Accepting “What The Market Dictates” In California
The Tribune reports from California. “March blew in a slightly lower number of home sales to San Luis Obispo County and a drop in the median price compared to the same month a year ago. The median price of a home declined to $506,000 in March, a 10.4 percent decrease from the previous year, when the median reached $565,000. A median of $525,000 was recorded in February.”
“Lenny Jones, a Realtor in Arroyo Grande, believes the county will see a ‘continual decline of the median home value for 2007.’”
The Press Enterprise. “Could something akin to eBay auctions be the next stop for new-home builders facing a glut of unsold properties? On April 1, builder Prosperity Homes held a live auction in Ontario for new condominiums available in San Bernardino. For another auction planned for May in Orange County, the company is looking into incorporating an online bidding element.”
“Steve Johnson, a director with Metrostudy, noted that unsold inventory of newly built Inland homes went from about 1.3 months of supply, or about 2,700 properties a year ago, to the current 2.4 months of supply, a total of around 5,000 properties.”
“To move those homes, he said builders are continuing to offer a number of incentives that began to kick in last summer, when the local new-home market began to soften.”
“Lennar is using the technology to expedite sales of the remaining 14 homes at Marquesa, with online bids starting as low as $295,000. ‘The expedited sale of these homes in a final close-out allows us to reduce our marketing costs in the development, which will put us in a position to accept what the market dictates as fair market value,’ said Bob Tummolo, regional VP for Lennar’s Palm Springs division.”
Inside Bay Area. “The market has slowed in San Joaquin County. Some 780 homes changed hands in March, down from 1,302 in March 2006. The median sales price in March was $415,000, down from $440,000 a year ago.”
“‘I think Alameda County is stronger than the Contra Costa County market,’ said associate broker Linnette Edwards. ‘We are starting to see short sales and foreclosures in outlying areas…like Pittsburgh, Bay Point and Antioch. The market has slowed down there.’”
From News 10. “Owners who bought ‘luxury’ condo conversions at the peak of the market in Elk Grove, now complain their complexes still feel like apartments.”
“Signs and banners in front of the complex advertise ‘luxury’ condominiums for sale from $190,000. But ads in housing rental publications offer the same units as apartments from $925 per month. ‘They explained they’re trying very hard to sell but they still need revenue, so they’re still renting them out,’ said Bill Bearss.”
“Now more than half of the 272 units are vacant and Rollingwood North LLC, has stopped paying dues to the homeowners association.”
“Rollingwood condo owner Sandy Simpson said she worries the developer’s default threatens the solvency of the association. ‘We hope that nothing major goes wrong with our places,’ Simpson told News10. ‘Our roofs are in really bad shape.’”
The Santa Cruz Sentinel. “In the first 13 weeks of this year, Monterey County averaged 42 notices of default recorded per week. San Benito County has averaged 10 per week, and Santa Cruz County has averaged 15 per week.”
“Santa Cruz attorney Balam Letona, a specialist in bankruptcy, said he is getting three or four calls a month from people with mortgage problems. Letona is taking a few of these cases, but not all of them.”
“‘A year ago, I’d go months without receiving a call like that,’ he said. ‘Most of these mortgages are vintage 2005 and 2006. Those two years are going to be terrible.’”
“Aptos accountant Patricia Beckwith has postponed her search, saying she couldn’t afford to pay $3,000 per month on a mortgage. In her house-hunting, she met people who owe more than what their home is worth because they had resorted to interest-only loans.”
“‘The whole interest-only thing is scary,’ Beckwith said.”
The Voice of San Diego. “When Rosa Gonzalez was left $10,000, she decided to invest it in a home. She found a two-bedroom, two-bathroom condo in Barrio Logan for $235,000. Because she hadn’t built a very thick credit file, she ended up with a loan geared toward those with bad credit.”
“She was intimidated by the fact that the loan papers, laden with technical and legal terms, were in her second language, English. ‘You sign the papers, but it’s so hard to understand,’ she said.”
“Bruce Norris hosts a real estate radio show in Riverside County. He said the impact of foreclosures will eventually be widespread among both rich and poor neighborhoods, even though it has been so far contained in some low-income neighborhoods in Southern California counties. He said the worst is yet to come.”
“‘This certainly hasn’t played out yet,’ Norris said. ‘It inevitably has to turn more ugly. More and more foreclosures being sold in the marketplace will depress prices even more.’”
From Fox 40. “Home foreclosures are rising across the country and there is no worse place than the Sacramento region. The latest figures show four of the top ten metro areas are Sacramento, Stockton/Lodi, Modesto and Yuba City.”
“Netta Savage believes she was scammed into her home loan, and that she is not alone. Savage said, ‘Under duress, you do dumb things. So I accept my responsibility. I should have said, ‘I’m not signing nothing. We need to take this home, and let me get with someone.’ But he’s saying sign it, sign it. It’s what we agreed on. It’s what we agreed on. Sign it, sign it, sign it. And I’m like…okay.’”
“Now into the second year of her loan, Savage’s mortgage payments exceed her monthly fixed income of $2,000.”
The Desert Sun. “The once-booming real estate market has indeed been a career draw: Roughly 1 in every 54 Californians holds a real estate license. And despite a generally sluggish housing market in recent months, California continues to add 200 to 300 new real estate licensees every week.”
