Bits Bucket And Craigslist Finds For April 23, 2007
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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i went to look at a few open houses this weekend. i saw some pretty nice coops in queens ny. the prices have come down a bit but
i am not doing anything. i have waited this long so i will wait until i can get what i really want at a fair price.
my search is hampered by the fact that we have a dog and many buildings will not allow a pet. the pressure is on from my wife though so wish me luck in weathering this storm.
it was obvious everyone involved is anxious to sell and the realtors are pretty desperate.
MG,
I’ve taken this approach with my wife. I show her how much money we’re saving every month by renting, which is about a grand a month. Then I take $125 of those savings and put it into our vacation fund. It keeps her torn between wanting a house and wanting what could be a sweet vacation. It’s impossible to get the house completely out of her mind. (I think I’ve posted this before)
(of course we really wanted to go to London, but with the $’s performance, we may be looking at somewhere out west)
Great Advice!
Agreed!
My fiancee (very soon to be wife) and I agreed to put the difference in savings, but a vacation fund would keep her more motivated… I think 1/4 of the difference is fair.
Got popcorn?
Neil
You should rent the movies “The Money Pit” and also “Fun with Dick and Jane”
both hilarious comedies about FB’s and foreclosure. google the movies. awsome. That will slow her down.
I love the credits at the end of “Fun with Dick and Jane” (the “Special Thanks” to Enron, Arthur Andersen, Worldcom, etc.). Hilarious.
Why don’t you tell your wives to get a job if they want a house that badly.
Desperate realtors can mean shady deals. Watch out for the ones that act to hungry.
“Yond Cassius(Realtor) has a lean and hungry look,
He thinks too much; such men are dangerous.”
That’s pretty funny.
What realtor fraud?http://boards.hgtv.com/eve/forums/a/tpc/f/6461009313/m/6721048613
The best part is that at the end of the thread after everyone says to get a RE attorney, some trolling re agent says that a Realtor will save her and to not panic. Priceless
We are in the same situation. The prices need to come down quite a bit more for them to be fairly valued. I use 1999 plus normal appreciation as a rule of thumb. So a common row house in Queens that sold for $250,000 in 1999 after an appreciation of 3% to 5% should be $350,000 to $400,000. Going from $700,000 to $650,000 as they have, is still way overpriced.
Current buyers are going to lose a lot of value.
1979 would probably be more appropriate when this thing is done…
Your probably right. But, we are looking for fair valuation, rather than a bottom of the market.
If we buy a home that is priced in line with long term valuation, though it might lose some value, it would regain that.
This is opposed to those who bought here the last few years, who will never see their house valued that high again. At least not in their lifetime.
Tell it like it is, sellnrun!
I’m using the 1997 date as well. I figure I’ll give them inflation and appreciation but I use core cpi for the inflation measure which we all know is but a shadow of real inflation over the last 10 yrs.
“the pressure is on from my wife though so wish me luck in weathering this storm.”
My wife so far has given me plenty of slack, although I know she would rather own than rent. But if she ever starts pressuring me, the first thing I will do is make her put pencil to paper (or maybe mouse to spreadsheet) and have her account for all the costs of ownership versus renting. I know that at current prices for what we would want to buy, it is still roughly only 2/3 as expensive to rent, and that is before taking capital losses into consideration — the median SFR price is down 18% YOY in our zip code, for a 1-year loss of $180,000 or so on the median-priced SFR. I wish I were wealthy enough to be able to shrug off such a reversal of fortunes, but I am not.
The boot’s on the other foot in our household…the husband wants desperately to be out of our rental by the end of the year.
But due to the laughs and gasps he hears from me every morning, as I read the housing blogs, he has relunctantly acceeded that next year might be a better time to buy for us.
Which is big of him - he’s been itching to rewire the house for ethernet for about 18 months now…I can only hold off his ‘d.i.y gene’ for a while
You can hold off this d.i.y. gene in the apartment by going wireless. Much tidier too.
We already have wireless, but we have a lot of games consoles and hi-fi equipment wedged into strange, unaccoustic places - it drives him crazy.
Its all sorcery to me…but apparently ethernet wired under the house is the way to go.
I can’t pretend I understand, but then he goes blank when I coo about owning bantam hens and growing my own potatoes.
Horses for courses, innit?
Same in this household — we are renting and all his tools are in storage. It’s not easy to hold the reins back!
I’m the DIYer in the family. I stick about $100 a month away for my “pwer tool binge” fund. We have no garage now. I also know I’m going to have to alarm the garage where ever we move. Tools and Hondas are the cash crop in Sacramento after meth and pot.
Three approaches in our household:
1. We have a spreadsheet that shows monthly payment would be for a given housing price (PITIM) in our selected area. We go to open houses almost every week. One look and we simply decide we don’t want to make the sacrafices needed to DOUBLE our monthly housing costs.
2. We are purchasing nice furniture with the money saved in renting. If the urge to buy gets too great, we go out and buy the next item on our furnishings list. When we do move, it won’t be to an Ikea-furnished house.
3. MIL sold her house in Northere VA in April ‘06. Every month I go to Zillow and look at the current price. It’s now down 14% and sinking.
After 2 years of rentng and seeing that we can’t afford the area where we want to live, she is now talking about moving out of the area all toghther! (just rumblings).
Here in W. Colorado, a year ago you could find one or two rentals(a town of 10,000) that allowed dogs at any given time in the paper. Now about 1/3 of the properties do - there are lots more rentals on the market, too.
i must also include that we are living in a pretty cramped space in a area we a are not very happy in.
So rent in another area. To buy now in Queens would be completely stupid. Queens and Brooklyn both have a massive kick to the jimmy coming. This whole area is bloated like Rosie O’Donnell after 3 hours at an Olde Country Buffet.
that was my original plan and i will go back to it now after seeing an apartment with $900 maint. that i could rent for $1300. it makes no sense to buy. i had a long talk with my wife
last night and i think the numbers sunk in.
Why not live here in Sunnyside queens, I used to have a view of the World trade center out my picture window… right along the LIE at greenpoint ave.
I know i pay under market, but most of the people are still the old timers whos houses are mostly paid off…
Plus lots of houses here have a real back yard for the pets. And if you are lucky (like me) you find a landlord that has one car and an empty off street second space for your car.
“And if you are lucky (like me) you find a landlord that has one car and an empty off street second space for your car.”
As for myself, I would make that a requirement. I have a condo with two interior spaces. Landlord doesn’t have the parking space you want? You might post a note on the bulletin board that you (or landlord) will pay $x for use of a space and subtract it from the rent offer (or variations thereof). There are people who either don’t drive or who need the cash, almost everywhere. In Florida condos, it’s easy to get a space for $100/mo or even less. While it likely would be much higher in NYC, so what?
Some Landlords ARE NOT grubby, and rather have the space(s) available for family or friends, then a lousy $100-150 per month.
a DJ friend of mine rents a 2 car garage for $400 mo. for the dj gear and one spot in the driveway for the commercial van…but then its a business deduction
if you must buy -walk the halls and use a flyer
I’ve done this several times
state clearly
1. you are not a realtor or “investor”
but looking for a home for your family
2. allude to a net deal- 2 parties can’t save the commision
I’ve done this 5 times with excellent results….
