Some Were Just Gambling In California
KGET reports from California. “New numbers on home foreclosures in the metropolitan Bakersfield area, and they’re up—way up. We checked with the people who publish legal notices and they said there’s been an alarming spike in notices of default and trustee sales. There were just over 2,400 notices of default on home mortgages in Bakersfield during the last five-and-a-half months—a nearly 300 percent increase over the same period last year.”
“‘I think a lot of borrowers were naive, young kids or old people excited about getting a new home and fell for the fancy financing,’ said Ann Marino, owner of the Daily Report. ‘We call it creative financing…and then some were just gambling that their homes would be worth more but that just hasn’t happened since the bottom fell out.’”
“Apparently no one is immune to the vagaries of the housing market it seems. 17 News has learned that the real estate mogul David Crisp and his wife are among the thousands of home owners and investors in trouble.”
“According to the Daily Report, Jennifer Crisp is in default on four homes she holds title to, worth about $2.5 million, including a Seven Oaks-area home. Jennifer Crisp purchased that home last September for $1.2 million. It sold just two years earlier for $630,000.”
“‘I believe the market is going to be down as these foreclosures go to court and unfortunately it could be two years to filter out the foreclosures coming up recently,’ local realtor Mark Ponder said.”
“Ponder said he’s spending a lot of time on short sales of foreclosed homes right now and said while he never had to broker a short sale in his previous nine years as a realtor, he’s got more than a dozen of them to deal with right now.”
The Bakersfield Californian. “The number of Kern County homeowners running into mortgage trouble has risen dramatically in the past year. In April, 770 Kern homeowners entered some stage of the foreclosure process, according to RealtyTrac.”
“Compared with the same month a year before, the figure represents a 564 percent increase in the number of local homeowners with mortgage woes.”
“Eight properties owned by local real estate power player David Crisp and his close family members have entered the first stage of foreclosure in just the last six weeks.”
The Lookout. “City officials Tuesday rolled out a budget for 2007-08 that…comes as indicators point to a cooling in the housing market, long-term spending currently outpacing revenues and the possible annual loss of an estimated $8 to $12 million tax stream, said City Manager Lamont Ewell.”
“The dramatic slowing of the housing market nationally and in California could begin to impact local revenue, Ewell said. In Santa Monica, the number of foreclosures has risen dramatically and homes for sale are staying longer on the market, he said.”
“So far this year, there have been 114 foreclosures in the upscale beachside city, compared to 140 in all of last year, according to foreclosures rates obtained by the City Manager’s office.”
“The current foreclosure rate is double what it was in 2005, when there were 65 foreclosures in Santa Monica, according to the data. ‘Assuming that you extrapolate that out, we are seeing more foreclosures, and it’s showing us that the housing industry is continuing to take a hit,’ Ewell said.”
From Marketplace. “At the Riverside Convention Center an hour outside of Los Angeles, about a thousand people with brochures and paddles sit in folding chairs as the bidding starts. On a big screen is a picture of a two-story house with a market value of $420,000″
“Two minutes later…House Auctioneer: Last call for 300,000, 290 now 3. Anyone else at $300,000? And I haaaaaaaaave sold that $290,000 subject to confirmation.”
“Savvy bargain-hunters can get quite a deal. At this auction, Regina Lane had the winning bid on a three-bedroom house near Palm Springs. It was valued at $399,000. She got it for 260,000.”
“Regina Lane: ‘It’s exciting. I just can’t wait to get into it, because I haven’t seen it. That’s the scary part.’”
The Business Press. “Sales of single-family homes dropped nearly 46% in Riverside and San Bernardino counties during April, the second consecutive month housing sales dropped so dramatically in the two-county region.”
“The last time Inland home sales dropped as dramatically as they did in March and April was in December 1990, when sales dropped 47.4%, said John Karevoll, DataQuick analyst.”
“The words ‘December 1990′ cause local home builders to break out in a cold sweat. Home sales in Riverside and San Bernardino counties were so bad during the early 1990s that some builders, especially in the High Desert, say the region’s housing market slipped into a depression during that time.”
“DataQuick analyst John Karevoll admitted the region’s March and April sales numbers were ‘grim’ and worse than he expected them to be.”
“‘We knew sales were going to come down - they had to - but we didn’t think it would get much worse than 35%,’ he said. ‘I think maybe the extra 10% has to do with the loans some of the banks have been giving out. But there is definitely a lot of readjusting going on.’”
“Rollie Heschong, the owner of High Desert Homes in Joshua Tree, has sold one house this year, in Twentynine Palms, and he had to reduce the price by $50,000 in order to make that sale.”
“‘It’s tough up here, and I have to think there’s more going on than readjusting,’ Heschong said. ‘There are 300 houses for sale in Twentynine Palms right now, 19 of them are mine and no one is buying any of them. My electrician had 30 people working for him last year at this time, and now he has two.’”
“‘It used to be that as soon as we got a frame built, as soon something looked like a house, we had a sale, but not anymore,’ he said.”
“Bruce Norris, president of The Norris Group in Riverside, believes the Inland housing market is down, not readjusting, and that it won’t come back for a while.”
“‘I think that when people say ‘we’re going back to a normal market’ it’s code for ‘we aren’t sure what’s going on,’ Norris said. ‘I guess I’m a pessimist. I don’t see the market coming back for about three and a half years.’”
“Part of the problem has been banks loaning money to unqualified buyers, resulting in defaults and too many houses going back on the market.”
“‘I don’t think gasoline selling at $3 a gallon has anything to do with it,’ he said. ‘I think there is so much inventory out there that the banks can’t deal with it. They aren’t in the real estate business, and with so much inventory out there they’re reluctant to loan money.’”
1ST two posts on my town. I feel so fortunate. LOL
Where do I begin?
The whole mogul tag is getting very annoying. You can be underwater by millions and be a mogul. Can you?
Ditto. How can you supposedly know that much about the market and get yourself in that much trouble? $2.5M, that’s a Serin-like amount.
Hi Crispy
Re: sleepless’ comments:
I was just thinking that - Jen Crisp is in the hole for 2.5M - that’s what Casey was in for.
Maybe Mr. Crisp can buy ad space on Casey’s site, lol.
And he is most definitely NOT a “mogul” any more!
~Misstrial
mo’ gullible
Crispy critters, I’d say.
I have been waiting for the day that this SOB was going to be exposed to all of Bako.
Exposed to all of Bakersfield! How shameful.
He’ll just hide out in Taft
Nobody would ever think you’d hide out in Pixley.
I’m thinking Mojave.
~Misstrial
“He’ll just hide out in Taft”
How about that lovely place Trona?
los banos!
Manteca or better known as Lard that you fry with.
Weedpatch! There or Pumpkin Center.
Dinuba or Reedley?
Hey, Bantering! Don’t you badmouth Trona. Those Pinnacles are my favorite tourist attraction anywhere. You can drive your car around in the God scene of Star Trek V. I’d buy it from the BLM for a mil if they asked.
The Pinnacles are fine, it’s the town of Trona and it’s methy inbred look, with all sorts of chemicals from the various plants, planted all over town, flying through the air…
That make it #1, in my list of places not to live, in the Golden State.
Nah, he’ll hide out in Shafter
Somewhere, at this very moment, he’s sitting there and saying in hushed tones, “f@ck…f@ck…f@ck….”
Guess there go those dreams of being a billionaire by 35. He’s got skills though that will be valuable, busing tables.
Anyone care to guess how much money this guy has blown in the last 5 years?
12 cars including $560K mercedes, Ferrari’s, probably a hummer or two and a Lambo,
$100K watches
$10K suits
$5 million dollar house
etc.
I am guessing he made a boatload of money and spent it all and then some resulting in nothing to show for it except for a bunch of expensive toy.
Crispy let me know when the estate sale is.
I see a divorce and some time in the local correctional facility with BFF “Bubba” in the near future for this young 26 year old shyster.
Why not, it’s the Trump way.
Doesn’t he have something to do with the twin towers to be built by Cal State?
Yes. Twin 36 story towers.
Those towers were lopped down to 30 stories, but still!
Crispy-
Is that a list of commercial or residential property?
