Bits Bucket And Craigslist Finds For April 16, 2007
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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I am a proud member of the “$700 Club”…
Why, when 100oz is only $690?
I’ll probably jump in on the next PPT “sell-off(*)”. Should be due in two weeks or three. Will knock the price down (temporarily) by $40.
(*) I’m not sure they actually have any gold.
But doesn’t a computer blip saying you do…
Make it so, number 1?
Hey aladinsane,
Any opinion on GoldMoney or the Perth Mint?
Physical only.
Everything else is the x factor.
–
News Report of Suspicious FIRE — Consequences of the Housing Bubble…
From a very reliable source:
Suspicious fire in hard to reach area of Tehachapi (hilly with winding road; takes time for a fire truck to reach).
Brand new spec home. Fire sources in two parts detected.
Time: very early Sunday morning (04/15/07). It was snowing in the area (my car and parts of the front porch were covered in the morning).
Person listing (could be owner) lives in 818 area code, at least an hour away.
Listed for 899,999 (very high price for the area). I believe this is the listing:
http://www.realtor.com/FindHome/HomeListing.asp?snum=4&mlsttl=&frm=byzip&pgnum=1&mls=xmls&js=on&target=&ct=&st=&sbint=1&sbls=&sblo=1&stype=&zp=93561&exft=0&exft=0&exft=0&mnsqft=0&lid=Enter+MLS+ID&ss_aywr=&fid=so&mnprice=850000&mxprice=900000&mnbed=1&mnbath=1&typ=1&poe=realtor&x=13&y=7&sid=08628C42D629C&snumxlid=1075706077&lnksrc=00002
22484 Creekside
Tehachapi, CA 93561
MLS ID#: 9954431
$899,999
6 Bed, 4 Bath
5,000 Sq. Ft.
5.56 Acres
Single Family Property, Approximately 5.56 acre(s), Year Built: 2006, View, Two story, Central air conditioning, Dining room, Laundry room
Jas
That thing is bug-ugly. No wonder they torched it.
Roidy
McMonster!
Eye sore.
–
UGLY homes are great for “the crap that we don’t need”!
And large ones to keep sqft/lb constant. The move-up craze was necessitated!
Jas
hideous house
We saw this driving back from Mammoth(off the 14), but at night… Or more precisely, we saw a glow in the mountains that we couldn’t figure out what we we seeeing. So how long did it burn? Or did I see something else?
Thanks,
Neil
Maybe you saw someone preparing a Mammoth serve of popcorn?
The ‘Bubble Fairy’ strikes again!
Was the picture taken before or after the fire? I can’t tell!
LOL.
counties near me raising rates already
amazing ,no matter how much they get,they spend it all
Its the never ending “Cash Cow” All in the name of “Service”…It just sucks….
Probably time to start a new index…
“Home de Plume”
Lola, Ellie, Maria and Oscar (not their real names)
Get us to 4, in a hurry.
Nice to see shame back in fashion again~
Little ditty about Maria & Oscar
2 Californian kids (adults) growing up, nowhere near the heartland
Oscar’s gonna be a real estate investing star
Maria sez: “‘We don’t dodge our bills, we just had a bad deal.’…
Oh yeah, life goes on.
Long after the cash I took out is gone…
There once was a lassie named Maria
Who had an affair with david Laria
The result of her sins was quadruplets not twins
One house, two mortgages, and a bank-repo-see-ya
Looking back at the early days of 1980, when Silver’s waves could never break as high again and only disappoint followers that hung out on their longboards, waiting for the next set of 48 foot monsters, to ride to glory…
The housing bubble dwarfs anything in my then 18 year old memories of things that transpired way back when~
What an interesting time to be alive.
So who’s playing the Hunt brothers in the remake?
Based upon the girth of Nelson Bunker…
Most of us.
The dollar
no, fiat paper in general (or to be more precise: central banksters); gold has already decoupled from the dollar.
Had Bunkah invested his $$$ like a PRO instead of a specualtor, his measly Bill or two in 1980 could be worth 100 bill or two today. He could have been wealthier the gates buffet the mexican guy and the indian guy all combined.
Bunker was a Billionaire when there weren’t many.
Kind of tough to anticipate that the PTB would change the rules of the comex in order to torpedo their position. Other than that little hiccup the plan worked like a charm
I took the kids to see TMNT today. For the first time AFAIK, the current housing bust is creeping into the Hollywood lexicon. Leonardo, Donatello, Raphael, and Michelangelo are seen watching the news and what are the headlines? The housing market is crashing.
Then I took a nap for the final hour of the movie. You parents know what I am talking about. We’ve developed a unique ability to sleep during an extremely loud kid’s movie while sitting in one of those multiplex seats.
On another note, does anyone have an opinion about American Home Shield? Is there a better plan out there? Are these plans worth it?
“On another note, does anyone have an opinion about American Home Shield? Is there a better plan out there? Are these plans worth it?”
I had American Home Shield before selling my house at the top of the bubble. I found it to be quite good and was glad I had it. I don’t know if there are better plans out there. However, don’t take my word for it. I am finding that companies and services that might have been good two years ago have deteriorated rapidly since. Seems to be a widespread infection of dishonesty, and fraudulent behavior.
It works out to $480/year, and I’m sure Chase gets a cut since my mortgage records were used by AHS for the junk mail promotion.
The house is 10 years old. I’ve replaced the POS air conditioner once, and that was about four grand. I wonder what are the odds that the other systems will go out soon? The water heater? Plumbing problems?
Thanks for your feedback.
I had Countrywide and that’s how I got the AHS solicitation. It was $420.00. If you have older appliances, it can really come in handy. They fixed the air conditioner (if we hadn’t had AHS, we probably would have been hosed into getting a new compressor). They also fixed the dishwasher. If you have any attention at all on any of your systems or appliances going out, I highly recommend AHS or similar plan, it more than made its money back. Stuff happens.
It’s not a bad idea. As you know, when you’re selling a home, you are responsible for full disclosure. After the home purchase, if the A/C goes bad or the roof leaks, the buyer is much more inclined to call American Home Shield and get it fixed. Without this warranty, they are more inclined to call an attorney and try to sue based on the fact that you did not disclose the property’s problems. On the buyer’s side - it’s not a bad idea - getting into a house is very expensive and then last thing you need is for a $3000 repair bill. I am not sure if American home shield is the best value but it is a good idea in overall.
Just a thought: with all of these vacant homes sitting on the market, I’ll bet there will be a lot of dishwasher problems for the eventual new buyers. [Dried out gaskets]
Gadfly — in Florida the problem can be much worse — mold from FBs setting their a/c temps so high that they don’t keep the humidity down, with windows closed to trap all those little nasties inside.
Home Builders BK ‘08
http://www.bloomberg.com/apps/news?pid=20601103&sid=aXqHEXUKrjqY&refer=us
Anybody have memories of the 1970’s gas shortages?
I was 11 in 1973 when the first one hit. It didn’t mean much, as I didn’t drive, so can’t tell you much there…
I was a freshly minted hellion on the loose with a license, in 1979 and remember the longest line I waited in to be approx 100 cars and it took me 2 hours to get my chance at the dinosaur distillates, we crave so.
This was in el lay~
Howzabout you?
Sure I remember the energy crisis and deep 1970s recession. It wa deeper in NY than elsewhere, and my family ended up moving to Tulsa OK so my Dad could get a job.
Given that these were my formative years, when I first noticed the world outside my own childhood (we late baby boomers are NOT the same generation as those who came of age before 1973), I would have expected more economic harm from the rise of energy prices than we have had. And I’m worried about inflation.
Totally true, WTE
I was conceived right around the same time as Yuri Gagarin made the space age, what it was.
A time we were told anything was possible~
We weren’t dropping acid during the Summer of Love in ‘67, hanging out @ Altamont in 69′, or protesting @ Kent State in 1970.
