Seeing The Financial Well Drying Up In California
The San Francisco Chronicle reports from California. “The median price for an existing single-family dwelling in the Bay Area hit a record $720,000 in April, up 6.6 percent from last April, according to DataQuick. That happened even though the number of existing homes sold in April fell 19.9 percent. The month was the 27th in a row in which sales volume declined, and April’s sales count was the lowest in 12 years.”
“The Bay Area numbers come with some caveats, however. The median price is skewed by strong activity at the upper end. ‘The volume (of sales) being low tells you that we’ve lost the bottom 20 to 30 percent of the market that can’t qualify for mortgages,’ said economist Ken Rosen, at UC Berkeley.”
“‘In starter neighborhoods, you’re more likely to see big sales drop-offs from last year and more significant price declines,’ DataQuick analyst Andrew LePage said.”
“Bearing out that thesis, Realtor Leif Jenssen recently cut $20,000 off the price of a 2-bedroom, 1-bathroom home he’s selling in Oakland’s Maxwell Park, which he considers a starter neighborhood, with home prices from $400,000 to $550,000.”
“‘If you search six blocks in either direction from the house, there are 80 houses for sale,’ he said. ‘The one right next door, which is a bit smaller, came on the market at $449,000. We were at $495,000 so (we reduced the price) to $475,000.’”
“Maxwell Park exemplifies the kind of area likely to suffer from the subprime problems. ‘It will probably have a fair amount of foreclosures because a lot of people buying in that neighborhood were low-income and didn’t have money to put down,’ Jenssen said. ‘I see properties out there that say they’re bank-owned (which means they have been foreclosed).’”
The Santa Cruz Sentinel. “There is a flip side to the April median home sales price that is near the record set in the red hot market of 2005. ‘The homes that are selling are the more expensive ones,’ said Herbie Lee, a statistician at UC Santa Cruz. ‘The low end of the market is what they’re selling less of.’”
“‘Cheaper places aren’t selling, so I think what is happening is only more expensive places are moving, thus making the median look so large,’ said renter Scott Oliver.”
“His theory is that people with better credit can get large loans to buy pricey homes whereas people with lower incomes who were buying less expensive places are no longer getting the no-verification loans that used to be granted.”
The Contra Costa Times. “While East Bay home sales slid to their lowest-selling April in 12 years, the median home price rose 4.3 percent in Contra Costa County, DataQuick reported.”
“‘The sharp drop-offs in entry-level neighborhoods have been dragging down sales,’ said DataQuick analyst LePage. ‘Contra Costa’s median price is up 4.3 percent, but that’s because there are fewer starter-homes sold.’”
“LePage said that tougher lending practices, foreclosures and higher rates have led to fewer first-time homebuyers being able to afford a home. And with less of those lower-end homes selling, the price of higher-end homes sold rises, skewing the statistics.”
“In areas where the typical price is less than $550,000, there could be 30 to 60 percent declines in sales. ‘Buyers are being very cautious,’ said Paul Ward, a broker associate in Danville. ‘There has been a big drop in transactions and cautious buyers and speculators are out of the market.’”
The Mercury News. “In the more expensive counties, median prices continue to defy the slowdown because the mix of homes that are selling has changed. Some local realty agents attest to the slowdown in ‘entry-level’ homes in Santa Clara County.”
“In the under-$700,000 price range, especially on San Jose’s East Side, ‘There’s a lot of homes out there right now and they’re not moving because there’s no one out there to buy them,’ said (broker) Robert Aldana.”
“He works with many clients on the East Side, which is suffering higher default rates than other parts of the county.”
“Creekside Realty owner Richard Calhoun said that in March and April, sales of houses in the high-priced cities of Mountain View, Palo Alto and Los Altos, for example, went from forming about 10 percent of sales in Santa Clara County to being 25 percent of sales.”
“‘Right now we’re seeing the reality of the financial well drying up,’ Aldana said. ‘I don’t think this is going to be a thing that lasts forever, but we’re going through some tough times.’”
The Manteca Bulletin. “The courthouse steps in Stockton are about to become the busiest sales location for South County homes. In a 17-day period starting Monday, 69 homes in Tracy, Manteca, Lathrop, and Mountain House are going on the auction block.”
“Long-time Manteca real estate broker Bev Marlow said she wasn’t surprised but was ‘dismayed’ at the foreclosures. ‘A lot of people put their heads into the sand,’ she said.”
“The biggest impact of the foreclosures won’t hit until the lenders repossess the homes officially on the courthouse steps. That means in the coming weeks the lenders will be putting those homes back on the market.”
“Unlike the buyers being foreclosed on, the lenders will price the homes to move to reduce their losses. That explains why one lender who foreclosed on property in Lathrop’s Mossdale Landing listed the home built in 2005 that sold over a year ago for $620,000 for $377,950 even though it passes inspections with flying colors and is in excellent shape.”
“The list of foreclosures moving forward to bid shows at least two other homes within two blocks where the lenders are owed in excess of $500,000. Tom Wilson, who has 31 years of experience in the Manteca-Tracy market, expects lenders to price those homes fairly aggressively which would put a damper on the sellers of other previously owned homes.”
“Compounding the market is the fact there are almost 570 resale homes for sale within Manteca’s city limits as of Monday. That doesn’t count new homes or homes being sold by the owner without an agent.”
“‘That kind of market conditions with an existing 10-month inventory means price is what is going to sell a home,’ said Wilson.”
“There were 586 notices of default sent to homeowners in the first three months of 2006 throughout San Joaquin County. That amount jumped by 193.7% in the first quarter of this year to 1,721 such notices. With the glut of homes on the resale market home sales are sluggish even for short sales where the owner sells for less than is owed of the home.”
“Wilson said it is also unfair to use subprime loans as the whipping boy for the rash of foreclosures.”
“‘The idea that subprime loans are entirely behind all of this is a fallacy,’ Wilson said. ‘People let themselves get lulled into the idea they could afford more house than they could. They bit a lot more off than they could chew with escalating interest payments.’”
The Daily Press. “With sales of new and existing homes plummeting to nadirs not seen for over a decade, some developers in San Bernardino County are putting homes on the auction block.”
“‘We are in for some unpleasant market adjustments, including lower prices,’ said John Karevoll, a DataQuick analyst. ‘Over the next six to nine months, there will most likely be a drop of about 8 percent from San Bernardino County’s peak price last November,’ Karevoll said.”
“Kennedy Wilson Auction Group usually handles between 100 and 250 auctions per year. But the auctioneer has seen a ‘dramatic increase’ in business since the fall of 2006, according to VP Marty Clouser.”
“One local developer putting properties under the gavel is National Security Construction, which is offering seven luxury homes in Rancho Cucamonga. The auction is scheduled for June 16, with opening bids of up to 40 percent off the pre-auction price.”
“‘We want to let the buyers decide a realistic price by putting them in the driver’s seat and letting them go after the kind of bargain they want,’ said Shone Wang, president of National Security Construction.”
Inside Bay Area. “Mortgage fraud rose significantly last year in California, which ranked No. 2 in the nation among other states for fraud incidents, a new study revealed Wednesday.”
“Stagnant and declining property values were blamed for California’s rise in frauds, according to Nick Larson, for the Mortgage Asset Research Institute. ‘Declining property values make it harder for fraudsters to cover their tracks and sell a house quickly,’ Larson said.”
“‘We’ve been talking to anybody who would listen for years about the negative impact (of mortgage fraud) on consumers and neighborhoods and trying to upgrade the industry,’ said Ted Grose, past president of the California Association of Mortgage Brokers. Grose said fraud would be reduced if the state’s laws against ‘fraud and lying’ were enforced.”
‘When voters approved $1.51 billion worth of bonds in 1998 to help relieve overcrowding in the San Diego Unified School District, the school system projected that more than 156,000 students would be attending its campuses a decade later. Instead, schools will likely enroll fewer than 130,000 students.’
‘In fact, instead of growing, student numbers have actually declined in recent years, and are projected to continue to do so through the rest of the decade, forcing school officials to consider closing down some sparsely populated campuses even as new ones open their doors.’
With all due respect to the school system and politicians there Ben, how did they expect normal income families to be able to afford to stay in outrageously overpriced San Diego and enroll their children in schools?
That was in 1998, when prices were still affordable. I guess they didn’t have the foresight that prices would go up 300%.
Well, it was difficult to predict some events.
Though perhaps less so in order to predict that “Easy” Al Greenspan would overreact and create the second and greater bubble of his tenure.
Mid-year 2003 the FFR went to 1%. Staying there for a year and piddly quarter-point adjustments thereafter did the trick.
how did they expect normal income families to be able to afford to stay in outrageously overpriced San Diego and enroll their children in schools?
Florida, anecdotally I can say that the same thing is going on in other areas such as Beverly Hills. My neighbor was able to enrol her kids in the BH school district, which is supposed to be one of the best, even though her address is not in the district. This is apparently because there was a shortage of students. If young families with children can’t afford a good area in San Diego, they sure can’t afford Beverly Hills, which has become too expensive even for a family with two working professionals.
“…which has become too expensive even for a family with two working professionals.”
Only trust fund babies can afford to buy San Diego “starter homes.”
“Only trust fund babies can afford to buy San Diego “starter homes.”
GS im one of those and no i can’t.
No, its just that everyone is so rich, they are sending their kids to private schools.
130,000 students…. if that was all San Diego had to worry about. What about pension payments “past due” and hidden in Enron accounting with no audits in years that are truefull. San Diego is living in pipe dream much like other citys and our own government but does not make it right.
diego de la san…
Congrats are in order for having perhaps the most severely goofed up finances of any city, across this fair land.
No wonder you dropped the “america’s finest city” gambit, just a little while back~
Well into the acceptance stage, methinks…
We have a long standing tradition of corruption in San Diego. Mayor Pete Wilson came up with the America’s Finest City moniker after the Republican’s pulled their convention from city because of the C. Arnholt Smith scandal.
Darrell, brilliant post. They were the greatest warrior generation, and also the greatest con artists. They got social security for themselves, increasing housing values and (in California) Proposition 13 (lowering property taxes). The rest of us got a bankrupt social security system, unaffordable housing, and high taxes. How great for them!
Here’s something else to consider. SD has a large number of children of immigrant parents attending class. So lets see… The parents don’t pay taxes yet their children attend class and the city was issuing bond to pay for it. Which I end up paying for.
Sigh…
It sucks to be gen X. The boomers want to steal from us to retire and the immigrants get all the benefits I do but don’t pay taxes for it.
Bomers stealing from us? Hell, I’m still paying Social Security and Medicre for my almost 90 y/o grandparents and almost 70 y/o parents. My baby boomer older siblings are the least of my problems right now.
Social Security and Medicare were intended to be a 1 for 1 relationship you put in money while your working to get the benefit of having money when you retire. If your parents and grandparents worked for a large portion of their lives and contributed to Social Security and Medicare they’re getting what they’ve earned. I’m sure you’ll feel the same way when you’re their age.
The problem with Social Security is it’s just too big of a piggy bank and government can’t resist not spending it.
Uh, no. Social Security was based on people not living much past 65 (the life expectancy when it was passed).
Increases in longevity, without corresponding decreases in benefits or increases in payments, destroyed whatever financial feasibility Social Security retirement was based upon.
