The Sky Is Not Falling, It Just Looks A Lot Different
The Union Tribune reports from California. “San Diego County’s tepid housing market continued to cool in April, DataQuick reported Tuesday. DataQuick Analyst Andrew LePage said April was the 10th consecutive month that the combined median price for all types of homes had declined year over year. ‘The sky is not falling, it just looks a lot different than it used to,’ LePage said. ‘It’s still unclear where we will be in the fall, If we have an interest rates spike or a recession, things could get ugly.’”
“‘I don’t think the bubble has burst yet, but we may not have a soft landing either,’ said University of San Diego economist Alan Gin. ‘Things are going down, but they are not collapsing…In the past, a slowing economy has dragged down the housing market. The question this time is, ‘Will the slowing housing market drag down the economy with it?’”
“Despite some gains, April had the lowest sales total for that month since 1997, LePage said. April also marked the 34th consecutive month of year-over-year sales declines. Single-family resale homes totaled 1,854 sales, down 16.3 percent from a year ago.”
The Voice of San Diego. “Fewer homes sold in Southern California last month than in any April since 1995, DataQuick Information Systems reported today.”
“The 19,269 homes sold in L.A., Orange, Riverside, San Bernardino, San Diego and Ventura counties measured the lowest number since 15,303 sold in April 1995, which was the lowest rate on record since DataQuick started tracking real estate statistics in 1988.”
“The rate dropped 28.9 percent from the 27,114 homes sold in April 2006.”
The LA Times. “Most of the erosion in sales appeared in the lower-priced markets of the Inland Empire that only a year ago still seemed to be soaring. In Riverside County, sales dropped 45.1% to 2,987 year over year, while in neighboring San Bernardino County, sales plunged 46.7% to 2,049, according to DataQuick.”
“‘The falloff in starter home sales has the effect of pushing median prices up a bit, although it’s still somewhat surprising prices haven’t declined more,’ said DataQuick president Marshall Prentice.”
The Orange County Register. “April homeselling stats from DataQuick show that buyers continue to be shy. Sales activity was down 24.7 percent vs. a year ago. That’s the 19th straight month in which the buying pace failed to meet last year’s activity levels.”
From Dataquick. “‘The drop-off in sales of more affordable homes was expected. That was the part of the market that was last in line for price and sales increases during the upside of the cycle. What we’re in for now is the somewhat painful endgame of that cycle,’ said Marshall Prentice, DataQuick president.”
“‘In addition to cyclical factors, there are other potential culprits behind the current lull: a buyer-seller standoff, the huge rush to buy during the frenzy (leaving less demand for today), tighter mortgage money, or something more ominous like a severe market correction,’ Prentice said.”
“The median price paid for a Southland home was $505,000 last month, the same as the March record. It was up 6.1 percent from $476,000 for April last year. When adjusted for shifts in market mix (i.e. fewer lower-cost homes selling now), year-over-year price changes went negative in January and are roughly one percent below year-ago levels. They are about two percent below the peak in June last year.”
The Mercury News. “Sarah Portales wants to keep paying her mortgage on time, but she’s got a problem. Her monthly payments are $3,500 and her income is slightly less than that. All the efforts to find a way to refinance her loan into something she can afford have so far led nowhere.”
“Even in the valley, the agencies that offer help to at-risk homeowners are finding their small staffs swamped by the problem. One legal group, the Fair Housing Law Project, is so backed up it stopped taking new calls this month; it will start again in June.”
“‘Lately, we’ve just had a huge increase in the number of cases we’re taking,’ said Annette Kirkham, the group’s senior staff attorney.”
“Portales is one of many borrowers nationwide who obtained bigger mortgages in recent years than their income and assets should have allowed. About 29,730 loans, or 24 percent, of the adjustable-rate loans held by San Jose-area homeowners will experience their first interest-rate adjustments this year, according to an estimate from First American LoanPerformance.”
“‘I was ignorant; I didn’t know how it all worked,’ said Portales.”
“Portales bought her first home, on San Jose’s East Side, in October 2005. She paid about $589,000, according to public records. She said her mortgage broker, who also acted as her real estate agent, exaggerated her income on her loan application, allowing her to qualify for the loan.”
“Portales, for example, will incur a $15,000 prepayment penalty if she refinances before October, she said. Now, she has two renters and a little help from her mother’s Social Security benefits to help make her payments on her three-bedroom home.”
‘In Shasta County, the number of homes in some stage of foreclosure in the first quarter of 2007 more than doubled from a year ago. RealtyTrac Inc. reported there were 197 foreclosures filings in Shasta County, up from 93 in 2006.’
‘More than 80,000 homes went into foreclosure in the first quarter in California, or nearly triple the figure from the year-ago quarter, according to Irvine-based RealtyTrac Inc.’
‘The Central Valley city of Stockton has the nation’s highest foreclosure rate, one foreclosure filing for every 131 households, nearly six times the national average, according to RealtyTrac. Other California cities with foreclosure rates in the top 10 include Vallejo-Fairfield at No. 2, Riverside-San Bernardino at No. 4, Modesto at No. 6, Sacramento at No. 7, and Merced at No. 8.’
‘With 30,505 foreclosure filings reported in April, California documented the largest foreclosure total of any state for the fourth month in a row. The state’s foreclosure activity was up more than 200 percent from April 2006, resulting in a foreclosure rate of one foreclosure filing for every 400 households, fourth highest among the states and nearly twice the national average.’
Well CA is a big state. We can never to anything in a small way. Move on over Texas, a new village idiot is in town >; )
My April NOD number is in for Palmdale 93552. 600% increase YOY.
However, MOM is down a bit, the 3 month trend turned down by 3% this month while the 12 month trend continues to soar.
I have a theory on this. There was a spike of NODs that peaked in Feb this year due to investors who are walking away from a loosing proposition as they have been unable to sell for profit. I call these the “smart money”.
Secondly are the GFs who are going to be defaulting in huge and increasing numbers through the end of this year as rate and payment reset kick in to gear.
I think the small down trend at this point is temporary and the real pain is fast approaching.
Anecdotally, in negotiating with a GF regarding rental of his former home the deal was killed due to his heloc to purchase a home in Texas. He said that if we paid $1800/mo. for the home (going rate) he would be out of pocket $2K. He tried to use this to up his wishing to $2200. Chalk up another foreclosed on GF in the near future.
i wonder how much los angeles heloc money went into “investments” in these areas?
That is why if we move to TN it won’t be until this shakes out. Fly over country is just as bubblicious as the coasts due to funny money.
Dude, you may yet have me as a neighbor in TN. Vanderbilt just needs to make me a firm offer and I’ll be the advance bitter renter party.
Funny enough, Nashville is one of the few areas in the US where real estate prices have really taken off in the past year. New firms moving in (i.e. Nissan), halfbacks fleeing Florida, and some simple arbitrage by some people leaving the coasts for places with better salaries vs. housing / insurance /taxes costs….
High end homes up 30% (US$100,000) in the past 18 months.
Stats here:
http://www.housingtracker.net/old_housingtracker/location/Tennessee/Nashville/
Marc Faber wrote about this a few weeks ago here:
http://www.whiskeyandgunpowder.com/Archives/2007/20070508.html
My point exactly. Nashville area is the last up and may be the last down. They are still on the bubble track because the price increases are not commensurate with salaries.
I saw many empty spec homes, some that had been finished and waiting for a buyer for over a year. They are in denial out there.
“something more ominous like a severe market correction”
And, they also acknowledged “market distress” in inland areas without naming them but we all know that means Riverside and Sacramento.
This is as bearish a report out of DQ as I’ve seen in 10 years, at least. Get ready for the summer plunge.
That brings to mind an image of the old Nestea plunge commercials, only the pool is empty.
LOL
“Now, she has two renters and a little help from her mother’s Social Security benefits to help make her payments on her three-bedroom home.”
My belief is that this is foreshadowing the future and why rents will be declining with home prices.
