The Cleaning Out Process Is Not Done In California
The California realtors report March sales. “Home sales decreased 20.8 percent in March in California compared with the same period a year ago, C.A.R. reported today. ‘March sales fell below the levels of recent months in reaction to an uptick in mortgage rates earlier this year along with tighter underwriting standards,’ said C.A.R. President Colleen Badagliacco.”
“‘Moreover, recent news regarding foreclosures and the subprime situation had an adverse impact on the market psychology of many buyers, leading some to delay their home-purchase decisions,’ Badagliacco said.”
“‘The inventory of homes for sale continued to increase, a sign of price softness in the coming months, as expected,’ said C.A.R. Vice President Leslie Appleton-Young.”
“C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in March 2007 was 8.7 months, compared with 4.7 months for the same period a year ago.”
“In a separate report covering more localized statistics generated by C.A.R. and DataQuick Information Systems, 36.4 percent, or 140 out of 385 cities and communities, showed an increase in their respective median home prices from a year ago.”
The Fresno Bee. “Home prices and sales continued to slide in Fresno and Clovis last quarter. The median price of a house in Fresno County fell 6% in the first quarter compared with the same period a year earlier, according to DataQuick. The number of transactions fell almost 24% during the same period.”
“Appraiser Carole Leval said prices have fallen an average of 1% per month since late 2005 and noted that some sellers are offering concessions such as money back to buyers.”
“In addition, foreclosures are on the rise. In Fresno County, the number doubled between first quarter 2006 and first quarter 2007. In Madera County, it increased almost 133%.”
“D.R. Horton Fresno division manager Tony Wyman acknowledged a sluggish market. ‘The market is what it is right now,’ he said. D.R. Horton has eight subdivisions in the central San Joaquin Valley under way and four more coming online soon.”
“‘We’ll have a soft 2007,’ added Mitch Covington, president of the Building Industry Association of the San Joaquin Valley. Covington said builders still are trying to dispose of unsold houses that became surplus when deals fell through. ‘The cleaning out process is not done,’ he said.”
From Bloomberg. “Investors are losing money because of places like Riverside County, California, where foreclosures almost tripled last quarter to 6,103 from a year earlier, the biggest increase in the U.S., according to Foreclosures.com.”
“Lehman Brothers Holdings Inc. used Riverside loans as collateral for $1.5 billion of bonds sold in January 2006. Some of the lowest-rated portions of the securities trade at 63 cents on the dollar, down from more than 100 cents in October, according to Merrill Lynch.”
“Driving around Riverside County’s Lake Elsinore, realtor Abdul Syed counts about 40 lots with brown grass in the 1,200-home Tuscany Hills subdivision. Owners stop watering their lawns when they are about to lose their homes, he said.”
“‘All of these people are probably in default and probably going to face foreclosure really soon,’ said Syed.”
“The owner of 16 Ponte Russo paid $650,000 for the Mission- style house in November 2005 and got financing for 100 percent of the price from BNC Mortgage Inc. in Irvine, California, according to country records. BNC is a subprime lender owned by Lehman.”
“The owner never made mortgage payments. Now, the house is on sale for $496,000 following a foreclosure.”
“That house is ‘a real nice one because it backs up into a canyon and you have endless views of hills,’ Syed said. ‘That’s a great deal. The banks must be getting kind of desperate.’”
“More than 43 percent of the bonds sold by Lehman, called SAIL 2006-1, are based on property in California. Foreclosures in the state have quadrupled since September to $2 billion, according to Foreclosure Radar.”
“Rates on almost half of the loans in the Lehman bonds are scheduled to increase to an average 10.3 percent in December from about 7 percent now, according to the prospectus for the securities.”
“Foreclosures in California will rise to 70,000 in 2008 from 3,000 in 2005, said Bruce Norris, a resident of Riverside, California, who buys houses in foreclosure. ‘There is no way this is going to play out without pain,’ Norris said. ‘It’s already not OK. It just hasn’t hit the courthouse steps.’”
The San Francisco Chronicle. “In an effort to stem potential mass foreclosures of homes financed with controversial subprime loans, a state Assembly committee on Monday approved a bill intended to create a pool of money for homeowners to refinance their mortgages.”
“‘We’re not trying to bail out lenders and speculators,’ said Assemblyman Ted Lieu. ‘The idea is to assist first-time homeowners who may face foreclosure due to bad loan products.’”
“Critics of the proposal questioned whether the state should be in the business of refinancing mortgages or bailing out people who may have made bad financial decisions. They also say it would be wrong to use funds from November’s Proposition 1C…when voters weren’t told that the money might be used to help troubled subprime borrowers.”
“‘That would be a fundamental violation of the pact and trust made with the voters,’ said Jon Coupal, president of Howard Jarvis Taxpayers Association.”
“State Sen. Mike Machado said subprime lending practices should be scrutinized in the future, but stopped short of agreeing with Lieu that the state should create funds to help restructure mortgage loans.”
“‘The state has to be very careful if it uses public funds for a bailout,’ he said.”
“‘The subprime lending has popped,’ said Assemblyman Alberto Torrico. But the first step will be to get a handle on the problem, including figuring out who benefited financially the most by these questionable lending practices, Torrico said.”
From MarketWatch. “Gary Kent has more foreclosed properties to sell than ever before during his 23 years in the real estate business. The San Diego-based realty agent currently represents about 100 homes for sale, 85 of which are foreclosures.”
“A year ago, Kent represented about 20 homes for sale with only a couple of foreclosures among them. ‘I feel sorry for the people who lost their homes, but I’m probably going to have to best year I’ve ever had,’ Kent said.”
“Even when priced below the competition, foreclosed homes can linger on the market. Kent thinks it could take up to four months to sell the foreclosed properties in his listing book, particularly those that appeal to ‘low-ballers’ and ‘bottom-feeders’ willing to wait in order to pressure lenders into taking just 50 cents to 75 cents on the dollar for the homes.”
The Record Searchlight. “The jump in home foreclosures in Shasta County and around California is about as surprising as rain showers at Kool April Nites. As the real estate market zoomed like a supercharged Camaro in the first half of this decade, rising prices fueled the popularity of all manner of exotic home loans.”
“Meanwhile, the number of new subprime loans more than tripled from 2000 to 2005.”
“It’s a heartbreaking day when any family is forced out of its home. Nonetheless, the wave of defaults and foreclosures is part of the painful but inevitable correction in the real-estate market. It’s hardly a bad thing, though, if mortgage bankers stick to borrowers who can actually repay their loans.”
“Easy credit and the real-estate bubble drove each other. Now they’ve run out of gas together. The ride couldn’t last forever.”
I love how Leslie Appleton-Young seems to end all of her statements with “…as expected.” If you look at all her cheerleading comments over the last couple of years, I don’t recall her predicting any of this fallout until well after a person in a permanent vegatative state would have noticed the implosion.
They beleive their own lies and cant remember what they say after a day goes by.Someone should gather all her past comments and send them to CNBC to air.Now that would be hilarious.
I think we are at a point where even the most blatant liar can’t spin the news anymore. The problem is that these people have the RE association as boss and the more they distort, the higher their pay. So spin away. It’s always fun to watch them on the news and then the next segment showed how bad the market is.
They lie so much it has become normal to them. They have no consequences so what do they have to lose?They say what they think people want to hear.
It would be, but they would NEVER air them.
Check out the video clip at :
http://www.cnbc.com/id/18288910
Even the CNBC talking heads are calling the NAR’s comments “spin” and having a giggle at the NAR’s blaming of the weather (again).
Leslie Appleton- Young was in Santa Barbara on Feb 8 of this year. She is quoted in the Santa Barbara News-Press on Feb 9 as saying that home values will “softly appreciate” in 2007. The News-Press web site is http://www.santabarbaranewspress.com. They have an archive and anyone can look at the Feb 9, 2007 article with her quote (and her picture, if anyone is curious what she looks like). I think you have to pay a couple of bucks for the story.
Simpleton-Young’s picture can be seen here:
http://www.realestateconnect.com/ny07/bios.aspx
These people are practised liars. Everything they say is a propaganda spin whose only purpose is to make money. A concern for ‘truth’ only gets in the way.
Leslie is bald??? -
LOL! That caught me off guard as well!
Hmmm, Leslie spent some of her early years as a research associate at the Federal Reserve Bank of Philadelphia. Which means she has more understanding than most of why this housing bubble is in play and how they pan out. Hard to make an excuse for her with that kind of background.
If we could just link ED to home buying or adjustable mortgages, all of this would go away a whole lot faster.
I’m sure there’s a correlation in there somewhere…
Hey! I want to go on the record that I want nothing to do with home buying nor adjustable rate mortgages at this time.
LOL seriously - imply that Mr Happy will be on permenant vacation and not only will all the men swear off trading up, you may also get the women have to choose between nesting and well…. potentially really nesting and lots of nookie.
One foreclosure is a heartbreaker. A million foreclosures is a statistic.
One foreclosure is a heartbreaker. A million foreclosures is a statistic.
ROTFL
And yet we won’t see it end at a million.
Got popcorn?
Neil
“Foreclosures in California will rise to 70,000 in 2008 from 3,000 in 2005, said Bruce Norris, a resident of Riverside, California, who buys houses in foreclosure. ‘There is no way this is going to play out without pain,’ Norris said. ‘It’s already not OK. It just hasn’t hit the courthouse steps.’”
If Bruce is buying and thinks 70K is the bottom …. I’ll be buying when Bruce is in foreclosure.
IMHO 10% of all house in Cal will go into foreclosure before this is through.
If Bruce is buying and thinks 70K is the bottom …. I’ll be buying when Bruce is in foreclosure.
HAAAA … that’s awesome.
I don’t see anything about a bottom. I just see a prediction for 2008. He doesn’t say there will be no foreclosures in 2009. Why are you saying he is calling the bottom when he is saying there is far more pain to come?
Hoz — If your prediction (10% of CA will go into foreclosure) comes to pass, the socialist impulses of California lawmakers will kick into overdrive, and we will all be FBs, thanks to share-the-wealth bailout schemes. Except that I will move out of state, to make room for yet another nice illegal immigrant family to move into town from south of the border.
You stole that from Joe Stalin:
“One death is a tragedy, a million is a statistic”.
Uncle Joe made more statistics than Hitler.
It takes one mad man to stop another.
I said that.
Stalin had many good quotes attributed to him. That was one that seemed appropriate.
This part of the original post bopped me over the head:
“The owner of 16 Ponte Russo paid $650,000 for the Mission- style house in November 2005 and got financing for 100 percent of the price from BNC Mortgage Inc. in Irvine, California, according to country records. BNC is a subprime lender owned by Lehman.”
“The owner never made mortgage payments. Now, the house is on sale for $496,000 following a foreclosure.”
“That house is ‘a real nice one because it backs up into a canyon and you have endless views of hills,’ Syed said. ‘That’s a great deal. The banks must be getting kind of desperate.’”
Ummm, maybe I’m not used to California math, but since when is almost a half million dollars a good deal?