Yes, it is a piggy bank. And the solution is to take the funds out of reach of the government and replace the system with individual private investment of the monies.
Those who continue to recieve “Social Security” retirement income should be subject to some kind of income “means” testing…and call the excess payments they get above their contributions what they are; welfare.
Check the history there sadash.
Roosevelt wanted to spend more than the govt. was taking in as taxes, but didn’t want inflation, so he decided to fund his “New Deal” by selling bonds.
Problem was, no one wanted to buy bonds. Bonds were for war-time, not peace.
So, they decided to MAKE people buy bonds out of their paycheck, hold them until they were retirement age, then let them sell them back.
But who want’s that?
So, the govt. PRETENDED it was a way to take care of old people.
Poof, the 1935 Social Security act. Say one thing, and do another. Say you’re caring for old people, in reality force them to buy bonds.
By 1939 people realized that what they got was not what they were promised. How the heck is the pittance saved up over 4 years going to be enough to take care of old people? And what about people that didn’t work and such.
So, the people DEMANDED they be given what they were promised. Of course, they didn’t want to have to pay for it. Poof, the 1939 ammendments that took all the money that was being paid in for future generations, and started passing it out to today’s retiree’s. The whole 1 for 1 crud lasted a whole 4 years. For almost 70 years it has been prettymuch , pay as you go.
And, along with those changes set up a system where the rates had to be raised every 5 years or so…. forever.
Well, we were able to stop rasing the rates for 20 years or so as the baby boomers were in their prime wage earning years….
Including employeer match, my grandparents paid 2% in the 40s, 3% in the 50s, 6% in the 60s, 9% in the 70s, 10% in the 80s, and retired just as it reached the 12% I’ve been paying my whole working life. 16% if you add Medicare.
I paid in 1 year, what they paid in 8 years of the 40s. I pay more in 2 years, than they paid for the entire decead of the 50s. It too them almost 30 years before their total contributions equalled one whole years pay (2% x 10 years + 3% x 10 + 6% x 8.3 years = 20% + 30% + 50% = 100% of a year’s pay).
Me? Counting Medicare it took 6.25 years to pay in a whole year’s pay.
Through the last 15 years in the workforce, they paid in another 1.5 years or so worth of pay. Grand total of 2.5 years of pay over their 45 years in the workforce.
Me? 16% a year for 45 years = 7.2 years of pay.
The result is that I’ll pay in more than 3x as much as my grandparents, as % of income.
With the baby boomer due to be collecting long before me, I have to assume my rates will go up 30%, and my childrens 50%, or the plan will have to pay me 30% less than promised.
So, I will get back 1/5th RoI my grandparents have gotten. 1/2th the RoI my parents are expected to collect.
Don’t tell me THEY’RE GETTING WHAT THEY’VE EARNED.
If so, how the HELL am I going to get back three times what they are getting? A 50% Social Security and Meidcare tax on my kids and grandkids?
Social Security, keep the promise?
Govt. of the people, by the people, for the people.
So, the people of my grandparents and parents generations “promised” themsleve that they would take 2-3x as much from me as they were willing to pay, so they caould have a retiement at my expense that I can never hope to acheive for myself.
Oh, should I mention the mass federal deficit that they also left for me. Not only did they promise to take way more from me in Social Security than they were willing to pay, but they also promised that I’d pay way more in income taxes to cover the interest on their debt.
Greatest Generation…. my arse!!!!
What a great post. The whole “Greatest Generation” thing is a joke.
Great post. And here I thought I was the only one thinking the same thing. As a 12 year old, I witnessed “the Greatest Generation” raise home prices through the roof beginning in the early 1970’s. $5k homes started selling in the Antelope Valley for $20k, then $25k and on up it went. Elsewhere in LA County it was the same thing, only the prices were higher. But they started it by taking advantage of the Boomers. That’s when women started to enter the workforce because the HAD to. Its been going on for a long time.
~Misstrial
You forgot to ad the interest earned on the money paid into SSI for 45 years ,(or how much you would of earned if you put the contributions in a regular CD.) You forgot to mention that one pays into SSi for 40 to 45 years yet they are fully vested after paying for 10 years .How many retirement plans make you pay a extra 30 years for something that your already fully vested in after 10 years .
Darrell: LOL! I have been nursing a grudge against my parents’ generation for many years! Thanks for the chance to vent. They never went to college, but enjoyed a good career and constantly increasing standard of living through his thirty working years, culminating in retirement at age 52! They live modestly in a paid-for house, collect pension and social security, can easily afford their low property taxes and expenses, and have been living a life of leisure for 25 years, with no end in sight! I love them, but secretly I think they’re deadbeats. Subsequent generations will be lucky to retire at age 65, and I predict won’t receive social security unless they pass a means test.
You are a pinhead .
If you notice from all the above posts the shift occurs in the 1970s. The biggest single change that occurred in 1970 was taking the US off the gold standard.
Blaming the “greatest generation” for a private banking system that had no idea of how to manage the enormous wealth the country had saved is ridiculous. There is no money in SS, there is no wealth in the country - it has been squandered.
Misstral, it was women entering the work force in great numbers that CAUSED the rampant inflation of the 70s. All of a sudden many households had far more income than they used to have. More dollars chasing a fixed amount of goods equals inflation.
Its Misstrial (as in trial lawyer).
The home price increases coincided with college graduation for boomer males and females. Am I to believe that most females were college grads at that time??? (Most young women were not college grads or able to work at the jobs “back then” that paid the sort of wages that supported the home price increases.)
We will have to agree to disagree.
~Misstrial
“Misstral, it was women entering the work force in great numbers that CAUSED the rampant inflation of the 70s. All of a sudden many households had far more income than they used to have. More dollars chasing a fixed amount of goods equals inflation.”
Do you know the definition of inflation?
Inflation is an increase in the money (debt) supply. More money borrowed into existence. Price inflation is a SYMPTOM of inflation - not inflation itself.
Women entered the workforce en masse during the 70’s due to both brainwashing (’women’s ‘lib’) and the fact that the increase in prices (due to previously created debt money driving up the cost of necessities) and the failure of men’s salaries to keep up FORCED them into the workforce.
Social Security and Medicare were intended to be a 1 for 1 relationship…
Um, no. Where do these silly notions ever get started?
Darrell in Phx — That post on SS was a tour de force. Are you an actuary?
Do you have a good reference on the dawning of the SS system?
Social Security was based on people not living much past 65 (the life expectancy when it was passed)
Yet another person who doesn’t understand what life expectancy means.
The reason the life expectancy was 65 back then was that a lot of people died young due to stuff like diphtheria, polio, etc. If you made it to adulthood you were likely to live almost as long as people today. Read some books or watch some movies from that era - there were lots of old people. Or just look at your own family history.
More dollars chasing a fixed amount of goods equals inflation.
This implies that the women didn’t produce any new goods when they were added to the workplace, in which case the companies that hired them must be insane.
If anything, the addition of lower-wage women would bring down average salaries nationwide, thereby constituting a deflationary pressure.
Women entered the workforce en masse during the 70’s due to both brainwashing (’women’s ‘lib’)
Any “brainwashing” that causes someone to reject being a parasitic dependent in favor of self-sufficient employment is OK by me.
Ha!
Taken a look at the drooling subhumans that pass as children in America today?
How about the fat a$$es stuffing their faces at fast food restaurants as opposed to eating nutritious home cooked meals?
You can thank working moms.
Homemaking and childrearing are professions as much as any other.
Agreed, we twenty-somethings look at social security as just another tax. The idea that anything will be left when we’re old is laughable.
Gen X, my generation (and that of Kurt Cobain :-)) will enjoy social unrest, overpopulation, peak oil and all the fun stuff associated with it. Like the calamitous 14th century, the ills of centuries past like starvation and disease outbreaks will resurge…
“The boomers want to steal from us to retire ”
They’ve been taking money out of my paychecks since 1967 for SS , Fed and State Taxes , Medicare and SDI and I’m going to be stealing from you ?
I worked years for a pension and I’m going to be stealing from you ?
WTF ?
Another generation Xer here.
And yes, you will be stealing from us. Pensions were a scheme, for the most part, to defer compensation to workers. Pensions work great as benefit when people die on schedule soon after retirement age. However as being shown by countless American companies and governments, promising to pay workers for not working, possibly as long as they did work, is a tremendous drag on the current workers.
Almost *any* retirement scheme that does not involve you spending the money you have personally saved for yourself involves taking from the younger generation. I expect that I will pay into social security all my life to fund my father’s and my grandparents retirement but there will be nothing left for me.
Gen X and Y is screwed - and the attitude that “we’ve earned the promises we made for you” (especially on SSN) is what we face as a generation. I have no illusions about my generation’s shortcomings but my sympathy runs short regarding the “promise between generations”.
I am sincerely sorry that you paid in all those taxes and I have no doubt you will receive some of what you were promised. I doubt I will be half as lucky as you.
Testify, boomer!
Vermonter, don’t worry. Your generation X and Y will be able to steal from generation Z so there will be something for you.
“They’ve been taking money out of my paychecks since 1967 for SS , Fed and State Taxes , Medicare and SDI and I’m going to be stealing from you ?”
Yes…. Your parents stole from you. They made a law in ‘39 that promised to take more from you than they were willing to pay themselves.
You allowed your parents to steal from you. Unlike us GenXers, you Baby Boomers had the numbers to do somethng about it. We simply don’t have the numbers to do anything against the weight of the Boomers, our parents, AND our grandparents… ALL of whom are stealing from us. As they promised themselves they would do OH so many years ago.
I have NO problem slicing Social Security down to size rather than straight up eliminating it. Since they dumped the “get back what you paid in” concept back in ‘39, it is long past time to stop pretending it is still a get back what you paid in plan.
It straight up needs to be a means tested program. You get to collect the equivilent of minimum wage from pensions and other retirement plans. For each extra $ above that that you make, you lose $.25 of Social Security.
AND they need to drop the max for witholding. No reason this tax should be regressive when all the other ones are progressive.
Fix Social Security NOW!!!!
Nope, nobody I know can afford to have kids. Single income family? Hah!
“They’ve been taking money out of my paychecks since 1967 for SS , Fed and State Taxes , Medicare and SDI and I’m going to be stealing from you ? I worked years for a pension and I’m going to be stealing from you ? WTF ?”
What you ‘donated’ to SS was used by the parasites from the generation before you. It’s gone. When you retire, you will f%ck over/suck the blood from younger generations.
It’s the American Way.
Generation X (or whatever)
Worse than that, some of the Boomers have guns and gold.
15.3%. 15.3%. 15.3%! That is what the gov’t gets off each dollar the average employee earns. (Ok, 94% of dollars earned.) If I got 15.3% of your income off the top (and half of which you still pay income tax on BTW) I could easily fund:
A term life policy that would cover your dependents as long as you needed it (and cover them much better than SS does.)
A disability policy that replaces 70% of your income in the event you were injured or became seriously ill during your productive years (and unlike SS you could actually collect)
A retirement fund that would pay a heck of a lot more than your lousey SS payments (compare CalPERS to SS - same amount invested 3 -5 times the amount paid out monthly.)
And a secondary retirement fund to cover health costs in retirement. (And BTW Medicare is what is going to destroy SS not the SS benefits portion.
