Bits Bucket And Craigslist Finds For May 8, 2007
Please post off-topic ideas, links and Craigslist finds here.
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Realtor Crisp “I can’t make payroll,,,”
http://www.bakersfield.com/619/story/136341.html
said he resigned from Crisp & Cole in late March after Crisp told him and five others with high salaries that Crisp could no longer pay them.
“He said, ‘I can’t make payroll for you guys.’ So we left,” said Doremus, who said he has remained good friends with Crisp
“Can’t make payroll”
High time to save up bail money. Not making payroll is one thing not being able to make bail is something else.
Bet he isn’t eating Tender Vittles himself though.
I doubt it. He has 3 NOD’s in the last 60 days, he owes over $100k is past due property taxes, his SLR & Ferrari are gone and the local real estate market sales are 70% of their peak. Without an uptick in transactions, these guys, like most in our town are screwed.
And two years ago he was the talk of the town. Amazing story to follow, really. Too bad he didn’t read this blog and learn from our “crystal balls” about what we thought of his certain end.
LOL.
“Bet he isn’t eating Tender Vittles himself though.”
Reminds me of “dad” in the Prince of Tides digging into the Alpo.
“Bet he isn’t eating Tender Vittles himself though.”
Hot tip for FB and L/O: don’t eat cat food. It’ll ruin the resale value of your kidneys.
He thinks he’s getting $4.5M for a place he bought in April last year for $2.5M? Wow. He’s not that contrite yet.
April of this year, 3 weeks ago. LOL. No way.
Share your opinions here:
http://people.bakersfield.com/home/Blog/schuster80/9008
Interesting to watch unfold.
“has remained active in plans to build twin high-rise towers on Cal State Bakersfield’s campus” was in Bakersfield two weeks ago and was told by inside sources that the towers would be built. Since a friend was involved I didn’t have the heart to express my negative view but thought it was better to let things run their course. I thought that Greg bynum was into leasing out RE commercial space but I guess he has expanded into development.
Would someone please post the link to the Wells Fargo (?) graphic of mortgages resetting (?) through the next year or so? I thought I had bookmarked it so I could look at it later, but now I can’t find it.
Thank you!
You are probably referring to Credit Suisse’s chart. Just Google “ARM reset schedule” and you will get the right link as the top entry.
Got it. Thank you!
I will make it even easier. I just bookmarked that page, as it is a useful reminder whenever I see propaganda pieces about how the housing market will bottom out by year-end 2007…
http://www.bubbleinfo.com/statistics-2007/2007/3/15/arm-reset-schedule.html
P.S. Note how the second wave crest of ARM resets comes around January 2011…
Stucco, I don’t think the 2011 ARM resets will matter. Before those resets ever even get here , at least 50% of them will already have folded. As for the other 50%, maybe a small percentage were people who should have had option arms (doctors, etc), and some will have refi-ed. Whatever fuel there is to be added to the fire, it will happen by 2009. The FB’s have no way of holding out for 3-5 years either financially, or mentally.
math guy –
I hope you are right, but don’t forget the efforts of everyone in the REIC (including the Congressional representatives whose campaigns they bankroll) to try to “contain” the damage from toxic loans through taxpayer-funded bailout programs and what not.
The effect of government-sponsored market distortions is to offset and delay the market’s ability to rationally adjust at the point when future catastrophes are already common knowledge.
“The FB’s have no way of holding out for 3-5 years either financially, or mentally.”
Math guy — While I hope that is true, I dunno. I doubt there is any disagreement that the vast majority of subprime holders are toast, now or very, very soon. Most folks, I believe, are blind to their own folly as long as possible and hope for salvation if they wait just long enough. Because the Alt-As and Option ARMs don’t begin resetting en masse until 2010, I’d think a large portion of them will be tempted to hold out and that the telltale sign will be early advertising of their homes but intransigence about cutting the price sufficiently to move it. Now, I want to be wrong on that, because if I buy a used house, that is the trance from which I want to choose.
tranche (though “trance” probably would work!)
Although since a large percentage of Option Arm holders are only making minimum payements, their loans will recast (be forced to make ammortizing payments) long before their interest rate resets.
“…their loans will recast…long before their interest rate resets.”
I hope.
This is a link to the original report that contains the graph:
http://www.billcara.com/CS%20Mar%2012%202007%20Mortgage%20and%20Housing.pdf
Thanks much, and kudos to Ivy Zelman for the usual outstanding, unbiased analysis of the housing situation. I saved a copy of that report to my Housing Bubble archives.
Very nice. Thanks!
Australian Federal budget brought down tonight.
Budget 2007 ……..Key Points……………
* Underlying cash surplus: $10.6 billion (1% of GDP)
* GDP growth forecast: 3.75 per cent
* Consumer Price Index forecast: 2.5 per cent
* Tax cuts: $31.5 billion over four years
* $5b fund for uni capital works, research
* Childcare benefit up by 10 per cent
* $22.3b for road and rail infrastructure
* Solar panel rebate doubled to $8,000
* Overseas aid: $2.58b of new initiatives
http://www.abc.net.au/news/budget2007/default.htm
Thanks, luvs_footie. US-Dollar bears like me have had a bad week or two (USD strengthening). What effect on AUD do you predict from the info you have just delivered?
Not a lot.
The budget surplus is nice, but it’s been obvious to the financial community for several months now that it was coming.
We still have quite a large CAD, larger than the US as a percentage of GDP. That will stop the $A from rising too much further.
On the other hand inflation is close to the top of the target range, and housing prices here are rising again except for a couple of outer-suburban regions of Sydney and Melbourne. Although these are politically significant, and we’re in an election year, I don’t think interest rates are likely to fall.
OZ has a big deficit..chinese slowdown is inevitable..OZ will suffer in its aftermath.
Do you mean slowdown in the rate of growth in China, or actual recession?
Either would be painful to China, but only the second would seriously hurt OZ.
Why in the world does Australia want its taxpayers to subsidize special treatment for filmmakers? Does movie-making employ some huge portion of an otherwise unemployable workforce? If not, it sounds like bribes or ego or both.