Ooops. Not just a good deal, but a GREAT deal. Which baffles Slim all the more…
Lake Elinsore is out in the middle of nowhere. Nothing short of a real mansion would be worth more than about $150K out there, and that’s California prices. It’s not close to anything except the lake itself. Resort property at best.
Yikes, I think SM landlord has lost it.
Using lake elsinore and resort property in the same sentence.
For those readers not familiar with the IE.
It is also known as Lake Smellsinore.
or Hell, Senor (Sorry for the missing accent)
From an old joke my dad once told me about the place.
The water has a strong sulfur smell and taste.
Resort proprty my A$$! On a hot day the lake smells like crap! I would never want to live there.
Shouldn’t that be HellSenior? The majority of the population there is pretty ancient.
I went to high school in Lake Elisinore. All I could think about was going to college and getting the hell out of there. I did and never looked back. This was also during the “dead fish” days when the lake water had an algae problem that killed all the fish. Didn’t exactly help the smell problem.
But c’mon, doesn’t everyone want to live in a town where Walmart is the “happening” place to hang out and a new fast food restaurant opening is actually an event?
I thought everyone had “equetrian estates” out that way!
“Lake Elinsore is out in the middle of nowhere. Nothing short of a real mansion would be worth more than about $150K out there, and that’s California prices. It’s not close to anything except the lake itself. Resort property at best.”
Lake Elsinore is one of the Armpit areas of SW Riverside county. Used to be nothing but Horse trailers and rustic ranchettes with retired folks and refugees from LA/OC.
During the recent RE boom there was large scale building of MCMansion tracts on the east/northeast corner of the lake but they overbuilt and the whole area still an urban/rural badly-planned mismash, with ragged pockets all over. The Lake itself is stale and sterile: not a resort lake but a gigantic rainwater collection basin.
The lake elsinore region is but one of dozens of Housing/planned communities put up all up and down the Temecula Valley, from South Corona all way to Temecula. Thousands and thousands of new homes have gone up just in this valley, the newest development being Dos Lagos. All this overbuilding combined with the hundreds of other planned housing tracts put up all over SW Riverside county has resulted in A huge overhang of new housing supply. This entire region of the IE will see huge price drops and a RE meltdown.
not a great deal until it’s 50% off purchasing price.
When is a good deal not a good deal?
When it is a good deal more
I would not pay $500,000 for a similar home in San Diego!
Much less in the boonies!
Oh, forget it!
Well, Kevin Bacon (I did NOT make that up!) of Century 21 Realty says San Diego is now AFFORDABLE!!
http://tinyurl.com/28zm3n
$450K!?!? I wouldn’t pay more than $50K for that POS…
Well, he’s obviously 7 degrees of separation away from reality.
I concede. Bill Gates can now afford to buy San Diego. Hey what about the rest of us? San Diego has gone down a good 10 - 20% since it peaked in mid 2005, but remains essentially in the stratosphere.
“The owner never made mortgage payments..” This had to be fraud. There’s really no other explanation.
That was exactly my thought. No bank is already discounting 150k off the loan, unless they know they got hozed. It’s the spring bounce for cryin’ out loud!
Earth to Alberto Torrico!
“The firsts step to get a handle on the problem including figuring out who benefitedfinancially”
” IT WAS WALLSTREET” but everyone knows that, he must be shooting for the “shake down angle”!
The person did not pay a damn thing!
He just signed a suicide loan ………..Victim kit sold seperately!
Wonder how much cash he walked away with?
Can we hear Donald Trump tell Leslie Appleton-Young she’s fired?
The lady should have been sh@t canned a long time ago.Is incompetence part of the job reqirements at the NAR?
But she’s a graduate of Wilson High School. She must be competent, right?
Not Wilson High in Hacienda Heights / La Puente area?
No idea. It was stated in the San Fran based article from yesterday. Made me laugh, and it stuck in my head.
The HS was around Long beach I think.
There is a Wilson HS located on Seventh st in the east side oF long beach. I don’t know anything at all about this L. Appleton-Young but I wonder if She grew up in LB and Attended LB Wilson HS, which was my Nieces school(My HS was LB Polytechnic).
Leslie Appleton-Young is Vice President and Chief Economist for the California Association of REALTORS® (C.A.R.), a statewide trade organization with over 195,000 members dedicated to the advancement of professionalism in real estate.
Mrs. Appleton-Young directs the activities of the Association’s Member Information Group. She oversees the analysis of housing market and brokerage industry trends, member communications, and membership development activities. She is also closely involved in the Association’s strategic planning efforts and is a well-known speaker in California’s real estate community.
Before joining C.A.R. in 1984, Leslie Appleton-Young was a consultant with Telesis Inc. in Rhode Island. She also spent several years working as a research associate at the Federal Reserve Bank of Philadelphia and as an instructor at the University of Pennsylvania.
Mrs. Appleton-Young earned a Bachelor of Arts degree in economics from the University of California, Berkeley, and her Masters from the University of Pennsylvania.
http://www.car.org/index.php?id=MzQzNTY=
Thats LAY’s bio, I’m just posting it, don’t shoot the messenger.
“She oversees the analysis of housing market and brokerage industry trends, member communications, and membership development activities.”
Their chief economist also oversees newsletter/e-mails to members and cocktail hours for member recruitment? I guess they don’t need much economic analysis.
Seriously, folks, that is stuff that exempt orgs hire pretty young things with english lit degrees to do. Serious lightweight here (oxymoron intended).
Want to bet that the time as an instructor at UPenn was running small discussion sections in a big econ class when she was getting her master’s? or maybe just reviewing problem sets with kids in a 101 level class?
One of my customers is (city name) Association of Realtors, they are late again with their payment.
LAY’s bio proves her statements were deliberately misleading, as she’s no dope. Anyone who bought in the last two years should add her to the list of defendants.
Why do politicians talk about the subprime meltdown likes its 9/11 or Katrina with victims and ‘relief’ needed? Any excuse to spend taxpayer money is siezed upon vigoursly.
God Bless the Howard Jarvis Taxpayer Association (even though I hate p13)
They act like these morons are victims instead of calling them what they are, gamblers.The govt is trying to figure out how to stop housing prices from falling in any way it seems.They know the economy has and is being run off of debt from homes.China makes all the stuff, sells it to us and we pay them from money we borrow from them by selling treasuries.Money is created from thin air via home appreciation.No wonder the dollar has tanked.
Because the only way to get us suck –er, taxpayers to bailout the banksters & subprime fraudsters is to scare us with Doomsday predictions about Financial Armageddon. A bleak “Max Max” style future awaits us if we, *gasp*, allow the market to punish really, really bad decision making.
Global warming is the new scare tactic out there.I think were all supposed to crawl in a hole in the ground and live off of canned goods and recycled water.I heard yesterday that sheryl crow wants to limit your toilet paper useage to save trees.Last I was in the forests were too many trees and needed thinning.
Ms. Crow should stop going on tour as her touring entourage must use tons of energy and spew tons of emmisions per year.
I would rather listen to cows fart and then die of methane poisoning than be subjected to a Sheryl Crow concert.
but you see, she can get pollution credits for her pollution riden lifestyle, that’s what green-house Al does to compensate mother earth for using $2700/mo. worth of energy to heat his little mansion in Tennessee.
I tell ya.. these blow-hards never cease to amaze me with their “do as I say not as I do” sermon.
sorry i digress.. just wanted to blow some steam.
got cash?
I would rather listen to cows fart and then die of methane poisoning than be subjected to a Sheryl Crow concert.
So just to be sure you a fan or aren’t you?
Actually bovine flatulence IS a significant greenhouse gas, it just doesn’t play very well with the social engineering crowd.
Actually, greenhouse gasses from agriculture including animal emissions are now thought to explain the strange warmth during the recent cool period. The science is complex, but consistent. What is even more complex is how best to react to what we now know. Dismissing what scientists say about emissions because it sounds like a plot to change behavior comes across as both childish and paranoid.
Mentioning cows was part of the joke people.
I have no problem with scientists making claims about emissions, but I had no idea that Sheryl Crow was a scientist.
Why do people get up in arms when Big Oil sponsors scientists to do research about other potential causes for global warming but seem to have no problem when the UN or Government sponsors scientists that place the blame squarely on human activities? Don’t governments have agendas as well *cough* increased revenue *cough*?
It’s kind of funny in respect that I’m a bit of a doom and gloomer when it comes to the financial system and humanity in general, but human induced global warming aka. climate change, strikes me as being as much of a canard as Y2K.
With Al Gore’s new found fame will people forget that he invented the internet?
Cruz,
Big oil has a vested interest in keeping consumption high. The government is more neutral on this stuff though some people do have an conflicts of.
The Global warming thing has spiraled out of control. Too much computer modeling and not a good enough understanding of thermodynamics.
Most of our predictions for global warming are looking out 50 years. Now every time a bad storm happens its global warming.
“Dismissing what scientists say about emissions because it sounds like a plot to change behavior comes across as both childish and paranoid.”
To keep this in line with this blog, do you believe everything put out by the “experts” in real estate? Are David and Leslie to be believed simply because you read it in the paper or saw it on TV? My question to you is what research have YOU done in this area?
One other question, what are these scientists that keep getting quoted? In the professional circles I’m involved in, being called a scientist is an insult. Engineers, Geologists, Physicists, etc. all worked very hard to earn their titles, and are proud of them. The guy from Humbolt with a degree in horticulture is called a scientist.
Think for yourself, question everything and don’t forget to follow the money.
Don’t forget to take a few hippies into your hole in the ground! We can be made into candles and, due to our herbivorous ways, delicious meat courses.
If you want fresh meat in your hole in the ground, dont forget to pick up a couple of hippies!
Did you mean Mad Max? That is one of my favorite movies.
Yup - ’twas a typo
Harm: What story are we to believe?
And all the while the DJI is closing on all time highs in US Dollar terms, but trades closer to 1960ish in real value “buying power” terms!
I fear that the ones leading the charge know the full ramifications this housing/credit bubble is posing to the US and the WORLD economy.
Americans are about to get a lesson, a lesson learned not by my Dad, but rather my grandad. I must confess that I have taken 75% of investment money “off the table”, and am sitting in cash. With the DOW flirting with lucky 13000, the stars are just about aligned for a fall of desperate proportions.
I am in 95% cash.The stock market has been taken over by the same folks who bought property at the peak.It makes no sense at all right now.We need a serious correction about now.
I’m about to rebalance my retirement portfolio. Suggestions, anyone?
Tax-free money markets. I-bonds. Tax-free mutual funds.
~Misstrial (who agrees with arizonadude re take-over of the Market)
Define “Cash” for me. The US$ is poised to take 30-40% haircut in the coming years. The dollar index is hitting the lows around 80. If it goes below about 78, it’s basically in uncharted territory. I am 50% in federal reserve notes, 30% gold and silver, and about 20% oil and gas trusts. I am going to put convert more federal reserve notes into gold and silver on this next little pullback we are going to have.
There really aren’t many investments out there right now that will give you more bullion than you put in. Buy bullion on pullbacks is my advice.