Xmas eve w a ton of cash may be the right time,but more likely in 08
Adjustments;…
Identify the building you are interested in……Either by county record information or what ever means you have, determine who is a owner and who is a renter….The flyer then gets mailed to the owner resident or the non-occupant owner….A follow up a week or two later with a second inquiry is also helpful. It reinforces that you are for real and not a realtor pulling some scam…..Lastly, if you can determine that the owner owns the property free and clear, than it may be that they are relying on the rental income even though it is a very low rate of return on their equity….Offer to purchase with a seller carry back 1st mortgage….The sellers monthly income is likely to be significantly greater then what they are receiving now….
flatffplan is correct…It works….
Same here. Though not cramped our apt. is a bit run downed. But because we’ve been here awhile, moving would mean a big rent increase. So, for now, it’s better to wait untill we can buy.
I’m totally sympathetic. My wife and I rent an apt. in a total dump of a converted house here in the D.C. area (might have been a boarding house at one point). But the thing is that we couldn’t even rent an efficiency in most real apt. buildings around here for what we pay. Fortunately, my wife has great financial sense and understands the way things are.
Maybe I’m greedy and cheap, but having a nice big fat bank balance more than makes up for living in a dump.
WASHINGTON (Reuters) - The Democratic and Republican leaders of the U.S. Senate Banking Committee said on Wednesday they see no need for a federal bailout of the subprime mortgage lending industry.
Both spoke after a morning summit on the crisis among subprime mortgage borrowers, who qualified for loans despite shaky credit, and their lenders. The meeting drew lawmakers, regulators, mortgage industry representatives and consumer groups.
“I’m not interested in (a bailout) at this point. I think this problem can be addressed without going down that route,” said Sen. Chris Dodd, the Democratic chairman of the committee.
Sen. Richard Shelby, the most senior Republican on the panel, said he would be “unalterably opposed” to a costly federal program to rescue troubled mortgage borrowers and lenders.
“I believe the subprime problem will go on for several years,” Shelby said, but added that market forces would be corrective.
Dodd, of Connecticut, said the participants had agreed to several principles to deal with the crisis but that he would convene another meeting on May 2 to hear concrete plans.
According to a leaked document prepared by Dodd’s staff, many of the principles concern ways to help borrowers facing foreclosure.
Mortgage servicers should seek to modify the terms of subprime loans before their interest rates are reset higher and set aside dedicated resources and staff to help those borrowers, according to the document.
Fannie Mae and Freddie Mac should work with lenders to make credit available to borrowers who have trouble refinancing out of subprime loans, the document added.
After the conference, Freddie Mac promised $20 billion in new financing to help subprime borrowers stay in their homes.
Another principle calls for servicers to make early contact with subprime borrowers with adjustable-rate mortgages to determine if they qualify for a more stable loan, according to the document.
The participants weighed “points of general consensus,” Dodd told a news conference after the summit. “I can’t speak for everybody in the room, but my sense was that these were agreed upon,” he said.
An explosion of subprime mortgages available to borrowers with damaged credit helped fuel a five-year run-up in home values that ended in 2005. Now that many of those loans are becoming delinquent, regulators, lenders and lawmakers are trying to stabilize the home finance system.
Among the participants in Wednesday’s gathering, titled the Homeownership Preservation Summit, were Sheila Bair, chairman of the Federal Deposit Insurance Corporation, the chief executive officers of Fannie Mae and Freddie Mac and senior executives from Citigroup, JPMorgan Chase & Co., Countrywide and HSBC, among other lenders. Representatives from consumer and trade groups also were invited.
“As we finished the meeting there was a sense that there were principles that are being worked on that the industry has the ability to handle,” said John Robbins, chairman of the Mortgage Bankers Association.
Thank goodness, I’m glad to see our legislators have ran into some good ‘ol common sense.
Common sense is not even on the list of what drives legislators’ decisions. First on the list is what do the lobbyist contributors to their re-election fund want. A far second is what do the voters in their home state or district want.
But from their perspective that is common sense.
I disagree, Bill. Donations come a very close second. A bailout proposal would cost them votes, so it’s a non starter. There was no political advantage to be gained, and a possible big mess to be started.
Let’s see of they say the same thing when Alt-A and prime mortgages go the same route.
No - Dodd has no common sense. However, he knows who votes for him and CT loudly says: NO BAILOUTS!
I might be confused here, but I thought bloggers thought the Freddie Mac $20 bil was a form of bail-out. Is Dodd saying one thing yet doing another?
I wondered about that, too. Although $20B is a drop in the bucket, it sets the precedent for this bubble/bust.
$20 bil. may look like a bail-out, but I don’t think they are going to do anything that is not in the best intrests of their stockholders. My guess. (hope)
Window dressing. $20 bn wouldn’t bail out Wyoming.
The $20 billion from Freddie Mac isn’t a bail out. I actually think it is the opposite of a bail out. Freddie is a stockholder owned corporation (not gov’t, just fed. chartered)- they are trying to keep their ARM customers from foreclosing by refinancing them into fixed interest loans. If they do it, it will be because it is a good business move. If it helps keep Freddie afloat and some FB out of foreclosure, it will probably lessen pressure for a bailout. However, I would guess that few of their borrowers would qualify- those that are way underwater would be a poor risk, and Freddie may have already sold their mortgages to investors- if they refinance fraudsters or FB, they could be stuck with a festering pile of unsalable mortgages.
That’s how I read it too. It would offer just enough to keep people paying ridiculously inflated mortgages for overpriced houses– that they would be much better off foreclosing and letting the lenders deal with the REOs. So long as this is done as a private investment and not with taxpayer money I’m not opposed.
But I do support a return to the old bankruptsy laws as the true bailout.
Read my Lips….No new Bailouts!!!
Great post DavidCee. My favorite line is, “An explosion of subprime mortgages available to borrowers with damaged credit helped fuel a five-year run-up in home values that ended in 2005.”
And yet people still do not understand why prices will come down substantially. They understand that subprimers drove the prices up but don’t understand that their exit will drive prices back down. People are just stupid or at the very least naively hopeful.
I think it is a little of both, the stupid ones (RE industry) are telling the naively hopeful ones (FB’s and future FB’s) everything is going to be alright.
“People are just stupid or at the very least naively hopeful.”
The main ingredients for boiled frog.
They are neither, they are simply ignorant (in the sense of not knowing by deciding to ignore).
The statement, “An explosion of subprime mortgages available to borrowers with damaged credit helped fuel a five-year run-up in home values that ended in 2005,” is very clear to long time readers here. To the average joe, it’s really very full of complex issues like liquidity, credit standards, speculators, fraud, and globalization.
People simply don’t want to be bothered with the details. That is why they are easy targets and will never know what hit them.
If it was negative interest rates that drove the prices up then what happens to the sub sobers will not change what happens to the prices. They were on the edges.
“I’m not interested in (a bailout) at this point. I think this problem can be addressed without going down that route,” said Sen. Chris Dodd, the Democratic chairman of the committee.
I take that to mean, “My office received so many e-mails, letters and angry phone calls that I don’t want to risk my political future.”
that is exactly what happened because that is a 180 from where he was.
I think Dodd started talking bailout before he had a clue about the size of this monster. He was all outrage about ruined families and neighborhoods until his banker pals briefed him on the numbers.Now he’s tap dancing backwards. Hillary and Obama will do the same.
You might be right. The dog and pony show which keeps reiterating the refrain “subprime is contained” masks the depth of the situation considerably.
There is simply too much political risk here to wade deeply into this. Dodd can go after the mortgage industry, sponsor hearings, draft legislation, all kinds of stuff to make him look like an active supporter of the little guy.