Absolutely great map (big hat tip to propertyshark and NYmag for publishing) on NYC bubble areas by zip code:
http://www.propertyshark.com/mason/Maps/?map=nyc2&basemap=bubble3
All NYC-dwellers-feel free to this link to anyone declaring things are “different” here. This data stands in stark contrast to the press releases REBNY and NYSAR are pumping out about NYC — particularly REBNY’s latest on how Brooklyn home prices are soaring — it truly reveals the cherrypicking that these associations can do in the absence of data to the contrary.
Perhaps the most interesting thing is the high rate of foreclosures on the Upper East Side, the traditional wealth belt of NYC — the area that was rich even in the mid-1970s.
Now basically all of Manhattan south of 110th Street is pretty much interchangably in, but with downzoning and full build out the Upper East Side has little new construction. It appears that the new condos elsewhere are siphoning off the super-rich, meaning Upper East Side prices will have to crash to a level the merely extremely affluent can afford.
Perhaps the most interesting thing is the high rate of foreclosures on the Upper East Side, the traditional wealth belt of NYC — the area that was rich even in the mid-1970s.
Now basically all of Manhattan south of 110th Street is pretty much interchangably in, but with downzoning and full build out the Upper East Side has little new construction. It appears that the new condos elsewhere are siphoning off the super-rich, meaning Upper East Side prices will have to crash to a level the merely extremely affluent can afford.
great graph. the area i just rented a 3 bedroom place in has a trifecta of unhappy faces!
we rent yahoooo
Great map — thanks. Didn’t know Property Shark had that feature. Presumably, you can see the map only via subscription — couldn’t find anything for Orlando, as a non-subscriber.
Cautionary tales from a teacher…
A friend’s wife had been a teacher in elementary-junior high for around 30 years and retired 5 years ago and decided to substitute teach again, as she was getting a little bored.
She substituted in the o.c., in a richer part of town, @ an elementary school and lasted one whole day.
She said that kids were literally bouncing off the walls and 9 year old “co-eds” were dressing like sluts. She related that as an added bonus, none of the kids showed the least bit of respect for their elders and dirty words flowed out of their very mouths…
This is a wise woman that knows the score.
Be afraid.
Yep, they had a story on the news the other night about “teacher baiting”, where the “students” try to enrage teachers or otherwise bait them into expressing frustration. They video it via camera phone or whatever and put it on You Tube.
I say, just shut down the whole public school system, it is completely broken, and let people figure it out. Let the communities get together their own schools or home schooling groups. When parents value education for their kids, this behavior will stop.
teacher and mini employee unions are scarrier than terrorists
total power
Unions and the government-run schools are part of the problem. The other part of the problem are parents who treat school as free daycare. My wife is a teacher and sees it all the time. She can tell which kid will succeed and which kid will fail by how involved the parent(s) are. The failures typically don’t have a dad around and mom doesn’t give a sh**.
Unions and government run schools were around 50 and 100 years ago and worked quite well. It may be something else that has changed.
Yes the 60’s occurred and we are living with the fall out 40 yrs later.
“Unions and government run schools” are the problem.
Auto workers union was also around years ago but are now part of the problem with our domestic plants and their lack of ability to compete.
I have two kids in intermediate (6th & 8th) school and my wife and I are extremely active at their school. We have been since preschool and this is purely because it was “demanded” by our school district. The quality of your kids education is your job not the schools.
Fortunatley, we have a local school district that ranks at the top of the country. But, it is a continual battle to keep it at this level because of the amount of fund raising needed to keep quality teachers. That being said, bloated districts with overbearing teacher unions are the kiss of death. (BTW, all it takes is a $100 donation from each family to dramatically help a district. That $100 dropped by just about everyone “who can’t afford it” at the school level but has no problem dropping it a the local bar…)
Vouchers are the answer. Painful for some but the only way to get these underperforming districts to step up. Kids/parents that don’t perform should not be allowed to poisen entire classrooms.
I think the problem comes down to this: Our society worships children and fails to understand that they are essentially untamed animals.
Kids/parents that don’t perform should not be allowed to poisen entire classrooms.
I think this is the key. If you could somehow whip the kids into shape without getting sued, I think a lot of other problems would evaporate. If there are still problems, then we can look at dismantling the system.
Public school system could function a lot better if expulsions (of uncooperative students) were easy. Agree with flatff to some extent. Didn’t I read that some huge percentage of Democratic convention delegates are teacher-union members? I am not making any pitch for the Republicans here, their delegates are possibly religious zealots. Just saying the teachers’ unions have a lot of political power.
Too much.
This makes no sense. Clearly, in some sense the problem is unions don’t have enough power- where it counts. The teachers unions WANT teachers to have more leverage over students, to be able to expel them, etc. Out of control students who disrupt classes are at least as annoying for the teachers as they are for the students. Do you all seriously think that teachers unions are agitating for protections for disruptive students?!?!? That makes no sense at all. The problem stems from federal student rights rules, and the tendency of some parents to sue or complain loudly any time their ‘little darling’ acts up in school.
I’m not a school teacher, but my wife was at one time (middle school and high school) and I know lots of teachers, and K-12 teaching has become hell…
My youngest brother is principal of a grade school for special ed kids…The kids have all sorts of problems, but he saves his real anger for what he calls ’supposed to be the parents involved”. Family values–what he describes are no values, or criminal values. Has a great deal of sympathy for the overworked grandmothers who are alone and trying to raise damaged grandchildren…says they are the only ones who show for parents night–coming after they finish their day jobs.
You couldn’t pay me enough to teach elementary or high school students.
I agree with much of what you say, Palmetto, but I think that kind of behaviour begins and ends with the way parents have reared their kids. No doubt modeling other kids behavior takes on increasing intensity as they age, but I find behavior tends to be highly reflective of how much quality time parents spend with their kids and how much they’re willing to set proper boundaries. It’s never shocking when you see a kid misbehaving, then meet their idiotic parents at a later date.
Former teacher here… Imagine what these kids will be like when their entire world comes crashing down and parents can’t buy all the “necessities” these kids are used to. A HUGE segment of the under 18 population wouldn’t know hard work, deferred gratification and sacrifice if it came up and slapped them in the face.
Which it probably will shortly…
I have always been impressed with the majority of the young people here in Brooklyn. Most of the one’s I have met are really great, and get along well with their parents. Why?