We were more interested in getting a Schwinn Sting Ray…
I remember it well - The government wanted to stop gas sales on Sunday. I think that may have worked in the cities, but the stations in our town expanded their hours to take advantage of the price increase. No problem getting gas on Sunday.
As an aside another scam in the Biodiesel market.
ConocoPhillips, Tyson Lobbied White House to Expand Tax Break”
“… The decision to expand the break, which Blunt opposed, may be worth hundreds of millions of dollars to ConocoPhillips and other refiners, while increasing demand for products from Tyson, the nation’s largest meat packer and second-largest poultry processor.
The tax credit was “hijacked,” said Brian Appel, chief executive officer of West Hempstead, New York-based Changing World Technologies, the privately held company that owns the plant in Carthage, Missouri, Blunt was attempting to help when he inserted the provision into an energy bill in 2005. …”
Bloomberg
http://tinyurl.com/233onl
Sing it, WT! I really, really, REALLY resent being lumped in with the same group of people who were growing their hair long and trashing college campuses during the 1960s.
With regards from another one who came of age after 1973…
WT Economist said - we late baby boomers are NOT the same generation as those who came of age before 1973
Too true - I was born just before JFK was assassinated, and despite everyone telling me I’m a late Boomer, I’ve always felt more like an early Gen-Xer. We need a generation between Boomer and Gen-X, for us kids born in the Decade of Love…
In 1973 I was much more interested in ponies, than I was in Mustangs…
I have vague memories of driving around with my mom as she tried to find gas.
I thought the reason for the lines was price controls. If we have a 1970s type embargo today, won’t the gas stations just charge the market rate, and we won’t have those lines (assuming no government intervention?)
I remember driving home the day of 9/11 and seeing lines at gas stations - and the stations were charging much higher than market rates on that day.
I had about 3/4 of a tank and lived close enough to work to just ride my bike, so I kept on driving straight home.
No, the reason for the lines was people were STUPID. Not just regular stupid but hella stupid. People with a half a tank and some with three quarters of a tank of gas would sit in those stupid lines burning up gas and wasting an hour or more of their life just to top off their nearly full tank.
I didn’t have much problem getting gas and I never got gas until my gauge was close to quarter tank.
I was quite young in 1973….but was able to drive in 1979. I recall driving on I-10 going west towards Texas. Needed gas at Lake Charles. Came up over the high bridge and as far as you could see on the right were oil storage tanks. On the left were oil pumps in fields pumping away. At the bottom of the bridge there was an exit with a Billups station. Waited one hour for gas!
My next car is a plug-in hybrid.
We will likely experience one or more of the following in the next 5-10 years….and it won’t be for just one or two months….(don’t even need peak oil for this…just shrinking oil exports available to the US or a dollar crash)
1. High gas prices (>>$10 gallon)
2. Rationing by coupon (perhaps 10 gallons per month) - how’s that commute again?
3. Rationing by inconvenience (lines)
Houses more than 3 to 5 miles from significant employment, government, or recreational facilities (for the well to do) or without good public transit will not recover from this bust. Maybe some telecommuter communities will hold up well.
The car mfgers can’t make enough electric/plug-in hybrids to replace anywhere near the current inventory of cars on the road. The price of these types of vehicles will likely rocket (think high end Porsche prices) if gasoline becomes dear. A lot of people will be blasted back to a 1900 level of personal mobility.
There used to be electric trolley cars on my street going to Midtown and Downtown Atlanta (2 and 4 miles away, respectively) in the 1920s-50s. It will be nice to have those back…but they aren’t coming back…maybe we’ll see the Atlanta Beltline, but not in time.
Letting the robber barons crush public transit in this country is coming back to bite us all in the @$$. Peak Oil theory or not, “scarcity” is something the oligarchs control and we have no Plan B. I see suburbanites forced to “get creative” in the coming years: food co-ops, car pools, buying clubs, Amway-like garage markets in neighborhoods.
Robber barons didn’t crush public transportation… Public transportation has withered because it’s inconvenient and most people who can afford to drive to work prefer to do so.
Well actually, GM and the oil companies bought up a lot of the local electric rail/trolley companies in the 1950s and shut them down and sold the cities buses and people cars. Certainly when fuel is cheap and plentiful cars are more convenient. But if we get a sudden, long duration 1970s like situation……looks like we can’t count on military power to bail us out either…..
I have vague horrible memories of this same thing…we ran out of gas while waiting in a gas line.
This was after waiting in one line, only to have that station close down just before our turn at the pump.
Energy crunch everywhere. Theaters closed, restaurants closed, stores closed early to save energy. I was dating my husband then and he really made out moneywise. No place to go for a date on the weekends. Gas lines were long and gas was doled out in small increments. Plus talk about high interest rates. By 81 house interest had soared to 19-21%.
Here in Houston you could only buy gas on alternate days according to the ending number on your license plate. Even/Odd. Pumping your own gas was kinda new at that time; and there werent a lot of full service stations for the older folks that didnt know how to do it. The lines were really long; tempers got hot if someone tried to cut in.
There was a station near our office. We would look out the windows to check the length of the lines and then dash down there at 10am or so to get gas.
My wife is from Buffalo and her secret trick was to just go over to Canada to get gas.
That sounded odd.
You could buy all you wanted in the land of my mother. No controls.
She said that when she went back and forth across the border, she’d just say “just getting gas” to either side and they’d let her pass through.
Might not be so easy now?
“War continues in Iraq. They’re calling it Operation Iraqi Freedom. They were going to call it Operation Iraqi Liberation until they realized that spells ‘OIL.”
Jay Leno
Oh, I remember it very well. In the first gas crunch, I remember driving home from college during Thanksgiving break. Ordinarily an 8 hour drive, it took 17 hours because the speed limit had been lowered to 55 mph and to avoid running out of gas in the middle of nowhere you stopped for gas whenever the tank was 3/4 full. Many stations were closed, those that had gas often limited purchases to $5, and the wait in some lines was so long that you turned the engine off, put it in neutral, and pushed the car whenever the line moved up to conserve gas. I remember sweating bullets a few times when my tank got down below 1/4 tank before I finally found an open station.
During the second gas crisis, I was a police officer in Palm Beach county, and remember the rash of gas siphonings. Drive offs were common, and a rash of large scale gas thefts left law enforcement puzzled until one night when we discovered their method. Tanker trunks from Miami were pulling up to closed stations late at night and, though appearing to deliver gas, were actually sucking the underground tanks dry. I even caught some nit-wit trying to siphon gas from my patrol car. Ah, good times
My dad worked for the dept of energy and when he travelled in utah they saw the emblem on his truck and refused him gas in some places. He was based in colorado and got to where he refused to work behind the Zion Curtain. The Utahoids knew who was to blame for the gas shortage - the gubmint, and they called a spade a spade. Gotta admire that.
I remember when they instituted 55 mph on the interstates. It was really weird riding along and all the traffic seemed to be crawling along. Everybody actually drove at 55 for a while. It felt and looked very strange.
And the politically appointed Washington State Patrol chief actually went on the radio and claimed that you didn’t get to your destination any faster at 65 mph than at 55 mph. Being from the big side of the state, that difference meant an hour to my trips back and forth.
You folks might want to spend some time at http:\\www.theoildrum.com.
Exports by the top 10 exporting nations were down about 7% last year. (We import almost 70% of our oil). Combination of depleting fields, lack of new discoveries, and increasing domestic use).
Ali Samson Bakhtiari, formerly of the Iranian national oil co., has outlined a four-phase scenario for peak oil, in which each phase lasts about four years. T1, which started last year, will be relatively mild and won’t be noticed much. T2 (beginning in 2009-2010) will be much more noticeable. T3 and T4, you don’t even want to know about.
Another victim of the static analysis trap.
People change. Problems breed solutions as long as opportunity is also present.
