“A Saturation Point To What The Economy Could Support”
Bloomberg reports from New York. “Luxury home prices slid in New York’s Long Island and Queens in the first quarter as more property came onto the market and took longer to sell, appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said. The median sales price fell 5.3 percent to $900,000 from a year earlier and houses took 25 percent more time to lure a buyer, the companies said today in a report.”
“An oversupply of expensive houses for sale is reducing demand, said Jonathan Miller, president of Miller Samuel. ‘You’re just not seeing the demand level that you had been seeing in prior years,’ Miller said. ‘You just reached a saturation point to what the economy could support.’”
“The median sale price of a condominium dropped 4 percent to $240,000, Miller Samuel and Prudential said. The weakness at the high end also hurt the overall housing market on Long Island, and in Queens, a borough of New York City.”
“Sales fell 6.4 percent to 7,001 from a year ago and the median sales price slipped less than 1 percent to $437,500. The number of homes for sale jumped 18 percent to 31,954.”
“‘Inventory levels today are double what they were two years ago,’ Miller said. ‘It’s a real issue. What that’s going to do is temper any price appreciation going into the spring market.’”
From Newsday in New York. “In Nassau inventories climbed 19 percent, to 9,260 houses. In Suffolk the listings rose 20.1 percent, to 13,424. In Queens the supply of homes listed for sale rose 13.7 percent, to 9,270.”
“Dottie Herman, Prudential’s chief executive, said the rising inventories shouldn’t be a cause for alarm. She said homeowners got used to a red hot market when ‘everything sold in two days’ but that was an ‘anomaly.’”
“‘In the last few years, you could put a home out in any condition…and it would sell,’ she said. ‘And now that’s really not the case.’”
“A MLS of Long Island report issued for February showed a rise in inventory listings, compared with January. Need more evidence that it’s a bad time for sellers? Median prices and total sales were down on most of Long Island in the first quarter of the year.”
The Buffalo News from New York. “Mortgage brokers are defending themselves against accusations by politicians and consumer advocates that they are to blame for causing the meltdown in the mortgage industry by giving loans to borrowers who couldn’t afford them.”
“‘Don’t just keep labeling mortgage brokers as the bad apples,’ said Nancy B. Gascoyne, past president of the New York Association of Mortgage Brokers.”
“‘There are so many aspects of why the subprime world is having problems,’ Gascoyne said. ‘To blanket it across the world and say it’s bad mortgage brokers, that is irresponsible.’”
“‘When you look back at who’s actually been fined for predatory lending, it’s been Ameriquest, Citigroup, Household Finance,’ said Harry H. Dinham, president of the National Association of Mortgage Brokers. ‘Not everybody out there who does mortgages is a broker. The lenders are the ones that are actually approving and closing these loans.’”
“At a press conference last week, Suffolk County Executive Steve Levy cited projections that the number of foreclosures in Suffolk would increase by 117 percent betwen 2005 and 2008. In Nassau, the increase is projected to be 111 percent.”
The Courier Post from New Jersey. “With unemployment below the national average, Charles Plosser, president of the Federal Reserve Bank of Philadelphia, described South Jersey’s economy as ‘doing better than many other areas of the U.S.’”
“Despite the good news, Plosser told an audience ‘uncomfortably high’ inflation and a housing market bogged down with unsold inventory are clouding the forecast.”
“These trends signal a continued buyers’ market for homes and an employees’ market for jobs.”
The Citizen from New Hampshire. “Joe Kevlin and his wife Lynne are in a foreclosure situation that is becoming more and more common across the country.”
“The Kevlins, like many families, encountered serious money problems after refinancing their home through an adjustable-rate mortgage. Their house payment went from $1,000 in past years to nearly $2,000 when they consolidated their bills and dropped a local bank mortgage that offered a fixed rate.”
“The Kevlins thought consolidating their bills was a smart choice considering that the financing plan they were given appeared to allow them to pay a slightly higher payment than the mortgage alone. What they didn’t understand is that the payments wouldn’t stay that way for long.”
“‘There really wasn’t a big difference, but then the rate kept going up,’ explained Kevlin.”
“Both Lynne and Joe Kevlin admit to being at fault for not fully understanding the terms of their refinancing plan, but say they are among the many well-meaning homeowners who are now in big trouble after being sold on a plan by a large national financing company.”
“‘They tell you the good stuff … they say its only going to be one payment (per month),’ explained Joe Kevlin.”
“As a mortgage consultant for a local bank, Chris Guilmett said underwriting guidelines sometimes require him to turn down an applicant with less than perfect credit thus creating a situation where they could turn to subprime options.”
“‘What I see, and it bothers me, is that I could end up saying ‘no’ to somebody, but I know one of these predatory lenders is going to say ‘yes,’ said Guilmett.”
Read your darned mortage documents. What do they say?
NEXT!
This sickens me! People are becoming quite versed in the: “I didn’t understand the terms, no one told me I would have to pay more” bull$hit.
It is like the realtors: “it is always a good time to buy.”
These borrowers knew god damn well what they were doing!
“It is like the realtors: “it is always a good time to buy.”
