Defaults Up And Will “Probably Even Increase Some More”
Dataquick reports on California. “The number of default notices sent to California homeowners last quarter increased to its highest level in almost ten years. Lending institutions filed 46,760 Notices of Default (NoDs) during the January-to-March period. That was up by 23.1 percent from a revised 37,994 for the previous quarter, and up 148.0 percent from 18,856 for first-quarter 2006, according to DataQuick.”
“Last quarter’s default level was the highest since 47,912 NoDs were recorded statewide in second-quarter 1997.”
“‘Defaults tend to happen after a certain length of time and today’s activity reflects a peak in the number of home loans made back in the summer of 2005. Additionally, the loans being made back then were riskier because of the subprime activity, as well as higher appreciation rates. It’s easier to make a loan when the security for that loan is going up in value, than when values are flat,’ said Marshall Prentice, DataQuick’s president.”
“Most of the loans that went into default last quarter were originated between April 2005 and May 2006. The median age was 15 months. Loan originations peaked in August 2005. Adjustable-rate mortgage use for primary purchase home loans peaked at 77.8% in May 2005 and has come down since.”
“About 40 percent of homeowners who found themselves in default last year actually lost their homes to foreclosure in the first quarter. A year ago it was nine percent.”
“The first-quarter numbers were a record in San Diego, Sacramento and Contra Costa counties.”
The Union Tribune. “A record 433 owners lost their homes in San Diego County to foreclosure last month, more than six times the March 2006 figure, DataQuick reported Monday.”
“The previous record was 337 in March 1996 at the tail end of the 1990s real estate recession, after which foreclosures dropped to as low as just four in December 2004.”
“Last month’s defaults locally totaled 1,395, about 400 less than the record 1,794 set in January 1996 and more than twice the 591 reported for March 2006.”
“On a quarterly basis, San Diego’s defaults totaled 3,931, up 156.4 percent from a year ago, when the figure was 1,533. Los Angeles’ total was 8,843, up 110 percent.”
From News 10. “Some 3,400 Sacramento County property owners faced foreclosure in the first quarter of 2007, up nearly 200 percent from the same period last year. In sheer volume of defaults, Sacramento County is in the top ten nationwide.”
“The figures from Foreclosures.com represent filings from lenders against homeowners who’ve defaulted on their loans. The hardest-hit county in California based on percentage was Yolo, with a nearly 400-percent increase from the year before.”
“San Joaquin, Solano and Yuba counties all experienced at least a 200-percent increase in defaults.”
From Reuters. “The likelihood of default was highest in inland Sacramento, Riverside and San Joaquin counties, where prospective first-time home buyers rushed in during the housing boom in search of relatively affordable housing.”
“‘It’s hard for me to say whether or not the damage is done in those areas,’ said economist Alan Gin of the University of San Diego. ‘It probably won’t be until 2008 before we seen some improvement,’ Gin said, referring to California’s default trend.”
The LA Daily News. “From December through February, 401 notices of default were issued to Santa Clarita Valley homeowners, compared with 193 for the same three-month period last year, according to DataQuick.”
“The more than twofold increase in notices of default, the first step in the foreclosure process, comes as home prices are faltering. ‘Yes, it’s up, and it’ll probably even increase some more,’ said Larry Gasinski, president of the Santa Clarita division of the Southland Regional Association of Realtors.”
“The area with the biggest increase in notices of default was the 91355 ZIP code, southern Valencia, which went from nine in December through February last year to 47 in the same period this year.”
“What appears to be driving the increase in foreclosures is that home values are not rising, DataQuick analyst Andrew LePage said. ‘Take away home-price appreciation, or ratchet it down or even make prices negative, and all of those forms of (economic) distress start to result in increased foreclosure activity,’ LePage said.”
The Record Searchlight. “As in the rest of the nation, foreclosures are up in Shasta County. The number of homes in some stage of foreclosure in Shasta County jumped 22 percent in 2006, according to RealtyTrac.”
“Foreclosure Specialists’ Mike Van Bockern estimates their business is up 20 percent from a year ago. When home values were going up 20 percent a year, owners could sell or refinance to bail themselves out of trouble. But home values have stagnated, so the money is no longer there, Van Bockern said.”
“Van Bockern has posted 152 sales notices in both counties this year, compared with 56 notices in both counties in the first three months of 2006.”
From Contractor Magazine. “Home builder Lennar Corp. has sent letters to its subcontractors in Southern California, Nevada and other states, telling them to cut their prices by as much as 20% and resubmit invoices for work not yet paid for.”
“The letters said the subcontractors have a choice of either cutting their invoice prices or being shut out of bidding on Lennar projects for the next six months. In some cases the work has already been completed.”
“‘Basically, they sent a letter out that said as the customers are paying us a lower price for our homes, we must pay you lower price for services,’ said an Orange County plumber with more than 200 employees.”
“‘So they gave us a choice of either reducing all unpaid invoices under current contracts by a percentage that varies from contractor to contractor, but it’s a range of 3% to 20%,’ the contractor said. ‘This is for work that we had already been lowest bidder on and it was ongoing like the fourth or fifth phases of the project. Lennar already demanded a 5% decrease from the previous phase, so this is the second time they’ve come to the well.’”
The Daily Pilot. “Newport-Mesa’s housing trends are mirroring the rest of the county’s slumping market with home sales dropping compared to last year.”
“‘The amount of sales have absolutely gone down and in my opinion it’s two-fold: There is more inventory and also because the lenders have tightened up a lot of the qualifications for first-time buyer programs as well as tightened up on the zero-down programs,’ Costa Mesa real estate agent Valerie Torelli said.”
“Because of the depressed sub-prime mortgage market, many lenders are being more cautious with the offers they give to entry-level home buyers, Torelli said. She’s had escrows delayed because the borrower had to pay off part of his loans as part of a ‘rapid rescore’ so his FICO score would improve.”
“‘Actually, loans got pulled and everything,’ Torelli said. ‘They tightened up and got real crazy…because they changed the guidelines right in the middle of when loans were being processed.’”
“In some areas of Newport-Mesa the difference in the median price changed drastically. ‘One of the drawbacks in drilling down the median price on the small city level in a high-end area is you can get everything from the older, modest small condo to the…grandest of houses,’ DataQuick spokesman Andrew LePage said Friday. ‘It can do funky things with the median.’”
“In Newport Coast, the median price dropped over 42%, but LePage said such big declines should be looked at cautiously.”
