good investment. As I was very early to call the bubble, appreciation continued and that fact was used against me. And given that prices have not dropped enough to make the nightly news, everything seems just peachy. Of course this family member doesn’t even watch any news programs, or read papers, etc.
It’s quite disheartening to find that my opinions and research have meant little, if anything. I have never been one to talk about a subject unless I have educated myself on it first. My family knows that about me. But, when it comes to housing, they (some) don’t want to believe me. Maybe it’s because they are so smitten with their newfound home riches.
Don’t worry. They probably laughed at Elijah when he told Ahab there would be years without rain. Prophets of Doom do not win many popularity contests.
The difference is the people can buy in Texas, lose a $100k and still afford it.
Is it disheartening that our research/data is ignored? I was chewed out by someone I love because I dared bring facts into a housing discussion.
That said… my company might be moving *thousands* to Texas. Well.. more precisely, 1,400 curent California jobs and about 2,000 new jobs (good paying too).
Or… we don’t get the contract and we just lose 1,400 California jobs.
Why the move? The contract is profitable with a move to Texas (Houston… not my first choice), but not staying in California. Cest la vie.
Got popcorn?
Neil
know the feeling, told my idoit cousin, not to buy a house when he moved the family to SoCal a few years back….. He just couldnt bring himself to throw money away on rent… He’s now in a short sale process, but it isnt gonna happen, FC is about 3 weeks away, and hes goin back home to Texas….. You cant bring reality to people whose eyes are Cartoonishly bulging with Dollar signs.
Sorry to hear about that ‘Bear.
Hang in there, you did the best you could, with the info you had available. Now you have a clear conscience.
I’ve had my fare share of failures and triumphs with bubble trumpeting. I started squeaking just a little in 2002, and backed it up with a move to MN. (put my money where my mouth was)
Then I started really squawking loudly around 2005, when I sold my place in San Diego. (really put my money where my mouth was)
Some friends/family listened. Some or most didn’t.
Forward to 2007, and now a few people hate me for being “right”, but some are thankful that I “saved” them.
More importantly, I’ve found that some of these same people (previous believers and nonbelievers) have made OTHER important changes in their lives, even if they did/didn’t listen to my housing advice
They respect my “financial wisdom” from “being right” about all “this housing stuff” and now I can educate them about:
- the importance of living within one’s means
-preparing for POSSIBLE recession/depression
-avoiding debt
-figuring out a sensible financial plan
and so on. This is like advanced rocket science compared to where they were.
I’ve even had a few who’ve “graduated” to topics such as;
-fractional reserve lending
-stealth inflation, and how it hurts us
-the federal reserve
-worldwide credit bubble
-peak oil (not that we’re there now, but that we may very soon be)
-economics of sustainable use, natural resource preservation, etc
-the dangers of our out of control govt debt/liabilities.
Thus, the response to my squawking has been mixed at best. But a lot of good came of it.
Hopefully, you’ll see that for every weed that sprouted behind your back, a few seeds of truth were planted as well!
Hmmm… I see a real, big bear hiding in them thar equivocations.
When I sold in SD in early-mid 2005, a lot of contemporaries thought I was barking mad for selling and renting. Now the story has changed to how ‘lucky’ I was to have gotten out when I did.
Luck, my a**.
I saw the writing on the wall and acted upon it. The ‘luck’ angle provides an excuse that the downturn was an event that they could not have foreseen.
Don’t feel bad, Bantering. I’m sure that all of us have similar stories. My colleagues joke about my real estate bubble obsession to my face, and they had a skit about it at a graduation dinner last year (I was out of town and missed it.) I’ve also offended a few relatives. But this year, people are approaching me for advice about selling/buying houses. I should probably get a real estate license!
Sounds like many of us have experienced the very same things.
Don’t worry, Bear. You are not alone. Imagine what they will be saying when prices revert to years much earlier than your first warnings.
CA renter: who’s been telling people not to buy since 2001, and who sold to rent in 2004 — we may be early, but we’re not wrong!
It’s ingrained in the American mind that once you buy a house you must be a “homeowner” until you’re pushing up daisies. I really think most people think it’s beneath them to go back to renting, even after a move to a new town. Buying is just what you do, its almost involuntary. Renting is what you do for a few years after college.
I know at least a dozen people who have moved to Portland and couldn’t buy something fast enough. I encouraged them to rent for a year to a. Determine if you like the area and b. Learn about specific neighborhoods before taking the plunge.
One couple I knew moved from San Diego, bought a $200k house for $500K in May 2006, and decided they hated Portland. Put it on the market in December 2006 and sold for $450K. I wish my pockets were that deep. Idiots.
I have to absolutely agree. people acted as if I was moving the wife and dogs into a crappy apartment in the ‘hood rather than a bigger house in a better area (for half the monthly mortgage cost of buying).
Congrats, sparkylab,smart move.
I moved to Portland last May from San Diego - I absolutely love it up here - no way in hell could wild demons drag me back to San Diego now.
Seasons, mountains, the rivers, rain - I love it all.
Didn’t buy though - did the rent vs buy gyrations and it comes out heavily in favor of renting - but to be honest I don’t wonder if I didn’t make a mistake - houses are still moving pretty quickly and I hear a lot of people “Just closed”.
Inventory is starting to rocket again though - the summer will be interesting.
sleepless: [couple] bought a $200k house for $500K in May 2006, and decided they hated Portland. Put it on the market in December 2006 and sold for $450K. I wish my pockets were that deep. Idiots.
The fact that they could afford to bail makes the decision to buy in the first place, merely a mistake.
ZONE Funding - sorry we are CLOSED for new businesss:
http://www.bakersfieldbubble.blogspot.com/
Too bad for them. Bad loans used to be good business and now bad loans caused them to be out of business. At least they can’t scr_w anyone else anymore.
“Short sales usually mean a smaller loss of value in that neighborhood than a foreclosure auction would. And as the banks become deluged with consumers in trouble and loans in default, they’ll become more likely to accept the offers from willing buyers in a short sale scenario.”
The day could soon come when the lenders will be stumbling over themselves to quickly accept and process short sales, as it’s cheaper and easier than a foreclosure.
The day could soon come when the lenders will be stumbling over themselves to quickly accept and process short sales, as it’s cheaper and easier than a foreclosure.
