Shoppers Are Choosing To Watch, Not Act In California
The Orange County Register reports from California. “Location, location, location is the mantra of the real estate industry, but at a Southern California home foreclosure auction Saturday, it was all about price, price, price. And even at $1.95 million, the highest bid on any of the 90 properties sold, the price was right for William Liao of Irvine, who won the bid on a three-bedroom, four-bath ocean view Laguna Beach home.”
“‘I thought it was a good price,’ said Liao, noting the previous value was $2.789 million.”
“With real estate sales plummeting and thousands of homeowners in trouble on their mortgages, would-be homebuyers see an opportunity that has been scarce for a decade, foreclosed homes.”
“As recently as a year ago in April, there were only 22 foreclosures in Orange County, according to DataQuick. That rose to 234 this April. As the numbers start to grow, lenders are beginning to turn over their properties to companies like Irvine-based Real Estate Disposition Corp., which oversaw Saturday’s foreclosure auction.”
“The three auctions the company is holding this month in San Diego, Los Angeles and Riverside are the first since the recession of the mid-1990s, said Rob Friedman, REDC chairman. He expects more to come as the home inventory builds.”
“Winning bids on the 15 properties in Orange County ranged from $225,000 on a Garden Grove condo previously valued at $299,000, a 25 percent discount, to Liao’s bid. Many were 15 percent to 20 percent below the previous value.”
“The bid price also did not include a 5 percent buyer’s premium charged by the auction company.”
“Several winning bidders said they were happy, but had hoped to pay less. ‘There was too much competition,’ said Ton Kim of Bellflower, who had the winning $495,000 bid on an Anaheim house valued at $560,000. ‘I was hoping to pay $430,000.’”
“The start of Orange County real estate’s 2007 has been a major disappointment, at best. Hopes had circled that buyers would…get their shopping patterns reinvigorated by the generous selection of homes for sale, a growing flock of somewhat motivated sellers and relatively affordable financing. Instead, buyers are increasingly saying ‘No, thank you.’”
“DataQuick stats show 10,661 O.C. homes of all stripes sold in the first four months of this year. That’s down 21 percent from 2006 after a 21 percent year-over-year drop in 2005. That puts 2007’s buying pace 22 percent behind the 1988-2007 average.”
“And this year’s sales pace is so sluggish that only two years – 1993 and 1995, started any slower for homebuying in DataQuick’s two decades of O.C. sales history.”
“What’s clear is that many shoppers, for now, are choosing to watch, not act. What’s unclear is what will get them to become buyers.”
The Tribune. “San Luis Obispo County home sales declined nearly 25 percent in April and the median price also fell slightly compared with the same month a year ago, according to DataQuick.”
“A total of 266 homes were sold last month, down from 354 in April 2006. That represents a 12-year low for home sales in April and the 19th consecutive month that home sales have declined year-over-year.”
“April was also the third month in a row that the median price for resale detached houses ($540,000 in April, down 5.7 percent from a year ago) declined from the previous year.”
“‘It’s not just Poly parents. I’m also working with local buyers who are saying they’re ready to buy because prices have come down, and they’re looking back at the amount they paid for rent last year,’ (realtor) Sean Fitzpatrick said. ‘They say, ‘I might as well buy and have the potential for appreciation.’”
“In the North County, houses are taking longer to sell and inventory has gone up in some areas. Mark Farley of ReMax Parkside in Paso Robles reported that 477 single-family homes are now on the market in that city.”
“The market, Farley believes, is ‘going through a cycle right now.’ But as sellers become more realistic about their prices, buyers will respond. ‘We had to find who the real sellers are,’ he said. ‘Buyers can be intimidated. No one wants to think they spent too much.’”
The Times Herald. “Vallejo’s downtown revitalization project likely will not meet its June 1 start deadline and will require another extension, a Triad Communities spokesman said Friday.”
“‘It was sort of a perfect storm, with the housing market tanking and Triad making some mistakes when its builder pulled out,’ said Vallejo City Councilwoman Stephanie Gomes.”
“‘It’s a difficult economic time to do home building in Vallejo, where home prices have softened while construction costs have continued to increase unabated,’ said project manager Mark Ruebsamen. ‘Downtown needs this project badly to keep the area from spiraling.’”
The Press Enterprise. “Despite the Inland region’s softening housing market, developers are still banking on McSweeny Farms, a major master-planned community that could bring about 4,000 new residents to an area east of Diamond Valley Lake.”
“The median price of a home in Riverside County dropped last month for the first time in a decade and home sales declined 45 percent, according to DataQuick. That and a decline in sales of almost 47 percent in San Bernardino County reflected the continued weakening of the region’s market.”
“There are two ways to look at the situation, Inland economist John Husing said. Demand for housing is expected to remain weak for the remainder of the year, and could stabilize by next year. After that, he said, demand for housing could resume.”
“‘It’s not going to go on forever,’ Husing said about weak market conditions. ‘Southern California still has a housing shortage.’”
The Sacramento Bee. “A red-hot housing market, fueled by loose credit and low interest rates, pulled California out of the brief economic slowdown after the collapse of the dot-com boom, but now housing has flattened, casting a pall of uncertainty over the state’s economic future.”
“Whether the post-housing plateau is equally brief or the harbinger of a longer-term slide will affect millions of workers and their families, but state and local government officials, whose budgets were fattened by the housing boom, are nervous as well.”
“The Legislature’s budget analyst, Elizabeth Hill…warns that the extent of the housing downturn is still being plumbed and that rising oil prices could generate a broader downturn.”
“The state is just beginning to feel the potential impacts of the housing slump on local property taxes. Housing starts have declined, tens of thousands of homes are being marketed below their original sales prices.”
“Economically, California appears to be in somewhat of a holding pattern. It has seen the dot-com and housing bubbles inflate and deflate and is waiting for the next big economic generator.”
The Bakersfield Californian. “About 20,000 Kern County homeowners will get a slight break on their property tax bills this September. The decreases, the result of falling home prices, will mainly affect homeowners who bought between July 2005 and June 2006, when the real estate market was at its peak.”
“Many of those homes’ values have fallen below their original purchase price, and county assessors are reviewing properties and lowering their values, as required by state law.”
“Most homes under review have dropped 2 percent in value, according to County Assessor-Recorder Jim Fitch. Reassessments are based on Jan. 1 home values.”
“For the county, the reassessments still translate into an increase in property tax revenues. But that may change if the real estate market fails to pep up.”
“‘I anticipate that we could be doing a lot more properties and that we could see a 10 or 15 percent drop from January 2007 to January 2008, if the trend continues,’ Fitch said.”
‘O.C. real estate and lending job counts remain flat as lending jobs — primarily mortgage — fell to their lowest level since June 2004.’
Did I just see the OC Register use the word “plummet”? What a difference a year makes.
How can these #’s possibly be correct? Give me a break, we read day after day after day about layoffs in real estate and lending and yet they say that they “remain flat?”
It is like the #’s coming out of the federal government, they are all a complete crock of $hit.
1099 employees are not counted in those numbers. You are right though, the numbers are just as bogus as: median home price, inflation CPI, unemployement (McJobs count as much as decent paying jobs), and my favorite, selling prices that don’t take into account builder incentives, cash back, or the free VW Bug.
‘O.C. real estate and lending job counts remain flat as lending jobs — primarily mortgage — fell to their lowest level since June 2004.’