“‘At least it’s not 1,000 a week like it was a year ago,’ said California Real Estate Commissioner Jeff Davi.”
“Indian Wells Realtor Pat Fredericks, who was president of the California Desert Association of Realtors two years ago, said Davi’s expectations for a decline in real estate licensees due to the market downturn should be right on target based on what she’s seen during her many years in the industry.”
“‘We are always about 18 months to two years behind the curve,’ Fredericks said.”
The North County Times. “Against the backdrop of an Otay Ranch field being leveled for people’s American dreams, about 300 construction workers, real estate agents and home-building executives gathered Friday to promote a renewed commitment to housing in San Diego County.”
“However, in issuing an annual forecast for new home construction in January, the California Building Industry Association stated that companies were voluntarily curbing building locally and around the state because of swelling inventories. The statewide association said those inventories were a result of prices so high few people can afford to buy.”
“Jerome Stocks, an Encinitas councilman, questioned whether there is in fact a shortage. ‘If we have a crisis of not enough housing, then why are all these houses on the market not selling?’ he asked.”
“Jerome Stocks, an Encinitas councilman, questioned whether there is in fact a shortage. ‘If we have a crisis of not enough housing, then why are all these houses on the market not selling?’ he asked.”
If you price something too high relative to market demand, it will never sell.
Conversely, if you ask a price the market will bear, it will sell immediately.
Homes are piling into San Diego for-sale inventory because there are not enough buyers willing to pay what the sellers are asking. Is this really difficult to understand?
I hear that if you price something so high that folks are unable to buy it even if they did agree to the price, that this will also slow down sales. Just a rumor though.
If credit really is tightening up, then there will be very few buyers indeed.
Just heard a commercial for a condo complex here in Sacramento. The pitch was that credit deals were going to disappear so you’d better buy now before you are priced out forever. The builder was offering money towards financing, 60K in upgrades, and no HOAs for 1 year. So sign right up for a small condo with “killer” financing in a crappy location.
First thing I thought of when I heard this was do I really a condo in a complex where the developer has to scrape the bottom of the affordablity barrel to get a sale? Ouch
“The pitch was that credit deals were going to disappear so you’d better buy now before you are priced out forever.”
Very interesting. Maybe the reason that the “credit deals” are going away is that they allow people who are already priced out to “buy now”, instead of waiting until prices become affordable again.
I pulled up a few sales in March, just to see how the deals are getting done. Every sale was still 100% LTV 80/20 financing. I truly believe the builders tossed back 10% to the buyers in the deal (even though the buyer essentially has 110% mortgage). The lender with the most loans: Option One. Idiots. Mr. Block must be pacing around his Beverly Hills mansion wringing his hands. How can the executives in charge still allow this idiocy? I think at the ground level in these mortgage companies, the rats see the ship is sinking and say, “What the heck, lets throw a little more ballast in the hold! The waters coming in so fast, no one will notice!”
I have no other explanation that makes any sense, except perhaps kickbacks to some of the particpants (other than the buyer, who gets his from the builder).
Wow, a new take on YBBNBYPOF. Gotta hand it to them for that. Except those of us with cash and 800 ficos are about to get priced a helluva lot more IN.
How can 50+ subprime lenders go up in smoke and the rest of the lenders suddenly start worrying about the consequences of making loans to help people buy houses they cannot afford without a substantial tightening of credit?
Reading Jingles article, they have been very recently. BTW, I group ALT-A along with Subprime. Bad loans to folks who cannot afford but have higher credit scores (for now)
There is no demand when your supply is overpriced…
There is a more subtler problem which underlies the burgeoning inventory of overpriced California McMansions for sale, which is the consequence of Greenspan’s attempt to reflate the U.S. economy to stave off the deflation hobgoblin back in 2003. The helicopter drops landed squarely in the housing market, resulting in an unprecedented inflation of U.S. housing markets from sea to shining sea (remarkable given that there is no national housing market!). High rates of inflation encouraged rampant speculation, and speculators in an inflationary environment prefer to buy the largest house they can, as they make twice as much money on a given percentage appreciation on twice as large a house. The result was a disproportionate share of new construction targeted at the relatively small pool of McMillionaires.
Now that inflation has given away to a residential supply glut and deflationary pressure, we have on our hands a massive imbalance in terms of supply and fundamental demand. There just are not enough budding CEOs to snap up all the “entry level” McMansions priced at $500K on up (CA) and $300K on up (flyover country).
This will be the big bugaboo for those living in coastal areas.
Having a $600K-$1.5M home is a wonderful thing. But only if you can sell it for that price one day. If you can’t, you’re screwed, especially if you took out that kind of mortgage during the past decade. Like I said elsewhere, the future will be more difficult on those who own expensive properties - more difficult than they imagine. Very few people will be able to afford a $600K house going forward much less a $1.2M property.
It is now better to be that Detroit “loser” who bought a house ten years ago for $100K and manages to sell the house now for just $75K. I wonder - is the percentage of Detroiters with $500K in liquid assets greater than the number of Los Angeles-ians with the same? I bet that percentage changes drastically in the future - and in favor of guess who.
Liquid assets are King.
We’re called Angelenos, not Los Angelesians.