SS is meant to cover a lot of things, but it is not invested, Congress steals it instead of allowing it to grow (why should they care - they have their own retirement system) and it does not do a good job at any of these things. There’s no easy answer - but something has to change. This is a retirement fund and should be treated as such without the ability to “borrow” from it earlier. (And not by the contributors!)
BTW even after I funded all of the above you would still have a pot of money for your heirs if you died before or early in retirement. Not true for SS. My parents paid in their entire lives and died young (if you smoke quit.) Nothing left for the kids. Both self-employed so they paid the entire 15.3% (or whatever it was than) and never got a thing out of it. Now that sucks.
Say what you want about SS, and analyze it anyway you want. So much of the debate is over what promises, if any, where made. Where these promises UNEQUIVOCAL? If so, where is the smoking piece of parchment with these promises written out in plain english?
I do not believe SS will help me in my retirement as it has previous generations. (I am a late boomer, 1960 vintage.) I do not know this quantitatively, I only know this qualitatively.
I know that not everybody has this option nor wants this option, but I have opted out of the conventional method of earning a living and paying SS taxes as well. My only saving grace into retirement is going to be my capital appreciation from dividend paying stocks, both in my tax-sheltered ROTH IRA and out of my ROTH IRA.
(In the interest of avoiding a flaming war, I will now state that I inherited nothing. No trust fund baby here.)
What will matter the most to folks that have opted out of the conventional work force in America like myself is what the future Hillary Clintons decide to do about the future trillions of dollars of accumulated wealth in the ROTH IRAs. Are they going to tell us “I’m sorry, but the original deal to pay all of the tax up front for the promise of no more taxation for ever into eternity can not be justified given your extraordinary wealth you have been able to accumulate in a tax free fashion for the past few decades while “opting out” and not paying a dime into the SS trust fund, and we mean to make this situation right. You paid tax on $100,000 30 years ago and now you expect a free ride on $25,000,000? And you have the audacity to complain about the greatest generation, the generation that fought WWII, as if this generation was greedy and getting over on all of society. Here is your tax on your ROTH IRA.”
Would this happen, and would it be immoral to break the original UNEQUIVOCAL PROMISE of no taxation ever on the ROTH IRAs?
Would this be no different than the gobmint defaulting on their bonds? A bond is an UNEQUIVOCAL PROMISE to pay face value on a future date. So if I buy a 30 year bond today and thirty years later the politicos tell me “hey, you have been paid your original investment back several times over on a tax free basis, and we aim to make this situation right. And you have the audacity to complain about the greatest blah, blah, blah…Here is your five cents on the face value”.
In my thinking, it would be no different.
Got 10% down?
The interesting bit is that enrollment in the San Diego Unified School District has dropped from 138,500 in 1998 to less than 130,000 now.
Wait, 3.5 million are supposed to be moving to SoCal over the next 5 (or was it 10) years.
They are catching 1 million a year now, so that number may be low.
If SoCal is adding 1 mil a year, how are we adding 9000 ex-SoCal citizens each month?
Here is the stat:
http://uk.news.yahoo.com/rtrs/20070501/tpl-uk-usa-immigration-factbox-20b2d2f.html
“Some 1.1 million people were arrested crossing illegally over the porous U.S.-Mexico border last year, most of them from Mexico and Central America.”
They’re catching nobody as of today…they just threw the gates wide open and flushed citizenship down the toilet, with the dollar.
With all due respect to our Senators in Washington who want to “Save Our Homes,” any bailout measures they manage to push through the legislative process are likely to contribute to sticky prices on the downside of the big runup, and hold coastal California’s economy in the doldrums for many years (kind of like from 1990-1996), rather than quickly getting through the correction back to affordable prices.
You know I kind of think that with or without a Gov Bailout, the housing market is not going to correct itself quickly and this is largely due to human psychology. It takes a while for popular thought to change course, for sellers to realize that they are not going to get boomtime prices or even near them. Denial takes a while. I look around and think to myself, “I wouldn’t buy these houses even for half the price being asked.” But even for the prices to drop 50%, it would take at least a decade of continual depreciation. So we’ll see what happens …
“But even for the prices to drop 50%, it would take at least a decade of continual depreciation.”
I can cite anectdotal evidence of homes in 92127 which sold for $650K in 2005 and were listed last fall for $490K, even before the subprime implosion took its terrible toll. That is a 25% drop over a little more than a year. It only takes less than three consecutive years’ worth of 25% drops to lop off 50%.
However, with the likelihood of bailout measures passing through Congress and lower Fed Funds interest rates (and accompanying high inflation) used to soften the correction, it will probably take longer than 3 years to get there.
Hmmm, that’s interesting. Maybe in some places that is happening. I wish it was like that here (Livermore). I have been looking at the houses in my area and that kind of drop just isn’t seen. Since 2005, on average, the prices of houses around my area have depreciated around 9% from 2005 prices. I’ve been doing the math for while now - taking flyers on my daily walks and such. I’m hoping for a big drop but I’m not going to kid myself about. In the meantime, I’m saving $$ and waiting for my threshold price, from which I will consider buying …
Melissa,
In case it is of any comfort to you, my wife and I bought in the Bay Area in 1996, at a price at 115 times what comparable places were renting for. I knew far less about California housing at that time than I do presently, but my wife and I moved with the intention of renting, but decided to buy because it seemed we could live more comfortably and cheaper by doing so, with a 30-yr fixed mortgage at 30% below what the place would have rented for.
Good things will come to those who save and wait, provided they have suitable inflation hedges against the War on Savers.
One more point:
Psychology matters little in a credit bust, unless you are talking about lender psychology. When lenders (of whom the currently surviving ones might be a bit more knowledgable about risk management than the recently departed subprime subclass) smell a whiff of housing price deflation, they suddenly become much more concerned about getting the appraisals and the foreclosure risk right, as they will become bagholders if an underwater foreclosed home becomes their REO. Hence they are no longer as anxious to make 100% LTV loans to buyers who say they have enough income but don’t. I can pretty much assure you that there are plenty of willing buyers out there at this very moment who would have qualified six months back but no longer can.
This point also shows why the Fed must create more housing price inflation — at least enough to offset deflationary pressure. So much for Mr. Market working better w/o intervention, because Mr. Market currently wants to take prices lower.
Yeah, I agree, psychology doesn’t affect a credit bust. Very true. But it does affect sellers expectations which I think is a different thing. Easy credit, low interest rates, the # of speculators in a market, etc., will affect the height to which the market will go, but not the timescale of the boom/bust cycle. The timescale is always the same when you divide boomtime into downturn. You always get roughly the same ratio. I’ve checked Shiller’s graph of the 70s and 80s US boom/bust cycles and also those of others markets like Japan and Australia. The timescale ratio is always the same. So I’m thinking this one will bottom out around 2018. But we’ll see, hopefully it will be sooner …
“But it does affect sellers expectations which I think is a different thing.”
Which pretty much explains all these sellers who keep their homes on the market for months and months with no offers…
the housing market is not going to correct itself quickly and this is largely due to human psychology.
Not this time. Too many factors predispose this bust to a much quicker and sharper decline. Want a list?
Just watch …
I am watching… NODs & foreclosures already surpassing their worst levels in the 90’s and we’re not even two years in. How about 72 sub-prime lenders gone in a little over half a year, too? This isn’t your father’s housing bust, it’s your great-grandparent’s (i.e. depression).
Keep in mind that a 50% decline wipes out much more than 50% of previous appreciation. If 100k home appreciates 50% to 150k then loses 50% (75k) it will only be 75k.
This another good example of deceiving statistics through use of %. Let’s not even consider the fact that inflation makes it much much worse.
and the EDU-crats will try to get mo money
municipal unions are the worst
“The Bay Area numbers come with some caveats, however. The median price is skewed by strong activity at the upper end. ‘The volume (of sales) being low tells you that we’ve lost the bottom 20 to 30 percent of the market that can’t qualify for mortgages,’ said economist Ken Rosen, at UC Berkeley.”
the only thing he left out of my post from yesterday was….
Danger, Danger Will Robinson.
“…tells you that we’ve lost the bottom 20 to 30 percent of the market…”
*******
Nice to see cheerleader Ken Rosen, having undergone his conversion, now stating the obvious!
And yes, the Bay Area market is “losing” a greater percentage of the remaining 75% of buyers every single day.
Besides the fact some people are coming to their senses, it’s also noteworthy that a disappearing entry level market will do a lot of damage to the move up market.
[reiterating a point made often here over the years]
Yeah, that’s exactly right. Do they honestly think that losing the bottom 20 to 30 percent isn’t going to affect the top of the market? During the boom, the bottom of the market was mostly speculating investors and also these Poor Fools who took such risky loans to buy something they couldn’t afford (because it was overpriced!). Now the speculation is gone and the Poor Fools are being foreclosed on. Big surprise! =o/ Once sellers realize that they are stuck in the stratosphere with no foundation beneath them, things will get pretty interesting and I’m just gonna sit back and enjoy the show …
Kinda like quicksand .
Yeah, ha that’s right.
Check out what Ben Bernanke had to say on Thursday:
Bernanke said while it was likely that there would be further increases in mortgage delinquencies and foreclosures this year and in 2008, he did not believe this problem would be enough to derail the overall economy.
“We believe the effect of the troubles in the subprime sector on the broader housing market will be limited and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system,” Bernanke said.
And this is from the Fed Chief! He ranks right up there with Lereah and LAY.
Once you take into account the dollar, is there an economy to worry about? What growth?
And this is from the Fed Chief! He ranks right up there with Lereah and LAY.
Melissa, I hear you, but OTOH, imagine what would happen if Bernanke actually said “the sky is falling”. The guy has a couple of pHd’s, he probably knows what’s going on better than you and I, he just can’t say it, because if he said the sky would actually fall.
Good point Cassiopeia. One thing to remember as well, people with Ph.D.’s do very well in an academic setting, where theory reigns. In the real world, it’s bit different. I know this because I work with all men who have Ph.D.s and I see this everyday.
Melissa, so true, but my guess is if regular people like you and I can smell a fish, they know it’s there. But their job is damage control and I don’t expect any straight talk from them in the same way as I don’t expect any straight talk from politicians on either side of the aisle. In fact, that’s my measure for a candidate. I don’t much care about the party, I just vote for the one who I think speaks less bullsh@t. I know, don’t tell me, it’s a hard choice. I’m down to voting for the guys no one ever heard of.
Trying to get out of Maxwell Park, agent 86?
“Bearing out that thesis, Realtor Leif Jenssen recently cut $20,000 off the price of a 2-bedroom, 1-bathroom home he’s selling in Oakland’s Maxwell Park, which he considers a starter neighborhood, with home prices from $400,000 to $550,000.”
“Realtor Leif Jenssen recently cut $20,000 off the price of a 2-bedroom, 1-bathroom home he’s selling in Oakland’s Maxwell Park, which he considers a starter neighborhood, with home prices from $400,000 to $550,000.”
Anyone paying this sort of money for a tiny shoebox in Oakland is sick in the head.
My thoughts exactly. Oakland is as bad as Compton. It’s worst than Bagdad.