So let me get this straight - if lending jobs fell, real estate jobs must have gone UP by an equal number. I guess the builders or realtor groups must be hiring like crazy.
Never thought journalists could be THAT addled-brains.
Is it possible there are more licensed realtors who came on this year? I still see ads in the paper looking for realtors.
I believe that realtors aren’t really on the payroll at realty companies. They are commission only sales folks who use the realty company’s name in exchange for giving the realty a cut of any sale.
I guess my point on the 2nd paragraph was that realty companies can keep adding and adding people. So perhaps there actually are more RE jobs being added. They will, of course, quit within 6 months.
It’s the price stupid. (to all RE people)
Was house hunting in Pacific Palisades, CA. this weekend and the realtor said something I thought I’d never hear. He said the house he was showing was over-priced but the seller is screwed and needs the money because of his HELOC.Can’t take any offers under asking.
I would’ve asked him/her why they were wasting everyones time, including their own.
No Sh*t!!!
You have to ask? It’s different in Pacific Palisades! Quick, huff some cupcakes! Now, do you feel like buying?
I would’ve asked him/her why they were wasting everyones time, including their own.
Just goes to show how pitiful the agents are today, they know the house is overpriced and will not sell, but the have nothing better or productive to do. Agents are used to sales just coming to them, they have no idea how to generate a sale otherwise. LMAO-OAO (Over and over)
“I would’ve asked him/her why they were wasting everyones time, including their own.”
An agent will do this in hopes of wearing the seller down while keeping the listing.
“An agent will do this in hopes of wearing the seller down while keeping the listing.”
“…the seller is screwed and needs the money because of his HELOC.Can’t take any offers under asking.”
What good is wearing them down going to do when there is no room for negotiation?
Exactly, the only rationale I can see in that is hoping to pick up a buyer that wants to do something now… otherwise it’s a complete waste of time.
The agent/broker has to take the seller through stages of realization. At some point, they will get to “short sale”, but not immediately.
BTW, that’s how I bought my coastal S CA house in 1996—I waited out the seller ’til he had no more choices left; it took over 4 months.
That’s an example of why these great unwindings take years
They must still be holding out for that “bag of money and box of stupid” buyer. Only now that would have to be a cash buyer, since the place likely wouldn’t appraise for what the seller is asking and no bank would loan the money anymore, now that there has been somewhat of a return of responsible lending standards.
“I would’ve asked him/her why they were wasting everyones time, including their own.”
(1) Since the alternative is working at the Burger Clown, the realtor’s opportunity cost is pretty darn small…
(2) It was probably obvious that you were not a GF. However, the elusive GF is not yet extinct in OC, thought it may be on the endangered list by now
Icouldbewrong, that’s major. A year ago no realtor would have said that, even if he/she knew it to be true.
I had this happen while lowballing a house in Woodland last month.
My home town. Whereabouts was the house?
was this house on a street that starts with the letter ‘E’?
“‘I thought it was a good price,’ said Liao, noting the previous value was $2.789 million.”
Well shoot then it was worth every penny! I know how this feels my neighbor was selling a gold fish for $13,000 but I stole it from him, got it for $10.5k.
Cool.
I know the home that was auctioned…I think it was a good deal. Homes on that street with similar specs hasn’t sold for less than 2.3 mill since 2003. Who knows where prices will go, for now, he can actually flip it and make about 200k at least.
If the bank thought it could have gotten that price, they would have had a reserve on it for at least that amount. If the bank was willing to let you buy it for that price, then I think you’ll have a hard time selling for more.
I agree. Not much flipping action gonna happen on these REO’s.
He COULD flip it… but then, why did it end up at auction in the first place?
Ever see what some koi sell for? 10.5k might be a steal.
no way, u serious?
I remember driving through Santa Barbara on the way up the coast and just for the hell of it stopping by to trip out on a koi farm that use to be there (some of you SB folks may want to chime in and let us know if it’s still there) and trip out is exactly what I did. There were little fingerling koi that were priced in the hundreds and up to thousands of dollars. The gal that worked there told my wife and I that some of the larger koi (glorified carp) were tens of thousands of dollars. Beauty!
Great, now we’ll have a$$hats using the house money to buy Koi. Well, I guess I shouldn’t be surprised considering this country had a pet rock craze.
Koi is the new bubble!
At least the new bubble is edible.
85249, if that is the case I am packing it in and moving to some remote part of Canada and going agra. I am so sick of the new global economy. This is just sick. People are sick. Massive greed is out of control and everyone is looking for the next big thing. Well, let me tell you the next big thing. It’s called depression. You can’t run an multi-trillion dollar world economy on just plugging numbers into a computer when you need some cash. At some point things have to be produced and real money has to exchange hands.
It will end - it has to.
http://financialsense.com/fsu/editorials/bearing/2007/0518.html
“As the great Austrian economist Ludwig von Mises warned, “There is no means of avoiding the final collapse of a boom brought about by credit expansion.”
This is nice quote from the article;
The trouble with pyramid schemes is that they’re not designed to go in reverse. Eventually, the number of willing dupes is exhausted. The same people who panicked late to get into the game are just as likely to panic when the music stops. The longer the music plays, the more leveraged and unstable the inverted credit pyramid becomes. As the late economist Hyman Minsky observed, “stability is unstable
I don’t think we’ll see a koi bubble until the Chinese catch word of the high-yielding koi market. Then we’ll see a federal coporation formed specifically to chop up the koi into little bits and package them into envelopes known as “koi-filled securities”. Almost instantly a credit-default swap market will emerge to distribute the risk of air-pump problems.
Of course with the sudden surge of demand for KFS, investors will start snapping up koi like crazy, bidding up individual specimens without inspection or intent of maintaining them longer than a week… The lucky few koi owners at the beginning will see their wealth skyrocket, and young aquarium owners will race to the koi farm to grab the newest skimpy, shriveled Longfin fry for $500k.
And one day, someone will open one of these envelopes… and the stench will shock the world.
You forgot to mention the booming of derivatives in the koi market and the creation of koi hedge funds that will leverage the risk of a deadly fish virus.
OCDan
Those were my plans exactly, move to Canada. We’ll be the next illegals.
can we live on the dole easily???!!!!
Don’t expect free no questions asked health care up here like the illegals get in the states. And they do deport people if they catch you working.
Google it..Record is 850K ! Now that would get you a down in a nice neighborhood.
“major koi show champions are valued at as much as $25,000-$250,000 for show or breeding purposes. $850,000 is the current record price paid for a koi.”
A friend of a friend in OC bought a koi for 70K and was extremely happy with the purchase. My friend lost a 10K koi when the power went out and the air pump shut off for several hours. Not a cheap hobby.
Hmmm now $1000 for a back up generator and 2-3 UPS doesnt sound so expensive
Yeah, no sympathy. Whole house generators and voltage regulators should be the norm for anyone “rich” and living in the officially sanctioned rolling black-out land of SoCal.
Hydropower makes up almost 20% of the California electrcial grid, and there’s no water from this point onwards, thus no hydro…
Whoops.
mine was $489 - a generac
I know someone in South SF who had a koi pond which packed up to a treed area. The Koi would “go missing” because the raccoons would come down and go grocery shopping. She tried everything to save her expensive hobby.