OK, that’s a little scary. My book and plan could be yours. Great minds think alike? Or just true believers about to burn? Time will tell, no?
You guys are crazy with the running inflation and the falling dollar, the best protection against money erosion is the stock market or the commodities (gold). Being in cash is like giving money to uncle Sam for free.
I agree. There seem to be many powerful people who want (cue deep offstage voice) mooore liquidity!
What we don’t know: inflation or deflation
What we do know: housing is going to suck ass
Let’s look at recent empirical data. Housing is going down. Liquidity and inflation is going up.
There will be deflation in housing prices, but that’s not going to be that useful for most bubble sitters since they weren’t going to buy for a while anyway, and when they do it will be to live in, not to invest in.
So far, the numbers appear to be going to inflation. Britain is looking at well above trend inflation and there is talk of their central bank raising rates until 7.5%. Buy sterling? The carry trade will go bonkers with GBP at 7.5 and JPY at 0.5% , and sterling is shooting up, making London prices even more insane. GBP/USD could go to 2.50 or 3.00 on an overshoot. The U.K. property bubble will go even more crazy until they hit the wall.
China will do nothing to change their hypergrowth and manipulated yuan until after the 2008 Olympics, so I see tons of dollar recycling (inflationary) back in the system.
At the moment, I’d guess this means “anything but real estate” (i.e. not a gold n ammo portfolio) until spring-summer 2008, when the traders start speculating about post-Olympic China.
European bonds and Asian/Asian supplier stocks.
I don’t know if it will do any good, but I did send an email to my state representative and senator to tell them to oppose AB 1538. I will continue to voice my opposition to any bailout to all elected officials. Like I said, I don’t know that if it will do any good, but it can’t hurt.
hate p13? Then why did you MOVE to California?
Well I was born here. can I still hate it? >; )
As one native to another: Yes.
Another native here and got the hell out of Cali as fast as my little legs could carry me many moons ago.
By 1970, the “suck factor” in Queen Califie Island was on the rise and we left.
I’m native too, and not too pleased with what’s happened to California over my lifetime. I stay to be near aging family members (and yes, prop 13 helps). Also I’m a bit afraid of moving to another state and being put down as an “equity locust”. Come to think of it, why is no stigma in being a newcomer to MY state?
There is.. we just call them Mexicans.
Giacomo, I assume you’re being slightly facetious about the equity locust comment, but I’ll address it just for fun: as long as you don’t behave as a complete jackass, people are generally pretty willing to accept a newcomer. I recall travelling to Crete just after the US bombed Libya, and there were a lot of warnings about the locals being angry with US policy, particularly with a naval base on Crete. It coudn’t have been further from the truth; we were treated with enduring graciousness. Lovely time.
I too moved to Oregon from Ca. I was afraid to be considered an equity locust. My advice, change your license plates asap. However, I was a Ca. renter for 30 years, so I didn’t feel too guilty. Also paid cash for a very nice place here in the country in 2004. I sleep very well at night.
Yes, I was being a little facetious.
Actually, my wife and I stayed at a client/friend’s vacation house on the coast of Oregon for a few months in the winter of ‘06 (yes, we understood in advance about the weather) and all the locals were very nice to us. We took pains to dress to local custom (work clothes mostly), offer compliments and NOT critiques, and be in passive, learning mode in virtually every situation. We couldn’t do anything about the license plates, though…
Lionel: yes, agreed; we visit family in Italy often, and my Italian is not good enough for us to “pass”- but despite being Americans, I don’t think we were never treated badly for political reasons.
I guess I was ust trying to express that it’s tough to give up my Calif. “credentials” to become a newbie somewhere else. Anyway, California is a big state, and I think we’ve found a pleasant, rural place where we can afford to pay cash (after a bit!). Thanks to Ben, and the other contributors here, for helping us resolve to be patient.
Teacher? Government worker? or did you buy to late?
Overly smug for no reason?
Of the thousands of articles written about the housing “crisis”, everyone involved in a real estate transaction has been blamed for the “mess”, with one curious exception….. Sellers.
Aren’t they the one’s who left the party with all of the cash that has mysteriously vanished?
My point is, if a buyer was suckered into “overpaying” for a property, how is it that the person that the buyer gave the “excess cash” to is getting no attention whatsoever?
I’d be interested in your view…….
The reason why is a good number of posters here have been those sellers. Including myself.
Somebody has to shear the sheep!
I got my bag of wool!
The key factor is that nobody forced the buyer to give the seller that amount of money. There was no exogenous factor that would make gouging a possibility. Unless it can be proven that easy credit is an analogous to a hurricane. But hey, nobody forced the buyer to take the easy credit either. I think the seller is in the clear and they should count themselves among the blessed.
It’s said that you can kill a sheep only once, but shear it many times. In the case of sub-prime mortgages and flipping the sheep died during the shearing process. And they met their doom willingly.
I disagree. Sellers taking advantage of a terrible set-up, knowing full-well manic buyers were paying far too much, are equally guilty. I laugh when I read on this blog about greedy sellers who won’t drop their prices, when so many of the people complaining were greedy sellers themselves a year or two ago, and were just lucky enough (and unethical enough) to sell for absurd profits in time. What’s “greedy” now was just as greedy then.
Sheep incidentally do not meet their doom willingly, and referring to buyers as sheep says a lot. The sellers who took advantage should not count themselves among the blessed, but among the greedy, selfish, unethical, you name it.
I sold my Reno house at the top in 2005. When I sold I had no idea it was the top, all I knew was that it seemed like a good time to sell. Does that me me unethical? I think not.
The buyers of my house in the summer of 2005, got an equally high peak price for their home, so I think the transaction is a wash.
As in, I’m cleansed of all guilt, greed and unethical behavior, due to them screwing the buyer of their home. Whew, that was close…. I feel blessed again.
Maybe Incredulous could start a company that goes around to different houses and declare, “This house is clean!”
Been there, done that. Loved it.
2005
some people thought it was a righteous time to buy, some people thought it was a righteous time to sell…
so what?
no one KNEW or KNOWS for sure what was or IS going to happen….
yet Incredulous damns all for having an opinion and acting on it
strange….I thought having an opinion and acting on it was called “living”
Imploder: “no one KNEW or KNOWS for sure what was or IS going to happen….”. You are dead on with your comment. I sold near the high in the summer of 04 as the prices simply didn’t make sense and in my analysis defied reality and rationality (for all the reasons we discuss on this blog). However, as you say, I didn’t “really” know what the outcome would be, it was a calculated risk. Same for the buyer. My neighbor actually thought I was nuts for selling because they were certain San Diego real estate would only go up indefinately and if we sold we would never be able to get back in.
Laughable! Sellers only have an advantage in a high demand environment. What was causing the high demand environment? Idiot sheep with dreams of buying said property and then selling to another dumb sheep with an even greater loan. The rules of the game are stated up front for everyone to see so don’t give me that b.s. that it was a terrible set-up.
I’m not much of a gambling man, but I do know that I wouldn’t fold pocket aces at the poker table because my hand has an unfair advantage.
Yes, real sheep don’t willingly get sheared, but human sheep do it to themselves all the time. Willingly. See Las Vegas as a prime example.
I bought in 1991 for $252K. We sold in 2006 for $775K. I bought at the market price and sold at the market price. Are you saying we should have left a couple of hundred $K on the table for the buyers, and let them flip it? Get a clue.
I’ve got to disagree with you. Please note, I have never owned a house (though I hope to after prices correct), so this is not a case of me trying to excuse my behavior. The sellers of homes were one of two parties to the transaction, with the other party being the buyers. The sellers try to get the most money they can for the house, and the buyers try to get the house for the least amount of money. This is natural (protecting one’s wealth), and it is understood by both parties, who are each willing participants. Do both parties have perfect knowledge of the market? No. Equal knowledge? Probably not. But as long as neither party commits fraud (by commission or omission), then the parties know that they are taking a chance by entering into the transaction based on imperfect knowledge. But they choose to do so.
Was a seller in 2004 “greedy, selfish, unethical”? The buyer got at least a year of fantastic appreciation. Some sellers got out because they felt that prices were at or near the top, just as they would sell a stock that they thought had peaked. The buyer buys, at least in part, because they think the asset will appreciate. This difference of opinion is what makes the market. Should a buyer in 2003 have tried to convince a seller that they should hold on because there was more appreciation to come? Each party is acting based upon what it believes to be in its best interests. As long as no fraud was committed, then each party bears the risks and gains the rewards of its decision. But that does not make sellers unethical. As to greedy or selfish, each of us is greedy or selfish to some degree because we all need to look out for ourselves and our families (and maybe be able to give some money to charity).
Spot on — sorry my post below was so redundant with the points you made.
“unethical”? To sell for “absurd profits”?
There is NOTHING “ethical” about ANY transparent transaction between a willing buyer and a willing seller.
When you sell to someone who is willing to pay your asking price, however “absurdly” high that price may be, you are doing what THEY WANT YOU TO DO! Whatever profit anyone makes is not “absurd”. It may be lucky, it may seem outrageous but as long as it is a condition created WILLINGLY, it is DESERVED.
Otherwise they wouldn’t buy it, would they? If people HAD to buy homes, if rental properties didn’t exist EVERYWHERE then, maybe, yeah, there might be some point of ethics in such a transaction (as the “buyer” wouldn’t be all that willing a partner, no?).
But free, ADULT, people, in ALL of these transactions, had choices. Now they have to live with them. The beauty of a free market is that each party has to live with their choice, live with the consequences because no “expert” is there to blame if it goes south. Harsh? Sure. But the alternative is some kind of nanny system that will result in an inflexible, undynamic and unproductive market….for EVERYONE.
This real estate debacle is going to be bad. The sums being lost, individually and collectively are going to be huge. But please don’t imagine there is a better system, run by some omnipotent “guru”, that will work, harmlessly.
I have no sympathy for adults who engage in a gigantic financial transaction who do not take the time to contemplate the financial implications for themselves. Maybe in days gone by, when information on real estate was elusive (at best) and hard to come by you could make a case about some being “helpless”. But a ten year old can do research on the net today in a few hours that even experts couldn’t gather in weeks only a decade ago. Even for illiterate people there are tons of “do-gooder” organizations happy to hold peoples hands….for free!
Your comments about “greed, selfish and unethical” can just as easily be applied to the buyers in this bubble. The notion of “ethics” between buyers and sellers, in this day and age, is ridiculous.
Research the term “Caveat Emptor”. It has a rich history that has stood the test of time….and will never change regardless of the “ethics” one might imagine should apply to a such transaction but never will.
like when I sell a stock and it goes down afterwards?
For the most part, I think the greedy sellers only turned around and plowed it into a bigger overpriced home….keeping the whole cycle going
OK, sooo…. Dumb buyers, dumb mortgage lenders, dumb bond buyers, dumb regulators, dumb securities brokers…..Smart Sellers?