Yep. Then the next thing they say, “you can sell it before your rate goes up”….that’s exactly why these ninnys are whining about not knowing anything about their loans…all they remember is, “and you’ll make a boatload of money within 2 years.”.
Or - ‘You can refinance before your rate goes up and extract even more equity.’
These people deserve to live in their cars - quit whining you worthless wimps. You knew exactly what you were doing, and now you’re stuck.
What wasn’t explained to you, what wasn’t in the mortgage docs, is what happens when your box doesn’t appreciate? What happens when the stated income loan market dries up?
Well, you’re finding out now, jackass.
The understood the terms just fine - The mortgage would reset, but by then the property would have increased in value 50% and they would just refinance or sell and buy his and hers BMW’s with the handsome profit they made. After all everyone knows property only goes up.
There was a video on CNN the other day that featured an immigrant woman, spanish speaking, that was in severe mortgage trouble. She said, in spanish, “It was very confusing. They were going so fast and everything was in English.” Well, you didn’t buy a house in Juarez.
She was blaming the system but the funny thing is that the guy who did their mortgage was a freind of her boyfriend. Her and her boyfriend were splitting the mortgage. Maybe the problem is he needs a new friend and she needs a new boyfriend.
Perhaps mortgage brokers should be required to hire a translator –one for each native dialect of the illega– ah, “guest worker” loan applicant.
Congress seems to be gearing up for an FB subprime borrower bailout … This is just infuriating. Read the latest -
http://tinyurl.com/2zgx8w
They will let the bankrupt homeowners dry in the sun. What they must do is protect the financial market and the dollar. There will be more bank regulation to give credence to “containment”. I think this is a similarity to the interest only mortgage bubble around 29 and the Fed’s eventual bank regulation moves. They can’t stop a credit contraction.
The above comment is the greatest single comment in this history of this blog.
I love that they seem to want to think that EVERY person who took out a subprime loan has suffered an “illness, layoff or other one-time event” or was a “victim of predetory lending”. So, NO ONE did this for greed and deserves what they get?
This guy was consolidating due to losing his insurance after experiencing escalating health costs. Also there’s still many who feel blind trust for government and business entities. You see the same here..maybe it’s everywhere?
The claim “if our leaders think its good for us it must be true” is seen often on our local blogs be it regarding education, town, crime, services.
Just yesterday I saw someone on a local blog suggesting the town would have never approved building on this site if it wasn’t perfectly safe.
http://www.youtube.com/watch?v=l9Nr3rfreQI&NR=1
If you watch this video of the property, you’ll never buy a home on a hillside, I promise.
Hey Kevlins, read your darned mortage docs. What do they say?
NEXT in line please…NEXT!
Sympathy for others is good but takes away from our own problems. The Kelvins should move on with their lives so we all can. We can only hear so many sob stories before we stop listening.
Potentially breathed in too much housing Ether?
et tu Gascoyne?
They read and understood. Most people seem these days, for a quick fix. I closed several arms loans in the past and you have to sign at least 3 or more documents stressing the arm at closing. Even if mortgage broker glazed over it the closing office did not. They felt “hey, we can solve our problem now and worry later about the possible higher payment.
what’s the spread on mort broker ( good guy) commisions
.5% normeal to 4% ? super toxic ?
From Newsday in New York. “In Nassau inventories climbed 19 percent, to 9,260 houses. In Suffolk the listings rose 20.1 percent, to 13,424. In Queens the supply of homes listed for sale rose 13.7 percent, to 9,270.”
Nothing like skyrocketing inventory to drive prices upward!
i may go to a few open houses this weekend just for fun.
maybe throw a huge lowball on something nice who knows what can happen? i might just get an acceptance of my ridiculous offer
I find it hard to lowball in DC area because my offer is less then they owe.
That’s exactly my problem in S. Cal.
That’s exactly my problem in S. Cal.
Had this conversation many moons ago on this blog — at that time wondering if this would be a stickier market than other housing busts before simply because so many will be taking a hit by sellling lower.
I think it the market definitely will stay stickier on the top -but once the panic starts, and owners get used to the idea that they’ll loose so much more by waiting, watch out
You can give a low offer to the FB… then a lower offer to the bank that got the home from the BK owner… then later an even lower offer to the bank that bought the BK bank…wow, this could be an infinite regression…
First the distant suburbs in Jersey and Long Island turn down, now the edges of the boroughs start showing cracks. You can see where this is heading, but somehow Manhattanites are still in denial. People are still snapping up crappy apartments in condo towers that are rising on every corner.
With all the feverish building going on, and signs of a slowdown in the financial businesses, Manhattan might get hammered worst of all when the correction finally arrives here.
we can only hope so.
it is slowly working it’s way up the property ladder
but hey the dow at all time highs!
my buddy works for a major hedge fund and they are
betting this subprime mortgage fiasco will get alot worse
btw his fund returned 28% last year so i tend to agree
He’s not the only one in that trade. Usually something that is as well forecasted as this story doesn’t work. But then again, sometimes the crowd is right.