Another cornucopian who believes that technology and energy are interchangeable. People need to eat to survive. 10 calories of fossil fuel energy go into every calorie of food energy that we produce. We are going to burn the last six inches of topsoil in the midwest growing corn to make ethanol to put in our gas tank. Very short-sighted. The one thing we could do to help us alleviate the upcoming energy crisis is to rebuild the national railroad system. It would create jobs and benefit society as a whole. The fact that nobody in a leadership position is even discussing it shows how “un-serious” we are. We will continue doing what we are doing until we can’t anymore; at which point, we will go, “Oh, sh**.”
If we had a real economy, it would be one thing, but virtually all of the economic growth of the past five to 10 years has been about growing suburbia and all the tanning salons, fry huts, chain retailers and so on that suburbia requires.
We have been stuck on page 666 of my favorite 1074 page tome, for some time now…
Who is John Galt?
Very short-sighted. The one thing we could do to help us alleviate the upcoming energy crisis is to rebuild the national railroad system.
Warren Buffet just made a big investment in railways…
10 calories of fossil fuel energy go into every calorie of food energy that we produce.
You said it, Viewer, and the more processed the food is, the more skewed this becomes. It is much more wasteful to eat corn chips than corn on the cob, but people are just not paying attention. As with everything else, we do what we do at our own peril. Most of our agricultural system is an example of bad allocation of resources through and through, and its sheer power is strangling sustainable production into oblivion, because it’s cheaper in the short term. Oh, the short sightedness of humans…
The only long term answer for energy, environment, peace, and general quality of life? World wide population control. If we do not manage it, mother nature will via war, famine and pesitilence.
natural selection? And I don’t mean tainted spinach, or do I?
“The only long term answer for energy, environment, peace, and general quality of life? World wide population control. If we do not manage it, mother nature will via war, famine and pesitilence. ”
This recently came up among friends as the only solution to most of the world’s problems. In the US, perhaps it could be something like a test that you’d be required to pass in order to have children, which would include demonstrating that you could properly care for the child and support it financially, etc. Otherwise, mandatory birth control would be instituted. Think about it.
that worked great in china - they now have 40% more men than women…people can have one child, so they abort until they get the sex with the best economic potential for supporting them in their old age.
like a test that you’d be required to pass in order to have children
I’m not sure this would work, but I certainly would back an incentive for pushing child bearing age to 25. Most of the unhappy, unwanted children in this world are born to immature mothers. I think if we held a carrot for women who decide to wait we would be taking a step in the positive direction.
Didn’t Singapore have a government program that paid women to not have children before they graduated college? I think we could pay girls (and boys, too) a certain amount each month and say “if you get pregnant, you’re gonna lose this check.” (not sure yet how to apply to the boys, have to check with Maury Povic) Hell, pay them every month for the rest of their lives! If you’re an educated married woman with $5k+ monthly income, you won’t care about a $400 government check, you’ll have your kid.
c: Didn’t Singapore have a government program that paid women to not have children before they graduated college?
I’m afraid you have that mangled. It pays college grads to have more children. Singapore’s birth rate is now so low that it pays *all* citizens to have more children.
And what “solutions” did the aforementioned gas crunch of the 1970’s breed except massive importing of oil and political deals with the Saudis? Yes, there can be market solutions to the impending oil crisis. You may not like any of them: massive price increases, “demand destruction”, outright shortages…
Put simply, there is no substitute for oil. A single barrel of oil has the energy equivalent of 25000 man hours of labor in a portable, high density liquid form. All “alternatives” involve marginal energy return on energy investment, massive capital investment, or both and aren’t even proven to scale up yet.
That doesn’t mean that there can’t be “solutions” that allow us to retain aspects of the quality of life that some of us enjoy, but it won’t be within the current easy motoring suburban/exurban lifestyle.
One ton of Uranium has the energy content of 16,000 tons of oil. ….surfing the next big bubble.
Cosgrove, there were no solutions, there were a few patches here and there. Car got smaller, for one.
I mean, cars got smaller until we forgot the oil crisis and started making SUVs.
highly recommend this web site for info about how screwed we really are vis a vis peak oil:
http://www.kunstler.com/
http://www.peakoil.net also has a ton of info. site isn’t well organized. hunt for the monthly reports. technically-oriented, rather than “alarmist”
The Russians have been quietly drilling super-deep wells for the abiotic oil that they’ve *known about* since 1951. They are now awash in oil, paying off their debts, acumulating cash and building smart, asymmetical weapons to counter a belligerent West.
We in the West still cling to the mid 18th-century fairly tale that a bunch of dead dinosaurs morph (while violating the 2nd Law of Thermodynamics) into petroleum products. But hey, it’s good for the bottom line to keep shutting down refineries while selling crazy to the unwashed masses [even better, the lefties and envirnmentalists eat this stuff up].
There’s plenty of good info about the 50+ years of Russian-Ukrainian abiotic oil science out there. Problem is, most of it’s in Russian and the West has been contentedly ignorant of it.
I used to buy into the Peak Oil paradigm, but my BS meter has been twitching steadily since 9/11. Sure, enough a little research into the subject poked enough holes into Peak Oil to drive a truck through.
Peak oil is a scam: artificial scarcity, high prices, public acceptance of phony wars–all leading us to cry “Help us, oh Great Leaders! Give us gas NOW–whatever it takes! Kill us some Ayrabs!”
While I don’t necessarily agree with your inferred conclusions, I do agree peak oil as well as global warming is a crock. Oil reserves are known to those in the industry however they are in politically undesireable locations. Man made global warming is a bigger farce, especially considering we are coming out of an ice age. The climate is cyclical, any earth science textbook will point out the many ice ages and periods of warming. It’s also interesting that the two biggest “problems” facing mankind today so neatly fit together (running out of the cause of the warming).
Don’t take my word for it, research it. Just don’t take the word of the MSM and interest groups with an agenda as fact. They aren’t anymore truthful than the REIC.
Abiotic oil has been disproven. It does occur occasionally in very small quantities. The vast majority of oil (like 99.99%) is of biologic origin. Has to do with different Carbon isotopes and their concentration in crude. If the concentration in crude is the same as in the natural mix of Carbon isotopes you have abiotic oil, is it the same as in plants then you have crude of biological origin. Turns out that almost all oil is of biological origin. But of course you can continue to believe in an urban legend if it makes you happy.
I think there is some merit to the “global warming” argument. However, whenever we start talking about it, I wonder to myself: what would happen to world temperature trends if we had another Krakatao or Vesuvius-like volcanic eruption?
Isn’t mother nature (mother earth?) ultimately in control of atmostpheric temperatures? Ice ages have come and gone, and will continue to do so in the future.
I’m not sure I have a conclusion to share. Just a thought process that points me in the direction of a lot of question marks….
I siphoned gas from a neighbor and with the money saved, bought pot. Turns out, I wasn’t very good at at either hobby. Another neighbor recognized me and I was forced to do 2 months yard work for the neighbor I stole from. It was a good thing as I never stole again… took another year or so till I decided I liked money more than weed.
you siphoned gas
to smoke some grass
they caught your ass.
so now, alas
your mowing grass.
we miss you
LOL — Rainman — welcome back.
“Anybody have memories of the 1970’s gas shortages?”
From WIKI: The 1973 oil crisis began in earnest on October 17, 1973, when the members of Organization of Arab Petroleum Exporting Countries (OAPEC, consisting of the Arab members of OPEC plus Egypt and Syria) announced, as a result of the ongoing Yom Kippur War, that they would no longer ship petroleum to nations that had supported Israel in its conflict with Syria and Egypt (i.e., to the United States and its allies in Western Europe).
And it worked because OPEC realized the US peaked in production in 1970 (at the very moment M. King Hubbard was being ridiculed). If we had been able to increase our own production, it wouldn’t have worked.
