Feeling The Vacuum Where Those Buyers Used To Be
The Santa Cruz Sentinel reports from California. “For home buyers, there’s good news, and bad news. The good news is the median price for a single-family home in Santa Cruz County dropped 2 percent to $760,000 in May after increasing three months in a row. The bad news is that’s not affordable for most first-time buyers.”
“Only 147 homes sold, a six-year low, harking back to May 2001 when a recession was on the horizon. The number of homes on the market has grown to 1,236, the most in 10 years for this time of year.”
“Nearly 7,000 homes in California were sold at auction last month, ‘a pretty staggering number,’ said investor Sean O’Toole. ‘Eighteen months ago about one out of 10 properties [in pre-foreclosure statewide] went to sale,’ he said. ‘Now we’re closer to 40 percent’”
“Santa Cruz County has seen 70 properties sold due to foreclosure this year, an exponential increase from last year, when 10 such sales occurred.”
“Peter Ogilvie of First Residential Mortgage Corp. in Santa Cruz, provided an example of a family in trouble. ‘They had been persuaded that they could buy the home of their dreams without having to worry about qualifying for a loan,’ he said. ‘They also didn’t read or understand English, so they didn’t know the details of the loan that was arranged for them.’”
“It was a stated-income mortgage with no down payment. Their income was exaggerated to qualify for the half-million-dollar loan; their take-home income was less than their mortgage payment, home insurance and property taxes. Their loan payment was set at 1 percent, but the actual rate was 8 percent, so every month, they owed more.”
“Now that mortgages such as these are not available, Ogilvie said, ‘the bottom-end of our real estate market is feeling the vacuum where those buyers used to be.’”
From CNBC. “At a foreclosure auction in Bakersfield, Calif., it’s standing room only. ‘It’s a tremendous business right now because of the huge amount of foreclosures coming in,’ says auctioneer Sam Marshall. ‘We’re seeing a lot more inventory from banks that are coming to us needing to reduce inventory.’”
“‘What we have right now is an oversupply, and we have a lack of buyers in the market right now,’ says Bakersfield Realtor Darrell Sparks.”
“But it’s not all bad news. Eric and Sheila Tomasi are bidding on homes at the Bakersfield auction, hoping to buy low and sell higher once the market settles down. ‘It’s unfortunate for a lot of people when they got into situations that they might not have known what they were getting into,’ says Eric. ‘Opportunity is there for us.’”
From CBS 13. “In a neighborhood of well kept houses and neatly manicured lawns, a home in foreclosure stands out. Paul Ramos, neighbor of home being foreclosed, says the previous owners just abandoned. The grass hasn’t been cut in weeks, the property is littered with clothing and garbage, and Paul’s drainage system was left in disrepair by a swimming pool construction.”
“‘What they did is the payments got way too high, well over $3000, and they went ahead and bought another house in Lathrop and they let this one go into foreclosure,’ said Ramos.”
“Foreclosure stories like this dominate the Central Valley. In fact, Stockton has the highest foreclosure rate in the nation, up almost 50 percent since May of last year. Merced is second; Followed by Modesto. The Vallejo-Fairfield area ranks sixth and Sacramento is seventh.”
“‘There are people in the mortgage industry who say that there’s still more to come. That we may have another year of this as another round of mortgages to adjust,’ said Dr. Chuck Williams, Dean of the Business School, University of the Pacific.”
The Valley News. “It’s one thing to hear about the record number of foreclosures in Southwest Riverside County, but it is another to go into neighborhoods of all income levels and see the numbers as abandoned homes.”
“Roger Hageman, manager of Prudential California Realty in Murrieta and Temecula, said the main reason for the record number of foreclosures is the sub-prime lenders who made it very easy for people with minimal qualifications to buy a home with adjustable rate mortgages.”
“‘Interest rates have gone up and their payments have gone up drastically and they need to let the property go,’ he said. ‘They were planning to refinance with equity in the property. They were banking on appreciation, but that didn’t happen.’”
“Hageman said as of June 12, there were approximately 2,600 active listings in Temecula and Murrieta alone. There were 250 properties in escrow. About 15 to 20 percent of the 2,600 have been foreclosed upon and are banked-owned or the ’short sales’ category, which means the property was sold for less than was owed to the bank.”