FBs need to take on renters to make the payments and more people moving back home to M&D or moving in with roommates to save a buck, especially if job losses start accelerating.
“FBs need to take on renters to make the payments and more people moving back home to M&D or moving in with roommates to save a buck, especially if job losses start accelerating.”
Yes, and don’t expect most of them to report it on their IRS tax form either. I can see the makings of a new cottage industry here!
If the tax-law writers were smart (ha) they would adjust the tax credit for renters, just enough so that renters report their rent so the IRS could put the hammer down on the landlords.
I wouldn’t want the govt to become aware that my builder-landlord’s place is rented to me. Officially the place is still under construction. If it were officially occupied, his property tax would increase, he couldn’t make ends meet, he’d be fore-closed on, and I’d be kicked out by the bank with no refund of any advance moneys I paid the landlord. He is hurting.
This lady has her son in a private school,drives a new van and she’s crying??? When you buy the seller tells you up front your payments…thats when she should have said…see ya (ignorant person!!!!!!)
I’m seeing “For Rent” signs around Boston like I’ve never seen before….yeah, FBs appear to need renters….
Rent going down:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=asLI7aWzN8Jc
http://www.miamiherald.com/548/story/100674.html
http://www.sun-sentinel.com/business/local/sfl-ybrental…ay14,0,2805722.story
This is pushing down CPI (Owner’s Equivalent Rent) which means rate cuts are more likely.
US dollar will continue going down the toilet
And real inflation (not the core crap) will be going through the roof. Got ka-poom?
Condo fees of $1700/mon? A true FB.
Just looking back at all the 1920-1930 era houses that ended up being hack jobs. It probably started like this; people with a McMansion can’t make a payment… take on some renters…. Throw up a few walls for privacy.
Its interesting to see that era behaviors repating itself.
Its interesting to see that era behaviors repating itself.
How many of the new McMansion tracks will become the new ‘South Central’ LA? It amazes me to see the detail woodwork, marble, etc. inside those homes in a slum!
Got popcorn?
Neil
south central has only been the way it is today for about 40 years; before the 1960s it was regular working class neighborhoods.
Listen up all you LA bloggers:
The following listings which i took the time to peruse will explain why LA County is still nutsville as far as insane housing prices. Also a tiny dark snapshot of the extent of fraudulent overappraisals in the LA slimezones.
This is a house which i happened to look at while driving thru Lennox blvd in ingelwood, 90304. This is a completely crapped out illegal-alien-overrun neighborhood, one of the worst sections of Inglewood, which says a lot, and is bad even by CCentral LA standards.
http://www.4900lennoxblvd.com/
almost across the street a 2/1 806 sq ft on 4845 lennox sold for $495,000 on 2/22/07.
almost next to this at 4848 Lennox a 2/1 882 sq ft is listed for sale fr $472, 387(may be a Zestimate).
I drove by several times to recheck these homes: they are simple stucco plain boxes on a nasty traffic clogged narrow street with humoungous throngs of 100% immigrant kids swarming thru on their way home from 3 nearby schools.
LA Is totally F*ked as far as fraudulent RE sales activity in the ghettos. This S*it never sees the light of day as far as MSM coverage.,as it is considered totally ‘unPC’ to ferret out and report RE fraud in Minority hoods.
http://www.zillow.com/HomeDetails.htm?zprop=20345459
Also in same Lennox hood heres a case of fraudulent repeated selling-3 sales in a six month span,last sale up to $470,000.
If you are a realtor/broker/seller working the inner LA hood areas you can make out like a bandit fixing up, selling, re-selling inner LA POS plain stuccos for one-half million, using every manner of frauduent overappraisal/kickbacks and every RE con trick in the book to sell that SCentral LA POS property. And the lenders,banks,gov’t watchdogs apparrantly do not give a rats ass what goes on in the ghettos, or are completely ignorant and bamboozled.
for those of you who don’t know LA county all that well there are literally thousands of run-down third-world slums and hoods where RE fraud is occurring.
I have done only a limited amt of checking in three notorioius LA hellholes(Pacoima 90331, LA Scentral ZIP 90011, and Lennox/inglewood 90304)thru Zillow, a total time spent of 1/2 day, and have ferreted out at least 10 cases of blatant outright RE fraud.
These listed areas/zips represent less than 5% of the total LA county third-world Hellholes so the amt of RE fraud going on in LA county must be staggering. This is one of the reasons why LA County is still showing positive 5.9% yoy per April Dataquick: all the rediculously fraudulent overappraials and selling of POS properties to mainly immigrant purchasers.
Will need to check Dataquick actual LA Zip charts and see if the YOY’s in the inner LA crapzones has declined: there was some cooling in some zips last check on Dataquick, and with the turning off of the subprime spigot there should be further downward RE price adjustments in the inner LA sh*zones.
By middle of summer any LA slum properties still selling in the mid-$400.000’s to over half a million is 100% outright fraud.
Fair amount of SFRs converted to duplexes decades ago in my old neighborhood. Recent trend was rehabbing back into SFRs.
I’ve been making this argument now for 2-3 years. Specifically that “housing units” (as traditionally defined) per job/household is the wrong way to view supply of housing.
The appropriate way to see how rents may move is by looking at housing ROOMS (ie. bedrooms) per capita for supply, and as a second measure, rents relative to income to determine affordability.
So long as there are sufficient bedrooms in the area, Rents vs. Income will ALWAYS serve as a ceiling on rents in an area. However, if there are lots of bedrooms relative to bodies, people will rent out a room (or two) rather than be foreclosed upon.
Lots of big houses have been built, and lots of small families have moved in.
I’m seeing “For Rent” signs around Boston like I’ve never seen before….yeah, FBs appear to need renters….
Yeah, just wait until code enforcement start enforcing the single family zoning laws.
There’s a bazillion little bureaucratic Hitler’s in Mazzholeland
who just luv to fook with the people who pay their parasitic salaries.
“Yeah, just wait until code enforcement start enforcing the single family zoning laws.”
There is a place where those ‘affordable housing’ activist could get busy- toss out SF zoning as restricting housing and blocking an income source for lower income home-owners. The fact that, as a side effect, this would put downward pressure on house prices, in no way influences my advocacy…
Hey wait a minute!!
Massachusetts is the home of Ted Kennedy, Barney Frank and John (Heinz) Kerry.
errr. nevermind
“‘I was ignorant; I didn’t know how it all worked,’ said Portales.”
Todays typical homeowner.
Don’t forget “She said her mortgage broker, who also acted as her real estate agent, exaggerated her income on her loan application, allowing her to qualify for the loan.”
…. but I signed it anyway, so am guilty of mortgage fraud, so both me and my agent should be immediatly arrested and tossed into jail.
Yep…so true.
Welcome to the jungle it gets worse here everyday…
wow this is getting ugly quick…but…but…but…it’s all contained.
“she’s got a problem. Her monthly payments are $3,500 and her income is slightly less than that.”
just a small problem
Only her reported income, perhaps she walks the streets turning tricks or deals crack to the students.
Unless you have the full financial picture - she could be the bus driver. She is by her own admission a liar and thief.
Where are those high paid Engineers making 100K easy ?
LOL! it just shows there isnt that many highly paid buyers left.
Sales has been sliced in half.
“she’s got a problem. Her monthly payments are $3,500 and her income is slightly less than that.”
Is that her real or “stated” income…
Typical perp talk if you ask me.
I was ignorant; I didn’t know how it all worked,’ said Portales.”
“Portales bought her first home, on San Jose’s East Side, in October 2005. She paid about $589,000.
Oh ,don’t worry only about a million or 2 others did the same thing. Hard to blame a snowflake for an avanlanche ,but wonder if these reckless idiots will get their smackdown. Mandatory payback, or jail!
I guess her agent made her sign the fraudulent documents at gunpoint .
At least this borrower is admitting that she knew the income was inflated to get the loan .She doesn’t seem to think that in the act of signing the document she was agreeing to commit fraud to get a loan and home she didn’t deserve .Her agent and herself decided that for personal gain they would f–ck a investor that puts up funds for loans .