If the economy goes down the tubes, it is in Dodd’s best interest that it happens in ‘07. (and it’s probably that he will get his wish).
I take that to mean, “Democratic Senators in other states received so many e-mails, letters and angry phone calls that I don’t want to risk their political future as well.”
Although new proposals at FHA and Freddie Mac may be a less visible way of “bailing out” people facing foreclosure.
…..or someone on his staff got a REALLY big calculator and he’s seen the actual $$$$ it’s going to take.
Dan, I think your point is more likely. I occasionally see signs of common sense in the Democratic Party (yeah, that’s me saying that and I am not on pain killers). I expect Shrillary and usama Bin Obama to backpeddle and leave the stupid buyers up s*&% creek without a paddle, as they should be left.
I’m not a fan of Obama, but tying him to Bin Laden just because their names rhyme is in very poor taste, Bill. He does not deserve that. You can do better.
Shrillary is a cute one…
All the partisan bi$%#slapping is based on the phony paradigm that there’s a dime’s worth of difference between the two parties. They are just wings of the same bird of prey.
As George Carlin said, “it’s a club–and you’re NOT IN IT!” From Obama to “Ace” McCain: “They don’t give a $%@# about you and me”.
Any politician promoting any REAL change from the status quo–who hasn’t already been marginalized by the MSM–will get his @$$ “Wellstoned” faster than you can say Federal Reserve.
Given their record so far, he fact that the Republicans don’t seem to be worrying about it is probably a guarantee that it will be a catastrophic collapse.
“As we finished the meeting there was a sense that there were principles that are being worked on that the industry has the ability to handle,” said John Robbins, chairman of the Mortgage Bankers Association.
Hey John, how about the principle of spending 3X a person’s income on a mortgage?
Another principle calls for servicers to make early contact with subprime borrowers with adjustable-rate mortgages to determine if they qualify for a more stable loan.
Ugh, I hear this idiot meme over and over. They want the FB’s to refinance into a fixed-loan. But these people didn’t qualify for ANY stable loan, or they wouldn’t have signed up for exotic loan in the first place. And if the FB signed up for that neg-am and invested the difference with Vanguard (remember that cheerleader talking point?), then they wouldn’t be an FB.
The only thing these FB’s qualify for is jingle mail, and I think Dodd finally got a clue.
“According to a leaked document prepared by Dodd’s staff, many of the principles concern ways to help borrowers facing foreclosure.”
Why would Dodd want to penalize people who bought homes which are more expensive than they can afford by making it easier for them to hold on to their albatrosses? The only reason I can think of is to help his constituents in the lending industry. Without the ability to sell at a higher price later on, the burden of paying of paying off $500,000+ in debt will be crushing on a low income household’s financial picture. They would be better off walking, as this article suggests:
——————————————————————————-
Who’s the real victim in the subprime mortgage debacle?
By Michael Lewis
BLOOMBERG NEWS
04/22/2007
…
Moving is never pleasant or cheap, but that is the main cost to the subprime defaulter: He hands back the house, whose value has presumably plummeted, to the people who lent the money to buy it, and walks away. He rents. (Shrewdly!) In effect he bought a very cheap call option on the U.S. housing market. While he waited to see if his call option made him richer, he lived in a much nicer house than he could otherwise afford and probably wondered why rich people had become so recklessly open-handed. His behavior was irresponsible, but the markets let him do it and so it’s hard to blame him.
http://www.stltoday.com/stltoday/business/stories.nsf/0/E4852A1F409DE660862572C30082647C?OpenDocument
That’s a great piece in the STL. Nice find Stucco.
Chin up MGnyc — just found out a half-built cinderblock box in my brooklyn neighborhood is going up for sale — developer can’t finish it and is unloading it — touting that buyer can make it “condos or rentals!”
New lending standards are going to kill most ny buyers — a down payment here is a small fortune. No other way for priced to go but down.
HEY geek whats with all the New Development of Lux Kondoze Right next to the Queensboro Plaza Elevated Subway 7 train?
I would love to pay $400K and have a front room view of elevated subway trains every 2 minutes with the morning koffee …geez
When I look out the windows of the 7 train I can only imagine that is what hell must be like.
Well John Rocker was right about how dangerous the 7 train is…but that was back in the 80’s, man i was scared to ride the 7 going to mets games….
Also they are tearing down a building right along the 7 at jackson/queens blvd. next to the gas station… its been empty for years…..Imagine it was only 20 feet or so from the tracks….
But maybe just maybe they have a plan not to rebuild, and to widen the road there and ease traffic….ya think?
Nah….we gotta have more hipster kondoze.
Your “kondoze” spelling got me thinking…maybe it should be spelled “condoughs.” As in CON you out of your DOUGH (money).
Nice…they also are building tons of condos in dumbo overlooking the Q …and let me bore you all again with my very old rant: New construction in NYC is to be viewed with suspicion. Much of it is done as cheaply as possible. The biggest con-dough is how much upkeep and maintenance (and suing your sponsor for poor workmanship) is going to cost many new-condo nyc buyers over the years…
“a down payment here is a small fortune”
A down payment in CA is also a small fortune — approximately equal to the loss in value of the median priced home since last year in many bubble areas ($100K+).
I mean “prices” …yawn…coffee
Many open houses in the NNJ this weekend. Believe it or not there were TWELVE open houses in one road, Magnolia Way in North Haledon. 11 were by Realtors, one was FSBO. It was surreal, there were three in a row at one point - very bizzarre driving down that road yesterday afternoon.
All absurdly overpriced, of course. $550K for a 3b/2b interior townhouse. I think not! $200K, maybe.
Just like Halloween - you feel like your Trick or Treat’ing.
“Many open houses in the NNJ this weekend. Believe it or not there were TWELVE open houses in one road,”
I believe it!
All the Sunday open houses in my neighborhood in Santa Barbara were cancelled, because it rained. (California makes you weak.) Checking the MLS, nothing in this neighborhood has sold, is pending, or has been reduced in price since January. (Only one house has sold around here all year, listed in October at $2.4 million, sold in November for $2.28 million. Not much of a price reduction, but still; there would have been multiple bids on Day One two years ago and the house, a nice one across the road from the ocean, would have gone for more than list) However, when I went out to walk the dog, I saw a guy in a black Escalade parked in front of the nicest of the houses for sale, screaming into his cell, “Barbara! This is your house! This is your house!” Aw, shucks…
FYI many people around here are retired or semi-retired, so moving is a choice not a necessity. I suspect the sellers are hanging tough on prices, and, if they can’t get what they think their houses are worth, they will just stay put.
tell her she has to kick in the lost equity- that will cure the problem
Los Angeles is burning.
http://louminatti.blogspot.com/2007/04/los-angeles-is-burning.html
not really, but with the drought, look for wildfires later this year as they always (unfortunately) follow the drought
Yea… its not fire season yet here.
Wait for August.
Thankfully the brush close to our new apartment burned last year during a wet time.
Seriously, it takes five years for nature to re-accumulate enough fuel to get flames past the border landscaping. Although the smell and ash can be bad (the Laguna-Nigel fires of the 1990’s was particularly bad).
But I’ll agree with MBA, fires at this time of year are controllable. The worst is a wet spring and really hot/dry summer. Those years keep LA on the news…
Then again, our “city” is bigger than some states, hence why we can have so many fires and not worry too much about it.
Got popcorn?
Neil
Don’t forget the lovely Santa Ana winds. I remember the fires from my childhood but I don’t remember homes being lost. That must be because places like OC are pushing into the dense wooded areas and they aren’t clearing the underbrush.