Residential only.
Ok, maybe you can help me understand this, being that it must be different up there and you’re local… But how does one become a mogul only owning single family houses. Is the mogul criteria different in Bakersfield?? I mean I’m just asking…
LOL.
He is no mogul. I laugh everytime I read or hear that word associated with this clown.
The local media for some reason, maybe because of the jets, exotic cars, $50k watches, etc…, decided he was a genuis and deserved the title mogul.
To me he is a kid who was in the right place at the right time and who thought this whole boom was because of his genuis. Eventhough a few years ago he was a busboy at a mexican restaurant.
Why are we talking about him in the third person?
I am not these clowns. I used a similar username because they reprented the madness in this town. Crispy as in burnt…
Sorry…I thought we had a Benedict Arnold in our midst.
Crispy, indeed.
LMAO!!
Classic mistaken identity, Crispy is one of the good guys, put your gun away, LOL.
mogul: the writer was a skier!
“Can you?”
Well, The Donald is often called “a mogul,” despite his personal familiarity with the bankruptcy and redemption process.
The Mongols just called. They wanted everyone to know they have no affiliation with the Moguls. They say they’ll go Ghenghis Khan on anyone who confuses them with flopped Donald Trump wanna-bes.
They also mentioned that they have better hair.
“How can you supposedly know that much about the market and get yourself in that much trouble? $2.5M, that’s a Serin-like amount.”
It was a “no-brainer” for these clowns. With the help of the loosey goosey lenders, they go out and buy 10 homes at $300k a pop, and they “own” $3 million in real estate. See how easy?! Adios muchachos!
mogul (2)
“elevation on a ski slope,” 1961, probably from Scand. (cf. dial. Norw. mugje, fem. muga, “a heap, a mound”), or from southern Ger. dial. mugel in the same sense.
Maybe they are not rich and powerful. Perhaps they are just a steaming heap or mound.
Did you see that list at the bottom of the BC article? They were just gambling.
Yes.
This is pure fPure and simple. All of these had to be cash back at closing.
I would bet all the loans were done at their “one-stop shop” as they liked to call it in their commericals. How can this be legal? Handling 100% of the transaction in house.
It’s all about loopholes.
Holy cow!! I never realized how young and excessive this guy was. Check out the other article about him from June of ‘06 from the BC article. 12 cars?? WTF? $5M house with a Bible study room? Not to get all religious but since when is this much excess a virtuous trait?
Greed did him in…
The only studying he’ll be doing, will be from a gideon, in a motel 6.
Nowhere does the bible advocate borrowing money, let alone money you can’t pay back.
Hey, there’s nothing like your own Bible study room to show everyone how big God is in your life.
Ben-
Gambling on what?. Unless those were commercial, positive income producing properties that guy is a complete idiot.
I dunno, Ben, I think they just have a thing for alligators.
Alligators need love too.
Be sure to watch the video on the first story. These clowns at this station were cheerleading this Crisp clown all last year. Even when it seemed he was done, they did several puff pieces. I assume its because Crisp advertised with them.
Now that he has stopped advertising on TV and newspaper, they are all over him.
Knock, Knock, Knock,
Let me in,
Not by the hairs on my chinny chin chin,
Then I’ll huff and I’ll puff….
Crispy& Cole,
WTF?!!
???
I am not this guy. LOL. No way!
“According to the Daily Report, Jennifer Crisp is in default on four homes she holds title to, worth about $2.5 million, including a Seven Oaks-area home. Jennifer Crisp purchased that home last September for $1.2 million. It sold just two years earlier for $630,000.”
Ain’t it grand to see these investers boiling in the pot of oil whose fire they stoked?
“Ain’t it grand to see these investers boiling in the pot of oil whose fire they stoked?”
It gives me great pleasure; a warm and fuzzy sort of feeling. I sleep a little better at night knowing that the country is on the mend.
Think this is just the very very tip of the first iceberg we will be seeing over the next few years of exponential decline in the RE industry. The credit implosion that brought on the Crash of ‘29 narrowed the price gap between the “Big” houses and the “Small” houses by a mile. Thus as this unfolds one may anticipate that a lot of these million dollar plus homes could implode by a much greater percenatge than the common home. When that happens and the tide goes out, then we will see that so many swimmers have been swimming naked (and probably peeing) in the pool.
It was just like yesterday the SJ Mercury had an article on young Crisp who dropped out of Bakersfield College and made huge sum flipping houses. It went on to descripe how the young Crisp found Crisp&Cole,
driving around town in the most expensive and flashy car, wheeling and dealing.
Guess what, we predicted the end of Crisp and Cole.
We should have saved these news article, as a history lesson. Same with Quick Loan Funding, from used car saleman to CEO , and .. back.
Looks like Mr. Crisp found one of Warren Buffet’s “zeroes”:
“Even very smart people have trouble not getting caught up in the game and thinking ‘I’ll just dance one more dance’. They think they’re smarter than the rest of the public and even though they know it will end they’ll get out a little sooner or they don’t protect themselves against something that will come totally from right field. If you take the numbers 28, we’ll talk percentages, 28 times 33 times times 17 times 22 times 0, the answer is 0. You can’t have a 0 in there and I’ve seen a lot of people put up a lot of good numbers and then they stuck a 0 in there and it’s over.”
‘(Fresno) Investigators say Phillip Contreras conducted appraisals illegally by using his boss’s license. He’s charged with 142 counts of forgery, grand theft, identity theft and doing business without a license.’
‘Michael Keller, real estate appraiser, says, ‘It’s happening all over the country right now.’ Keller is a certified appraiser in the business for 37 years. He says the real estate boom a few years ago forced appraisal firms to hire employees with no experience in the real estate field. ‘Now, things have slowed down, so these employees are without work, doing work on the side, forging the signatures of the licensed appraiser.’
Ben,
(Fresno) Investigators link seems incorrect
I fixed it. Thanks for letting me know.
Hmmm, seems he’s out on a $1.7M bond. Who the fudge posted that? His former boss?
Since he has made the local news one of the Fresno’s “big time” lawyers will get him 6 months and he’ll be out by Labor day with Fresno’s overcrowded jail population. Of course my money is on him being about 20 miles from the TJ border right about now.
Is there a site to find area fc numbers? Interested to see how the Valencia/Santa Clarita area is holding up. I am hoping it will be time to buy there in two years.
Not even close. If you’re looking for a bottom, you’ve got at least 4 to 5 years.
I can’t take renting for 4 more years. Man I miss owning a house
I’ve “taken renting” for 18 years. You’ll live.
I’m an in-n-outer. In the 24 years I’ve been goin’ it on my own, I’d say it’s 50/50 between renting and owning, jumping in and out when it made sense. Honestly, the only time I resented either situation was when it was costing me money. Aside from that, I’d give a slight edge to renting. In all fairness, though, I’d have to say I’m a hate-to-be-tied-to-anything type of guy. I love the idea of being able to walk away whenever I please. Oh, and I resented the hell out of the weekend homeowner honey-dos.
I’m an in and outer also. In in ‘87 and out on ‘91. Rented for 3 yrs and back in in ‘94. Three houses later out in late ‘06. Renting now. I have to call it even. One thing is that if you own, your life and enjoyment will revolve around improvement and maintenance. If you like that stuff great. If you rent your enjoyment will be getting out and doing things. My rent includes all yard maintenance and I don’t do a thing but pop in and pop out. Have to admit sometimes I wander into a HD just to see what it’s like (mostly empty last month) and dream about building a BBQ or deck or some sh&*t. I have to say that most people would be crazy to own now. The rent to own multiples are way out of whack. No tax brackets make it viable - and AMT will get you anyway. The only reason to buy now is if you HAVE to do home improvements on weekends. Even then I suggest renting and volunteering for Habitat for Humanity or something if you can’t part with your hammer. And while prices to buy are falling, I think deflationary forces are more evident in renting. I got the best deal I could (great) 6 mos ago and I swear I could probably get 1-2 more rooms now for the same price. LOTS of inventory.
Why? I’m interested, seriously.
So many reasons.