Moral question : Is it right to rip off investors because they have money to invest in loans and the FB doesn’t ?What if it was her mother’s pension plan that went bust because it invested in these loans ? Or what if she got her taxes increased because of bailouts for these loans ? Do you think this borrower would than understand why it’s wrong ?
Caveat lendor. (None of the on-line Latin dictionaries gives a better word.) I have had just a few lying scumbag borrowers, and the way to deal with them is, rapidly.
It’s the idiot investors who have made all this lunacy possible, by buying the trash passed on by the mortgage brokers. They deserve to lose their money.
Want to guarantee getting your money back on a mortgage? How about this: only loan 75% of the true value of the property, based on rent equivalence. Individual borrowers can always misstate their incomes, or run into trouble later, but fundamentals never lie.
But the dumb dumb investors were giving a rating on a loan by Wallstreet that was fraudulent or a loan to value on a appraisal that was inflated . Maybe the funders of loans were dumb to trust the ratings and the lender agents , but for years they were very reliable until this lending cycle .
Now, she has two renters and a little help from her mother’s Social Security benefits to help make her payments on her three-bedroom home.”
Sounds like “Cousin Eddy” in Lampoons Family Vacation. Wife working two night jobs, Aunt Edna’s SS check, Military Disability check (Although that was cut-the plate in his head was too small) and he still needs to borrow “about $52,000″ from Clark Griswold.
“Demand destruction”. That’ll help inventory numbers!
‘Her monthly payments are $3,500 and her income is slightly less than that.’
Huh? Who would have guessed you could get yourself in trouble by signing up for a mortgage whose payment is higher than your income?
“The median wage has to $10/hr in the 4 corners. How are they supposed to afford 300K houses? That’s way higher than in northern Colorado (about 250K) and the median wage is about twice as much.”
Perhaps you missed the strawberry picker with the $16k annual gross income who qualified for the $750k house.
‘ How are they supposed to afford 300K houses? ‘
-Here in So Cal we feel that we are entitled to it. We have a movie star govenor and we all feel that we could win ‘American Idol.’ Most of us have never been in a Wal Mart or McDonalds … like the loosers in the rest of the country.
“like the loosers in the rest of the country.”
*cricket noise
Oops, pasted wrong quote. Should have read:
“Huh? Who would have guessed you could get yourself in trouble by signing up for a mortgage whose payment is higher than your income?”
Perhaps you missed the strawberry picker with the $16k annual gross income who qualified for the $750k house.
These people aren’t ordinary stupid. They are borderline retards, actually forget about the borderline part. Seriously, everyday I read about some FB here on HBB and think this has to be the dumbest f-tard ever and you know what someone dumber always comes along, ALWAYS.
I think the dumb bunny that’s gonna be hard to top though is Aida Marie Jansen. At 77 with an income of $11,212 dollars and no job she buys a 250k home.
Sometimes you really should read the whole article because this one was just too much. Her solution? This 77 year sea hag is going to adopt a child to pay the mortgage.
“Jansen, who has visited a food pantry twice in the last two months, said she is in the process of applying with the state to adopt a child so that she can get some extra income to pay her mortgage. “They pay about $102 a week,” she said. “
She’ll end up in a crappy state-run nursing home after the inevitable foreclosure. Wow, its amazing someone could go their entire life without gaining an ounce of common sense or good judgment.
Now I just object to giving liar loans to 77 years olds that might not be getting enough air to the brain .
Kinda hard to get air to your brain when it’s firmly planted up your rearend.
“Wow, its amazing someone could go their entire life without gaining an ounce of common sense or good judgment.”
That’s why LBJ called it the “great society” legislation. Isn’t it great?
“something more ominous like a severe market correction”
AND
“Foreclosure activity is rising but is still within the normal range in most areas. Several inland markets are showing early signs of distress”
Bearish as it gets from DQ. They are finally buckling. Next - capitulating. This summer is when we see serious price declines as the REOs begin to dominate sales and send prices lower, starting the vicious cycle.
“Foreclosure activity is rising but is still within the normal range in most areas.”
NODs are at a record level for San Diego. Does that qualify under DataQuack’s definition of “normal,” and if so, what would not?
That’s the whole point. These guys are pure unrelenting shills. Once they start reporting the obvious and don’t call the bottom any more you know it’s really grim. This summer they will be reporting distress EVERYWHERE as capitulation grips the resale marketplace.
The HBs will be F%CKED as buyers vanish entirely except for those scavenging through the wreckage of REO auctions. This is going to be one epic bust. The early ’90s bust will be a kid’s birthday party with balloons gently hissing air like a “souffle” in comparison. This bubble will erupt not with a pop but rather a nuclear bomb explosion.
Well put, AZ.
I totally agree.
Except it’ll be a nuclear conflagration in…..exquisite…..agonizing……
….never-ending…..slooooooow…..
….moooootion……
We’ll be telling our KIDS there was a time a body could make money flipping residential real estate. They’ll humor us — and then when we turn away they’ll make the ‘cuckoo’ sign behind our backs…
“Now, she has two renters and a little help from her mother’s Social Security benefits to help make her payments on her three-bedroom home.”
Since when did the “American Dream” entail taking in boarders? Is it really even your house at that point?
“Since when did the “American Dream” entail taking in boarders? Is it really even your house at that point?”
It’s part of the American Dream…You own your own business, a B&B.
You’ve got a point, Sammy.
In fact, I once rented a room from a lady who was having trouble making ends meet. She was also in the beginning stages of having a nervous breakdown, but that’s a whole ‘nother story.
Toward the end of my brief stay, she accused me of invading her house. (Mind you, I was paying rent. But, by that point, she wasn’t the most stable ship in the ocean.)
“In fact, I once rented a room from a lady who was having trouble making ends meet. She was also in the beginning stages of having a nervous breakdown, but that’s a whole ‘nother story.
Toward the end of my brief stay, she accused me of invading her house. (Mind you, I was paying rent. But, by that point, she wasn’t the most stable ship in the ocean.)”
What a disrespectful beeeyatch. I can’t stand those selfish types. When someone makes the decision to rent out a room, they need to respect the renter, and their contributions, and welcome them into their home with open arms. If they are too small to do so, they should not be renting out space.
Bantering, how do you know that the b-word is what her son called her when she told him I had to leave?
Oh, BTW, a few weeks after she tossed me out, she tossed the son out. A very nice 12-year-old, and one who was fortunate enough to be taken in by his father.
since I’ve been looking for a new rental recently, I’ve received a number of solicitations from people renting rooms or looking for roommates. I don’t want to go there. I think it would be rather uncomfortable renting in someone’s house. I’d feel like a paying guest, actually. and I have a feeling a lot of the people renting rooms probably treat the renter as more of an imposition than someone who is helping out by paying good money.
Bingo! I’m getting these crazy offers in Sacramento too.
I won’t take in renters or be one. I’m too territorial. I think it’s an estrogen side effect much like being able to sense a shoe sale 20 miles away.
I just love it. People making 40K buying 600K houses. That’s 15X income. I wonder what goes through these peoples minds as they sign away. I guess that’s what happens when our school system cranks out functional illiterates who can’t even figure out that there is no way they can afford a 600K house.
Even with two boarders and help from Mom there is no way she can make the payments.
600k is a freaking lot of money. I wonder how many folks actually have that much money in their accounts??
And yet you have these pissants without two nickles to rub together feeling entitled to sign contracts promising to repay 600k plus interest.
These feeble wits are nothing but incompetent thieves. If they signed the contract they committed fraud. Forget debtors prisons, bring back roadside work gangs for these criminals. The country’s infrastructure needs maintenance.
do you really want our roads and bridges maintained by these types of people?