‘The number of of foreclosed homes in California sold at auction has increased significantly in the past six months. More than 5,300 California homes in foreclosure were sold in March, according to a foreclosure listings company. The sales last month represented a 27 percent increase from February, and a 264 percent increase from six months earlier.’
‘Sean O’Toole, chief executive officer, said foreclosed homes account for 15 percent of all home sales in the state. ‘This isn’t just a story about failing subprime lenders and their customers,’ he said. ‘At the current pace, foreclosures will be a significant part of the real estate economy, a fact which bears close scrutiny even in areas not yet affected.’
‘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. ‘I figured they’d go up,’ said DataQuick analyst John Karevoll. ‘I didn’t figure they’d go up this fast.’
‘O.C. new-home inventory grows’
Karevoll is just one more REIC knucklehead who is suprised/shocked at how quickly RE has deteriorated in a “strong” economy.
That particular meme was lost very quickly, RE doesn’t go down without losses in 2 job sectors… except for this time!
I find it phenomenal that Wall Street essentially believes that there won’t be any financial settling of accounts for any of this. The prevailing attitude is that the sub-prime mess has been cleaned up, all the “toxic waste” CDOs have been dumped into the Asian markets, and that the banks and investors will walk away unscathed. Unbelievable, but that’s clearly what The Street believes.
or rather, wants YOU to believe.
No they believe it ex-nnvmtgbkr. Had a conversation with a high-ender this weekend at a social event. They believe…
A case of drinking their own KoolAid, aye?
Drowning in it…
I can TOTALLY see that. Same with all those realtors, mortgage brokers, etc. Same as with the “new economy” dot-commers before them. The very people that should know better… don’t want to know better.
Just another reason why this is going to be sooooo bad.
Had a conversation with a high-ender this weekend at a social event.
A lot of so-called Wall Street ‘high-enders’ are little more than glad-handling deal-making schmoozers with social connections who have little feel for markets - corporate politicians as clueless as many high executives at a typical corporation.
In addition, many are underlings who listen to the resident guru who tells them to calm down and take another sip of the nice kool-aid. Everything will be just fine …. till all of the guru’s have decided to quit milking the market and moved their holdings to a safe haven.
One of the ***BIG*** clues should have been when they had to recalculate (or figure out a new way to calculate) the affordability index in California because *cough* less than 10% of Californians could afford the median priced home.
I might believe that some on Wall Street are stupid enough to believe this but I doubt all of them do. There are a lot of political puppets who manage to squawk a lot without rocking the boat. They see and they know but they pretend that they don’t. They are thinking further down the road than most Americans are and they won’t admit anything until it all totally crashes. They stay positive to prop up everything else.
I think GroupThink takes hold in these organizations and the participants truly believe in the dogma.
The real estate people (brokers, lenders, appraisers, etc) truly believed RE prices would always go up, that it made sense to continually cash out equity and so on.
The Wall Streeters truly believe their crap as well.
GroupThink rules; Never underestimate its persuave powers.
I agree about GroupThink, nice comment.
try ‘target fixation’ at wiki
‘I figured they’d go up,’ said DataQuick analyst John Karevoll. ‘I didn’t figure they’d go up this fast.’
So he’s been watching the numbers increase about 20% each month for the last 6 months and all he could analyze out of it was that they were going up?
Let’s see:
November 2006: “Up 20% from last month. Seems to have reached a permanently high plateau”.
December 2006: “Up 20% from last month. Seems to have reached a permanently high plateau”.
…..
March 2007: “Up 20% from last month. Seems to have reached a permanently high plateau”.
April 2007: “Up 264% from 6 months ago. Wow!That’s a lot. I didn’t expect that!
Old timer and Wall Street Survivor reminded me with
“The Trend is Your Friend”…. Discards are the BS and the emotion.
Works every time, for me
“…..433 owners lost their homes in San Diego County to foreclosure last month……foreclosures dropped to as low as just four in December 2004.”
So, between December 2004 and March 2007, foreclosures increased 100 fold? That’s two orders of magnitude! Like the difference between a 5.0 earthquake and a 7.0….minor damage compared to major destuction.
Backstage,
I like the earthquake analogy.
7.0 can do damage…
But an 8.0 is total carnage.
9.0 levels everything.
Let’s see… 20%/month compounding…
Hmmm…. takes us a year to get to a 8.0. But wait… You would then have foreclosures exceed sales! Yep… massive disctuction.
I see nothing slowing this down. Oh, false “bull traps”, but no true slowdown.
Got popcorn?
Neil
“‘The amount of sales have absolutely gone down and in my opinion it’s two-fold: There is more inventory and also because the lenders have tightened up a lot of the qualifications for first-time buyer programs as well as tightened up on the zero-down programs,’ Costa Mesa real estate agent Valerie Torelli said.”
First time buyers are the oil that keeps the rest of the chain moving. Without them, no one trades up, trades over or trades down for retirement.
Put a fork in it.
“They tightened up and got real crazy”
Real crazy? Oh, I don’t know whether to laugh or cry at the stupidity of this statement. Lenders haven’t even tightened up to what we would call traditional underwriting standards, yet this gal thinks they’re going “real crazy”. Yeah, not wanting to lend their money at 100% with little or no documentation is “real crazy”. What’s wrong with you lenders?!! Jeez!!
Doesn’t it seem odd to be talking about first-time buyers and zero-down financing in an area like Costa Mesa? Correct me if I’m wrong, but a typical Costa Mesa home is what? 900K?
Tough to say what a “typical Costa Mesa home” is (I live in Costa Mesa). I swear that they must not have had zoning laws here for a long time, because you get some incredible swings just driving down the same block (light industrial, apartments, SFRs, 2-on-a-lot, all in a variety of conditions), let alone the differences between the east side (more upscale residential) and west side of Costa Mesa. But, if you’re looking at say a 4 bedroom, 2 bath stucco ranch house on a 6,000 sq. ft. lot built in the 1950s in an average neighborhood, you’re probably looking at around $750K. Put that same house in a slighter better neighborhood in Costa Mesa, and you can probably add another $100K. It is truly amazing. I look forward to these houses dropping 50% or more in price.
I grew up in OC and the idea of anything there vlued at over 300k is just beyond me. I can’t wait for the county to file bankruptcy again.
I agree for the most part. Clearly certain areas (Newport Coast, Lido Island, Laguna Beach, Villa Park, etc.) justify higher prices (just as the barrios in Santa Ana, Westminster, Garden Grove, etc. justify much lower prices), but for the average home in an average neighborhood here, $300K seems about right.