“‘A foreclosure is not always the best deal,’ he said. ‘A buyer has to go in with their eyes open. Banks want to get as much as they can out of the property and some are overpriced and have been on the market a long time. They are sellers like everyone else.’”
“‘There is a misconception that it’s the poor people who are losing their homes,’ added Neil McTiernan, Real Estate Consultant in Winchester. ‘It’s the matter of buying above your means.’”
“McTiernan said the sub-prime lender played a huge part in the refinance boom of 2003 and 2004, but he doesn’t let off the hook those realtors who were doing anything to make a deal. ‘Everyone saw property values going up and expected to see them continue to go up,’ he said.”
“This is not just a shaky time for homeowners; realtors are taking a hit, too. Many who have been around for a while predicted that the real estate bubble would break. ‘We were saying, ‘This can’t go on forever. There will be a correction,’ and it happened,’ Hageman said.”
The Orange County Business Journal. “The woes of the national housing market continue to impact Irvine-based Standard Pacific Corp. The company’s decline has been dramatic, if not unexpected. Standard Pacific has spent much of the year getting rid of land, cutting building costs, offering incentives to buyers and dealing with slow sales in key markets such as California, Texas and Florida.”
“‘The degree to which the (Inland Empire) market is correcting is greater than we expected,’ CEO Stephen Scarborough said last week. ‘Buyers…like what (they’re) seeing, but haven’t gotten comfortable with the pricing they’re seeing.’”
“Standard Pacific has about 57,000 home lots for current and future projects. That’s down from about 74,000 at the end of 2005. ‘We’ve walked away from several thousand lots over the last year or so,’ said Andrew Parnes, the company’s chief financial officer.”
“The company’s employee count is down 15% from a year earlier. Like other builders, it’s asked subcontractors to lower prices to bring down construction costs.”
The Press Enterprise. “Jobless claims in the Inland region inched higher in May for the third consecutive month and remained well above year-ago levels, according to figures released Friday.”
“‘This I consider all related to housing,’ said Esmael Adibi, an economist at Chapman University. ‘As home sales go down, you’re going to have lots of industries are affected. A lot of self-employed are now basically out of a job.’”
The Orange County Register. “Over the past 12 months, financial activities, which includes the real estate and mortgage sectors, has lost 3,400 jobs in Orange County.”
“‘The question is: Are we bottoming out or have we bottomed out?’ Adibi said. ‘I don’t think the housing market has really hit the bottom. If that’s true, it means financial activities still has to do much more adjustment to the new reality, and that means more layoffs.’”
The Union Tribune. “Alan Gin, economist at the University of San Diego, said that the new job figures were ‘bad news.’ San Diego lost 6,900 jobs in construction; 3,200 in financial services, including real estate and mortgage operations; 1,300 in construction and 1,300 in trade, transportation and utilities.”
The Fresno Bee. “Unemployment rates rose in the central San Joaquin Valley and across California in May, as a weak housing market continued to bring job losses.”
“Mike Miller, Fresno division president for nationwide home builder Lennar Homes, said the company has shrunk its Valley work force by about 25% over the past 12 months. ‘The market has really pulled back, not just in Fresno County, but throughout the Central Valley,’ he said.”
The Contra Costa Times. “The housing market has gone from hero to zero and turned into a drag on the East Bay economy. ‘The housing downturn is starting to show up much more clearly in the employment numbers in California,’ said Howard Roth, chief economist with the state finance department. ‘We are seeing the effects of the slowdown in construction employment and financial jobs.’”
“Those effects have ripped through the East Bay as well. In the past year, 1,800 construction jobs have vanished in the East Bay. The loss of 1,300 jobs in residential construction triggered the rout in building activity.”
“The Alameda-Contra Costa region lost 800 real estate jobs during the year. An industry called credit intermediation, which largely consists of mortgage agents and loan officers, lost 1,200 jobs during the 12 months that ended in May, an analysis of EDD figures shows.”