My theory is the consequences of doing otherwise are readily apparent. A couple of miles away are places where kids don’t really have parents. And if kids go wrong there, they don’t get 10 stints in rehab. The lucky ones get one chance, the unluckly ones none, and if then straight to the social landfill. So the kids stuck with their friends families, almost as part of a state of siege.
My feeling is the consequences aren’t as apparent in the OC. As BK becomes better off, perhaps those who have the advantages here will lose that edge.
WT Economist: state of siege like that!
THANK GAWD you cant place the blame on Rap Music for the sluttiness and filthy language.
They must have be listening to that awful Country music filled with cheatin lyin thievin swearin….l
Surely supply teachers are fair game?!
I recall the taunting of a French teacher quite clearly, and that was at a good private school.
IMHO kids today aren’t any different, it’s us that have grown into our parents.
Loafer
We’ve lowered ourselves down to the level of a dumb beast and the results are showing…
Disagree. Kids are worse and the reason why they’re worse is because every generation keeps repeating the same mistakes which compounds the problem. It the snowball effect.
“I recall the taunting of a French teacher quite clearly, and that was at a good private school.”
Perhaps where you’re from. I was fortunate to have attended non-government schools and so did my children. At any of them, taunting would result in at least a trip to the office for a major chewing out, suspension on the second offense, expulsion on the third. “Don’t like it? We didn’t ASK you if you like it.”
Give the teachers back the right to discipline their students and things will change. Respect comes from power when you’re dealing with wild animals. Of course, respect can turn to hate if the power is abused, so teacers should try to care about the kids - fewer kids get that at home anymore (IMHO).
Yeah I think the bottom line is a mix of love and discipline. There are plently of kids getting one and not the other, or neither.
I teach ninth grade English, and read this blog at lunch and after school when I should be sleeping, so I’m stoked I can actually contribute something today.
Here it is:
The districts need more power to expel troublemakers and those who flat out won’t do their work (there are plenty of these, no matter which socioeconomic tier you’re in.)
There need to be options, like apprenticeship programs in the construction trades and service/retail industry, for the 80% of students who don’t go to four-year college.
The Teachers Unions need to go down in flames so that the moderate to large number of teachers who hand out worksheets and expect the kids to figure it all out on their own so they can keep themselves otherwise occupied during working hours or who just flat don’t want to teach anymore can be FIRED.
However, the most important thing that we need is the parents on our side. Unfortunately, they’re too busy trying to keep a roof over their heads, twenty bucks a week for chips, candy, and soda in the kids’ pockets, and Hollister clothing on their backs to pay attention to things like their children’s academic performance.
Kids are spoiled with things, when they need to be spoiled with love and their parents’ attention. They’re starving for it, and THAT is what we should “Be afraid” of. Their bad behavior is just the outworking of their desperate need.
However, this is not to say I don’t want to slap ‘em sometimes. ; )
–
All authority has been vested in the govt. It has been taken away from God, priests, parents, teachers, you name it.
Govt. is there to look after the “welfare” of the governed. Tocqueville called such a form of “Democracy In America,” in attempting to forecast its future 170 years ago, despotic.
We have arrived at where we were supposed to.
Jas
WTF does this have to do with housing?
Well, if we raise generation after generation if semi-illiterate, self centered, immoral brats, then we shouldn’t be surprised with the ensuing mess.
–
These “brats” are the future buyers of homes that the retiring Boomers will be selling to! I seriously doubt that we will come out of this housing depression in twenty years because of the ability, or lack thereof, of the future buyers.
Jas
http://sarasota.craigslist.org/rfs/326495722.html
For the glutney
Reply to: hous-326495722@craigslist.org
Date: 2007-05-07, 10:57PM EDT
For those of you who purchased land for nearly nogthing and or threw a home on it and are mad that you cant sell it for ridiculas prices I laugh at you. You had opportunities to sell earlier and make money but most were too greedy and wanted more. Your taking something from the average people. housing is something we all need and making people pay far far more then what it costs so you can make more money; Honestly who’s the bottem dweller. For all the other home buyers who bought homes to live in who cant sell and or will lose lots of money because your now upside down due to decreasing home prices you can thank these people calling us bottom dwellers. Anyway this years gonna be hell again for those investors and no prices will not be going up anytime soon. baby boomers are not even going to start to retire for at least another 7-10 years by then property will be cheap again!
Location: sarasota
it’s NOT ok to contact this poster with services or other commercial interests
PostingID: 326495722
Hey, Key Lime, thanks for the link. Sounds like this poster is frustrated and I can certainly understand it, I feel the same way. I’m sure it will get yanked, but I give the guy points.
Anyway, is it smelling smoky where you are? That’s what woke me up this AM. It’s breezy, so hard to tell which wildfire is causing it.
Yeah it is smoky. What do ya think it is?
Yeah it is smoky. What do ya think it is?
I’m watching the news and they’re saying because of the cool front, the winds are blowing the smoke down from Georgia and North Florida. But the smell is a little more intense than that. I keep hearing about all these wildfires. They had a graphic map of Florida on last night’s weather report, it looked like a birthday cake for an 80 year old, all those little flame graphics marking where the fires were. But they keep saying none of this is threatening any homes. With all the development, I don’t get it.
Thanks, I am in north Tampa right now and speaking with someone in south Tampa and the smoke is everywhere. Last night I heard unusual low flying helicopter activity, maybe there is a larger fire nearby and with these matchbox developments it is hard to believe homes are completely safe. All you have to do is to drive and see these half finished houses in the midle of dry fields
I’m in SouthShore Tampa Bay (east Hillsborough County along the shore of the bay). We’re overcast from the smoke. They’re starting to comment on it on the news, just showed an overhead traffic shot of the Tampa commute. Yow!
True, the smoke and smell is getting worse and yes I notices that there is an overcast and the air looks cloudy. Hard to believe that they don’t have more on point information for the residents of this area as to the source of this. With all the technology and “flying machines” we should have known what is going on
“With all the technology and “flying machines” we should have known what is going on”
God forbid the media should make mention of any potential dangers, they don’t want to disturb sheeple. Until, of course, the disaster has happened and then they have a field day. I swear, if a fire was creeping toward your subdivision, some happy faced idiot would get on the news and tell everyone not to panic, everything’s fine. Just like the housing bubble.