Yes and no… If the bank can squeeze another $50k out of someone, they will. Also, at some point, the bank is doomed anyway…
But for a while short sales and foreclosure sales will become common. I’m betting banks will stay in denial until about August. At that point the FDIC will persuade them to ‘get er done.’
Got popcorn?
Neil
“Short sales usually mean a smaller loss of value”
Very telling statement about the Mortgage Industry’s Plan A. Keep home values up as much as possible to stem the tide of panic. It ain’t a’gonna happen because people have already spent more money then their a$$ can cover.
“‘I don’t think we’ll ever have housing costs that look like Kansas,’
unless kansas has 900 sq ft homes going for 600.000, no it won’t ever look like kansas.
on the other hand do they have 1000’s of empty mcmansion neighborhoods starting at 1.1 million? the building frenzy in carlsbad, california reminds me of orange county back in the 1970’s. nobody cool wanted to live in orange county. the environmentalists hated seeing the land torn up for family homes. carlsbad has added how many new homes in the past 5 years? how do you find this out?
i was agitated now im frenzy.
I grew up in OC and the growth there in the 70s killed everything remotely desireable about the place.
Sadly, I see the same thing happening here now in Sacramento.
It’s happening in Boise now. A few months ago, the newspaper quoted and equity locust who said the Boise area reminded them of OC 20 years ago- thanks for coming here are wrecking a good thing!
It always made me sad to see that before I left. So many new housing developments have been built in Carlsbad in the last four or five years. Farms and empty fields have been torn up for houses that are almost on top of each other.
I was thinking about this today. The only reason developers have been able to get away with squeezing more houses on less and less lot is because they could sell them. If the buying public would wake up and stop being sheeple and simply refuse to accept a sardine like neighborhood this foolishness would cease.
It may have started here in OC - well if one really thinks about it, it started a long time ago in every other urban area with high density - but this time the zero lot line crap was something that washed over OC and then spread elsewhere like the plague it truly is.
I will simply never buy a lot of house on a little lot. I live outside as much as inside so why accept someone else’s profiteering as the limits on my lifestyle.
Let’s sit back, eat some of that popcorn Neil is warming up and watch how these packed in developments fare now that the heat has been turned down on this madness.
I just wrapped up an accidental “bubble tour” through parts of the West. I drove from Boise down to Fresno and seeing the sprawl, over the top signage, outrageous prices in person was quite a shock. I kept saying: “they want how much for a house in this town?” $300k for a tract home in Fernley, NV? $400k for a place on the dusty west side of the San Joaquin Valley? Fresno was the worst. The whole city is built on agriculture and self-feeding consumption based service and retail economy. The biggest employers in the city are the school district, the city government, and the county government. How is a school teacher or a police officer going to swing $350k for a 1400 sq foot starter home? The city is a house of cards and is going to fall hard.
I had to laugh at my cousin who just bought a place in the west side of Fresno. He was bragging about all of the “free” upgrades and money towards a down payment in his $340k house that the builder “gave” him. I feel bad the he bought into a crashing market since, but nobody forced him into the house. He could have stayed a renter.
Oh come on!! Everybody wants to live in “Ferntucky” Nevada!! With its one grocery store, inbreeding, and my favorite place “Another Bar” this town has it all. Many people that couldn’t afford to buy “in town” bought in Fernley with the belief that they could sell for a profit in a couple years and then move back to Reno. I have heard of people now being severely upside down with ARMs about to adjust. Ferntucky’s gonna get fugly!
Reno Girl: Fernley Nevada, found it, 89408
I forgot to mention how excited I was to see my first “sign twirlers” while driving through Fresno. You are looking at trouble if you buy a condo being marketed by hucksters twirling signs along the roadside. What a joke!
In the words of Palmetto (?), “Testify, brutha!”
I’ll be in my hometown of Fresno this weekend. One of my wife’s friends (an accountant no less) is selling his home in Fresno. It’s a regular 1960s-era stucco ranch-style house in the middle of town, kind of near the Fig Garden area. He is asking over $500K for it and can’t figure out why nobody has made an offer in the past three months. She has told him repeatedly that his price is at LEAST $100K too high for any nibbles but he keeps talking about how other homes in the area have sold for the same price per square foot. WTF?? Who bases their nieghborhood comps on price per square foot??
half a million in Fresno….I am absolutely flabbergasted at the notion…
I may never set foot in California ever again. If people are that insane, it may not be safe to pump gas.
Hey that was funny, but we aren’t all that dangerous.
Just find a full service station and don’t get out of the car!
> I may never set foot in California ever again. If people are that insane, it may not be safe to pump gas.
That’s why they’re all moving to Oregon - so they can get their gas pumped for them.
“One of my wife’s friends (an accountant no less) is selling his home in Fresno.”
I am embarassed to say that I am also an accountant. So many of them are idiots, and to think they are advising others in regards financial aspects.
“‘We have to put some of the responsibility on some of the rookie brand new loan officers who got into the industry to make a quick buck and didn’t necessarily look out for the best interest of the home buyers,’ Pulliam said.”
Senior mortgage brokers, Ms. Pullian added, however, would NEVER try to make a quick buck….
Of course they wouldn’t.
“‘We have to put some of the responsibility on some of the rookie brand new loan officers who got into the industry to make a quick buck and didn’t necessarily look out for the best interest of the home buyers,’ Pulliam said.””
I’m sorry Ms. Pulliam, but again who did you say trained them?
So, one of my coworkers comes in, wondering if I got all the extra-duty pay I turned hours in for last month, since he thinks his paycheck doesn’t quite add up. We get to talking about homebuying. He mentions that he’s going to sell his house in a year.
I tell him, “Sell it NOW, bank your equity, rent, and in two years, buy your wife the house she really wants to live in in the nicer neighborhood.”
He periodically chuckles at me when I start going off about why the market’s going to go down (I do have that apostolic fervor thing going about the housing crash) and that he should take the money and run, rent, let wifey stay home with the new baby for a year or two.
Then again, there were a few moments when he looked like he just swallowed a pound of sawdust and needed a drink of water badly.
He informs me that his house is worth $550,000 and that no matter what I think it’s not going to dip below his mortgage amount: $360,000. He says there’s not enough supply in SOUTHERN CALIFORNIA for all the demand.
I counter: “But the buyers for your house aren’t going to be able to get LOANS in a year. They’re going to have to pony up at least $50K and have great FICO, and have an income of about $135K.”