The Ventura County Star. “Property owners who think their tax assessments should be reduced amid falling real estate prices should wait before hiring a company to help them win a reduction, Ventura County Assessor Dan Goodwin said Friday.”
“That’s because their homes may be among 8,622 whose assessed value has been cut under a program that Goodwin’s staff launched this year in response to the real estate downturn.”
“The reductions will lop off about $400 million in valuation from the county’s assessment roll, which is to be announced in early July, Goodwin said.”
“‘What this is really about is the good government thing of giving people a fair tax bill, not one that is excessive,’ Goodwin said. ‘The other big issue is I didn’t want to wait for thousands of people to have to call me and say, Didn’t you notice? The market went down.’”
‘Mosquitoes definitely love the housing slump for its rising numbers of neglected and abandoned swimming pools. But neighbors and real estate agents are fighting back as foreclosures rise and some homes sit empty.’
‘In the past 33 days they’ve reported 363 algae-plagued swimming pools to the Sacramento-Yolo Mosquito and Vector Control District. That’s since a Bee story reported the district’s efforts to recruit real estate agents to fight the tiny carrier of West Nile virus. Agents know neighborhoods and see the pools.’
‘The district says 250 reports of slimy pools arrived within two days of the story. Typically, that’s the monthly total.’
Pools of slime and real estate agents. There has to be a joke in there somewhere. Anybody that has grown up dealing with mosquitoes knows how nasty they can be to have around, even without West Niles virus. The deterioration of the quality of life in so many of these neighborhoods will drive prices down for sure. It only takes one garbage house to ruin a neighborhood.
Personal responsibility should still count for something. Agents are not forcing people to sign on the dotted line. They are only enabling the greed of the customer to be expressed.
What’s the difference between 250 pools of slime and the Real Estate Industrial Complex?
One is infested with swarms of vexatious, blood-sucking, disease-ridden insect predators.
The other you can spray with DDT and It’s All Good.
Google Maps, Google Earth, and similar are great for finding swimming pools - they really stand out. To find out if they’re slimy, though, you’d have to use other means…
Last housing downturn in SoCal liberated a lot of swimming pools for skateboarding. This downturn is going to be epic and with a tool like Google Earth, its going to be out of control.
Wouldn’t a 99 cent gallon of bleach solve the problem temporarily?
Not as well as a film of kerosene would. If you don’t have methoprene handy, floating a film of kerosene on top of the standing water is a good start. Of course, it looks and smells bad, but it’s better than letting the mosquitos breed.
Both of these suggestions are NOT good for pool filter sysatmes and surfaces…but then again niether is the muck
SYSTEMS…NEVER drink good Pinot when blogging…NEVER!
But it’s not all bad news. Eric and Sheila Tomasi are bidding on homes at the Bakersfield auction, hoping to buy low and sell higher once the market settles down. ‘It’s unfortunate for a lot of people when they got into situations that they might not have known what they were getting into,’ says Eric. ‘Opportunity is there for us.’
Eric is so smart. He was granted divine wisdom to know we are at the bottom of the cycle and “right now” prices will start going up. It must be nice to have divine wisdom.
Fresno County’s jobless rate was 8.2% in May, according to data released Friday by the state Employment Development Department.
Those who are unfamiliar with the San Joaquin Valley (the California farm belt) would probably be shocked that the unemployment rate is so high there. Actually this 8.2% is the lowest I’ve seen. Typically the unemployment rate is double digit - about 11% in the “six county” area, due to low wage labor in the farm industry. It’s been in a depression for several decades. And house prices have doubled and sometimes tripled since the year 2000 there.
What’s going to happen when the immigration bill passes and large numbers of immigrants start to be registered in the unemployment statistics?
I know I’ve mentioned this here before but the Central Valley is going to be burnt frackin’ toast when this all done. Almost NOBODY there earns enough to afford a home at current prices. It’s all service sector jobs as far as the eye can see.
“But it’s not all bad news. Eric and Sheila Tomasi are bidding on homes at the Bakersfield auction, hoping to buy low and sell higher once the market settles down. ‘It’s unfortunate for a lot of people when they got into situations that they might not have known what they were getting into,’ says Eric. ‘Opportunity is there for us.’”