I can say $1M home is a bad idea. In California thats nearly 15,000 a year in property tax. I can do alot with 15,000 a year.
That $1M home was only 250K less than 10 years ago. Avg/Med income did not go up that much. Nore did inflation.
Yes, $15k/year will pay nearly all of my San Francisco rent. So much for the “renters throw their money away” canard.
For those who bought in the last several years…..my condolences. This the worst (bar none) time in the history of the U.S. to buy anything…let alone an severely overpriced “McMansion”.
Enrty level Mcmansions for 500K on up in Cali ? “on up” in price is right. I sold my 25 year old 2 Br Townhome, all 1100 square feet of it for more than 400K.
Stupid FED trying to save the dot com bubble. Now we have above trend inflation being tolerated because of the housing bubble. War on savers is right.
A few years ago, homeowners where I work were constantly saying (bragging, actually) their homes were worth whatever buyers were willing to pay, even if it was seemingly an outrageous, ever-increasing number. Well, it works in reverse, too. If your home sits on the market for 6 or 9 months at price $X and there is no interest and no sale, IT AINT WORTH $X!!!! Too bad, so sad. Get it through your thick skulls!
“housing not selling…… reality starting to set in.
CA.Building Industry Assoc. - is Voluntarily “curbing production”…to help the supply issue.
Now that was rich! You mean the banks haven’t pulled their lines of credit YET! Guess we are still early in the cycle.
“Netta Savage believes she was scammed into her home loan, and that she is not alone. Savage said, ‘Under duress, you do dumb things. So I accept my responsibility. I should have said, ‘I’m not signing nothing. We need to take this home, and let me get with someone.’ But he’s saying sign it, sign it. It’s what we agreed on. It’s what we agreed on. Sign it, sign it, sign it. And I’m like…okay.’”
It wouldn’t surprise me if I found out that Netta has been impregnated at least once by some dude she met in a bar, who swore that he owned an oil field and had had a vascectomy.
“Netta Savage believes she was scammed into her home loan, and that she is not alone. Savage said, ‘Under duress, you do dumb things.”
Under duress? Was Lucca Brazzi holding a gun to your head at closing?
There’s an old joke that goes something like this. “Did you hear about the Chinese godfather? He made them an offer they couldn’t understand.” This whole thing conjures up just such an image with me. “They threatened me with confusion,” is what I’m hearing this woman say.
(Net-geekdom warning) There’s also an old-ish quip about the OSI networking standards that goes “What do you get when you cross a mobster with an international standards committee member? - Someone who makes you an offer you can’t understand”.
OSI is easy.
ALL PEOPLE SEEM TO NEED DATA PROCESSING
Application
Presentation
Session
Transport (TCP, not UDP traffic)
Network (TCP/IP - Logical Protocol Addresses) Routers work here
Data-Link (Switches work here and this is the address hardcoded into your card)
Physical (Be Fiber, Ethernet, BNC etc)
Good one…Vinnie
“‘The whole interest-only thing is scary,’ Beckwith said.”
The FBs had no fear of such things when they thought prices would continue to rise 20 - 30 percent per year. But now, after they’re already toast, they are scared. You prepare before you fight the battle, not after it is finished. They shouldn’t have any fear at this point. They lost, plain and simple. Throw the keys back to the bank and move on your way. You’re broke. You’re not dead.
Yeah, I remember going to open houses here in LA during the ‘04 - ‘05 boom. I cannot begin to tell you how many realtors told us we could “just give the keys back to the bank” if we ran into problems making the payments. They were also pushing interest-only neg. am loans. One realtor scumbag actually threw me and my husband out of the open house because we were telling him it wasn’t reality. We can’t wait to go visit him next year (he’s a big-shot here in Valencia) to laugh in his face! Prices here in Valencia(91355) seem to be holding somewhat firm even with all the foreclosures. Also, I have seen a funny thing in Ziprealty. The listings for 91355 have went from over 350 to 190. I do not understand. Are they playing with the numbers or what’s up? I know the vast majority of the people out here do not make over $150k a year family income. How can they afford this?
“Also, I have seen a funny thing in Ziprealty. The listings for 91355 have went from over 350 to 190. I do not understand. Are they playing with the numbers or what’s up?”
I am sure they are fuding the numbers. Nowadays everybody cooks the numbers. I am also beginning to think the zillow is backed by real estate investors who have an interest of making people think prices are holding steady. I keep seeing homes with a zillow zestimate of around 500K, but when I’ve gone to see some of these homes they are abandoned and falling apart. I think zillow is only good, and this only partially, for seeing prices of houses which have recently sold.
This reminds me of how Enron was cooking the numbers and showing great sales and revenue growth when in fact they were suffering huge losses. The public didn’t know and even most of the employees were loading up on the stock.
Like Enron’s off-balance sheet partnerships with the “Raptors”, I’m pretty sure there are many dodgy business practices in the various real-estate info/service companies.
“I am also beginning to think the zillow is backed by real estate investors who have an interest of making people think prices are holding steady. I keep seeing homes with a zillow zestimate of around 500K, but when I’ve gone to see some of these homes they are abandoned and falling apart. I think zillow is only good, and this only partially, for seeing prices of houses which have recently sold.”