1. Tired of moving (we are in our third house in three years, one was us wanting to move, the other was a CA investor’s house who wanted way to much rent then went into FC)
2. Tired of having to call someone to have things fixed and then not having anything done about it.
3. Tired of not being able to do what I want to the house cosmetically
4. Tired of never knowing how long I will be living somewhere. As we have found out, we could get a call tomorrow that the house has been taken over by the bank and we are out.
Look I know it does not make economic sense to buy now, but in two years we are moving out of this s%#& hole state of NV and moving back to CA. I am going to find a home I can put 20% down on and afford the payment on a 30 year fixed and then I am going to stop worrying about the RE bubble.
I don’t understand how some of you seem so fond of renting? I know we are saving money, but other than that it sucks a**
So many reasons.
1. Tired of moving (we are in our third house in three years, one was us wanting to move, the other was a CA investor’s house who wanted way to much rent then went into FC)
2. Tired of having to call someone to have things fixed and then not having anything done about it.
3. Tired of not being able to do what I want to the house cosmetically
4. Tired of never knowing how long I will be living somewhere. As we have found out, we could get a call tomorrow that the house has been taken over by the bank and we are out.
Look I know it does not make economic sense to buy now, but in two years we are moving out of this s%#& hole state of NV and moving back to CA. I am going to find a home I can put 20% down on and afford the payment on a 30 year fixed and then I am going to stop worrying about the RE bubble.
I don’t understand how some of you seem so fond of renting? I know we are saving money, but other than that it sucks a**
“we are moving out of this s%#& hole state of NV and moving back to CA”
Talk about frying pan to the fire. I agree NV has gone to heck, but only because it’s been Californicated. Go buy your home, but I think you can do better than Cali.
I’ve lived in NV and CA. I actually liked the year I was in NV because most of the people I knew where completely without pretention. I’m sad that CA invaded. I’d go east, wayyyy east.
I guess it’s all a matter of personal taste. I agree there are better places to get more for your money, but for me you can’t beat the climate and way of life in Ca. I guess for us it feels like home and where we want to be. I totally agree that the CA gov has made it less attractive, especially for a business owner like me, but it’s stll home.
“I agree NV has gone to heck, but only because it’s been Californicated.”
Then it’s a lose-lose. What place in the West hasn’t been? This process really ramped up over the last 5 years. Correlation? I think it’s a cause and I still think when this bubble dies so will the desire for former Californians to live elsewhere.
Colorado is a great state. I’d be there if there were any jobs.
Back when I lived there, the locals were biatching about the Californication. I told ‘em, “So mess somethin’ up!”. As long as it is a beautiful state, with light traffic, affordable housing, great job market, relatively low crime, the awesomest NFL and NHL teams, etc… people are gonna move here.”
Seems they took my advice. The job market crashed, housing bubbled, the Avs tanked, the Broncos can’t win a playoff game, they had one of the worst winters in recent memory… Not such a great place anymore.
The “way of life”. Sorry, because once again I need an explanation.
Well, we lived in Valencia so it had a smaller community feel to it plus no inversion layer in the morning. Great schools, friend and of course weather. Still only 20-30 minutes from going to see the Dodgers and 45 min from going to the Clippers (fine or Lakers) and Trojans.
Only 30 min from the beach and only an hour or so from the mountains. Not a bad way of life for us.
I know there are serious tax problems and immigration problems and several other serious issues, but I’ll take it!
It is very very difficult to move to any other place with a cold winter after spending 10 years in Southern California.
“Well, we lived in Valencia so it had a smaller community feel to it plus no inversion layer in the morning. Great schools, friend and of course weather. Still only 20-30 minutes from going to see the Dodgers and 45 min from going to the Clippers (fine or Lakers) and Trojans.
Only 30 min from the beach and only an hour or so from the mountains. Not a bad way of life for us.”
I take it you moved away in 1994?
“I take it you moved away in 1994? ”
LOL, ya got that right…
Capocorso
Two suggestions from someone who has rented. Get something that is 2 to 5 years old. That’s the sweet spot for homes and low maintenance. After the warranty work and before the sh&*t starts to fall apart. Both rentals I’ve had were in this category and no problems for 7-8 years. Second, find a rental that’s professionally managed. This doesn’t eliminate the bk problem but it helps. Managed rentals tend to be owners who have been doing it for awhile as opposed to newbies who’s cash flow is a ticking bomb
Still only 20-30 minutes from going to see the Dodgers and 45 min from going to the Clippers (fine or Lakers) and Trojans.
Only 30 min from the beach and only an hour or so from the mountains. Not a bad way of life for us.”
Cool! I always wanted a helicopter.
capo - go back to Valencia for 2 weeks this summer and see if anything you list is still REMOTELY true…. really!
I’m spending my weekend PAINTING my house (and fixing the roof, if time permits. All that glitters is not gold. That said, we bought the house we intend to die in, and it will be paid off before I retire.
I rent and love it. I found that if you do a few small maintenance items on the home, the landlord will love you, be afraid to raise your rent, want to keep you in the house, etc.
I’m staring my fourth year renting there. He’s raised my rent a total of ~6% (including the last increase for the fourth year), and has done so apologetically and hopes I can stay. I don’t have the heart to tell him how much we actually earn…
It’s all about the house and landlord. Renters should begin to make landlords fill out applications…
When I started renting my current place 8 years ago the roof needed to be replaced. I offered to advance my landlord a year’s rent if she needed cash to get the job done. She’s never raised my rent since.
If the rent don’t fit, then you must commit.
“I can’t take renting for 4 more years. Man I miss owning a house”
Why don’t you go and take a shot at your house owning you? Go ahead and buy, we need some people to take one for the team.
Not sure why all the hostility. I did say I plan on renting for another two years. Some of you take way to much pleasure in all this. I sold three houses over two years ago and have been renting ever since.
Also not sure why So Cal gets such a bad rap for traffic. I’ve lived in DC, Seattle, LA and Vegas and there is traffic everywhere. There is nowhere in this country I want to live that doesn’t have traffic problems. If your idea of a good life is buying a bunch of acres in the middle of nowhere then more power to you, not sure why some of you have so much hostility to those that A. miss owning a home and B. want to live in Ca.
Yes!
We do need some knifecatchers for the forseeable future - Treasury Secretary Paulson is saying as much…
“Why don’t you go and take a shot at your house owning you? Go ahead and buy, we need some people to take one for the team.”
Please, no more of that, I just spit coffee on my keyboard!!
The numbers to watch are Case-Shiller. Wait for it to bottom out. How will you know? When it actual starts rising for 6 - 8 months straight. Question is how long before it starts rising again? It’s anyone’s guess, but probably measured in multiple years from today.
That’s a good plan. C-S is not a lie, even if seems to understate the San Diego problem.
Don’t forget - it’s a lagging indicator. Possibly may also miss certain improvements, ie say the FB put $100M in improvements, still sold it for less than he bought it for. C-S misses that, I believe. I’ve got unfortunate experience there! I need to buckle down and read the whole data sheet on its calc methodology, though.
capocorso: Oh I so understand your situation. I’m in NM but also maintain a residence in Cali. I think I would go crazy without a connection to my home state.
The Daily News, Santa Clarita Valley/Valencia edition. The Daily News has a big facility off Rye Canyon Road - the real estate editor there may be able to offer some ideas on where to get FCs. Also banks publish their own lists in Cali.
~Misstrial
I grew up in the NW and went through all the Californians moving up in the 80’s. I remember getting so sick of kids from California always telling me how great it was in CA. Now I know how they were feeling.
I hear you guys. I’m a SoCal native, and I really like it here. We get all the touring productions from Broadway as well as all the concert tours, and that’s really important to me. The variety of foods (both restaurants and store-bought) is hard to beat if you also are sensitive to cold weather like I am. Every time I visit New York I think about how cool it would be to live there, but it’s expensive there, too, and they actually have a winter. When visiting family in San Antonio we consider moving since the housing is so cheap, and then we hear that they have limited theater options and we have yet to find a Mexican food place there that even comes close to 100 mom and pop places in SoCal (let alone all the other non-American food restaurants we have here). Our friends and family here in SoCal are also very important to my husband and I.
I admit that I am envious of folks who could leave Cali with little issue. It must be nice!