I get your point. Just not sure all sellers are as innocent as it may appear. Particularly homebuilder-sellers. Some intelligent force had to, at a minimum, “encourage” buyers, et al, into a deal that ultimately resulted in what is being painted as an all around losing proposition. I suspect there are more winners than are being counted.
Food for thought……
When someone is trying to shove fistfuls of dollars into your hand, close your hand.
Sellers didn’t force anyone to do anything, but they did profit from the mania.
By that same logic, a stock trader with no inside knowledge buys and sells shares of Enron profitably, should return the ill-gotten gains?
That is a monumental stretch!
Then don’t call today’s holdout sellers greedy, when they are doing nothing more than those who sold two years ago.
If someone sold at the top of a bubble, knowing it was bubble, then, yes, that person is guilty of unethical behavior. If he didn’t know it was a bubble, then no, he wasn’t. But, to brag about how much money one made sheering the sheep two years ago, and then to call stubborn sellers today greedy is more absurd than anything posted here today. Does the phrase “It takes one to know one” come to mind?
As a long-time investor and market-watcher, I say selling when the market is high is just being rational. Current sellers who refuse to lower prices are just not being rational. You can’t get blood from a stone, etc. The market is what it is. If you need to sell, you are subject to the market. Willing buyers and willing sellers are the market. If the buyers lose touch with reality (see 2005) and the sellers benefit, so be it. If buyers have gotten cold feet, that’s the reality the sellers have to contend with. Greed and fear help drive the process, but the individual buyer or seller at a particular moment in time is just there in the moment.
“Then don’t call today’s holdout sellers greedy, when they are doing nothing more than those who sold two years ago.”
I don’t call them greedy. Dumb, maybe, as they are holding on to an asset producing negative returns rather than cutting their losses by dropping the list price to a level where the home will sell.
I have never called today’s sellers greedy for not lowering their price point. I call them stupid for not lowering their price point to make the sale IF they need to make the sale. I’ve said it before and I’ll say it again, if you can and want to hold on to your property until you get an offer that you want, by all means do it. It is your choice and in my mind you are not being greedy. BUT, if you make the claim that potential buyers are being greedy by not meeting your price point then you are just stupid.
Stubborn sellers are not greedy. They have their reasons for not wanting to unload their property at a lower price. That doesn’t mean that they are correct in their actions. Perhaps sin of pride may be more apt than sin of greed.
“BUT, if you make the claim that potential buyers are being greedy by not meeting your price point then you are just stupid.”
I am not currently in the market, so the issue of current sellers meeting my price point is moot.
Your point that the sellers have the right to hold on to their listing prices forever if they choose to do so is well taken. And judging from the dates that some San Diego area sellers first listed, it looks like some of them may be highly successful in pricing out potential buyers forever, especially when the new home builders are undercutting them with more attractive homes priced 20% cheaper.
“Then don’t call today’s holdout sellers greedy, when they are doing nothing more than those who sold two years ago.”
Actually, they are doing less than those who sold two years ago, as they are not selling if they are pricing out their prospective buyers forever.
My buyer had to buy, otherwise he would be throwing his money away on rent. (-;
“If someone sold at the top of a bubble, knowing it was bubble, then, yes, that person is guilty of unethical behavior.”
Since the only one that could do this is God, you have with your own arguments absolved those you attempt to condemn
every buyer and seller takes a chance…period.
but thanks for the self righteous and ill conceived ethics lesson…
Yes, smart sellers. I sold late 2005, I went against the tide, no blogs, no downturn, no encouragement. I rented-have not rented since I was single over 20 years ago. Do I personally know anybody else that did what I did, no. Homebuilders knowing what was going on? They would have slowed building and kept prices up even longer, and had no inventory when it died. Yes, smart sellers.
What about the guy that sold in 03 or 04?
Where you calling the ethical unethical line.
And everyone shows up and plays dumb/victim and trys to get another free buck. Entitlement/victim mentality.
I will not remember this era in American thought/mindset kindly.
So people who think their house is overvalued are “unethical” to sell it? If they “know” there is a bubble? (How does one “know” there is a bubble?). If they don’t “know” there is a bubble, then it’s OK. Yeah, that makes sense.
If all the sellers took their houses off the market becuase they KNEW it was overvalued (and they refused to sell at a less than market price)….that would further restrict the housing supply and cause prices to rise further. Thus making other “unethical sellers” who DID sell even richer and making the buyers even more extended. So that would be ethical?
That makes no sense, sorry.
People buy and sell in the market every day. If I own a stock and I think it’s overvalued, it’s “unethical” of me to sell it? I can only sell if I think the price is “fair”? Why would I sell it then?
Today’s sellers who “won’t give it away” are greedy in that they will get less money in the future instead of selling today (IMO). Their short term greed blinds them to the reality of the situation.
Were the sellers of yesterday greedy? Sure, there’s no sin in doing what’s best for you financially, as long as you don’t cheat someone or put a gun to their head. It’s letting greed blind you to reality and thinking that your will alone will cause your house to sell at a price you deem “fair”. Just like people who didn’t sell Cisco at $80 (because it was $100 once) were greedy…a year later it was $20.
My take is that the Fed forced well-informed people to do something they probably wouldn’t have done otherwise. When all your neighbors are bragging about how much their house in now worth and buying high-priced goodies with HELOC, in the face of deteriorating economic conditions for the average worker, the prudent thing to do is to sell the house, rent for a few years, and hunker down for the inevitable storm to follow.
Our current monetary system is literally destroying our communities, and this is closely related to the housing bubble.
“the Fed forced well-informed people to do something they probably wouldn’t have done otherwise”.
Utter and complete nonsense. Did Fed policies contribute to this fiasco, certainly. But please explain to me where an adult is “forced” by the actions of someone else, some group, or some government official to BUY SOMETHING.
Yes, its hard to buck what “the crowd” is doing but probably every teenager in America (if not the world) has heard something like the line “If your friends jump off a bridge, you would too?”.
For the love of God will anyone in this country take responsibility for themselves again?
Does anyone take the time to imagine what a society will be like where everyone, any time THEY screw up, suffers no consequences?
I’m all for helping people get back on their feet, get a second (or third or fourth, whatever) chance. But if you think this debacle is bad, imagine the next time when the idea of no consequences to bad decision making becomes accepted.
When no “moral hazard” applies to everyone, with everything, guess what? There ain’t gonna be any “safety net” big enough to fit 99% of the population.
The Fed dropped interest rates to negative real interest rates. This is highly manipulative of peoples propensity to save. People realized in comparison to housing they were losing purchasing power by holding money. People moved in the direction the Fed wanted them post dot-com bust. It probably saved the economy from going into a severe recession. Unfortunately bubble economics have to fail and to their credit most of the readers here understood that.. I know several people in the bay area who just recently bought. None of them are greedy speculators. They are expecting to live in their houses for 30 years. I do not believe in bail outs but I will be very pissed off if they suffer the consequences of piss poor monetary policy. Throughout history if people are not rewarded by saving in money they look for another commodity that they believe will best preserve their purchasing power. The Fed’s monetary policy consists soley of turning that valve. The US Fed Reserve Note has lost purchasing power for the last 100 years except for a brief spike in the beginning of the great depression when the demand for money increased due to a loss of liquidity.
Value of money….. is lost because of “printing money with no restrictions” . Not hard to understand. Sold in 2005 California house and bought better quality home in beautiful rural area out of state at “half” the price with added purchases to gold/silver as the dollar tanks more. Common sense, common sense. It doesn’t go out of style.
Technically speaking the Federal Reserve Note has only been around since 1913, so in about 8 years it will be 100.
The FRN was created when the Fed was created by the Wall Street cronies in 1913.
‘My point is, if a buyer was suckered into “overpaying” for a property, how is it that the person that the buyer gave the “excess cash” to is getting no attention whatsoever?’
We are at least supposed to have a free enterprise (aka capitalistic) economy in this country, where private transactions between a willing buyer and a willing seller are legally allowed. Unless the seller somehow deceived the buyer by misrepresenting the quality of the property that was sold, I am missing your point, as it is a buyers’ and a sellers’ mutual agreement which sets the price in a two-party sales transaction.
Now if you are a communist or a socialist, then that is another matter entirely…
Actually, I am a bit of a Socialist, but my point was that there a lot of people here laughing at the GFs who bought THEIR (the laughers’) overpriced properties, and then blasting the GFs for not selling them at a loss. The word “greedy” appears here dozens of times day with regard to these sellers or wannabe sellers, who are no greedier than those who took advantage of them in the first place. After all, those who took advantage found GFs: something they condemn when the GFs try to find greater GFs.
When someone sells a house to someone who can’t afford it, and know this, telling him he can flip if for a profit, he is unethical. Craigslist has tons of these come-ons, and we all point them out and make cracks. But, are we any better for engaging in the same behavior?
There are a lot of people out there who don’t know what they’re doing and are not con artists, but are simply trying to better their lives by whatever they think is sure bet. Instead of blasting them incessantly, can’t we show sympathy? The constant hilarity over others’ misfortune is disturbing. Equally disturbing are the constant mirthful, Casandra-like predictions of calamity, poverty, and suffering (”It’s going to get blood in the streets . . . blah, blah”), and the “I got mine, tough crap” philosophy spouted by people who are hoping to cash in on the misery. I suspect many of those posting such comments really are bitter or envious, which they deny, and extremely unpleasant to be around.
“I suspect many of those posting such comments really are bitter or envious, which they deny, and extremely unpleasant to be around. ”
I’ll have you know that every poster here has incredibly soft skin, beautiful hair, has the voice of an angel and smells of lilacs and roses. Now how can that be deemed unpleasant to be around?
I’ve seen some of the people in question, and I wouldn’t let them in my apartment building, much less my apartment. “THIS house IS clean!”
I don’t think sellers were going around saying “buy now or be priced out forever “. Most sellers who sold at peak didn’t know if the market was going to continue upward or not . Sellers were caught in the RE mania rah rah stuff also . In fact ,with all the cheerleading going on by the REIC ,the sellers were taking a risk by cashing out .Some sellers were smart in knowing that the up market would end and with others it was just luck . Some of the sellers that cashed out by selling just bought a more expensive property .
A seller who engages in fraud or kickbacks are the ones that need to be busted . You can’t tell me that these sellers that gave a cash-back after escrow to a buyer or RE agent or third party did not know that they were screwing the lender .
All my friends in 2005 thought I was making a mistake by selling .I was not paying attention to the market leading up to selling my long term home . When I looked at the comps I was shocked at how high prices had come up but I did not have knowledge at the time that lenders were making bum loans and I assumed that incomes had gone up .I would of never dreamed that lenders were making these bad loans because I was retired when I sold and was not in touch with the RE business at the time .
This was a real estate mania that got out of hand because of faulty lending /appraisals .All sellers are shown comps to price a home for sale and most sellers try to get as much as the market will give them . A seller who is selling a car tries to get as much as the market will bear also .
It was up to the buyers to back off when the market started inflating . Instead of a needed market contraction because of affordability the real estate market went into a false /fake market of speculation and unqualified borrower sub-prime driven 100 % financing . The faulty lending is to blame for the inflated market that went into overdrive .