Up here we get floods and we love to build new McMasions right on the floodplain. I love looking at topo maps of CA and the central valley. THe CV was a huge inland sea. Global warming would put us all back underwater even in the early stages.
That Hollywood Hills fire came damn close to us.
Got marshmallows?
–
We have four seasons in SoCal:
Drought (this year thus far)
Fires
Floods
and Earthquakes.
Jas
and the culmination of all of the above, the piece de resistance - mudslides
You know it’s really getting ugly here in Florida where our Governor is now pleading with citizens to remain here despite the ridiculously-priced homes. From the following article:
http://www.sun-sentinel.com/news/legislature/sfl-faskgov23apr23,0,1036250.story?track=mostemailedlink
“Stay in Florida because help is on the way,” Crist said in response to a Dania Beach woman’s lament that she may have to leave Florida to find an affordable place to live. “It will be in the form of property insurance and property tax reductions. We’re just at the very beginning of chopping down these twin towers of pocketbook issues that are … crushing [Floridians] financially.”
What the governor doesn’t get is that it’s not just insurance and the property taxes that are out of control; it’s the prices of the homes.
I sold my 4/3 McMansion just outstide of Atlanta for $270K early in 2005 and moved to South Florida for work. I am now renting a 2/2 townhouse here for $1100 per month. It would cost me $290K to buy a similar place and I’d have to pay nearly 2% per year in property tax, $3600 per year in insurance, and $150 per month in HOA. My PITI plus HOA would be around $2600/month. Even if Crist could *eliminate* insurance and property tax, which he can’t, I’d still be paying $1950/month for a 2/2 townhouse. I paid less than that for a 4/3 SFH in Atlanta with more than double the square footage. Also, based on any rent versus buy calculator, it simply doesn’t make any sense whatsoever to buy in most of Florida.
That’s why there is a mass migration from Florida; it’s not just the taxes and insurance. Unfortuantely, if Crist “fixes” the problem, it will only delay the inevitable devaluation and correction in home prices. Basically, it will only hurt those of us sitting on the sidelines waiting for the correction to buy.
The state of FL is going to experience huge shortfalls in revenue due to this correction. The more people who leave, the more severe the loss of revenue for the taxing authoritiy.
Home prices need to fall; that’s the only way around this massive problem. Just stop gaming the system (changing the rules) to support these stupid home prices. Leave it alone, and let the market find the correct prices!
And yes, you’re correct, the people most hurt by this stupidity is those who have been waiting patiently on the sidelines for this correction to finish.
This is a bailout, plain and simple.
The more people that leave Florida, the more home prices will fall to the point where people will eventually be attracted back to Florida again. Perhaps an over-simplification of a complex and painful process, but the market will ultimately correct the problem.
Concerning a bailout, isn’t it plausible that some of those that may benefit from a bailout are also the same ones that used leveraging to make huge profits during the boom, but later squandered their gains? Meanwhile, those of us on the sidelines are rewarding, through our taxes, those that gamed the system. Unbelievable.
Michael, OT, “The Effects of Nuclear Weapons,” get the 1977 version.
I feel your pain.
I live in San Diego. At least in FL government is acknowledgeing that people are leaving and trying to get them to stay. Where I live people are leaving left and right. What’s even scarier is their all being replaced by low income earning Mexicans legal and illegal.
Shadash,
At least the Mexicans are, for the most part, willing to work hard. Now we need to force them to absorb our education (in other words, improve their schools to save ourselves).
But that is an interesting point… we are losing mid to lower end of high-wage earners and somehow replacing them with low-wage earners. Whiskey Tango Foxtrot? The longer they prop up prices the faster they will fall. (More people will leave and if prices stay up, that’s with their money.)
Got popcorn?
Neil
Neil,
It’s true Mexicans do have a good work ethic. I can’t deny that. But, because their not educated they all compete for the same lawn mowing, pool cleaning, or cooking jobs. What this does is depress their earning power because more people are fighting for less jobs.
Reguarding fixing up the schools. That won’t happen until children of illegal parents aren’t allowed to attend the same classes children of tax paying parents attend. Or if you are illegal you should pay a fee to have your children attend school.
The reason all the Mexicans are moving into California is all the “free” social services.
If the kids were born in the US they are citizens and entitled to the same social services as anyone else, regardless of who their parents are. Read the 14th Amendment sometime.
I hate to bang this drum yet again but significant portions of the hispanic community is migrating out of CA and into the midwest of all places. You really see this increase in places with large meat packing facilities and ag communities that failed back in the mid to late 80s.
The border states are still home to the new arrivals but the established families are leaving. Often there is a small family that is established here and then all the cousins and aunts cross illegally. In those cases, everyone is going as a group.
I think that now that we are seeing hispanic flipper families loosing homes, that migration pattern will increase in speed and volume.
From my limited understanding of this, that Amendment was to apply to former slaves, after the Civil War and had something to do with Jim Crow laws in the Southern states. It was not to apply to illegal entrants into our country. Otherwise, were this the case,t hen I could go right now and rob B of A, turn around and give it to my daughter and she could keep the money. Same principle. Illegals violate the law, but their children get to stay - doesn’t make sense to me…
gwynster,
What are some of the midwest cities seeing a good amount of this? Thanks.
“What’s even scarier is their all being replaced by low income earning Mexicans legal and illegal.”
This is one of the main reasons that San Diego prices will drop considerably, at least in real terms (not sure whether inflation can pick up enough slack to fend off large nominal price declines). The segment of the population responsible for the exodus over the past five years is much wealthier than the newly-arrived immigrants from south of the border. Many home purchases over the past five years were clearly only possible with stated income loans, and we now get to read, on nearly a daily basis, the sob stories about these hapless families who were tricked into buying homes they cannot afford, and who now face mortgage payments of over 50 percent of their monthly nut.
I bet they’ll leave too, when they can’t get jobs with builders or manufacturers and nobody can afford to pay day labor.
How can anyone making the median income in Florida afford to pay that kind of propterty tax???
propterty = property
And while were on the subject, how can these median income families afford the insurance?
We were able to in 1999, pretty easily. The problem is 100% in the prices. Even insurance costs would be a lot less if houses sold at 1999 prices, because the companies are looking at 2006 prices in valuing their risk.
No they wouldn’t. Insurance companies are concerned about the cost of rebuilding the house, which has gone up only a small amount, not the current market price of RE which is much more volatile. If you want to know why insurance companies have jacked up rates so much, it’s because they think the hurricane risk has increased.
The Economist has an article that surveys the derivatives landscape (and touches on the subprime meltdown), arguing that they create money without the involvement of the Fed which has led to asset inflation (and what goes up may go down). Nothing completely new, but it does give an excellent overview. From the article:
“David Roche, of Independent Strategy, argues that derivatives have created a form of liquidity outside the control of central bankers. . . This derivatives “money” is not being used to buy food, clothes or cars—which is why there has been no general pick-up in inflation. But it has been used to inflate asset prices, Mr Roche argues. The danger is things might go into reverse.”
http://www.economist.com/business/displaystory.cfm?story_id=9033348
Excellent suggestion. Thank you.
A little scary in my view. The money supply is out of Fed control. After all, short term rates are actually pretty high — but long term rates are still low.
“The money supply is out of Fed control.”
Could you expand on this? Who IS controlling it then?