That’s funny we’re from Texas living in SoCal, and we can’t find any Mexican food that competes with Austin and San Antonio.
I grew up in the Bay Area, and while it’s nice, it’s also crowded and I’ve explored almost all of it. It’s nice to visit, and if the housing prices were the same, I’d THINK about moving back there, but now, I just want to pay the house off, set up retirement, and explore the Northwest more. California weather is great, though, at least on the coast.
“Is there a site to find area fc numbers? Interested to see how the Valencia/Santa Clarita area is holding up. I am hoping it will be time to buy there in two years”
http://www.foreclosure.com/search/CA_037.html
Hope this gets you to Foreclosure.com, Los angeles county. just type the name of any city or community where it says city. or type in zip code for a specific zip search.
Santa clarita; 91350 and 91390 48 FC/124 NOD’s
Valencia 91355 91354 69 fc/198 NOD’s
Castaic 91384 20 fc/54 NOD’s
Canyon Country 91351 91387 77 fc/243 NOD’s
All data from foreclosure.com
“‘I think that when people say ‘we’re going back to a normal market’ it’s code for ‘we aren’t sure what’s going on,’ Norris said. ‘I guess I’m a pessimist. I don’t see the market coming back for about three and a half years.’”
Alright Norris, we know you’re here. Care to break your anonymity?
You are probably right. That’s funny.
He has his own blog and has been interviewed many times by Lansner’s RE blog.
He is a died in the wool bear on CA housing, even sold his multi-million primary residence.
Actually, Norris is wrong.
If he were a pessimist, he’d be saying the market’s not coming back for 5, or 6 or 7 years. At the earliest.
This “three and half years” business is for optimists.
It’s wierd, how everything HBB predicted is coming true. Maybe stock market analysts will looking at this blog ASAP.
Common sense is weird?
Apparently it is. Spend some time with J6P’s wife all you’ll hear about American Idol and why their house is worth 4x what they bought for in 99′.
When this is all said and done, the trail to the ultimate source of all our problems will lead us to American Idol. It’s pure evil.
Hey, my cross-town neighbor just won! No hating.
Seriously, the ONLY time I’ve watched that show was when I was in the hospital with a 10cm kidney stone. You know how scratching an itch… creating new pain take your mind off the old…Well, American Idol made the pain of the kidney stone seem a little less.
I’d take a 100cm kidney stone and a lava rock shoved up my a$$ for good measure over one episode of the god forsaken program.
I’ve proudly not watched even a scintilla of it…
Gee’s….I love A-Idol (without the nerds please)…I think its great that a young girl (Pickler) from some podunk town with no opportunity is now cutting CD’s…
“I’ve proudly not watched even a scintilla of it”
me either!
American what?
“Common sense is very uncommon.” Horace Greeley.
Neither weird nor unprecedented.
Read this fascinating book to learn why:
http://www.randomhouse.com/features/wisdomofcrowds/
> Not even close. If you’re looking for a bottom, you’ve got at least 4 to 5 years.
> I don’t see the market coming back for about three and a half years.
So which is it, ex-nnvmtgbrkr? Is it going to be 4-5 years till we hit the bottom or only 3.5 years before the prices are back to 2006 levels?
Once the market hits the bottom, it ain’t going to bounce back up like a rubber ball. It’s going to stay at the bottom for years (Japan stayed at it’s bottom for over a decade). Only after stabilizing at the bottom for a few years, can the market recover.
The question buyers should be asking is: when will we hit the bottom, not when will the market recover after the bottom.
I think we may hit the bottom in late 2008 or mid 2009. I hope I’m not being too optimistic (too early). I really don’t want to continue renting for another 3 years, but if that is what it takes, I will.
I also forgot to mention… The other question buyers should be asking is what will the prices be at the bottom. I’m guessing anywhere between 1990 and 1998 prices, a pretty large range. Most likely, between 1994-1996 prices. Basically under $100/sq. ft. for the median home.
Heck, I don’t know. I take my cue from the government and pull numbers out of my a$$ just to rile people. How am I doing?
I can see your in one of those moods again
He has been a little edgey today, hasn’t he? Overdue for the rough stuff, ex?
I’ll give it a go. Look for details on tomorrows Bits Bucket.
The chart to watch is Case-Shiller. You’ll know when it has hit bottom after it begins to go up (however slightly) for 6 - 8 months straight. Now, how long before that happens? It’s anyone’s guess…
I think you will know when you hit bottom where it makes economic sense to buy as opposed to paying rent. My gut feeling is that house prices are currently about 30-40% overvalued in California. What I think may happen though is because there is just too much supply when housing prices drop the 30-40% rents might have dropped 10% or so. So just keep watching the buy rent ratio and you should know when to buy.
“…it makes economic sense to buy as opposed to paying rent.”
DING! DING! DING!
As a regular poster here has often suggested, patience will reward those who can defer gratification with a home priced at 100-120X current rent. For instance, if your rent is $2000, you will eventually be able to buy at $300,000, not $500,000 (these figures are in line with current and future San Diego prices).
How about San Francisco where I my rent is $2,100 month for a house that would sell for ~ $900K (Zestimate $1,077,922). The scary thing is that homes are still selling in San Francisco rather briskly. It appears that most for sale signs go pending sale in a matter of a week or so. They are still drinking the Kool Aid here in Frisco.
Instead of trying to pick the bottom, just buy when it makes financial and personal sense to do so (relative to renting).
oops… should have read to teh bottom of the thread.
that second quote wasnt ex, it was him quoting norris. check the quotation marks. i’m right.
PMFJIH, but here’s my take (if you haven’t already heard it):
Prices trend down steeply into 2009, then drift marginally lower for another decade. Expect most of the losses to be realized by 2010, so as long as you’re looking for a place to actually live in and not see appreciation then you should be fine. Why another decade? Boomers retiring. Demographics will weigh heavily against housing (and the economy) through 2020.
Exactly.
We have a population band that is dying and leaving behind it houses - a whole lot of houses. Forget advances in healthcare because I’m already seeing this in Davis as rentals are coming on the market because of owner deaths.
Even if the standing inventory from those deaths are absorbed by the echo boomers (not as many of them as you think fyi), that still leaves a schload of surplus out there.
So, the city of Santa Monica is starting to have trouble paying the bills. Oh well, they could cut back on city employee benefits and reduce the number of employees (i.e fire the worthless bums). Don’t know if that will happen in a socialist paradise like Santa Monica.
They could increase the parking-ticket entrapment, already a severe disincentive (for me) to visit that area.
Hey you hit a sore point! My daughter went down there to visit her older sister an got a ticket for not having a front license plate on her car. Her car was parked and the ticket was issued in the wee hours of the morning! It’s only gonna get worse people.
Yeah uh ok. Today parking tickets. Tomorrow martial law!!
The parking ticket racket has been going on for some time, but at least in Westwood area it’s run by private companies that are contracted by the city. Once I got back to my car just in time to move it before the 4:30 cutoff time for that street. There was a guy standing there, ready to write the ticket, and when he saw I beat him to it he actually cursed really loud.
I never had a parking ticket in my life until I arrived in Westwood, Los Angeles in the late 1990s for graduate school at UCLA. I have not received one since I left California. I received the first ticket within 24 hours of my arrival because I was parked in what was supposedly a loading zone. It was on an old street in Westwood Village, and the curb was literally crumbled concrete and dust, and many cars were parked around me. The nearest business was a non-descript small hotel and the entrance was several hundred feet away. After the ticket, I saw that there was some white residue mixed in with the concrete dust that used to be the curb, so I guess that I should have known.
Later that week, I managed to get a parking decal that allowed for street parking on the street where I rented a room in a house. This took some work because the LA parking permit office wanted a photo on my driver’s license, even though a paper license is all that I was issued by the California DMV, which mailed the real thing a couple of weeks Iater. After pleading with a manager, they eventually accepted the fact that I could not produce what did not yet exist and I showed my new UCLA photo id instead. I was actually surprised that I took the begging route instead of just getting angry, but I literally could not stay in my cheap rental on a nice street without that parking permit, so I made the compromise.