DC Burbs are not happening, it is slowly making it’s way towards the city too.
I don’t know if Long Island has really cooled off. I have a friend of the family that lives in Williston Park. She indicated that the house down the street from them sold in two days for $600K. That’s very much a record for the neighborhood.
Houses are still going to sell and in nice areas they may sell quick. But from a Macro standpoint, they are going to sit.
You can see where this is heading, but somehow Manhattanites are still in denial
Was it last week or the week before that CNBC had the day-long “now’s a great time to buy” theme? Anyway, I was watching and one of the reporters gave a live report from a residential building under construction in Manhattan. The camera didn’t pan up to the top of the construction site, but from what you could see it was at least up to the 4th floor. Then the reporter happily announced that it was already 25% sold. WOW!
I know it’s different everywhere, but here in Chicago a residential highrise doesn’t get a piece of equipment on site with that few contracts signed. You’d be lucky to clear the site at less than 33% sold. They don’t start drilling caissons until you’re up past 50%.
The banks giving out the construction loans are the ones imposing these rules, so I guess they think it’s impossible to fail in Manhattan, not so much in Chicago.
FYI, the latest residential highrise to start construction in Chicago was over 85% sold before they went and got building permits.
We have an office shortage in NYC. No one will lend to construct office buildings without substantial pre-leasing, even though we lost a huge share of the office stock when the Twin Towers fell. This means you cannot build a new building for small businesses, who are being priced out of the city.
Meanwhile, they’re thowing money at building sales and residential.
Why do those who merely follow the other lemmngs, eventually over the cliff, get paid so well to do it?
“With all the feverish building going on, and signs of a slowdown in the financial businesses, Manhattan might get hammered worst of all when the correction finally arrives here.”
Currently Manhattan is moving in the opposite direction. Huge spike in sales last quarter with a corrosponding drop in inventory. Prices are up moderately and there are apparently shortages of inventory in some segments of the market (e.g pre-war 3 bedroom apartments in the Upper Eastside). There is a surplus of not yet built inventory though. There are two new buildings going up on 86th street right now. Entry level prices on one building are 2 million for a 2 bedroom.
Clearly people with money would rather live in Manhattan than Queens. What a surprise.
“At a press conference last week, Suffolk County Executive Steve Levy cited projections that the number of foreclosures in Suffolk would increase by 117 percent betwen 2005 and 2008. In Nassau, the increase is projected to be 111 percent.”
put a fork in suffolk county it is done!
nice weather this weekend expected so the shills will be out in full force
I wonder what solid mathematical principal was used to come up with these figures?
A ruler placed on the two last datapoints. And that’s what he smart “analysts” do. The average chief economist would decide that the numbers have topped and will stay flat for a while.
BTW: These numbers would describe the increase in San Diego county……per quarter! We’ll pass 4000 on foreclosure.com in a week or two. Last July it was 415.
“An oversupply of expensive houses for sale is reducing demand…You just reached a saturation point to what the economy could support.”
Typical New York Metro. An oversupply of “luxury” housing (or at least luxury-priced housing), and a housing shortage otherwise. You folks have any suggestions on how this disconnect might be resolved? How about making that “luxury” housing affordable to some of the other 90%?
wt they try and sell “luxuary condos” in ghetto neighborhoods this is a total con job on the sheepie. il just max the old 401k and stock pile cash in the meantime
yawn
E.G. $1000/sqft “Luxury” Condos in Long Island City.
Like the new “Luxury” condo going up in Queens Plaza, across from the subway and next to the Stripper bar.
In NYC, indoor plumbing = Luxury :-}
Hey, in Alaska indoor plumbing IS a luxury
And I’m not kidding when I say I would rather have a stripper bar across the street than granite countertops. Tho’ my wife might disagree…
I checked out LIC “luxury” condo sites the other weekend… WHAT A DUMP!!!! It’s getto, with no hopes of gentrifying ever.
“rising inventories shouldn’t be a cause for alarm.”
Oh really? Here, once again, we have an idiot telling us to ignore what are known to be fundamentally sounds reasons for causes of alarm. Inventory levels past the 6-month mark have always been a classic sign that housing is in trouble. But, of course, it’s different this time. And the stupid bitch award goes to…..
The way all the RE industry insiders are trying to cover up, and describe everything as perfectly normal and contained, reminds me of one of those Hollywood movies where a bunch of guys are (hopelessly) trying to hide a dead body. We’re now past the point where people have started to notice the smell and we’ve had an arm and now a leg fall out from under the blanket. They are frantically pushing the leg back under the blanket, but now we see a police car approaching in the distance.
Today’s AP article on inflation: ….Many investors were heartened by the government’s report that March housing starts rose 0.8 percent - smaller than February’s 7.6 percent advance, but much better than the drop investors expected. Building permits also rose….
So, increasing house inventory above existing high levels is a good thing? Can someone ’splain that to me? Is it because more supply drives prices down and slows inflation? This stuff confuses the heck outa me. Recently I heard that inflation was in-check because prices have remained stable, EXCLUDING energy and food. Does housing even figure into inflation calculations? Is this a Chinese menu approach to inflationary measures?