Nobody. Sure, the Fed creates money out of thin air and they certainly control what they are creating. However, the banks also add to the money supply every time they write a loan. Contrary to popular belief, the amount of money that a bank can loan out is not limited to the amount of deposits on hand.
Greed? Euphoria? Confidence that stuff can only go up? If so, then fear and pain will cause the contraction. Reserve requirements served to dampen things. The Fed essentially removed them in the banking system long ago and there aren’t any (as far as I can tell) in the “financial markets”. Ever see that popular science fair demonstration of how fast a pop can filled with steam collapses when it cools just slightly?
This is going to hurt.
Totally true. They released the monster, and it’s running wild all by itself.
Hence the retirement of M3. It’s out of the FED’s control.
The WSJ says remittances from the U.S. to Latin America are going down with construction activity.
why is buffet buying western union ?
this funds transfer thing is big- and drying up fast
In the war on drugs, they go after the dealers, the product, and the money. In the war on terrorism, they chase the money trail. Why is it even legal to be able to send profits from a criminal enterprise such as illegal immigration out of this country?
How dare you even ASK?
You know its Politically Incorrect to ask how someone made their money…especially if they are some “minority” then we must accept they have different standards then “us”!
When Guiliani was mayor of NYC, he ordered city police, fireman and welfare bureaucrats not to question the legal status of anyone…he was a huge booster of illegal immigration.
Did you catch the headline the other day that Guiliani has reversed course on that policy now that he is a contender for President and that view (friend of illegals) nationally isn’t so popular?
Sure did. Nice to see that american politicians of all stripes have such firm core values and principles. There are scarecrows in Iowa with more backbone.
The State of Utah actively encourages illegals, as they like the cheap labor. Illegals from Colorado go to Utah to get driver’s licenses - too hard to get them here (unless you buy illegal ones, another topic). Illegals are now leaving Colorado, as new laws make it harder to get employment. There’s talk of using prison crews in agriculture - the state pays them 60 cents an hour and the farmers pay the state for the guards that have to watch them. Talk about a weird economy.
“Why is it even legal to be able to send profits from a criminal enterprise such as illegal immigration out of this country?”
Who cares about legality anymore, really? At this point what laughably passes for “law” in the US is nothing more than a device to protect the crooks and the profits of corporate interests. You should have seen the Attorney General testifying (yeah, testify, Gonzo!) to Congress last week. A complete and utter contemptible joke. That’s all you need to know about the state of the “law” in this country. It is now in much the same state as that which you would find in a third world country. Laws are so laughable and unenforced that Congress’s solution to the breaking of laws is to legalize that which they can’t enforce. So maybe they’ll legalize mortgage fraud and corporate fraud and that way, the only law is “Caveat Emptor”. Which is a thing of beauty, in a way, because those who don’t follow it automatically get punished by the system, like your basic FB.
Great observation.
Do you think we need a “Department of Remittances” now to police the money that people wire out of the country? Isn’t government already a little too big?
Can’t be any dumber to have that department too, rather than building a wall in lieu of just enforcing the existing laws…
All you have to do is tax the remittances and then those taxes would go to the community in which they originated to pay for the additional health care, education and law enforcement that comes with illegal immigration.
Isn’t government already a little too big?
Ya Think ??
(I missed posting on this in yesterday’s Oregon thread because of time zone differences.)
a nearly 300-unit, four-story hotel-condominium project
In Prineville???
As it happens I have actually been to Prineville. When I was holidaying in the US in early 2001 I spent an afternoon in the town. (There happened to be a book on the history of the local railroad in my local [Australian] library. I was fascinated by the concept of a town owning its own railroad, so I swore if I was ever in the area I’d look in.)
There’s nothing wrong with Prineville, but when I was there it was a quiet dusty little town a fair way from anywhere.
A flash Hotel-Condo complex? You have GOT to be joking.
The McD’s owner in Prineville is a buddy of mine so I gave him a call about the project. His response: “That’s Nucking Futs…..”
Your buddy has summarised my thoughts admirably.
I live in Rockville Maryland and for what ever reason the market is seems to be real strong here again. About six months ago the houses in my neighborhood were do about 5-8% from the highs but now they are right back where they were and houses are getting multiple bid. Granted the bids are at or near the asking price and not above like two years ago.
I guess because it is fairly close in to DC and the schools are very very good people want to live here.
That’s good news for someone we know who is about to list his house in 20853 so he can retire to Florida (yeah, go figure). I had been looking on realtor.com and it seemed like there weren’t that many houses on the market in his Zip code.
BTW, he bought the Florida house a year ago, and my best guess from watching the county property appraiser’s web site for recent sales in his neighborhood, he’s down 15 to 20 percent already.
I’m seeing the same thing here in the Philly ‘burbs. Still doesn’t make sense to me, though; I mean, what has changed here in the last four years that people would be willing to pay year-over-year huge increases in prices? The schools were great 5 years ago and it was still convenient to Phila back then. I’m pretty sure that wages have not climbed at the same rate that house prices have. My guess is that there is higher demand than ever due to internet marketing and continued low interest rates. When I had started looking for homes around 2001, the realtors I dealt with were unfamiliar with Realtor.com. Generally, the only demand for houses came from people who were strongly interested in buying. Many times I was only one of a handful of people who had looked at a given house.
Nowadays with the internet, houses have become an impulse item. It amazes me how many people now know about all of the houses for sale in my area.
test
Yes, it is a test, a test of our economy and our greed. Nice post.
This is a test of the American Federal Reserve System. This is only a test. If this were an actual economy you would have a stable and reliable retirement plan, housing and stock prices would be justified by rents and earnings ratios, and manufactoring and production jobs would exceed the finance industy. But this is only a test. We will now resume your currently scheduled credit bubble.
These things move from the outside in. If you want to see the bubble cycle in action, go out to Frederick and see what’s happening (or not happening) out there. Same here in No. Va. Arlington and Alexandria are bloodbaths yet, though not much stuff is moving from my casual observations. But out in Loudon and Prince William Counties? Gettin’ ugly out there. The bust will come closer to DC, count on it.
Please, please. please. I am renting in Rockville. Haven’t even bothered to start looking yet, though I might this weekend just to geta feel for what the new condos look like. And I dearly want to drop a few “Oh, that is much more than I can afford”s into the mix. I won’t even make a counter offer. Just let them know that they want more than a government worker can afford - not more than I could borrow - I could borrow what they want, I just can’t afford it.
Who will gain from the coming foreclosure boom?
– Realtors specializing in foreclosures and short sales?
– Mortgage servicers (foreclosure related service fees)?
– Politicians?
– Bitter renters?
– Short sellers?
– Others?
Please Please dear Gawd , make it MEEEE!
I am a paralegal and work is very slow, i need to work 50 hours a week doing Foreclosures, but right now the only work is in minoritys area in queens and Brooklyn and not very easy for me to get there by car or subway.
One problem for short sellers, is the they will be charged federal taxes on the lender’s write off. So, if you owe $ 500k and sell your house for $450 k, your taxable income bounces up $50 k–at least that is my understanding.
Who sends the 1099? The lender?
I’m reading that a very likely part of any bailout package will be forbearance on taxing that “gift.” Sucks, but it might be the least-sucky part.
I live in Rockville Maryland and for what ever reason the market seems to be real strong here again. About six months ago the houses in my neighborhood had fallen about 5-8% from the highs and were sitting on the market for months but now they are right back where they were and houses are getting multiple bids the first weekend they go on the market. Granted the bids are at or near the asking price and not above like two years ago.