I successfully parked my modest car on a tony street for the next year and a half ticket-free. Then the City apparently instituted alternate side of the street parking for a couple of days per week on our street. One day, I saw the new sign walking home from school (no campus parking permits available that semester for folks who lived somewhat close to campus) and yep, there was a ticket. I honestly believe that the sign went up the same day that I received the ticket, but I had no proof and no one else noticed. I guess that I was lucky to skate by with just two parking tickets in the City of the Angels.
try the hell of 5R in West Hollywood…parking enforcement are Nazis and there is no adequate pkg except for the newer garage near Barney’s Beanery. It’s worse now than when I lived there - everyone charges $10 for an hour in little lots….
AnonyRuss,
similar experience while I was at USC. On one fine Friday afternoon as I was getting ready to leave for the weekend, I came out and hopped in my car, started the engine and attempted to take off… My car wouldn’t move, so I hopped out and low and behold, there was a nice yellow boot on the tire. Luckily for me I had an ATM card, ’cause the good city of L.A. didn’t take checks or credit cards. Apparently all those parking tickets from not moving my car on the street sweeping day (which I kept throwing away) caught up to me. Now I can LMAO but at the time I was pissed.
That’s pretty funny. I saw a young kid walk to his Porsche this afternoon in Parking Structure D (that’s for you Chrisusc) and it had a nice shiny yellow boot on the front wheels. Poor sap probably has been doing the same thing.
ChrisUSC,
Yeah, I was pretty paranoid about tickets piling up and having more severe problems like that later on. I saw it for what it was, a small shakedown. I briefly considered contesting the second one based on the fact that the sign was probably only hours old, but I had a lot of schoolwork and it seemed like they ripped me off fair and square.
Perhaps the Phoenix area cities will start that nonsense when tax coffers diminish. Actually, my 19 year-old cousin received a parking ticket on a quiet street in the middle of a residential subdivision in Peoria for being parked in the wrong direction. It was a completely legitimate ticket, but I simply had never heard of such strict enforcement outside of downtown Phoenix.
My sister lives in Westwood, and has received an unconscionable number of parking tickets (which is a weekly subject). Glad to hear she’s not quite as irresponsible as I had thought.
I was a strait-laced law abiding citizen until I started street parking in San Francisco. Now I just think of it as my little contribution to the city general fund. Sometimes you just HAVE to use the emergency reserve parking space with the red painted curbs.
I was a strait-laced law abiding citizen until I started street parking in San Francisco.
No kidding! Never in my life have I considered double parking until I moved to SF, where it’s ubiquitous, and I must admit I’ve done it (briefly) a few times when in a hurry. It’s disgusting behavior but sometimes you just go with the flow.
“My electrician had 30 people working for him last year at this time, and now he has two.’”
How can this be? The employment numbers look great.
How the Government Creates Jobs:
http://financialsense.com/editorials/benson/2007/0524.html
It is hard to take an article seriously when it start like this “something quite different that wheat we are told.”
I suck at typing too, which is why I dont’ write many articles.
Spelling aside, do you disagree with the content? Or is it you needed something to nitpick?
Oh, it was a great article. Just unfortunate it has a start like that.
We all know the job growth and unemployment are pure crapola… good to be reminded from time to time.
It all goes back to Roosevlet’s “Nothing to fear but fear itself”. If sheeple knew the truth, they’d all be acting on it. Everone that owes more than the 2001 price would just stop making payments and wait for the sheriff to come kick them out.
Knowledge is power, which is why we’re not given any. We have to go find it for ourselves.
Who’s Roosevlet? A Russian president? Na na na na na…
Anyway, interesting that the Net Birth/Death computer model added 49000 (imaginary-) construction jobs in April.
That was Roosoviet.
This is your day in the sun, Crispy. I expect to get mine in a year or so when Dallas implodes the same way.
LMAO!
My wife has kin folk in Bakersfield and when they visited with us in So Cal they would hardly say a word when I brought up their local housing bubble.
We had wife’s kin over this weekend. Sis that bought 6 years ago for $143K on a 30-year fixed, but now, 3 refi’s later, owes $243K on a sub-prime, IO, 8-14% ARM. She listed at $302K since that is what she needs to pay the loan, pre-pay penalties, and get out with a down payment on a new place. Nothing around her has sold for over $260K in a year. Nothing near her has sold in 6 months, despite a dozen listed. Last time we talked, she’d given up on FSBO and was looking for an agent.
Week later, she decided not to sell.
When she was coming over, I was FORBIDDEN to discuss housing NO MATTER WHAT was said.
Couple times sis said she’d gotten an offer for asking, but it was other issues that stopped her from moving. Each time, I was a good boy and just ignored the comment. I think she had to say it multiple times because she was looking for an “I told you so” oppertunity. Actually, I’m the one that could have made the “I told you so” comments.
The statements were:
No way is she selling the house for that price!
Oh, I can sell it for that price easy!
Ummmm. Sell didn’t happen. I said so! Lie about a phantom offer all you want. If she’d really gotten an offer for $50K over market, no cash-back or other crap that made it a REAL sell price, she would have SOLD no matter what else came up.
On the other hand, my mom’s husband sold his rental for a tidy profit last year. He hadn’t been able to sell the house for a decent amount back when they got married and had been renting it out. He told me he was planning on putting the house on the market and I told him to sell it quick before the bottom dropped out of the housing market.
admit it … we all love reading this stuff…
How One Family Descended Into The Nightmare of a Foreclosure
Inside Stories From Today’s Real Estate Market
Jason Walker, AOL Real Estate
“We’re into the last leg of our foreclosure. Once the mortgage company has gotten you out of the house, then the sale date is posted. You basically have no more shot at that point,” says Lisa (who asked that we not use her real name). When we spoke with this 35-year-old wife and mother of four, her house was just a few weeks away from being auctioned off on the town’s courthouse steps.
“Several years ago, we bought our first house. We’d rented until then and hated renting. (My husband) was the only one working, and we had two kids at the time. We were getting by OK, and I didn’t want to work so I could take care of the kids. We were able to eek by and it was a fixed loan. I never went for an adjustable loan,” says Lisa.
Refinancing Their Way Into Trouble
“We started having problems with our cars and had to get two new ones. So we refinanced the house and put the car expenses into the house loan. Real estate prices were skyrocketing, so it was easy,” says Lisa.
Then the family grew to a third child and then a fourth. “I talked to my real estate agent and lender, who was the same person. I guess that’s a conflict of interest. We were talking to her about moving after the fourth baby and getting a larger house. The agent really pushed us to list our house. I was always the one who was more cynical and negative. But we had already listed the house, so we just went for it.”
“We did not get an adjustable. We got a fixed rate,” says Lisa. “The payments were still kinda tough, and we also had a second mortgage.” In total she says they were paying about $2,100 a month. “Then we got into a cycle of refinancing to pull money out and cover the bills we couldn’t cover,” says Lisa. She estimates that they eventually refinanced around six times.
Those Little Checks That Come in the Mail
“We would pull out as much as we possibly could (when we refinanced) to pay down credit card bills. We were using our credit cards to pay the bills. They give you those little checks in the mail and so I used those to pay the mortgage,” says Lisa. She also points out that she and her husband were always careful to pay bills on time so as to maintain high credit scores. “We were neurotic about paying our bills on time.”
One Late Credit Card Payment Tipped the Scales
Lisa says she had most of her credit cards from the same company. Then she made one late payment, and they raised the interest rate on all the cards. “I forgot to pay one account and wound up paying late. So they raised my interest rates way up. I had at least three cards with $20,000 on each and they were full! The minimum monthly payment was like $750 for one of the cards and like $530 for one of the others.” Considering that their monthly mortgage payments at this point were more than $2,000, there was little left over for expenses.
N-I-N
Ennyone can screw up!
C-O-M
Empathy? I’ve got none!
P-O-O-P-S .
My jaw is dropping…a bigger house,2 new cars, 2 mortgages, refied 6 times and 20k each on 3 ccs…and now four kids and a stay-at-home wife.
How did they think this was going to work out?