For all you people out there in the good old U.S.A, what is it about Cali that inspires you to pay a king’s ransom for a crackhouse in slums like Oakland, Compton, Watts, East L.A, Riverside, Fresno and Oxnard? Is it the weather or do you enjoy the sound of gunfire in the morning?
Sorry, it should be “worse”, not “worst”.
Native Californian here. To answer your question:
1. Legal immigrants from Asia, Lebanon, Armenia, Middle East, Europe. To them, Cali prices are a bargain since in these countries, home prices are much higher. Add political stability and supermarkets and they can’t resist.
2. Some people are just wired for homeownership. They just have to buy, no matter what makes sense. I guess its family expectations (like newlyweds or “the baby’s coming” sort of thing). Imo, these people have always had one safety net or another to rely upon. So, the thought that foreclosure and/or bankruptcy may happen to them is a farfetched idea.
3. Societal disapproval of renters; an idea that has been fostered by the REI and carried along by homeowners plays a part in this too. Society has to stop demonizing renters.
~Misstrial
Im not positive its rust belters rushing west to buy a half million dollar brokedown palace in Oaktown…..you gots to think Fraudsters of the local variety…..
Oxnard is a beautiful place it’s too bad the mexican gangs control it
“My thoughts exactly. Oakland is as bad as Compton. It’s worst than Bagdad”
I do not know anything at all about Oakland but i do know the slums of LA Metro region quite well. I Have repeated stated that there are seriously degenerated areas of LA which would scare the living S*t out of anyone who ventures into these cesspool regions.
These are the really bad crapped out areas of LA, in no particular order:
Maywood,Wilmington,Bell, Compton,SCentral,lennox 90304, Pacoima,San fernando, La Puente,Cudahy,E el ley,inglewood,LA inner ring surounding dwtn, El sereno,Boyle hts,
Hawthorne, Long Beach 90805, Parts of Sylmar,large portions of Lywood and southgate:this is not an inclusive list.
The really astonishing thing is i have seen 2/1 800 sq ft crackhouses in the worst slimiest LA slums fetching $400,000-500,000. Who IN The f*k pays that amt in these gang-infested hoods. The lenders approving these loans in these nasty hoods need to get their heads out of their rear orifices and need to be dragged out by their collarbones out to these LA slimepits and see where their money is being flushed down the toilet.
cmon, if local gangsters werent able to get their hands on some of that FRAUD money, it would be racist.
My brother-in law and his wife. Despite our warnings, they bought an 853 sqft house in Highland Park. They can’t understand why no one on their block will stand up to the guy on their block with the wild parties and pit bulls. Uh, maybe it’s becasue he’s the local gang lord and everyone’s afraid of him? Just a hunch. BTW we live about four miles away from them in South Pasadena, but we might as well be in another country. Tree lined streets, award winning schools, upscaple neighborhood. That’s LA
Grew up in La Puente. Parents bought in the 50’s, nice tract home, swimming pool, cul de sac, bunch of kids playing in the street. I drove down the other day to show a friend where I grew up, and she said “we aren’t going to get shot, are we?” It was that scary…
La Puente is on my list as one of the rundown pits of LA. If you go east on valley blvd off the 605 fwy thru La puente/city of industry it isn’t a pleasant drive. Your experience must be that of plenty of other folks who grew up in formerly middle class tidy neighborhoods all over LA which have declined, or aged,and have become slummy exurbs abounding in rented homes packed with illegals,turned into r-3 apt zones,or pockmarked with weedy ragged neglected sf properties. This has been occurring in such areas as East Torrance,East SFV,Whittier,Long Beach,Gardena,Carson,Van Nuys,ect.
Even such really crapped out areas as Compton, Lynwood, S Gate, Wilmington, Panorama City, Inglewood, S Whittier, Norwalk, Buena Park, East LA, Echo Park, Lincoln Hts, Bell Gardens, Lawndale, and yes, La Puente, were 30-50 yrs ago tidy middle class All-American communities till the middle classes fled to the outer exurbs, leaving only the aged, lower working classes, and incoming immigrants in these degenerated inner LA burbs.
Not sure about Baghdad, but Oakland, where we live, competes on a regular basis for the honor of being the most crime-ridden city in California. Our main competitors are Richmond and Compton.
We rent a nice apartment in a nicer part of Oakland and we still hear gunshots every so often. The first time we heard them, we didn’t know what the sound was, but a friend, who’d spent many years working in Kosovo, assured us it was gunfire. Now, when we hear them, we just turn over and go back to sleep. (911 just puts you on hold forever and, besides, the town has invested in this new technology that is supposed to pinpoint the location of gunshots!)
Time to move, but we can’t really afford to do so till the husband finishes law school.
I dropped my brother off at the Oakland bus station in 1990 in broad daylight. God was that a frightening experience. Oakland was the first place that I ever saw bars on the windows of homes. Sadly, that was not a fad.
“Oakland was the first place that I ever saw bars on the windows of homes.”
Clearly, you’ve never been to Miami, or even parts of Tampa. Ybor City has those lovely (ahem) iron bars behind the charming bougainvillea.
Freakiest thing I ever saw was beautiful homes in suburban Johannesburg with walls around them topped with razor wire.
The beautiful corner of San Pablo and Castro …….
Really nothing to fear here, except the once a decade homicide. Hell, a freeway drops there once a decade beating that number. You can throw a rock (okay, a really long throw) and hit the Claremont Country Club from the bus station.
That’s …… The Claremont Country Club.
But you’re right …… dropped my brother from New Jersey off there years ago, and fled like a gazelle under attack……and I lived there! I’m sure, like NY, it’s kind of a “fun scary”.
On a side note,
Jerry Brown fell into a great opportunity in Oakland with the revitalization of the downtown. Expansion and real estate values soar, while you’re at the helm. While taking nothing away from Brown’s input and work (serious here….), ultimately a guy at the right place at the right time……
hey, …..Rudy Giuliani !?
I remember going to a concert at the Oakland Auditorium. We got off BART and walked along Lake Merritt since we were early. There was a guy with a handgun just popping off shots into the water. I backed away, then ran to an AC Transit bus stopped at a light, to tell the driver. He looked at me as if to say, So? and said he didn’t have a radio. Niiiiiice.
Oakland was the first place that I ever saw bars on the windows of homes
In Vancouver, BC, Canada, which is one of most expensive cities in North America, even houses in good neighborhoods have bars on the windows.
That’s not Canada, just Vancouver. It’s different there.
Freakiest thing I ever saw was beautiful homes in suburban Johannesburg with walls around them topped with razor wire.
Electrocution wires and/or spikes are also very common on the tops of walls in South Africa.
Bars on the windows are not that uncommon in California - offhand I would guess more houses in Los Angeles have them than don’t.
For $550K, a buyer would be in some of the better towns in a lot of the states in the US. But in Calif., you get some of the worst areas or the exburb areas.
2007-05-15 19:35:06
Here are some listings In LA county, in Inglewood zip 90304 lennox, a particularly bad run-down district of LA.
No part of Oakland can be worse than this hood.
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 SCentral 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. Badly deteriorated slum area with evidence of flippers/sellers/agents patching up houses everywhere and quickly marketing them in order to obtain obscene price markups on 2/1 800 sq ft plain shoebox claps of $400,000 and up. This is occurring all over the inner LA crapped out zones,and the owners in almost every case using the cheapest illegal alien contractors to do quick fixes.
Whis is there a domain for 4900lennoxblvd.com ? I never seen a house for sale have its own domain. (subdomain perhaps)
lol, that house could not be more lined up with the approach to runway 25 left at LAX and it’s only about 1/2 mile from the airport.
Think of the fun of counting the rivits on the undersides of planes as the landing gear scrapes your roof and the jet exaust floats gently down on your head. Of course when the prevailing winds blow the other way the jets take off over your house and rattle your fillings loose. However picking up friends from the airport would be a breeze.
inglewood and watts must be the absolute worse city in Southern California to be in. black people are scared to drive through watts.
LOL that is so on the money.
Another thing about your example property is that I remeber that at one point you had to beg someone to pay 60k for a house like that. What’s so crazy is the fact that when they were asking 60k for them the area and areas like them were a lot nicer too live in. L.A. surely has it backwards.
“Whis is there a domain for 4900lennoxblvd.com ? I never seen a house for sale have its own domain. (subdomain perhaps”
It was posted right on that wire fence you see in that picture, at least on the day i drove by. Strange to have that domain for that tiny stucco in such a crapped out hood. What you don’t see in that pic is that on the day i drove by hundreds of kids and teens just out of school(virtually all of them offspring of illegals) were swarmimg past that house which is on a corner lot. That’s why they have that fencing.
The sellers may have put up that web domain because this teeny 2/1 shoebox was probably dirt cheap if purchased pre-2000 and sellers are probably looking at margin of $200,000-$300,000 profit if this POS sells for at least $400,000.
“Another thing about your example property is that I remeber that at one point you had to beg someone to pay 60k for a house like that. What’s so crazy is the fact that when they were asking 60k for them the area and areas like them were a lot nicer too live in. L.A. surely has it backwards”
Ha Ha Ha! Get this! I once drove thru zip 90011 near corner of Jefferson and central ave. In case anyone is courious, this section of SCental LA is indescribably bad, with trash,bedding, broken furniture, and even an occasional dead dog strewn all over the streets and alleyways. Anyway, even in this nasty pit zone i saw tons of for sale properties, 2/1’s, oversized 4000 sq ft monstrosities, Weedy crackshacks, adobe duplexes, section 8 apts,ect. I bet not one property was listed for less that $450,000, which was BTW the median sales price in this slimezone per march datquick.
Comment by peter m
2007-05-16 06:32:27
http://www.zillow.com/HomeDetails.htm?zprop=20345459
Here is another Lennox beauty, on corner of Prairie and 105th. Added bonus: automatic $60,000-$70,000 step up in valuations every 2-3 months:
Note:Likely fraud here, looks like sellers selling to family members. straw buyers,ect. Pull out that equity,pay nothing on mort for 1 yr, strip house to a carcass,get out ahead of the sheriffs, and flee to Mexico with the pulled out equity, and buy that Mexican ranch at 1/7th in American dollars and retire like a king in Michoacan.
“which he considers a starter neighborhood, with home prices from $400,000 to $550,000.”
When a good history of this debacle is written, I hope the author will chronicle the approximate time when 10-15 x a two-earner low-wage income became the accepted price of a starter home. Dear god, this will be an extremely painful correction for many people.
Got bread lines?
Every now and then something in these comments just kicks you in the head. This was one of them. The idea that low-income people are out buying 400,000 to 550,000 dollar homes is really staggering. That these are tiny 2 bedroom, 1 bath homes (and probably 50+ years old) just makes it more incredible.
Most had parents/family members take out 2nds to get them a down payment. Meaning the newly purchased home is not only at risk, but the parents’/family member’s is as well.
“The idea that low-income people are out buying 400,000 to 550,000 dollar homes is really staggering.”
No, they’re not buying anymore. They were buying in the old days of ez-qual, no-doc, neg-am and all the other easy money schemes that uncle Ben says he’s going to put an end to.
Now these starters may have to find 10% laying around.
amen
I let out a gasp reading that quote. Starter homes for low income buyers at over $400k !!!!!