It’s not that I want whole subdivisions to go down in flames, but I really wonder what would happen if one of these new developments caught fire. If that ever happened, then Florida would truly be toast, because wildfires would be added to the hurrican risk.
Yes, very smoky, have all the windows closed.
I heard on the radio it’s from the wildfires in Georgia. I woke up and thought my apartment building was on fire at first!
I thought there was a fire in my building, too, which creeps me out, because the place where I was living before this really did have a fire and now the smell of smoke puts me on high alert.
Oh that’s not good… were you living in one of the several apartments in Brandon that have had fires in recent years?
Hey, Mystry62, no, not Brandon. Down in the SouthShore area, Ruskin/Apollo Beach. Really sucked. I’m still looking for another rental, I’m living in a temporary place.
If you’re in Boston, you might be familiar with the local interest TV show called “Chronicle” which airs on Channel 5.
Last night, the theme was “What A GREAT Buyer’s Market It Is In Real Estate” (my own words). Someone in the realty business must be sleeping with a Chronicle staffer because this show was absolutely falling all over itself to call the bottom… buy now before you get priced out again forever (again) and they even had our favorite Boston Globe real estate editor, Kim Blanton, in the flesh.. pumping absolutely furiously for the REIC. She was pumping so hard you could almost see the sweat beading on her forehead.
Subtopics included what a GREAT buy “soho” condos in BROCKTON and LOWELL are. They didn’t mention whether bars on the windows were standard or optional, but they do have stainless steel and granite to distract your attention from the gang fights in the street below!
They also showed a few putrid “sub 300″ ramshackle tear-downs that various local yokel realtors claimed were such a “baaaahgain”.
They didn’t spend any time talking about the insane skyrocketing of inventory, massive foreclosure rates or subprime woes. It was like they just don’t exist.
So to reiterate.
BUY NOW AND GET YOUR LIFETIME APPRECIATION GUARANTEE CERTIFICATE SIGNED BY KIM BLANTON.
I know Kim lurks here. Would love for her to post. How about it, Kim?
Brockton? Trendy condos in Brockton? LMAO!
Don’t forget Lowell… trendy condos in Lowell LOL.
are they buying or lieing ?
it’s that simple, if bulls aren’t putting down hard cash on RE RIGHT NOW !
then it’s bs
I wrote an e-mail to Chronicle to vent. Geez! What are they thinking. The are in bed with the Boston Globe and the famous Kimberly Blanton. Great time to buy my a$%! I particulary enjoyed the 450K fixer-upper and the notion that the end of this year prices will be climbing. This was a 30 minute infomercial for Realtors.
You would think with all of the nice articles Kim writes about Real Estate, they would at least give her an office. Or maybe a better cube with higher walls so she can surf the net and come to housingbubbleblog.com to see what the enemy is writing about.
The glasses say she is intellectual but the scarf says whimsical.
I wonder if when she was younger she wanted to be a lackey for the Mass Association of Realtors. I bet she really wanted to write about things that helped people. Oh-Well, gotta make the Mini-Cooper payment somehow.
I said this on yesterday’s posts about Fl. A lot of baby boomers in the Midwest will not be retiring anytime soon. Many have lost their jobs and are working minimum wage postitions in retail, fast food, and calling centers. Many more that had pensions no longer do, or they are so drastically reduced that they have to go back to work. Many who had medical thru their pensions have lost it. To keep afloat they have remortgaged their houses to way beyond what they are worth and are now struggling to make high mortgage payments on houses that should have been paid off. People who would have sold here to buy houses in Fl could have done about an even exchange. Now they can’t afford the prices down there and have little retirement money left to make a payment. We’re in our mid 50’s and ready to retire next year. Three or four years ago we could have bought in Fl and kept a house up here, but not now with the prices. I’ll keep my newer 2000 sq ft on 6 acres house here, since it’s paid off and maybe take a vacation there once in awhile. Our insurance is $450 a year and covers most everything. Our taxes are $2000 a year. Our retirement is secure and we’re thinking about not going south. How many others are thinking it’s not such a great financial move at this time in their lives.
You got it right, Ghost. Florida is now just a winter vacation destination we can drive to. The house here cost less than half what we sold our Florida house for in 2005, and we have no mortgage. Get this- our electric bill here is under 7 cents per kwh! Taxes are low, insurance is reasonable, golf at our course is $34 for two with a cart (no more than $50 at nearby courses). We paid $160 at one course in Florida when we were there in January.
“Nothin’ could be finer than to be in Carolina…”
“Nothin’ could be finer than to be in Carolina…”
Be careful — I notice that hardly any of the “Best Places to Live (Retire, etc.) in America” remain high on the list for consecutive years. As soon as they are discovered, self-important pilgrims descend on them and begin to agitate for change — to make it more like they place they screwed up and abandoned.
You make a good point, ghostwriter. Places that have rapidly appreciated due to the expectation of mass waves of baby boomers moving in, are the same places that the baby boomers will decide are too expensive to move to.
I expect broke retirees will look for places where they can get a double wide for low $$$. The will be living off their SS and whatever menial work they can find (until they are too feeble to work).
Spoke to an old family friend who’s a realtor last night. He’s been in the business ~40 years. He’d been trying to reach me for a while and I finally gave in (even though I knew where the conversation would go).
He was trying to “help” me get a house (even though I told him from the get-go that I’m moving into a new rental next month) and asked what my price range is. I told him there’s nothing on the market in that range. I told him how much I make, that I have an easy 20% to put down, but I refuse to pay the current asking prices. He starts trying to sell me on crappy, little townhouses that list around $200,000 - townhouses that sold for around $85,000 just prior to the boom - saying they are such a good deal. Um, no. I told him I’m too conservative to stretch that far. Said that’s WAY over the 28 - 30% gross income rule. He said, “Oh that’s the old rule. I haven’t seen that for years.” I said, “Years as in just the past several years when real estate has been booming?” He admitted that, yes, that’s what he meant. Why does everyone act like 7 years ago was a couple decades ago?
Anyway, he did admit that this run-up is the largest he’s ever seen. He also said prices have been flat and “may even go down a bit”, but then went into the typical realtor-ese saying, “But of course then interest rates will go up and it’s all the same anyway.” Blah, blah, blah. He also said, “You know, the longer you rent, the harder it will be to buy something.” Sounded an awful lot like another way of saying, “Buy now or you’ll be priced out forever!”