In December, I made an $850K offer on a beautiful, tragically neglected house in Lexington, MA that was listed for $1.2 million. The offer was accepted. The inspection was a disaster of biblical proportions (have you ever seen an electrocuted mouse in a fusebox?) and we withdrew from the deal (thank you, Mr. Inspector!). Somebody else bought the wreck… I mean, architectural masterpiece in February for $850K (so glad it was not me!). Just checked the listing on Zillow and the Zestimate is $1.128 million, despite the recent sale price. How can this be?
LArenter - I noticed the same thing last week on my ZipRealty L.A search, it went from 2400 to 1900 in one night. Never did find out why.
I live in the San Fernando Valley and “for sale” signs are springing up everywhere. Many of them now say “for rent.” There’s a big new luxury condo complex I’ve been watching in the Warner Center that’s supposed to sell in the low 600s. It was well underway but almost looks like construction has stopped now. Yet prices do not appear to be dropping yet, and inventory numbers do not show any higher than last summer (when I saw a lot fewer “for sale” signs) on realtor.com. What gives? Who is cooking the numbers?
same here. My search went from over 1800 to 1100 (mainly westside LA and some valley SFR). Something is fishy.
I noticed the same thing on ziprealty for the Simi Valley, Thousand Oaks area…
just give the keys back to the bank” if we ran into problems making the payments.
Yea I was told that also. Sell my House and buy identical house with no money down, if prices fall walk and who cares I have all my Equity in the bank from first sale, Ca law is bank can’t come after you for the difference in price if the bank gets less on house than you owe, so what if your credit is trashed you have big bank account, eveybodies doing it , wink wink.
crazy times hahaha. realitors in Cali what a bunch of crooks, they should work at a circus next to the two headed cyclops.
BTW… I just checked realtor.com and the number of properties for sale for 91355 came back at 230! Ziprealty comes back at 193. What gives?? I am sooooo sick of the FRAUD!! A home is simply a place to live and sleep nothing more!!!! Why don’t these stupid people try getting some skills and education and trying to EARN a living!! Instead everyone is trying to get rich quick via real estate. What a SCAM!
“‘The whole interest-only thing is scary,’ Beckwith said.”
Yes, it is. And there is no way to get back to a better place fundamentally (down payments, savings, no credit card debt, income verification) without things getting a whole lot scarier for a whole lot of people.
Everyone on this blog knows that once “exotic financing” goes by the wayside, current home prices won’t hold up for 20 minutes.
Interest only isn’t scary. It just means your principal isn’t going down. It’s usually on 10-20% cheaper than an amortizing payment. But if you can pay it easily, what do you care? Most amortizing loans don’t pay down much principal in the early years anyway.
What may be scary is barely being able to afford an IO and counting on home value appreciation to provide HELOC money to pay living expenses, and then having the house value go down. No increase in value = no heloc money available.
Legitimate interest only and adjustable rate mortgage loans may be a good product in a normally appreciating market where you may find yourself selling within a few years. For example, say a young family moves into a starter home for 3-4 years and then upgrade as the family grows and income improves. The problem is that the market is not normally appreciating in many places now that the bubble is deflating. Those with an I/O loan may have to take money to closing (if they can even sell) to account for a lower home value and RE commissions.
If there’s anything I’ve learned on this blog, it’s that there’s no “normally appreciating” housing market. It’s either falling, stagnant, or bubbling. If a family can’t afford a reasonable down payment, they have no business buying.
“It’s either falling, stagnant, or bubbling.”
I think this is true for California. However, the bubble currently playing out in Wisconsin is historically anomolous. If you go back in time before 1997, you will discover that home prices used to vary in a range between 2.2 and 2.4 times median household income, which made purchase of a home a low-risk means of building wealth. By contrast, purchasing in California has always been a high risk gamble, with periods (like the early 1990s and right now) when risk lovers were burned by falling prices and rising foreclosure rates.
“Interest only isn’t scary. It just means your principal isn’t going down.”
I have to disagree. Paying down your loan balance isn’t just some quaint notion. The equity in your home is your safety net. Without any equity, the borrower is completely screwed if the RE cycle reverses, which it typically does every ten years or so.They have all of the responsibility of owning a home, hundreds of thousands of dollars in debt and no safety net.
Making a downpayment, making a full P+I payment or sending in a little extra each month really does add up over the course of a few years.
It’s like saying…why bother contributing a lousy $200 each month to a retirement account??
You have to start somewhere. And it does add up over time.
I’ll go even further than that. Being on the owing end of ANY mortgage is risky and scary. My husband and I paid off our 1970’s mortgage ASAP, and the few homes I’ve owned since then were bought for cash, period. People often said stuff like “You can’t live in your bonds.” Oh yeah? Just watch me live in my (foreign) bonds.
Preacher on Sister Az
Sister-AZ.
I would like to suggest to you, that the current DXY level @$80 for the US dollar is a tried and true tested level.{5 times I believe}. A level that I beleive will one day be broken/ smashed/destroyed.
But that day is NOT today!
So Sister now is the time to trade out of your Foriegn bonds and into US treasuries. The DXY rally in the US dollar SHOULD
achieve to 95-105. FOR a sweet 30%.