This is why I said a few weeks ago that CA would fall a lot harder and faster than AZ (to much disagreement here). Both are crazy but CA is crazy by hundreds of thousands of dollars more than AZ.
50% chop on starter homes in AZ = $100K
50% chop in CA = $250K
As far as I know the wages at Walmart or Burger King in Fresno are the same as the wages in Queen Creek.
What’s the comparison of wages when you compare say, strawberry pickers and melon pickers? I just ask to see whose better equipped to finance half a million or more.
“That explains why one lender who foreclosed on property in Lathrop’s Mossdale Landing listed the home built in 2005 that sold over a year ago for $620,000 for $377,950 even though it passes inspections with flying colors and is in excellent shape.”
Not so bad the lender got out with a 40% haircut. And now we have a new appraisal number. I would hate to be the bag holder at $377.9K , (Stockton’s median house in 1994 was under $132,000 and historical houses could be bought in 1998 $132,500.) because it can fall another 50%.
Aurum est potestas
377K is still a lot of friggin money.
It is for that area, about 60 miles from San Francisco. It is insane anyone paided $620K for a cowtown with few jobs.
That’s the big story. Not that someone is foolish to pay 377k now, but that the 2005 great investment “buy-in price” was 620k.
I would really hate to be the bag holder at 620k (lender).
Which assumes it wasn’t a pay-option loan, now at about 650k (it is).
Which of course assumes this wasn’t the ever popular mortgage fraud scam (it is).
I’m sorry, prices haven’t fallen this far this fast, even in Lathrop.
But will the appraiser use an REO sale price for an appraisal?
There is a lot of debate over this issue. I used to be a review appraiser for a mortgage company. My experience is that in a declining market where more than 10% of the recorded home sales are REO’s, an appraiser would be strung up at the nearest tree if he didn’t include, at a minimum, a discussion of the possible effects of lower priced sales in any given market or neighborhood.
The biggest obstacle to accurately “reflecting the market value” is in the definition of what an “arms length” transaction is. I for one think that if there is sufficient REO activity, that IS the market talking and an appraiser should be compelled to use that data. (IMO)
If a neighborhood has one distressed sale ,this doesn’t make a market, just as one high sale doesn’t make a market .But if you have many foreclosures in one neighborhood that will define the market . It gets to the point that neighborhoods that have many foreclosures go downhill fast in price and condition .
It just like when you have a builder reducing prices it will bring the market down .
Housing Wizard–>If a neighborhood has one distressed sale ,this doesn’t make a market,
Well I will make it the MARKET………LOL
‘“Unlike the buyers being foreclosed on, the lenders will price the homes to move to reduce their losses. That explains why one lender who foreclosed on property in Lathrop’s Mossdale Landing listed the home built in 2005 that sold over a year ago for $620,000 for $377,950 even though it passes inspections with flying colors and is in excellent shape.”’
A 39% price cut? Now things are starting to get interesting!
The first step is a tall one
But it’s only the first step.
(descending ladder)
That’s one great leap downwards, for house-kind
Wonder if they are listing there to see if they get multiple offers. Maybe looking to bid it up. Maybe looking to sacrifice one home to test what the real value of all their REO’s are.
These other sellers should take lessons from the lenders who are more realistic about pricing.
Could they be more painfully obvious it’s a reserved auction?
“One local developer putting properties under the gavel is National Security Construction, which is offering seven luxury homes in Rancho Cucamonga. The auction is scheduled for June 16, with opening bids of up to 40 percent off the pre-auction price.”
aladinsane,
They could also just start low and use shill bidders to get the bids up…Not that a auction house would ever use shills…
Chris
Just a quick note on Rancho Cucamonga. it is, belive it or not, one of the better planned and organized communities of the IE, which I know is comparing apples to rotten tomatoes as the rest of the IE is pretty much the pits.
There are some really decent neighborhoods, and RC at least has some industrial/coomercial jobs infrastructures. Having sprung up in the early 80’s it is a bit older than most of the newly-sprung IE communities farther east and has had more time to fill out and come closer to critical mass.
Still, RC has been over-building in both housing and commercial units, especially toward the eastern/northern sections adjacent to the 15/210 fwys. The folks out in RC are as over-leveraged and indebted to the eyeballs as anyone in Scal. And it is surrounded by less=than desirable IE armpits such as Fontana, Upland, Ontario.
‘“Unlike the buyers being foreclosed on, the lenders will price the homes to move to reduce their losses. That explains why one lender who foreclosed on property in Lathrop’s Mossdale Landing listed the home built in 2005 that sold over a year ago for $620,000 for $377,950 even though it passes inspections with flying colors and is in excellent shape.”’
A 39% price cut? Now things are starting to get interesting!
Of course this will never make it into the “official” NAR stats.
Redfin fined $50,000, forced to alter blog
http://blog.seattlepi.nwsource.com/venture/archives/115501.asp
“The Northwest Multiple Listing Service has fined Redfin $50,000 and asked them to stop publishing a popular blog in which the online real estate brokerage posted reviews of Seattle area homes.
Redfin is appealing the fine, though it took steps this week to shut down the reviews on its “Sweet Digs” blog. With about 3,000 e-mail and online subscribers, the blog was written by 15 freelance writers who over the past five months posted reviews on about 1,000 homes in Seattle and San Francisco. The company says it plans to maintain the blog as a source of information on pricing trends and recently sold homes. ”
This is just another way for RE agents to surpress information from buyers and sellers.
I sure hope the DOJ wins its case against the NAR.
If the DOJ wins that case, I would not be too surprised to see venture capitalists begin funding anything and everything similar to Redfin… as they usually do, with the pack mentality of junior high schoolers.
But that just might be OK. We can only hope Redfin becomes as big an Internet household name as E-Bay, Yahoo! or Amazon.
Realistically, though, perhaps it would only become as well known as the online discount brokers - which would certainly put the “six percenters” under serious pressure!
I wouldn’t hold my breath waiting for the Dept. of Justice to win anything, let alone from big campaign contributors like NAR. The DOJ is now totally a political entity, used at the discretion of current admin.
“The DOJ is now totally a political entity, used at the discretion of current admin.”
You got it, spike, just like in some Latin American countries.
Really? Why don’t you ask Joe Nacchio, Bernie Ebbers, Martha Stewart and Ken Lay (via Ouiji board).
Also ask Tyco’s Kozlowski. Athough I think he went down on a state prosecution. However I bet think they all gave to the RNC.
It’s not as easy as conspiracy nutjobs like to pretend but in prosecutors will bring a case against anybody they feel they convict.
I know, it is much easier to think the government is coming after your kugerands…
What about the fact that real estate agents from the MLS/realtors publish articles and opinions of value or market trends all the time . The MLS realtors publish articles on opinions on great places to invest in and almost any darn upbeat opinion you can imagine on real estate subjects .
check out this report for Flip this House
Flip this House is a big PHONY
http://www.myfoxatlanta.com/myfox/pages/Home/Detail?contentId=3200981&version=2&locale=EN-US&layoutCode=VSTY&pageId=1.1.1
Please don’t take this sarcastic or insultingly.
You probably would have gotten more comments had we not already discussed it each of the last two days.
“Realtor Leif Jenssen recently cut $20,000 off the price of a two-bedroom, one-bath home he’s selling” [for $475K]. B F D !
He needs to add another zero to that $20,000.
“One local developer putting properties under the gavel is National Security Construction, which is offering seven luxury homes in Rancho Cucamonga. The auction is scheduled for June 16, with opening bids of up to 40 percent off the pre-auction price.”
“‘We want to let the buyers decide a realistic price by putting them in the driver’s seat and letting them go after the kind of bargain they want,’ said Shone Wang, president of National Security Construction.”
Ya hear that, Rancho Cucamonga homeowners? It’s the sound of a developer sneaking up behind you wearing a two-foot strap-on. I’m not gonna lie to you, it’s going to hurt like hell!
Everybody Wang Chung Shone Wang tonight
LOL. No lube, and they won’t kissed either. Ouch. Where’s auger-inn? This is a perfect set up for him.
“The auction is scheduled for June 16, with opening bids of up to 40 percent off the pre-auction price.”
This is a bogus pricing - the operative words are “up to”. In reality it may very well be 10% net. Not worth the gas to drive.
Two shill bidders in the crowd should drive up the price nicely. Beer Me, Rich
Your point about the “up to” reminds me of driving into a motel in Amarillo a couple of weeks ago, where the hwy advertising had been (I think) $27.95 and up. Yes, they had a single. $29.95 plus tax is $34.95 (I think). I said, what happened to the $27.95 on the billboards? The clerk kept pointing out that the signs said “and up”. I said swell, you might as well advertise it as $14 “and up”. I got mad and said I wouldn’t stay there. The clerk adjusted the price to $27.95 plus tax. I stayed. Too bad we can’t be that bold in our housing transactions. Or maybe we can … ?
I got mad and said I wouldn’t stay there. The clerk adjusted the price to $27.95 plus tax. I stayed.
Two dollars + tax and you got mad, I feel sorry for the poor clerk who waited on you. I would hate to see the poor guy who leaves one White Castle burger out of your bag by mistake.
The problem is that this type of deceit, intended or not, happens constantly day in and day out and eventually you just can’t take it anymore. Here in Springfield, MO Mediacom raised the fee from 45 cents to nearly $4 on a service most people didn’t even know they had signed up for (in home repair contract). Mediacom raised the fee with with NO notice…just stuck it onto the next bill. The local newspaper reported this deviousness on the front page. Then when people tried to cancel this “optional” service there was a $2 cancellation charge! Yeah, it’s only $2, or $4 or whatever but it seems like this stuff happens all the time.
LOL all I can think of is the Sex in the City episode where Charlette doesn’t want to be the up the butt girl and she askes what she should do…..
“relax” >: )
So who ended up being that girl?
No she didn’t. I remember that episode.
said Shone Wang, president of National Security Construction.”
Ya hear that, Rancho Cucamonga homeowners? It’s the sound of a developer sneaking up behind you wearing a two-foot strap-on.
Especially with the last name of Wang!
man, you guys, you’re killing me here. I’m wiping dinner off the computer fer chrissakes.
“Wilson said it is also unfair to use subprime loans as the whipping boy for the rash of foreclosures.”
“‘The idea that subprime loans are entirely behind all of this is a fallacy,’ Wilson said. ‘People let themselves get lulled into the idea they could afford more house than they could. They bit a lot more off than they could chew with escalating interest payments.’”
Sounds like somebody NEEDS subprime loans to continue being offered………ain’t gonna happen Mr. Wilson
In all fairness, he is right that this mess was not caused just by subprime loans. Subprime loans have been around for awhile, and can be used effectively with proper underwriting. The problem was the no-down, no-doc, no verification crap with teaser rates. Lenders gave money to anyone (subprime, Alt-A, and prime) with no worry of whether they actually had the capacity to repay the loans, and the FBs didn’t worry about it either (they figured they would just sell or refi - oops, no Plan B, so now they are defaulting).
Actually, I agree with this chump. Although I don’t see enough of his reasonings to know if it’s for the same reasons that we agree. For the last several months subprime has been the scapegoat used by many to downplay the gravity of the tsunami that lies before us. No doubt subprime played its part, but there so much more below the surface yet to be revealed. By isolating subprime as the only problem here, the spinners can point their fingers at a specific source and call the problem “contained”. The problem is they’re only going to fool people for so long. Subprime was the easy and obvious target to start with, but soon the other players will be identified.