The conversation put me in a bad mood all night.
I honestly believe every single person on this planet OTHER than those who visit this blog really and truly cannot conceive of prices coming back in line with true fundamentals. Man, I hope we’re all right.
may go down? already have
2. how much is he buying now ?
answer none !
Hang in there buddy. Keep putting a dollar or two in your piggy bank, be patient and you will wind up the proud owner of an adequate house that you will be able to comfortably afford with a 15-year fixed mortgage. Your payments will be lower than the boom-time buyers’ and you will still be done years before they will.
Don’t talk to these guys, eastcoaster. I was at a local gathering over the weekend and stopped by a local REIC booth to make a contribution to a charity. I engaged a realtor working the booth in a little real estate chit chat. Nice lady, but completely crackers when it comes to where the market is headed. However, when I switched the conversation to the subject of taxes, it sort of pierces the veil of hypnosis (at least here in Florida). They blame taxes for the situation, it is mind-blowing. It’s not the prices, it’s not the insurance, no, it’s the taxes. I dunno how these people live. They’ve all gone mad.
Over at Patrick, one of the frequent posters has within the last 24 hours stated that he is currently trying to prevent his soon-to-be-in-laws flipping their McAlbatross (renting at a loss, tried to sell last summer without success) to the happy couple.
Who already own a starter home, bought at a “reasonable” price in 2005, so if they took up this generous offer they would have to themselves become landlords or sell into the current market. Some honeymoon!!!
The proposed price hasn’t been mentioned (yet). I get the impression that it’s somewhere around the outstanding loan amount, with the “equity” in the house being a wedding gift. The poster’s view is that the house could not sell for the loan amount in the open market.
Lets just say he’s not a happy camper at all. It looks like he’s the only party with any real financial surplus at this point, so if the SHTF on this down the track he knows who’s going to be getting the phone call.
A lot of the subsequent discussion has centred around the motives of the ILTB; whether they are consciously getting out from under or whether they truly think they are offering their son and daughter-in-law a big step up the ladder.
“But of course then interest rates will go up and it’s all the same anyway.”
That statement alone shows his true colors. For being in the business 40 years, he knows dang well that you can refinance a high interest rate, but you can’t refinance a high price. He tried to lure you into the how-much-a-month trap, then he tried to make you feel guilty for being a low-life renter.
I don’t think I would have been as polite as you were. I would have called him out and asked him, if it was such a great time to buy, why did he need your business so badly that he had to chase you down? Shouldn’t people be beating down his door? And I would have asked him what’s so great about the “new” rule of 40% — isn’t that the same rule that’s crashing subprime?
…if it was such a great time to buy, why did he need your business so badly that he had to chase you down?
I thought that exact thing after I simmered down. Shows desperation IMO.
I hate this whole fiasco. And I’m tired of being pissed off about it, yet it’s hard not to be. Hoping moving into my new place will chill me out for a while.
Oh, I’m totally with you on being pissed off. Everyone else is living it up, clubbing at the community center and getting laid on their granite countertops (at least that’s what the ads imply). Meanwhile, David Learah and his ilk have told lies of omission — in the form of bumper-sticker slogans and incomplete statistics — and succeeded in rebranding responsible behavior into a slacker stigma of bitter renter. Dummies fall for it; smart cookies just get annoyed.
To mix a metaphor, the wheels of karma turn slowly, but they grind to dust. hang in there.
i talked to a realtor who started saying real estate only goes up and i flat out told her that i am a bear and to please stop saying how great owning is.
it sort of shut her up.
me too!!!!!!! it is frustrating.
hang in there eastcoaster i just signed a new lease for a new place as well
we are right keep the faith
Eastcoaster — thanks for the first-person story — love to read them.
“Why does everyone act like 7 years ago was a couple decades ago?”
I’ve added that to my long list of memorable quotes from Ben’s blog. Well and succinctly said.
Some of these realtors are just liars but frankly, I think most are simply just…stupid.
Next time you have a talk with a realtor Eastcoaster, don’t just tell them you think the markets going down. Tell them WHY you think the market’s going down (ie. really stupid lending practises). You will be amazed to find that most realtors have never even HEARD of Alt- A loans. Every single one I’ve mentioned Alt A to has stopped me and asked me “What’s that?” (!)
If they don’t know about the shoddy lending, it’s easier for them to believe this is a blip and “our area is special”. They’re just ignorant sons of guns.
Well, I just watched my first episode of “Flip This House.” I’m sure this show has beed discussed ad infinitum here, but I have to post anyway because I was so sickened by it. In this episode, the flipper bought a rat-infested place that probably should have been bulldozed. Despite the flipper’s surprise and angst over all of the hidden damage to the home, he profited about $25K - enough to buy gas for his Hummer. Given the condition of the home in the beginning, the flipper did the neighborhood a big favor, but the flipper was such a jerk that I was hoping that he would lose big bucks on the place.
I can’t stomach that show, or that dude and his tramp wife. Those shows really need to be put to bed because the sheep in the mass herd see them and think: “Hey, I could do that.”
I watched that same show and was hoping that this time he’d lose big-time $$$, I was a little disappointed he came out ‘ok’ in the end.
One thing I keep wondering about these shows is the liability they are exposing themselves too. They obviously cut a ton of corners fixing problems; it’s well documented on the show. If any of the buyers have problems in the future, watch out.
Nah, the flippers just go into bankruptcy. Judging from the guy on this show, he spends everything he makes on his lifestyle.
“Flip this House”, “Flip that House”… I always get those 2 shows confused….
Anyway, Flip this House has changed a lot. It used to just be a typical flip, but they forgot to mention the cash-back that was used to inflate the market. People would buy, re-do floors and kitchen, and dump back into the market at a huge profit. Yeah right.
It has changed a lot this season. Gone is the “sugar coat” redo.
The first show this season was a place that had a fire. They had to gut it to the rafters, replace a bunch of them, seal, rebuild.
That second show was disgusting. I’m so proud of the flipper’s brother for walking off the site. Anyone moving in there is going to have massive health problems, and I hope they sue him for everything. It needed to be leveled and rebuilt.
I would never buy a house that guy was remotely associated with.