He insists that there aren’t enough homes because, and I quote, “everyone wants to buy a home in Southern California.”
He keeps arguing that my sources are biased, which I admit is true, because I’m EFFING PISSED that my husband and I can’t afford a house with a 130K combined income so I tend to look for bearish sites that, obviously, cheer me the hell up.
At the end of the conversation, I say, “Look, if you want to read all the articles I’m getting my info from, go to Thehousingbubbleblog.com.”
He flat laughs and says, “All I need to know about what you just said is the name of that blog.”
And leaves.
I’m steamed, so I go to ZipRealty. We’re friends (even though I currently consider him about as thoughtful and observant as a blindered carthorse) so I’ve been to his house and I know where he lives; I want to see what houses like his in his neighborhood are selling for.
Lo and behold, a nice house, the same model as his, is selling for 470,000.
In a year, it’s going to be hard to hide my smirk.
“Money often costs too much.” — Ralph Waldo Emerson
Good story!
“everyone wants to buy a home in Southern California.”
“want” and “able” have different meanings.
I want a home in Monaco on the beach besides that of Sheik Abib Al Zura’s from Barhain.
In a year, he won’t be a friend. Just another pissed, envious dummy that will feel ripped off and cheated by his ‘bad luck’.
“In a year, he won’t be a friend”
..and there will be little reason to hide that smirk.
I have a lot of friends who recently bought, or are looking to buy now, and I’ve basically given up on explaining the whole bubble theory to them. They want what they want, and no amount of reason or explanation is going to deter them. Plenty of them either give me the smug look that says “you don’t know what you’re talking about” or they start an argument which, frankly, I don’t want to engage in with my friends. So I don’t bother anymore.
It seems to me that people just like to prove their “intelligence” about money by making random decisions with it. If they end up right, they can brag about it forever. If they’re wrong, well, who’s going to call them on it?
I just agree with them that housing will go up. Yep I’ll be buying right after you
. At least in Phoenix almost everyone I’ve met has a pretty good idea where RE is headed. Back in Cali the saying was “once you more out you’ll never be able to move back”. Which I guess has been true for many years.
My friend’s boyfriend had a tendency to send me housing ‘good news’ articles (NAR prop. pieces) every month or so. He and I had a protracted back-and-forth email exchange about six weeks ago, about how wrong I was about the housing market’s imminent implosion. He stated that lenders wouldn’t make loans that were likely to fail, because that wouldn’t be a good idea. It was painful to read. I answered every one of his points with facts and logic, and he refused to hear any of it. “They wouldn’t do that” was how he refuted my points about liar loans, toxic loans, etc. He’d show me how the Median price keeps going up, even as I told him how that absolutely happens when the first-time homebuyer is priced out of the market. I asked him for the fundamental reason why housing should permanently climb 100%+ in five years, and he said ‘because that’s where money went after the tech bubble burst’. Did it really not occur to him that the same money could flee housing just as easily? I don’t know, but I got tired of trying to convince him. Some people just have to experience it for themselves.
Funny thing is, I haven’t heard a peep out of him since Subprime ate itself…
hllnwlz,
I hope your co-worker doesn’t pick today to check out this blog.
No worries, Kris. If he does, he’ll laugh. He’s cool like that.
Offer him $250K for the house in two years. That’ll show him, and he’ll probably have to take it.
Had that **exact same** conversation with a friend just last week. Too funny!
I was once told that the only eaterys that survive in Merced are self-serve smorgy types. And that has proved absolutely true over the years. Low cost dining experiences and high cost housing - no wonder foreclosures are a booming business. Big problem here though as the median buyer must see a 50% drop in price to afford these bubble-built houses. And 50% is no wish price, it is required.
He was bragging about all of the “free” upgrades and money towards a down payment in his
Man, ain’t nothin’ free. Just like in the sales world, the “hard in, easy out” rules apply. To explain, the tougher and more skeptical the prospect is at first, the easier the sale will be towards the end. Conversely, the prospect who will chat with you at the drop of a dime and want to hear everything you have to say will be very tough to close.
Sounds like your cousin chose the “easy in, hard out” route, along with millions of other American home-debtors.
‘But you know, if we lost like 25 percent of the value of homes, then the area would be competitive again in terms of housing.’”
Too bad this is impossible, since RE never goes down.
All renters and move up buyers are now priced out forever. It sucks when your own stupid catch phrase turns around and bites you in the butt, isn’t it.
“‘I don’t think we’ll ever have housing costs that look like Kansas,’ said Ed Schafer, senior demographer for the San Diego Association of Governments. ‘But you know, if we lost like 25 percent of the value of homes, then the area would be competitive again in terms of housing.’”
This guy has just committed professional suicide. I know that there are probably competing interests, bringing jobs to the area etc, but WOW is all I can say. I really laughed reading this. This guy is going to get blamed when (not if) his comment comes to pass. I hope he enjoys the move to Texas.
It’s true… San Diego will always be more expensive than Kansas. So, in that sense, what he says is true. But there’s no reason at all that San Diego can’t have housing costs that look like San Diego… in 2000.
San Diego has commanded a premium over Kansas. That’s unlikely to change. But for San Diego to command a premium over itself, something would have had to bsaically change in what people make here. It hasn’t.
If San Diego and Kansas both revert to the mean, as they will, then San Diego still won’t have housing costs like Kansas, and this guy will still be technically correct. But that’ll be cold comfort to the folks who bought in 2004-2005.
San Diego is a nice place to live. I know, I’ve lived here since the late 70s. But it hasn’t gotten three times nicer since 2000. House prices, on the other hand…
–Shannon
Too bad it’s not true either. I’d say more like 40 to 50%, and with the rest of the country suffering reduced credit availability prices elsewhere will be dropping too.
All renters and move up buyers are now priced out forever. It sucks when your own stupid catch phrase turns around and bites you in the butt, isn’t it.
Yep… companies are looking to relocate. At profitable wages… they know their employees are priced out forever…
Got popcorn?
Neil
OMG, the nerve:
“HELPING BORROWERS SAVE
San Francisco-based Wells Fargo said it made $398 billion of residential real estate loans last year.
According to the bank’s Web site, the Home Rebate card lets customers reduce $1 of principal on their mortgages for every $100 they spend, with automatic reductions in $25 increments. Spending $15,000 would lower principal by $150, for example.