The prblems are: (to name just a few)
Fraudulant cash-back-at-closing deals that inflated prices.
Appraisers that inflated values to make room in the loan for the fraudulant cash-back deals.
Realtors that knew there was mass fraud, but ignored it as inflated prices meant inflated comissions.
Leanders that knew there were fraudulent deals, inflating prices, but didn’t care.
Speculators that rushed in.
Lenders that gave loans to speculators.
Home improvement tv shows that didn’t check the facts of all the “flip” deals.
Lenders that continued to offer crazy credit, even after signs the market was topping.
Politicians that watched it all happen, and ignored it because higher prices means higher property taxes.
The American population that saw it happening (me included), but didn’t shout out loudly enough to make it stop.
More?
“The American population that saw it happening (me included), but didn’t shout out loudly enough to make it stop.”
Some of us tried, but they thought we were crazy.
Actually, these were once in a life time chance to get 100Ks from
the MBS buyers, and people/thugs/builders/realtors/bankers/lenders
were not stupid, they all jumped in.
Many are retiring in comfort.
Nice summary . You forgot to add that they handed out equity money on appraisals that exceeded 100% loan to value and these were liar loans with inflated appraisals just as much as the purchase money loans they made were .Sometimes these equity loans were made within a few month of the original purchase ,(you know let your property work for you ).
I think alot of people were saying things like ,”who has the money to buy these high price places “,but people never dreamed lenders were giving people loans they didn’t deserve .
To me those are the symptoms of bad monetary policy not the cause of the housing bubble. If you are getting negative real returns on your savings you are going to look for the commodity that you feel you stand the most chance of perserving your future purchasing power. This was deliberate Fed & PTB policy. We’ll give homes $500k free capital gains for married couples. Name another investment that gets that tax break. Why? It was an asset bubble that they encouraged to dazzle us while they steal our savings through inflation.
Correction. It was bad regulatory policy, not bad monetary policy.
In most sane places, there are regulations to prevent obvious sources of financial bubbles and fraud—especially ones which can wreck the entire economy.
But Greenspan seems happy to blow bubbles, and I’m very disappointed that Bernanke testified he agrees. I thought he might have been different.
Without the crack-hit euphoria of the housing bubble, people would have been paying attention to their lack of wage increases and their exploding realistic cost of living, as well as the exploding debt and exploding body parts of soldiers.
Most asset bubbles are the same way. Lots of groups think there’s lots of easy money to be made, and everybody plays along even though many know that eventually the party will end. Everybody thinks they’ll get a seat.
But there will always be individuals or groups that try to pin the problem on a specific thing, party, or event to suit their agenda.
“The American population that saw it happening (me included), but didn’t shout out loudly enough to make it stop.”
Oh spare me. Overall, the American population saw it happening and wanted it to go on and on. “Shout out loudly enough.” ROTFLMAO. Perhaps a minority like the people here. But not the populace overall. People overall were chanting “Go! Go! Go!”
For these type of asset bubbles to hit their peak, they must have access to the “patsy of last resort” for the truly goofy stage. The American population overall was just as culpable as any of these parties just as it was in the tech bubble.
“Stagnant and declining property values were blamed for California’s rise in frauds, according to Nick Larson, for the Mortgage Asset Research Institute. ‘Declining property values make it harder for fraudsters to cover their tracks and sell a house quickly,’ Larson said.”
While the second sentence is correct, the first sentence is not. It was rapidly increasing home values and non-existant loan underwriting guidelines that led to the fraud. The stagnant and declining loan values just make the fraud easier to spot. While the prices were rising astronomically, a lot of fraud was not seen because the increasing prices allowed the lenders to avoid losses.
What kind of logic can you expect from people who blame the end of the perpetual housing boom on “bad press”?
‘Mortgage Asset Research Institute’??!!
This reminds me of those ridiculous tv commercials for some moisturizer developed by the ‘Ponds Institute’. People in white coats with clipboardss, translucent sliding doors, you name it.
I wonder if Nick Larson wears a white coat. What a jokester.
I was hoping their name was “Mortgage Asset Research Syndicate”
from MARS, of course.
No such luck.
There parent company is Mortgage Originating Research On National Statstics
“National Security Construction”
WTF?
Well, looks like all of the illegals are on the fast track to legal citizenship. By rewarding their criminal acts, our government has just thrown fuel on the fire. We’re sure to see millions more scrambling our way. Maybe all of the overdevelopment was the grand plan after all. These mexicans seem to not mind living 2 or 3 families to a home, so perhaps they’ll be more than happy to all pitch in and pay the overinflated prices. After all, 15 low incomes will afford CA prices. Welcome to the new USA. Isn’t it grand?
Is ther room for all of their cars or will they just simply park on any street? Any driveways being blocked. To bad. Homeowner rights no longer apply as this will enter fear with the priority rights of all your “new” neighbors and everyone will learn what it means to be good neighbors. What a wonderful time it will be living in the city.
In the middle class neighborhood I live in, there are already two “multi-family” households. One of them sports no less than 5 vehicles at all times. I would guess there are at least 15 people living there (including kids). They must be on top of each other since the house is 1700 square feet.
every time i see so many cars i think wow those people must be extremely poor to not be able to park in their garage. thankfully where i live near LA you are allowed to convert your garage into a room. now why are people allowed to use public streets to park their cars 24 hours a day forever?
We’re not very far from taco-carts on every corner.
over the next 10 years the conservative (Republican) political philosophy will shift to LOWERING the requirements for citizenship….part of a strateg to overcome the overseas exportation of jobs that are suited for US immigrants…..
Got tacos?
what’s wrong with tacos?
Buh bye middle class. This is the just another nail in the coffin for the middle class. Amnesty for illegals, more taxes, a BS war, inflation running at 8% plus, and fraudsters and criminals running most of the Fortune 500 companies in this country. But most people think everything is peechy keen. Oh boy…
It’s a pretty good gig, to be able to enter a country illegally, collect welfare benefits, receive free health care, and pay little to no taxes while working under the table for cash. Meanwhile, the honest hard working CITIZENS of this country, many with no health benefits, shoulder the enormous tax burden and inflated costs associated with these lawbreakers and their ways of life. It looks like the lesser of two evils is again the repubs. If this amnesty bill goes through, the dems are done for next election. They forgot who buttered their bread.
Yes, BanteringBear. That is exactly what the Indians said as your relatives invaded their land at Plymouth Rock or wherever else. We are all guilty somehow in this Melting Pot of ours, so get off your soapbox. Or move to Antarctica.
What a joke, JimmyB. Are you really serious?
We are all guilty somehow in this Melting Pot of ours, so get off your soapbox
OK jimmyboy, send BB to antarctica, give him a few million $ and let him have exclusive rights to gaming, since you are so full of guilt. I have the same frustrations BB has, watching this country go third world.
You’re the one needs to move to Antartica. Every group of people in every country on this planet just about came from somewhere else at some time. Those who call themselves “English” are a mix of Celts, Germans and Italians. Old Queen Liz is a German (Battenburg, changed to Mountbatten) Take a good long look at some of the so-called “indigenous” people of Latin America and tell me they didn’t come from Asia somewhere back in the mists of time. Difference is, we actually put together a country based on a rule of law here and worked to right some of the past wrongs, etc. The illegals coming here have no such notion about a rule of law. Law of the jungle and I’m preparing for it.
I agree completely with Bantering Bear and palmetto. I Did wage a good strong fight against illegal immigration back in 2003, sending hundreds od E-mails, letters, faxes to every public pundit,pinheaded gov’t official, senators.ect. Was in the forefront of the campaine against the CA drivers license for illegals bill, which brought down then governer Gray Davis and installed Arnold S. Think I am ready to wage another fight against this ammnesty, though it will detract from time spent on Ben’s Blog.
Note : back in pre-911. even back before yr 2000, before anyone gave a rats ass about this illegal alien problem, I was a regular listener to George Putman on AM talk radio 870, who was the lone wolf back then railing against the illegal alien problem, waaaay before John And Ken or anyone else jumped on the band wagon.
It’s true that everyone came from somewhere else. Usually they encroached on the indigenous, and displaced them by sheer force (arms, number, might). Read Caesar on the various Gallic tribes, as well as the Germanic migrations.
The difference is that the winning nations beat out the losers.
Here, there is no question of winning, losing, or resisting. Instead, the government has just rolled over on its citizens.
This is a bipartisan ‘compromise.’ I now see that anything that comes out of Washington that is ‘bipartisan’ is simply a closing of ranks by the PTB against the American citizen.
Let’s see, when was the last time we had a ‘bipartisan’ ‘compromise’ out of DC? Oh yes, it was the bankruptcy ‘reform’ act.
Oh boy, Bantering, I was on the horn today to my Senators and Representatives. I assure you the exchange was not pretty, I laid it on the line. I’ll go you one better, if this amnesty goes through, is isn’t the dems who are done, it’s the country, because repubs have pushed just as much for this, especially the wastes of flesh Martinez, Graham and Hagel. Effectively, they are saying, if you broke the law here, we’re rewarding you. You can now live and work legally in the US. It completely demeans US citizenship and the rule of law. Actually, kiss the USofA goodbye, because it’s over. The US is nothing but an idea based on the rule of law. Congress has decided to hand over the country to enemy interests. That’s treason, in my book.
BTW, I am attending a local symposium this weekend given by a former law enforcement official on how to prepare for what is coming and avoid becoming a victim. I suggest everyone do so in their own communities and most especially the ladies.
Palmettto, please let me know how I can get the info as well. Thanks.
Palmetto, et. al. you are all right on the mark. Our leadership over the last 20 years has sold our country out from under us and is destroying the middle class. The elite rich are getting richer as it benefits them to squash the middle class out of existance and replace them with the lowest wage earners or simply outsource to the lowest bidder. On its current path, what will the U.S. look like in 50 years? Easy to answer, just look South. We are letting our selves be invaded by our “neighbors” to the South and are allowing our culture and values to be erroded. Globalization isn’t supposed to mean we erode our status in the world downward to that of 2nd and 3rd world nations. Soon we will be a bonifide second world country and soon L.A., Miami, etc. will be absolutely no different than Mexico city, Panama City, etc. The changes will then turn North and what used to be the know as the U.S. (from a cultural standpoint) will only exist in a few pockets, principally the Northern States and parts of the Mid-West).The writing is on the wall and only those that purposely try not to see the obvious or are profiting by these changes wil not admit it.
time for a political action committee? middleclass.org?
What cheeses me off is that my wife and I have been working here legally for six years (on H1B visas), paying huge amounts of taxes, and we haven’t been able to get green cards (it’s tough when your division is repeatedly sold). Seriously, we should just let the visas expire, work illegally and get one of the new Z permits - the immigration system here is totally messed up.
Steve,
why do you even want to live here? As an american, I can’t believe the deterioration in this country…at every level. With much worse to come. Where are you from, and why wouldn’t you be happy to get out of here?
Spike66,
We’re Canadian, and no, we don’t want to stay here forever - we just want to leave on our own terms and have the freedom to move to different jobs if we want to without six months of immigration hassle. We’ve found Americans to be a great group of people individually - it’s just the collective government that seems messed up!