Final score
Raccoons 22
Homeowner 0
I’ve heard that is due to the pond design. To thwart raccoons the pond needs to have steep sides. If the sides are graduated towards the bottom, the raccoons can just wade in. Like fish in a barrel.
After .com and extreme-housing this will be the next boom in California !
Was it “ROCK BOTTOM* PONDS” in SB? They sell koi.
*I kid you not - that is their name. lol
There is also an aquarium store off Anacapa called The Ocean Floor. Not sure if they sell koi.
~Misstrial
Must be a rich guy from China buying this. Those rich immigrants are trying to save the RE market.
…working visa lobbyists already working on that.
does anybody on this blog watch the chicago merchantile exchange housing futures exchange. may 07 contracts for los angeles market are at 265, feb 08 contracts are at 256. not a huge drop forseen by the “smart money”.
Did the “smart money” foresee the drop we have already had?
Did they see the drop? Yes.
Did they tell you? No.
here’s the url:
http://housingrdc.cme.com/?
think you need a username/login
The Bakersfield Californian. “About 20,000 Kern County homeowners will get a slight break on their property tax bills this September. The decreases, the result of falling home prices, will mainly affect homeowners who bought between July 2005 and June 2006, when the real estate market was at its peak.”
Key word slight. “Hey, get one-finger larry and his typewriter. We got work to do.”
Seriously. Let me know when they get a drastic break on their property taxes… I’d love to see the headline.
“Property Taxes Plummet!!! CAR predicts home price turnaround ‘any day now’”
“‘It’s not going to go on forever,’ Husing said about weak market conditions. ‘Southern California still has a housing shortage.’”
forever.. pure genius… but seriousely a shortage? maybe low income housing but where i live there are vacant apartments, homes and condos. 90277
Things are not moving.
You could have solid stucco from the Mojave to the Pacific and they’d still be calling out a housing shortage. Wait a minute….it’s already solid stucco from the desert to the sea. My bad - never mind.
You guys beat me to it. The cliches these a$$hats use to justify their existence and selling overpriced crapola is utter nonsense. Face it, the So Cal market is toast. The problem is not a shortage of housing, but a shortage of FBs.
Quote ” “Several winning bidders said they were happy, but had hoped to pay less. ‘There was too much competition,’ said Ton Kim of Bellflower, who had the winning $495,000 bid on an Anaheim house valued at $560,000. ‘I was hoping to pay $430,000.’” ”
The winning bid of 495K + 5% = 519k. Overall, he only got a 7% reduction in price.
Dumb ass: He could have gone through Reamtor and got a house with 10% reduction. Not that that would have been a bargain either.
I was just going to point that out… this is the latest bubble… bidding over your ‘max’ at auctions.
LOL. Ripe for a shearing. Looks like the GF’s found the auctions.
I’m going to setup a Three-card Monte table outside the next auction.
“who had the winning $495,000 bid on an Anaheim house valued at $560,000. ‘I was hoping to pay $430,000.”
BUYER’S REMORSE hitting this idiot just about NOW!!! Let’s see what kind of financing he doesn’t qualify for. The winning bid is no more than an offer with contingencies. 50% of these winners will not close. There is no close sale until title actually changes hands. Auctions are Just another marketing ploy to take advantage of the Carlton Sheets seminar crowd.
I wonder what makes him think that the place is “worth” $560,000. Because the builder said so? This guy probably buys stuff off of late night TV commercials and thinks he got a great deal because he bought some poorly made plastic item for $19.95 that the advertiser claims was a “$150 value”. It never occurs to these people to stop and think about what a rational person might actually pay for something.
When “winners” like Ton are completely flushed out of the market, I’ll know it’s safe to get in. Not a moment before.
There will be no steals until 500-600K homes come down to 250K-300K levels. People making even 100K cannot justify spending 5.19X income on these stucco crapboxes.
“There will be no steals until 500-600K homes come down to 250K-300K levels.”
…And they’ll just sit there 120 days on market. plenty of them. cause no one will want them. then there will be deals….
What a nitwit. He spent more than he wanted (which was still a joke) by $65K! How many shills were in that audience watching Ton bid against himself?
Reminds me of when the Texas Rangers were bidding for the services of ARod back in the day. Remember that, he got 25.2 mil out of them because he had them bidding against themselves. People can be sooooooo dumb!
Auctions aren’t for amateurs…
He had to pay a 5% buyer fee also .
It seems like a 5% commission is fairly standard for real estate auctions (at least in ones up here in AK)… are they this high because nothing might sell? It strikes me as an insanely high percentage compared with the (minimal) effort put in by the auctioneer…
we looked at this one 2 weeks ago just to see what was out there. Listed originally at 1.2MM … has been sitting for 120 +/- days. Agent told me (literally as I walked in the door) that it was reduced to 1.09M and would probably go in the mid-high 900’s. You could smell the desparation.
still listed
What is a 3/4 bath?????
Is that a sink toilet and a shower stall but no tub?
i think so too… interesting that it’s called a 3/4 bath given that the only thing missing is the bath tub.
yes
That is one ugly overpriced SOB-POS! Nuff said.
900k? Dude, tell me you’re not thinking of buying that for that. That’s insane… Did he hire someone from Camirillo to that addition. What a joke…
Holy SHHHHH. I see places like that for sale here in Council Bluffs, IA, all the time. They languish on the market for months - priced at $110K.
we saw this house a few weeks ago just to see what was out there. Listed at 1.2MM originally, has been sitting for about 120 days. The agent told me (as I walked in the door) that it had just been reduced again to 1.09MM and would probably go in the mid-upper 900’s. Its still sitting.
This is why the bubble has been and still is nutso. That home, considering it is Redondo, should not be a penny over 500K. Puhlease. That is a run of the mill ordinary home that the Brady Bunch could live in. You are paying for the hood that is all.
yep. I personally like Redondo but it’s not all Hermosa walk streets or anything. This one is very close to Prospect avenue (think fast traffic), and has a yard about the size of a pool table. Bad layout and mediocre condition. He actually told me he did not think prices were coming down,,, just that people were paying a premium and they no longer do. I told him $/sqft is lower and dropping… things are sitting… prices are coming down. He just smiled. You should have seen my wife’s face.
“He actually told me he did not think prices were coming down,,, just that people were paying a premium and they no longer do. I told him $/sqft is lower and dropping… things are sitting… prices are coming down. He just smiled. You should have seen my wife’s face.”
I’m a realtors worst nightmare. I went to look at an overpriced POS a few weeks ago in support of a family member (certainly not by my choice), and had a good laugh as I picked the place apart. The realtor (some tool in his late 30’s) was spouting off about how the market is poised for a comeback in 2008. I simply asked “really, why”? He went silent for a moment, obviously confounded. He then stammered a little and uttered “it’s the cycle”. I laughed heartily and exclaimed “the cycle”!? I proceeded to bruise his flimsy ego for a solid 5 minutes straight with virtually every fact talked about on this blog over the course of the past year. After I was through, the poor guys hand was shaking so badly he was unable to lock the door. I actually felt a little sorry for him. I don’t think he’ll use that weak sauce again.
“really, why”?
Love it when you call these guys arguments. To be a fly on the wall there……..
…As if the 1990s Real estate collapse will never happen again in Southern California!
Atta boy, BB!