More houses being built? Good. Seems to me that the more homes on the market, the better my price when I buy in 2008/9.
“‘What I see, and it bothers me, is that I could end up saying ‘no’ to somebody, but I know one of these predatory lenders is going to say ‘yes,’ said Guilmett.”
capitalism at it’s finest
A little “r” thrown in, would better complete the word…
Crapitalism
Capitalism works just fine as long as those that make bad decisions have to pay the price for those bad decisions. When those that make bad decisions don’t reap the consequences capitalism breaks down, since it breaks the risk vs. reward principle.
>> When those that make bad decisions don’t reap the consequences capitalism breaks down
When that happens, it’s no longer capitalism.
packman’s quote deserves to be enshrined in the “best of” Hall of Fame.
Um, you are arguing that the existence of corporations is antithetical to capitalism? The whole point of corporations is to shield people from the consequences of bad decisions… same goes for bankruptcy law, etc. Are you also arguing that capitalism requires strong regulation, so they they have to pay for their externalities (pollution, etc.)? Heck, capitalism is in its glory exactly when it is disengaged from the consequences of its actions
Are you being ironic here?
this guy’s logic would make Spock turn over in his grave (he did die, didn’t he?)
Says Dottie Herman of Prudential. “Rising inventories shouldn’t be cause for alarm….” Um, Dottie, my love. You missed a few little items in your rosy, now-is-the-time-to-buy, opinion. For instance: Speculators, exotic mortgages, affordability and not just excessive inventory but mind blowing inventory. You should be very alarmed, sweetheart. In fact, go take another Prozac and get your pharamacist to call your doctor for a re-fill and get him to up the potency strength. You’re gonna need it as this mess unwinds over the next 4 (yes, 4) years.
So could one say that Dottie didn’t cross her own “t’s” and dot her “i”?
Dottie may need some Xanax with that Prozak.
WASHINGTON, D.C. — Fannie Mae and Freddie Mac are rolling out subprime programs for borrowers facing foreclosure. Chief executive officers of the two government sponsored housing enterprises joined regulators and consumer groups in testimony to Congress Tuesday on rising foreclosures. (April 18)
I guess they are trying to give up their Triple A status.
Want to lower your payment and get better terms? Just allow your house to go into foreclosure, take a hit to your credit report for a while, get bailed out, go on vacaton and congratulate yourself on working the system.
I know this is a double-post but it fits better here… Please write your representatives telling them NO to the bailout. Write your own letter or start with the template on this link and modify it and go from there.
http://marinrealestatebubblewiki.wetpaint.com/page/alternative+draft+letter
I plan to write. Unfortunately, I think this is about protecting house prices and the institutions that created this mess. That said, I doubt any bailout would really work, and this will inevitably unfold as it will an in it’s time. In cases where a borrower can prove they were defrauded by a lender, our current court system would be an appropriate avenue to pursue that angle, but for government to “volunteer” our tax dollars to essentially bail out gamblers is absolutely wrong.
Interesting it’s Freddie and Fannie introducing subprime programs aimed at the worst of the worst borrowers (defaulting subprimers, as opposed to subprimers who might actually make it on their own). If there was any doubt that the Federal government and the Federal Reserve are actively involved in attempted manipulation of markets, then this announcement about Freddie and Fannie should obliterate all doubt. Look, nobody would buy this trash on the open market. Nobody. We are a debtor nation to the tune of nearly $1TRILLION a year. Where is this money going to come from? Ah, the magic of credit creation. This is just tragic. The dollar’s days as the world’s reserve currency are truly numbered. How low will the dollar index go? Anyone?
We are doomed with this type of crap! Working hard, saving, and living within means no longer exist. I don’t even think they buy and hold stratrgy works anymore.
They’ll print the money, buy the crap, say that all is well in the economy, pump out some clearly phony inflation numbers, and most in America will try so hard to continue to believe what they are being told. Meanwhile, the big money players overseas will be doing everything they can to move out of dollars and into anything else…anything. Kudlow will be yahcking his head off about how great NAFTA and trickle down are wonderous dreams for the American worker. But the poor working stiff will be going to the gas pump and paying $5 a gallon, eggs that are 50% more expensive, and that’s only when he’s going from one minimum wage job to the other (all other jobs were outsourced to India or China). On top of all this, they actually want the masses to believe stratospheric home prices are sustainable. Yeah, right. Joe Sixpack might buy into it for a while, but foreign investors sure as hell won’t. The spectacle will not be the housing crash (although it will be worth watching). No, the real spectacle will be the crashing dollar and the end of American hegemony as we know it.
This country is toast, economically. We are only going to last as long as foreigners invest in our debt. Once we lose reserve currency status, it’s bye bye economy. All I know is if this things gets through and we start seeing 1.5-2 trillion annual deficicts, run for the hills.
As for Kuntlow, that guy is the biggest USA cheerleader ever, bar none. On the other hand, I wouldn’t trust him with a penny. He is so phony it isn’t even believeable anymore. That guy has to go home at night, look in the mirror, and just laugh at all the money he makes for being on TV, spewing his dreck.