California had odd/even rationing in the late seventies. I remember a very upset young lady when I was late for a date because it took 2.5 hours to get gas. Her favorite tunes on the 8 track didn’t even calm her down…
Rationing actually adds to a gas shortage. The average car has approx. half a tank of gas in it. If people are afraid they won’t be able to get more, they will fill up much more often (even if they don’t really need it). This will push the average number of gallons in the tank up. If everyone had just an extra 5 gallons, times the millions of cars on the road (or parked), the oil companies supplies will quickly be depleted causing a true shortage.
Todays fuel efficient hybrids won’t change a thing, they still have a tank their owners will want to keep full just in case. As for all the SUV’s, 30 gallons in your personal storage container will keep the Pinto going for quite awhile. Disclaimer: I drive a very old SUV, paid for. I like the desert and the truck shows it, but it looks great in the parking lot next to all those shiny BMW’s and Hummers!
Commodities, whether gas or health care or whatever, will either be rationed by price, or by quality and availability. Governments can’t wave magic wands and create stuff out of thin air.
Rationing by coupon doesn’t produces shortages. It does produce a black market though.
I bought a tiny little Honda in 1973, as an exaggerated “I’m getting 50 MPG!” reaction to the gas issue. It had a two-cylinder engine and was fun to drive — roughly like an underpowered and bare-bones Mini. Also bought a Porsche 911E Targa for the weekends — it was a fairly decent gas sipper when you kept it under 100. The falling dollar got me all of my money back on that one, fortunately. What I WISH I had bought (and stored) was a bunch of late ’60s muscle cars.
This is in a n’hood of custom homes in the exurbs of my area, about 10 other spec houses have been sitting for 6-12 months (3 or 4 occupied homes, 40 lots total).
Just reduced, open to leasing, I had to link it because it looks like it was built by the infamous “Bluth Company”…
http://www.realtor.com/Prop/1073172845?lnksrc=00045
I hope people get your comment, it made my day.
I have been trying to marry Lindsey Bluth for some time so that I could be part of the Bluth Family! They’re my favorite of all time.
Michael, George Micheal, Gob, Lindsey, Tobias, Maebe, Lucille, Lucille 2, George Sr… ahhh good times!
where’s the banana stand?
The banana stand is still down by the pier, having been rebuilt after Michael and George-Michael burned it down- along with all of the cash hidden in its walls. What I want is one of the original Cornballers that were banned everywhere but Mexico. Maybe e-Bay?
Not as big as it looks, though. It has approx. 4,500 heated sq.ft. — in this market I’d spring for $450K max, IF it was on a lot with a great view. For this one, the lot looks to be unimpressive, so maybe $350K. I like Greenville. Wonder how much they want as rent.
after buying GOLDEN WEST)
this can’t be wright -comments
http://finance.yahoo.com/q?s=WB
Has Fannie Mae come clean on everything, or are we still waiting?
When has any government sponsored program come clean about anything?
Bueller? Bueller?
http://www.csmonitor.com/2007/0416/p01s04-usec.html
As US tax rates drop, government’s reach grows
52.6% of Americans receive a significant income from government.
I bet it’s closer to 80% if you include people who receive government largess in the form of tax-deductible mortgage interest and/or child tax credit. Both subsidies should be discontinued.
Fannie Mae has not published their re-statement yet. I have to wonder what is taking them so long. I have it on reasonable authority they have the data they needed at this point (actually in Dec 2006).
Its as if the “Financial Engineers” are taking the numbers to Sales (aka Accountants) and they are rejecting…”Now get back in your cube, and give me something I can sell to JULS!”
It’s called bailout and systemic risk.
Fannie IS large enough to bring down our whole economy. It had very loose lending, and is insolvent.
Thus, cover up. Allow them to unwind a lot of their positions.
they may even roll up more of the bad deals that are out there to save other banks. Example: take Wells and WaMu’s bad loans and put them into Fannie etc…
it’s great when you can have a “private” institution bail out all the other banks while not showing any statements, and yet still not being delisted!
hooray.
It’s like a financial black hole….
From Bloomberg: defaulting subprime borrowers victors, not victims.
http://www.bloomberg.com/apps/news?pid=20601039&sid=akbLYcPz6UNM&refer=home
“Moving is never pleasant or cheap, but that is the main cost to the subprime defaulter: He hands back the house, whose value has presumably plummeted, to the people who lent the money to buy it, and walks away. He rents. (Shrewdly!) In effect he bought a very cheap call option on the U.S. housing market. While he waited to see if his call option made him richer, he lived in a much nicer house than he could otherwise afford and probably wondered why rich people had become so recklessly open- handed. His behavior was irresponsible, but the markets let him do it and so it’s hard to blame him for taking a flier.”
“Am I the only one who wonders how a person who borrows money he can’t repay, buys a house he can’t afford, and then stiffs his creditors, is allowed to play the victim?”
“A more convincing victim, I would have thought, is the person with weak credit but strong resolve who stood to benefit from a subprime loan — and who now can’t get one because the market is scared of his shadow.”
“In effect he bought a very cheap call option on the U.S. housing market. While he waited to see if his call option made him richer, he lived in a much nicer house than he could otherwise afford and probably wondered why rich people had become so recklessly open- handed. His behavior was irresponsible, but the markets let him do it and so it’s hard to blame him for taking a flier.”
It is hard to fault the logic of the buyer. I just do not wish to be stuck with the bill.
Very logical. Likely got a few months free rent during the foreclosure process as well.
Sometimes wish I was cheesy enough to have taken advantage of it. If a bailout occurs, I will likely have to do some self-reprogramming.
“If a bailout occurs, i’ll likely have to do some self reprogramming”. I’ve felt this too. God it would be a stretch though. I’m so used to the pull yourself up by the bootstraps mentality and feeling that sense of accomplishment.
I also think that TPTB KNOW that, if you’re dependent absolutely on them, it can lead to your losing your will. Then they own you and you shut up. Kind of like how when welfare has become entrenched, it can absolutely wreck an individuals will. But they get numb then and don’t pay attention to what the guys who are sending the check are doing.
Is this why we had so many government jobs vs. private sector jobs created last month?
But isn’t the forgiven portion of your mortgage debt treated as income by the IRS? That’s a little more downside risk for the subprime defaulter.
“A more convincing victim, I would have thought, is the person with weak credit but strong resolve who stood to benefit from a subprime loan — and who now can’t get one because the market is scared of his shadow.”
I think little is done within the credit community to determine if a valid reason exists as to why a potential borrower has poor credit. IMO a person with a long history of stability who got nailed with poor health or some valid reason for not repaying their bills is a very different animal from the compulsive spender and habbitual defaulter, but credit scoring appears more punitive than predictive, so both are cast together.
With regards to subprime loans, taking the weakest section of society and charging the most seems like a recipe for disaster. Either a person is credit worthy or they are not, so taking persons who have demonstrated they are not credit worthy and loaning them more money than they could possibly repay, at rates higher than ususal is just plain wrong.
Mortgage credit standards have always been tough, because they needed to be to ensure the safety of the lender and the borrower.
Many thanks for posting that great piece by Michael Lewis (he’s the guy who wrote MoneyBall and The New New Thing). It articulates EXACTLY my frustrations about media portrayals of subprime borrowers (and other small-potato RE “playas”) as victims.
Michael Lewis writeups on Bloomberg are usually great reads. “Liar’s Poker” and “The Money Culture” are, too.
I don’t get it. The author says that President Bill Clinton is the guy who loosened lending standards, but I don’t remember this happening. I remember he was all about eliminating racial discrimination; did this somehow lead to looser standards? Is there someone on this blog who can fill me in on the history?
Yes, eliminating “racial discrimination” can cause lending standards to deteriorate IF the reason for the previous “discrimination” was bad credit.