And here are two more clowns not knowing what they are getting into. If you are buying at an auction you’re already paying too much.
“once the market settles down”
As long as they have the means to feed an alligator for a decade or so…
Reminds me of a front page article in the LA Times at the end of the tech boom a few years ago, about these hotty party girls that went to all the lavish parties in SF/San Jose thrown by internet startups swimming with cash, where they’d hand out $400 computer devices as party favors. They couldn’t figure out where all the parties had suddenly gone.
The punchline of the article was the party girls saying they’ll just have to wait until “things get back to normal”, i.e., all the parties and big spending come back. Guess they still must be waiting.
The former Real Estate Geniuses known as Eric and Sheila Tomasi ….
They just bought Tickle Me Elmo for $400 and can’t wait to turn around and sell it for $1,000.
Did someone say beanie baby?
oh, no?
Oh, sorry, I thought the market had stabilized………..
rats!
“Peter Ogilvie of First Residential Mortgage Corp. in Santa Cruz, provided an example of a family in trouble. ‘They had been persuaded that they could buy the home of their dreams without having to worry about qualifying for a loan,’ he said. ‘They also didn’t read or understand English, so they didn’t know the details of the loan that was arranged for them.’”
“It was a stated-income mortgage with no down payment. Their income was exaggerated to qualify for the half-million-dollar loan; their take-home income was less than their mortgage payment, home insurance and property taxes. Their loan payment was set at 1 percent, but the actual rate was 8 percent, so every month, they owed more.”
“Now that mortgages such as these are not available, Ogilvie said, ‘the bottom-end of our real estate market is feeling the vacuum where those buyers used to be.’”
********
There are many thousands of “home owners” here in the Alt-A (SF) Bay Area who may face a similar circumstance - and they needed no convincing and are English speakers and readers.
So what is their excuse?
A nice mixture of greed, stupidity and arrogance.
I’ve said this before, but I think this housing bubble is so fascinating in that it brings so many from so many different income levels to the same final destination: Zeroville
Doesn’t really matter how much you make, your education level, your work experience, etc., once your mortgage hits 6x income, your chances of pulling away from the black hole of Zeroville are pretty low. At this point does it really matter if someone has a mortgage at 8x their gross income vs. say 20x? Nah. They’re equally busted. Programmer, teacher, strawberry picker, doesn’t matter. Bought 1 home, 3 homes, 5 homes, doesn’t matter.
Even during the biggest speculative excesses of the stock market, brokerages would not loan you hundreds of thousands of dollars if you had no meaningful assets. And then loan you hundreds of thousands more once you had a tiny amount of equity. Nah. They might have the draconian margin requirements of say 20-30% (*GASP*). Yay for the little guy who before wasn’t rich enough to put a financial gun (or in this case, panzerfaust).
There’s just something refreshingly egalitarian about this bubble. Everybody gets a ticket to Zeroville where the formerly rich, middle class, and poor (still poor) now all live miserably side by side.
I suppose that should read:
Yay for the little guy who before wasn’t rich enough to put a financial gun (or in this case, panzerfaust) **to his head.**
Yes, everything and anything multiplied by zero still gets you zero!
Wino bear’s post was very, very good. Copied to a Word doc and let my wife read. We both agreed poster is probably very bright.
Gee, how many felonies can you find in that paragraph?
Will we prosecute? No!!!! The Man gave them too much money. They had their civil rights violated!
If they can’t afford it(80-20) we don’t want them in my town. No affordable housing deadbeats either. I don’t want to subsidize them. If businesses can’t get enough labor they will raise wages. Don’t subsidize. Let the private sector do it.Housing prices will eventually drop and buyers will be found.
Didn’t George Bush meet with the Association of Builders the other day, promising to push for “immigration reform”? “Immigration reform” is clearly a euphemism for low-cost labor, at any cost to the average citizen. It is clear that Bush is really pushing to pad the pockets of his corporate cronies.
Disclaimer: I voted for Bush, twice, so I can make fun of the boob.
Voted for him twice, as well, and still can’t believe it. W/o going to political, I think Bush will go down as the worst pres we’ve ever had w/Clinton on his heels. Should also mention I will no longer be taking part in anymore elections. Sick and tired of the 2-party system.