~Misstrial
“should not be a penny over 500K”
$500K is just as nutso as $1 mill. Think about it. Median Income of $60K. If this is an average house, it should be $180K max.
You said it. Even in crazy SoCal, $500K got you a very nice place and $1M got you a palace not too long ago. Methinks they’ll get even cheaper this time around.
That’s what I’m hoping for, but when I talk about the downturn to my father in law, he invariably comes back with, “Well, I don’t think prices will come down that much” (meaning 50%). But he never has an explanation for WHY they won’t come down. I think it would probably be, “RE never goes down.”
People must have some sort of mental block about RE. That or they’re emotionally invested. I wonder if there are studies about it.
What? I KNOW I closed that tag!
That house is nowhere near as nice as the Brady house.
11222 Dilling St. in the San Fernando Valley.
That’s the address. Look it up on Zillow; it’s interesting.
It’s not just Poly parents. I’m also working with local buyers who are saying they’re ready to buy because prices have come down, and they’re looking back at the amount they paid for rent last year,’ (realtor) Sean Fitzpatrick said. ‘They say, ‘I might as well buy and have the potential for appreciation.’”
Buy right now and get locked in for some negative appreciation folks, step right up and don’t step on the FB in front of you.
SLO realtors like to pull the “Poly parents” crap out of their hat to try to create buyer anxiety so that we will just capitulate and fall down on our knees with open wallets/checkbooks/brokerage accounts.
Take a look at realtor.com and just look at all of the condos/townhomes that “Poly parents” are now trying to offload because their HELOCs/ARMs are due.
“Poly Canyon” residence halls should be completed next year. 1500 new apts on campus. Just think of what that will do to realtors in SLO.
~Misstrial
“Economically, California appears to be in somewhat of a holding pattern. It has seen the dot-com and housing bubbles inflate and deflate and is waiting for the next big economic generator.”
Food service of course
http://tinyurl.com/25hc5p
“…the next big economic generator.”
The stock market = the once and future bubble. Too bad that won’t help J6P avoid foreclosure on his unaffordable home bought with a high risk loan.
best keep your eyes to the ground, Ive heard a couple of my friends are back into the stock market…….Ive had to use the same friends on 2 occasions…….1. Tech bubble, when they got in I got out. 2. Housing bubble, when they got out I got out..NOW…Dow,S&P, NASD are getting attention from the invest-mentally challenged……Im rethinking a couple of plays.
anyone here of any Dentists, or other monied professional thats thinking its a good time to buy the market?
Market due for a correction. Sell in May…(that’s what I’m doing, to a degree).
Sell in May. What happened to those who sold in May last year?
WSJ had a cute story a while back. “In the trading pits there is a small god who allows anyone to call the top correctly once, call the bottom correctly once, and be wrong as many times as they want.”
I punched out last May, I did it because I could not rationalize the reasons the markets were doing what they were doing. I try to stay out of investments I do not understand, so I parked everything in cash equivalents for dollars, Korean Won, British Pounds and Euros. So far so good, but I am getting worried about Euros.
If you sold a year ago, you’d have been smart only until late July, when the market started up again. In 2005 you could have stayed out of the market until mid-November before it started up again. In 2004 the summer slump lasted until mid-October. In 2003 there was no summer slump. So you’re right, the market could do anything in the short term, although many times it takes a breather over the summer. I’m just a little apprehensive about the economy. My bet is the economy sputters, interest rates go down a little, and bonds are a better bet for the moment. So I’ve re-balanced a bit. It’s all a crap shoot in the end, but I can’t resist making some adjustments around the margins.
My neighbor, nice guy, lost a lot in the tech bust. He just built a second home in Mexico using equity from his so cal house. I gave him the book, “Sell Now,” but he “doesn’t read.” I overheard him telling his friend that he had opened a stock account and was trading for the first time in six years or so. Look out below.
My father in law is back to day trading. He lost his house day trading when the tech bubble collapsed, but now claims to have a “system” that will win it all back. There goes his recently liquidated retirement. Good lord…
Oh yeah, it’s time to slowly start exiting the market.
There is no “next big economic generator” - it is just wishful thinking. Americans leveraged themselves at the behest of low rates further than I thought was humanly possible. The sheer recklessness of how people have been acting and spending is madness. There is NOTHING that can bail this out, bio-tech my a$$.
“Economically, California appears to be in somewhat of a holding pattern. It has seen the dot-com and housing bubbles inflate and deflate and is waiting for the next big economic generator.”
NASDAQ falls from 5000 to 1200.
House price falls from 500k to 498k.
Two classic bubble deflations.
“Hopes had circled that buyers would…get their shopping patterns reinvigorated by the generous selection of homes for sale, a growing flock of somewhat motivated sellers and relatively affordable financing. Instead, buyers are increasingly saying ‘No, thank you.’”
Sellers are somewhat unmotivated and hence the price ain’t right. No thank you.
“Many were 15 percent to 20 percent below the previous value.”
Certainly better than Florida, where 40 to 50% below prior is more normal at so-called auctions.
“The median price of a home in Riverside County dropped last month for the first time in a decade and home sales declined 45 percent, according to DataQuick. That and a decline in sales of almost 47 percent in San Bernardino County reflected the continued weakening of the region’s market.”
If sales decline 47% the fall in prices can not be far behind. Ray Charles could see it.
“DataQuick stats show 10,661 O.C. homes of all stripes sold in the first four months of this year. That’s down 21 percent from 2006 after a 21 percent year-over-year drop in 2005. That puts 2007’s buying pace 22 percent behind the 1988-2007 average.”
Don’t two consecutive 21 percent drops result in a 38 percent drop? Who cares about the 1988-2007 average — let’s look at how far we have fallen off the bubble top.
We want to see that, but the REIC has little motivation to share such easily digestible information.
“‘It’s not going to go on forever,’ Husing said about weak market conditions. ‘Southern California still has a housing shortage.’”
Sounds like Husing practices faith-based economics.
I have to comment again on this quote because Husing is a dumbass. This past weekend was out and about again w/the kids for Little League, soccer, etc. Must have seen 50 open house signs, of which I might take out 20% for douoble signage. WHat does that leave? Oh about 40 in a 10 mile radius of the apt I live in. This is only going to get worse. There is no shortgage. In fact, 2 of the homes I went to just to get the flyers had no one at them. No surprise as these homes were going for 750K and 829K. I have to ask, who the he11 is left buying this junk? On the beach maybe, not 15 miles inland in Rancho Santa Margarita or Mission Viejo!
even the beach is not moving. my neighbor’s unit is for sale at 10% less than what he could have gotten last year and we are practically on the beach. we never had ‘reduced’ signs around here… now we do. I talked to him last weekend in the driveway… not one offer. They are on their 3rd open house at least. still sitting
870k LOL well it is close to the beach. 500k at most on a good day.
“my neighbor’s unit is for sale at 10% less than what he could have gotten last year”
You need a really nice unit if you are hoping to sell in this market. And you had better make damn sure it is bigger, and better, than your neighbor’s unit.
Last night the kids and I visited a ghost McMansion tract home development nearby where we live (in the Rancho Bernardo W 92127 zip code). Later I looked it up on RedFin.com and discovered that it does not show up there yet, despite the obvious fact that there are maybe 250 brand new unoccupied SFRs in the development (current MLS used home inventory in 92127 is 250 or so), mostly finished and a few still in various stages of construction. And there are various other entirely distinct “new home communities” under construction in 92127. It sure looks to me as though the Sword of Damocles is hanging over the locally frothy market’s head.