For whatever reasons, it seems that bad credit is more heavily concentrated among “minority” groups. If the PTB decide that these higher credit risks (minorities) should have more access to credit, then standards will naturally be lowered.
As things progress, and funding channels are opened, prices escalate which is the starting point of the bubble. Prices rise, more people buy in (because housing is seen as a “can’t lose” investmet), credit is loosened because the value of the collateral is going up, etc., etc. That’s where you see the positive feedback loop.
Quite frankly, it shouldn’t matter at all what color or “group” one belongs to. If someone doesn’t qualify for a loan, they should not get a loan.
Yesterday Muggy posted about 10 news articles about arson, with the implication that it was related to insurance fraud to bail out FBs. Thought I’d do some correlation analysis on arson vs. median home prices to investigate the hypothesis that declining prices would be related to the number arsons. I hypothesized that, in line with the original poster’s anecdotes, there would be more arson during the only time in California since 1970 when median home prices were declining (1992 to 1996).
Data:
Data came from several sources. California’s attorney general yearly crime publication provided the number of single occupancy residence arsons from 1991 to 2005. California Association of Realtors provided median home price data from 1991 to 2005. The California Department of Finance provided data for estimated population from 1991 to 2005. Although it would have been superior to normalize the number of arsons by the number of single occupancy residences, it was not readily available. Total population was used as a proxy.
Method:
A simple correlation on the normalized arsons and the median home prices will illustrate their basic relationship. An ordinary least squares regression of median prices on normalized arsons will provide a basic statistic about home much they are related.
Results:
The correlation between the number of SFR arsons (normalized by population) and the median home price is -0.82. Evidently these are strongly related.
A regression of the normalized number of arsons against the median home price reveals that every decline of $10,000 in median home prices is associated with 1.1 additional arson per million people, or an effect size of sigma = 0.07. The result is statistically significant at the alpha less than 0.001 level.
Limitations:
I note two limitations. First, the attorney general unfortunately does not have publications online before 1991, limiting the analysis to 1991 onward. However, the correlation was statistically significant even with the limited amount of data available. Second, while total population was convenient as the normalizing factor, results might shift dramatically if the underlying average family size or the average living arrangements (e.g., probability a family lives in a single occupancy residence vs. multi-family) changed from 1991 to 2005. These assumptions were not explored.
Conclusion:
Arson appears to increase during times of falling home prices, presumably due to insurance fraud.
Appendix:
Here is the raw data, comma delimited:
year,arson,population,median
1991,2279,30459,200660
1992,2295,30987,197030
1993,2229,31314,188240
1994,2195,31524,185010
1995,2039,31712,178160
1996,2012,31963,177270
1997,1867,32453,186490
1998,1717,32863,200100
1999,1696,33419,217510
2000,1700,34099,241350
2001,1654,34784,262350
2002,1401,35393,316130
2003,1315,35990,371520
2004,1235,36522,450990
2005,1310,36982,524020
Nice work! Did you try the analysis with income/employment data?
Nice job~
Anecdotally…
A friend has a business in Newhall, Ca., and a vast bastion of el lay cops and firemen, live there.
Last year he was telling me about a veteran firefighter that started in the late 80’s, and this fuegoman told him that from 1991 to 1992, they were so many suspicious fires, many more than were reported, in his opinion~
Right at the same time the localized el lay housing bubble did it’s burst.
A mere coincidence?
No, it was late last night and I just did this while my wife was out at the gym. I could add in employment data pretty easily as another correlate and redo the regression, no problem. I thought that employment might be colinear with the housing bust, but perhaps not. I’ll check it out. I wish I could find the old arson numbers back to the 70s, then I could add in a few more regressors.
Over the weekend I was reading an article about marriage/covenant marriage/divorce somewhere in the NYT and it appeared to me that the divorce rates in the US correlated fairly closely to the housing market.
An interesting problem would be to slurp the names from property defaults off foreclosure.com or realtytrac and to see how many of those match up with a random sampling (or one sample per zip) of Realtors in the San Diego area. http://www.real-estate-agent-lists.com/databases/database_products_realtor_msa.asp?id=D286
Geez, you’d be dangerous if you had gone to college!! Just kidding, nice work and very interesting.
Hehe thanks. This is about as unsophisiticated as my econometrics gets. Anyone looking for a data hound to hire and don’t mind that I work from coffee shops except on presentation days?
good catch 2007 will be inflamatory
Will Phoenix rise from the ashes?
I apologize for being critical, because doing these kinds of analyses is a great idea. But…
All this correlation is reflecting is a general trend upward in home prices, and a trend downward in arsons, over the short time period. Notice for example that even as median prices were dropping from 91 to 96, arsons decreased! (According to the theory, they should have increased.)
As they say, correlation doesn’t imply causation, and there are a gazillion possible reasons that arsons might have trended lower over time, unrelated to home prices. (Also, it’s dangerous to put more faith in a stats program than in just looking at the data itself. I’ve been burned doing that myself.)
That’s why it’s important to normalize the number of arsons with a proxy for the total number of homes, which I did. Also, I was careful in my write-up to not claim causation, just that they are related. Of course, there could be a third variable that causes both arson and lower home prices (like a recession). Or reverse causality–that arson caused lower home prices (yeah, right).
Still, I think it is amazing that they trend at all (statistically different slope than zero). I was skeptical that any pattern was there.
No, normalization doesn’t change things. Arsons per home STILL doesn’t rise from 91 to 96.
I really think you need to plot the data and just look at it, and you’ll see what I mean.
it just doens’t mater” Meatballs
http://biz.yahoo.com/ap/070416/economy.html?.v=11
txchick, did you see any more info on that PMI insurer refusing to pay because the loan was fraudulently obtained? You are right, this may be a huge blow to the lenders.
Yesterday GetStucco posted in the Bits Bucket about the NAR getting Congress to pass the Zero Down Payment Act of 2004 and in 2005 getting legislation to allow lenders to raise the cap on increases in the ARM rates to 2 points in the first 2 years of the loan. Was this a joke? I’m too lazy to Google - I’ve been reading this blog for 2 years and I’ve never heard of these bills.
Here’s Ron Paul’s take:
http://www.lewrockwell.com/paul/paul186.html
Thanks Chilidoggg
To everyone on this blog, if you aren’t going to register Republican and vote for Ron Paul, why in god’s name not? Who among the current gang of chumps could possibly be a better choice?
Sorry….I have had my fill of politicians from Texas…..
Democrat. My working theory is all this bailout talk is Shumer, who’s bought and paid for by the banks. Nothing will come of it. Nobody wants it, no voters on either side. After very early talk of federal intervention, Obama and Dodd both eschewed bailout for “stricter regulation”, which seems to be in line with what Ron Paul is upset about in that link.
Bigger issues will play out before the election anyway… what happens to Fannie Mae, Freddie Mac, interest rates, and when does the recession hit?
Agreed that nobody wants it, except for the FBs… at least judging from the comments posted in response to the Schumer bailout article in my local paper. The comments were 100% all against a bailout.
The guy makes a lot of sense. Pity his party doesn’t. Other Repubs are going to hang him out to dry.
The clinical definition of insanity is repeating the same actions over and over, but expecting a different outcome. Kind of like voting Democrat or Republican and then expecting genuine change. As if….
Dr. Paul is 100% libertarian, but runs as a Republican as a practical matter. He is the only person I know of who consistently scores 100% on the Libertarian Party’s measure of least government / most freedom. I will vote for him for President, most enthusiastically, if he runs, and I’ll contribute to his campaign, but I won’t switch from Libertarian to vote for a candidate from either major big-government party in the primaries. (Not that anyone cares, mind you.)
Is there anybody currently serving in Congress who did not vote for the 0 downpayment? (Besides Ron Paul who appears to have not)
Zero Down Payment Act of 2004
http://thomas.loc.gov/cgi-bin/query/z?c108:H.R.+3755:
Reads like a Whos Who list of states now at the top for mortgage fraud (Georgia) and foreclosures (Ohio, etc). Isn’t BofA headquartered in Atlanta?