When the S… does hit the fan long after the the DJI market blows through the 1987 lows 1750 ish…. Euro debt will be discredited. The foundation set forth by this EURO fabrication, a “true fiat currency” is not bear market tested…& IMO - doomed to fail.
It’s creation was formed in the midst of a powerfull bull market of “lets all get to gether”. Bears breakup these marriages and over throw governments, not the least of which is a unified Europe whose individual partners are no longer abiding by much of their treaty.
If you are a true “real estate bubble bursting believer”, then you know the global anglo saxon real estate bust is bear market STUFF.
I know the following comment is against the “holy Grail” for IMF financiers, but I beleive even the SWISS have drunk to much of the High finance Kool-aide, this time. They are eye to eye deep in the same brown (R.E.} stuff our banks &brokers are into…meanwhile; who do you think were the MAIN sellers of their physical gold reserves these past 20 + years. Certainly not US Banks. So they sold forward gold @ 250/oz. and now its not in your banks, because people like the Iranians had their assets airmailed home!
True, if the would-be principal payment of an IO is just blown on crap, then IO is scary. But this “safety net” you speak of is savings, and an amortizing loan is simply an enforced savings plan in the grand scheme of things.
All things being equal, eg. if the choice is between maxing out the 401K or making principal payments, it’s not entirely clear which is better, given the tax advantages of the 401K contributions and the tax deductions of mortgage interest.
Even without 401K considerations, money earning a higher after-tax interest rate than the deduction-adjusted interested rate will put one ahead with IO.
All the time now, the local real estate radio shows harp on and on about how paying down your mortgage is so dumb, and that anyone that is smart uses any equity to buy more properties. Granted, there are still some properties that can cash flow here in Homicide Roads, but there are for rent signs everywhere, along with the for sale signs. They love to reference the good times as far as values going up, but never mention if there are years of negative values. 11% a year+ is generally what they say. Once you hear the callers, then it all comes together how all of this happened.
The funny thing is that when interest rates first started going down (late 02), I remember all the mortgage broker radio ads in SoCal were mainly pushing 15 year and even 10 year loan refinances because paying off your home was the smartest thing to do. They obviously changed their tune as the bubble ran up prices and needed to keep marketing their creative mortgage products.
Right, when you take an interest only payment you are at the mercy of the market. If you suddenly need to sell and you can’t get your original price +6% commission cost you have to come up with the difference. That’s why those loans are risky - well at least for the lender -.
“Everyone on this blog knows that once “exotic financing” goes by the wayside, current home prices won’t hold up for 20 minutes.”
Yes, and as a retired real estate investor and homeowner for over 30 years I will say one thing:
Anything other than a 15 or 30 Yr FIXED RATE mortgage is “exotic financing” in my opinion.
Keep it simple when it comes to financing your home purchase. If your not sure if you plan on staying in the home, then dont buy it. Only buy a home when you are ready to keep it for the long term, even if it is investment property.
Excellent advice!! If only everyone though like this!!
THOUGHT
“She was intimidated by the fact that the loan papers, laden with technical and legal terms, were in her second language, English. ‘You sign the papers, but it’s so hard to understand,’ she said.”
She was intimidated by the lack of a view from the edge of the cliff, the bottom hidden by mist and fog. She wasn’t wearing her glasses, which she need to see. “You take the step over the edge, but it seems so dangerous”, she said.
Has anyone heard about RealtyBid.com?
http://www.pe.com/business/local/stories/PE_Biz_D_homeauctions14.34d13b3.html
“It was a good response,” Prosperity CFO Rob Wallstrom said this week. “We auctioned 23 condos and sold 23 condos at an average discount of 15.3 percent ” off the original asking prices, he said.
“….new condominiums available in its Bordeaux development in San Bernardino.”
It would be interesting of someone in the area could follow this up in 60 days to see what is still available.
I went to a Kennedy Auction bid and felt the prices got bid up way too high, way to quickly. I made a couple of bids only to see the price run much higher. A week later, they called me to say the winner could not “qualify” and would I like the unit? Sure. The catch? It was not at my bid, but the bid of the “winner”. I told them to call me back when they got real.
I often wondered if they had “fake bidders” working these auctions. It was strange.
Wow. That sounds a lot like street magic. Baffling at first, but when you find out that everyone else on the street is in on the trick, it makes sense afterall.
Could you imagine that poor person working the phone? “Hi, yeah, this may sound really stupid, but would you consider…”
It’s only with the frying pan cooled and fat congealed that the eyes see the horror that the body had craved. America’s housing market.
““She was intimidated by the fact that the loan papers, laden with technical and legal terms, were in her second language, English. ‘You sign the papers, but it’s so hard to understand,’ she said.”
And the reason she didn’t show these papers to a bilingual real estate attorney was…???
The biggest purchase of your life, and you blame ignorance of the financials on a language barrier. When in doubt, don’t, especially when it comes to money or legalities.
Another “no speaka da ingles” BS excuse.
No one in my family spoke English when they emigrated from Europe. To date, every last one of my immigrant relatives has transacted real estate, a few of them many times over. To date, not one has reported any serious losses or ended up in a questionable loan.
Please stop with the “no speaka” excuse, people.
The Koreans in my area have prospered, without having English as a first language. The Vietnamese and Cambodian owned nail salons are nothing but major cash cows. How many FB sob stories have we seen from Asian immigrants?