OCDan, this weekend I had a lot of family stuff, so I did not do my usual rounds. But I did stop at an open house for a condo on Olympic Blvd. near Miracle Mile in LA. About 1,100 sqft with an asking price of 500K. Two hours into the open house and I was the first one to sign in. Sign of the times.
Gee, I never signed in at open houses. Or, if I did, I made sure my handwriting was at its worst. (Not hard for me to do. My handwriting is so bad I can’t read it at times.)
Hey all, correct me if I’m wrong but my friend who is a former realtor told me not to sign in with MY name, but use his name instead. This protects us from being forced to use the agent as a buyer’s realtor. Am I right about this?
Something tells me there have been a record number of Charlie Mansons, Jim Morrisons, Amelia Earhardts and Judy Garlands showing up at open houses.
Hey Central Valley Guy, you’re friend is wrong. You are not signing a contract….unless it is a contract.
The reason he’s telling you this is that if you signed at a open house without him, then when he goes to present your offer to the listing agent the listing agent if he’s sharp will reduce his compensation because he did not techically show the house. Not really a concern for you unless you have a problem with your rep making less than the listing rep.
Ah, thanks for the clarification.
No, it doesn’t. Way too much housing, but since there were people buying several ‘owner occupied’ houses at the same time, the true extent of the problem is still not known.
Plus, the overriding reason some people went and lived in these areas was (repeat after me) CHEAP HOUSING. Once that disappeared in the boom, why would people want to move here? This then further diminishes the housing demand in California.
Then again, getting straight predictions from anyone in the REIT for the last few years has been an exercise in futility.
“Several winning bidders said they were happy, but had hoped to pay less. ‘There was too much competition,’ said Ton Kim of Bellflower, who had the winning $495,000 bid on an Anaheim house valued at $560,000. ‘I was hoping to pay $430,000.’”
One things for sure……….this is not the “smart money” buying.
“I was hoping to pay $430,000.”
Then this is where you stop. That was the value you put on it before the frenzy of bidding Ton…… the property is so “unwanted” it’s at an auction for cryinoutloud .
What’s neat about an auction is that everyone immediately knows who the greatest fool is.
Slightly off topic, but what is everyone paying for Gas this week?
Here, it ranges between $3.05 and $3.30 a Gallon. This is in Tampa.
I also found two websites that might help people.
1. ) Reduce the demand for gasoline by carpooling. http://www.icarpool.com
2. ) Find the lowest prices for gas http://www.gasbuddy.com/
$3.53 to $3.80 in San Ramon, CA (30 miles of SF).
$3.45 for el cheapo here in South OC at Arco, no less!
interesting that the prices between CA and MN have narrowed so much.
I’m used to gas costing about 50 cents a gallon more at least out there. Looks like that has narrowed.
you figure with ethanol and them not being able to get it out of the midwest because of a bottleneck that it would lower prices there but even ethanol prices are up which has also raised the price of food, price of feed, and the price of the animals who eat it and are then slaughtered for meat.
Yeah, inflation seems up, but this will take money away from non necessities and will cause them to drop making inflation seem like less of a problem.
Ethanol may never make it out of the midwest because of the increased pollution it generates, along with the problems of storage, handling and distribution.
3.33 here in Ventura and I paid 3.28 up in Ojai when I went fishing up at Rose Valley Lake.
$3.39 for regular in Mpls. Premium is more.
At costco it was $3.19/gallon.
this is a record for us.
the gas may kill the far out exurbs. As people start to slowly wake up to the fact that $1.75 gas isn’t coming back any time soon (unless we have a huge recession, in which case folk won’t be able to afford $1.75 gas)
that said, folk are pretty resilient… the shock value of mid $3 gas is gone. I’ve said before, I think the new shock price (at least here in MN) is $4.00 per gallon (regular)
each year it gets worse. I am looking forward into the Natural gas and heating oil situation for the winter.
We may be in a world of hurt.
Every season there’s a new reason for sky high gas prices. it’s hot. it’s cold. it’s cloudy. it’s sunny. people are driving. people aren’t driving.
Oh we took refineries off line for “scheduled” profits maintenance. We also didn’t know it was the peak driving season! yeah right
That is exactly the issue. The refineries are down…
This is just a repeat of what Enron did to California during the energy crisis it suffered…only this time, the whole nation is paying the price.
And the government won’t do anything about it. I think it’s time to throw execs in jail, all the way up to the CEO.
At over $30 spreads, what refinery wouldn’t want to be running full bore. Marketers with a refinery down has to buy on spot and give profit to someone else.
Yes, those refineries are all over 30 years old. Expecting them to run 95% or better year round is ridiculous.
That is a lame excuse…especially when the average number down per year is 2…this year we have 12 down.
Coincidence or what?
We were in Michigan last week (old homestead) and it was $3.49/gallon for regular. Here in Orlando it is $3.03/gallon.
That’s the going rate here. There was a fire somewhere in the midwest distribution chain that is supposedly causing this. They are saying it’s adding $.20 a gallon.
We’re going to England in a few weeks where gas is $8/gallon, in part thanks to the crummy exchange rate. Now, that’s a shock price!
Yet, the fed’s got inflation under control. LOL
I think a diet coke is also $8…
shadow statistics
Its been around $7-$8 dollars a gallon in the UK for the best part of a decade.
S’funny how popular those teeny SMART cars are over there..
Have fun in Blighty!
Just drove across France, Bavaria, and Austria. It was averaging about 1.41 Euros/liter. That’s about $7.20/gal in Bu$hco dollars.
$3.33 / gallon here in Salinas, CA for cheap regular.
I paid $3.49 in the Central Valley…
The whole key to gas, is availablity.
I envision a 1973 or 1979 like supply shortage, this summer.
5 dollars a gallon coming to Minnesota….followed by gas lines and the nastiness it entails.
This is going to sink the economy…you should go to the malls around here….I am getting reports that they are dead and not even keeping or making enough to keep the lights on.
After Christmas 2007, the lights will be going out all over these businesses.
Peak Oil is here.
Check out http://icarpool.com to find rides that match yours. Meaning from, to, and the same time and days etc…
$2.96 in Plano TX at Sam’s Club
$3.33 best I can find near me in Portland, OR.- maybe $3.25 in the best place in town.
My unlimited ride Metrocard is still $76 per month (pre-tax). I did see $3.29 last week up in Westchester.
Thats a deal!
$3.06 at Diamond Shamrock in Ahwatukee area (part of Phoenix). Did i not mention Pengrowth stock a few days ago on this blog? Up today 3%. The 14% to 15% yield is sweet.
I paid 3.19 in NoVA
Too bad gasoline can’t be freeze-dried and then reconstituted ‘cuz I’d send you all some from New Mexico (especially you in California with the “Special Estate Reserve” that is sold there). $2.97/gal here.
Gasoline here is actually going DOWN in price. Maybe because it lacks all of the “fuel saving” additives, we actually are getting more mpg than California fuel.
Note to travelers: the cheapest place to get gas in southern NM is on Motel Blvd. off of the 10 fwy: Pilot gasoline. (Which competes with Shell across the street (and which has the same price).