The Mortgage Bankers Association said that for the week ended March 30, the size of a typical U.S. home loan was $247,200, and the average rate on a 30-year fixed-rate mortgage was 6.13 percent.
According to a calculator on Wells Fargo’s Web site, a homeowner who takes out such a loan and spends $2,500 a month on the Home Rebate card would pay off the loan 16 months early, and save $24,192 over its life.
Total payments including interest would fall to $516,821 from $541,013.”
yeah, that’s REALLY gonna help.
http://tinyurl.com/2mty5p
So by going into more debt for $100, they knock a buck off your mortgage balance. I don’t know that this deserves a response, as it’s one of the absolute dumbest things I’ve heard in weeks. And I hear a lot of dumb sh!t.
I wonder, with the new BK laws, if going the BK route is harder than the “jingle-mail” approach. Maybe that’s the strategy.
that’s why I only use parking meters that allow pay-by-credit card!
Geez
“…the Home Rebate card lets customers reduce $1 of principal on their mortgages for every $100 they spend, with automatic reductions in $25 increments. Spending $15,000 would lower principal by $150, for example.”
Boy, that’s generous of them. At today home prices, that’s like filling up a dump truck, one grain of sand at a time. Here’s a thought, quit using credit cards, and apply the interest saved to your mortgage principle! Nah, that’s too confusing. Instead, J6P will go for the banks gimmick.
Holy crap, how stupid can things get? I thought that maybe it was a debit card but then read the article and saw it’s a regular old CC. Knowing the typical American, they’ll charge things they can’t pay off in full, then pay exorbitant interest on the card for decades. Meanwhile they may have reduced their principal by $1K, but their home is now worth $200K less than when they bought it. Brilliant. These FBs are getting their just desserts, IMO.
So what happens if you overpay your mortgage each money by $100 and make that $100 go towards the principle paydown?
I CAN’T HELP BUT WANT TO SCREAM, SO I AMPOSTING IN ALL CAPS. HELL, IF YOU HAD 15K TO SPEND, WHY NOT PAY DOWN THE PRINCIPAL TO BEGIN WITH.
I REALIZE MANY OF YOU CONSIDER ME TIN FOIL, BUT THIS IS THE LAST STRAW. THERE IS NO QUESTION THAT THIS PROGRAM PROVES, WITHOUT ANY SHADOW OF A DOUBT THAT THE USOFA IS DONE. STICK A FORK IN US. ANY FOOL WHO TAKES THIS DESERVES TO LOSE EVERYTHING.
I don’t know what else to say. I am dumbfounded.
I may just pull every last cent of mine out of that bank after reading that. Wow.
And some of you thought Jesse Jackson was grandstanding. The wires are going nuts with this story tonight:
NEW YORK - Civil rights groups called Wednesday for a six-month moratorium on foreclosures resulting from high-risk loans given to people with shaky credit, arguing that lenders should help borrowers refinance their mortgages or face lawsuits.
A coalition of advocacy groups said mortgage lenders should immediately halt foreclosures on so-called subprime mortgage loans made at high interest rates to people with weak credit histories.
The groups, at a news conference in Washington, D.C., said a predicted wave of foreclosures stems from “reckless and unaffordable loans” for which investors bear some responsibility. They also said lenders, real estate agents and investors who bought subprime loans could face lawsuits under a federal law prohibiting housing discrimination.
http://www.msnbc.msn.com/id/17953080/
—And some of you thought Jesse Jackson was grandstanding. The wires are going nuts with this story tonight—
I saw this as inevitable.
Bottom line: Of course there is going to be some kind of government bailout.
No there won’t be Ken. Just grandstanding.
So if minorities aren’t given financing, it’s discrimination. If they ARE given financing it’s…. discrimination. WTF?
If a white guy walked into the loan office with a subprime credit score, guess what….. THEY GAVE HIM A SUBPRIME LOAN!
Also, in LA the Latinos always use Latino Realtors and Mortgage Brokers. So I guess Latino’s can now discriminate against their own race?
In black majority neighborhoods I drive in, I see tons of African American Mortgage and Realtor Brokers advertising on Bus Bench Ads and Billboards….
Give me a break, this is NOT a race driven issue. This was an equal opportunity SCR&WING!
(So if minorities aren’t given financing, it’s discrimination. If they ARE given financing it’s…. discrimination. WTF?)
they weren’t given financing, they were given a loan they can’t pay. that’s what you people don’t get. you always jump to the same conclusion. people like JJ want minorities to get financing that works for them. it’s not an either/or. you can give minorities financing and not rip them off.
it’s not an either/or. you can give minorities financing and not rip them off.
Plenty of non-minorities will lose their home too.
Yes, you can give them FHA’s, build their credit and move everyone up to prime.
Got popcorn?
Neil
“you can give minorities financing and not rip them off.”
You can give “ANYONE” financing and not rip them off. Why would being a minority be part of that equation?
“people like JJ want minorities to get financing that works for them.”
I call BS on this. If you can’t afford to buy, no “financing” is going to work for you, and that is true no matter what color you are. Simple. If you have the downpayment, the supporting income, 3-6 months of rainy day savings, and enough to pay your real estate lawyer, then you can afford to buy, assuming you have also included taxes, maintenance, and insurance in your budget. If you don’t, you can rent.
Or ask Jackson for “financing”. He’s amassed a personal fortune in the millions by extorting money from the government (that is, from honest, hard-working tax payers) running his poverty hustle.
Right on, spike66! Testify!
I know a gullible white lady who lives with her blind, brain-damaged adult son. They were able to pay their small mortgage for years on their combined Social Security. They were befriended by a guy who talked them into a toxic loan three years ago. They weren’t greedy - just ignorant. Their friend disappeared and they are in foreclosure. I feel terrible for them - the rent will be far more than their mortgage ever was.
It’s people like these who *might* deserve some kind of bailout IF they can prove that the lenders/brokers deceived them when drawing up thier loan.
That is a very, very sad story.
“Give me a break, this is NOT a race driven issue. This was an equal opportunity SCR&WING!”
I agree to a point.
A lot of minorities were given subprime mortgages when they qualified for prime. (they were consistently not offered prime, so they couldn’t get prime)
This is not what Jesse is arguing, so I think his idea is bunk.
However, there was some considerable research done that showed that black people were coerced into subprime loans WAYYYY more often than were comparable whites. (same FICO same income etc).