As for Joe6Pack, it doesn’t matter anymore. Several months ago I posted that the gov’t just wants everyone to be lifetime debtor. Helps keep everyone in line since no one has to time to march on DC or anywhere else for that matter. Also, make jumbo money for the banksters, which helps them make campaign contributions. The problem is that you will not get any of this kind of reporting from the media, on either side. I have to laugh when I hear guys like Bill O’Reilly tell me he is looking out for me. Yeah, right, then why are you selling everything that isn’t bolted down to the TV studio on your website. What a prostitute all of them have become. Savage is no better. Yeah, not gonna right anymore books. Sure, then another comes out. These guys make me laugh.
Well the last laugh is going to be on them. At some point people are finally going to wake up and realize the whole system is a sham. Foreigners will no longer want to invest in America and the Fed can print all the money it wants to PPT the markets, but it won’t help. Once everyone figures out the game is rigged, it will finally be GAME, SET, and MATCH.
However, I think it will be a good thing. It will be a chance to start over. Maybe we will get some honest people in charge and some real dialogue going about what this country really needs to do.
However, until this all unravels, the printing press will continue to pour out crap that is called a dollar, politicians and banksters will continue to screw over the country, and people will continue to work the system. It is sad to think that this may still take a while before it all collpases on itself.
In conclusion, I just want to add a quote my father used to tell me when I was little and before he passed. He mentioned to me that Hitler once opined that capitalism in the US would eat itself up. I have tried to find that quote, but never have. Any help would be useful. It could also have been Hitler talking to hear himself. However, the more I look at how this country operates and screws everyone and everything up, I have to wonder if Hitler may have been on to something, just a little bit premature. I think my dad used to tell me that because he saw even in the 70s and 80s how corporations and banks were beginning to screw people out of jobs and the gov’t was stealing from SS and stealing from people with programs like SS.
Sorry for the rant, but I just don’t see how if this bailout, if it goes through is not going to finally crush the economy. WE CAN’T AFFORD THIS! WE ARE BROEK AS A NATION!
OC Dan…great post. It’s going to get bad. Real bad. The housing implosion is just periphery. Kinda mundane, really. Rome is burning as we speak. We saw how our societal structure functioned during Katrina. That was just an isolated storm, however. The economic tsunami cometh and will wash across the entire country. I’d hate to be in a Los Angeles, a Houston, Miami, Detroit, etc.
frcp,
What gets me is the incerdible number of people who still buy into all of this. I realize they aren’t called sheeple for nothing, BUT come on. Look around. When you a reliving in a nice neighborhood and your family income is say, 75K, what do you think is going on? You drive a ‘98 Saturn and the wife has a ‘02 Honda, but everyone else has a matching pair of less-than-a-year old Escalades and goes overseas on vacation twice a year and you know that the neighbors aren’t making anymore or much more than you are, unless the wife is working ebay and AVON and/or you are growing pot in the house.
A big problem in this country is that no one wants to talk about personal finances. No one wants to admit that their family income is 60K or 75K and that they are having trouble, even without the credit cards or any other debt. We just run around saying all is well and everyone is doing great. Well, BULLSH!T! People are stressed out, inflation is growing faster than salaries, pollution is running amock, people are working longer and harder more and more often, we have a negative savings rate (and don’t add home values to the mix because until you sell a home, you have nothing but imaginary equity), the national debt is a joke, the annual deficit is a joke, the trade deficit is a joke, and forget about the future entitlements like SS and Medicare. But hey, everything is great, according guys like Krapmer and Kuntlow. No wonder we are screwed in this country!
“He mentioned to me that Hitler once opined that capitalism in the US would eat itself up.”
The quote is not from Hitler. It’s attributed to Karl Marx: “The trouble with capitalism is that it eats its young.”
Actually, Hitler was a major fan of capitalism. He abolished unions and other worker organizations, and let stockholders own and run companies (IG Farben of poison gas fame ring a bell). He went to far as to pass a “Charter of Labor” that gave employers almost complete control over their employees. And one of the first things he did was to toss the various leftists (communists, socialists) into jail when he came to power.
This country rewards risk-taking behavior. If you’re not a risk-taker (which I am not), then you’re likely to continue working hard. To me, it’s the trade-off for being able to sleep at night. Are you familiar with the parable of the prodigal son? That story irks me, because the prodigal son wastes his fortune but gets all the praise; the conservative guy gets a pat on the head for being a good boy. So now we have the prodigal house flippers.
The point that Jesus was making with the parable of the prodigal son is that it is never too late to repent of one’s sins.
And the good son is given more than a pat on the head. He is told “everything that is mine is yours”.
Sounds like what the taxpayers are telling the FBs.
>> This country rewards risk-taking behavior.
By privatizing gains and socializing losses.