BTW, the 10 fwy going through Las Cruces is a big-time speed trap. Californians: there is no “fudge factor” forgiveness of 5 mph or less as in Cali. Here, they will pull you over for going even 1 mph over the speed limit. Notice too that the truckers will slow down from doing 85 mph (yep) when they enter Las Cruces city limits. They will drive 65.
~Misstrial
Heehee - misstrial - the I395 (in CA) going north to Mammoth does exactly the same thing - so funny to see snow bunnies fail to slow to 25mph (from around 90mph) once they hit the limits of little towns like Independance or Big Pine.
And you better be going exactly 24.5 mph and no more, cos the local police lay in wait to give tickets…must be nice little earner for those towns, once the winter skiing season is over.
$3.29 for regular in Costa Mesa, CA 92627
Yeah dummy, your high bid really upset the auctioneer’s second cousin so bad that he puked from laughing on the way to the bank.
“Housing Market Threatens to Stagnate the US Economy”
Will the real estate market crisis lead to stagnation? Will stagnation, if coincided with inflation, lead to an economic crisis the impact of which even the giant transcontinental American companies will not be able to absorb?
All these questions raise concern and suspicion in the minds of American economists, the answer will not be possible until the effect of the housing market in the overall performance of the economy becomes clear in the coming months.
http://english.daralhayat.com/business/05-2007/Article-20070521-aee79baf-c0a8-10ed-01b2-ede81fd832e9/story.html
noting that the number of defaults on loans payments today represents 13% of the total home loans in the country, or 10 trillion dollars.
Is that correct? The number of current defaults = 13% of total home loans? If so, then we’re in for a world of hurt, as this is just the beginning. Could up to 1/3rd of the current loans go into default?
“What’s clear is that many shoppers, for now, are choosing to watch, not act. What’s unclear is what will get them to become buyers.”
I loved this quote. What a conundrum!
Prices are unaffordable. What will it take for prices to be affordable?
Hmmmmmmmmmm…..darn, can’t seem to come up with an answer!
“The Poverty Business”
In recent years, a range of businesses have made financing more readily available to even the riskiest of borrowers. Greater access to credit has put cars, computers, credit cards, and even homes within reach for many more of the working poor. But this remaking of the marketplace for low-income consumers has a dark side: Innovative and zealous firms have lured unsophisticated shoppers by the hundreds of thousands into a thicket of debt from which many never emerge.
http://www.businessweek.com/magazine/content/07_21/b4035001.htm
“Plankton Aquaculture”
“thicket of debt”
How about “pinnacle of pain”? “Rainforest of regret”, “island of incumbrance”, “reef of red ink”, “tundra of torment”, “paddock of eternal ass-pounding”… the possbilities are endless.
Peak Debt
aladinsane:
peak debt
http://www.financialsense.com/fsu/editorials/jain/2006/0904.html
This time, the banking Crooks have taken the problem to such a scale that the middle class in America will be decimated. America will become a nation full of bankrupt households most of whom were formerly middle class.
” America will become a nation full of bankrupt households most of whom were formerly middle class.”
Through history, this has been the cause of revolutions.
Isn’t that the whole purpose of the banking system?
Yes. “Print money” until there are no takers.
“paddock of eternal ass-pounding”
ARM’s in arrears……
Oh! There is always bankruptcy.
Not for those who make above the median income: http://www.bankruptcyaction.com/bankreform.htm
And since the vast majority of subprime “owners” have refi’d, Heloc’d, or both in the past 7 years, they have already converted their no-recourse purchase-money mortgages into full-recourse loans. So, no simply just mailing the keys back to the bank, either
Can’t get blood out of a rock, though.
If there is no money there, no amount of hounding is going to bring it back or do you want debtor’s prison again?
Oh, I agree. If I had my way, they’d “un-reform” the Bankruptcy code. There’s something fundamentally wrong with a system that allows companies to glide in and out of bankruptcy whenever they please, while regular people get saddled with debt forever. First, they made student loan debt perpetual, and now credit cards and everything else.
Is it any wonder the banksters make bad loans by the cartfulls? Virtually no downside risk for them, thus, no need to qualify borrowers any more. Sell all the ‘definitely bad’ loans to MBS holders and keep the ‘probably good’ ones for yourself. If any of the good ones go bad, just hound the debtor to his grave. Nice to be able to write your own laws like the banksters, isn’t it?
“It’s not just Poly parents. I’m also working with local buyers who are saying they’re ready to buy because prices have come down…”
Most of the resets haven’t even happened yet and these people think they are getting good deals. Yeah right. The fact that people are buying on what appears to be a dip leads me to believe this downturn will be much longer and worse than I originally thought.
In a year, after many more resets, these buyers will have already bought (on this dip). So who’s going to buy the resetting mortgages at that time? Not only that, but values of homes bought on the dip will plummet further as the resets set new lower comps.
yep…. if Buffet’s so keen on Real Estate right now why does’nt he use some of that 50 billion in cash burning a hole in his pocket on real estate? instead he wants to buy a cash - producing company. interesting
oh wait he owns C-21 right? guess he needs these ‘bargain hunters’ to generate revenue for his cash-producing company. hhmm
“The fact that people are buying on what appears to be a dip leads me to believe this downturn will be much longer and worse than I originally thought.”
The NASDAQ crash was the same thing. People were so conditioned that there was no way to lose money on those stocks, that every little dip was a buying opportunity for the financially “savvy”. We’ll see the same thing with RE. And anyone who is buying now will probably be stuck with that house for a while, so count them out for any trade-up or trade-over action. More and more of the chain will just freeze up. First timers can’t get in, and more and more above them won’t have the wiggle room to do anything but stay put.
“The fact that people are buying on what appears to be a dip leads me to believe this downturn will be much longer and worse than I originally thought.”
I agree, but I think the stink bomb will be CC debt unwinding in addition to less consumer spending. We all know that HELOC’s helped many on their way to serfdom but so did those auto leases, home builder purchases, Best Buys, etc on the how mucha a’month it a’gonna cost me plan. All of those lay away time payment plans took away from future sales and we will soon see them in the nude on wall street balance sheets in the near future.
I agree. CC debt will swell soon as all the HELOC juice is gone and those new cards get filled up. This is what will finally stall the economy… when the CC usage finally slows (its already climbing if you look at MBNA, Capital One etc.)
“CC debt will swell soon as all the HELOC juice is gone and those new cards get filled up. This is what will finally stall the economy… ”
The credit card companies are already reporting increased spending so far for 2007, as if this is a GOOD thing, as if this points to the U.S. consumer “holding up” in the face of a slowing economy and “sluggish” housing market.
People are using credit cards because they can’t make ends meet, and the housing ATM is tougher to tap.
“‘It’s not just Poly parents. I’m also working with local buyers who are saying they’re ready to buy because prices have come down, and they’re looking back at the amount they paid for rent last year,’ (realtor) Sean Fitzpatrick said. ‘They say, ‘I might as well buy and have the potential for appreciation.’”
all’s this translates into from this “Realtor” is “there’s never been a better time to buy”
“And this year’s sales pace is so sluggish that only two years – 1993 and 1995, started any slower for homebuying in DataQuick’s two decades of O.C. sales history.”
“A total of 266 homes were sold last month, down from 354 in April 2006. That represents a 12-year low for home sales in April and the 19th consecutive month that home sales have declined year-over-year.”