They did it dollar by dollar. Individually the dollars did not seem so big and each decision seemed like a good one. They thought it would work out because no one was there to tell them it wouldn’t. The only voice they heard was “Borrow…Borrow…Borrow”
All this borrowing crap works just fine until something goes wrong.
Try to remember the kind of September
When you could spend like no tomorrow
Try to remember, and if you remember,
Then borrow, borrow, borrow, borrow, borrow, borrow.
how did they think it would work out? Who thinks about silly things like that? They wanted a bigger house, two new cars, 4 kids and a stay at home wife. That is enough. They wanted it and therefore they are entitled to it. Don’t you know that? You just want really really hard, and the gimme fairy shows up and takes care of you. A house is an ATM. Come on, everybody knows that. It shouldn’t have run out of money. That is the problem… they had a bum ATM.
Lisa you are you that stupid, because if you are you shouldn’t have reproduced 4 times. And I love those lines: 1. we had car trouble so we had to get two ‘new’ cars. My wife and I were married for 20 yrs before we bought our first new car. 2. You didn’t want to work so you could be home with the kids, and because you couldn’t afford your existing house payment and car payment you had two more kids.
““We would pull out as much as we possibly could (when we refinanced) to pay down credit card bills. We were using our credit cards to pay the bills.”
And this people is why no government bailout is going to help this housing fiasco; think of it as a ‘housing nuclear fission’ reaction.
You got it right, Salinasron. It isn’t a housing fiasco. Housing is just a part of it. It’s a debt and credit fiasco. The chain reaction is getting ugly.
I don’t defend these idiots actions, but the people offering the money are very shrewd at getting people to borrow. Let’s see how good they are at squeezing blood from a turnip. Getting their money back from lots of people will become very tough.
Come to think of it, my parents were married for something like 15 years before they bought a new car. And it was a VW Beetle.
If she doesn’t have a job so she can stay-at-home, then pray tell, why does she need a new car?
“Then the family grew to a third child and then a fourth.”
Does this lady have a clown car between her legs ? Stop having kids and you won’t “Need” a bigger house.
bahahaha I was thinking the same thing. Couldn’t they at least put some condoms on the CC?
From here on out I suspect they are practicing “subprimus interruptus”.
I’m in tears over that visual. Little Bozos everywhere. Thanks for the laugh!
““We would pull out as much as we possibly could (when we refinanced) to pay down credit card bills.”
The husband should have pulled out early
Just like this joke.
Husband and wife are waiting at the bus stop with their nine children. A blind man joins them after a few minutes. When the bus arrives, they find it overloaded and only the wife and the nine kids are able to fit onto the bus.
So the husband and the blind man decide to walk. After a while, the husband gets irritated by the ticking of the stick of the blind man as he taps it on the sidewalk, and says to him, “Why don’t you put a piece of rubber at the end of your stick? That ticking sound is driving me crazy.”
The blind man replies, “If you would’ve put a rubber at the end of YOUR stick, we’d be riding the bus . so shut up.”
If I had a quarter for every time I heard someone say, “I’ll always have a car payment because I’ll never drive anything more than 2 years old.”
If I had a dime for every time I yelled at a debt consolidation TV commercial, “You can’t borrow yourself out of debt!”….
If I had a nickel for every time I telled at a clothing store commercial on the radio, “Spending less than asking price on some overpriced crap that you don’t need, is NOT saving money!”…
If I had a penny for every time I scremed at a newspaper or magazine ad (you name the product), “I do NOT need your product to be happy or make my life complete!”…
Add up all those quarters, dimes, nickes and pennies, and you’d just about have as much money as one of these addicted to credit fools blew in the last 4 years!!!
Empathy? I think not.
I make twice as much but live like I make half as much. I’m called envious? Envious that I’m not a complete moron? I think not.
Come on Darrell. You know we need people like this to buy buy buy. It’s what keeps the economy moving along and keeps prices down for those of us that do only buy what we need and what we think is a good vaule. Don’t be hating the conspicious consumers. Encourage them.
That’s right. America has to continue spending its way into prosperity or else…
Just as Bush said in a news conference today, the problem with China is a currency devaluation, and (HERE IT COMES) They need to consume more”
Our own Presidnot says, China needs to consume more.
When the American way of life depends on the Chinese consuming more, it is not all good.
ICEBERG DEAD AHEAD!!!!
I watched that news conference and when the President stated that, I thought to myself “the Chinese bankers are getting ready to screw the Chinese people next by teaching them Western consumerism”.
Whenever I here, “Shop here and save!” my reply is, “Stay home and save even more!”
Oh, and I used to live next door to a guy who liked to tell all of us about his Ultimate Easy Payment Plan: 100% down, no additional payments.
“Stay home and save even more!”
That’s a good one. Do you mind if I use it once in a while?
“Whenever I here, “Shop here and save!” my reply is, “Stay home and save even more!””
Reminds me of a scene from the great old movie The Best Years of our Lives. Dana Andrews, just home from WWII, is working at a drug store notions counter and Teresa Wright, whom he’s got the hots for, is his customer. He’s showing her some jars, and the dialogue runs something like “This is Vanishing cream. It’s on sale–and you’d be overcharged at half the price. THIS, is vanishing ceam remover. I’ll tell you how you can save some money–if you don’t put any of this on, you won’t need THIS to take it off…”
Aside from its anti-consumerist moments, the movie is slyly subversive in other ways too.
I hate, “The more you buy the more you save.” No. Just no.
I think some of us AZ folks should get together and have a beer when the credit collapse really gets rollling. It could be bad around here because it’s all about “buy, buy, buy now and pay later” in these parts.
I think Westcor has four new mega-malls in the works for the far east and west valley fringes…
A single income, with that much overhead, cannot compete in dual-income, credit crazed world.
“real estate mogul David Crisp and his wife”
Let’s see, ah, ah ‘mogul’: a bump on a RE downward price slope formed by the repeated refi’s (turns) of ‘investors’ tripping over the same path to riches.
“DataQuick analyst John Karevoll admitted the region’s March and April sales numbers were ‘grim’ and worse than he expected them to be.‘We knew sales were going to come down - they had to - but we didn’t think it would get much worse than 35%.’
Does John live in a frggin cave? Wino’s have more sense than him.
I thought that the Inland Empire would tank badly - but Bakersfield might give it a run for the money.
John Karevoll is the “data analyst” that couldn’t se a trend in the foreclosure numbers a couple of months ago….
John Karevoll is the “data analyst” that couldn’t see a trend in the foreclosure numbers a couple of months ago….
“…worse than he expected…”
Is Leslie Appleton-Young still hunting for a new moniker these days? Because I suggest “worse than expected” as a prime candidate.
“Regina Lane: ‘It’s exciting. I just can’t wait to get into it, because I haven’t seen it. That’s the scary part.’”
No worries Regina, I’m sure it’s lovely, and you just got $130K in “instant equity” so you are way ahead of the game no matter what the former homedebtors did to the place.
I just like that 130K instant haircut. I think we need to see a whole lot more of those.
“Regina Lane: ‘It’s exciting. I just can’t wait to get into it, because I haven’t seen it. That’s the scary part.’”
The scary part just might be the ‘neighborHOOD’.
“Regina Lane: ‘It’s exciting. I just can’t wait to get into it, because I haven’t seen it. That’s the scary part.’”
Come on MSM, get the cameras rolling and show us the expression on her face when she moves in.
This brings up another question to ponder: under CA law if a triple murder happened in the house you’d have to disclose that fact within the first three years but since it was bought at auction does that mean all disclosure forms of a normal RE transaction are null and void?
How can anyone buy something for $290K without having even seen it first? It just boggles my mind.
They, (whoever “they” are) advise getting a professional inspection before bidding at auction.
I can only imagine what issues will be discovered with that place.
Still plenty of suckers out there and this person is proof of that.
Must have been a photo of it on the auction block.
No kidding, my father-in-law is a plumbing contractor. He got a call last week for somebody’s purchased FC in the San Beranrdino area. Turns out the evictee sabotaged the place by pouring concrete down the drain. Cha Ching!!!
OMG that’s such genius! I was thinking of using a nice chunk of potassium would make things interesting.
at least they left the windows, I’ve heard of windows being removed, all the copper pipes, etc. Minor details, Regina, you just won the Lottery!