I guess because it is fairly close in to DC and the schools are very very good people want to live here. I don’t get it.
Some of this Maryland price phenomenon is simply that the current owners cannot lower the price because of what they paid. There’s a ton of stuff on the market for what it sold for in 2005, plus the 6%. So, I wouldn’t make that judgement unless you are actually checking these sale prices against the purchase prices/refi’s.
Another tactic being used is to initially price the houses very high, then cut the price in 2-4 weeks if no greater fool comes to the rescue…
Michael,
You’re not trying to pump the housing market in the Montgomery County area are you? The Realtor stats show houses are only selling for 95% of their sales price…
http://www.mris.com/reports/stats/
I live in Bethesda and 20814 has picked up too, but 20817 (Bethesda) and Potomac (20854 are slacking
I think this mainly due to prices going over 1mil mark in Potomac and Bethesda. I sure like to know what do those folks do for living.
lobbyists….
I mentioned this on Bubble meter, but never really got an answer.
With BRAC, a lot of new jobs are coming to Maryland (you can read an article provided in the link). I realize that some of this is spin and hopeful thinking, but new jobs are coming. I grew up in Haroford county, where Aberdeen Proving Ground is located, and there they expect 15,000 new homes will be needed (this was mentioned on NPR this morning). BRAC is a very hot topic here, and I fear will continue to fuel speculation.
I am moving to DC/Rockville in a month after I graduate. I rent now and will do so for at least the next two years so I can save up and pay off student loans. I know the DC area is overpriced, I would never pay $500,000 for a shoebox, but do you really see prices coming down a lot in this area?
Sorry, here’s a link:
http://www.hometownannapolis.com/cgi-bin/read/2007/04_20-62/TOP
I do, but it is a painfully slow process. Most townhome communities are down 10-15% from peak. It’s hard to gauge Rockville, Bethesda, and Rockville because they are not cookie cutter style housing. The thing about Brac coming, in AA County, I’m not sure all the jobs will be paying enough to pay the prices in that area, not sure about Harford, I think it is a little more affordable up there.
Here’s an interesting take on it:
“Foreclosure filings are now rising four times faster in the Baltimore suburbs than they are in the city. Court records indicate foreclosures increased by more than 15 percent in the suburbs last year. In comparison, foreclosures increased by less than 4 percent in the city.”
“For instance, in Howard County, a once affluent suburb of Baltimore, there is a huge gap between income and home prices. More than 70 percent of the jobs available in the county pay less than $50,000 per year. The average house in that area costs $485,500, almost ten times the average income.”
http://efinancedirectory.com/articles/Baltimore_Housing_Market%3A_Foreclosures_Ravage_Suburbia.html
“An apartment complex just north of Baltimore that is in the midst of being converted to condominiums is in default and is to be auctioned off next month, the auctioneer said yesterday. Renovations of the 508-unit Rodgers Forge Condominiums, built about 1955, began last year as the cool-down in the housing market accelerated.”
“They include Triton’s and a condo conversion in Rockville, which Price said is also being refinanced. But Billig is also working on foreclosures of significant developable properties in Aberdeen and the Havre de Grace area.”
“Those four properties together are worth more than a quarter of a billion dollars, he said.”
http://www.baltimoresun.com/business/realestate/bal-bz.foreclose18apr18,0,2799985.story?coll=bal-realestate-headlines-1
Actually, the BRAC 2007 is helping the community I bailed out from in 1996 in Ridgecrest Ca. My house, which I sold for a 20% loss at a price of $79,000 is zillowed at $245,000. The number of jobs has doubled in that tiny town. But I made a smart move by taking the loss, as my income is well over double what I would be making now if I stayed.
What the hell is BRAC ??
Base Realignment and Closure (BRAC)
Every few years the military closes, consolidates, or expands military bases which is a big, big economic deal for the towns that host military bases.
http://www.defenselink.mil/brac/
Base Realignment And Closure, the same process of military downsizing that contributed so much to the SoCal downturn in the nineties.
(Military) Base Realignment and Closure or something close to that.
The current round of BRAC is a *big* deal in the DC metro area because the military is shifting a lot of paper pushers out of rented office space and onto various bases for security reasons. This will greatly affect northern Virginia, since something like 15,000 additional workers will be commuting to Fort Belvoir in Fairfax County. The biggest effect will be on traffic patterns, since most of these people already live and work in DC Metro.
Ridgecrest, in the desert like Phoenix but not as hot.
Thanks for all the quick replies, it is no wonder I have found this site so informative and addicting.
Keeping in mind that I know nothing about this market, my fear is that as the foreclosures grow and prices start to decline, a wave of new people will come in (and as everyone believes that “it is different here”) this area will get a second bounce.
But I guess there are also other factors. Such as how badly will these people have been burned from trying to unload their last home? I think most are coming from NJ, so maybe they wont have the credit or money to pay for all this crap.
The Rockville MD house prices do seem to be pretty strong. However, the inventory is stale, and a bunch of low end houses have dropped their prices. Most notably, rents are dropping.
I live in that area and I can also say that house’s are moving pretty well. Three houses I’ve seen listed on my neighberhood since March have sold sign on them . I would say that prices are selling at 10% off the peak prices of 2005. Most of the houses are under 700k. I think reason is that new houses that are going up starts at 1.1mil and that was slashed from 1.3mil listed several months ago. I’m sure buyers are attracted to good schools. It’s will interesting to see if this will change as more houses comes to the market.
Someone posted here about who will benefit from the coming foreclosure explosion. Here’s an example.
http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20070423/BUSINESS/704230428/1438
Unfortunately it won’t work for the many FBs who are now upside down. The Herald Tribune also had another article today about how the year-rounders are happy now that the snowbirds have all left. Traffic is lighter and you can get a table at a restaurant without waiting. Oops, that also means a lot of potential house buyers have also left. Article didn’t mention that aspect.
How does somone lose a $60K guvmint lifetime job just for getting sick?
She is not telling the whole story.
Well aren’t these boys just a coupl’a generous ‘ol thangs.
“They also get an asset that is likely to appreciate if homeowners cannot repurchase.” Sorry to be so cynical, but this poster believes that that is exactly why they’re doing this. They’re not in it for the Mother Theresa Award.
Oh, and they get a 6% commission for brokering the deal. That’s charity, all right. And the FB has to pay an additional 6.7% for the option. Gee — that’s 12.7% of the value of the house, in which they had at least 20% equity, just to get the execution stayed for two years.
These guys are investors. They said so. IMO, this is a new shade of lipstick.
Any Chicago area people have thoughts for this gentleman…
https://www2.blogger.com/comment.g?blogID=30296944&postID=5890326421304021693
Price declines are working from the exurbs into the suburbs. It will still take a while to see prices come down in the city.
The inventory problem can’t continue forever.
I’m waiting until $300K can buy a decent bungalow in a good NW side neighboorhod in the city. Right now bungalows are selling for $450k to $500k in the better neighborhoods (old irving, jefferson park) $400k to $450 in the so-so areas (albany park, portgage park) and $350K+ in the not so good (north of humbolt park, bad areas of logan etc). I think prices are uniformly heading south but they are really sticky on the way down.
I went to about 4 open houses in Arlington Heights last Sunday and every one of them had come down between 10-20K in the 500-700K range. And most had already transferred and holding 2 mortgages.
My realtor still hasn’t gotten back to me about the point-blank question I asked late last week. I asked if she is or is not willing to place offers for me. Offers that are considerably lower than listing prices, but that are within my affordability comfort zone. What’s so hard about that question? It’s a yes or no answer.