Can’t resist:
The worst President…
&
The WORST Vice President…
&
A mostly impotent Congress…
&
A Supreme Court that promoted the first domino’s of destruction involving Individual Citizens Liberties.
&
Two of the most “important” Wars in the US History
ALL of this…at the same time.
Bugs: “eh, Daffy’s been swimming in the green-algae foreclosure pools with his tin-foil-hat on again.”
Marvin the Martian: “Ohhhhhhhh…That makes me Sooooo MAD!”
Vote for Ron Paul.
No doubt, it’ll be a ‘wasted’ vote, but its better than not voting at all.
Agreed. Ron Paul… even tho’ ol’ bearnanke be outta a job. (RP would eliminate the FED)
If elected do you really think he would be successful with that… I mean really… I happen to believe he’d be knocked off first ala Kennedy.
Agreed.
At Least It Would Finally Be Clear Where We Stand…
Nobody NEEDS to bump him off considering what a few congressmen cost.
Consider Ron Paul..a vote for honesty and fiscal responsibility.
“once the market settles down”
I’m not sure they understand how far down the market is likely to settle…
I bet that they think they just bought at the bottom. Millions upon millions of people have no idea how long a correction can go on. We are an instant… gotta have it now country/world. These folks more than likely just screwed themselves to the wall. A few months from now they will be part of the “it’s not fair crowd”.
That’s the mindset of… uh, everyone here in L.A. (excepting the few people posting here…) People buying now at 5-10% off peak are *thrilled* at the bargains. Oh well…
I have two friends who have bought in San Diego the past six months. Both were just panting to get into a house and thought they had found great bargains when prices softened slightly.
One paid $650K for a two-bdrm “Spanish charmer” (read: tiny and old) and the other, also $650K for a 4-bdrm fixer that is in the nicest part of a crummy neighborhood.
I’m afraid of what I will say so I just can’t talk to them right now.
RH,
I know what you mean. I have a customer who just bought a condo in Mission Hills. She is trying to rent it out, ’cause she prefers to keep renting her apartment near the beach.
So she latched on to an alligator of which the rent will be a fraction of the PTI, not to mention association fees.
Such stupidity is truly sad.
Paul
In San Luis Obispo county from 1990 to 1996 it dropped 34.7 %. But, it’s different this time the realtors and others from the REIC say.
Pismo! I’m waiting, waiting, waiting. You reassured me the other day, that the days of reckoning will come. Yawn!! Wake me when they are here.
azlender, just read the good book a bit! Seven years of plenty (ended fall ‘05) and seven years of famine (ends 2012). But it’s different this time! Pismo has survived four cycles including Volcker. hehehehehehe
Just showed the now famous reset chart to an associate who just bought. His face went ashen.
Lucky he’s a very stable guy, 30yr fixed and will liver there to raise his family.
The Press Enterprise. “Jobless claims in the Inland region inched higher in May for the third consecutive month and remained well above year-ago levels, according to figures released Friday.”
“‘This I consider all related to housing,’ said Esmael Adibi, an economist at Chapman University. ‘As home sales go down, you’re going to have lots of industries are affected. A lot of self-employed are now basically out of a job.’”
- They never mention the ‘Multiplier’ AKA the ‘Illegals’ that these self employed subs had for their workforce. Since I work in the construction industry I can honestly say that the subs that I encounter on the jobsites are dying for lack of work. Even the contractors will mention to me that subs are calling them for work constantly.
If I wanted a true picture of the economy in that area I would go to the local hole-in-the-wall restaurants and convenience stores. Ask them how high the traffic is from construction employees. Illegals typically don’t buy from Tiffany’s but they all eat lunch and they all buy stuff from 7-Eleven and other gas stations. If sales at these places are way down then you know what the real employment picture looks like.
NYC, that is a great point. We always look at Target and Wal-Mart, but I think we need to look at AM/PM gas/food stations, here in CA and 7-11. If these places are taking hits, then we know that things are going south in a biiiiiiiiig way!