I would support a bailout of subprime borrowers who qualified for prime but were illegally steered towards subprime. (of any race).
the rest can rot.
“I would support a bailout of subprime borrowers who qualified for prime but were illegally steered towards subprime. (of any race). the rest can rot.”
Amen that. Also how many will want bail outs for multiple homes? So make that owner occupied only too.
AND had either fully documented income, or can now produce a tax-return whose gross is in the ballpark of the stated. A lot of people defrauded either the lenders or the IRS and that could become a dark side of the bailout. Call it ‘the Jailout’
and no HELOC debt.
Agreed. They must prove that there was no fraud on their (borrower’s) part.
Additionally, I’d still say the lenders should be fined (as well as the executives & any other involved person if they committed fraud, of any kind, on the lender’s side) and all bailout monies should come from a fund set up with this money.
NO govt bailouts, period. Let those who profited from the credit bubble lose by it as well.
I would support a bailout of subprime borrowers who qualified for prime but were illegally steered towards subprime. (of any race).
As long as it’s the lenders bailing them out. This is all between lenders and borrowers — if anyone else is forced to contribute their tax dollars to this, it’s WRONG, regardless of how sad the story is.
Just read yours after I posted mine above. Amen!
The way I understand it, current law already provides a lot of recourse to those that truly got scammed. I would be amenable to helping out those that got scammed but aren’t covered under existing law.
My wife is a lawyer at a big shot firm - big shot firms like to do a lot of pro bono work to help their reputations. Thus the lawyers are kept in the loop of what’s happening in the non-profit world. Right now there are all sorts of seminars out there for potential pro bono lawyers to get familiar with all the laws that protect the scammed, what to look for in the contracts and such to see if they got scammed, and strategies to use to win cases for them.
A person that thinks they got scammed should be visiting a lawyer. If true, they can not only prevent foreclosure but force the lender to pay whatever it takes to put them into the loan they should have had in the first place, plus some penalties for their conduct.
These cases have been growing in number for months and I’m surprised it isn’t getting any media attention. The bailout [of the deserving] has already started.
Oh boy, I knew it was only a matter of time.
This means is the credit tightening will be even more severe, which means an even bigger plunge. Bring it on Jesse!
Exactly dwr.
How are they going to force investment banks to loan them money to refinance? Guess what, most of that money is forign. If they get scared away (and they will), they’ll just start buying commodities in exchange for our dollars. Funny thing then… inflation for us.
JJ needs to see the big picture. A bailout would only BK everyone (government, banks, etc.).
This is going to freeze up the market faster than anything else. Scared banks do not lend.
Got popcorn?
Neil
“Lenders, they said, should help homeowners affected by the problems in the high-risk mortgage market by allowing them to refinance their mortgages into conventional 30-year mortgages with a fixed interest rate.”
As has been said here before, the problem is that many of the subprimes can’t afford their mortgage on a 30-year fixed rate even at prime rates. The only way this bailout would be viable for many subprimes is if you reduced the principal amount on the loan. The six-month moratorium would be a fiasco because a vast number of people would simply stop paying their mortgage altogether. If you’re underwater on a house and have trouble making the payment, why not live rent-free for six months if you can’t be kicked out?
That could absolutely torpedo the CDO and MBS markets. Who’s going to buy a bond with no payments AND no collateral?
If Jesse Jackson want’s further dry up any credit that’s left, that kind of talk will do it. No lender is going to want to lend to anyone without a signifcant down payment, sparkling credit history and at a reasonable level of debt to income. He’ll make it to risky to lend to anyone else,
Everyone is a victim. I am so sick and tired of all the whiners in this country. Buck up. For cryin’ out load what will we do if we ever have to go to war and it is as clear cut as WWII, not this Iraq war? We have become a country of spoiled, no-good, lying, crying, whining, fat, dumb, stupid, lazy-ass babies.
WHAWHAWHA!
Maybe they should just cut the loan amount in Half ….. blow up a bunch of Mortgage investors. That would be pretty entertaining.
Oooops, forgot the headline on that one, it’s a doozy:
Credit cards help reduce mortgage principal
so basically pay off mortgage with credit cards? and then file for bankruptcy hoping homestead exemption will wipe away the debt and thus the house is free and clear right???
Oh Gawd! You can’t make this $#it up. Bankers create a new rebate credit card to help pay off your mortgage principal:
NEW YORK (Reuters) - As more Americans struggle to make payments on their homes, Wells Fargo & Co. is joining other lenders in introducing a credit card to help people pay down their mortgages faster.
The No. 2 U.S. mortgage lender’s Home Rebate card joins cards offered by Citigroup Inc., Bank of America Corp., GMAC and Countrywide Financial Corp., among other lenders, to help homeowners reduce mortgage principal. Wells Fargo described its card and its terms on its Web site.
http://news.yahoo.com/s/nm/20070404/us_nm/creditcards_rebates_dc
If that’s not a sign of the approach of the Apocalypse, then I don’t know what is.
This is a “Sweet Deal™ ” . Pay 19% interest to pay off 1/100 of your 7% Arm payment. Who do they have thinking this stuff up in their marketing department, Bezel-bulb?
Love the TM’d “sweet deal.” LOL.
No sh*t! You have to wonder who comes up with these programs. However, I see why they do, every time I step foot in public.
ROTFLMAO! Imploder, this gives new meaning to selling your soul to the devil. Sadly, some boobs will bite on this bait. What makes this disguting is that bankers are trying to squeeze the last pennies from anyone who is on the financial respirator. Man, I hate the banking industry more and more.
Mortgage payment: $2883
Daycare: $950
Food and clothing for the kids: $600
Payment on the new Toyota Sequoia: $370
Electric, Water, Gas, Phone, Cable, Internet: $480
A card that pays you 1% on your mortgage balance for the debts you rack up: Priceless
The amount of horseshi*t going on with bailout talk and good old-fashined LYING (I mean, Spin) makes me ill. Wake me up in the Spring of 2008 so I can get some bargains.
-“A lot of people are moving to Texas from here,’ said Darius Khoshnevis, owner of the U-Haul on Ninth Avenue in Escondido. ‘I think it’s because of the housing market. They can buy a house there for less than half of what they would pay for one for here.’”
Well of course. Most shit-holes are usually half-priced
Then California should be 1/4 priced
“‘Our prices were increasing rapidly,’ Pulliam said. ‘People felt like if they didn’t jump in right then and do whatever it took to get a home they weren’t going to be able to afford a home down the road.’”