Does anyone know a realtor in the Montgomery/Bucks Co., PA area that will not have a problem submitting low offers? Frankly, I don’t know why realtors take issue with this. Do the listing agents get mad at buyer agents who submit low offers? It’s not like that offer’s coming from the realtor. Is it all just about not looking bad to your “colleagues”? Maybe I should get my real estate license and advertise, “I will gladly lowball for you!!!”
Realtors are worried about their reputation. For you, it is a single transaction and you shouldn’t care how many people hate you at the end (just like a used car salesman). But, for the Realtor, the agents on the other side will be irate and will remember. So, for them, it is a repeated transaction in a series, so they need to care about others (just like a auto mechanic with good business sense).
Of course, if you apply this logic to a Realtor’s situation, you realize why they have no problem with you hating them at the end; you are unlikely to use them to buy another house even if you love them.
Referrals add another level to this game and keep a smart Realtor from allowing every buyer to hate them.
I am waiting for a silent spring to soften up the Realtors and sellers. I don’t even go to open houses. I hope that by June they all believe nobody in Suffolk County, NY wants to buy any house at any price. Then, a lowball will seem like manna from heaven (which it is).
Maybe your solution is to portray yourself as investor rather than someone looking for a place to live. I wrote a piece last year about a string of townhome sales. All the investors paid 140k for the townhomes. All the people intending to live there paid over 160k…
What about going directly to the seller’s agent to make the offer? That way, the commission wouldn’t be split and maybe they’d be more accommodating. Eh …maybe not yet, though.
Keep us posted. Your adventures are fascinating.
Your question is a very easy one. The majority of realtors will not submit lowball offers for two reasons: 1) Most importantly, because there is massive collusion, corruption, and arrogance in the people who represent the ’system’. A lowball offer will get you blackballed by your peers; and will likely be rejected by the broker. 2) A lowball offer nets far less income for your realtor than what sellers these days typically want.
Keep in mind, though, that in a free-enterprise system, point #2 doesn’t matter. From a volume-business point of view, I’d probably have more success getting 100 $300 paychecks than I would getting one single $30,000 paycheck.
I like your question — It’s a very simple way to get to the heart of the corruption in the business.
I think that you already have your answer, as based on the r.e. agent’s refusal to get back to you.
One tactic you may try is to contact each homeowner directly, with a written offer. Don’t get to fancy, just something basic with the general terms needed per normal r.e. contract law.
If you are seriously looking to buy right now, you should already know how the following info on each home: when they bought and for how much, what they owe, what values are doing.
Then you should probably only offer in cases where the sellers can actually accept your offer; in other words, they have the requisite equity. If they are upside-down then you are just wasting your time anyhow.
Also, maybe try having the listing agent kick in two points for your closing costs. Remember, you are the one with the money, and you are driving the train. Everyone else is just happy to be on board.
Realtor 101: All offers must be submitted to the seller–period.
Yes, in Colorado, it’s a legal requirement. But tell me who enforces it (for sure not the Board of Reators or the State Realtors Commission)?
Not frivolous offers….
You dont know what you are talking about. Realtor 101: agent must be paid if he/she has an exclusive listing, if not then the seller does not have to pay agent for securing a buyer the agent does not secure. But if there is an exclusive listing, then even if seller procures their own buyer, they still must pay agent.
By the way, if you are going to talk like you know and be a smart*ss, then make sure you do know - before you put down others.
Folks, sorry for the last sentence, misread part of the prior posts.
Question to those in the know - would it be illegal to simply contact the sellers directly - verbally? Just tell them on the phone (or in person via visit) that you’re interested in making an offer - but it’s so low that you don’t want to waste yours (and theirs) agents time unless they would consider it seriously. If they would consider the, or serious negotiations, then have them have their agent contact your agent.
Such a verbal offer would be non-binding, and thus not illegal to do without realtor, would it not?
If the sellers hang up on you (or slam the door), then so be it - just wait, and 6 months from now they might change their mind. No harm done.
Its perfectly fine to do what you suggest but “NOT” through your realtor…Once the seller has a Agency relationship with the a realtor, any other realtor is obligated to go through that realtor in presenting any information to the seller…However, if you “BUYER” were to send a direct inquiry to the seller that should be perfectly fine.
Depends on the contract the seller signed with the agent. Some contracts state the agent gets a commission regardless of who sells the house, others have an exclusion for if the seller sells it on their own (realtors HATE this and few will sign, but sometimes they will). You can also put an exclusion in a contract for specific people, e.g., if someone has shown interest before you signed on with the realtor. I’ve talked to owners a lot, maybe they’re out in the yard or something when you drive by, I usually like to talk to them about the neighborhood. Typically, agents do all they can to keep the seller and buyer apart. I mean, they HATE it when you talk to each other, they lose control.
eastcoast,
I have made a few really lowball offers through a local realator, but they were not formal. I asked if she knew if the sellers were willing to sell for less. She couldn’t answer for properties that were “her listing” but she could for others. Our market is pretty small so she often knows the seller’s situation. I threw a very low number at one property and she passed it on verbally and it was rejected without a counter. Another property she said I should offer “anything” but I didn’t like it. Keep looking, you will find someone who isn’t fully in the club and will help you.
Been tracking homes for sale in Denver city limits on MLS for a couple of months-it is a constant march upwards.
2/6/2007 3915
2/7/2007 3925
2/8/2007 3927
2/9/2007 3927
2/12/2007 3946
2/14/2007 3953
2/22/2007 3972
2/23/2007 3981
2/26/2007 4001
2/27/2007 4007
2/28/2007 4015
3/1/2007 3976
3/5/2007 4015
3/6/2007 4027
3/7/2007 4027
3/12/2007 4087
3/13/2007 4085
3/14/2007 4076
3/15/2007 4090
3/16/2007 4100
3/19/2007 4178
3/20/2007 4164
3/21/2007 4163
3/22/2007 4171
3/23/2007 4182
3/26/2007 4217
4/5/2007 4260
4/6/2007 4262
4/9/2007 4285
4/10/2007 4278
4/11/2007 4286
4/12/2007 4284
4/16/2007 4343
4/17/2007 4289
4/18/2007 4329
4/19/2007 4368
4/20/2007 4402
4/21/2007 4442
MY LATEST BUBBLE EXPERIENCE:
Sold a motorcycle on eBay last week, it was a NO RESERVE auction, high bidder wins it, bidding started at $500 and went up to over $6000….high bidder was a guy in San Francisco…he never contacted me! After a Google search found out he was Realtwhore, saw one of his old postings on CL with a phone number.
When I called him up and asked him where my deposit was he just fumbled and said sorry “he was in the middle of a re-model”….sure, fricking deadbeat loser! Good thing there was a backup who actually had the cash!
Hope you reported that douchebag bidder to ebay.
Oh… that you YOU? Sorry about that…
J/K =P
–
April 23, 2007
NABE Survey Index Falling Down Sharply
The survey for bigger businesses is following the same trend as for small businesses — at four year lows and similar to 2001. As I have argued earlier these surveys show double bottoms for each cycle, one just preceding or at the beginning of a recession and the second one 2-3 years later. In the real world recession never lasts just for few months.
The down turn in businesses seems to have begun in March and continuing in April.