The family home was in Villa Park then we moved to HB. My mother is still there. I beg her to get out every time we talk.
My aunt and uncle (he was a precious metals broker) lived in Villa Park; I grew up in Huntington Beach. Houses in VP are relatively big, and they are on very large lots (by Southern California standards).
I loved Villa Park.
Welcome to California. I know a couple who tried to buy for around $750K, first time buyers, 100% financing, deal fell apart at the last minute.
They should be thanking their lucky stars, but won’t be I’m sure. No doubt they are disappointed their “sweet deal” fell through like that.
I see homes listed in the LA Times for in and around 900K accompanied by “great starter” or “great for a first-time buyer!” or some such crap.
‘First time buyers are the oil that keeps the rest of the chain moving.’
I guess now we can call them Last time buyers. As they filled in the low rung, everyone else jumped up but generally spent the equity that had allowed the jump, and failed to secure the necessary wage increase to stay there. So now that the bottom rung is being expunged it’s not like the rest will simply drop back down a notch.
People will literally (figuratively) plummet from all heights of the ladder and have to start the climb from underwater.
From Contractor Magazine. “Home builder Lennar Corp. has sent letters to its subcontractors in Southern California, Nevada and other states, telling them to cut their prices by as much as 20% and resubmit invoices for work not yet paid for.”
This is just plain rotten… 1st get the work done and then stiff the contractor.
the contractors should get the money for the work done, and swear never to work for Lennar again. Lennar is just playing dirty by threatening to lock them out of future work, what’s not to say they’ll come back 3mo. latter and ask for another reduction.
What gets me is that these builders already have a 50%+ margin on these Mcmansions, and rather make a reduction to the CEO’s package they are all too willing to $crew the little guy…
got cash?
I wonder if that means they’ll refund 20% of recent sales they already made to people. Hey they’re asking for a discount for work completed, they should give a retroactive discount to recent buyers. Of course, they won’t, but still…
This is sooo similar to the way it played out in the early 90’s. Now wait for the trickle down. If you’re lucky enough to still have your construction job in the coming months, you’ll start to wonder if your lucky or not. Anybody who has been making money in construction down there has been “piecing”, because everyone knows that hourly gets paid squat. Watch as you start to hear about these guys complaining that their piece prices get cut by up to 50%+. I saw this happen in the early 90’s. Guys were working 60 -70 hours just to make what they used to make in 30 hours. You don’t like it? tough sh+t, we’ll find someone hungry enough who will.
Oh, it’s only beginning…………
“it’s only beginning…………”
That’s why I’m counting on being able to have a new house built in 2008 for far less in materials and labor costs, and builder profit, than I could have had the same house built for in 2005. I’m guessing 1/3 less. Who knows — maybe a little more than that.
Why not build it for even less in ‘09, and even less than that in ‘10.
Got patience?
Lennar is simply starting to do the same thing Wal-Mart and the auto makers have been doing for some time. Squeeze your suppliers because there’s no other channel in which to sell your product or your labor. The alternative is for those suppliers to find another line of work.
There’s a difference, Bill. Wal-Mart buys commodity manufactured items. Lennar will try to do this with building trades, but it won’t work over the long haul. Poor quality workmanship is ‘build right in.’
Please recall that the building industry likes to use bankruptcy as a business strategy.
Maybe WalMart can have modular homes built in China and have them shipped over here.
Has Lennar been through bankruptcy before? Arent they one of the biggest builders and been around for a long time? I have always heard their developments were some of the more well built ones as well. I figure some of the bigger builders can get away with this since they can still keep building and building through a downturn and the contractors must know this.
The difference is that (to the best of my knowlege) while WallMart squeezes their suppliers for the prices of products that they want to buy from them, they don’t try to retroactively lower the prices of materials that have already been delivered.
It’s about time someone with muscle sticks it to the subs! They have been charging way too much for shoddy work by illegal aliens. But, they have recourse. File ‘mechanics liens’ against Lennar’s property or units or don’t work for them anymore.
I happen to know some of these contractors working for Lennar in California. What the contractors are doing is that everything becomes a change order; everything the phone rings, they bill like attorneys. This is in fact costing Lennar more.
Regarding Lennar asking subs to discount prices:
I have been in the trades before and I will tell you, if I was the lowest bidder for Lennar and they came back after signing contracts to pay us, and asked for a 20% reduction in pay for work completed, I’d laugh my ass off while I’m at the counter filing liens. Let every contractor Lennar subs with file liens and or form a class action lawsuits and see who’s stock price gets hammered.
Paybacks are a _ _ _ _ _ and those subs will remember this.
Every potential homeowner should boycott Lennar until they pay their subs under existing contracts.
Every potential homeowner should boycott Lennar because there is a good chance the house will fall apart in ten years. Man, the quality of workmanship I have seen in these bubble homes is downright embarassing. I should say, complete lack of quality workmanship. Sorry, but if I’m going to pay $500K for a condo then the doors and trim should be level and flush. Disgusting.
Bad construction to begin with, but trying to screw the subs is like sending back food at a restaurant. You’re not going to want to eat what comes back. It’s insulting, and you better believe that the guys on the ground pounding nails are getting hurt financially.
If you think it was shoddy construction before, wait to see what happens when the subs are dog tired for working 70 hour weeks to make up lost revenue, or are simply ticked off to no end for being screwed.
You think the quality was bad before? Now those contractors are really unhappy and hate Lennar…
thanks CA Guy,
I will be sure to ask when I go in Open Houses.
Me: So you want a $500K for this Lennar house.
Realtor: Yes its Lennar and priced to market.
Me: You do realize how badly Lennar homes were made.
Realtor: What do you mean?
Me: I mean if you want me to buy, your will need to discount 25% due to bad construction and faults. BTW, there is no “AS IS” in California.
That may happen at first when subs feel they can lose a builder like Lennar and be fine. But i know most of these guys are looking around down there and getting scared that work is getting scarce (and it is) In the face of that, do they really want to screw themselves out of ever getting another contract with Lennar again? I really doubt subs are even close to being in the driver seat down there. It’s all about “Thank you sir, may I have another?”.
It’s voluntary. You don’t have to take it. You just get frozen out for 6 months.
I’d take the freeze out.