Too bad these numbers aren’t adjusted for population, some areas might very well be experiencing the worst sales number per capita ever.
I’m just thankful it wont spill over into the broader economy. Particularly in light of what you just pointed out.
“Southern California still has a housing shortage”
Ah, good to see Myth #1 making a comeback during the bust phase. A local professor took this one on for San Diego at least, there is no housing shortage:
“The housing shortage.” Referred to by the more excitable pundits as the “housing crisis,” this is the crowd favorite. The claim is simple: there aren’t enough places to live, so the homes that are here have become very valuable. Despite the popularity of this idea, though, the San Diego housing supply has actually grown in line with population all along.”
http://piggington.com/the_san_diego_housing_bubble
I just signed a new lease in North County San Diego (guess I’ll have to change my name), but the prices in La Costa are tanking so low I had to do it. After turning in my credit app I pulled my future rental owner’s property report, no defaults, no risk of foreclosure, it not just property owners who have to screen tennants these days, renters are advised to screen their future landlords.
BTW, driving up Alta in La Costa this weekend, I thought Pacific Beach was bubbly, the whole street is for sale, sign spinners on every corner, one for sale sign on top of another. If anyone wants to buy in 2009 you might want to check here, its full of FBs.
“After turning in my credit app I pulled my future rental owner’s property report, no defaults, no risk of foreclosure, it not just property owners who have to screen tenants these days, renters are advised to screen their future landlords.”
Excellent, excellent, excellent advice. Only thing I would add is to make sure the LL is not in arrears for the utilities (should that be a provided service in the lease). Don’t want to have the water shut-off.
~Misstrial
Mike,
I know Alta well….will still do better the San Ellio Hills.
What you to know that the extreme sport of Street Luge was born on Alta.
its alga!
Its the spring bounce. A few high sales here and there. A couple of people getting excited about “deals” and the market gets some momentum.
Sit back and relax. Save some money.
Two years from now… this will all be like some weird dream. Five years from now we will wonder how prices ever got that high.
Headlines will be:
Will real estate ever recover?
How far under water are you?
How will real estate survive without FM?
don’t forget ‘there is life after foreclosure’
I keep hearing that higher end homes slow down first, but middle-range home sales stay strong a little longer. At first I was discouraged, but I just realized that this only means that the POS homes in my price range are going to have to compete with higher end homes once the higher end homes are forced to lower their prices to our level.
The day will come when I can get either of the below for $250,000
Cubic cookie cutter sh**box slapped together in three months and flipped 3 times
or
A relatively quality home, currently stagnating the market at $350k with NO interest from buyers…about to begin its journey back to reality.
Which one will I choose?
Ever have one of those; If it wern’t for bad luck I’d have no luck at all days?
http://www.foxnews.com/story/0,2933,274393,00.html
Not sure about other states, but in OR the realtor and seller are not obligated to disclose any death that occurred in the house.
In California you have to disclose deaths in the house.
“When you have a family, it’s always a good time to buy!” LOL
http://www.youtube.com/watch?v=AYiX2BuRVhg
I could only watch a few seconds of this one. It’s almost as bad as those videos of barking dogs.
The best part was “Why should we pay the same in rent when we could own?” That’s the only good metric in the commercial, and one that fails in almost every market today? “Why would I spend nearly twice as much to own when I can rent?” is the proper question.
I still think you need to factor in the capital gains income tax exclusion in figuring real estate buying verses renting along with the mortgage and property tax right off . But you know those factors were already priced into the increases fron 1998-2002 ,along with the low interest rates . No reason the price increases yearly should of continued the way they did .
I also think that affordability would cap real estate eventually even if you had a limited supply of real estate because qualified borrowers would be in short supply . Now you have the worse situation for prices crashing ,which is big supply of homes with short supply of qualified buyers .
Tax exclusion my a$$.
The only difference between an owner and a renter is that the landlord is a financial institution instead of a private.
In overpriced markets (91320 in my case), find yourself a nice landlord to rent from and put the 50% you save each month to work for you.
Then buy at bottom in 2012.
Oh I agree to not buy now ,but still there is some merit to the price increases up until about 2001/2002 IMHO .
I like the comments on that video, maybe it was someone from this blog that left them?
These ads make me want to throw up. I should buy because of “choices”? All “realestate is local”…talk about smoke. How about the fact that prices are nuts and anyone who buys now will get buried.
Just noticed a few things this past weekend. After months of zip activity in the “hood” where I’m at a bunch of houses went up for sale. Summer season.
Walked the dog past a house that popped up in the realty track free email. That guy is under for 40K or so. He had a couple of toys for sale in his yard. I thought about buying a motorcycle from him to save some gas. Almost makes economic sense for me.
People are underestimating the 10%~20% drop effects.
If we had a measly 10% drop in my area (low cost for SoCal) it wipes out any “equity” you would have built for almost seven years along with your 5% downpayment. Not sure what a larger downpayment (20%) means for you in this case. Just means it ate your downpayment along with opporitunity cost. With cost of sales… You are talking about not having equity for ten YEARS! How is that for throwing your money away on rent!
My cost basis (from my rent) is under 1500$ per month and there are substantial number of units in that price range. So, I have to wait till things equalize (if they ever do) in my area. I figure five years of 5% inflation along with 10% price drop.
Poof, I buy something. Maybe.
Words: 1
Conviction: 0
“I thought about buying a motorcycle from him to save some gas. Almost makes economic sense for me.”
I got my motorcycle out of winter storage a couple weeks ago, topped off the tank on the way home. I drove it over the next several days back and forth to work, about 115 miles. Filled my tank up again just a couple days ago, 2.6 gallons. Ah, that felt good.
Snowpack say goodbye now.
http://cdec.water.ca.gov/cgi-progs/current/PLOT_SWC
Today, while talking to my insurance company, the agents assistant made mention of her “investment” properties in AZ as we chatted on the phone. I would be shocked if this woman makes over $40k per year. Boy is this gonna be something…
Well, someone’s been busy…This was at 1,109 yesterday,and 950k last month…..
http://tinyurl.com/2jcads
I see 1,226,182 listings at 9:57 p.m. EST on May 21, 2007.
Just wait till the NAR cuts ZipRealty off from the MLS. I also don’t think this includes FSBO’s, REO’s, and foreclosures or new construction. Factor that in and I bet you are close to 2 million.
Will they do that?? They do have some REO’s in there. But they rarely have new construction. I kind of got into an argument with my zipreality realtor about that. She said everything would show up if its in my price range. I said thats not true, I saw some new construction that wasnt listed. Havent talked to her since.
Probably not FSBO or new construction, but I think bank owned properties show up.
We went to look at one in our zip-code months ago… it’s still on the market. It’s in the MLS. It is range priced, the minimum is what they owe the bank. I heard a lot of visitors say “good luck” to the agent when they left, the place was quite big, but a dump. The amazing thing was that this house was bought decades ago, so the owner must have managed to burn pretty much the $1.095M he now owes the bank. And it was not used on remodelling…..
Mortgage business keeps shedding jobs…
Coworker just informed me that his girlfriend was laid off today from the mortgage company she works for. Apparently, she only heard of this today and was told not to show up for work tomorrow! The excuse she got for not having been given some notice time, was that “everybody is laying off people this way” without any previous notice.
Sad for her, but it would be surprising if they handled this any other way.