Gee, I wonder where they got that idea?
LOL Fisher it’s contained. The storm is contained. The meltdown is contained.
April 4 (Bloomberg) — Federal Reserve Bank of Dallas President Richard Fisher said damage from the U.S. subprime mortgage market is mostly contained and central bankers are trying to “tread very carefully” in response.
…
“The damage from the subprime market has been largely contained,” Fisher said. “Fortunately, the financial system and the economy are strong enough to weather this storm.”
…
“Our job in this regard is to be very careful that any meltdown in any sector does not infect the entire system,” Fisher said in response to a question. “I don’t think we should be in the business of focusing on any one asset class. I don’t think we should be in the business of making markets happy. If we do our job, then the markets will be happy.”
http://www.bloomberg.com/apps/news?pid=20601170&sid=asDdu6RDxcb4&refer=home
If Fisher were the damage control officer on my ship, I’d start looking for the lifeboats.
You missunderstand. He’s paid to get his friends in the life boats first. If it was your ship, you would have already been discretely informed to dress warm and meet on the boat deck.
Seriously,
This is bad. The fact that the fed must reassure people as often as they are means that they see the light. You know, the headlamp of the oncoming freight train.
Got popcorn?
Neil
“The fact that the fed must reassure people as often as they are means that they see the light.”
The Fed has clearly become gloomier, and is openly hinting that it is standing in the ready with liquidity-fueled fire hose in hand…
and is openly hinting that it is standing in the ready with liquidity-fueled fire hose in hand…
Oh… I’m sure they’re ready.
But Auger Inn could best describe what they’re going to do with that fire hose.
Got popcorn?
Neil
Just a crazy thought, maybe the FED is preparing the public for the eventual rate hikes. ‘Yup, housing troubles are contained. Trust us. Here’s another hike.’ I’m all for that!
Probably the FED is in a blind, foamy-mouthed panic behind closed doors. Foreign central banks have recently raised their bank rates, so keeping the FED rate fixed might lead to devaluation. Not much they can do to replace this bubble. Any wrong move and the whole house of cards could come down. I especially like hearing BB contradict other gov’t officials (Paulson wants the Chinese to devaluate the dollar, BB wants to avoid it; BB wants Freddie Mac to tighten its lending, other gov’t officials want it to loosen up and bail out FBs. etc etc)
Maybe he means they have the capability to pay off every single mortgage in the country just by printing the money and buying the offending mortgage. Of course they’d charge the USGov some kind of fee for this service, but they are “strong” enough to work out somekind of deal. We’ve already given the FED our currency, our soul may not be far behind.
Thanks, maven, I feel so much better now.
What about a meltdown in all sectors? Just curious.
Go over to Calculated Risk and read Tanta’s post on Fisher’s comments. Don’t drink anything if you don’t want to ruin a keyboard.
Seems like not everybody agrees the market has dipped. This crappy stucco box I drive by every morning was sold on 10/30/2006 for $850,000:
http://www.zillow.com/HomeDetails.htm?o=North&testAds=false&zprop=17061003
It’s now for sale (MLS 076016645) for $1,470,000!!!
http://www.sandiegodom.com/sdd/default.aspx?tabid=29&zipcode=92107&proptype=res&uid=076016645&page=3
As far as I can see, there hasn’t been any remodeling or improvements done. But then again, they are only asking 73% more than they paid 4 months ago.
Future mortgage fraud deal. The game may be ending, but this fraudster is still tring to play. They list at that price so the $1.2 million fraud sale looks O.K. when the underwriter tracks the listing history. If only they looked at prior sales history. They will soon.
Waiting for a sucker to come walking in…
Checking on DQNEWs
http://www.dqnews.com/ZIPCAR.shtm
Lots of double digit declines…very common…
i expect when we see 50% decline YoY wil be golden time to buy…
not there yet and FC not peaking yet
http://www.dqnews.com/
Even worse than that. Here are the comments for that listing:
“Scrapers Delight. IMAGINATION begins with this property. Welcome to the Beverly Hills of Ocean Beach. Venture through this neighborhood and SEE what is coming to BE. If you DESIRE a place in Ocean Beach that has humongous opportunity then read on! This info is regarding availble plans for a tri-level home.”
The Bevely Hills of Ocean Beach!
LMAO
“Blame it on the sky-high housing prices. In all but one year of this decade, more people have moved out of San Diego County than have moved in from other parts of the state and nation. And, not surprisingly, say analysts, the trend accelerated during the last three years, with homes never more out of reach of the typical area family.”
A decade old trend they’ve been denying for the last 9 years suddenly becomes apparent!! What clowns.
I am so glad I go on vacation beginning Thursday afternoon. I need to get away from all this. The economy is toast and now the devil is offering CCs to FBs so they can pay 19% to get $100 bucks off the principal. Man, I gotta believe this is the new match paradigm.
I’ve been on vacation all week, and I’ve spent too much of it on this website. You guys are addictive!
OMG! You guys have got to read this thread on a fishing website. Anyone else noticed that other blogs/forums, even those totally not related to housing, sound more and more like the HBB? Check out SDCIA, Broker’s Outpost, etc. — they are at least as bearish as we are!. Love it!!!
From AllCoast Sportfishing:
“Selling a house in a down market… ?”
I’ve got an 4 year old investment rental property in So. Corona (2000 s.f. single story on the golf course in Trilogy) that I’ve had on the market for a year but no takers…and no offers. It’s very surprising since $ for $ this is one of the best priced units and has been since I’ve listed it with one of the best area realtors.
The realtor says no one is even looking or attending open houses other than competing neighbors, and advertising is not getting any response. All the while it sits empty since the tennants moved out a year ago, and there are plenty of other empty investment homes for rent in the area (55+ market) w/ apparently no 55+ rental demand. Although the property has appreciated to double o/ the 4 years, it since has lost $100K in equity from it’s high in the current the market slide and appears to continue to drop, w/ present valuation of about $650K.
I’ve got a couple of kids in college and would rather cash out than to hold it for a rebound in the years ahead. Any suggestions? I miss the good days of crazy buying…
A reply:
The value of your property today has little to do with what it could have sold for 2 yrs ago. With the recent meltdown of the subprime lenders, rising mortgage defaults, you will soon be competing with bank-owned foreclosure properties on the market. If you think prices have fallen in the last yr., you haven’t seen nothing yet. Every month your empty property has been bleeding your equity away…
The guy simply refuses to drop the price. Check out the many **great** responses!
link?