The company that used to be on that show, Trademark, out of Carolina, now has their own show “The Real Deal”. The one I’ve seen is still doing the make believe “sugar coat” type flips. Paint, floors, redo kitchens…
These shows have CLEARLY become much more about making a tv show, with all kinds of FAKE!!!!!! tv drama…
Oh no, the house is going to be demolished!!! It is condemend!!! I just learned about this!!!! I may be ruined!!!! I hope it gets removed from the demolition list!!!!
Hello. You passed your inspections. It is just a “rubber stamp” formality.
Good post . I have noticed lately that the flipper shows are about making drama out of a flip .The flippers on the show set up some stupid deadline in which they have to finish the house ,( like 5 days from purchase ).It than becomes a drama about whether or not they can finish the house by the end of the week when they scheduled a open house. It’s just such BS .These flip shows aren’t even good drama because the flippers are not likeable characters , (just greedy ) and you don’t care if they win or lose .
I absolutely care. I’m always cheering for them to lose (except for one episode where this carpenter completely redid an entire house from soup to nuts and really made it shine and didn’t cut any apparent corners to do so - that guy deserved to pocket whatever he did)
This is a really random thought — I suppose it’s good to have a carpenter in charge of the rehab. They don’t want bad plumbing to spoil the looks or materials of their work, so they’ll ensure the plumber is first-rate, or at least let you know if they aren’t.
That show is full of crap. Do you really think for one second that they give actual purchase prices, actual sales prices, actual renovation prices, and account for all the ancillary costs?
On occassion, I have taken charter flights to Vegas — basically, gambling junkets. Amazingly, on the flights home, EVERYONE has either made great money or has broken even. No one ever admits to losing a bundle. What I can’t figure out is how they build all those huge, opulent casinos when everyone either breaks even or wins big.
Similary, I admit to very few how I lost my shirt on the Dot.com crash (except on anonymous message boards).
I’ve wondered about this myself until I met a guy who told me he hit a $1,000 jackpot on the same slot machine on the same night! That in itself is rare good fortune in Vegas, but the thing he neglected to mention was that it took him putting in more than $2,000 total when all was said and done to hit that jackpot. I’m willing to bet people love to talk about their winnings, be it in stocks, Vegas, or house flips, and conveniently neglect to mention anything about their losses.
“Similary, I admit to very few how I lost my shirt on the Dot.com crash (except on anonymous message boards).”
i used my losses as deductions and saved a bunch.
I tried the same exact excuse on my wife when she saw our portfolio wither away. Unfortunately, she saw right through me. Now, when she says, “I saved money by buying stuff at on a great sale!,” my retort is always, “Kinda like all the deductions I made by holding on to those Dot.com stock?”
http://www.signonsandiego.com/news/business/20070507-1257-consumercredit.html
You guys see this yesterday? People are having to use credit cards more and more…
Speaking of credit cards - I’ve had a Citibank MasterCard since college. Haven’t used it in years as I’ve been using a VISA and earning airline miles. But I always kept the MasterCard just as a backup.
Got a letter in the mail this weekend from Citibank. They said they recently did a review of accounts and saw mine’s been inactive for quite some time. Therefore, they are closing my account. If I want to get another Citibank card, I can re-apply.
I found that interesting. Are credit companies perhaps trying to clean things up?
They did the same to me. Actually I found it refreshing that they are trying to clean things up. But it’s really about cost containment.
CCard issuers are worried about fraud lately. Dormant accounts make fraud detection more difficult since there’s no transaction pattern to base the fraud detection upon.
They got the headline wrong.
Headline reads: “Consumers boost borrowing at fastest pace in 4 months despite energy prices, housing slump”
Should read: “Consumers boost borrowing at fastest pace in 4 months BECAUSE OF energy prices, housing slump.”
Morans.
“People are having to use credit cards more and more…”
How else do you expect us to spend ourselves out of a recession, given the negative national savings rate?
I’d be very interested to see the demographics behind that spending boomlet.
This may have already been posted, but here is housing collapse reality. $525,000 fixer collapse: http://tinyurl.com/2q82j3
to quote another poster on socketsite.com “cold arson”
while I am not sure I agree, it does seem awfully convient that this rotting home (RE Agent had posted enter at own risk warnings), that would have taken years (if ever) to get permits to demo thanks to SF politics, suddenly collapsed.
I mean who does DIY foundation work in earthquake prone SF?
If this couple did have an ‘accidental’ collapse it is probably the best thing that could have happened for them.
A “young couple”?
By the looks of the “young lady” in that picture, perhaps the reporter is in his 90s?
finally found some glimmering hope of progress in northern va. my wife and i have been watching the vienna, va market for over six months now and a home came on the market that shows some signs of collapse…
05/15/2001 sold for 1,250,000
10/26/2004 sold for 1,078,900
for sale 05/08/2007 979,000
still a ways to go but it’s the first i have seen in this neighborhood priced back to 2004 levels. i bet his neighbors are pissed off…lol.
I’ve been following the listings of a 4000+ sf home “to be built” not far from where I live. It’s been on the market for at least a year now. Yesterday, the builder RAISED the price 8%. Hmmmm.
watch for the builder to soon “lower” the price and advertise that it was “reduced for a quick sale” (insert eye roll here)
This company seems to have borrowed a strategy out of Silicon Valley’s play book. An option is not debt, right?
I am wondering how this product would work if, say, a homeowner gifted their home to the next generation? This “home equity option” program seems to assume that homes will be sold before they either burn or crumble to the ground, and that they won’t be transferred indefinitely to the next generation down the road.
And what if real estate didn’t “always go up” for twenty years into the future? I guess REX sees high future inflation in its crystal ball…
———————————————————————————
Product Taps Home Equity Without Taking Out Loan
By James R. Hagerty
Word Count: 406 | Companies Featured in This Article: American International Group
A small San Francisco investment company, backed by a subsidiary of insurer American International Group Inc., is rolling out a product that lets homeowners tap into their home equity without moving or taking out a loan.
The company, REX & Co., offers to pay homeowners cash now in exchange for a right to part of the proceeds when the home eventually is sold.
The owner of a home valued at $750,000 might obtain $100,000 in cash by giving REX a 50% share of the change in the home’s value. If the home sold for $850,000, REX would receive $150,000, the original $100,000 invested plus half the increase in value. If the home sold for $650,000, REX’s share would be $50,000, half of what it had invested.