You apparently didn’t get the memo either, these people from down south are victims who are entitled to free medical care and free homes because they no abla.
We live in interesting times. California and other states won’t give driver licenses to illegal immigrants but lenders do give them million dollar loans! During the boom, people who crossed the border and got in on time into a house made 100s of thousands of dollars! This is incredible;
Careful, even though what you said is true, you put yourself in danger of being labled a racist for telling the truth. The only two groups you are allowed to talk about/put down today are whites and christians. Everything else is hands off according to the thought police which now control America. White bashing is particularly encouraged.
Mormon bashing is OK
Hey, I’m the the last person to come to the defense of illegal aliens, but let’s put things in perspective: who’s the bigger fool, the WOB lettuce picker with a third grade education, or the 5th Generation American “professional” with 16+ years education? We didn’t get to where we are today without a bunch of dumbass white people signing suicide mortgages.
I’m entitled to my entitlements!
You miss the point. In the past, lenders checked to see if the borrowers had a reasonable chance of paying back a loan (because back then, you didn’t “sell” a loan, you held it). Today, that idea is simply quaint.
So, in reality, your family never had a chance to be a FB.
The rules have changed, yet many people (understandably) assume that lenders would not be so STUPID as to lend money to people who are simply unable to meet the terms of the loan - except if they win the lottery.
Yes, this whole mess has been caused by lenders lending OTHER people’s money! Some basic instinct tells me that this spells serious trouble.
Just to add a tiny bit more:
“…caused by lenders lending OTHER people’s money!”…without those OTHER people paying ANY attention as to where it was going.
You miss the point. In the past, lenders checked to see if the borrowers had a reasonable chance of paying back a loan (because back then, you didn’t “sell” a loan, you held it). Today, that idea is simply quaint.
Rocks,
I reread the article. In it, Ms. Gonzalez complained that the papers were in her second language and too difficult to understand. So it was the borrower, not I, who made the point about the language barrier. If Ms. Gonzalez had stated that the bank gave her the loan without any consideration for her ability to repay, I would agree with you.
How do you say due diligence en español? (or any other language, for that matter).
When I first moved to Taiwan and was not yet fluent, I tried to book a plane ticket to Okinawa and ended up booking to Osaka (or reverse, can’t remmember now). I think I just froze up in fear because of the language barrier and chose any japanese city that started with an “O” and ended with an “A”. LOL.
A few weeks later when they called to confirm, I found out I was going where I had never intended. It was silly but not a make or break mistake. (Plus, they let me change my ticket).
I cannot imagine traipsing in to a brokers office to sign a loan contract in a language you do not understand. Something is seriously wrong with that picture.
That is why the banks came up with the idea in the first place!
Enter the UCC without fearer knowledge of the ramifications….
where the lawyers roame and freedom does not exist.
In this UCC arena the last lie stands …this is the method of discovery!
But he’s saying sign it, sign it. It’s what we agreed on. It’s what we agreed on. Sign it, sign it, sign it. And I’m like…okay.
And he’s like “ohmygod”
and I’m like “alright already”.
And he’s like “gag me with a spoon”.
So I like, signed it.
And he’s like “ohmygod”.
Then the rate reset and I was like “ohmygod”.
And then I’m like “oh sh!t”
And then I was like “ohmygod”.
LMAO. Thanks for the laughs, Home_a_Loan.
Too bad you’re 100% correctamungo.
I’ve read a lot of funny stuff here, but that’s probably the funniest. Can we make a poster or something out of that?
Thats funny!!!!!!!! Old Valley talk back when english was still spoken there.
Excellent analogy.
Further:
“Anyway, he goes are you into s and m?
I go, oh right…
Could you like just picture me in like a leather teddy
Yeah right, hurt me, hurt me…
Im sure! no way!
He was like freaking me out…
He called me a beastie…
Thats cuz like he was totally blitzed
He goes like bag your face!
Im sure!”
“Valley girl
Shes a valley girl
Valley girl
Shes a valley girl
Okay, fine
Fer sure, fer sure
Shes a valley girl
And there is no cure
Okay, fine
Fer sure, fer sure
Shes a valley girl
And there is no cure”
http://www.zappa-analysis.com/drownsin.htm
From the News 10 linked article:
“Rollingwood, Somerfield and eight other Northern California condominium conversion projects are marketed by another Nevis company, Housing Source Partners of Lodi. They include the downtown Sacramento high rise conversion at 500 N Street.
Some condo owners at Rollingwood said they would reluctantly welcome tenants in the vacant units to raise money for the homeowners association. But owner Jim Colvin doesn’t agree.
“Then it becomes a rental property again,” said Colvin. “And our value is gone.”
What value? Repeat after me…they were APARTMENTS! How about they shouldn’t have become “luxury” condos in the first place. We all know that they were given a superficial face-lift to give the look and feel of a “luxury” condo in the name of greed. You just cannot make a silk purse out of a sow’s ear.
BayQT~
“When Rosa Gonzalez was left $10,000, she decided to invest it in a home.”
$10,000 is a nice sum to ‘invest’ .. in a MOTORCYCLE, NOT a home.