Don’t worry Ben will fix everything !!! Hilarious picture !!!
http://goldismoney.info/forums/attachment.php?attachmentid=16255&d=1151502289
Your mojo is certainly risin’…
No need to change a word on this one~
Well, I just got into town about an hour ago
Took a look around, see which way the wind blow
Where the little girls in their hollywood bungalows
Are you a lucky little lady in the city of light
Or just another lost angel…city of night
City of night, city of night, city of night, woo, cmon
L.a. woman, l.a. woman
L.a. woman sunday afternoon x3
Drive through your suburbs
Into your blues, into your blues, yeah
Into your blue-blue blues
Into your blues, ohh, yeah
I see your hair is burnin
Hills are filled with fire
If they say I never loved you
You know they are a liar
Drivin down your freeways
Midnight alleys roam
Cops in cars, the topless bars
Never saw a woman…
So alone, so alone x2
Motel money murder madness
Lets change the mood from glad to sadness
Mr. mojo risin, mr. mojo risin x2
Got to keep on risin
Mr. mojo risin, mr. mojo risin
Mojo risin, gotta mojo risin
Mr. mojo risin, gotta keep on risin
Risin, risin
Gone risin, risin
Im gone risin, risin
I gotta risin, risin
Well, risin, risin
I gotta, wooo, yeah, risin
Woah, ohh yeah
Well, I just got into town about an hour ago
Took a look around, see which way the wind blow
Where the little girls in their hollywood bungalows
Are you a lucky little lady in the city of light
Or just another lost angel…city of night
City of night, city of night, city of night, woah, cmon
L.a. woman, l.a. woman, l.a. woman, your my woman
Little l.a. woman, little l.a. woman
L.a. l.a. woman woman, l.a. woman cmon
Rest in peace Jim, you had something to say…
Once upon a time~
I’m familiar with the higher meaning (not looking for a religious lecture, here), but on its face, the story gives the squanderer a break, even celebrates him; how’s he going to learn from that? What an idiot the good son must have felt like.
The prodigal came back ashamed, repentent and willing to work to make things right. The dad threw a party, gave him clothes and a hot meal. The dad didn’t give him anymore money (smart dad).
The difference nowsdays is that the prodigals come back angry because the gravy train is running out. The government (stupid paternalistic jerks) try their best to appease the angry, greedy punks.
Was it Hitler or Kruschev that your thinking about?
http://en.wikipedia.org/wiki/We_will_bury_you
Here is an article that talks about hyper-inflation prospects for your enjoyment.
http://www.gold-eagle.com/gold_digest_05/taylor041707.html
Their brilliant solution is 40y mortgages. I’m not sure how that can bail out FBs who budgeted with 1.5% IO teaser rates?
“Both Lynne and Joe Kevlin admit to being at fault…”
I seriously doubt it. These folks are probably obese too, but it’s those big fast food corporations that are at fault, not them; they likely go to church where they are forgiven - for everything!
Read the article - there’s a photo. The man is not obese and he’s a Vietnam vet. I’d say he’s given enough to this country that he doesn’t need to be mischaracterized here. He made a mistake. Very sad.
“Read the article - there’s a photo. The man is not obese…”
I saw it and the skinny kid too.
“An oversupply of expensive houses for sale is reducing demand,” said Jonathan Miller, president of Miller Samuel.
Oversupply does not reduce demand!!! - ECON 101
However, the lack of reasonable financing options (i.e. credit tightening) reduces demand, buyer’s perception of value might reduce demand, attractive housing options (i.e. rent) reduces demand.
Oversupply and flat or falling demand results in lower prices . . . why is this so hard to understand??
What he means by “demand” is reducing the desperate people who think that have to buy or risk being renters for life, and would offer any price to get that home. Yep, oversupply will do that. Welcome to reality!
The Citizen from New Hampshire. “Joe Kevlin and his wife Lynne are in a foreclosure situation that is becoming more and more common across the country.”
Jake Blues: I ran out of gas! I got a flat tire! I didn’t have change for cab fare! I lost my tux at the cleaners! I locked my keys in the car! An old friend came in from out of town! Someone stole my car! There was an earthquake! A terrible flood! Locusts! IT WASN’T MY FAULT, I SWEAR TO GOD
“You just reached a saturation point to what the economy could support.”
Perhaps the number one spot this will play out in the Northeast is on the east end of Long Island.
Everyone who is tuned into real estate out on the east end of the Island knows that prices are steadily coming down. What is maddening though is that the pace of activity at the very upper end of the market has yet to truly be affected, so this elevates the median and average prices. This in turn gives the agents something to tout to gullible buyers.
A huge percentage of the homes out there are second homes and thus investments whether the owners care to consider them investments or not. As soon as it becomes clear to a critical mass that these are not only investments but shaky investments, we are likely to see a significant and protracted price decline.
I’ve suggested several times on this blog that there are two housing markets that parallel the wealth divide in this country. There are two first-time homebuyer markets, one for weathly, one for poor, each of which is connected to its respective upper end homes. Theoretically, the lower market can collapse and the upper market continue puttering along. I’m thinking about the car market where the price of Lamborghinis is unaffected by the price of Huyndais. People are going to pay full price for a Lamborghini, regardless of how many are available on the market. It sickens me, but I’m starting to believe this as I watch prices out here in the Philly ‘burbs fall (and not sell) on the low end and increase (and sell) on the high end.