Jas
-x-x-x-x-x-x-x-x-x-
“Comments: “Nearly every indicator in the April NABE Industry Survey showed slower momentum in the first quarter than previously, with very cautious expectations for the near future,” said Ken Simonson, Chief Economist, Associated General Contractors of America.”
“Based on a quarterly survey of 107 NABE members in four broad sectors, demand for goods and services at respondents’ firms increased at far fewer firms in the first quarter of this year. The weaker growth can be attributed to a pullback in finance, insurance, and real estate (FIRE) and services sectors. In contrast, there was little change from the fourth quarter in net numbers of firms reporting growth in goods-producing or transportation, utilities, information, and communication (TUIC) sectors.”
http://www.nabe.com/publib/indsum.html
-x-x-x-x-x-
Fewer U.S. Companies Plan to Increase Hiring, Capital Spending
By Shobhana Chandra
April 23 (Bloomberg) — U.S. companies plan to slow hiring in the next six months and limit capital spending as they grow more pessimistic about economic growth, a survey by the National Association for Business Economics found.
Fewer firms plan to increase staff compared with the prior survey while more expect to reduce payrolls, leading to the lowest net employment reading in at least two years, the NABE reported today. Thirty-seven percent of executives in the April survey said they plan to boost capital spending in the next 12 months, down from 43 percent in the January survey.
http://www.bloomberg.com/apps/news?pid=20601103&sid=a9MLY8kj5NF4&refer=news
From today’s WSJ, p. A1:
============================================================
After Big Wins in Las Vegas, An Investor’s Luck Turns
By Jennifer S. Forsyth
Word Count: 2,194
LAS VEGAS — In this city known for gambling, high-stakes business deals and outsized real-estate transactions, Billy T. Walters has played a lucky hand.
As one of the top sports bettors in town, he has become a millionaire many times over, routinely placing six-figure wagers on football and basketball games. Along the way, Mr. Walters, who hobnobs with city officials and is a fixture on the local charity circuit, has beaten federal and state criminal charges related to various gambling and money-laundering allegations.
Using proceeds from his gaming wins, he has snapped up golf courses and other valuable property. But …
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comments:
Countrywide’s Mozilo Says Regulators May Worsen Subprime Losses
Bloomberg
“… The plan is an “inadvertent attack on liquidity exactly when it shouldn’t happen,” Mozilo, co-founder and chief executive officer of Countrywide Financial Corp., said in a phone interview last week from his office in Calabasas, California.
The change would block more than half of subprime borrowers from refinancing mortgages at a time when slumping real estate prices have already caused delinquencies to rise to a four-year high, according to Mozilo. …
Mozilo compared the proposals to the savings-and-loan crisis of the late 1980s, when he said more than 1,000 thrifts failed in part because regulators set rules that encouraged thrifts to buy bonds with credit ratings below investment grade and then forced them to sell, causing prices to tumble.
Next Junk Bonds
“These junk bonds performed beautifully later on,” Mozilo, 68, said. “It’s like anything else in life, all they need is time,” he said. “If we can give then another two or three years, income goes up, their home’s value eventually goes up.”
A Merrill Lynch & Co. index that tracks the performance of debt rated below Baa3 by Moody’s Investors Service and below BBB-by Standard & Poor’s fell 4.36 percent in 1990 before gaining 39 percent in 1991 and about 17 percent in 1992 and 1993….”
Countrywide made $462 billion of home loans last year, or 15.5 percent of the total in the U.S., according to newsletter Inside Mortgage Finance.
Spokespeople for the Fed, OCC and FDIC declined to comment. Each of the agencies reacted differently to Mozilo after he raised his concerns, he said, declining to elaborate.
Rule Changes
“The Fed is very different than the OCC,” which regulates national banks and “is very different” that the Office of Thrift Supervision, which oversees U.S. thrifts, Mozilo said. Countrywide became a thrift last month, dropping its OCC charter. …”
http://tinyurl.com/yrf7xq
“The 1st Amendment protects the right to speak, not the right to spend.”
Byron White
Plunge protection action on the headline indexes is really choppy today…
http://www.marketwatch.com/tools/marketsummary/
Home On the Bubble Range
Oh give me a home
On a funky ARM loan
Where the developers and realtors do play
Where never is heard
A reasonable word
And hopefully I’ll never have to pay.
(Sorry, send coffee)
Was at an open house in Arlington Heights, IL at one of the mcmansions on Haddow.. the builder was talking to some guy and saying the market will just flatten out, I don’t see it giong down. The media is causing a lot of problems talking about housing… the other guy was saying most buyers he talks to are sitting and waiting to see what will happen.
an interesting time in economic history right now, a fulcrum…
Looks like Mozilo is selling his CFC shares:
NEW YORK (AP) — The chief executive and chairman of Countrywide Financial Corp., one of the country’s largest mortgage lenders, exercised options for 46,000 shares of common stock under a prearranged trading plan, according to a Securities and Exchange Commission filing.
In a Form 4 filed with the SEC Friday, Angelo R. Mozilo reported he exercised the shares Friday for $10.89 apiece and then sold all of them the same day for $37.84 apiece.
Freaky incident in Laguna Beach yesterday. Note that the two were “involved in real estate” and that they had “boxes of documents” in their hotel room.
It will be interesting to see what the documents were. RE deals gone bad, perhaps?
http://www.ocregister.com/ocregister/homepage/abox/article_1666382.php
I posted this home on this blog for a laugh a year and a half ago. About 3 months ago, I posted about how it was for rent with like 4 signs in the yard.
It’s a 550 sq. ft. “gem” of a glorified living room with a roof. It sits on a 600 sq. ft. plot of land backed up into another house.
Asking price then $530k, asking price now : $699k!!!!!!!!!!!!!!!!
http://guests.themls.com/view_photo.cfm?mlsnum=07-179671
WTF!!!
Please join me in e-mailing the realtor encouraging commentary
Here’s what I sent. Sorry if I come off rude, but I couldn’t help it :
Wow, what crack are you smoking? …because I want some.
You guys have to be joking. $699k for a 580 sq. ft. glorified living room with a roof. I went to the open house for that thing 2 years ago and laughed went it was $510k. $699k!!! Assuming 20% down, which no one does anymore in this irrational market (140k), that’s $2797 a month at 6%. $2797 a month, with $140k tied up that could be easily kicking off 5.5% from a decent cd.
For what???? To live in a glorified condo. That place is too small to be considered a condo. Here is where the carnage begins. I rent an “A” property in West Hollywood on a 6,000 sq. ft lot within walking distance to all the amenities for $3000+ a month. You expect someone to dish out the same for a shitbox that’s not even really in WeHo. You need to wake the fuck up, but I have a feeling this market will do it for you. The unrealistic prices are soon coming to an end. Banks are feeling the after-effects of easy money, bond holders are getting bent over. Money is drying up, and once too many idiots like you’re seller hold out for an unrealistic price, the glut will correct everything.
You are doing you’re client a dis-service as a realtor, which by the way, isn’t even a real profession considering you can switch to that career quite easily from flipping burgers. By the looks of your photo it looks like you ate too many of them anyway, so you’re probably better off as a realtor. But, as this market dries up, I fear you’re only option will be french fries again in two years.
I would recognize reality now, because come this Fall, there’s another kick to the nuts coming. The news about the coming disaster in Alt-A is coming soon. Are you and you’re idiot seller ready for it?
Later chubbs. Enjoy you’re 6% while it lasts. Save you’re money, and I wouldn’t put it in California property at this point - unless you enough -3% return on a leverged investment for the next 7 years.