$10,000 is a nice sum to ‘invest’ .. in a LENNAR 2009 PUTS, NOT a home.
good idea, swiss
An article I just found about a meeting of the Community Economic Development Agency (CEDA) Committee in the San Francisco East Bay. Topic: Oakland Renters Are About To Get Screwed Unless They Fight Back! [Condo-Conversions Are Bad For Your Existance!]
It’s a dated article (November 2006) but pertinent to what’s going on in Oakland regarding condo-conversions, reduction of affordable rental units and a pretty good demographic description of a few of the metro districts. Although this is about Oakland, it paints the picture of how a lot of cities will have to do damage control.
This is kind of information that never makes the 10pm news.
http://www.indybay.org/newsitems/2006/11/14/18329563.php
BayQT~
Sounds like a socialist call to restrict property rights. Just because someone rented a place to live doesn’t mean that the owner has a lifetime obligation to support them.
Not really “socialist” - landlords don’t have the right to do whatever they please just because they own property. E.g., they can’t knock down the building and replace it with a lead smelter or a petting zoo. It’s called zoning, and like it or not, in most places government does indeed have the right to control property use through zoning laws. For a zoning-free paradise try Houston.
Of course there is a housing crisis.
Everyone wants to own one.
Millions of vacant homes are for sale . {40 yr high}
Yet nothing is affordable!
Rents remain below construction costs.
The disequilbrium of the current real estate demand supply curve is properly functioning under the expansionist monetary policy, with FULL or above full employment.
Price movements rise for physical assets &remain resistant to dropping with the ongoing explosion in money creation, even when demand drops, as buyers are priced out of the market. {affordability}
While demand at the new family formation, “entry levels” continues to grow due to illegal immigration. affordability continues to deteriate.
After a long period of stable pricing. ie. the 1980-2001’s, the effects of the current expansionary money policy, {that have been disguised by 2 rapid rising & falling interest rates and falsified economic indicators (using substitutions}IMO ). are unanticipated. When this occurs output {housing production} and employment increase in the short run.
{Creating excesses in both}
Considering we’re on a California thread, I think I’m justified in pointing out that 1990-95 was a period of unstable, falling RE prices.
And fall they did. And all it took was for a single sector of the local economy (defense contracting) to crash.
I have a good friend who lost 400K in a few months during the last LA crash. Bought the house next door, then, tried to sell his own house, but his timing was really, really bad. Kept dropping to sell as the house he just bought also declined in value. He’s a resolute renter now.
Actually that was a period of correction. Fact is 1988-89 was the peak and needed a correction. Prices were way beyond affordability and easy financing which turned into disaster. . IT too was a a bubble.
It was a peak, but nothing like now. I had a small house in Escondido that peaked at 220K, before it fell to about 150k. That house would have fetched at least 500K last year.
I also recall 1980-1982 was also a period of declining real estate values in Southern California.
My wife made me stop at a couple of open houses (South Florida, Broward) yesterday just for fun. It reminded me of looking in SoCal back in the summer of 92. As soon as we asked the price, the realtor immediately started babbling that it was negotiable and we could offer less, etc. etc. A real look of desperation in their eyes and they were very lonely open houses with no other lookers in sight. One was in a gated community and the security guard didn’t even know there was an open house that day in the community since no other lookers had asked to enter.
Patience grasshopper. People thought the dot com bubble would never burst, but in the end, fundamentals (like actually making a profit before the sun burns out) did matter.
It doesn’t matter how many people want to live/buy in California. If they can’t afford a 600K house, they can’t afford it. Those houses can’t sit empty forever (be a non producing asset).
Banks no doubt will first resort to every trick to keep FB’s in their houses. But they can’t service mortgages while only charging 1% interest indefinitely. Eventually they will have to foreclose, sell the properties for whatever they can get, and take the write off (and hope they remain solvent).
“While demand at the new family formation, “entry levels” continues to grow due to illegal immigration.”
This is likely to wane in the wake of the subprime implosion. No more liar loans, no more illegal immigrant purchases at $500K on up.
Yes and no. I think Southern California housing fundamentals have changed and will remain this way for at least 20 years. Meaning that poor immigrants (both legal and illegal) are more willing to accept less housing, in that 12 people will live in a 3-bedroom house, with at least 6 working adults. Thus the rents will be higher than the 4 person household with 1 working adult (how quaint - nevermind) But even with 2 working adults at whatever service industry job you can imagine, it will not pay the same rent as 6 jobs in the tax-evading underground economy.
No more fake multiple bidders.
We are now proudly offering the Marquis de Sade development, on the internet, just like you’d buy some $6 trinket~
Hopefully prices don’t Tummolo much further down, in Palm Springs…
et tu Bob?
Two thumbs way up…
“V For Vendetta”
on directv, now.
For Guy Fawkes fans, everywhere.
Alan Moore, non?
(psssht….no one here knows who Guy Fawkes is…ok…maybe I do)
I have enjoyed many a Guy Fawkes celebration, thank you very much. I admire him more and more each passing year.
soz, mate - never know how many ex-pats there are here…
speaketh for thineself
Darn, if I’d read that SLO Tribune article this morning, I could’ve gone to that “real estate investors” meeting at the Elks Club a couple of hours ago and LMAO. It is indeed delightful to see SLO county prices at last substantially down. I think all the big shots here are “real estate investors”, and a lot of the little-shots too. I have been amazed at the steadiness of the (asking) prices in the actual seaside communities … like 30x annual rent, or more.