Never found the list of who voted how on that link. I’m sure it’s there but they certainly don’t make it easy to find.
I couldn’t find it either. It also didn’t tell me if all these “sponsors”, etc. were Democrat, Republican, or what.
The thing is, I’m absolutely CERTAIN that 0% down payment loans were available via Fannie Mae as early as 2001 or 2002. So what did this bill do that was different?
By 2001, prices in So Cal were at a “natural” peak, IMHO, and would have dropped from that level if there had been no credit bubble.
Our house doubled in price between 1998 and 2001 (San Diego). Prices were unaffordable by then.
Everything post-2001 has been 100% credit-driven, IMO.
Wow! Virginia Inventory is exploding.
Just under 4000 new listings in two months with almost 1000 new available in the last week alone. There should be another spike at the end of May when school is almost over.
High point last year was August of ‘05 with 21565 available listings and 25001 total listings. See below.
Date Available Listings Total Listings
17-Feb 12888 16562
20-Feb 12861 16725
22-Feb 12810 16595
26-Feb 13023 16774
2-Mar 12881 16337
6-Mar 13112 16609
7-Mar 13167 16696
8-Mar 13182 16746
13-Mar 13548 17199
16-Mar 13798 17670
19-Mar 14000 17909
21-Mar 14063 17966
22-Mar 14162 18109
23-Mar 14307 18302
29-Mar 14495 18580
5-Apr 14837 18686
9-Apr 15297 19271
16-Apr 16115 20247
Was browsing throught some Business Week clips for the past few months and found this, from around the start of the year:
“”In 1993, Porsche sold 3,700 cars for the year,” says Peter Schwarzenbauer, president and CEO of Porsche Cars North America. “That’s what we now sell a month.”
I wonder how many of those cars were financed by HELOCs or by fat-cat mortgage brokers. Not sure I’d be confident about anywhere near those sales numbers for 2008.
Porsche and other high end car makers have been doing extremely well in Europe too over the last few years; low end brands are doing far less good (although relavitely good lately because there is another flood of easy money flowing through Europe). EU buyers usually don’t use HELOC’s to buy a car. It’s all about the widening income gap: the bottom 95% or so of the market is slowly squeezed until the last drop, while the top 5% or so (the Porsche, BMW etc. customers) get 10-30% more every year, both from higher income and from asset appreciation.
porsche is the official car of the santa monica heloc set
I know this is only anecdotal, but this morning I was at an established independent muffler shop with a reputation for good quality work and I asked them if they could tell if we are slipping into a recession and they told me that we have been in a recession for some years now.
Got 10% down?
IMHO, we’ve been in a recession since the beginning of last year.
If you look at the government statistics (BLS), over 50% of Americans have been living in a recession since 2000 and now it is getting worse.
No way. Maybe no one is fixing their muffler because they’re all just buying new cars, or maybe all the Japanese cars are just lasting way too long. We certainly haven’t been receeding over the last few years. The last few months probably.
On yesterday’s Florida thread, there was mention of the article(s) stating that US citizens are quite bullish about house prices, but more bearish about the overall economy.
I believe this is due to escalation of financial/emotional commitment supporting the previous paradigm (with a healthy helping of cognitive dissonance thrown in).
We saw the same thing as the Tech bubble started to blow in 2000/01. Most of the analysts (even the honest ones ;)) were forecasting fairly healthy trends for no-earnings stocks even as they burned.
I think there was a paradigm along the lines of ‘these companies can’t all just collapse’, so analysts retained a set of assumptions (E.g. availability of Venture Capital) that would allow most of them to stay alive. The NASDAQ then went from 5000 to 1300 or so, just like the Nikkei went from 40,000 in the late 80’s to 11,000 (and is only back to 17-18K now, 18 years later).
Today the equivalent paradigm seems to be ‘we can’t go back to 20% down as the norm’. The reason? Even the most casual analysis of some markets shows that if credit did tighten to require 20% (or even 10%) down, then prices would fall by amounts which are, quite literally, unthinkable. (Currently unthinkable, that is.)
The assumption from this paradigm is that high-LTV mortgages will continue to be available, at a price but not too high a price to crush buying interest. The ’soft landing’ scenarios depend on this absolutely, whether they recognise it or not.
IMHO it’s if this assumption starts to break down, or maybe merely gets called into question, that the real panic and political pressure for a bailout would start to build.
(And I find it interesting that both the 2000-Tech and the 2007-RE industry assumptions concern continuing credit availability.)
Today the equivalent paradigm seems to be ‘we can’t go back to 20% down as the norm’. The reason? Even the most casual analysis of some markets shows that if credit did tighten to require 20% (or even 10%) down, then prices would fall by amounts which are, quite literally, unthinkable. (Currently unthinkable, that is.)
This argument might hold some water if prices hadn’t just finished RISING by unthinkable amounts over the past few years. Why is that totally plausible, whereas a drop of a similar scale is impossible?
“Unthinkable” to the RE analysts, not me.
Nice post, ajh.
A related assumption that may be proven wrong is that house prices must fall gradually, over a long time period. I think this ignores the effect lenders have on the market. It’s true that selling a house takes time, etc., but credit can dry up in a heartbeat, as the subprime rout has already shown. And if liquidity disappears (to the degree that you suggest), prices will drop very quickly, as set at the margin by desperate sellers. This bubble was all about liquidity, after all.
Very nice, indeed!
I always loved the silly notion that otherwise intelligent people entertain that certain things cannot happen because the consequences would be too dire. WTF kind of reasoning is that? The best way to guarantee that the worst *will* happen is to pretend it can’t.
No way should the government be subsidizing zero down homeloans. Some people are perpetual moochers. I tried to help a girl who was in an abusive situation, get out. She got health care for her and her 3 girls (born to the same guy over 14 years-however never married him), $400 food stamps a month, someone even rented her a trailer for $325. She got $3800 back in taxes through the unearned income, even though she did not pay any. When she was with this guy she made $12,000 and he made $14,000. Not big money, but Northeast Ohio is cheap to live in. Many houses for sale under $80k. She blew the money from taxes on tons of miscellaneous things. She did buy a cheap vehicle. They ate out 4 or 5 days a week. She had bad loans on her credit report and a legal aid from the courts was working to help her clear them up. Long story short. She skipped town and went back to him leaving behind a whole trailer full of clothes, furniture, etc. that came from the Waystation (a nonprofit help place). She left behind debts on credit cards, bank loans, from an eviction when they didn’t pay 4 months rent, and more. A lot of people who are struggling are doing so because they know they can get welfare somewhere. I really got my eyes opened with this incident. I’m sure with what her children learned that they will be 3 more statistics on our roles and now there are 5. Now elderly or someone with medical problems is a whole other story. I guess it doesn’t pay to not buy, and not eat out when the cash flow is small. Except now I have a house that has a 15 year mortgage that will be paid off this summer a year early. Anyone else sick of sacrificing for deadbeats?
You are lucky she wasn’t family. I have an entire pack of in-laws like that. I am certain that my husband and I will have to start supporting them at least two of them in about 10 years because we just are not cold enough to let them be on the street. (Though I am morbidly curious as to what happens when a grossly obese person becomes homeless — would the weight loss actually prolong my in-laws’ lives and help with their diabetes since at this point they still act like they’d rather go blind and lose limbs than give up sugar?) I have already looked into low-income apts and am trying to figure out how to provide a supplement to whatever food assistance they get.
Find them an apt. with a garden (and buy them some canning supplies, if you think they’d be remotely motivated to can food).
If you’ve got a vegetable plot and you’re starving but can’t be bothered to garden, well then, that’s the end of it.