“This I consider all related to housing,’ said Esmael Adibi, an economist at Chapman University. ‘As home sales go down, you’re going to have lots of industries are affected. A lot of self-employed are now basically out of a job.’”
Aren’t we in a goldilocks economy and right in the sweet spot? I’d hate to see what a bad economy looks like to some of these brilliant economists like cocaine kudlow.
i don’t get cable anymore so i don’t even have to look at all those idiots. this right here and a few other sites is it for me. funny, on a way to look at a house this morning i heard a lady on a radio talk show about stocks say how
she agrees with kudlows assessment that we are in a goldilocks economy. the same guy along with cramer who
were saying that enron was all a witchhunt.
I thought a good gauge was the amount of money immigrants were wiring to south of the border. The amount has decreased vs. last fall I guess.
i read a good article about this over at financialsense.com but it’s been a while so i’m not sure i could find it.
anyway, they showed a chart of i think they called it redemptions (sending money back “home”) but that chart has fallen off a cliff
Yup, there was a good article in the WSJ about a month ago, and also one in the LA Times about businesses in Mexico who depend on those money transfers that are taking a huge hit. They interviewed one guy from Oaxaca who had a cement business supplying home builders who in turn build houses for the families of immigrants who send money home. He said he had gone from about 6 trucks a day to about 2, if I remember correctly. I know it’s just anecdotal, but anecdotes do add up to something in the end.
“remittances”, move sent back to your country of origin.
move=money sent back to el pais de mi suenos. And its remitance, one ‘t’. Lo siento.
Actually, two t’s is correct.
“things going south in a big way”
Maybe even some Persons going south.
We need videocams at the border to see if the flow is no longer one way. Although I guess those going south don’t have to sneak across.
last night i dreamt i needed a passport to be in california. like now i am the foreigner.
“‘There are people in the mortgage industry who say that there’s still more to come. That we may have another year of this as another round of mortgages to adjust,’ said Dr. Chuck Williams, Dean of the Business School, University of the Pacific.”
Good news to all Californians. One more year and all of those nasty rate resets will be over. That should get the values skyrocketing again. Well, I have to get going. I’m having dinner with Santa Claus and the Tooth Fairy tonight.
LOL… I read on another blog that Dataquick said:
“…There may be an uptick in sales now because mortgage interest rates have been trending up the past few weeks, and they’ll want to get in before rates go up further. Prices seem to be holding steady in most neighborhoods. It’s easier to buy a home if you don’t think it’s going to go down in value,” said Marshall Prentice, DataQuick president.
Best (sarcastic) reply to this from a poster was:
Rising interest rates are likely to create a surge in buying and stabilize home prices. This is just the sort of kick-in-the-pants the housing market needs to bring about a recovery. Since housing is probably the weakest sector of the US economy, these higher interest rates could boost the overall economic outlook and, once and for all, dispel any growth concerns.
Just what I always wanted: a 600K house, depreciating fast, with a 7.5% interest rate (that could tick up if an ARM). With comments like the one plysat mentioned and idiots who are def. not mathletes, let alone a von Mises, no wonder this country is so screwed up!
On the other hand, what if they don’t create a surge in buying?
This comment is just another way of saying “real estate only goes up.” It never occurs to anyone that it’s possible that the economy isn’t always wine and roses……
What are you guys having for dinner? The Easter Bunny.
Squirrel steaks.
Well they’re well fed squirrls anyway.
Hey! I’m going to phone the animal rights people.
What is really going on in the California budget negotiations
“….That housing bubble that we all thought would hit this year, it did hit this year. Because banks are working with people, people are still selling homes, even if it’s 20 to 25% less than it was a year ago. But next year, those folks, they can’t work with the bank. Those foreclosures that do happen–those subprime loans that hammer people, and they are out, that will affect us greatly next year. All we have to look at is the $750 million drop in the last month that we just saw, and that should show us, I think, the pattern where we are moving towards….”
from California Progress Report
Assembly Republican leader Mike Villines to the Sacramento Press Club
I love California politics! If I lived in California and read these assembly comments, I would move to New Mexico. Somebody’s BIL is making a fortune on Wall street glomming 20% commission on Bond issues.
http://tinyurl.com/3334qb
Housing to dog Wall St despite some optimism !!!!!