A good form letter for mailing to your representatives expressing your views of the proposed bailout.
Please make a few mods to it before emailing it so they don’t get duplicates of the same letter.
Thanks.
http://marinrealestatebubblewiki.wetpaint.com/page/alternative+draft+letter
Ben is finding a lot of these loan consolidation refi stories. The same kinds of people who can’t use credit cards responsibly, can’t refi responsibly. They fold the CC debt into the house, then start to run the cards up again.
That, and the 2 mortgage stories. Like Chris Thornburg said yesterday we are reaping what we sowed.
“Luxury home prices slid in New York’s Long Island and Queens”
this is deflation, Japan deja vu
No offense, but the Kevlins got no do re mi in their Kalvinator fridge account…
Got a plan B, aside from playing the blame game?
Okay, the guy is a Vietnam vet. Still doesn’t mean he and the wifey didn’t try to play the debt=wealth game with house money, literally. Now, when the reset kicks in, it is all about “We didn’t understand what we were signing for.” I call BS on all of these people. When my wife and I bought our home 11 years ago, it was with an FHA ARM and you BETTER FRIGGN’
BELIEVE I read those docs that speeled out all the possible scenarios a hundred times. I am no RE guru or financial wizard, but by the time I was done, I could amoritize a loan in my head within a hundred bucks a month. I knew what the monthly would be if the rate went from 7 to 8% or 7.5-8.5%. When we got a HELOC several years ago, same deal. These people don’t get any love here. They just signed up because the bank gave them a checkbook with $100K in it. Now they sing the blues because the money is gone and mortgage payment has gone up. Sorry, if you were mentally handicapped or ill or some other serious problem as has popped up, I don’t think many of us would have a problem. But when all we see are teh same regular schmoes saying they have been victims of predatory lending, sorry, not going to get any love over here. YOU FREAKIN BLEW IT. Bottom line….STAY OUT OF FREAKIN DEBT! If you can’t afford it or can’t afford to pay it back in a timely manner, don’t buy it! NO MORE OF THIS INSANITY.
He lost his insurance after becoming ill. Let’s hope nobody dancing on his proverbial grave here ever gets to experience what that feels like. Unless your pockets are very deep you could soon lose everything too depending on the illness. I say the bills during my cancer surgeries and was very thankful for my insurance.
Aw my tv paymend iz du. dey gunna tak it awey. Caveman not undastand term of lone need bale-out.
Very funny GH. First thing I thought of was those stinkin GEICO ads. Yeah, so easy a caveman could do it. Sure, isn’t that one of those lenders ads also. “The biggest no-brainer in the history of mankind.” Sure, until the reset kicks in. Then it becomes the biggest kick in the pants in the history of mankind.
No Florida thread today, but the situation I ran into yesterday sort of illustrates the insanity of the bubble at the highest levels of government and industry in this country.
I have been looking for an apartment or inexpensive small house or cottage in SouthShore Tampa Bay. This area used to be very rural in nature, with quite a few farms, but is within reasonable commuting distance (30 to 40 minutes) of Tampa. I have no desire to live in another part of the county and so am looking desperately for an inexpensive apartment around here. Because of the bubble, most of the middle income mom and pop apartments sold out, so my choices are either subsidized housing, which I don’t qualify for, or ridiculous rental rates for desperate FBs trying to make their mortgage.
Because of the bubble, we did lose a lot of farming land around here to development. So what do they do? They build yet ANOTHER subsidized housing devleopment for farmworkers in the area. Damn nice, too, with playground and clubhouse and swimming pool. I kid you not.
However, here’s the catch. Even though I pay taxes to support this crap and even though they have “Equal Opportunity Housing” signs all over the place, I and other taxpayers are not allowed to live there unless part of our income comes from farm work!!!!!!!!! Basically what it is, is a taxpayer subsidy for corporate farms to house their illegal workers, who also lie and say they work on farms, but then try to get other jobs, like in construction.
We already have a few of these subsidized apartment complexes around here that can’t even fill their available apartments, and they build ANOTHER one they can’t fill. So there’s even a glut of subsidized rental housing here. But meanwhile, returning Iraq veterans can’t find places to live.
Here’s the kicker: the newest guest worker complex is right behind a new Morrison Homes development where they are asking $300,000.00 and up for the homes. In Southshore Tampa Bay, LMAO! Anyone who lives in that development is going to have a rough time dealing with their guest worker neighbors and the increased noise, mariachi music blasting away, break-ins and drug traffic. That’s what they are paying top dollar for, LMAO!
Bargain with potential landlords.
I was recently offered to rent a place three blocks from the ocean, beautiful house, for $1800. The list price, were it for sale, would be the high six figures. But I figured that if they were willing to lose that much money, they’d be willing to lose more. So I told them I’d rent for $1300. They said “no”, so I left. I got a call back a week later, and they offered $1100 if I’d take it right then.
Of course, from private owners, you also risk the home going into foreclosure or being sold. So you do roll the dice.