Owners who bought ‘luxury’ condo conversions at the peak of the market in Elk Grove, now complain their complexes still feel like apartments.
Must not have been a very good conversion….
OT for TxChic, how would you like to live in these houses in Kemah? I guess it’s better than living next to an airport.
http://www.coasterphotos.com/maingallery/v/Kemah/2006/040607/Kemah-Construction-040607-18.jpg.html?g2_imageViewsIndex=1
This is OT but it seems to appropriately describe the sad state of US affairs…
Here is Plato describing how an oligarchy transitions into anarchy.
“’Don’t you think, I said, ‘that the transition from oligarchy to [anarchy] is a result of people being insatiably greedy for what they’ve come to accept as good—that they ought to get as rich as they possibly can?’
‘The way I see it is that because political power within the community depends on the possession of wealth (e.g, how much does it cost to run for president of the US?), the RULERS aren’t disposed to curb by legal means the undisciplined elements of the younger generation, to prevent them from spending their money and ruining their estates, because this enables them to buy up those estates and to loan money at interest, and so get even richer and gain even more POWER.’
‘Now, the negligent sanctioning of indiscipline which occurs within oligarchies has been known in the past to reduce men of some caliber to POVERTY. There they SQUAT in the community, I imagine, equipped with their WEAPONS. Some are in DEBT, some have lost their citizenship [felons lose voting rights], some are enduring both these hardships. In their hatred of the people who have acquired their property, they long for REVOLUTION’
‘But their targets, stooped businessman that the are, appear not to notice. They continue to inject the VENOM of MONEY into any remaining member of the community who SUBMITS to them, they continue to collect compound rates of interest, and they continue to fill the community with drones and BEGGARS.’”
Love that post - peter
Talk about OT. Nevertheless, I did some research some time ago about the voting disenfranchisement of felons, and was surprised to see it evolved out of the 14th Amendment. And the 14th Amendment is also credited with endowing fictitous entities (e.g. corporations) with all the Constitutional rights of natural persons.
I think that Civil War Burns fellow needs to do a series on these amendments. Just don’t air it opposite American Idol.
Article from bloomberg about home builders going bankrupt
http://www.bloomberg.com/apps/news?pid=email_en&refer=news&sid=aXqHEXUKrjqY
Good gloom and doom prediction- for those who like those things. (hehe) Thanx for the link.
more than 1 million homes currently in foreclosure
Sweet, sweet music to my ears!
Perhaps more appropriate for a Fl. thread but Perlman scam,as regards to Church st. project in Orlando…and the scam continues….
http://tinyurl.com/yq92xe
I’m is sonoma county,and heard an ad on the radio promoting a condo auction with bids starting at 35% below the latest asking price.according to the sonoma housing bubble 47% of the homes on our mls are in some stage of foreclosure,and we have a 13 months supply.the low end buyers have disappeared according to a broker i know and trust $600k
Wow. 47% is high high high. I noticed many MLS homes up here on the foreclosure lists too. But we’re no way near 47% - yet.
That has *got* to bring prices down.
not yet… the press has clammed up and stopped regular housing reports. We are averaging maybe 2 piddly pieces a month where they give fudge packed numbers that come from a couple local realtors. Apparently it is way too much to expect a journalist to type in http://www.ziprealty.com or norcalmls.com, or realtytrac.com or foreclosure.com and check the numbers themselves.
so they aren’t reporting on the foreclosure, and the prices and the sales they report on are flat out lies. I basically look up what Zip has and norcalmls, and realtytrac.com and do the basic math. No real thinking to it… click the county, get the count… determine the %. apparently simple math is not on the job description of reporters who are responsible for covering the real estate market. Since the general population seems to be math averse as well, they don’t notice what the paper isn’t telling them, and the barely literate don’t read the blogs. so the madness is silence is consent… the news is silent, the functionally illiterate is also silent. Sonoma County is having a back room real estate crash. It’s the best kept secret in the county. :-/
people south of you in Santa Clara and San Mateo believe its reasonable to have prices go 400 percent in 10 years. Somehow even after near depression level drop in business due to dot.com bust. Prices are still up in the two counties and many find it reasonable. 800K for 1000 sq ft 1970s condo is seen as being justifable. Its crazy…
People who can afford to pay CASH are waiting for condo auctions with bids starting at LESS THAN 35% OF the latest asking price.
Patience and prudence will be rewarded!
Got 10% down?
I mean a minimum of a 65% discount, even more in a few short years
Got 10% down?
Pricey Hill Country Dubbed “Little California” by Some:
http://tinyurl.com/2rtwg2
Keep an eye on housing inventory,
http://www.nashuatelegraph.com/apps/pbcs.dll/article?AID=/20070415/BUSINESS/204150412
Wow, everyone check out Nordine.com, there is an explosion of residential listings…
He’s exclusively an REO agent…
Pension funds and mutual funds are among the biggest buyers of the crappy bundles of Alt-A+Subprime+high LTV loans. Now, how long would it take for their deep wounds to be exposed in day light?
Is anybody here shorting Fannie Mae or thinking about it?