…
P.S. My crystal ball sees short sales.
Stucco, I saw that article and wondered if it would be possible to game them. Say I know my paid-for house is worth $400K, but I “convince” their appraiser it’s worth $500K. They loan me $100K. In 5 years, due to the current decline and a mild recovery, I sell the house for 400K. Looks to me like I can walk away with an extra $50K plus the interest I earned on the $100K.
Over the last few years, it’s been very easy to “convince” appraisers. If the company’s in California and I live in the Carolina boondocks, what’s the chance they’ll come out and verify for themselves?
I wonder if the actuaries who cooked up this insurance scheme understand endogenous risk?
For more info on this, see this diagram:
http://www.rex-inc.com/images/rex.agreement.over.time.gif
In a falling marketplace, they will end up eating their shorts. It does look like they would do well in a flat market (with prices fluctuating up and down). I am too lazy to look at whether increases only in nominal price (due to inflation) could give them a decent return. In essence, this is another version of the ol’ reverse mortgage, but much flakier (note that they are not loaning all that much, in any event. The diagram implies that they will loan around 10% of appraised value).
It is impossible, or unbelievably stupid on AIG’s part, that the “owners” would be able to sell for whatever they want, whenever they want. Which means they’ won’t be able to. Betcha, there are handcuffs in the agreement that offering price for sale must be agreed by the “partner.”
I’m curious, is this legal?
$245000 2/2 Condo Appraised $255K Selling For $245K with 15K Cash Back
Reply to: tdyer38072@aol.com
Date: 2007-05-07, 10:41PM EDT
Your choice pay full price and get 25K back at closing or use anyway you like. Or buy it at 245 and get 15K at closing. or just buy it for 230K with no money back your choice. Great investment deal. Currently rented at 1050 can be increased with the right property manager. If interested I have one other property as well all same figures as above just minus 5K because it is a ground floor unit….So it will be 250K for that one. If you want more info please call.
This can also be purchased to live in most leases will be up in the next coming months or so or may be bought out of lease.
Lakewood Ranch
Theresa
813-789-0951
Vista way google map yahoo map
Location: Bradenton Lakewood Ranch
it’s NOT ok to contact this poster with services or other commercial interests
PostingID: 326482591
Rent $1050 can be increased……Yeah sure i’ll bet she has them on a years lease, to cover her butt a little
So the new owner has a choice to will till the lease ends and the tenant moves out with the new rent increase, or to pay the tenant $3-5000 to break there lease ( moving expenses FULL deposit refund and maybe a months free rent)…and move out so you can raise the rent and still not get new tenants …
Interesting choices
Why would I buy a place that would cost me $2500 a month, that I can rent for $1000 a month?
The “cash back at closing” ISN’T legal, unless it’s disclosed on the loan documents, and the bank OKs it. My impression is that most of these cash back deals are NOT disclosed to the lenders, and could be prosecuted as mortgage fraud.
It is shaping up to be a “Greenspan put” day on Wall Street…
http://www.marketwatch.com/tools/marketsummary/
PPT came back early after lunch today…
Realtors group sees home prices falling 1% in 2007, weaker than previous forecast and 1st drop on record. Full story soon.
cnnmoney.com
Home-price forecast: First ever decline
National Association of Realtors cuts 2007 forecast; would mark first drop since it began tracking values in 1968.
By Les Christie, CNNMoney.com staff writer
May 8 2007: 10:06 AM EDT
NEW YORK (CNNMoney.com) — Home prices are expected to finish down for the year, the National Association of Realtors (NAR) said Tuesday, which would mark the first drop since the group started tracking values in 1968.
http://money.cnn.com/2007/05/08/real_estate/home_prices_to_dip/index.htm?postversion=2007050810
Don’t they see the risk of causing a crash (especially in the number of sales) by honestly reporting expected price declines? Nobody who was gambling on 10%+ YOY gains in 2005 would rationally pay 2005 prices under the expectation of zero-to-negative gains. But that would mean that rational individuals would only purchase a home now at lower than 2005 prices (unless they expect a near-term repeat of the greatest protracted period of U.S. housing purchase price inflation in history, from 1998-2005). This is a conundrum, which can only be resolved by either (1) qualifying lots of irrational buyers; (2) quickly resparking high rates of housing price inflation; (3) precipitating price declines in excess of 1%.
Frenzy of risky mortgages leaves path of destruction
Reuters
http://tinyurl.com/22mlzr
“”I’ve been doing this for 54 years,” Mozilo recently said during a speech in Beverly Hills, California. For many years, he said, “standards never changed: verification of employment, verification of deposit, credit report.”
But then new players came in with aggressive lending policies. Names like Ameriquest, New Century, NovaStar Financial and Ownit Mortgage Solutions set a new, lowered standard, changing the rules of the game, Mozilo said.
“Traditional lenders such as ourselves looked around and said, ‘Well, maybe there’s a (new) paradigm here. Maybe we’ve just been wrong. Maybe you can originate these loans safely without verifications, without documentation,”‘ Mozilo said.
In 2006, Countrywide originated $461 billion worth of loans. Nearly $41 billion of that activity was in the subprime market, where Countrywide ranked third behind No. 1 HSBC and No. 2 New Century.”
Frenzy of
risky mortgages leaveshigh-risk lenders leave path of destructionand you wondered why real estate hustlers (realtors+brokers) are so detested!
http://today.reuters.com/news/articlenews.aspx?type=topNews&storyID=2007-05-08T140759Z_01_N03298922_RTRUKOC_0_US-USA-SUBPRIME-OVERVIEW.xml&pageNumber=1&imageid=&cap=&sz=13&WTModLoc=NewsArt-C1-ArticlePage1
“Most are engaged in business the greater part of their lives, because the soul abhors a vacuum and they have not discovered any continuous employment for man’s nobler faculties.”
Henry David Thoreau
Thoreau, while I greatly enjoyed his writings, worked as a butler, never married or had children, and lived and died penniless. Austerity has it’s price too.
Sounds like he had a plan…
I hope to leave this good earth with about a Dime to my name.
What about the kids?
BROCKTON!?! Has the whole world gone crazy? Am I the only one who gives a sh*t about the rules?!