“The outlook for housing is crucial since home values have served as a key source of extra income for American consumers, whose spending accounts for two-thirds of U.S. economic activity.
“I think the worst is yet to come,” said independent investor and author Dennis Gartman.
“There still has not been enough pressure put on speculators. Housing downturns last between 18 and 36 months … so right now I think we are just through the first 18 months.”
The outlook for housing is crucial since home values have served as a key source of extra income for American consumers, whose spending accounts for two-thirds of U.S. economic activity.
“I think the worst is yet to come,” said independent investor and author Dennis Gartman.
“There still has not been enough pressure put on speculators. Housing downturns last between 18 and 36 months … so right now I think we are just through the first 18 months.”
The outlook for housing is crucial since home values have served as a key source of extra income for American consumers, whose spending accounts for two-thirds of U.S. economic activity.
“I think the worst is yet to come,” said independent investor and author Dennis Gartman.
“There still has not been enough pressure put on speculators. Housing downturns last between 18 and 36 months … so right now I think we are just through the first 18 months.”
http://www.reuters.com/article/InvestmentOutlook07/idUSN1537290920070615
“home values have served as a key source of extra income for American consumers, whose spending accounts for 2/3 of US economic activity”
“there still has not been enough pressure put on speculators”
Duh. “Speculators” are precisely those American consumers who regard “home values” as a source of “income,” whether they get the “income” through HELOC’s or through actual sales. Pressure on these speculators will continue to increase, and will cause consumer spending to flatten or fall.
“‘The question is: Are we bottoming out or have we bottomed out?’ Adibi said.”
Funny language, because I still see the market at near the peak, and just starting down the gentle part of the bell curve. Not till next year of the following year will we see the massive price slide many on this blog have been waiting for.
When it comes, I wonder if any of us will have jobs or 2 cents to rub together to buy even at 40 cents on the dollar?
“bottoming out” - agree this is a ludicrous characterization
Realtor double speak, never trust a realtor, in fact it is better to not to save them when the mother buries them in the sand box.
I love California politics! If I lived in California and read these assembly comments, I would move to New Mexico.
I already did. If someone here is grumbling about the govbmint, etc, I tell them that they don’t know how good we have it here in comparison to California. Lots of CA folks have made there way here.
Took daughter to a birthday party today. Birthday boy’s mom and day have house up for sale. They already bought a bigger house. Now feeding 2 alligators, hoping this one sells. Another mother there went into RE and was telling me how terrible the market is. She confirmed everything we have been saying on this blog, and that I have nailed down the Albuquerque market as to where the better place to be is, and places to avoid. In ABQ, most of the floppers are now losing their collective A$$es on the west side, and the houses built after 2003 are of dubious quality. East side holding (and will more so) better. This refers to which of the Rio Grande river the building was on. Most jobs on east side, and new speculative development on the west side. The traffic to cross the river is terrible and can make a commute bad.
The MSM keeps telling me that the housing market is “stablizing”, contained and has found Bottom. They also are claiming NOW is the best time to jump in their Buyers Market.
My only thought and question is …how DEEP is the frigging QUICKSAND?
munch ..QQ…munch..watching ..munch
They’ve been saying, “Housing has bottomed” for the last 12 months. Every month the decline accelerates.
Hopefully, like the Titanic, housing will eventually find the bottom.
Does it really matter if we find bottom. Everyone is dead at that point.
“Now that mortgages such as these are not available, Ogilvie said, ‘the bottom-end of our real estate market is feeling the vacuum where those buyers used to be.’”
Auction sales = housing market vacuum cleaner (or in the case of algae-filled pools, housing market sump pump)
Merrill Lynch seizes Bear Stearns fund assets: report
Sat Jun 16, 2007 8:26 PM BST28
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CHICAGO (Reuters) - Investment bank Merrill Lynch (MER.N: Quote, Profile , Research) has seized $400 million in assets of a troubled hedge fund at Bear Stearns Cos. Inc. (BSC.N: Quote, Profile , Research) and plans to sell them off, The Wall Street Journal reported in its weekend edition.