Oh, everyone is getting concerned about real estate. Something like 40% of the wealth of the influent is invested in real estate. Now, what that 40% doesn’t mention is that they are leveraged. Now some will own outright and have cash flow positive properties. Good for them.
The genius at work who has four flips? Yea… negative cash flow on four homes might hurt a bit…
Got popcorn?
Neil
OMG! You guys have got to read this thread on a fishing website. Anyone else noticed that other blogs/forums, even those totally not related to housing, sound more and more like the HBB? Check out SDCIA, Broker’s Outpost, etc. — they are at least as bearish as we are!. Love it!!!
From AllCoast Sportfishing:
“Selling a house in a down market… ?”
I’ve got an 4 year old investment rental property in So. Corona (2000 s.f. single story on the golf course in Trilogy) that I’ve had on the market for a year but no takers…and no offers. It’s very surprising since $ for $ this is one of the best priced units and has been since I’ve listed it with one of the best area realtors.
The realtor says no one is even looking or attending open houses other than competing neighbors, and advertising is not getting any response. All the while it sits empty since the tennants moved out a year ago, and there are plenty of other empty investment homes for rent in the area (55+ market) w/ apparently no 55+ rental demand. Although the property has appreciated to double o/ the 4 years, it since has lost $100K in equity from it’s high in the current the market slide and appears to continue to drop, w/ present valuation of about $650K.
I’ve got a couple of kids in college and would rather cash out than to hold it for a rebound in the years ahead. Any suggestions? I miss the good days of crazy buying…
A reply:
The value of your property today has little to do with what it could have sold for 2 yrs ago. With the recent meltdown of the subprime lenders, rising mortgage defaults, you will soon be competing with bank-owned foreclosure properties on the market. If you think prices have fallen in the last yr., you haven’t seen nothing yet. Every month your empty property has been bleeding your equity away…
The guy simply refuses to drop the price. Check out the many **great** responses!
Sorry for the double-post. BTW, here’s the link:
http://www.allcoastsportfishing.com/forum/dcboard.php?az=show_topic&forum=312&topic_id=219711&mesg_id=219711&page=&topic_page=1
CA renter: I love the way the replies get progressively more rude. This guy could make over $100K but thinks he’s going to make triple that. He will end up losing money.
It’s not just California and Florida.
Wisconsin HomeDebtors are are financially maxed out and really exposed from refi’s too. They should thank their lucky stars for one of the warmest winters in midwest history this year.
Of course, they’re too proud to admit that between the moneypit, the 52-inch Flat screen TV and the cable bill they’re damned near distitute. Snowmobiles and houses didn’t sell well this year.
Auh…What the Hell ? As long as they have Beer and Packers, they’ll THINK they’ll survive.
http://www.jsonline.com/story/index.aspx?id=581164
Can`t see this alone saving too many FBs:
Activists want foreclosure moratorium
Housing activists say families that have mortgages with questionable terms should be given six months to work out deals.
http://money.cnn.com/2007/04/04/news/economy/foreclosures/index.htm?postversion=2007040413
I’m all for it, provided lenders are forced to eat the costs. It will make lending dry up even more quickly than it already has, and bring prices back in line much more quickly than the alternative. The lending industry may also learn an important lesson from the experience that would help them avoid making the mistake of throwing away underwriting standards again for at least the next century or so…
It will make lending dry up even more quickly than it already has,
I believe the financial term you are looking for, is that the mortgage lenders will experience “pucker butt.”
If JJ gets his way, no one will get a loan for more than 60% LTV unless its FHA.
Got popcorn?
Neil
Neil- You are right on. Go ahead and threaten the guys with the money. That is like calling Medussa your bitch.
“In many cases these loans were never a good fit,” she said. “We have been warning that Latinos were getting bad loans. It should not be a revelation, but it has taken families being taken out of their homes to shed light on this issue.”
It was quite another matter entirely back in 2005 when San Diego real estate only went up. I recall reading an article (I think in CNN Money) about a serial move up recent Mexican immigrant to San Diego who started out with a modest home in Chula Vista and serially moved up every couple of years in lockstep with the bubble price blowout. I believe he had settled in Rancho Santa Fe by 2005, or maybe he was merely eyeing homes in that tony zip code by that time, but you get the idea.
A governement who robs Peter to pay Paul can always count on the support of Paul…
“Without the cushion of a personal investment in the property, the road to becoming upside-down in the house moves quickly when a market starts to decline.”
Do you think the policy wonks who pushed downpayment assisted-100% financing to help low income buyers realize the American Dream foresaw that they would actually be also helping them realize an American Nightmare of getting foreclosed and kicked out of their unaffordable homes?
“‘If you have a huge increase in the volume of properties, you’re going to be a little more inclined to take a reasonable offer on a property and cut your losses there,’ said Rick Sharga of RealtyTrac.”
Not to say that a huge increase in the volume of properties is remotely possible or anything…
“The major coastal counties of San Diego, Orange and Los Angeles have been posting net domestic migration losses for years, and Riverside County has been capturing a large chunk of the movers.”
I have to wonder to what extent is this net domestic out migration from coastal California offset by illegal immigration fueled by subprime liar loans?
What’s left? A population of people who can’t pay their mortgages and have no money left over to spend in the local economies. God save California. The ground is starting shudder, creak and groan.
You forgot a vast population of illegals sucking public services dry without paying state income taxes or property taxes. If enough honest citizens leave, the place will be trashed.
I can’t wait for California to become northern Mexico. How many of those arrogant bastards will flee to flyover country? Maybe the better lot of them will jump of bridges instead of ruining other states like they did to Oregon and Colorado. MECHA-boy Villaraigosa is a good start. All we need is Cruz Bustamante to become governor and it’s all over.
aladinsane tulip-o-meter:
Down to one tulip left…
Could be tiptoeing through the tulip-less tulip patch tommorow.
This can’t be good.
Quote of the week, courtesy of local So-Cal realtor Ron Gent (in Homes Magazine):
“I never ceased to be amazed at the way media interupts (misspelled, and he meant interprets) statistics…after all the scare tactics in 2006…foreclosures helped fuel a 10% drop a decade ago, today’s economy is a very different animal…Uncle Sam loves people that own homes…this realtor’s opinion sees…the current buyer’s market shifting back to a seller’s marlket in April and May.”