Hate to poke holes, but… someone like that will likely sublet to half-a-dozen other lowlifes plus deal drugs out of the apartment. When the place gets thrashed and the cops bust everyone, guess who becomes liable and/or negligent?? Best to give them a few dollars once in while and stay the hell away.
Had a similar thing, but much smaller scale - hired a gal who was soon to be homeless with 2 kids and a dog - hired her to help paint a house. I even bought the kids/dog groceries and fronted her some money. She was always late for work and got very little done, then decided it was easier to move in with her mom - leaving me with a half-painted house. I didn’t lose much money, but it burned my attitude some. Found out later this was how she skated through life.
Does anyone have an explanation on why banks and private equities would buy Sallie Mae and what it means?
Also why anybody would want to buy Fremont and what it could mean for lending going forward?
Thanks.
The have customers with cash to burn and they (the banks) want to make a very fat commission. The big guys have greater fools they cultivate for these occasions, just like retail brokers do.
Is it really as simple as that Tulkinghorn? That they’re taking advantage of really stupid people who have a real lot of money? I wish it were! But doesn’t it feel like some sort of set up being played on the rest of us? Am I being too paranoid?
God I hope you’re right. Idiots with deep pockets. Hope it’s as simple and non-evil as that.
Actually, what I had in mind is worse - these greater fools are fiduciaries: pension plans, hedge funds, etc. I hope I am wrong about this.
And why a sale of 2.9b $ of subprime would result in only
100 million of pretax loss (3.4%)
“April 16 (Bloomberg) — Fremont General Corp., barred by U.S. regulators from offering mortgages to borrowers with poor credit, said it agreed to sell $2.9 billion of subprime home loans to an unidentified buyer.
The company is selling the mortgages, the majority of its remaining subprime loans, at a discount and expects to record a $100 million pretax loss as a result…”
“…Last month, Fremont said it entered into agreements to sell $4 billion of subprime loans in transactions that would result in a $140 million pretax loss. The company didn’t say whether the loans it’s selling now were included in those agreements.”
http://www.bloomberg.com/apps/news?
pid=20601087&sid=ajyC5gsgQlvg&refer=home
Did they only sell the good part?
Yes. We’re getting to a layer here that is scary, perhaps because I don’t understand it. Plus, a lot of it seems to be happening behind closed doors, out of view.
The price drops, refreshing of MLS properties, crappy loans made, foreclosures, horrible legislation (the 2004 no downpayment thing passed by Congress), all that was easy to follow.
But I feel like we’re in gray zone now where things happen behind the scenes that can affect us all.
I’d love to know who’s buying what, why they’re buying, and what they plan do with it. What is in it for them?
A Saudi just bougt some US banks? Or part of them anyway. See, it’s too wierd, why is all this crap suddenly hot property?
I’m with you, seattle, this is all feeling surreal. Another example, homebuilder stocks seem to be magically levitating. I wish I knew whether it’s just idiots bidding up the prices, or it’s big boys in the know, with inside knowledge of bailouts or something. I have long-term puts on the builders, but I’m not real confident in them.
And so begins the great stock run-up of late April, to make my APR $35 CFC, WFC, and NDE puts worthless.
Yeah, this is incredible. Absolutely no rhyme or reason for this runup, and still it goes up, up…. Is the index futures tail wagging the individual issue dog?
For the record, WFC has a very low time-component premium in options pricing because their price variability is extremely low. Today’s shift of 75 cents is a huge outlier.
Yes, I have only CFC puts out of the 3 you listed. My gut feeling is that WFC won’t be ripe for a fall until CFC and NDE keel over.
Look at the brighter side - our future bets will pay off that much more (assuming counterparties stay solvent… hehehe)
Great time to buy index puts, though… just that much farther to fall.
From the “predictable as hell” dept: Northern Virginia jurisdictions raise property tax rates as assessments drop.
Much of N.Va. to Raise Tax Rates
Housing Slump Causing Election-Year Dilemma
By Kirstin Downey - Monday, April 16, 2007; Page B01
After seven fat years, elected officials in Northern Virginia are grappling with their first lean one, and tax increases are looming almost everywhere.
Swollen by surging real estate assessments, area budgets have ballooned, rising sharply from a cumulative total of more than $3.7 billion in 2000 to more than $6.3 billion for the coming fiscal year. Loudoun County’s budget tripled in that period, Alexandria’s rose 76 percent, and Fairfax County surpassed the $3 billion mark.
“The good times are over,” said R. Scott Silverthorne, a nine-term veteran of the Fairfax City Council, which voted Tuesday to raise real estate and personal property tax rates. “This is the first time in recent memory that we have had a slowdown in the real estate market. This is a challenging era. It’s the most difficult budget we have had in 16 or 17 years.”
http://www.washingtonpost.com/wp-dyn/content/article/2007/04/15/AR2007041501141.html
That’ll encourage people to buy RE. NOT. This is going to happen everywhere I bet. They practically emptied whole towns in upstate NY with these kind of property tax increases.
I wish I was not paying such close attention to this whole mess. It is astounding the incompetency all along the way. And it has made me lose faith (what little was left) that there are any politicians at any level who have a brain.
I think they have brains. Now, souls, that’s another thing…
Stuff like this makes me sick… state and local governments have just enjoyed an enormous boom in revenue and as soon as it starts to diminish they have to raise rates. I guess they expected the good times to keep rolling forever. Government at all levels is so short-sighted.
How come nobody is latching onto the tidbit of news that the bailout folks want to pump money into the “nonprofits.” Remember, just a mere 9 months ago, these same kinds of nonprofits were playing the gift downpayment grant scheme that got exposed. And, now, we are going to give them millions of dollars to educate the bad people that they helped get into houses. The only scam on par with the REIC is the nonprofits, so somebody better wake up real quick…
The government moves at the speed of paint drying. In Ohio 4 years ago they were going to put predatory lending laws in place and make all mortgage brokers and loan originators go through classes and get licensed through the state. Haven’t seen anything yet.
You’re talking about Ohio Senate Bill 185. It was passed last year and went into effect on Jan 1, 2007. Too little too late, it seems.
This about sums up the “*whew*, glad THAT’s over” mentality that permeates California real estate:
San Luis Obispo Tribune:
“Biz Buzz: Median home price dips again”
http://www.sanluisobispo.com/102/story/16500.html
““I have seen nothing to date that makes me think we aren’t in a stable and gradually improving market,’’ said Beverly James, a broker with the Landmark Co. in San Luis Obispo. She notes that the March DataQuick figures showed very little change in the total number sold.
Lenny Jones, a Realtor with Jones Goodell & Associates in Arroyo Grande, believes the county will see a “continual decline of the median home value for 2007.”
But Jones said the buyers and sellers are out there.
“With the tax deadline almost behind us and the spring weather, activity and sales will be picking up and continuing into the summer months,’’ he said.”
Ah - “tax deadline” added to the mix — that’s a new addition to the pantheon of seasonal-related excuses for lack of buyers interest we’ve seen - including:
winter
Super Bowl
bad weather
March Madness
and now, April 15
I keep waiting to see a “the weather has been too nice for people to look for houses.” People had better hustle to get their houses before Memorial Day and summer vacations, I guess.
Beverly is right, I find the housing market to be improving substantially. I will rent for another year while the housing market continues to improve.
LOL
Reminds me of Bill Murray in “Groundhog Day.”
Can someone help me- I am trying to find an old link regarding people letting builders use their line of credit to build a development. Usually they are left with just an unfinished house or empty lot. Was this in Colorado or Florida?
Just got wind of a group that will be coming thru San Diego pitching this. Want to gather evidence to warn some people.
I am searching but not having much luck……all these stories start to run together…hard to keep track of.
You’re thinking of the Construction Compliance debacle down in Florida, I believe. The Herald Tribune has done a whole series of articles on that:
http://tinyurl.com/2ok7z5
Great- thanks.