I’ve already mentioned the guy I knew in the bay area. He had bought 2 houses in the bay area in 2003-4 . As far as I know he made most of his income at the flea market. He flat out told me he had taken out all the equity ,and bought his retirement home in Mexico. He was just riding the wave until the party ends…I expect that will be the case in most Ca. metros. Party’s over, let’s continue down at my place back home……
A cousin of a friend did this with credit cards in the late 80’s-early 90’s, he cash advanced over $ 100K and went back home to retire. So now the cash amounts are larger and they use RE. This is in the Bay area too.
- At least the guy had a plan, albeit slightly felonious … I kind of have to respect him for that. It sounds like he knows the donkeys south end from its north end.
15X income thoughts…………
“Real Estate prices always go up”
They only did this thinking the value of the house would rise and the profit would make the cost irrelevant.
Ooops.
Taking in boarders actually was a traditional way for widows to make ends meet, in pre SS days. As a parent, I know that having a boarder would be one heck of a lot less annoying than having a couple of teenagers in the house.
Sure. Part of this winter I rented a couple of rooms from in a very fancy South Pasadena section, from a 78-year-old lady who was happy to have me and treated me well. Didn’t charge much, either. Can’t find this stuff through ads though.
Hey az_lender - you were in my neck of the woods. I live down the street from the Trader Joe’s. Did you get a chance to check out the ridiculous prices here in South Pasadena while you were in town? One GF down the street from me paid 1.6 million for a 2200 sq ft house on a 4500 sq ft lot. Amazing!
I hear you… I just heard of another house selling in So. Pas. for more than last year’s purchase price. Not enough to make money for last year’s buyer, but up about 5% nonetheless. Are things really different in South Pas.? It is insane. We still have GFs galore here. I have ranted before, but did everyone in our little town suddenly strike it rich?
There must be something going on in So. Pas.
A relative put a nice rental property up for sale and got 4 offers (one all cash) at her asking price with someone actually offering an EXTRA 10K!
What’s with that? I have no clue how So.Pas. can be that much different than the rest of CA
Since when did the “American Dream” entail taking in boarders? Is it really even your house at that point?
This may come as a shock to you, but this was common practice in the US right up until the 1950’s. It was only then that the “Leave it to Beaver” nuclear household became the norm.
If you don’t know any old people, try reading some books from the pre-WWII eras.
This one’s a classic!
http://hosted.ap.org/dynamic/stories/O/ODD_SPAIN_MUMMIFIED_BODY?SITE=TXDAM&TEMPLATE=STRANGEHEADS.html&SECTION=HOME
There’s a metaphor in there for the taking.
Hey, I’m going to Barcelona this Thursday…I wonder if I’ll find any mummified previous owners in my rental?
It’s the new tapa!
Tapas Corpus Delecti
“‘I don’t think the bubble has burst yet, but we may not have a soft landing either,’ said University of San Diego economist Alan Gin.
Typical Economist doubletalk
Hey Alan why don’t you get a real job in the business world before you comment on it. As a person with an Econ degree nothing pisses me off more than these tenure chasing sham artists and the journalists that interview them.
How about talking about the disappearance of M3 data?
What about discussing recent changes in the way employment numbers are tabulated?
How about giving more of a Macro evaluation of what’s really going on.
Oh wait… You can’t do that because it might involve sticking your neck out. You might actually be right or wrong.
Sigh…
No quinine in Mr Gin’s tonic water another victim of the Anopheles.
LOL. We are all having a very clever, jocular evening.
I’m suffering through a number of G & T’s, to ward off the potential mosquito malarial menace to the north of me, as reported yesterday on this very blog…
Ha! “jocular”, one of my favorite words. It should be used more often.
“‘The falloff in starter home sales has the effect of pushing median prices up a bit, ”
finally, I get why the median sale price # is still so high everywhere. The people who would buy the “lesser” priced starter homes can’t qualify.
wonder how long it takes to drag down everyone else? if no one can buy your starter home, how can you buy a better one?
But if starter homes are not selling, how are people ‘upgrading’? Are there an increasing number of folks paying two mortgages?
Good question. I often hear that the high end isn’t as affected by a downturn since buyers have so much money to play with. Not sure I buy that since I live in an upscale neighborhood and things have screeched to a halt.
However, I suspect in cases where it is true, two mortgages is the answer. Most of the affluent types probably can weather months if not years of payments, especially if they bought a decade ago. Mid-range folks perhaps not so much.
‘But if starter homes are not selling, how are people ‘upgrading’?
Agreed. Last week there was a post stating that the down leg of the process was the sale of the starter home. From that sale came 3 or 4 sales on the up leg of the cycle.
- I can also imagine that this will also weigh in on the new comps for the future sales.
“A coalition of California consumer groups sent letters Monday urging six mortgage lenders to suspend foreclosures on home loans for the next six months and find ways to keep borrowers at risk of default from losing their homes.
If the mortgage lenders don’t act, hundreds of thousands of Californians who took on risky loans could lose their homes, according to the letter sent to the CEOs of Countrywide Financial, Wells Fargo, Citigroup, Washington Mutual, Bank of America and Merrill Lynch. ”
http://www.dailybulletin.com/news/ci_5897199
Most of these borrowers had no business buying a home they could not afford. Let the banks foreclose on them and send them back to renting, where they should have stayed in the first place.
Aren’t most of these groups really funded by the banks, trying to get people to stay in their overpriced houses?
Hey all you other lenders, how about we all stop foreclosing in hopes we can get that FHA reform scam passed, and can get all these houses refi’d to govt backed programs before the prices crash too much….. Once they’re all FHA, THEN we foreclose!
That’s the game plan. But first flood the msm with sob stories of all the victimized borrowers…
“Hey all you other lenders, how about we all stop foreclosing in hopes we can get that FHA reform scam passed”
It sounds like that would be the Mother of All Scams.
It’ll be a sad state of affairs if the banks are able to pass the by-products of their rapacious predation onto the honest taxpayers of this country.
Even worse if they do so while denouncing the idea of passing the bill on to the taxpayers. This is the advantage of offering the bailout in the form of a govt (taxpayer-funded) guarantee.
Even worse if they do so while promoting a free economy (esp. abroad) while socializing the risks and privatizing profits for the large banks and mortgage lenders.
These people deserve to be called out for passing such crazy proposals.
Thanks Ben for following up a few threads ago. It’s good to hear that at least some people think this is a horrible idea. Until it gets rejected though, I won’t rest very easily.
The most incompetant of all Fed parasites work for HUD/FHA.
“Monday urging six mortgage lenders to suspend foreclosures on home loans for the next six months and find ways to keep borrowers at risk of default from losing their homes.”
Yes, yes, by all means let’s keep them in those homes through the summer heat so they can pay those high utility bills and keep the lawn watered. Let’s kick them out right before Xmas into a cold winter’s night.
I read this in my local paper and don’t forget they played the race card too, quote ” In California, black and hispanic neighborhoods were almost four times as likely than white neighborhoods to have borrowers with subprime mortagages”. You know all the realtors around my area with their picture on the for sale post in the front yard are all mexicans ? But they would never rip off their own people would they ? Beer Me (PLEASE !)
Lenders should triage borrowers: 1. Hopeless (borrower simply can’t afford house no matter the loan terms): foreclose. 2. Work-out possible (borrower could afford house with better loan terms): offer better terms.
I know ‘triage’ should have three categories, but these are the possible categories I see. I would guess there may not be too many who will fall into category 2.
The problem with this logic is that it assumes that people who CAN stay ina house, WILL once they see people buying houses around them for 30-40-50% less that they paid with $0 down.
Putting myself in the role of someone that bought at teh peak…. “Why should I pay $2000 a month on my $300K house when the guy next door is payng $1200 a month on his $150K mortgage? Why not walk?”
“About 29,730 loans, or 24 percent, of the adjustable-rate loans held by San Jose-area homeowners will experience their first interest-rate adjustments this year, according to an estimate from First American LoanPerformance.”
‘Do you know a way from San Jose?’, Sarah Portales intoned.