“I’ll have you know that every poster here has incredibly soft skin, beautiful hair, has the voice of an angel and smells of lilacs and roses. Now how can that be deemed unpleasant to be around?”
Yes and we are all smarter than average, have large savings accounts, maxed out 401ks and 6 figure incomes too. Did I forget anything?
You’ve noticed that too? I think many of these claims are bogus, and the products of computer geeks living in their parents’ basements.
I have a SEVEN figure income!
(if you count the two digits to the right of the decimal point)
“When someone sells a house to someone who can’t afford it, and know this, telling him he can flip if for a profit, he is unethical. Craigslist has tons of these come-ons, and we all point them out and make cracks. But, are we any better for engaging in the same behavior?
There are a lot of people out there who don’t know what they’re doing and are not con artists, but are simply trying to better their lives by whatever they think is sure bet. Instead of blasting them incessantly, can’t we show sympathy?”
I hear what you are saying but we do not live among saints. This is a capitalist society where it is every man, woman, and child for himself.
“we do not live among saints”
I do. I have some of the nicest relatives and friends one could imagine, and though most are well-off, none is greedy.
Are they really saints or have they simply not had the opportunity and power to show their greed. This is not specific to your relatives and friends, necessarilly, but in general. So socialist and communist systems are bound to fail because they have to be run by humans.
Equally disturbing are the constant mirthful, Casandra-like predictions of calamity, poverty, and suffering (”It’s going to get blood in the streets . . . blah, blah”), and the “I got mine, tough crap” philosophy spouted by people who are hoping to cash in on the misery
I agree some posters are too negative. Silly negative.
And yes sellers are greedy if they hold on to thier asking price and a year goes by and the price is now below offers they refused earlier. Or maybe just stupid. And I really hate it when the RE agent says the seller needs this price so they can retire ? F%^K that I’m already getting reamed in SS taxes which I’m sure they will means test when I’m ready to retire and collect.
I agree some posters are too negative. Silly negative.
Yes, just you run along now and enjoy your koolaid.
I imagine you would have stayed put in New Orleans, too. “Really now… how bad can a CAT 5 really be?”
“And I really hate it when the RE agent says the seller needs this price so they can retire ?”
Yeah, or when the realtor says the seller has to get her money back from the remodel. Well, #%, it’s a crappy remodel with dark tile that is unevenly set - it lowers the value to me. I’m not responsible for her bad remodeling job and I’m not going to suffer for it.
“I suspect many of those posting such comments really are bitter or envious…”
Did it ever occur to you that with your line of posts you are coming across “bitter or envious”? Like someone bitter and envious that they didn’t have a house to sell when they could clearly see what they felt was a top?
Of course you have never sold, cause you are a “bit of a socialist” and would rather become financial cannon fodder, so that others may prosper.
People have and are enduring discomfort and disruption in their lives because they sold their homes in an attempt to defend themselves from the financial mania and insanity. Sometimes they vent.
Gee, guess that’s why it’s called the housing bubble blog.
When someone sells a house to someone who can’t afford it, and know this, telling him he can flip if for a profit, he is unethical
First of all, it is not responsibility of the seller of a house, or anything else for that matter, to determine if the buyer can “afford it”. I mean, is an expensive restaurant supposed to interview its diners to see if they can “afford” their meals? It’s the responsibility of the buyers, and those providing financing, to determine affordability. As if that weren’t obvious.
On your second point I agree, it is unethical for the seller of anything to promise future capital gains (and sometimes illegal). But it is also stupid for the buyer to believe any such promise.
“Even when priced below the competition, foreclosed homes can linger on the market. Kent thinks it could take up to four months to sell the foreclosed properties in his listing book, particularly those that appeal to ‘low-ballers’ and ‘bottom-feeders’ willing to wait in order to pressure lenders into taking just 50 cents to 75 cents on the dollar for the homes.”
I wonder how long it will take Real Estate agents to stop using the terms ‘low-ballers’ and ‘bottom-feeders’ and start using ’savy-investors’ and ‘prudent-purchasers’.
I read somewhere this morning about a fellow bubble blogger being called greedy for waiting for home prices to fall.That is the metality of some of these dipsh@ts out there gambleing in the housing market.
Sellers are lashing out because they’re frusterated and scared. I don’t know what they’re thinking though. When was the last time you walked in a store and were yelled at and called “greedy” for not buying anything when it was all overpriced?
Agreed. These same sellers wouldn’t walk into a department store during a sale and offer to pay full price…
They did but now we have come to the “yard sale” of housing pricing
I bought our house because we liked it and it was 2 1/2 times our income. When we sell, I’ll take as much as someone will give me, and buy our next house for 2 1/2 times our income or rent.
They’ll stop using those terms when the only people left to buy are the ones they have derided. There are still the knife catcher and “oh, what a great deal” markets to squeeze.
wonder how long it will take Real Estate agents to stop using the terms ‘low-ballers’ and ‘bottom-feeders’ and start using ’savy-investors’ and ‘prudent-purchasers’
As soon as one walks into their office.
I’m thinking of shorting a company with stock symbol MDC. Their earnings report is due out in 2 days, and whether it’s good or bad, I feel that the stock will go down anyways.
What do people on this blog think? I’ve seen recommendations in the past on other stocks, but back then was still reticent to take the plunge. The market that these builders sell in are around the SW sunbelt region: SoCal & Arizona mostly and, but also a little in Colorado and Florida.
Of course these are the regions that this blog has concentrated on as being the harder hit areas, and with all this talk of a weak spring housing slump, it’s just too tempting not to take the plunge. I’m thinking of plopping down a $1000 tomorrow on a put for MDC. I understand the risks, so no need for the moral flaying (everyone should have a healthy dose of greed).
But I was wondering if other people have taken advantage of this bubble so far instead of just talking about it. Please post. Would like to know.
Vince
I shorted New Century in February at 16.20 and covered at .70, so that worked out well. Not that I’m any big investment genius–I just got lucky.
These days the only way to make money in real estate is by not owning any.
“These days the only way to make money in real estate is by not owning any.”
Good advice.
As new century is no longer trading and if you don’t cover, there is no transaction and you can pocket everything. Tax free
The market seems to be shrugging off bad news for all the builders that have reported or warned so far. I own puts on some builders already but I don’t expect to see them profitable until the third quarter or so. My advice would be to buy some LEAP puts to give yourself some time; you’ll pay more but you’ll sleep better. The builders as a group have taken a 10% jump in price in the last few weeks and just turned down these past few days so puts may be attractively priced right now.
OT - I used to work for MDC (very briefly). I’d love to see you take them for a ride. Good luck.
Thanks for the advice. I’ve noticed that homebuilder stocks have gone up a little lately too, but was baffled. Maybe just herd mentality, people thinking this is actually the bottom, or uninformed investors. Either way, I can’t come up with a reason for these stocks to go up any further. It’s just not reasonable. . . I’m going for the ride.
Interactive map on California’s polpulation growth:
http://www.latimes.com/news/local/la-migration041807-f,0,7918254.flash
Great find. I love that set of maps and graphs. My friend who always agrues about how great LA and that everyone wants to live there? She won’t like it as much **evil grin**
Proud lowballer and bottom feeder here.
Hey dumba$$ Gary Kent, I am your customer so don’t try to insult me into over-paying for your foreclosures.
I have got all the time in the world, you don’t. Who wins the Mexican standoff? The lowballers and bottom feeders, b!tch.
Yep. As I was reading that article, I recognized myself as the “lowballer” and “bottom-feeder.” They can call me what they want, but I will hold out for a great deal. After all, I don’t have to buy, but they have to sell.
The best part is that this “mexican standoff” is happening in the minds of the sellers, Realtors ™, and mortgage vendors. The rest of us are inside ordering dinner wondering why some “village people” reject is standing in the middle of the street, staring straight ahead, ready to draw a pair of water pistols.
Got popcorn?
Neil
That’s pretty funny.
hilarious, Neil.
That popcorn is seriously working your mojo
Too funny!
I look at this as a seige. We sit outside and wait for the citadel to starve and surrender. The longer they wait and this drags out the weaker they will be at the end.
If only I could sneak in, poison the well water and toss a few diseased carcasses in to speed up the process.
Who wins the Mexican standoff? The Mexicans do. They get to stay in their $500k sh!boxes on their $30k salaries.
“A year ago, Kent represented about 20 homes for sale with only a couple of foreclosures among them. ‘I feel sorry for the people who lost their homes, but I’m probably going to have to best year I’ve ever had,’ Kent said.”
Au contraire, this is probably going to be the worst year you have ever had. Good luck finding borrowers with 10% cash down. At the end of the year come back and post how many of your one or two or three hundred listings you have closed.Ha ha ha.
Got 10% down?
What’s with all the titles like “Still more declines to go”, “Not done yet”, etc?
Are we even getting *started* yet? Is there anyone who thinks that this Fall isn’t going to be devastatingly brutal? Is there anyone who thinks that next year its all going to turn around? Real estate cycles are long, slow 14-18 year cycles. And that’s nationally.
But regionally, real estate cycles can be more like 75-100 years. Just look at New York neighborhoods like Brooklyn. Or Harlem. Last real boom there was before our parents were born. To residents of those neighborhoods the phrase “real estate always goes up” must seem hilarious. Brooklyn took over 100 years to come back. All those brownstones that are now being restored to their former “turn of the century” (single-occupant) grandeur didn’t get converted to multiple-residence dumps because the owners needed less space. The market turned. Demand dried up. Owners subdivided. Lower income families moved in. Schools started to suck. Crime soared. And the neighborhoods died. That’s what happens in a down market. And it happened *fast*.
To say that we may “Still have some declines left” or that “We may see further weakness” is like strapping a nice soft cushion to the end of a cruise missile. Hell yes we’re going to see further weakness. We’re witnessing the decline of the American economy, the US dollar and US oil hegemony all within the space of the next decade. This is going to be positively traumatic.
“‘like strapping a nice soft cushion to the end of a cruise missile”
haven’t heard that one… beautiful
Seconded! LMAO!!!
“‘like strapping a nice soft cushion to the end of a cruise missile”
imploder uses this as “dating tactic”
Well… I just made it up.. but it seemed like a good analogy.
I am in total amazement when I hear claims of a rebound beginning in the second half, or beginning in ‘08… What gives anyone that impression. We’re looking at minimum 8 years to bottom in RE resales for price declines IMO.
The only big enough outside influence that could turn the RE market around now is MASSIVE FLOOD OF FREE MONEY by the government through every domestic finance agency there is. I haven’t discounted that prospect entirely yet. I’ll admit the Fannie/Freddie/HUD/FHA/VA… and everyone else that’s lining up to save the lenders is spooking me a bit. Of course the dollar gets crushed once that starts and those that are above subprime with ARMs will be on the street too as rates rocket without even more bailouts. I hope there are at least a few clear heads left in DC.
Love the pillow remark.
On a plus note we have gobs of Uranium. So, as oil recedes in to the past we have a glowing future to look forward to.