And let’s not forget the wiring. Stealing copper wire is every crook’s favorite pastime around PHX these days. Just today some birdbrain fried himself climbing up a pole to try to rip down a LIVE 12,000 volt power line. He’s in Maricopa county medical center–I believe his condition is listed as medium rare.
“Stealing copper wire is every crook’s favorite pastime around PHX these days.”
This is happening all over the country. It’s the tweakers way of funding their meth habit.
People who buy pre-construction houses or condos do this too. I agree that it’s insane.
“No worries Regina, I’m sure it’s lovely, and you just got $130K in “instant equity” so you are way ahead of the game no matter what the former homedebtors did to the place. ”
LOL. Indeed.
Living in west hollywood currently, and I’d be glad to see prices come down to $300/sq ft in any area I’d want to live(i.e. won’t get mugged walking to the mailbox)
An uninsured motorist totalled my car, so I bought a 15 yr old one with cash. I never added it up before but I save around $500 a month after figuring payment/ins/depreciation, and my previous car was a Corolla. I can afford a few repairs for $500 a month savings.
Oh, that’s releveant sorta cuz someone mentioned the homedebtors buying 2 *new* cars. They were a BK waiting to happen.
I feel your pain…lived there for 8 years and bailed out….and i had some serious rent control (the kind you bribe to get). i wish you the best as multiple unisureds hit me - not just one. you got smart - drive a pos and hope for the best!
“‘I think that when people say ‘we’re going back to a normal market’ it’s code for ‘we aren’t sure what’s going on,’ Norris said.”
I think it is code for “I have lived out on the east coast all my life, and don’t get out west much.” Because nobody who has driven through a broad swath of the southwest desert over the past couple of years with their eyes open could miss the mania.
I am shocked, shocked, to learn that gambling has taken place in real-estate.
round up the usual suspects
“‘I believe the market is going to be down as these foreclosures go to court and unfortunately it could be two years to filter out the foreclosures coming up recently,’ local realtor Mark Ponder said.”
That two years time horizon only pertains to the foreclosures “coming up recently,” as though the past is ahead of us. This is the tip of the iceberg, as the current subprime mess only represents the first wave, with tsunami crests of high-risk prime and Alt-A resets still heading in to shore.
“Alt-A resets”
I personally know people who are a couple of years away from foreclosure and they don’t even know it yet.
Alt-a, stated income loans that reset in two to three years and they are trapped. They can refi without coming up with 20 to 30k.
“Savvy bargain-hunters can get quite a deal. At this auction, Regina Lane had the winning bid on a three-bedroom house near Palm Springs. It was valued at $399,000. She got it for 260,000.
Regina Lane: ‘It’s exciting. I just can’t wait to get into it, because I haven’t seen it. That’s the scary part.’”
No, honey, the scary part is that there are still lenders out there wiling to hand over $260,000 to GFs like you.
In this instance the house is valued at $260K - Not one penny more. In a couple iof years when it comes up for foreclosure it may be valued at $150K and so on. A house is valued at what a buyer will pay. No more and no less.
I’m so sick of this “house with market value of $420K bought for $290K” and “It was valued at $399,000. She got it for $260,000″ crap.
If the house was worth $420K someone would have PAID $420K, but obviously it was only worth $290K because that’s all anyone would pay for it!
Just like those stupid craigslist ads that talk about “$50K instant equity” - Oh really - you’re going to leave $50K on the granite kitchen counter for me? Why would you do that? - are you stupid or is there really no “equity” there at all?
Unless there’s somebody out there selling $5 bills for $4 than there is no such thing as “instant equity”, period.
From now on I’m going to go around and tell people I got a Big Gulp that was “worth” $4 for only 99 cents, that the DVD player I just bought for $75 is really “worth” $200, and that my worn out jeans have a “market value” of $50 even though you could get the same thing at Goodwill for 5 bucks. I’m such a financial genius, always getting so much instant equity in everything I buy. Now if I could only find someone else to sell all this crap to at “market value”.
“From now on I’m going to go around and tell people I got a Big Gulp that was “worth” $4 for only 99 cents, that the DVD player I just bought for $75 is really “worth” $200, and that my worn out jeans have a “market value” of $50 even though you could get the same thing at Goodwill for 5 bucks.”
LOL, excellent!
Put on a golden jacket and they will believe you.
And yesterday I bought a bunch of tulips for my wife. I paid $3.99, but told her they were worth the price of several houses.
Dang it Alta - don’t start the next bubble!
We had instant equity when we bought.
It was the 20% we put down.
“there is no such thing as “instant equity”, period”
thank you…the entire concept of ‘value’ has become so screwed up in this country we can’t even talk about it intelligently! If a property is worth $400k, it will sell for $400k. THE MARKET DETERMINES THE WORTH OF THINGS!
‘instant equity’…like you, that one always has me laughing
I think we’re going to see this over and over on the way down…
“The Joneses bought the 1.2 million dollar house for $800k, due to the soft real estate market”
“The properties, which the builder said were worth $300K each, sold for $175K”
It will be nauseating.
stage 1 was “prices never go down”
stage 2 is “instant equity” due to this temporary spike in foreclosures
stage 3 will be here shortly
I just had an experienced custom builder proudly state that all of his spec homes appraised at list price. Too bad none of them has sold. The BEST honest appraisal is but a faint approximation of true market value.
Wait until homes bought out of foreclosure by savvy buyers re-enter the market for actually reasonable prices to create new comps. THEN we’ll see real problems.
House “A” is “worth” $300k, identical house “B” sells at foreclosure sale for $150k.
Owner of House A: “That doesn’t really count, it was just a foreclosure sale, of course the price will be lower. That guy got a steal of a deal, $150k of instant equity.”
No comp established for appraisers. Buyer of house “B” at foreclosure sale flips house for $180k, pocketing $20k in profit after expenses. Bingo. New comp for appraisal. Now, what is house “A” worth?
These secondary sales have yet to occur with great frequency. Once they do…watch out below.
Maybe owner A can double-down, then try to sell both for $240 apiece?
There will be all kinds of money-making opportunities in the down market - maybe forming “equity protection groups” within neighborhoods to buy the foreclosures and resell at “acceptable” levels - a good realtwhore could set up a business for this and scare HOAs into paying for services “to protect the value of your home”. Whole ‘hoods could become like NYC condo buildings where you don’t own an acutal house, you own shares…
That presumes that these folks understand markets well enough to manipulate them AND they have some spare cash/borrowing capacity to do so.
There will be some money making opportunities, but I’m afraid trying to manipulate a market like that would be like trying to keep back a wave with a soup spoon. Some may try, but more often than not they’ll get crushed…
Part II
“I had no more room on my credit cards. We basically could not make any more payments on the mortgage. We had to fight just to keep the electric on and gas on,” says Lisa. “Never in a million years would I have imagined myself getting into a foreclosure and filing for bankruptcy. You never would’ve thought this could happen, having had a 700-plus FICO score.”
Selling Off the Family Possessions to Make Money
As a way to make extra money now, Lisa sells objects on eBay and Craigslist. “We have so much in the house, and it all has to go. We accumulated a lot of stuff as a family that I can sell. I don’t do any more buying. Just selling! But that’s the thing. I see so many listings on Craigslist and eBay where families are selling everything. So I know they are going through it, too. People stop short of saying they’re in foreclosure. They just say they’re moving, and not because they don’t own anymore. It’s totally humiliating.”
Because of the stress from the foreclosure and the strain it put on their marriage, Lisa eventually moved out of the house into an apartment. Her children go back and forth between the house where her husband is still living and her apartment for now. “I don’t know what’s out there for me. And I know this is not the end. That’s what I want my kids to get from this. Things happen and change. I tell them how much I love them. We will be OK.”
Words of Advice
On getting a home loan: “I would say go to someone who is not going to benefit from your loan or refinance. See if they think you can meet the payments. (The agent we used) wanted to make her commissions. She was a very nice person and I don’t think she intentionally hurt us. She was just doing her job. I could have used a financial planner.”