I was working as a software consultant for a large IT firm in California in the wake of the dot-com bust several years back — the company decreed that all consultants needed to drop their billing rate by 20% or they would be terminated. A few months later, they issued an identical decree. I have to tell you, at that time, 64% of my billing rate was better than no billings at all
Not to mention - the subs who agree to these terms are probably not going to be the highest-quality guys — in other words, the guys who are confident (because of their skills and reputation) that they don’t have to chase every bid. The more “desparate” subs who cave are probably often (but not always) lower quality subs, as well. What goes around …..
“What appears to be driving the increase in foreclosures is that home values are not rising, DataQuick analyst Andrew LePage said. ‘Take away home-price appreciation, or ratchet it down or even make prices negative, and all of those forms of (economic) distress start to result in increased foreclosure activity,’ LePage said.”
Pardon me, but what does the lack of home-price appreciation have to do with people not being able to meet their monthly mortgages? Why would anyone be in economic “distress” merely due to flat or falling prices, if they (a) could really afford their mortgage, and (b) bought their house to live in?
Is Mr. LePage trying to tell us something here about buyer “demand” from recent years?
What Mr Lepage is trying to say, without coming right out and saying it, is that what they had was a classic Ponzi Scheme.
The Economist agrees:
“The American housing market seems to be suffering from the unravelling of a Ponzi-type system. Subprime loans were offered on generous terms that, implicitly or explicitly, depended on rising house prices. The banks that made these loans bundled them up and sold them in the credit markets to investors, eager for high yields. This was supposed to make the financial system more secure by dispersing risk more widely.
But look what is happening now. The buyers of these loans are asking the original mortgage-writers to buy them back. But these homelenders do not have the money to do so. The confidence that sustained their balance sheets has evaporated, leaving many in dire trouble.”
“The confidence that sustained their balance sheets has evaporated, leaving many in dire trouble.”
Ah, yes,the British talent for understatement again, “dire trouble” indeed.
Huffhuff, well, I say, looks to be we’re rather in a tight spot what with all these failing thrifts and such. Huffhuff.
IT’S ONLY A FLESHWOUND!
Let ‘em point and laugh. The British housing market is about as bloated as ours:
http://www.housepricecrash.co.uk/
Let see average price at £214,858 and with £1=$2 it puts the average price in UK at $430k.
Don’t know what is the average price in the US as opposed to the median price, but 430k sounds like a hell lot of money.
They don’t have a mortgage interest tax deduction, either.
Sooo… the foreclosures are for sure not a result of folks overpaying for homes and borrowing more than they could afford to repay?
“Sooo… the foreclosures are for sure not a result of folks overpaying for homes and borrowing more than they could afford to repay?”
It’s a hoot, all this talk that tries to dance around the elephant in the room. Prices got too high. People paid too much. No one seems willing to just come out and say it.
But how do you roll back the clock? Each step the lenders take to return to more traditional lending standards will be another nail in the coffin for prices.
They didn’t overpay! The houses failed to appreciate! Is that their fault?
Nothing like a good victim.
HARM,
A) and B) went out the window the minute banks started loaning at over 3x gross income. Or not requiring a downpayment. Or cash reserves. Or steady employment.
I have wondered for the past few years how on earth people were managing to “afford” these prices. I wouldn’t go anywhere near what friends are spending on places, and I don’t know how they sleep at night.
“Most of the loans that went into default last quarter were originated between April 2005 and May 2006. The median age was 15 months. Loan originations peaked in August 2005. Adjustable-rate mortgage use for primary purchase home loans peaked at 77.8% in May 2005 and has come down since.”
According to these statistics, the coming months will be even worse.
To bad the sheeple can’t read between the lines as you can.
YES! They are saying that the majority of the current problems are due to the ceasing of price appreciation (which, until now, was bailing out the imbeciles). The majority of the loans in the given window have not yet even RESET!!! Maybe their second mortgage was adjusting slowy and surely, but I doubt any of their firsts had budged yet - nor were they paying any of the principal.
2007 (and 2008, 2009…) is going to suck.
-Rent
I actually think that the Crash (albeit followed by a long slow painful crawl down) will be over by 2009. We’re seeing that stupid loans of 2005 go bad due to reset at the same time as the insanely stupid loans of 2006 go bad to early payment defaults. The latter is why so many subprimes are going bad: forced repurchase due to EPD. With the insanely stupid loans becoming unavailable and prices stagnant to declining, it won’t take very long for the dumbest of the FBs to be swept out of the market. Then, according to the Credit Suise (sp?) chart we’ll have several years where the garden variety FBs can make it if the interest rates on their ARMs don’t get to bad. I predict a long, flat to slightly declining bottom on this one. But IF prices decline enough in the big crash buying anywhere along the bottom, even if you don’t perfectly time the absolute bottom would make economic sense.
And these defaults are primarily (if not solely) due to sub-p write-ups. Like a bad spot on an apple, given time it slowly spreads. The 2/3 months center will surely spread to involve greater ranges of loans and products. Nothing good here.
I’d love to see the breakdown in these loans. High percentages are going to be:
1. 12 month “teaser” rates/low payments; and
2. Option ARMs that hit the max principal accrual in 19 months, thus eliminating the low payment option.
And we are just now shaking out the weakest anbd dumbest of the lot. Folks with more staying power will be able to hang on a bit longer, but will be soon be dropping as well.
The now famous Credit Suisse chart says it all. The weakest financially got the shortest ARM. “Prime” ARMs have a bit longer.
For those who haven’t seen it, the chart shows a massive bubble of Subprime ARM resets between now and January 2009, then a bit of a lull for, say, 6 months, then another bubble of Prime, Agency, and Option ARM resets for the following 2.5 years through January 2012.
The missing part of the discussion though is that the Option ARM holders who have been paying the minimum (lots of them) will have their payment jump once they hit their max principal amount, which could be much sooner than their prescribed reset date, which I’m assuming the chart was based on. I expect that 6 month lull (which is about about 60% of today’s reset pace) to be filled in nicely by accelerated Option ARM resets, making the pain more or less steady for the next 5 years, with the max pain Q4 ‘07 and Q1 ‘08, and pretty constant everywhere else. For what it’s worth, max pain is with resets at about 2x today’s reset pace.
The popcorn is buttered, salted, and ready.
And it’s not just “max principal” recasts — there’s a tremendous amount of standard 5-year recasts, too. Soooooo, even if someone doesn’t max out their principal, they’ll still go to a 25-year fully-amortized, adjustable rate loan at the full index and margin some time in the next few years.
Those that don’t adjust at 5 years do at 10. The aftershocks will just keep a comin’.
Yeah, they’ll fall out after their 401Ks are drained.