Also if this whole global warming thing turns out to be nonsense then we have lots and lots of coal.
1975 global cooling
1985 acid rain
1995 rain forest
2005 global douching
We have hardly sufficient fuel for current use.
“Lack of fuel may limit U.S. nuclear power expansion
March 21, 2007
Limited supplies of fuel for nuclear power plants may thwart the renewed and growing interest in nuclear energy in the United States and other nations, says an MIT expert on the industry.
Over the past 20 years, safety concerns dampened all aspects of development of nuclear energy: No new reactors were ordered and there was investment neither in new uranium mines nor in building facilities to produce fuel for existing reactors. Instead, the industry lived off commercial and government inventories, which are now nearly gone. Worldwide, uranium production meets only about 65 percent of current reactor requirements….”
MIT news office
http://tinyurl.com/25fu8g
Alas, there is a real quandry with nuclear reactors. There are really two whole technologies, the breeder reactor and the, er, non-breeder reactor. The latter relies on a single rare isotope of uranium (a small fraction of the uranium content in uranium metal), and the world reserves are not that impressive as a potential savior of civilization. The use of breeder reactors converts more common isotopes of uranium into plutonium while they run, so that the world supply of uranium is able to produce many many decades of power even at much greater consumption. However, the side effect is… lots of weapons grade plutonium all over the place. (note, I don’t think the Iranian reactor is a breeder reactor, for instance, but I think many Japanese reactors are). Decisions, decisions…
AKRon
Why have we not started another Manhatten Project for the development of Fusion? We could almost eliminate our need for oil.
Our country seems to pass on every oportiunity to further the development of Fusion enegy but seems intent on using every available square foot of land, drop of water, enormous amouts fossil energy, increase the price of food, deplete the land to create a biofuel that produces significantly less energy than is used to produce it. WTF.. we put the time an effort into the making of the thermo-nuclear bomb but cannot harness this energy for peaceful production of electricity?
I have completely lost faith in our leaders.
At the age of 51 I wish that I would entered the world of engineering instead of accounting to make fusion happen. The sad story of our county is that I probably would not have near the net worth that I have today.
To think I make more money managing financial assets than I would help making the world more energy efficient. Truly sad.
I voted for Bush but when he said “Switch Grass” (Spelling?) has potential I could not belive it. The guy is an idiot.
The earth no longer has the unlimited supply of water and healthy soil to abuse to make fuel for our cars. Brazil is the only exception, for a time. They will eventually turn their land into waste as they plow under the rain forests an alter their growing seasons.
It is within the grasp of the best minds on the planet to break the tecnological barriers of peaceful fusion energy if we as a country truly want it.
Yeah that’s what struck me. At $496k, it is still about 2 or 3x what i could pay. If i wanted to live in Elsinore that is. Friend had an “investment property” out there for about a year. He sold it cause it kept getting burglarized. Lots of meth out there, rumor has it…
That area is a meth haven. Stay away from it.
“The owner of 16 Ponte Russo paid $650,000 for the Mission- style house in November 2005…….Now, the house is on sale for $496,000 following a foreclosure.”
What do you think is going through the minds of all of the other owners in this subdivision right now who probably also paid $650K??
I am no so smart after all? My neighbors are lowering my property values, how dare them. I am really screwed because I pay 12% interest and due to rise.Boy, I didn’t lose this much money on pets.com. David lereah is not the genius my realtor told me he was.
What minds?
All they’ll thinkin’ about is their next monthly payment. And where the money is going to come from. Her parents or his.
There’s no long term plan.
“The more you eat…the more you sh*t”…Woody Guthrie
Seriously, when I suggest offering even 10% below asking price, I’m a ‘bottom-feeder’ and ‘lowballer’, but when sellers were accepting offers 10-20% over asking, they’re ’smart investors’ and ‘proud owners’.
That’s why its been suggested here that people don’t even bother with the b.s. of making offers right now. Why fight with idiots who are drowning, just wait and buy from bank or RTC. Besides, the idiots can’t go below their 100% loans and HELOC’s, so in most cases, offering is a waste of time anyhow.
Just sit back and watch the desperation, eat the free dessert at the open houses and wait…
I told one listing agent last weekend that the seller could take my offer now or sell it me for less next year. I can wait. She didn’t come straight out and call me a b!tch but she sure looked like she wanted to.
I will agree that if you are looking at an occupied home, it’s a waste of time. They are hungry enough yet.
I know I’m mostly spinning my wheels out there but it’s funny in a sickly sort of tragic way. I have a very black sense of humor.
I have not found any free food at open houses. I am going to have to go a bunch this summer.
I agree with you Chrisusc.
You really can’t blame buyers for wanting the best price they can get and you can’t blame sellers for wanting the best price the market will bear .If you want the best possible price you might have to wait for those deals . I’m only saying this because the sellers believe all the myths the REIC have been saying about a market that has reached bottom .
It’s sad that some sellers will lose their house because they believe the myths and spin of the RE industry .When the NAR tells the buyers that “it’s a good time to buy” because the market is due to turn upward ,than it also tells the sellers to hold out for the upturn in the market .
We don’t need no stinkin’ “sellers” — just wait for the REO.
Right .
“Rates on almost half of the loans in the Lehman bonds are scheduled to increase to an average 10.3 percent in December from about 7 percent now, according to the prospectus for the securities.”
OUCH! That’s gotta HURT. Imagine the faces on these FBs when they realize they are stuck with a 10%+ interest rate loan.
Imagine the looks on the Lehman folks’ faces when the FBs stop paying.
But is Lehman holding the risk ?
The most disturbing thing about this impending debacle is that the enablers of this boom/bust have made their money, laid the risk off on someone else (hopefully chinese bond holders, and not my pension fund) and gotten out already - only the stupid (New Century et al) hung around too long and
got stuck holding the (empty) bag
My refi in 1993 (4.75 fixed) funded the day before Capitol Commerce closed it’s doors due to a liquidity squeeze - I knew then we were on the roller coaster still heading up but the drop is coming.
Let’s assume that those loans are for $400K (about $100K under the median in CA, so I’m being pretty conservative). 10% on an interest only loan of $400K is $40K/year, or $3,333.33/month. How many subprime FBs can afford that (let alone an amortizing payment)?
That’d be about 60 grand a year in interest alone in California.
‘March sales fell below the levels of recent months in reaction to an uptick in mortgage rates earlier this year along with tighter underwriting standards,’ said C.A.R. President Colleen Badagliacco. ‘Moreover, recent news regarding foreclosures and the subprime situation had an adverse impact on the market psychology of many buyers, leading some to delay their home-purchase decisions,’ Badagliacco said.”
Really? Thanks for letting me know why I’m not buying right now. For all this time I thought I was waiting because the price was to f*#$ing high!
MDC HQ here in Denver, they running for cover. I’m a headhunter in town and get a call a day from someone in deep over there about to get “shorted”. Shorting them is a sound play, but in this market is crazy, who knows? Up is down, down is up. Cats and dogs living together…………..
But Lenny…Lenny…if I’m right, you’ll have saved the lives of millions of registered voters.
Of millions of belly up FB’s drying in the hot sun. Got shovels?
“But Lenny…Lenny…if I’m right, you’ll have saved the lives of millions of registered voters.”
Damnit-you owe me a 1/4 of diet pepsi and a new computer monitor. Har!
Went out with a RE agent to homes in North Fresno yesterday. Saw a few older homes at price’s 2x and 3x their value 7 years ago. When I told him I want to cut 20% off asking he went wild. “20%?
You CAN’T get 20%….that’s 60,000 or more!”
When I said the owners had no problem asking 150% more than 5 years ago and 20% was only a small dip into that, he shook his head, told me to look for auctions and walked away. He was stunned, upset and acting like I was some kind of
con trying to skew his market.
This is typical of the r.e. agents today. I’m telling you, they are all either former used car salesman or Payless Shoes salesmen who are drinking the koolaid (OR) they are out and out fraudsters who know better. In either case, the guy was rude becasue he thought “he had a live one” and was going to be able to make the beemer payment after all and keep his trophy girlfriend for another month or so…
Yes, people in RE truly are out of touch with reality, with incomes in most other lines of work, and with what homes are really worth in the current economic environment.
Ballsy. Nice touch though. And what, no counter offer? Give him a few months. He’ll cold call you as he chews off his leg, wondering if you’re still interested in a 20% off deal.
Which means everything is 20% off now, so the new offer is 40% off the old “wishing price”.
There goes the other leg ……
told me to look for auctions and walked away. He was stunned, upset and acting like I was some kind of
con trying to skew his market.
So he was new to Fresno then?
I was out sifting through open houses last Saturday. My experiences are similar. They get mad and then I give them my card. Once the a$$hats read my job title, they start asking questions about the economy, demographic shifts, etc.
So I give them the bad news. Here is where it gets good- they start arguing with the data - priceless
“C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in March 2007 was 8.7 months, compared with 4.7 months for the same period a year ago.”
Per the Realtors, 6 months is equilibrium. So 8.7 months should put some nice pressure on prices. And that number should continue going up as inventory rises and sales continue to decline.
“Investors are losing money because of places like Riverside County, California, where foreclosures almost tripled last quarter to 6,103 from a year earlier, the biggest increase in the U.S
- Inland Empire … soon to lead the nation in forclosures.
“‘Moreover, recent news regarding foreclosures and the subprime situation had an adverse impact on the market psychology of many buyers, leading some to delay their home-purchase decisions,’ Badagliacco said.”
Don’t underestimate the power of market psychology. As I’ve stated before, I have personally swayed the contents of news articles by pounding my local reporters with facts and chastising them for RE cheerleading. Tell everyone who will listen about this bubble and that this is a stupid time to buy. The facts back you up now. I also harrass local realtors when their wishing prices are too high or won’t drop. Screw these people, they are shameful cheerleader/parasites and deserve to be brought down.
Got a clue?
RE market foreclosures from sub-prime fallout are not just a market psychology . It’s a viable fact that to many foreclosures can bring down the market values in a neighorhood . Why would a buyer want to buy into a unstable market ? Not only do foreclosures raise the supply of homes but they usually sell at lower prices because they are trashed .Sometimes lenders won’t touch areas that have to many foreclosures .
The lawmakers are brainstorming on how they can stop this market correction that involves so many people going into foreclosure .The faulty lending was so widespread and there isn’t enough greater fools that qualify for a loan that can absorb the doomed homes .Foreclosures are a viable market fact that should be cause for concern for any buyer .
I don’t know where RE prices will settle at but right now who wants to take the risk . I think in the final analysis affordability will dictate where prices settle at .
“Forgive me if this article has already been cited (it is FULL of great quotes):
http://www.counterpunch.org/whitney04242007.html
Some random quotes from the article:
“Treasury Secretary Henry Paulson delivered an upbeat assessment of the slumping real estate market on Friday saying, “All the signs I look at” show “the housing market is at or near the bottom.”
“Baloney.”