(bad pun for the day)
This is interesting, because even as of now, there are 1500 foreclosures just in my hood (between I-680 and Evergreen). And that’s even before many of the loans hit the reset yet.
I meant pre-foreclosures.
So, is there a buyer-seller standoff or is there just an absence of buyers? Certainly there is an absence of buyers at current prices.
It is a stand off beteween the unable (upsidedown sellers), unwilling(banks that don’t want to take the full hit now), and desperate (builders) on one side and unable (don’t have down and can’t qualify) and unwilling (to jump in hear the top of a down market) on the other.
Based on exploding listings and crashing sells, I see no end in sight.
Sounds like the sellers and builders are willing to do anything in their power to keep it going, so their wants and needs can probably be ignored in the analysis…meaning that the *real* standoff is simply between banks and those actually capable of buying the properties. When at least one of them cave, then movement can occur.
Well, I think it really is an absence of buyers. During the boom, all I heard about was people (*a lot of people*) buying multiple properties - buy, buy, buy. Some of the people I know did this. This was caused by interest rates and easy money, I think, which in turn resulted in prices skyrocketing and the RE market becoming totally disconnected from the fundamentals. Now all I hear about is people trying to sell and get out before it’s too late, including those of my friends who fell for the boomtime propaganda and bought a bunch of houses. What I think is that once you start hearing “get out before it’s too late” everywhere, then it’s already too late. The reason houses aren’t selling isn’t because of a buyer-seller standoff, it’s because most people can’t afford houses at the prices that sellers/bankers/builders are expecting, even without the tightening of credit which is another factor in the absence of buyers. It’s just common sense but these real estate people and FBs (effed buyers =o) don’t really seem to have much of that …
Here here. I have to speak up for the low-wage minority on this blog.
One of the reasons I’m not buying is that nothing is affordable. We make a bit better then the median houshold income in Sacramento county, have enough for the FHA 3% down (and then some), high FICOs, and only student loan debt yet we can’t buy because zip, zero, nada, nothing is low enough to purchase without commiting financial suicide.
How rude of you not to commit financial suicide…
What I think is that once you start hearing “get out before it’s too late” everywhere, then it’s already too late
The time to get out is when you start hearing “get in before it’s too late” everywhere.
‘” Now she’s fighting depression at the thought of moving into a rental unit and praying for a good outcome.
Her monthly payments are $3,500 and her income is slightly less than that.
Ah, how effective the NAR et al have been at convincing everyone that not only is renting throwing money away, it is one of the worst things that could happen to you. She’s not depressed that she can’t even afford her mortgage payments, let alone food, tp, gas; it’s that she would have to (please say it ain’t so) RENT
“I’ve been struggling all my life, you know, and so I’ve still got to continue struggling. But I thought I would be able to stay in my home.”
It’s baffling about the rentophobia. Why, if she knows about struggling, would she sign on to a $600,000 mortgage? Why would she take on payments that wouldn’t leave a penny left over to take care of herself or the kids’ other needs? THAT’S what would leave ME depressed.
Probably couldn’t qualify to be a tenant in a nice place. Didn’t have first, last, security, etc.
Renting right now is much harder than buying. At least it has been in the recent past. A decent apartment will soon be a greater sign of wealth and prestige than a $hitty mcmansion. You will hear people say, “they rent a nice apartment. They must be rich.”
Agreed. I have been saying that for a few years now. In our current apartment in Scottsdale, we have to have first, last and security, plus they run credit and criminal background. Plus you have to have more than three times the rent to qualify for the payment ratio (sounds familiar to what used to be the underwriting requirements for home loans). This is standard now for most REIT owned complexes. And these hoops are more than the hoops that homebuyers in the last 36 months have had to jump through…
I don’t mean to be sacrilegious but, what is the going rate for a gross of small St. Joseph statues.
Meanwhile inventories in many parts of Cal have already passed last years highs. Since we’re still a few months away from the typical inventory peak season, it’s easy to see the pressure cracks in housings foundation spreading. Inventory, housing related job loss, the credit cards being used to currently pay the bills approaching max-limit, rate resets galore, more inventory……..they say that just before an earthquake the pressure between the two opposing plates is so great it causes a high-pitched squeal that can be detected by some animals, like dogs. Can you hear housings squeal?
Bingo. Here in the SFV we are exactly where we were last september (inventory peak). It’s going to be a long long dead summer.
Off topic sidenote. I received a flyer from the realtor that sold my house in 2005 yesterday. JUST SOLD! LIST PRICE $859,000 and it profiled the property he sold. I couldn’t resist. I zillowed it. Guess what? “JUST” means January close of escrow and $859k really means $769k (sales price). That was the nail in the coffin in our relationship. Deceiving, deceiptful and outright lying. I’m afraid he typifies the dumbass realtor that think we, the consumers, are dumbasses too.
“‘I was ignorant; I didn’t know how it all worked,’ said Portales.”
“Portales bought her first home, on San Jose’s East Side, in October 2005. She paid about $589,000, according to public records. She said her mortgage broker, who also acted as her real estate agent, exaggerated her income on her loan application, allowing her to qualify for the loan.”
“Portales, for example, will incur a $15,000 prepayment penalty if she refinances before October, she said. Now, she has two renters and a little help from her mother’s Social Security benefits to help make her payments on her three-bedroom home.”
Did she place an Ad in the “help wanted” or “For rent by a FB”
“‘I was ignorant; I didn’t know how it all worked,’ said Portales.”
“Portales bought her first home, on San Jose’s East Side, in October 2005. She paid about $589,000
Is she so ignorant that she couldn’t sit down with a pen and paper and write down monthly income $3500? - annual $40,000, house price $589,000. 589000/40000 = 15 or so - I will pay every cent I make for 15 years just to pay the principle. I know they are nice and don’t include interest. I also don’t need to eat, have utilities, feed my kids, buy clothes, transportation to some crummy job, maybe a vacation or night out, etc. She was ‘gambling’ it would keep going up and she didn’t want to ‘miss’ it. Now she lost, she is a victim. BBBBBBBBSSSSSSSSSSS. And, she lives in a truly $hitty area.
I spoke to a friend in Union City CA yesterday. He said nothing moving, and hearing of $200K+ drops on houses in the $1M range up there. We’re getting a cash a ready for when idiots like these are long gone, and the bank owns and just wants to get rid of said POS at any price.
Its one thing when people don’t read the papers they sign, but it is quite baffling when they don’t even skim the first page!
“‘I was ignorant; I didn’t know how it all worked,’ said Portales.”
There’re are going to be a lot of poorer but wiser people around before this all plays out.
Who said education was free?
My father always called it “Life’s Tuition”, then followed with “It Ain’t Cheap!” I think he picked that up from his mother. Dust bowl, Great Depression era tough as a nail was that woman back in the day…..
Only it will be the taxpayers that still have jobs that will be paying….These mopes won’t be paying what they don’t have, much less give a rip about any lessons learned…
My Okie grandma would pour water into an empty milk bottle and swirl it around to get all the milk out. Can’t imagine the Real Women of Orange County doing that.
Experience keeps a dear school, but fools will learn in no other.
Ben Franklin
OT: Over at the CBS 60 minutes website’s comments section, a fight has broken out between realtors and brokers. I’m hoping out it’ll become an all out war soon. woo hoo!
Yup, the REIC. One big happy fam-uh-lee.
Not pretty:
“How dare you disgrace the professionalism of Realtors! …
I believe you owe us (Realtors)a big apology for how you protrayed us. There is no one that works harder than a professional Realtor. Isn’t that what professionalism means. To take care of everything like it should to keep your clients out of court? “
With hbb, who needs nitrous oxide.