“The figures from Foreclosures.com represent filings from lenders against homeowners who’ve defaulted on their loans. The hardest-hit county in California based on percentage was Yolo, with a nearly 400-percent increase from the year before.”
Woohoo! I’ve been waiting for Yolo county to feel some pain. This is actually great news. I expect West Sacramento and Woodland to keep lowering prices all summer then Davis will finally need to compete.
I have friends in davis that just bought a house, before they sold their 1st townhome in sacramento. each has rationalized this differently, wife “it was to stressful to do all at once” husband “we will wait till summer, hopefully the market will be better”. i have tried to convince them to sell ASAP, it will only get worse. I dont know all the specifics, but it sounds like if they sell now it will be at a loss. Of course they are renting @ negative cash flow and if they cant sell for what they want (owe) they may take the long term perspective and own for ten years…which of course doenst make sense since they are already renting at a loss.
these are otherwise smart people letting their emotion override their rational faculties, im sure there are many more. i will never understand the rationale for buying house #2 before house #1 sells
Hell, just put most of your stuff in a POD, sell and rent while you look for a new place.
I think Ben Jones had the correct explanation. As long as values were going up, having another meant increasing upside. Participants were not seriously thinking about exposure or risk or what might happen if the market tanked. For many the whole point was that properties are not like stocks.
Yep. Some people got hung up on the tangibility* of real property. That doesn’t mean that the pricing of it is any more or less rational than stocks.
*kind of like gold bugs
The Union Tribune. “A record 433 owners lost their homes in San Diego County to foreclosure last month, more than six times the March 2006 figure, DataQuick reported Monday.”
“The previous record was 337 in March 1996 at the tail end of the 1990s real estate recession, after which foreclosures dropped to as low as just four in December 2004.”
“Last month’s defaults locally totaled 1,395, about 400 less than the record 1,794 set in January 1996 and more than twice the 591 reported for March 2006.”
“On a quarterly basis, San Diego’s defaults totaled 3,931, up 156.4 percent from a year ago, when the figure was 1,533. Los Angeles’ total was 8,843, up 110 percent.”
So much for all those who came here and argued about how many people owned outright or would not be in trouble. These numbers are just the begining. In the next 4 years we are going to see these numbers continue to climb, for sure, and there will be a lot of skinny dippers. Oh well, I digress, the economy is running smoothly and so many people are stable in their homes right now. Keep dreamin’!
How long can you last while waiting for your FDIC check? A paid for house may still beat out a bank account. This game is not over yet.
Part of what sucks in this bubble is where do you store your wealth? Banks have 60% of their asssets in real estate. Banks aren’t safe. Stocks are more overvalued than almost any time in history. Bonds are paying all time low yields after adjusting for inflation. Even TIPS are paying below the real inflation rate.
Gold? Where do you store it? This bubble sucks. I don’t care if you’re the happiest renter on the planet this thing is bad news.
Agreed Climber. You know I have been a solid bear since I first came on this board and completely agree that this entire economy is a big Ponzi scheme. While nothing is safe, your best bet is to have NO DEBT (I know, I keep banging that drum) and to set a side some serious cash in the mattress. I would also want to rent because as Hoz (I believe wrote yesterday), you want to be able to get out of Dodge quickly if the ‘hood goes to hell, which could very well happen in many areas, think Lancaster and Palmdale, if you don’t think it will ever happen again.
Bottom line is as they say, “Keep the powder dry.”
I’m just venting.
A lot of my concern is for folks who made career decisions based on the housing ATM like my brother-in-law who quit being a mechanic to work for a jet ski company. He had no idea why that industry was booming, he just saw an opportunity.
A lot of people just don’t look at the big picture.
Yeah, my buddy just quit a job managing the pharmacy and a major university’s teaching hospital to go be the general manager of at an expensive new golf club.
D’oh
“While nothing is safe, your best bet is to have NO DEBT (I know, I keep banging that drum) and to set a side some serious cash in the mattress.”
You, me and anyone who has an ounce of common sense left in between their ears.
The few the proud, THE SAVERS!!!
Gold? Where do you store it?
A good floor safe can be had for under $200. Great place to store cash as well.
Shoot! just get an old can from the recycling…It’s free!
Look at CEF - long time Canadian fund traded on AMEX whose only business is to buy and store gold and silver. Watch the premium and buy when it touches 4-5%. Your going to pay that kind of premium over spot anyway if you buy bullion coins. Closest thing to the real thing there is.
You pay a 5% premium for your coins? Wow, you have GOT to find a different broker. I pay less than 2%. (Around $10-$15 per coin).
Even TIPS are paying below the real inflation rate.
I agree, this bubble is making investment tough.
One new “investment” to consider is the new “forever” stamps from the US post office. They’ll roughly track inflation, and are easy to store, unlike precious metals. They don’t pay interest like TIPS, but depending on how much the gov’t lies about inflation numbers, the stamps might still be better, because they’ll track TRUE shipping costs. Probably beats cash in a savings account.
No thanks, I’ll wait for the ETF.
Once I saw a lady in line at the Post Office trying to sell back some sheets of stamps to the clerk. It took a while for her to realize what she was being told - they don’t do that… You’d have to piece out the stamps to end users, and don’t forget that Costco sells rolls of 100 for less than face value.
Have you read about the “Perth Mint”? Check out their certificate program.
In some of the better, older areas of San Francisco and LA, people do own property outright. They bought it years ago and it’s paid off. They aren’t selling. This is why places like Marin hold their value better than other areas. There will still be foreclosures — but not as many because there were never that many houses for sale. That’s what drove the prices up in the first place.
But places further out are going to pay the piper.
That makes sense. It’s the exact opposite of these new “flipper acres,” developments built 2 hours drive from major metropolitain areas.
Denver area seems still stuck in the mud. No out-of-state migration in or jobs to prop up housing market. Prices boomed in late 90’s tech/t-com runnup and never went down. I’ve been an independent corp. headhunter here for 10 years and still don’t know anyone, much less place them in positive salary growth job, here making enough to afford housing prices. Thought about making a 65%+ reduced offer on a $439K home this weekend, but just flat out reconsidered. Even at 20%, 30 year fixed. Can anyone tell me what the hell is going on in Colorado? I know this is a CA thread, but help me out.
I would wait until Ben includes Colorado on a post; you will get a lot of Coloradans talking then. They may not even read a California-related thread.