————–
“Last week, Washington Mutual announced a $2 billion program to slow foreclosures (Washington Mutual’s subprime segment lost $164 million in the first quarter) while Freddie Mac committed a whopping $20 billion to the same goal. In fact, Freddie Mac announced that it “would stretch the loan term to a maximum of 40 years from the current 30-year limit.”
——————————-
In fact, the Federal Reserve and the five other federal agencies that regulate banks issued this statement just last week:
“Prudent workout arrangements that are consistent with safe and sound lending practices are generally in the long-term best interest of both the financial institution and the borrowerInstitutions will not face regulatory penalties if they pursue reasonable workout arrangements with borrowers.”
Translation: “Rewrite the loans! Promise them anything! Just make sure they remain shackled to their houses!”
————————————————
“Kenneth Heebner, manager of CGM Realty Fund (Capital Growth Management):”What you are going to see is the greatest price decline in housing since the Great Depression..The one thing that people should not do, is go near a CDO or a residential mortgage backed security rated Triple A by Moody’s and S&P because these are going to get down-graded by the hundreds of millions—because they are secured by subprime and Alt-A mortgages where there’ll be massive defaults”.
————————————————————
“Americans with a net worth of at least $25 million, excluding the value of their primary homes, reduced their exposure to hedge funds in 2006″– The amount of money held by wealthy investors in hedge funds has dropped dramatically– “The average balance, which was $2.8 million in 2005, was just $1.6 million last year, a 43 percent decline”.
So, what do America’s richest investors know that the rest of us don’t?
…..
“Despite Hank Paulson’s cheery predictions, we are no where “near the bottom”. In fact, a recent survey showed that only 1 in 7 Americans believe that house prices will go down. Even now, very few people grasp the underlying issues or the potential for disaster. We’re on a treadmill to oblivion and they think it’s a merry-go-round.”
“…only 1 in 7 Americans believe that house prices will go down.”
That is one very good explanation for why the likes of Paulson and Bernanke are so upbeat. Most Americans have no capacity for independent thought, and hence will believe whatever the top authorities propagate through the media.
Oops, they forgot to mention the margin of error was 50%.
6 out of 7 people know when weather improves so will house prices.
Even now, very few people grasp the underlying issues or the potential for disaster. We’re on a treadmill to oblivion and they think it’s a merry-go-round.”
I just had an intense (way too much coffee) mental picture of mummified hamster rigored to his wheel. The new rallying cry at Fannie Mae: Die now or be forced to run forever!
Do you have link to this sad factoid? Would love to print it and leave it in lunch room when no one is there.
C’mon guys, just start Bubba Mac already!
I just want to say God bless all of you CPAs and tax lawyers out there. You do great work.
So you didn’t need to puke on the table? .>; )
It’s hardly a bad thing, though, if mortgage bankers stick to borrowers who can actually repay their loans.”
Bugs Bunny: “eh, who might that be… Daffy?”
Bugs: “Daffy, you still gonna pay that $650,000 loan for that $375,000 house with a built-in duck pond?”
Daffy: “Eh, I don’t know Bugs…the note says I still have 28 years to go, Do ducks live that long? You think Taz would rent a room?”
Lake Elsinore! Oh boy you could get a 1/2 acre, 4 bedroom tract home there for 150,000 in 1995. I almost bought one but they found out I didn’t own a pickup truck and I got rejected.
On Kudlow a guest named Laxmi said RE is rebounding and was buying into Glodilocks. Probably wants to be guest again.
Greenberg said 1300 Auto jobs cut in San Deigo because people don’t have enough equity to buy car with. He also mentioned Million + dollar stucco boxes. And was dismissed as being too -ve.
Is there a there a slam Kudlow Blog?
There is blog for Larry Cinderella Kuntlow story never told BS and these are a few pictures I took of their members just prior to going on line.
http://jackthehack.com/pot.jpg
http://img63.imageshack.us/img63/2567/realtorszf8.jpg
stanleyjohnson,
I never fail to get a laugh out of those photos everytime you post them.
Is there a there a slam Kudlow Blog?
You should start one.
Don’t know if anyone posted this, but TED LUI (CA assemblyman) and others on the California banking and finance committee passed a proposal Monday to use money from the Affordable Housing Bond to bail out homeowners who were “victims” of “predatory” financing and can’t make their mortgage payments. CALL Ted Lui’s office, talk to Tiffany or Mark, 916-319-2053, and call every assemblyman on the appropriations committee (that’s where it goes to a vote next), and call your local state assemblyman, tell them you don’t want your hard-earned tax dollars going to bail out buyers who overpaid and didn’t read their loan documents, tell them the affordable housing bond money was to be used for affordable housing not for bailouts, call or don’t complain when it happens!
I made the call and left a message on Marks phone … these people are dumbass’s.
I left him a message, what a dolt. I told him it will be his car registration tax hike (a la Gray Davis). Political suicide. He will be recalled and serving coffee at Starbucks for the rest of his life.
I gave Mark every completely rational argument I could give, not screaming or yelling, just speaking in a controlled, professional voice, against this bailout idea…all he could counter was “that’s your opinion”, “I’m sorry you feel that way”, “we’ll just have to agree to disagree so there’s no point discussing this”, and he just kept going on and on about how many people were “victims” of “predatory” lending and that was what this was trying to correct. No explanation as to how such lending was predatory, why the ADULTS who signed the loan documents were not responsible for their actions, why it is my problem as a taxpayer, nor why we should reward those alleged predators by making payments that didn’t pencil for the borrowers to begin with. I hope every one on this board calls him and every other assemblyman you have time to harrass, I mean contact.
Maybe Mark read this piece…
http://braintrustproject.org/article/the-new-predatory-lending:–alternative-mortgage-products-and-housing-market-risk
Try this if the above link doesn’t work…
http://tinyurl.com/2hvv5m
Very intelligent piece, I hope Ben decides to post it.
Be sure to ask them:
1. What is “predatory” about making loans that are fully documented with all lawful RESPA disclosures (if not fully documented, then they’d be unenforceable…);
2. Why are we using taxpayer funds to bail out ADULTS who failed to read the documents and do the math;
3. Why is someone else’s loss in the free market our problem;
4. If these lenders are so predatory and what they’re doing is illegal, why are we using public money to subsidize and reward them, why not prosecute them instead;
5. A stretch, but: Will any of this money be used to make whole those of us who stayed out of the market, by compensating us for the upside we missed by being responsible and not taking advantage of the lose credit that was available?
I called too! This is great! I know they will listen if they get in to work tomorrow to a full voicemailbox.
Please leave a message- and tell this Jackhole to wake up!
I just did. I hoe\pe you are right and they have a full vmail box in the am.
Left a message for the lame ass, hope he returns my call.
lainvestorgirl ….I also want to know what “predatory lending” is also .
I agree with you that if a law was broken by a lender than the remedy is the legal system for the borrower .
“Homeowners who have to sell in an area where foreclosures are numerous might want to follow the lead of home builders, which are throwing in extras in to attract buyers while keeping up the selling price.
“One thing that the builders do is to offer to put all kinds of things into the house at no extra charge, like granite countertops,” said David Seiders, chief economist for the National Association of Home Builders. “That gives the buyer more house for the money.” ”
Try reading the last quote WITHOUT it sounding like Homer Simpson (think “Moe is the leader.”). I can’t do it.
They CAN’T Sell..CAN’T Refi..CAN’T make the Pymts..
I’m Taking BETS on who can TREAD water the LONGEST
Smart MONEY is on the FENCE SITTING Buyers
mrincomestream, laig, et al., what kind of cap rates are people getting for an apt bldg with about 50 units these days? What would you go for? No riff-raff, stable employment, good condition, reasonable part of town,…
That’s way out of my league, but decent areas of LA you’re talking cap rates of 4, 5, no higher than 6 for sure, here’s some examples:
http://www.loopnet.com/xNet/MainSite/Listing/Profile/Profile.aspx?LID=15105863&RecentlyViewed=true&ItemIndex=3&PgCxtDir=Down
http://www.loopnet.com/xNet/MainSite/Listing/Profile/Profile.aspx?LID=15089121&RecentlyViewed=true&ItemIndex=5&PgCxtDir=Down
http://www.loopnet.com/xNet/MainSite/Listing/Profile/Profile.aspx?LID=15031378&RecentlyViewed=true&ItemIndex=10&PgCxtDir=Down
testing
That’s way out of my league, but I’d say around 4, 5, probably not higher than 6, you can get over 6 if you go into south central, but here are some examples of somewhat decent areas:
http://www.loopnet.com/xNet/MainSite/Listing/Profile/Profile.aspx?LID=15031378&RecentlyViewed=true&ItemIndex=10&PgCxtDir=Down
http://www.loopnet.com/xNet/MainSite/Listing/Profile/Profile.aspx?LID=15054824&RecentlyViewed=true&ItemIndex=7&PgCxtDir=Down
http://www.loopnet.com/xNet/MainSite/Listing/Profile/Profile.aspx?LID=15089121&RecentlyViewed=true&ItemIndex=5&PgCxtDir=Down
I’ve posted my answer twice but it won’t post on the board. Ben, do you know what’s up?
If you include more than one link, your post is quarantined for Ben’s review.
spamfilter
Oh, thanks
Anyway, around 4-6, no higher than 6.
Wait until all the FB’s realize their only hope is to rent the houses and hang on. All these apartments selling at 4% cap rates will be massively upside down as vacancy drops and expenses rise (more turnover, higher labor, utilities, taxes, …etc.) There are already a large number of upside down apts in the Sacramento valley, falling into foreclosure step by step. The number of homes for rent is increasing exponentially. The shadow vacancy factor. There is a new class of FB being formed right now. The MFB. That could be for Mother….that could be Multi….take your pick. All the same.
You’re dreaming, there is such a low vacancy factor in LA right now it actually made the front page of the LA Times…forget all the immigration coming in, how about all the people packed in apartments designed for only 1 or 2 bedrooms who would love a place of their own? And I’m talking middle class Americans in many cases, not just illegals.
What if we are the ones who live in an alternative reality and the rest of the world is sane….
I’m cool with that. I kind of like my reality better.
Alternate realty?
Since you can change your name anytime you want and post on this blog, the thought has occurred to me that there are really only 3 or 4 people on this blog - they keep really busy. Pretty versatile bunch, clever,too.
I’ve long believed there weren’t thousands of people buying real estate in Miami, only about 10 or 12 endlessly flipping condos with each other.
I do post here under housing_apoaclypse_now when I’m bored at work.
Ha - good post.
I can’t tell you what other names I post under here, since I don’t know - a true multiple personality isn’t aware of their condition. (Is “their” singular or plural in this case???)
We’re just part of someone else’s dream and when that person wakes up we will no longer exist. Am sure glad they incorporated chocolate into their dream though.
Now I finally understand why everyone else on the road in San Diego seems to be driving a new BMW or gargantuan SUV.
————————————————————————————-
Subprime Auto Loans Hit $50 Billion in 2006
April 24, 2007
• The Road to Ruin: Subprime Auto Lending
• Subprime Auto Loans Hit $50 Billion in 2006
Those risky subprime loans aren’t just for homebuyers.