Median income is 65000 the median house price will reflect this. Even with lower interest rates it can only go to Median price= Median income * 4 (maybe x5)
The hardest-hit valley neighborhoods tend to be those with lower home values and median household incomes, and therefore more first-time buyers. And many of the affected neighborhoods have a majority of Latino residents. One example is ZIP code 95122, on San Jose’s East Side, which is 56 percent Hispanic and has a median household income of $65,015 - lower than Santa Clara County’s median household income of $83,568 - according to Claritas Research. There, about 11 out of 1,000 loans in a sample loan pool defaulted in the first quarter, the highest percentage in the county, according to data compiled from public records by DataQuick Information Systems.
Median is traditionally 2 -3 x income, not 4 -5. If the goal is to keep people in their homes and pay mortgage, taxes, maintenance and still have money left over for other things, that is. If not, then I guess the sky’s the limit.
There was a time when 3 x was considered a stretch. I think we’ve got enough supply of houses in this country right now to allow prices to go back to 2 X income. It would solve a lot of the cash flow problems people are experiencing if rents/house payments plummeted.
Just saying, 4 - 5 X is too high.
CFHI is down to about $4.00. The company is now being controlled by the FDIC.
Dang - I was hoping to short them several months ago at $8, but couldn’t since the brokerage didn’t have the shares to lend. Oh well.
“…Although we believe we use the best information available to make determinations with respect to the allowance for credit losses and that our current allowance for loan losses is adequate for such purposes; future adjustments may be necessary if the assumptions used in making our initial determinations prove to be incorrect. In determining the appropriate allowance for the Affected Loans, we evaluated each loan on the basis of the status and progress of construction, the amounts needed to complete construction, the draws available, the deficiencies, if any, and the current performance of the Borrowers under each loan. We then estimated a potential default rate based on construction completion and borrower credit worthiness. If these estimates and the underlying analyses are not correct, then future adjustments may be necessary for these purposes as well.”
Companies 10Q
WTG Coastal Financial
Coast is Toast.
Okay, something is not right about the dq numbers…the prices increases in each county range from -3% to +5.9% (with 4 of the 6 counties being negative), but the overall total increase is +6.1% ???
Look at it like this. They sell a high end piece of RE for 10 million dollars. In the meantime, 10 houses sell for 10% less than a year ago. Lets say they were 400k and sold for 360k. What happens? Well the Median Price increases up. The numbers can get skewed very easily. Especially while stocks continue to do well (I have no idea why).
I think in your example the MEDIAN would be lower (360 vs 400 last year). The average would indeed be higher which is why average is rarely used. Right? What may be happening with the original question is that certain areas are going up lets say 5%. However other low cost area are going down or not selling at all (can anyone say subprime?) Therefore total median goes up a lot reflectin the fact that low cost housing isn’t selling….
i ran the numbers for the zip code i rent in (sherman oaks 91401). forget about median. i compared the difference between the average price per square foot for 2006 and march of 2007. $110 per square foot less in March!
That amount ($110/sq ft) is about what the cost of construction should be.
I wonder how overvalued Sherman Oaks really is. I guess we’ll see when the resets kick in…
The Lifespan of our California NOBILITY appears to be only a Few Palace Payments. Hark….Is it Fraud Play or does something SMELL in SALINIS ?
“‘The sky is not falling, it just looks a lot different than it used to,’ LePage said.”
Does it look anything like this?
http://www.flickr.com/photos/mcclanahan/10956414/
“‘It’s still unclear where we will be in the fall, If we have an interest rates spike or a recession, things could get ugly.’”
No recession is necessary for things to get ugly, as the overbuilding of high-end homes, the ongoing inventory correction in the used home market, the tightening of lending standards and the sudden absence of 67 subprime lenders from the scene should be sufficient to keep downward pressure on prices for the foreseeable future.
I will add that given San Diego’s real-estate-dependent economy, a recession is more likely to be an effect rather than a cause of the bubble collapse.
Exactly stucco. It’s been said many times here before. This thing is collapsing under it’s own weight. We don’t need a recession…this will cause one all on it’s own.
‘I don’t think the bubble has burst yet, but we may not have a soft landing either,’
I wonder at what point Alan Gin will notice the bubble has burst, and will attempt to save face by loudly proclaiming in the media that he said it all along?
I think the Internet will dent a lot of professional reputations, and I’m not talking about the fallen American Idol contestants or Libby Hoeler. Archives of online material are going to haunt a lot of the folks like Alan Gin for a long time to come.
SOFT LANDINGS are for whale turds, happy little little girls in pink pj’s and 1/2 sober airline pilots.
I want something with a nice hefty terminal velocity REIC SPLAT that DOESN’T BOUNCE!
dude you are a Poet…
“April homeselling stats from DataQuick show that buyers continue to be shy.
Shy. Yeah, we’re all coy and sh*t like that.
LMAO!
Woman after my own heart.
http://money.cnn.com/2007/05/14/real_estate/first_quarter_NAR_prices/index.htm?postversion=2007051514
“NAR President Pat V. Combs said in a statement that the flattening in home prices is encouraging. ”
“It appears the worst of the price correction is behind us,” she said. “More stable home prices and declining mortgage interest rates are increasing buying power, which should encourage potential buyers who’ve been on the sidelines.”
What’s wrong with these people??! Only $uckers will jump from the sidelines into this madness even at the so called corrected prices. Prices are still way to high!
A bit off topic, but Zillow has Arizona worried:
Should Zillow Be Licensed?
by Peter G. Miller
Deep in the heart of Arizona the state appraisal board believes that Zillow.com — an online site which provides estimated home values — is required to have an appraisal license under state law.
Zillow clearly says values found on its website are not appraisals. The “Zestimate home valuation is Zillow’s estimated market value. It is not an appraisal. Use it as a starting point to determine a home’s value.” ………..
http://realtytimes.com/rtcpages/20070515_zillowlicense.htm
As long as they don’t claim to offer actual appraisals, why should they have to be liscensed? It is part of their freedom of speech to express their opinion any particular home is worth $1 or $10,000,000, or whichever number they choose on that range.
The problem is, they are presenting it as real value… Just think since their inception how many times you have heard someone quote the zestimate. Down the line that could be problematic.
I would feel differently if they called them “Zvalue” instead of “Zestimate.”
I see you’re point but you happen to be smarter than the average bear…
Most are taking those numbers as gospel. As damaging as they can be on the way up they can cause the same damage on the way down.
you’re=your
They oughta be called Zdreaming.
Zwishing?
I don’t think the state really cares about the principal of the thing; they just see an opportunity to shake a company down for money. And they’re going to need it, given the soon to be falling real estate taxes.
Nah it’s about more than that. Just think if Zillow values had credence. How many people would that leave without a job on the state level. If zillow can can circumvent appraisals you’ve wiped out a whole department in the State of Arizona. Licenses would no longer be needed wiping out an entire industry. Someone is taking the fight for their existence to the street early.
I’m drinking G & T’s, laughing my arse off @ you…
e-CON-omist, Gin
“‘I don’t think the bubble has burst yet, but we may not have a soft landing either,’ said University of San Diego economist Alan Gin. ‘Things are going down, but they are not collapsing…In the past, a slowing economy has dragged down the housing market. The question this time is, ‘Will the slowing housing market drag down the economy with it?’”
Where did I read that 8 of last 10 recessions were PRECEDED by a rear estate collaspe?
Perhaps you were thinking of a statistical point I occasionally bring up here, which is that every time (7 out of 7) dating back to 1955 that residential real estate construction dropped off peak by 25% or more, the rest of the economy went into a recession concurrently or shortly thereafter.
This is the eight time for a 25%+ residential construction recession, and I believe we are currently off by 40% or so from the peak.
Builders are not very optimistic at the moment, either; the builder’s confidence index for current market conditions is at the lowest level since February 1991. Evidence that the economy is most likely either headed into or already in a recession is clearly apparent for anyone who cares to look.
(It bears mentioning that the economy was in a recession from July 1990 - March 1991:
http://www.nber.org/cycles.html/ ).
—————————————————————————
Home builders: No recovery till ‘08
Builders’ confidence falls in latest survey, view of current market at lowest level since 1991.