Also See: Tips on Buying Foreclosure Properties
On refinancing your home and taking money out: “I would tell people don’t get sucked into the refinancing thing. You just don’t know when the market is gonna cap. Don’t believe the lender who says you can do it and is all positive. (Ours) was this perky little young thing. She was like, ‘The market will keep going up,’ and we could refinance. She was just a positive person and wanted it to be true. And we wanted to believe everything she said.”
Her Final Reflections
“I wish I could have gone back and just been happy with what we had. And not wanted something bigger and better.”
““I would say go to someone who is not going to benefit from your loan or refinance. See if they think you can meet the payments. (The agent we used) wanted to make her commissions.”
Hindsight is always 20/20. But I would like to see a discussion on how this concept would actually work other than paying cash. When do you become accountable and think for yourself… LOL is it always someone else’s fault.
This is really pretty sad. These folks bought the whole consumer schtick…bigger, better, newer, and now have a lot of stuff to try to unload un ebay.
But the marriage is kaput and the kids are shuttling back and forth.
What value is the stuff, when you family is done.
At least she not only sees the problems she is offering others some great advice on how to avoid them. We can say it to friends and family until we’re blue in the face, but hey what do we know. Maybe people will listen when they hear it from someone just like them who is losing everything including her marriage!
Oh crap~
http://www.liveleak.com/view?i=c28_1180051991
I wish I could do that.
“Bruce Norris, president of The Norris Group in Riverside, believes the Inland housing market is down, not readjusting, and that it won’t come back for a while.”
Good thing RE is local. I’m sure this statement doesn’t apply anywhere else in the U.S.
Word on the ground, locally, is getting more & more negative, while the MSM/talking heads/CEO’s keep babbling about a bounce back later this year. Spring has been a disaster and with more foreclosures competing with resales and new homes, it’s a downward slide from here.
My uneducated prediction is that the IE housing market will not reach 2006 levels for another 10 years.
The Lookout newspaper should drop the “the” and add an exclamation mark, i.e., Lookout! In a few years they can expand it to “Look the f–k out!” Very appropriate for the times.
Anyone know whether there is public data on how many of the foreclosed homes had subprime, alt-A or prime loans?
I’m assuming most are subprime, but I’d love to see the trend as time goes on.
It doesn’t exactly answer your question, but Google
“Reich outline of testimony financial” . The late-March testimony of John Reich before the House Subcommittee on Financial Services contains, among other things, the remark that the increase in Alt-A foreclosures is “daunting”. See page 8 and the following pages.
Apologize if this has been cited already:
Apparently the rating companies are getting (academic) heat for conflicts of interest. Perhaps they should get ahead of the curve for once and declare the non-agency CDOs/MBS as junk rating.
“The authors also question the accuracy and objectivity of credit rating agencies. “We show that the big three rating agencies are often confronted with an array of conflicting incentives, which can affect choices in subjective measurements of risk,” says Rosner. He points out that credit rating agencies have taken on the role of underwriters rather than mere publishers of information.”
“The study, entitled “Where Did the Risk Go? How Misapplied Bond Ratings Cause Mortgage Backed Securities and Collateralized Debt Obligation Market Disruptions,” calls for significant increases in public access to performance reports, CDO and MBS product standardization, and CDO and MBS securities ownership registration.”
http://www.bigbuilderonline.com/industry-news.asp?sectionID=367&articleID=490993
And from another article in Big Builder:
“Southwest Florida’s Fort Myers market is a case study for an extreme home building makeover.”
“Necessity is the mother of invention, they say. So if that’s true, then 40 months–yes, four-and-a-third years–of for-sale new- and existing-home inventory is about all the necessity housing’s topsy-turvy world can handle. Which begs the question, where’s the invention in Fort Myers?…”
…
“Fortunes that were made as median existing-home prices in the market galloped 150 percent in five years and average lot prices quantum leaped from ranges of $5,000 to $10,000 up to $60,000 to $80,000 from 2001–2005 are now precariously close to frittering away. Almost 20,000 new-home units stand available among more than 150 home builders’ 350 communities of single-family, resort, attached, and condo products scattered among Lee County’s 15 submarkets. Considering the area only created a little under 10,000 new jobs last year and is trending down in that category, the overbuild problem becomes clear.”
“Roughly that means about $5.4 billion worth of already-started new homes awaits sale, even as home buyer psychology remains in a deep freeze, the sub-prime and ARM reset fall-out begins to unfold, and affordability hurdles have wiped out the ability of three of every 10 prospective home buyers to ante up for homeownership in the market in the past five years.”
…
“Lee County right now is a 10,000 to 12,000 home market,” one local real estate expert says. “Lennar a couple of years ago closed on 21,000 homes all by itself, and last year, they delivered on about 13,000. This year, they’ll be lucky if they close on 600 homes, so that has to hurt.”
“We are looking at market pricing every few weeks,” Hovnanian says. “You have to. We’re looking at it every week, but more formally every few weeks. In some cases, it may make more economic sense for a community you were planning to open, to postpone that opening for a year, or until market conditions change. You’ve got to write it down now, but postpone the opening.”
…
“All the national builders are dreaming of getting land prices back down, but every land seller knows the builders are so chock full of liquidity, they’re not going to give in that easily,” says a real estate executive with knowledge of national builder strategy in the market.”
No matter how the media denies it, the SoCAL housing market is doing down and down real bad. It’s way overpriced and seller are now starting to realize that their houses are not worth what they think. Buyers are just waiting and they will continue to wait for that “bargain” and it will come. House prices are coming down and they will go down even more in the coming months. SoCAL is no where near rock-bottom in the housing market. So if you want to buy, the secret is to WAIT for price and don’t worry about not getting the house of your dreams, there will be plenty of choices out there. More everyday. Once sellers start dropping prices, it deeps dropping until the market starts to move. Sellers are still very greedy and in denial that their houses are worth more. House deals are coming our way, finally after years of outrageous prices.
Anyone making a profit in the housing market has already come and gone a long time ago.
“Eight properties owned by local real estate power player David Crisp and his close family members have entered the first stage of foreclosure in just the last six weeks.”
Former real estate mogul.
LOL!!!!!!
“‘I think that when people say ‘we’re going back to a normal market’ it’s code for ‘we aren’t sure what’s going on,’ Norris said. ‘I guess I’m a pessimist. I don’t see the market coming back for about three and a half years.’”
That sounds very optimistic to me. There is a good chance that the market won’t even hit bottom that soon, let alone “come back.”
Bruce Norris, president of The Norris Group in Riverside, believes the Inland housing market is down, not readjusting, and that it won’t come back for a while.”
“‘I think that when people say ‘we’re going back to a normal market’ it’s code for ‘we aren’t sure what’s going on,’ Norris said. ‘I guess I’m a pessimist. I don’t see the market coming back for about three and a half years.’”
“Part of the problem has been banks loaning money to unqualified buyers, resulting in defaults and too many houses going back on the market.”
Wrong and wrong.
3 1/2 years. How about 5 years at least?
The stupid dolts drove up the price of houses to follish levels now houses are unaffordable until they drop about 50%.
HOUSES PRICES ARE TO HIGH UNAFFORDABLE
It is a pleasure reading these articles day after day after day.
It’s called be proven right eventhough nearly every dolt around you would doubt and tease and boast about their real estate prowess as property values went to stupid levels. Now silence.
LOL!!!!!!!!!!
3 1/2 years. How about 5 years at least?
5 years to reach or scrape flatline at the bottom and then maybe the rebound starts from the bottom.
Coming back to peak levels again. A Decade or two?
Perhaps never, in real dollars (adjusted for inflation).
David Wyss, chief economist at Standard & Poors, has forecast a price drop of about 8 percent for the 24-month period through the fourth quarter of 2008.
His prediction came during a general economic outlook session at the Mortgage Bankers Association’s (MBA) National Secondary Market Conference & Expo in New York this week.
Housing prices will suffer from a “significant increase in defaults and foreclosures,” he said, with affordability still a major issue. Wyss worried how hard the slump will hit already highly inflated housing markets.
So called experts. What a joke! Where was this clown 3-5 years ago as this mania was running at hyper speed?
Not as peep at of this waste.