The left hand doesn’t know what the right hand is doing, and vice versa…
‘In fact, instead of growing, student numbers have actually declined in recent years, and are projected to continue to do so through the rest of the decade, forcing school officials to consider closing down some sparsely populated campuses even as new ones open their doors.’
Aladdin Sane you know why the construction continues. If the city said “everything is fine, no new buildings needed, no new employees needed”, The politicians would not receive campaign contributions. Politicians create unneeded wants (schools, roads, county offices) in the US to insure they receive campaign contributions and can stay in office.
On average a paved road must be repaved every 7 yrs. For 1/3 more than paving a road can be made to last for 40 yrs. How many rds are made to last 40 yrs? The Iter lasted 2000 yrs.
Hoz:
are you sure it’s not “A Lad Insane” as opposed to “Aladdin Sane” :O
I’m on the verge of abandoning my old moniker, so here’s what it was all about…
Aladinsane = easy answer, David Bowie fan
ALADInsane= Huge Adlai E. Stevenson, Jr. fan, analgram
It was a right brain, left brain thing…
My new nom de blog:
EmperorNorton_II
Have a read about my namesake:
http://en.wikipedia.org/wiki/Joshua_A._Norton
HIC,
How is the BWCA fire? Hopefully under control.
Aladdin Sane was a superb album, “Jean Genie” etc.
from David Bowie’s Aladdin Sane song.
“Watching him dash away, swinging an old bouquet - dead roses”
A fitting epitaph for housing.
“‘We are in for some unpleasant market adjustments, including lower prices,’ said John Karevoll, a DataQuick analyst. ‘Over the next six to nine months, there will most likely be a drop of about 8 percent from San Bernardino County’s peak price last November,’ Karevoll said.”
But just yesterday we heard from an idiot that San Bernardino’s housing market is recession-proof.
And, while I think that Karevoll is understating the upcoming declines, I have to say that this is about the most bearish statement I’ve heard from DQ, which usually tries to put a positive spin on the numbers.
Karevoll was the analyst that couldn’t see a trend in the foreclosure numbers a couple of months ago…..
‘There has been a big drop in transactions and cautious buyers and speculators are out of the market.’
If they are “out of the market,” then are they really “buyers” (cautious or not)?
“Long-time Manteca real estate broker Bev Marlow said she wasn’t surprised but was ‘dismayed’ at the foreclosures. ‘A lot of people put their heads into the sand,’ she said.”
Translation:
Long-Time Lard real estate broker Bev Marlow…
Hey Bev, can I get some Manteca here in the pan for the frijoles I’m about to refry…Gracias…
‘We are in for some unpleasant market adjustments, including lower prices,’
So, exactly why are lower prices an unpleasant market adjustment? Every chump is entitled to their opinion, I suppose. But, the whole housing price run-up (indeed, the whole economy the last six years) centered on bolstering housing well above any fundamental value. The next several years will bring prices back down to a realistic, affordable, and fundamental level.
It will be very unpleasant for realtors and builders, who will see their industries suffer when demand dries up. But it would be in the interest of both groups to have a quick adjustment to affordable prices, as the market would then resume a normal level of activity reflective of fundamental demand for homes as a dwelling. I am pretty sure our Congressmen will manage to intervene with the natural correction process and drag out the pain if given a chance, though.
Lotsa luck leaving last year’s Lutefisk, Leif…
“Bearing out that thesis, Realtor Leif Jenssen recently cut $20,000 off the price of a 2-bedroom, 1-bathroom home he’s selling in Oakland’s Maxwell Park, which he considers a starter neighborhood, with home prices from $400,000 to $550,000.”
Just notified my political party HQ, congressmen and senators that I don’t want any taxpayer bailout and I don’t want any form of Amnesty in ANY shape, form or name.
To HELL with ALL the Riff Raff in Washington DC. They’ll NEVER get another Dime or Vote from me!
I’ve been spreading the word also. No amnesty. No lender bailout. No FHA reform.
And no amnesty for illegal aliens either.
Funny!!!!
Amen!
I have to say, I really am having a hard time with this immigration thing.
Almost every single person I talk to is uniformly AGAINST giving amnesty to illegal people.
And yet somehow it’s at the top of things to do. (give them amnesty)
Clearly, our country is falling into a Banana Republic. they don’t even TRY to ask what US Citizens want. instead it is what does:
1) Agribusiness want
2) big corp want
3) Mexican Elite want
4) Illegal non-citizens want.
I’m fine increasing LEGAL Mexican Immigration. If we want more Mexicans, fine… let us vote on letting more in, and then take only LEGAL mexican immigrants.
But I’m tired of the every-other-decade Amnesty program.
And it is so insulting to hear “This isn’t amnesty”. well what the hell is it then? Is letting illegal people have citizenship some form of “punishment”?
I wrote my congresspeople. Like it matters.
Perhaps I should write the Mexican congress… they’d probably be more responsive.
We need to bring our troops home…we need them to help us establish democracy in America.
Didn’t Jefferson write in the DoI that people had the right to overthrow the gobmint when it was no longer working for said people. Therefore, I am all for the military kicking out the 535+Pres+supreme court+hundreds of thousands of leeching, overbloated, uselees, power-hungry, shiate-heads working in DC. I realize that could be construed as traitor talk, but I’m jut sayin’, ya know.
Let’s focus and not get Ben shut down. Although I do agree, but still…
A little treason is good occasionally….maybe the troops are pointed in the wrong direction.
We share the same sentiments HIC.
Politicians want amnesty to gain votes and businesses want it to have low wage workers. I think both will live to regret these ideas.
When 10’s of thousands of people, who broke the law ,are bold enought to march in the streets “demanding” amnesty does anyone really think they will be satisfied with low wages and few if any benefits once they have legal status?
US workers have timidly accepted decreased wages and benifits as well as jobs being exported to China and other countries.
Once they have legal status I expect to see much more violence. I think the marches, protest and riots they will institgate will shock this nation.
Wait until their employers want to reduce their wages or benefits or export their jobs. I think they will riot and bring the company down.
I think if amnesty goes through this is going to get ugly
When you reward bad behavior you get more bad behavior.
I’ve spent the whole day today on the phone calling Feinstein’s and Boxer’s offices, all around CA and in Washington. Does no good, they hate “us” who hold these views and don’t want to hear what we have to say.
The biggest joke was this fool in SF who answers the phone for Feinstein, who had the nerve to tell me the amnesty will bring a lot of “opportunity”. For whom, I asked him, for me to pay thousands more in taxes?
Nice combination we have here: power-hungry, statist Democrats, and poor, illiterate Mexicans who want free stuff from the taxslaves we call the middle class…and absolutely no one representing us.
1) Agribusiness want
2) big corp want
3) Mexican Elite want
4) Illegal non-citizens want.
Clouseau, you are right on. Personally, I have been struggling with this for a long time. I want a humane solution, but I refuse to be dragged by the nose by Mr. Tyson pulling at my heart strings. There is a strong convergence of interests between the lowest paid workers and the richest people in this country and both of them couldn’t care less about the middle class, and especially the lower middle class which includes many American born minorities. Republicans have managed to coat their message in fake compassion which I don’t buy for a nanosecond (I’m sure they won’t be happy to pay legal wages and benefits to the second generation born to the illegals who know allow them to become even richer than they already are). And liberals are totally messed up and cannot agree on a clear message because this conflict could divide their side even more than the war in Irak. Just yesterday I was listening to a report on NPR about how some unions oppose the amnesty in no uncertain terms while others such as the unions in the service sector are all for it because they see their membership would soar.
The whole thing is a mess, and I think it is going to become THE issue in the next few years, although I have not heard ONE politician give me a solution that I can live with. It’s all so messed up.
The Mexican government will be more responsive about illegal immigration coming in from the southern borders. They happen to deal extremely harshly with Guatemalans & Salvadorans sneaking over to take Mexican jobs away.
It’s really quite simple. Just stop getting your car washed, getting take-out, having your lawn mowed and make sure any work you hire out on your house is with a contractor that can show he/she is not hiring any illegals. Our (so-cal) local economy depends on these low paid workers, legal or not. Once they become legal - via any means - their pay will rise (no fear of deportation) and the effect will be fealt most by the middle class. The elite can afford to pay any amount for serices; its you and I who will have to pay 20 bucks an hour for labor rather than 5-6.
“‘If you search six blocks in either direction from the house, there are 80 houses for sale,’ he said. ‘The one right next door, which is a bit smaller, came on the market at $449,000. We were at $495,000 so (we reduced the price) to $475,000.’”
this is one of the reasons houses sit so long - realtors and homedebtors price their homes based on current wishing prices and not on what will actually sell their house. every person works off the inertia of others without putting any original thought to the process. i’m glad to see the bay area finally getting some “love” related to foreclosures, unaffordability, etc…i know prices will come down, but may move in the next couple years to a market farther along the correction curve.
“this is one of the reasons houses sit so long ”
That is part of the problem. The big crash in April was due to tightening lending. So, now it is a two front war. People asking too much, and too few people willing and/or able to buy.
the Emperor’s new currency…
Please, have some.
http://en.wikipedia.org/wiki/Image:Nort10d.jpg
Sort of sincerely,
Emperor Norton II, of the Inland Empire
Emperor Norton the First would be a refreshing change, aladinsane, as to the leadership in the economic and political spheres we have had in both parties.
Anyone for benevolent monarch with a gallows at the ready?
/sarcasm off
I’ll do my Emp-ness to obey your wishes…
Emperor Norton II, of the Inland Empire
If the bottom 20 to 30 % represent 700,000 dollar homes the middle is about to get a tummy tuck.
These CA threads are too funny, and so true. I lived in both the LA area and the Bay area for many years. The slums that have been named were scary 10 years ago. I picture they are much worse now. I had one of my friends (caucasian male) telling me that he wound up in a Compton neighborhood at night once and a police officer escorted him out to a freeway. He said that he was told to not even stop at red lights. $500K for these shitboxes is unreal, and the ‘residents’ can’t afford that. For half of that price, I now have a nice large house near mountains, lots of fun activities I couldn’t do/afford in CA, safe, better schools, 2700 sq ft in a metropolis that is growing and in a much better fiscal shape as far as government goes than anything I remember in CA. I remember being scared in some Oakland and some inner city LA suburbs I mistakenly drove into. I am just glad to be out of there and the pain that I believe is coming to that entire state. Arnold has a big job, and won’t be able to deliver.
I wouldn’t be so smug if I were you…whatever is happening to CA will eventually reach the rest of the country, rampant illegal immigration being just one example.
“The Bay Area numbers come with some caveats, however. The median price is skewed by strong activity at the upper end. ‘The volume (of sales) being low tells you that we’ve lost the bottom 20 to 30 percent of the market that can’t qualify for mortgages,’ said economist Ken Rosen, at UC Berkeley.”
Look at the bright side: At least the median price went up!
Hey, our median’s still going up too!
http://www.azstarnet.com/allheadlines/183422
I guess, given what the ariticlae stated, that Median would rise if sales at the upper-end of the scale were skewing the number.
Ownership Society….how Orwellian.