Wasn’t there also a group of people in Virginia — minorities — who were suckered by someone they trusted — maybe a preacher or someone in their church, into doing this? Sorry I don’t have the article at hand. It was not that long ago — late Fall, I believe.
REIC “economists” can take a lesson from White House spokesperson, whom I paraphrase: ” I can’t be held accountable for something I said earlier when it turns out later that I didn’t know what the hell I was talking about “. Priceless.
Much of N.Va. to Raise Tax Rates
Housing Slump Causing Election-Year Dilemma
By Kirstin Downey
Washington Post Staff Writer
Monday, April 16, 2007; Page B01
After seven fat years, elected officials in Northern Virginia are grappling with their first lean one, and tax increases are looming almost everywhere.
Swollen by surging real estate assessments, area budgets have ballooned, rising sharply from a cumulative total of more than $3.7 billion in 2000 to more than $6.3 billion for the coming fiscal year. Loudoun County’s budget tripled in that period, Alexandria’s rose 76 percent, and Fairfax County surpassed the $3 billion mark.
Now, however, with the housing market in a slump, politicians are caught between raising taxes or reducing high-quality services that residents have come to expect. Even though many officials are up for reelection this fall, they are choosing tax increases…
http://www.washingtonpost.com/wp-dyn/content/article/2007/04/15/AR2007041501141.html?hpid=topnews
Reminder for Tax Day
A lot of people on this blog have substantial savings for a downpayment once prices come back to normal. So, in honor of tax day, please remember that this is also the due date for first quarter estimated tax payments. That cash generates revenue (pretty much a whole month of living expenses for me) and you might need to make estimated payments to avoid interest and penalties. Check out irs.gov under forms and publications - 1040-ES is the form you are looking for. There is a worksheet to help you calculate what you think you might need to pay, but I didn’t bother and the calculation is NOT sent in to the Service, just some basic identification information and a check.
Tax Jokes
Treasury Secretary Henry M. Paulson, Jr. urged leaders of all African nations receiving U.S. aid to “hold off” on cashing their humanitarian aid checks until after April 17, when the U.S. government is expecting “a whole bunch of money to come in” from 2006 tax returns.
“I know the checks we sent are dated for the 11th, and I’m pretty sure they’ll clear anyway, but to be on the safe side, please wait until the 19th or 20th,” said Paulson on Tuesday, adding that the U.S. is experiencing an “extremely minor” cash flow problem at present. “The Rand Corporation told us they would hold our check for $7.8 billion until the end of the month, so unless they’re being dicks about that, all this probably isn’t even a big deal. But you never know.”
The Onion
Good point. Thanks.
Ok, here it is. Finish the scenario.
2057 History Class:
“It all started as small financial problem in the market for buying and selling houses. For the previous ten years, people had bought houses that they couldn’t afford and could not pay their lenders. This spread throughout the world economy of the time…”
From this morning’s WSJ: “It doesn’t seem like there’s anything to stop [the markets] right now” from marching upward, said Todd Leone, head of listed trading at Cowen & Co.
It is incredible what passes for analysis on Wall Street. The market goes down a few days and “It’s time to batten down the hatches, take risk off the table, get defensive, ya-da-ya-da-ya.” The market goes up a few days and you get statements like the one in the WSJ above. It doesn’t matter whether it’s stocks, oil, gold, bonds, the US $ or anything else. However an asset has trended over the last couple of days (or even the last couple of hours) is how it will trend going forward. And folks are paid six and seven figure salaries for this BS.
I am happy to see these type of statements. As a trader that believes we are close to an S & P top (60 points away) and as there is more bullish media reports than I can possibly read, there is a greater likelihood of a crash than a sustained rally. Rule 1) The market will do what it can to cause the greatest amount of pain to the most amount of people.
Where will the buyers come from? What unexpected earnings shortfalls are going to occur?
Foreigners have stopped buying in the US markets and Americans are broke.
Rule 1) The market will do what it can to cause the greatest amount of pain to the most amount of people.
The market’s gonna pit David Lereah against Michael Bolton on American Idol?
Its different in Canada !
http://www.cbc.ca/money/story/2007/04/16/homesales.html
It’s different everywhere!
Its different in Canada ! Home prices continue to escalate. Not enough land and trees.
http://www.cbc.ca/money/story/2007/04/16/homesales.html
Tweedle, how long can the West hold up the Canadian economy? When do you think the Canadian dollar will tank?
In other news, hot water heaters are big business in Canada. Yeah, you read that right… hot water heaters !
http://www.cbc.ca/money/story/2007/04/16/ue-alinda.html
–
Housing Mkt Index DOWN & All Three Components Also DOWN
HTTP://WWW.NAHB.ORG/GENERIC.ASPX?GENERICCONTENTID=529
More of the same as the last month and even worse than I expected.
Index at 33 (= Bad) . Prospective Buyers at 27 ( = Horrible conditions)
Housing hasn’t even started sliding down the cliff. How could it have already bottomed?
Jas
So obviously Dow is up 108 points…..
Here’s the reason (CNNFN):
“Retail sales strong in March
9:52am: Government report on spending at retailers tops forecasts; weak February readings also revised higher.”
We’re going to shop ourselves to prosperity.
Mattel went up because the rest of the world is buying Barbies now. Barbie Doll sales down 21% in the US last month. I can’t believe I’m paying attention to this sh%t but isn’t that a way low number for US sales? Are American kids suddenly only getting one Barbie apiece instead of 5?
That would mean they are getting 4 Barbies instead of 5. But my birthday is this month, so sales should go WAY up. Look for April 24th numbers.
check the demographics of U.S.A.
parents are buying their girls, BRATZ.
reminds me of a GREAT Robben Ford song:
“Think I’ll give up on livin’
And go shoppin’ instead…”
Jas - that’s a pretty impressive (and for a bear, encouraging) drop.
Ouch. This must hurt:
http://tinyurl.com/2gmshn
“Free MLS listing - Iggys House
Iggys House offers a valuable service for owners who want to sell their homes themselves: free access to the multiple listing service (MLS).
According to Joe Fox, founder of Iggys House, some 1.2 million people went the for-sale-by-owner route in 2006. About 800,000 of them were successful. “The new service is a no-brainer for people like that,” he says. “It will open you up to more exposure.”
He adds that clients have trouble accepting that this Iggy’s is a free service. “People love free,” he says, “but they keep asking about the catch. There is no catch.”
Sellers are free to load up their listings with as much description, data, and photos of the property as they care too, including video tours.
Fox hopes, but does not require, that clients who use the free service will migrate to his other site, BuySide Realty, which acts like a traditional real estate broker except that it rebates 75 percent of its commissions back to buyers at closing.”
Looks like Realtors should start lobbying for Endangered Species status.
“Looks like Realtors should be lobbying for Endangered Species status”
Well, if they do, it appears they’ll get. It looks like Congress gives them whatever they want, no matter what it is or how much damage it will cause (No money down loans? G-d I didn’t know that before today).
Mish had a recent post discussing this company and another company that assists buyers looking for a home, further endangering realtors. Fine with me.
How does he make his money?
California foreclosures near record levels
By David Streitfeld, Times Staff Writer
12:25 PM PDT, April 16, 2007
The number of Californians losing their homes to foreclosure rose in the first three months of the year to the highest level in a decade, a real estate information service said today, providing grim evidence that the shake-out in real estate is nowhere near over.
Foreclosures totaled 11,033, up 802% from the placid levels of early 2006, according to DataQuick Information Services in La Jolla. Foreclosures peaked at 15,418 in third-quarter 1996, at the tail end of the last big slowdown in the state. They bottomed out at 637 in the second quarter of 2005, as the most recent boom was cresting.
http://www.latimes.com/business/la-fi-forclose17apr17,0,5052032.story?coll=la-home-headlines