I remember to well the dump that was Westgate Mall and the rest of that ‘burg in the days of Orange Julius. I went back to see a movie about ten years ago. Gang fight in the parking lot. Soho indeed.
To the poster wondering if everyone else is wrong. The answer is simply: yes. By every metric and rationale, yes. Reversion to the mean, rent to own ratios, rising vacancy rates, et cetera ad nauseum deus ex machina (that’s all the Latin I know).
“If you can keep your head when all men doubt you…”
“to” >> “too”
Here is an e-mail I just received from an AE of some fly by night mortgage company. Evidently, there are some lenders out there willing to finance a property flip, with no seasoning up to 100% on a cash out refinance. I would love to see how successful pedaling this crap on the secondary market.
No Title Seasoning for Purchases or Refinances to use Appraised Value!!!!
Do you have an investor that got a great deal on a property and wants to sell it at current market value but other lenders are considering it a flip because of title seasoning? As long as the value is there, we don’t care.
Do you have a borrower that got a great deal or has made substantial improvements and wants to cashout the current equity? That’s fine, we will do 100% cashout, 1 day on title.
We are not a hard money lender, we are just good ole fashion sub prime with common sense underwriting. Give me a call with any questions whatsoever.
“…we are just good ole fashion sub prime with common sense underwriting.”
“I am not a robber, I am just a property redistributor.”
Martian mortgage brokers communicating with the mother ship:
http://sarasota.craigslist.org/sls/301791736.html
We need to post the text of such ads — 9 of 10 get flagged before the bloggerate can read them.
speaking of collapse; It is a beautiful warm sunny day here in FL NY. The fields are a sea of yellow. The danelion is an important source of spring pollen for the honeybees and they will work them even when fruit is in bloom. i walked a couple hundred acres of fields and saw not one bee. Not one f###ing bee. None on the cherry tree either. This is not good.
Sorry, back to housing.
Come check out my rose bushes. We have plenty of them.
Beekeepers in Australia are reporting hives going from fully healthy to no-living-bees between visits. It is really worrying. A phenomenal proportion of the tree fruit industry relies on pollination by honeybees.
Someone will make a zillion dollars if they can figure out how to cut out the bee as middlebug.
Sounds like a job for Bee.com!
Any “Disney nuts” out there?
At Animal Kingdom in WDW and in Califorina Adventure at DLR, they have a movie called “It’s tought to be a bug”. Big musical finally…
Sing with me…
We’re polinators…… WE’RE polinators….
Oh… If you like vegitables, fresh fruit or flowers,
be thankful for bugs and their marvelous powers.
cut to the end…
The best thing about us is that you can’t live wihout us.
Still it’s tough …to… be… a….. buuuuggggg.
I suppose that a 0 % percent down, no doc loan is the equivalent of getting a “FastPass”. You don’t have to wait in line to ride Indy or Space Mountain, why should you have to wait to “own” a home?
If course, Disney’s FastPasses don’t have any unpleasant surprises down the road (unless you are riding Big Thunder Mountain and the train derails!).
“‘The housing market has definitely softened, but from the (foreclosure) numbers, you’d think we’re in a precipitous fall in home values, but it’s simply not the case,’ said David Stone, president of Nevada Association Services”
Oh, give me a break!
Somebody musta waked and baked, hmmm.. Mr. Stone?
Just returned home (W.Colorado) from a trip to Salt Lake yest. Near the Sandy exit, there’s a big billboard that says something like “Who protects your property rights? Realtors.”
Big sign.
WTF?
Realtors protect property rights? Since when?
Messrs. Smith & Wesson do a pretty good job. Great summary of the matter on TV the other night — might have been 20/20 — (the gist of it) “A bad guy is kicking in the back door of your house. What do you want to have in your hand, a phone, or a gun?”
Too bad they didn’t add… ‘you or your family member is really depressed. Life is not working out. You are in debt. What do you want to have in your hand, a phone, or a gun?’ ;(
The flip side of the armed society.
Hey, but at least that’s a personal choice. You don’t choose to have someone threaten your life or property.
What’s a good example of a black swan? THE NAR FORECASTS FALLING HOME PRICES…
Also, how many months does the bond market yield curve have to stay inverted before it is no longer “just noise,” and a signal of an impending recession?
http://www.bloomberg.com/markets/rates/index.html
———————————————————————————
PAUL B. FARRELL
Recession ‘07: ‘Black Swan’ or ugly duckling?
Economist predicts subprime woes the cause, trader laughs at ‘noise’
By Paul B. Farrell, MarketWatch
Last Update: 7:33 PM ET May 7, 2007
ARROYO GRANDE, Calif. (MarketWatch) — Recession 2007? Improbable? Totally unpredictable? So why are most economists predicting it won’t happen? And can you trust anything you read in the news about a coming recession? One trader says it’s just “noise.” You decide:
“To be competent, a journalist should view matters like a historian, and play down the value of the information he is providing,” writes trader, math professor and epistemologist, Nassim Nicholas Taleb, author of the just released bestseller, “The Black Swan: The Impact of the Highly Improbable,” and his earlier “Fooled by Randomness,” which Fortune calls “one of the smartest books of all time.”
Taleb says breaking news is just “noise.” And to avoid distracting the public, a “competent” journalist should qualify all comments. For example: “Today the market went up, but this information is not too relevant as it emanates mostly from [random] noise.”
http://www.marketwatch.com/news/story/2007-recession-blindside-happy-talk-economists/story.aspx?guid=%7B711FF308%2D1A2E%2D41D3%2D87BE%2D4DFD5218A833%7D
I am presently trying to read the boolk, but the author sounds bipolar and I am struggling.
Hi…
Does anyone have any advise/opinion on The Mili Group?
http://miligroup.net/home/index.php
Yeah. They sound like c**p.
http://www.youtube.com/watch?v=GSqV3rWM4iQ
Oh, you didn’t mean Milli Vanilli?
No…
Apparently, MILI thinks the current downturn is “a window of opportunity that won’t stay open forever.” Where have we heard this before… “Buy now or you will be priced out for ever.”
http://realtytimes.com/c/MILIGroup
You can almost feel the desperation now:
http://tinyurl.com/yuojsm
Very anectdotal evidence, but lately craigslist has been running at 300-400 real estate listings per day. This is the first to offer a free t-shirt and Chipotle though, hot damn!!