By Chris Isidore, CNNMoney.com senior writer
May 15 2007: 2:25 PM EDT
NEW YORK (CNNMoney.com) — Home builder confidence fell for the third straight month in May and executives in the battered sector now believe they’ll have to wait until next year for even a sluggish recovery to begin, according to an industry survey released Tuesday.
The survey by the National Association of Home Builders saw the confidence index sink to 30 in May from 33 in April, matching the September reading that had been a 15-year low at that time.
The subindex measuring builders’ view of current market conditions fell to the lowest level since February 1991, while their view of the market six months from now and their perception of buyer demand both dropped to match the 15-year lows hit in late 2006.
http://money.cnn.com/2007/05/15/news/economy/builders_confidence/?postversion=2007051514
The survey by the National Association of Home Builders saw the confidence index sink to 30 in May from 33 in April, matching the September reading that had been a 15-year low at that time.
The spin will probably be, “This is wonderful news as it is apparent a bottom has been reached.”
You took the spin right out of LA Times “journalist” Annette Haddad’s mouth…
“But some analyst see a bottom to the nation’s housing market correction coming as soon as the end of the current quarter.
The pace of the decline in sales has slowed significantly since mid-2006, Ben Garber, an economist for Moody’s Investors Service said in a report Tuesday. That phenomenon, coupled with persistently low interest rates and small gains in income growth, have helped to “ameliorate the extent of the housing bust and set the stage for its recovery,” he said.
annette.haddad@latimes.com “
Yaaawwwwnnnnnnn!!! (not on us, on Garber)
“But some analyst see a bottom to the nation’s housing market correction coming as soon as the end of the current quarter.”
This represents a logical fallacy which we should anticipate will be repeated over and over and over again over the next several years. The reasoning goes something like this:
“Since the current level of X is the lowest it has been since Y, the real estate market is expected to bottom out by Z,”
where X is the bearish real estate indicator du juor,
Y is some date from back around the early 1990s and Z is a future date over the next year or two.
GFs who were lured into buying the dips on tech stocks due to similar journalistic nonesense during the Y2K dot com crash lost their shirts and then some.
“rear estate” is bottoming? Isn’t that redundant??
“Despite some gains, April had the lowest sales total for that month since 1997, LePage said.”
The pace of sales has receded to pre-bubble levels. Next up: Price recession.
“April also marked the 34th consecutive month of year-over-year sales declines. Single-family resale homes totaled 1,854 sales, down 16.3 percent from a year ago.”
34 months back means this trend dates back to June 2004. I am guessing that 34 consecutive months of year-over-year sales declines is a record (for Mr. LePage’s information, this is decidedly not normal). Can anyone corroborate? By contrast, year-over-year price declines have only just begun.
One 666 down, several more to go…
adios falwell.
Aladin,
Three things that can never be discussed: 1) Other peoples parents (I can call my father a jerk, but if you do…) 2) Political opinions and 3) religions of any sort.
It makes a boring world, but I can think of all the good that Falwell did over his lengthy career. And I did not and never have agreed with his positions.
At least Falwell has been re-united with his lord, Satan!
Name some of the “good” that he reportedly has done.
I grew up in the hard core evangelical church so I am somewhat familiar with Falwell’s rap sheet.
desire to buy home to escape roommates… buy big home…. take in renters… raid mom’s social security… some American Dream to own some wood and a yard.
I think realtors on TV shows should get a licensed because they tell borrowers what their house is worth . I think all realtors should be licensed appraisers because they tell sellers what they should list their house for .
Really aren’t they taking this to far . I agree with GS that if you make Zillow get a license you have to make the whole real estate world get a license because they (realtors ) express ‘Opinions of value ” based on comps all the time in the course of business. I just hope that the public know the Zillow ,as well as realtors ,are just stating a opinion and a license appraiser
is making a more accurate estimate of market value (if their not a crooked appraiser ) .
I thought the guys on T.V. were licensed Wiz… or do you mean an appraisal license.
MR I,.. think they are talking about a appraisal license aren’t they ?
Got a name for a new tv show…
“American Idle”
or “Turn this plane around-I SMELL Equity Vapors”
She said her mortgage broker, who also acted as her real estate agent, exaggerated her income on her loan application, allowing her to qualify for the loan.”
This incestuous conflict of interest between L/O; sales agents; and
appraisal number hitter’s smacks of a violation of Federal RICO statutes.
Government does nothing because the housing ATM and the real estate biz are the only things which have been propping up the economy for the last decade.
NO place to hide now that it’s time to pay the piper with mortgage resets in a declining market scenario.
Does anybody get the feeling that the powers that be want to take away easy to get information from the public that they should be entitled to .
For example if they require Zillow to get a license ,than they can’t operated anymore because than they would be liable for their opinion of value on their ZESTIMATE OF VALUE (whatever they call it ) .I only liked Zillow because I could get comp. information and tax information ,sales history ,from that site along with some interesting charts and graphs . I am wondering if the realtors are behind getting rid of Zillow or is it that the public is taking Zillows comp estimates to serious ,or is the County not wanting people to see tax assessments or property sales history ?
Zillow provides a whole history on the property in question and its enough to turn any buyer off .The history also shows property going down and than up again with this recent boom.
“or is it that the public is taking Zillows comp estimates to serious”
That’s the real problem, if they didn’t have that value component why would you pay to advertise on that most of the tax and comp stuff you can find online.
I bet a lot of $crewed borrowers look at their silly zillow estimate and feel reassured; they say “all is well; my house is still worth an extravagant amount.” This mirage keeps them in place, waiting for the knife (forclosure) to hit.
Exactly, when the average consumer looks at that they have no idea that they are taking an all in approach to their estimates, which is a bad thing.
Zillow estimated prices are being phased out due to no license in state to conduct appraisals on homes.
Housing Wizard -
I think its more to do with the fact that the AAR feel it to be unwelcome competition - in much the same way that the ‘60 minutes’ piece highlighted the (questionable) laws in other states that lean heavily in favour of the state’s Realtors(tm) Association.
I’d wager that if Zestimates were going up for AZ properties by enough, they’d be crowing about it as a ‘useful tool for homeowners’…
…and judging by the really big companies having problems with copyright/freedom of information on the internet, I’d also wager that the AAR has about as much chance of banning it as a celluloid cat in hell’s.
Interesting comments about Zillow from everyone .
It’s really starting to bother me that we seem to be.
starting to enact laws to limit information or spin on information with a concept of protecting the stupids of America . I think this is a dangerous concept in that people that like to control people will control the information based on “we know what is best for the people “.
The internet is starting to make a lot of people nervous. Protectionism is all it is…
The future and technology is strarting to make people question there existence and how they are going to survive. Best believe the guys who are behind the crying in Az. are appraisers or ex-appraisers.
Jobs being off-shored and the internet is sarting to spook everyone and in reality it should especially if you’re not retired or just starting out.
In my eyes the only truly safe profession is prostitution and medicine.
Is that one profession these days? I must be old-fashioned then.
Mr incomestream , the real estate agents/appraisers are really feeling the pain right now .
The best way IMHO to solve problems is to define the problem first and right now everyone is still in denial or cheerleading a agenda .
We got to get to the root problem of why this Nation was so vunerable to some stupid contrived RE mania .
Nobody wants to take the medicine to cure the ills .I don’t like the Country that I was born in being in a spot like this , but it was a long time in the making I think .
“Sarah Portales wants to keep paying her mortgage on time, but she’s got a problem. Her monthly payments are $3,500 and her income is slightly less than that. All the efforts to find a way to refinance her loan into something she can afford have so far led nowhere.”
I have two possible solutions for this case.
1. Sarah was truthful about her $40K salary, and the lender had no business lending her the money (doubtful) in which case they should go to hell since they were in effect speculating and knew full well she would be unable to make her payments.
2. Sarah lied and “Stated” her income at some amount more than she really makes, in which case arrest her and put her in jail for loan fraud. When she is released, make her pay back the money and waive the statute of limitations.