DenverSlim, as bad as the market is in Colorado, it doesn’t seem that prices have come down much in Denver. Even though we’ve had basically no appreciation the last 5-7 years, I agree that, in Denver, they never went down any noticeable amount. Three people in my office are trying to sell their homes in Denver and “move up.” One sold his house in three weeks, which, in my opinion, is really fast for the market.
If by “will even probably increase some more” he means “will incontrovertably go nuclear” I agree.
http://www.smugmug.com/photos/136440158-O.png
Thanks. I’ve been trying to find that chart since last week.
I’ve got it bookmarked.
(h_a_n is my alter ego when i post at work.)
that bookmark is an image - how frequently is the data updated and can we get a link?
Farking great chart!!!!!
Bravo, everyone should look at this. Seems spring of 08 is going to make the invetory of today look like childsplay!!!! The bulk of this sticky painful bowl movement will be in December of 07 resulting in nasty, sticky, stinky feces covering the entire REIC just in time for the 08′ superbowl.
Would you like a bowl a warm shit for your chips Mr. FB, no no I insist eat up!!!!
That chart is scary.
If you think you are getting away unscathed, you better think again.
And just when subprime has wrecked havoc the prime and agency arms start adjusting. If the fed and congress sacrifice the dollar for the subprime bailout long term rates could be horrific by then.
“About 40 percent of homeowners who found themselves in default last year actually lost their homes to foreclosure in the first quarter. A year ago it was nine percent.”
Wow. This seems like an awfully high percentage. Anyone know what an average rate is and what it was at the height of the last downturn (e.g., 1996 in SoCal)? With NODs continuing to rise, if this percentage stays the same (or grows), the number of foreclosures should continue growing, thereby placing more downward pressure on prices.
That quote stuck out at me as well. correct me if I’m wrong but it really doesn’t matter how many NOD’s are filed, it matters how many people actually end up losing there homes. If this many people are losing there homes this early in the cycle things are going to get a lot worse before they get any better.
Let’s not forget that on Thursday, April 5th, it was reported that 15 out of every 100 homes sales in CA were auction. Don’t be surprised at how fast and how high the foreclosure rate gets in certain areas. People and banks greatly overextended themselves on the hope that this time it would be different and the appreciation would continue forever. Well, unfortunately, reality is setting in, rates are adjusting, people are eating ramen and not liking it, and the rest of us are just waiting fot the whole thing to go kaput!
“Wow. This seems like an awfully high percentage.”
it is, but you have to remember that last years crop had some meat on the bone, the market was still rising and someone could come in a clear up the mess with a last minute purchase. now you have the majority of your fb’s upside down. it should only get worse from here, unless the latest group of fb’s made substantial down payments before they defaulted. not.
Santa Clarita NODs are up twofold. Yippee! How come I am not holding my breath for prices to come down to sane levels (2002-2003 prices)? This would mean a 50% discount on $700k homes.
Hang in there. As as been said here many times, RE is sticky on the way down. RE is not a very liquid assest, hence the slowness of the process. However, if prices do not come down, then rent. I was a homeowner for 10 years and now rent and I can honestly say I don’t miss it. Would I prefer to own, sure, but I will not be as naive as I was when I first bought.
Renting provides many alternatives that owning doesn’t. Besides, you have a many choices for renting; apartment, condo, home. Also, while moving sucks, at least you can pick up and go. With RE, you better have a buyer or a renter, unless you can afford to leave the home empty. Besides, I have inlaws that used to live in Santa Clarita. Somewhat nice, but too windy for me. Gets tiring after awhile always saying well at least the smog is cleared out.
No way I am buying unless monthly mortgage payment on a fixed 30-year loan is just a little over my rent for a similar house. I refuse to fund somebody else’s retirement or slush fund. My landlord currently pays ~$3,400 per month (PITI) on the condo I am renting. Purchased in 10/2005 for $480,000 using an 80/20 loan. My monthly rent is $2,000. Thanks for the housing subsidy, Mr. Homeowner. Another candidate for the bailout - late on his property tax - again. Was late in 2006 as well.
Tell the landlord, your willing to help him out on costs.
Tell him you will feed the squirrels each week!
And he can pay the property tax bill.
late on his property tax - again. Was late in 2006 as well.
la, could you give me the LA Tax web site so I can check my landlord, 91354.
Thanks
desmo,
Site to get the Tax ID Number: http://assessor.lacounty.gov/extranet/DataMaps/Pais.aspx
Click “How much are my property taxes” link and enter the Tax ID Number. Walaaa! Find out if your landlord is an FB.
Site to check tax status: http://lacountypropertytax.com/portal/contactus/paymentinfo.aspx
Thanks
Does anyone have this info for Orange County? I’d love to get my hands on it from the comfy confines of my computer.
Cheers,
MMAB
OC Dan: Somewhat nice, but too windy for me. Santa Clarita or the inlaws?
Its been done before in 1991,
when prices declined to 1986 prices.
That was a 35-40% correction.
35% correction…shucks…hat’s nothing. Some market went up 200% or 300%.
Me, I’m waiting for it to come down 100% to 125% before I buy. (Talk about your cash back at closing!)
“In Los Angeles County, the default rate is almost 60% below the first-quarter 1996 peak, DataQuick said, an indication of strength in many sectors of the market.”
I have been following this thing for a while now. Los Angeles is about 12 mos behind San Diego in the current cycle. If you live in LA and want to see where this thing is going look south. I think the statement in the LA Times article is a little misleading.
I remember last year as San Diego held steady with their median price and their defaults were high, but not at the levels we’re seeing today, the media was saying the same thing. They were talking about how San Diego is the bellwether for what is to come for much of California as it was about 12 or so months ahead in this current cycle. Funny how as things have taken a turn for the worse in San Diego, they no longer look at San Diego, or at least do not publically acknowledge San Diego, as a leading indicator.
Agreed. I think San Diego and Sacramento are the leaders here in Cali, as they both appear to be on about the same page (SD might be a couple months in front). OC seems to be about 12 months behind. LA seems to be even further behind. But, yeah, we can simply watch SD and Sacto to see where we’re headed. The MSM doesn’t seems to want to acknowledge this anymore.
“In Los Angeles County, the default rate is almost 60% below the first-quarter 1996 peak, DataQuick said, an indication of strength in many sectors of the market”
Dataquick is full of s*it. We are just at the early stages of this default/foreclosure wave in LA County yet I already notice many LA zips with 30-40 foreclosures, mostly in the marginal crappy areas. I look at foreclosure.com almost on a daily basis to check LA County and see cities/areas such as Compton, Northridge, N hollywood,Long Beach,Sylmar,Whittier,SCentral,Van Nuys, ect close to epidemic stage and this thing is just in the first inning. This Foreclosure/NOD’s is like a pandemic which will gradually, or rapidly, infect the entire LA County basin, with the Westside getting hit last.