Facing some of the pressures that have contributed to heightened risks for subprime home mortgage lenders, automotive dealerships initiated nearly $50 billion in subprime new-vehicle loans in 2006, according to real-time retail transaction data from the Power Information Network (PIN), a division of J.D. Power and Associates.
The growing number of subprime loans is causing concern on Wall Street, where analysts are beginning to worry that subprime lending, currently unraveling in the mortgage industry, will deliver a double whammy to the economy as more and more consumers, who financed their cars with subprime loans, default. If it happens, consumer activists say banks and car dealers only have themselves to blame.
“Car dealers are destroying their market, with phony loan documents and hidden charges that are driving their subprime customers into default,” said Duane Overholt, founder of StopAutoFraud.com, in a ConsumerAffairs.Com video report.
About 1.85 million of the 9.6 million customers in 2006 who leased or financed a new vehicle through the dealership — either with a bank, independent finance company, credit union or the automakers’ captive financing services — were in the subprime category, according to PIN.
http://www.consumeraffairs.com/news04/2007/04/jdpower_subprime_auto.html
Subprime Auto Loans Hit $50 Billion in 200
You mean I not only missed out not getting a new house, I blew it here, too?
Bring it on. I am ready to buy some nice vehicle very cheap on craigslist.
“The Cleaning Out Process Is Not Done In California”
Yeah, it’s about as clean as Casey Serin’s pool.
They told him to clean it or drain it and he says he needs to call them to figure out his options. Pool maintenance is not part of flipper reality. Like taxes, it’s optional.
“The owner of 16 Ponte Russo paid $650,000 for the Mission- style house in November 2005 and got financing for 100 percent of the price from BNC Mortgage Inc. in Irvine, California, according to country records. BNC is a subprime lender owned by Lehman.”
“The owner never made mortgage payments. Now, the house is on sale for $496,000 following a foreclosure.”
“That house is ‘a real nice one because it backs up into a canyon and you have endless views of hills,’ Syed said. ‘That’s a great deal. The banks must be getting kind of desperate.’”
########################################
Oh look, another house “under market”…
Interesting that “pig men” investments in hedge funds should decrease so greatly even as multiple hedge funds go public with IPO’s to “make investing easier for the common man.” Sure, our wonderful rich leaders wouldn’t be screwing over the sheeple yet again, leaving them holding the bag as the hedge fund explodes? Hahahaha - it is so much easier to figure out how to invest when you realize how the people running the game are NOT doing you any favors.
or 140 out of 385 cities and communities, showed an increase in their respective median home prices from a year ago.”
name one not near an oil derrick
No one has yet posted that both suspects/victims at the Montage were licensed RE Agents in debt and legal troubles? Not a pleasant thing to post about, but that is the story
Yep, Ben is probably trying to stay away from the human carnage angle of the housing bubble.
That story is where I draw the schadenfreude line.
Suicide by cop for a RE broker and his agent wife, this early in the game is kinda scary.
The latimes has the better story, but OCR and OC Weekly also are covering it.
Do you think these people need to call eachother before saying almost the exact opposite?
The icing on the cake is Leslie Appleton-Young saying, we expected this to happen. Yeah, if they did, they didn’t say anything about it until now. So now we finally learn what they “were really thinking”.
Well, we did have the huge unexpected blizzard here in San Diego.
I’m sure that put a few people off buying.
The following article is total BULLSH_T because it does not talk about the fact that numbers are influenced by a disproportionate number of sales at the upper end, which distorts measures such as median price and average price.
The reality is prices are down by about 10% and the price decline is accelerating. People out there are scared sh_tless and realize their whole financial lives are about to unravel.
Net, net is people are desperate to get out before their losses become too great - which will happen over the next couple of years.
If a strong hurricane made a direct hit on Long Island, (as was the case in 1938), no evacuation plan would work. Well, right now the evacuation plan in real estate is set to fail as well. The wise goot out in the past couple of years. Some may get out relatively unbruised now. But when this party crumbles, a huge number of the people who bought since 2000 are going to drown.
Hamptons Home Prices Rise at Slowest Pace in 4 Years
By Sharon L. Crenson
April 24 (Bloomberg) — Home prices in the Hamptons, New York’s beachside playground for the rich and famous, rose in the first quarter at the slowest pace in four years.
The median price of a single-family home jumped 8 percent to $690,000, according to Suffolk Research Service Inc., a real estate data company. In East Hampton, where Martha Stewart has a house, prices rose 14 percent to $970,000, the fastest in the area.
“There is still a lot of inventory and pent up demand,” said Diane Saatchi, a broker for the Corcoran Group who has been selling Hamptons real estate for 19 years.
While Hamptons prices have increased steadily since 2003, the number of sales fell 13 percent to 709 for the quarter, showing even the most robust markets are tempering. Across the U.S., the residential market has been derailed by two years of rising interest rates, a glut of inventory and tightening credit among subprime lenders.
The National Association of Realtors reported today that sales of existing homes in the U.S. slid 8.4 percent in March to the lowest level in almost four years. A separate report on the S&P/Case-Shiller Home Price Index showed home-price declines in 20 major cities accelerated in February.
Affluent Area
Hamptons gains are being fueled by the area’s affluence. The median household income in Suffolk County was 55 percent higher than the national figure in 2000. About 26 percent of the county’s 470,000 households reported a median income of more than $100,000, according to the U.S. Census. Nationwide, 12 percent of households made that much.
Sales in the Long Island seaside communities are hampered by sellers who have been unwilling to drop their prices and buyers expecting a fire sale because of negative news about the national real estate market, Saatchi said.
“Everybody is looking for the silly rich, but the rich are not so silly,” she said. “There’s not a sense of urgency.”
Shelter Island was the most expensive place to buy in the Hamptons with a median price of $999,000, 3 percent more than in 2006, Suffolk Research said. In Southampton, the median price rose 7 percent to $795,000.
The total value of sales for single-family homes gained 4 percent to $982 million, Suffolk Research President George Simpson said. The record was set in 2005, when sales topped $1 billion.
The latest data does not include deals that are in contract and have yet to close. Those include some sales for more than $30 million in Southampton, an $8.1 million sale and one for $7 million on David’s Lane in East Hampton, Saatchi said. She declined to name the buyers or sellers.
To contact the reporter on this story: Sharon L. Crenson in New York at screnson@bloomberg.net .
Last Updated: April 24, 2007 16:18 EDT
http://www.bloomberg.com/apps/news?pid=20601103&sid=aUg2K8d59jRs&refer=us
I was there last year.
Talk about an underwhelming place. Traffic, I think Southampton could be name SouthHypeton. This is THE runway for the emperor’s new suit.
Did this one from the Washington Post get posted here already?
Housing Boom Tied To Sham Mortgages
“As more of these cases come to light around the nation, the question is: How much did an epidemic of fraud contribute to the frenzied housing market of recent years?”
And a related question is, how much will current buyers overpay by pricing off of fraudulently inflated comps? Thanks, but I will wait until the flatulent fraudulent air leaks out of the balloon before I think about getting back into the home ownership game.
Thanks for posting this article Wino Bear . Not only did fraud inflate the bubble ,but speculators and unqualified buyers inflated the real estate market .This article you posted is the real truth of the housing boom .
I would not be suprised if in the future the lenders put a cap on how much a development can go up in one year because of this mania that was riddled with fraud . I bet alot of the straw buyers that sold their names and credit to the crooks were sub-prime no down buyers .
Getting a loan has to be a careful process in which you approach the loan package as if the borrower has to prove they deserve the loan . I have been saying all along that the fraud aspect of this housing boom inflated prices . When lenders saw that prices were inflating by 20 to 50% in months in some cases they should of known something was wrong . Now the lenders will have to change the way appraisals are done in order to prevent fraud .I can’t believe how many crooks got into the system .
The lenders failed in their duty to prevent loan fraud and they failed in qualifying borrowers and speculators .
Drove up to Salt lake city today. For about 50 miles along the freeway (I-15) through the heart of the Wasatch Front, I did an informal tally = 4 out of 5 billboards advertise new housing developments. Half of them must have French or Italian developers, as they’re called Pointe or Tuscany or some such nonsense).
Haha, I’ve been very tempted to start a Utah Housing Bubble blog. Things still seem on the up-swing here in Utah… we’re way behind the curve.
I posted this weekend on house farms I saw in Kaysville on a recent trip to SLC. Areas of Ogden looked very new and very non-lived in as well.
Utah is the last car of the roller coaster that’s all.
“Haha, I’ve been very tempted to start a Utah Housing Bubble blog. Things still seem on the up-swing here in Utah… we’re way behind the curve. ”
How about this one?
http://slcrealestate.blogspot.com/
Here’s a quote: I believe as the summer selling season starts making headway, existing home sales will improve. One month’s numbers does not a trend make. Utah’s existing home sales bucked the national trend in the first quarter, but signs of a slow down did appear.
See…….Utah’s different!
Heres a link to “SAIL” thing. I think this a CDO and you can see the “insides” Structured Asset Investment Loan Trust 2006-BNC3 It has REO/Foreclosure status of loans, arverage ARM interest rates, bond coupons… a head spinning amount of info. More that I can handle. OK bubblebrain trust… time to go to work (please).
Structured Asset Investment Loan Trust 2006-BNC3
http://www.sec.gov/Archives/edgar/data/1372833/000105640407000352/sai06bn3_10d-200612.txt
Look at this… we can see the insides of CDO, complete with foreclosures and late payments.
Off topic but has anyone noticed lately that they are winning alot of so called give-a-ways or contests. So far for the last two weeks I have won a new 32 inch TV ,a trip for 7 days and nights to Mexico ,a 2 thousand dollar air system , a new car , and a get-a way in Las Vegas . I get calls on my phone telling me that I just won a contest that I never entered .I never accept these so-called wins because I figure it’s some sort of a scam and I just hang up, but I can’t believe how many contests I have won in the last two weeks .
Does anybody know about this winning free stuff scam . Prior to winning free stuff all the time ( that I won’t take ) I got non-stop calls from mortgage companies trying to get me to take out a loan .
I can bet you almost 100% that it is a scam. When it is “too good to be true”, be skeptical, be very skeptical.
I don’t know what the scam is because I won’t talk to these people but I’m wondering if it’s some sort of attempt to steal my identity .
What information would these scam artist ask for if I accepted the win .
I remember years ago I got a notice in the mail that I won a piece of property in Mexico . In very small print it stated that the only cost to me was the 850 dollar a month homeowners fees . I tossed the postcard but it’s amazing how many people fall for these marketing scams .
What is the consensus on average % of haircut? Based on my observation dated back the 1990s, it will be around 40%. Any thoughts?
I lived in Santa Monica 1986-1990 and then NY in 1990. 50% haircut on my SM townhouse between 1991 and 1997(after I sold), 35% haircut in LI 1990 to 1995. These were $350K properties. This was my personal experience. Made 2X in SM, lost 35% w/commissions in LI.