Regulators, Lawmakers Consider Ways to Ease Mortgage Foreclosures
CQ (www.cq.com), April 17, 2007
Lawmakers and regulators agreed Tuesday that Congress, local governments and private industry should act together to try to slow the record tide of mortgage foreclosures that is roiling the economy.
“This is a problem that needs to be addressed at all levels of government,” Carolyn B. Maloney, D-N.Y., said at a House Financial Services Committee hearing on Tuesday.
Committee members heard a variety of ideas to stem the problem, including public-private partnerships to prevent foreclosures, mortgage refinancing and rewriting efforts, and calls for national standards for those who sell or offer mortgages….
Much of the focus has been on programs that allow borrowers to refinance their adjustable-rate loans into fixed-rate mortgages with less onerous terms and conditions. The Federal Housing Administration (FHA) runs such a program, and lawmakers expressed support for expanding the agency’s ability to work with subprime borrowers.
The committee is scheduled to hold a hearing on FHA overhaul legislation (HR 1852) on Thursday. That bill would allow the FHA to work with subprime borrowers it cannot help under current law and increase the number of loan products available through the agency.
Similar efforts are under way by mortgage finance giants Fannie Mae and Freddie Mac and by nonprofit groups.
Still, those at the hearing agreed that more must be done. Sheila C. Bair, chairwoman of the Federal Deposit Insurance Corporation, called for national standards for mortgage brokers and lenders. Currently, the industry is largely regulated by state laws that offer varying levels of protection and licensing….
I believe the appropriate response to FB’s that say “I didn’t understand the documents” is: “Tough sh*t”
Sometimes I read these stories about people who didn’t understand and I start getting images of 12 year olds, or people who are mentally retarded living in special hospitals. No. These are adults who deal with marriages, bank accounts, taxes, jobs, etc. And if they didn’t understand something and signed it anyway - -well then they’re aggressive risk-takers to boot. What we have here is a bunch of people who made stupendously bad business decisions. They gambled. They lost. Tough sh*t.
Contract law stipulates that one must be of sound mind for the contract to be valid. Aside from outright fraud or mental retardation, these contracts are all valid and should be enforced. The house is collateral for failing to honor the contract.
Can’t afford it? Too bad, so sad, bye-bye.
I’d like to point out that there really *is* a culprit to the housing bubble and its a culprit that has, as yet, escaped this fiasco unscathed:
The media.
The media CONSTANTLY quoted David Lereah and countless brokers saying “the market always goes up”, and “this is a good time to buy”. We, here on this blog, said otherwise — but let’s not forget that YEARS went by and very few mainstream publications printed ‘contrarian’ views about the housing bubble. In fact, the term ‘housing bubble’ was rarely used until its implosion was already an established fact.
I’m not in any way suggesting that individual responsibility is not the key issue here. It is. A bad business decision is a bad business desicion, and its owned entirely by the decision maker. But: The media contributed enormously to the public perception of a boom market. Why? Because real estate advertising represents an ENORMOUS percentage of advertising sales. Let’s not forget that publications like the New York Times make THE MAJORITY of their ad revenue from classifieds. They took this bubble all the way to the bank. And they should not be able to jump sides and report on the shady mortgage brokers without looking in a mirror and accepting fault themselves.
My two cents.
As a member of the media, everybody should be aware that those who read anything without considering the source aren’t exactly thinking for themselves. I remember once handling an event in which locals bashed the media for a poor season at the Jersey Shore. Turns out the papers had the nerve to print stories about the syringes, vials and other medical waste washing up on the beaches! So they took turns plunking an “editor” in a dunking booth. Very funny stuff.
Seriously, mainstream publications will give you mainstream viewpoints. If you want more, you’ve got to find specialized media or such places as this. A lot of folks don’t have the energy, just as they can’t bring themselves to read that they’ve just refinanced with an “stealth” ARM.
The first article I have seen addressing what this mess will mean in the 08 election cycle.
Housing Bubble Bursts into American Elections (AEI editorial)
London Financial Times
Wednesday, April 18, 2007
“…At an emotive level, the travails of the US housing market will receive increasing political attention as the 2008 election approaches. Scenes will become commonplace of single mothers or minority homeowners being evicted, unable to cope with rising interest rates on their adjustable rate mortgages. The owners can be expected to charge that those mortgages were foist upon them by deceptive lenders, who knew full well that they would not be able to meet those mortgages’ terms.
“Politically more important will be the fallout on the overall economy’s performance. A 30 per cent decline in housing construction could shave up to 1.5 percentage points off gross domestic product growth. In the same way that rising home prices induced home owners to borrow against their homes to increase consumption, declining home prices could put that process in reverse. This prospect has prompted Alan Greenspan, former Federal Reserve chairman, to suggest that there is a one-third chance that the US economy slips into recession by year-end….”
http://www.aei.org/publications/filter.all,pubID.25982/pub_detail.asp
Yes, I implicitly trust everything the AEI tells me. For instance, that the Iraq war has been going peachy keen ever since they convinced the POTUS that that it would be the next Grenada (with oil to boot). They have convinced me that a ‘think tank’ is a large toilet down which you flush your thoughts…