“‘Actually, loans got pulled and everything,’ Torelli said. ‘They tightened up and got real crazy…because they changed the guidelines right in the middle of when loans were being processed.’”
————————————————
The deflationary process at work- tight lending is just starting. Japan lowered interest rates to under 1% and still had 16 years of falling prices.
In Newport Coast, the median price dropped over 42%, but LePage said such big declines should be looked at cautiously.
“We’re definitely seeing the volume of sales decreasing and I think that’s across the board for a lot of cities, but what we’re not seeing from a data standpoint is that prices are going down,” Norquist said. “It seems from what we see that prices are actually, if anything, are showing higher.”
42% drop really means prices are getting higher!! Thanks Daily Pilot!
In all fairness, that 42% drop isn’t reality; it stems from looking at a median price for a small set of sales so that differences in the makeup of homes sold is causing that number to drop precipitiously. However, the fact that starter homes are not selling as well (because first time homebuyers are priced out of the market and lending is tightening) is causing the median price to show increases when, in reality, prices are dropping for individual homes. DQ always seems to try to downplay/excuse the lower prices while trumpeting higher prices. They are classic cheerleaders.
The people at DQ live in Canada! They can publish the numbers, but I will interpret what they mean myself.
BTW, while your at it send me case of Moosehead will you aye!
Well, them canucks use those cheaper dollars, shorter miles, colder degrees and lighter pounds. Seems natural for them to use screwed-up precents too.
Of course a 42% drop at this point is a distortion. But DQ is beyond cheerleading. It’s willful distortion. Funny how these people only find caveats on the way down.
Funny how it’s called Newspapers when they print something that has discussed and documented here for at least 4 months. I would say that you’d have to be of Mr. Karevoll’s caliber to miss the trend on this one:
http://tinyurl.com/35d53f
Anyway, a drop of malice in the champagne: the numbers reported on foreclosure.com are probaly 1.6x the real numbers. I don’t know if it’s because people default on 1st and 2nd at the same time, of if foreclosure.com make mistakes (it’s in their interest to show as many as possible), but if you go to a particular zip-code, you’ll see a lot of repeat entries. I’ve never seen more than 2 on the same address though.
“a drop of malice in the champagne”
love it. poetry!
This “bubble” is like watching paint dry. When will we see some significant price reductions in the Bay Area? Maybe never?
Always tought to predict a timeline. But there is no doubt that Bay Area prices will drop significantly. Just look at the outlying areas as a forecasting tool. Start with the farthest commuter locations, as they will drop first, and the drops will work their way towards and finally into the Bay Area. Check out iTulip for more on this. They seem to have a pretty good handle on this.
Dont count a price decline of 50% or more in SF.
I was looking at zillow SF area and saw most homes at $800K to $1M. Just LOL and wonder … are there really that many jobs out there to even cover that many mortgage payments. No there arent! Job growth has been in Goverment and Retail over the past 6 years. Just like the Subprime crash, Im sure there is a silent bomb ticking way. Ah! patience young “Grass Hopper”.
Don’t worry, Web 2.0 is about to crater. Google can’t hire everyone. And they seem to be overspending like Microsoft.
Bay Area was the first to go up, it will be the last to go down. I’m waiting myself. I think the worst case scenario for us Bay Area watchers (especially in places like Menlo Park, Palo Alto) is flat prices for a while. Best case scenario is slowly sliding prices for years. In any event, I don’t expect a quick correction in the most desirable places.
It would take a lot tighter lending pretty quickly to have a large impact on the best places in the Bay Area.
“When will we see some significant price reductions in the Bay Area?”
When buyers snap out of their collective fogs and start offering 3x over their income.
This is what I am wondering. I am looking to buy next year (managed to delay for two years…wife is mad, but kid is on the way) in the Pleasanton/San Ramon area. One of wife’s best friends lives out in Brentwood and she is saying the prices are dropping there like a rock.
It is coming…slowwwwwly…but surely.
When you look to buy, have your wife talk to her best friend again about if prices have stopped dropping. Then add in commission and explain to your wife about how much of your down payment would be gone in x months if the slide continues.
Then go find a very nice home to rent for less money so you have somewhere nice to put the baby.
It will be fun to walk around
Ground Zero ( Palo Alto )
after the day after,
where the Google heads
paid $1M for 800sq ft cottage
turn into equity-poor zombies.
“MUST EAT YOUR RAMEN”
First major earthquake — start shopping about two weeks to a month after that. San Fernando Valley had a lot of bargain houses for sale after the Northridge earthquake.
Typically, when bubbles collapse, at some point there is an avalanche effect down. Will we see that happen in 2007?
Here’s the scariest statistics from the DQ story:
“Most homeowners emerge from the foreclosure process by bringing their payments current, refinancing, or selling the home and paying off what they owe. Still, about 40 percent of homeowners who found themselves in default last year actually lost their homes to foreclosure in the first quarter. A year ago it was nine percent.
Trustees Deeds recorded, or the actual loss of a home to foreclosure, totaled 11,033 during the first quarter, up 81.5 percent from 6,078 for the previous quarter, and up 802.1 percent from 1,223 for last year’s first quarter. Foreclosure sales peaked at 15,418 in third-quarter 1996, and hit a low of 637 in the second quarter of 2005.”
Think about that last statistic: foreclosures went from 637 2Q05 to 11,033 by 1Q07. That is quite a rise, and there is no sign that it is topping out yet.
That looks like a geometric progression! Are we talking foreclosures or the reproductive rate of bacteria?
foreclosures going “viral”.
Thosre are not trustees deeds those are notices of default. If the banks were taking back 3,000 homes per month on average. The conversations on this blog would be entirely different
No, those are trustee deeds recorded. These numbers are for ALL of California, but they ARE trustee deeds, not just NODs (approximately 47,000 NODs filed in 1Q07 in Cal). And we’re talking closer to 4,000 homes/month that banks are taking back.
You’ve opined (and I think you’re right) that it’s the number of foreclosures, not NODs, that matters in this market. And we are seeing the foreclosures rise dramatically in the state. Each county is different, but statewide foreclosures are dramatic. The stat I saw last week was that statewide foreclosures were equal to 15% of all sales.