What a clown. His e-mail is rongent@msn.com if anyone wants to set him straight. I’m too speechless.
I’d have to put realtors below journalists in the IQ scale. The only people below them are the ones who live and die in that overcrowded toilet known as SoCal, esp the LA area
I love the anti-SoCal mentality! Hopefully others will adopt the same mindset and we’ll get back to being a great place to live! I can’t wait for people to move out in *droves*…
Jerry, did somebody from southern California do something to you? You have a lot of anger. Lighten up, they’re people too.
Hmmm. I have it. How about “Out an illegal, get their home” On second thought, they don’t actually own the homes… OK, how about, “Out an illegal, get their BoA credit card with no SS number and a fake name…”
I moved to Texas out of San Diego about two years ago. There was so much tax free equity I asked myself : “Why should I work in California anymore? It would take decades to make this amount of money.” Purchased a designer Texas home with triple the square feet for half the cost. Builder matched the options.
Presently, roughly two years later, the new owner of my former stucco box property is now under water according to Zillow. Sadly, the price of purchase was so high that the small home even matches my Texas property tax — a Texas home with triple the square feet on half an acre. Amazingly, my new Texas home is not under water.
Just the facts. Over and out.
Hi John, where abouts in Texas did you decide to settle? I’m looking too…thanx
I work with people who were born and raised in Texas. They left the great lone star state because “the weather sucks and the bugs are as big as your fists.” SoCal has its negatives, no argument there. Just wonder why so many more people live here compared to Texas with its low cost and affordable housing? Oh I get it, most people are just too plain stupid to realize that Texas is heaven on earth.
“Oh I get it, most people are just too plain stupid to realize that Texas is heaven on earth”
Nah…
a lot of it is perceptions and economy.
In the past, Texas was considered to be so backwards and conservative, that many people didn’t want to live there (unless they met the standard that was allowed in Texas: white Christian and conservative).
California was always considered to be more diverse. Thus if you were a black lesbian, you felt more comfortable there, at least in the metro areas. (excluding places like Fresno and Bakersfield etc).
Add to that, Texas’ economy was hurting for a long time, so no jobs. So the exodus from Texas to CA.
Over the last 20 years, the society in America has become so mobile. Now, many people living in CA were born somewhere else. And also, many people living in TX were born somewhere else.
You suddenly had places like Austin TX which were relatively diverse, a big change. In addition, even San Antonio and Dallas and Houston developed more diversity. Not saying that everybody mixes the best, but there is a place for everybody. So that black lesbian might have a community of her own in Texas, an impossibility in the 80’s.
Also, with the “chain-ation” of America, no matter where you go in our country, the stores are essentially the same.
You have Target and Walmart and Victoria’s Secret and PF Chang’s, and so does Texas.
Thus, for the average person, the stigma was released from Texas. Texas now has pretty much what California has.
(since most people don’t go to the Balinese restaurant, they go to places like Applebee’s and go to “exotic” places like PF Changs).
Add in that California is no longer affordable. Sure, it’s always been expensive, but you could swing it.
now you can’t.
Thus, there is no choice. Leave California. Texas is acceptable.
what’s more important: the weather, or having a good place for your kids to grow up?
By the way, the same argument holds for places like Phoenix, Las Vegas, Portland, Seattle, the Inland Empire, and so on
And this argument is why Salt Lake is sort of taking off but not really (people still worried about the lack of diversity and the intolerance there) and also why places like Alabama and Mississippi have been skipped.
This argument is also why places like Minneapolis and Chicago continue to grow despite the bitter chill. They have tolerance and high paying jobs and great schools. But it is FREEZING. So the cold keeps people away, but the lifestyle overcomes the cold for those who come and stay.
This argument is also why places like Minneapolis and Chicago continue to grow despite the bitter chill. They have tolerance and high paying jobs and great schools. But it is FREEZING. So the cold keeps people away, but the lifestyle overcomes the cold for those who come and stay.
You know, some people (like me) actually like cold weather and snow. The worst thing about the weather up in this area is that the changes in it are dramatic. -20 in the winter, 100 in the summer (with very high humidity). Which is the root of the age old joke of these parts:
We have two seasons, winter and road construction.
“You know, some people (like me) actually like cold weather and snow.”
That’s why you’re called “mad” renter. Not because you’re angry, but because you’re crazy!!!
I’ve lived in Mpls full time now since 2002. and let me tell you, I still hate the cold. But I love it here. You take the good with the bad.
But a lot of Minnesotans say stuff like “geez, when is winter coming!” and “I can’t wait for the snow”.
Ack!
I thought the two seasons were winter and mosquito season!
There is the perception of intolerace among the ignorant West Coast and Northeasterners. When I moved to Texas, my friends were shocked that I was going to live with the rednecks. As an Asian and buddhist, I have not been harassed for my religion and haven’t faced anymore racism than I did in NY or CA.
Ignorant people think Dallas is a redneck town, but the mayors for the past 30 years have been two Jewish women and a black man.
Also, do a search for Sushi restuarants in the Dallas area. There must be at least 50. There are also plenty of Buddhist temples, Synagogues and Mosques.
Whites are only about 30% of Dallas now. The same goes for Houston, which probably mirrors LA in racial demographics. San Antonio was and still is mostly Hispanics. It is probably the least diverse of the three. Austin is mostly white people, but very liberal.
The ignorance of the West and East Coast morons will live on for decades
Another price decrease…
Price Change - Decrease $928,000 2 Beds 1.00 Baths
MLS Number
06-149057
2430 pier ave,santa monica, CA 90405
Area: Santa Monica
Attn: Motivated Seller - Bring All Offers. Desirable Sunset Park area of Santa Monica. This 2BR/1BA home is situated on a large flat 7,000 sf lot. LR w/fireplace & remodeled kitchen w/granite counter tops, SS appliances & bay window. Refinished red oak hardwood floors, Pella windows, copper plumbing. Large backyard w/spa, stereo and pop-up speakers & avocado tree. Add a 2nd story and you would have views of the Getty, Hollywood, the mountains & ocean. Near Clover Park.
——————————————————————————–
Property Type: Residential-Single Family
Rooms:Living
Equipment:Antenna,Dishwasher,Garbage Disposal