As amnesty looms, CA citizens and taxpayers are going to be even more seriously screwed. More welfare, more entitlements, more taxpayer-funded schemes for the “disadvantaged”. CA’s future is Argentina-the super-wealthy and a huge population of the uneducated and unskilled.
“Deepening the nation’s diversity, the minority population of the United States reached 100.7 million in 2006, led by California as home to the largest numbers of the two fastest-growing racial groups, Latinos and Asians, the Census Bureau reported today…
In California, minority voters have shown “systematic differences” from whites in their electoral choices, with more support for more generous immigration policies, taxation and public investment in schools, according to Dowell Myers, a USC professor of urban planning and demographics…
http://www.latimes.com/news/local/la-me-census17may17,0,2612217.story?coll=la-home-center
New-car registration drops 7 percent
New-vehicle registration dropped 7 percent during the first quarter, compared to the same three-month period last year, according to the California Motor Car Dealers Association.
Record fuel prices and a slumping housing market likely contributed to some of the first-quarter sales decline, especially as both affect consumer confidence. Increased consumer debt levels and negative savings rates also played a role, according to the Sacramento-based organization.
‘There has been a big drop in transactions and cautious buyers and speculators are out of the market.’
It’s different here in San Diego. I see substantial evidence that speculators are trying to cash out, but a dearth of buyers are willing to catch their falling knives.
I produce a snapshot below using April 2007 SFR sales from Sandicor:
New = Total value of new listings by list price
Sold = Total value of sales
Community New Sold New/Sold
————- ——– ——- ——
Chula Vista $255m $52m 4.9
Carlsbad $176m $84m 2.1
El Cajon $125m $43m 2.9
Encinitas $108m $45m 2.4
Escondido $174m $31m 5.6
La Jolla $178m $72m 2.5
Oceanside $148m $44m 3.4
Rancho Santa Fe $237m $62m 3.8
Rancho Bernardo $182m $67m 2.7
Carmel Valley $106m $51m 2.1
Other $1,697m $537m 3.2
TOTAL $3,387m $1,088m 3.1
Escondido (5.6 new / sold) and Chula Vista (4.9 new / sold) definitely had extraordinarily high ratios of new listings to sales, but Rancho Santa Fe (3.8 new / sold) also has a much higher ratio of new listing value to sales than the overall ratio (3.1). I guess people who buy homes valued above $2m don’t like to catch falling knives?
Dumb question here, but since I live in the Bay Area and MAY buy when the market drops (I like renting) — does this mean that Zillow is going to escalate prices even though the information is skewed?
“Stagnant and declining property values were blamed for California’s rise in frauds, according to Nick Larson, for the Mortgage Asset Research Institute. ‘Declining property values make it harder for fraudsters to cover their tracks and sell a house quickly,’ Larson said.”
Er, if declining property values make it easier to detect fraud, then how is it that declining property values caused fraud? This is like saying that turning on the kitchen lights caused the cockroaches that are now scurrying about on the floor to spontaneously materialize out of thin air.
My personal view: The fraud have had a bit more to do with a lending industry running wild during a period of lax regulation, coupled with ever-rising prices which made it quite easy to hide fraudulent transactions behind the next couple of years’ worth of home equity gains.
Stucco-
My friend if you thought the fraud going up and at the peak was bad. Man oh man wait untill the market gets tough. Friend mark my words you’ve seen nothing yet…
Yep , I agree with what you say mrincomestream so it’s even more important that lenders do their duty .
Well written article regarding the extent of the inevitable amount of foreclosures. We are just getting started…..
http://www.mises.org/story/2555
Well written? In what way? The second para of the article makes this factually incorrect claim (and even provides the link to prove it’s wrong):
“The National Association of Realtors estimated optimistically (have you ever known a pessimistic realtor?) that housing prices will fall 16 percent in 2007 — their first overall decline in 40 years. ”
Also talks about a coming 40% failure rate of Alt A though no link is provided for that one.
Agree that he seems to have pulled the 16% figure out of his ass - the link he provides says the NAR predicts a 0.7% decline.
Also he says that Kenneth Heebner predicts a 20% decline this year, while the link says 20% total.
The 40% alt-A failure is actually predicted by Heebner at the link they provide.
A bit of research indicates that mises.org is some sort of libertarian “think crank”.
This just in: Apparently it’s NOT “different here.” Check out the months of inventory.
Portland-area home prices down slightly
Posted by The Oregonian May 17, 2007 16:59PM
Categories: Breaking News
A new report today shows that the Portland-area median home price slid to $285,000 in April, down slightly from March’s median of $286,200.
April’s median was 5.8 percent higher than April 2006, a moderate increase compared with the region’s recent history but still far greater of an increase than the national housing market has experienced. The numbers were released this morning by the Regional Multiple Listing Service.
Inventory of homes on the market reached 4.4 months supply, far greater than the 2.4 months in April 2006.
See The Oregonian’s business section Friday for more information.
Yep, Oregon is farther back in the roller coaster, as someone here said, but that doesn’t mean we won’t follow the rest of the country down.
Here’s an example in my town of Ashland:
MLS# 2601671
September of 2006: $759,000
November of 2006: $749,000
March 2007: $699,000
Today: $639,000
http://www.johnlscott.com/propertydetail.aspx?IS=1&ListingID=26651957
can’t be -it’s one of the HOT cities
$759…in Oregon? Good God….
That’s what WE say. The wages/salaries sure as hell don’t support it. Those prices rely on incoming California equity.
The Next Home Equity Surge?
“Just when you thought consumer home equity induced spending was dead due to a slowing market and tightened credit standards, a new product promises to put some juice into it.
The novel product gives homeowners cash for their equity in return for a portion of the proceeds from the eventual sale of the home. For instance, a homeowner who has a $500,000 home can extract $100,000 of that by giving REX 50% of the change in the home value. So, if the home is sold in five years for $750,000, REX receives half the increase, or, $125,000. If it sells for $600,000, they receive $50,000.”
And if it looses value? hehehe
http://usmarket.seekingalpha.com/article/35834?source=d_email&u=12036
And if it looses value? hehehe
I dunno. I guess there’d be a lot of loose value lying about.
Now, if it loses value, that’s a whole different thing
Paulson was on Lehrer’s show. Lehrer asked if the housing slump would wreck the economy. Paulson said we have had a major and inevitable “correction” in housing, and that it is near the bottom. BS BS BS. He knows the ARM reset chart as well as we do. Liar.
Americans are lied to so much, how can one tell the difference anymore? Paulson is nothing but another GOP mouthpiece.
No, the worst is far from over. We really can’t see the bottom until President Bush and his admin is removed. Whoever is the next President will be cleaning up this mess for their entire term.
If all Americans just have faith in their leaders, then everything will turn out just fine. Get with the program and buy a McMansion next week!
Gentle folks,
What are Paulson or Bernanke supposed to say “The US economy is non existent and we are going down the tubes along with the dollar?”
All the government economists can say is “everything is as we expected and the economy appears to be recovering this 4th quarter.”
The obvious indicators of the severity of the economic problem is supported by the number of US companies jumping ship.
Halliburton
Intel
AMD
Motorola
Abbott Labs
Baxter Labs
These companies announced major moves overseas in the last three months.
Another indication are the fewer companies listing on US exchanges. We were number 1 in listings 2 years ago, now number 2 (behind London) and soon to be number 3 (behind China). Financial salaries in London are higher than financial remuneration in New York. Financial salaries in China are higher.
The corporations are bailing; they see the problems.
Stop focusing on the big picture, and keep your eyes on the headline stock market indexes. As long as they are making new highs every other day, it’s all good.
The Next Home Equity Surge?
“Just when you thought consumer home equity induced spending was dead due to a slowing market and tightened credit standards, a new product promises to put some juice into it.
The novel product gives homeowners cash for their equity in return for a portion of the proceeds from the eventual sale of the home. For instance, a homeowner who has a $500,000 home can extract $100,000 of that by giving REX 50% of the change in the home value. So, if the home is sold in five years for $750,000, REX receives half the increase, or, $125,000. If it sells for $600,000, they receive $50,000.”
And if housing prices fall?……..hehehe
http://usmarket.seekingalpha.com/article/35834?source=d_email&u=12036
Oh, the chance of falling prices is priced into what the homedebtor receives. Any interest rate consists of real rate+inflation premium+liquidity premium+risk premium… I have no doubt there’s a steep discount (for which REX takes on the risk of falling prices). Just another game like the notebuyers and lawsuit-proceeds buyers. May they all rot.
Chief:
Could we get the “Cone of Silence” ?
“Maxwell Park exemplifies the kind of area likely to suffer from the subprime problems. ‘It will probably have a fair amount of foreclosures because a lot of people buying in that neighborhood were low-income and didn’t have money to put down,’ Jenssen said. ‘I see properties out there that say they’re bank-owned (which means they have been foreclosed).’”
Just read an article with this quote:
“It’s part of the slowing housing market,” said Scott MacIntosh, senior economist for the National Association of Realtors. “Fewer first-time buyers are willing to take that risk and go out and buy. I guess they see it’s safer to put money in the stock market rather than buy their first home.” (Emphasis added)
I guess the NAR really dosen’t view a home as a place to live anymore.
Proposed new NAR slogan: “Put your money in the stock market, because stock prices always go up.”
“Dictators are rulers who always look good until the last ten minutes.”
Jan Masaryk
I grew up in LA Crenshaw and Slauson, not a nice place. People are asking over 500k for some of the small homes on a nice street but go 4 blocks over and your in another world and its scary. You could buy the same size home in parts of OC for the mid 500s which is way over priced but at least your almost safe.
A good friend of mine lives in compton, prides himself on never getting jacked. Two days ago he got jacked in Beverly Hills, what a world we live in…
Ben, suggested topic for this weekend: What effect, if any, the immigration “reform” will have on the housing market.
We need a sub category of median home prices. Median of prices of homes sold above the average price, and median of homes sold below the average price.
It’s not the lenders fault that guidelines are being raised, it’s the investors fault for not supplying the capitol. Also the interest rates are not going up. The Fed has kept interest rates the same for nearly a year now, at historically low levels. Why does the MSM keep reporting that the interest rates are going up. They should clarify by saying; Interest rates rates on adjustable rate mortgages are going up. Duh, thats what they do.
back to entitlements (social security, medicare, welfare, …) the problem is that presidents are elected by those who receive the benefits, proportionally speaking. so the inter-generational conflict will not even be discussed in congress.
the only way i see to vote against it is to make a living in a way that doesn’t involve payroll, so that you don’t have to pay FICA. do you guys see other ways to avoid paying the tax against the young that i cannot? need all ideas here!
another tax against the young and healthy in New York is the health insurance law, that makes it illegal for insurance companies to charge differential rates based on age, health, exercise, weight and the like. so i am paying right now as a baby boomer, even though i dont’ use any service.
i’m sick and tired of subsidizing the people that hold 2/3 of the assets in this country (people older than 60 years old, believe it or not). i’m a radical, but i’m considering getting rid of health insurance and pay expenses out of my pocket. the whole subsidizing issue makes me sick, if i dont’ do anything about it i’ll really need a doctor.
Julietta, I am planning on self-insuring with a high deductable low premium plan (for broken bones etc.) and paying out of pocket for the rest. Even my doctor self-insures now !
Realtor “TM”
Realtor (TM)
Realtor (sucks)