Oh ok I see and stand corrected. I just re-read the whole thing you are correct.
Trustee deeds are important because:
It’s game over.
They are final.
They are only counted once per property.
It’s the law of nature: foreclosures always go up up UP!
To Teh Moon!!!!
Not to be understated, but I do see foreclosure numbers going up “some more” - and by some I mean several hundred percent. So things may get just a wee bumpy in the next couple of years.
So if the foreclosures and NOD are so bad…why is the stock market up every day.
I would have thought by now that the lower MEW would have filtered into lower consumer spending. Very bizarre.
strawberry and mushroom pickers may qualify for a 750K loan in Hollister but most FBs don’t have the brains to be in stocks.
According to Ben Stein, the top 1% of the wealthiest own 50% of the outstanding stock. The top 10% of the wealthiest own 90%. Until these people start hurting, the stock market will do pretty good.
So what does the bottom 90% of the population own? Oh… right: insanely overpriced houses. Or more accurately, they are “owned” by the mortgages on those houses.
most people I talk to in wall street think that (believe that, to be precise) is not a big deal.
“It’s not as if you will know anybody that will bankrupt”, one told me literally.
some people learn only from personal experience. and my guess is that most traders/brokers/analysts are not having the personal experience yet.
they are still blaming the people (subprime borrowers) and not the product (anything that’s not traditional fixed rate loans). in about 6 months from now the retoric will switch towards blaming the product… cause people like them will get hurt too.
“What appears to be driving the increase in foreclosures is that home values are not rising, DataQuick analyst Andrew LePage said.”
Hmmm…so it’s all about appreciation, or lack thereof. I love how there’s no reference to people buying houses they had no business buying in the first place.
I heard on the radio that Arizona did indeed stop Zillow in that state cuz “they aint licensed appraisers.”
Awsome. They need to pulled off the net entirely. Their prices are so ridiculously high; by the way, who “owns” zillow? I would not be suprised to find out it is owned by real estate consortioum.
Nope owned by the guy who put travel agents out of business. People thought he was going to do the same to Real Estate agents… Not!!!. That going to take fed intervention. Same thing is going to happen to all those discount brokers and all the rest slow errosion into nothing.
Maybe Zillow won’t put Realtors out of business…but sites like this one might put Buyer’s Agents out on their @sses:
http://www.buysiderealty.com
- MMAB
I disagree. Their models look sound (from what I’ve seen). They’re just based on a “normal” market. Feed a good algorithm screwy data and the results will be messed up. After the bubble is finished, they’ll list prices under current market (unless they tweak their models).
Are they based on a “normal” market, or the last few years of “bubble” market?
Bwwwaaahhhaaa taking over the Real industry hunh bwwwaaaahhhaaa too funny.
I assume they mean that zillow no longer gives “zestimates” on Arizona property. they can probably still provide local assessment info, instead (like they do in some places where sales data isn’t readily available)
Its interesting that the Great Depression of 2006 talks about bailouts and suspensions on forclosures. Apparently large numbers of people just decided to not pay.
Will we go down that road again?
You can always counter on a low ball offer and say “I’m just trying to call a bottom”
Here’s the latest data plot for CA foreclosures. The slope on this graph was predicted back in December. I thought it was ugly back then! Next time I post, I’ll update the slope. Thanks to Jim in San Marcos.
http://www.putfile.com/pic.php?img=5244122
LOGRITHMIC scale wow!!
So how soon will the banks realize they can’t dispose of their foreclosed properties fast enough and use their lobbying clout to resurrect Resolution Trust Corporation?
My guess is by the end of this year.
What’s everyone so excited about? Santa Clarita Valley, San Juaquin, Riverside, Sacramento? Who gives a rat’s @ss? Wake me up when there’s NODs in Santa Monica.
lainvestorgirl,
People who can’t afford Santa Monica give a rat’s @ss to what is going on elsewhere. Not everybody is a millionaire. Not everybody wants to wake up with bums outside their doors and pee-smelling sidewalks.
Ouch…
If those places are the best you can do in CA, it’s time to get out of state.
lainvestorgirl:
Chill. It’s not all about you and what you want; there are other people on the blog who live in and around those places.
Also, you’ve heard it before, but this bust is going to work itself out in the reverse geographical order that it boomed. The bubble started in the cities and worked out to the suburbs and then the exurbs. It’s now working itself back in from the exurbs towards the cities. So, for you, the explosion of NODs and foreclosures in Riverside is relevant, as what happens in Riverside will be working its way into LA.
It is odd, isn’t it, how this nuclear event starts at the outer reaches and moves inward? Those at ground zero will still get totalled, of course.
Santa Monica was among the last to crater in the 1990s, but crater it did.
I bought a house in SM in 1985 for 165K, sold in 1989 for 290K. I was back in SM in 1997 and the place was listed for $165K! Believe me, SM will come back to earth.
desmo,
Site to get the Tax ID Number: http://assessor.lacounty.gov/extranet/DataMaps/Pais.aspx
Site to check tax status: http://lacountypropertytax.com/portal/contactus/paymentinfo.aspx
Click “How much are my property taxes” link and enter the Tax ID Number. Walaaa! Find out if your landlord is an FB.
Too late at that point. Use it to find out if your prospective landlord is a FB.
I have been driving around Carlsbad, California taking different streets looking for photo ops of mc mansion neighborhoods. I keep finding new ones to explore and am compiling a list of fancy names for fancy homesteads. when I spell checked the list, many of the words are made up. I am getting good at writing Italian. I wish I could copy/paste my unbelievable photo collection of homes starting from the 900’s.
a sneak peak of my list includes:
shea homes 4,374-4,873 sq. ft. starting from the 900’s. and
la costa ridge, an exclusive gated enclave
April 17, 2007
For Illegal Immigrants, Housing Slump Takes Toll
By EDUARDO PORTER
HURON, Calif. — Some of the casualties of America’s housing bust are easy to spot up and down California’s Central Valley.
From Fresno to Sacramento, big tangles of wire and PVC pipes clutter vacant lots in silent subdivisions, waiting for houses to be built — some day. Dozens of “For Sale” signs already dot the lawns across new residential communities. And right next to the ubiquitous billboards from builders are fresh signs offering homeowners help to avoid foreclosure.
But another set of losers is less visible: the immigrant workers, mostly illegal, who rode the construction boom while it lasted and now find jobs on building sites few and far between.
OT, but here is another very pessimistic article about the housing bubble:
http://www.counterpunch.org/whitney04162007.html