Agreed.
Say it aint so!!
Flip This House rigged???
http://tinyurl.com/2fdrgj
Bwahahahaha!
Expect to see more of this as the curtain is pulled away.
AWESOME FIND!
Wow, good catch. That news report explains a lot. Thanks for exposing it.
Watching that show you just knew it was BS. Glad to see someone proved it. A&E now has about as much credibility as the Mammals Gone Wild channel (aka The Learning Channel).
Excellent. Please let the Montelongos be next.
Man, I hear you! Next to Trump, that guy’s got to be the most egotistical, greedy asshole on TV.
My fiancee had to come up with a new word for those guys….
smarmy.
Sorry, she’ll have to get in line with the entire UK population, who have been using ’smarmy’ since god was a small boy…
Unless she’s from the UK, in which case she’s pulling your leg.
And, yes, ’smarmy’ is perfect word for him.
Ohio AG seeks Wall St Ties to Subprime Fraud
Tue May 15, 2007 6:14 PM ET
By Tim McLaughlin
NEW YORK, May 15 (Reuters) - Ohio’s attorney general said on Tuesday he won’t hesitate to file civil racketeering charges against Wall Street investment banks if his investigation finds they had a hand in fraudulent subprime lending.
Marc Dann, a Democrat who became Ohio’s attorney general in January, said legal action could be taken as early as the end of summer.
“We’re going to try to find a way to hold them accountable,” Dann said.
Wall Street investment banks played a key role in funding lenders who provide high-cost, risky mortgages to people with weak credit. They raise capital by packaging pools of mortgages into securities that are typically sold to pension funds, hedge funds and overseas investors.
That process, called securitization, flooded the subprime market with capital. Wall Street pulled back, however, when late payments escalated, forcing a number of subprime lenders out of business.
“The folks that were securitizing these loans and raising additional capital to loan more should have known loans were being fraudulently obtained from Ohio homeowners,” Dann said.
He didn’t name any specific banks, but compared the impact of fraud in the subprime loan industry to taking a home at gunpoint.
“It’s no different … if someone went through Cleveland taking people’s houses with guns,” Dann said.
He said one legal strategy he might pursue is using the U.S. Racketeer Influenced and Corrupt Organizations (RICO) Act, which was formulated to fight organized crime. The act allows for civil claims to be filed, too, to allege fraud.
“We’ll take the case where the evidence leads us,” Dann said.
What about the entire REIC complex?
The question this time is, ‘Will the slowing housing market drag down the economy with it?’”
yes
Wow!
I wonder if they have the follow up piece they mentioned at the the end available yet?
Yea, they do it’s on the site. But it wasn’t much of a follow up piece…
Welcome to the world of FSBO…
The median list price in my zip code (92127) has dropped by $96,000 since I started tracking it around February 1 — from $1,395,000 down to its current level of $1,299,000. I expect it to continue dropping, because there is simply too much new home inventory at this price and higher relative to a dearth of buyers at this price level. For instance, the 92127 median SFR sale price reported by DataQuick was $850,000 — a level $449,000 below the current median list price. That gaping chasm is unsustainable, plain and simple.
To add to the above post, there are currently three homes listed exactly at the current 92127 list price on ziprealty.com. Which of these identically-priced homes would you buy if someone handed you $1.3m and put a gun to your head? For instance, would you prefer 2180, 3531 or 3861 square feet of floor space? And would you rather have 3 bedrooms or 5 with that house?
(I noticed none of these listings start with “Seller will entertain offers on a range from…”)
—————————————————————————-
8260 SANTALUZ VILLAGE GRN S SD - Rancho Bernardo, 92127
$1,299,000 - $1,299,000
Beds: 3 | Baths: 3 | Square Ft: 2,180 | Lot Size: N/A
Yr. Blt: 2003 | Listing Date: 02/24/07
Description: Charming casita, former model on the village green! Watch the 4th of july fireworks from your… more
Your ZipRealty rebate: up to $7,794*
Price reduced Listing has multiple photos
———————————————————————-
14418 CAMINITO LAZANJA SD - Rancho Bernardo, 92127
$1,299,000 - $1,299,000
Beds: 3 | Baths: 4 | Square Ft: 3,531 | Lot Size: N/A
Yr. Blt: 2002 | Listing Date: 11/04/06
Description: What a great deal!This home has over $250k in upgrades:leaded windows,wood shutters,built-in’s… more
Your ZipRealty rebate: up to $7,794*
—————————————————————————–
14435 ROCK ROSE SD - Rancho Bernardo, 92127
$1,299,000 - $1,299,000
Beds: 5 | Baths: 5 | Square Ft: 3,861 | Lot Size: N/A
Yr. Blt: 2003 | Listing Date: 04/13/07
Description: Santaluz plan 2 garden home.This 5br home with`tech center`loft features a large,bright family… more
Time to pull off the gloves now (thx Redfin.com). Here is the sales price history for the three 92127 homes currently listed at $1,299,000:
14435 ROCK ROSE
SAN DIEGO, CA 92127-3617
Sales History
Date Price
12/11/2003 $793,500
Hypothetical capital gain = $1,299,000 - $793,500 = $505,500
4418 CAMINITO LAZANJA
SAN DIEGO, CA 92127
Last Sale: $716,000 (07/29/2002)
Hypothetical capital gain = $1,299,000 - $716,000 = $583,000
14385 CAMINITO LAZANJA
SAN DIEGO, CA 92127
Last Sale: $907,000 (02/12/2004)
Hypothetical capital gain = $1,299,000 - $907,000 = $392,000
TOO BAD ALL THE OTHER FLIPPERS ARE TRYING TO CASH OUT AT THE SAME TIME!
From what I heard regarding SD you can expect a 50% decline. The bottom may well be around 650K or so.
On a bubble scale of 1-10 where do you good folks think we are currently.
I’m thinking on a national basis 6-7 and by year end 7-8.
Im in OC and currently my house is -80K/10% by YE 100k easy.
07 year end 7-8
08 year end 8-9
09 year end 9-10
Things are moving along just as many here predicted and as soon as I think it’s not, another bomb drops.
FYI, I just heard PIMCO hired Greenspan, probably as a consultant.
I guess the U.S. tax code might now be changed to save these idiots who bought 800k McMansions with state income zero down ARMs. I can think of many other areas of the tax code that would need to be changed if all of a sudden personal transactions are going to be equated with business tranactions
NAR Says Eliminating “Phantom Tax” on Foreclosures is Good for Consumers
WASHINGTON, May 15, 2007 - The National Association of Realtors® commended Senators Debbie Stabenow (D-Mich.) and George Voinovich (R-Ohio) for introducing a bill today that would repeal a law that forces individuals to pay income tax when a portion of their mortgage loan is forgiven after a short sale or as part of a foreclosure.
Since the mid-90s, NAR has actively engaged in efforts to change this law and is encouraged by the actions taken today by the Senate in S.1394, the Mortgage Cancellation Tax Relief Act
I might support the elimination of this tax if it coincides with the termination of the mortgage interest tax deduction.
Form of tax-bailout .Forgiving debt is a gift . The bank gets to declare it as a loss so less taxes collected from bank . Needs to be offset by FB paying taxes on gain of not paying debt and lenders loss . This would encourage FB’s to walk or really rip the lender off even more .
You all want a laugh?
http://chicorealestate.com/chicorealestate/propertytemplate.asp?uniq_rand=0.7827457&rentid=CH272
Hmmm…don’t see anything funny about that. It would be 1.2 MM if the web address was http://santamonicarealestate...
“The Mercury News. “Sarah Portales wants to keep paying her mortgage on time, but she’s got a problem. Her monthly payments are $3,500 and her income is slightly less than that.”
I love how the MSM reports these things. No different than “Ed is going out tonight but he’s got a problem, he can’tt remember the address of the bar he’s supposed to meet his friends at.” That is a “problem”. Making less a month than your mortgage payment is a bit more serious than “a problem”.