Ever heard of tip of the iceberg?
The “War Zone” in Albuquerque is a much better place than the gangland areas of Oakland or Los Angeles. At least I am not terrified of the area when I have driven through, or stopped there. Of course, definitely is not the nicer part of Albuquerque and glad that I don’t live in that area. Looks like the residents there are Hispanic, Native American, etc and are definitely on the lower end of the economic scale. The car dealership, Byrider, look like they are a buch of slimy a$$hats willing to steal money from someone on the edge. I don’t know how such people sleep at night. Same for those that run payday loan places, etc.
Housing prices appearing to be holding up quite well in my immediate area.
Same in LC. Lots of denial, “it won’t happen here,” “this area is different,” that sort of thing. They are waiting to prey upon Californians and people relocating from CO.
I was in ALBQ 3 weeks ago. Not too bad, but traffic was heavy at rush hour. We were in the eastern part of town. We were given many warnings by native NMs to stay out of the western part of town and if we do find ourselves in the bad part of ALBQ to keep our windows in the “up” position. We were also warned about Santa Fe: the sanctuary city for illegals that is *the* contributing factor to crime in ALBQ.
~Misstrial
Whoever posted about the idiot in South SF and her koi pond where the raccoons 22, idiot 0. She heloc’d her house over $200,000 to buy 22 koi, of which turned into raccoon food? That has me rolling.
Diet Coke ME.
http://www.npr.org/templates/story/story.php?storyId=10118254&ft=1&f=1018
David Lereah was interviewed by ROBERT SIEGEL of NPR.
ROBERT SIEGEL, host: But to put this in some context, you have been a positive voice for real estate. So much so that a couple of years ago, you published a book in 2005 whose original title was “Are You Missing The Real Estate Boom” …. the subtitle of that book was “Why Home Values and Other Real Estate Investments Will Climb Through the End of the Decade.” What went wrong? Where was the point where you stopped seeing real estate values going up through 2010 and something happening to it instead?
Lereah: Great Question! First the boom was Double Day Random House Word that ..
Seigal: that your publisher, you are telling me
Lereah: .. put on the title. It wasn’t my title unfortunately. So it was a poor choice of titles.
Siegal: You are not the first person with that excuse in this studio.
Lereah: But if you actually read the book. I say the boom is not good, it cannot sustain itself. I actually redefine boom to be a healthy expansion.
Siegal: Well wait a second. But in the cover of the book you said it would be the “golden age’ of real estate.
“DataQuick stats show 10,661 O.C. homes of all stripes sold in the first four months of this year. That’s down 21 percent from 2006 after a 21 percent year-over-year drop in 2005. That puts 2007’s buying pace 22 percent behind the 1988-2007 average.”
Real estate Math? I don’t get it.
How about this one from our friend Angelo (aka Tan Man):
“The cause of the problem that we have today is decreasing values. That’s the cause of the problem, because we didn’t have delinquencies and foreclosures when values were going up,” he said at a Mortgage Bankers Association conference in Manhattan.
“First-time home buyers were begging us to make them loans because they thought home values were going up significantly, and so they put a lot of pressure on us to make them loans,” he said.”
Ben, I don’t even know where to begin with this one……….
Let’s see,
The CEO of mortgage institution gets paid millions of dollars to PLAN and drive business execution.
However, analysts at CFC never told poor Angelo that there was a probability that home prices could go down.
That is why he kept cashing stock options and never thought of a plan B.
Yaks…
How about this one from our friend Angelo (aka Tan Man):
“The cause of the problem that we have today is decreasing values. That’s the cause of the problem, because we didn’t have delinquencies and foreclosures when values were going up,” he said at a Mortgage Bankers Association conference in Manhattan.
“First-time home buyers were begging us to make them loans because they thought home values were going up significantly, and so they put a lot of pressure on us to make them loans,” he said.”
Ben, I don’t even know where to begin with this one……….
What…? you don’t think there’s a little truth in that statement… Econ 101 Supply and Demand
Oh come on, yeah the borrowers had Angelo and his minions in a freaking headlock forcing them into giving them bad loans.
Yeah, decreasing home values are the root cause of the subprime problem. Gee, why didn’t I figure that out?
Now you’re just being disingenuous…or stupid. I don’t which one.
“Oh come on, yeah the borrowers had Angelo and his minions in a freaking headlock forcing them into giving them bad loans.”
Everybody’s a victim in this haven’t you been paying attention…
FYI I was just pulling your chain.
I am still waiting for the major pull back in San Luis Obispo county homes. Sellers still can’t belive how low their neihbors have sold recently. It will come back up they think. Yeah right in 4-5 year maybe. Let the bleeding begin!!!!
Flippers, specuvestors, and “Poly parents,” are trying to offload with the completion of Poly Canyon looming on the horizon. Just think - 1500 new apts on campus. The Tribune should run with this one. they could scare the living daylights out of local realtors, but they probably won’t do it.
~Misstrial
Looks like housing DOES affect the economy after all:
“In few places has the decline in auto sales – foreign or domestic – been more pronounced than in San Diego County.”
“In 2006, car sales slid 8 percent in the county, and they are projected to decline nearly 2 percent this year, according to data released last month by the California Motor Car Dealers Association.
It was the biggest decline since San Diego’s post-Cold War recession of the early 1990s. Only three of the nation’s top 24 auto markets had worse declines last year: Cleveland, Philadelphia and Pittsburgh. In Pittsburgh, the worst-performing area, vehicle sales were down nearly 14 percent. ”
….
“In the past couple years, a lot of people were using home equity lines of credit to buy cars, but that’s not happening much right now. And the price of gasoline is going up, which is also affecting sales.”
…
“Since hitting a peak of 20,800 workers in December 2004, auto showrooms and repair shops in San Diego County have shed 1,300 workers, or 6 percent of the work force. Automotive employment in the county is now at its lowest point in five years.”
….
“Sales at luxury car maker Lincoln dropped 40 percent in San Diego County last year. Sales of vehicles by GMC dropped nearly 24 percent in the county last year. Sales dropped 21 percent for Ford, 19 percent for Jeep, 18 percent for Chevrolet, 14 percent for Buick, 13 percent for Mercury and 11 percent for Cadillac.”
http://ww.uniontrib.com/news/business/20070422-9999-1b22carsales.html
http://phoenix.craigslist.org/rfs/335832114.html
“$100000 Attention RENTERS-Your Burning Your Money”
I think I’d be looking for a 6%er that knows the diff between your and you’re…..
Heck, I would like a real estate agent that knows the difference between colonial and contemporary.
There are listings here in NoVA for 20,000 square foot townhouses, which I find unlikely.
Yeah, they sure earn their 6%, but they don’t have time to proofread.
It’s all about affordability and price.
Prices in Calillalaland and other lala housing markets need to drop by 50%.
At least and from their high. I am seeing asking prices rise over the last year and to me that just means they will have to drop even further than they would have had the prices remained flat. I am wondering how many FBs have squeezed everything out and now are sitting on a house with 0 equity and a loan that will reset and send them straight into fiscal chaos? Could they be asking/wishing for more because they owe more? I never bought into that “to each according to his need” thing and I certainly will ignore any seller who is wishing to get what they owe. Significant price tankage is coming. Since my crystal ball clouded over some time back I do not know when, but everything I see tells me it is coming.