The report said Merrill Lynch had seized the assets of the High-Grade Structured Credit Strategies Enhanced Leveraged Fund, despite the sell-off by the fund’s managers of nearly $4 billion in high-quality mortgage bonds to cover losses.
The losses related to subprime mortgages. Bids for the seized assets are scheduled to be negotiated starting at noon EDT on Monday, the report said.
Representatives of Bear Stearns and Merrill Lynch could not be immediately reached for comment.
Is this going deflate Goldilocks come Monday morning?
Yesterday, Stucco or somebody asked which OTHER hedge fund had recently been shut down because of subprime mortgage losses. I have just stumbled across the answer: a UBS hedge fund called Dillon Read Capital Management.
I shorted the stock for all these crooks at the first reporting period right after New Century croaked. Goldman Sachs owned 2.5 million shares of New Century and millions of shares of the other sub-prime lenders. Man, that had to hurt. Notice this news came out Friday after closing. This is how you know it’s bad news. Companies do this so the weekend buffers the shock.
These guys skated through that first quarter, hiding the losses but they can’t hide them anymore. My loss for bad timing, but I was right that they are rotting from the inside trying to not let Wall Street see them seat. Hank Paulson timed his exit just right. He left someone else holding the bag. Pretty soon some boot will come along, kick the front door in and the whole rotten mess will collapse.
seized the assets…WOW !
Hated blogger leaves U.S., threatens lawsuits
Casey Serin, arguably the world’s most-hated blogger, rocketed to Internet stardom after disclosing his pending foreclosures, marital strife and unwillingness to find a job. But the 24-year-old’s online fame was hardly flattering: it arose from legions of readers who call themselves “haterz” and frequent his iamfacingforeclosure.com blog to ridicule his financial missteps and urge Serin to pay back up to $420,000 he is said to owe creditors.
http://tech.msn.com/news/articlecnet.aspx?cp-documentid=5013133>1=10138
Why did I giggle when I read this?
Sorry for the OT….just to juicy not to post.
Met a stereotypical FB this week. We responded to an FB’s ad for a beautiful teak desk for only $150. Very large (3500 sq ft) house in the suburbs not being lived in. The couple is divorcing. Guy seemed very depressed. Overgrown lawn. Sparsely-furnished, litter-strewn house. The home office containing the desk was full of title company folders and stationery - apparently he works in the RE business. Zillow tells me that they bought the house in 2005. Don’t know why it’s not for sale - maybe he can’t afford to sell it and is just waiting for foreclosure . . .
The poor sap probably has to make payments as part of the separation decree. He probably can’t sell it or contract on his own either. Life is a bitc-. Sorry hehehehehehe
How much did you offer for the desk? I hope you did not take pity on the SOB. I would have said $50 bucks and if you need money there is a McDonalds not too far from here that needs help at night.
Think of the parties they held when they first bot the McMansion, how they bragged about how smart they are as they took out the first HELOC on the appreciation they thought they had in 2006 and blew it on crap they’re selling for pennies on the dollar now. Wife got used to the good life until they got turned down for the refi since they’re probably underwater on the mortgages now, and then hubby gets laid off. Would make great plot for a hilarious comedy. Rags to riches to rags.
Got diversified assets?
What IF somebody threw an Open House…and NOBODY shows up ?
Whoops…they’re doing that Tomorrow…
All OVER America !
I am seeing a full court press of propaganda by the NAR and Home Depot Lowes etc in the media in So Cal lately. It is time to get that house fixed up they say at Home Depot and Lowes. In other radio ads and TV ads I see by the NAR, there has never been a better time to buy a house. I was convinced and bought my cats a new cardboard box to play in and they were right, my cats love that box!
Amazing, and stunning the lies they spew on the media, I guess they have to try.
So I was driving in Palms (West L.A.) this evening to meet some friends and lo and behold my wife and I came across an open house, which was still open at the unusual hour of 6:00 p.m. The realtors were a husband-and-wife team whose command of English was only so-so. The SFR (on Tilden Avenue, for anyone who knows the area) was a 2/1 built in the 1940s that needed a TON of work to make it liveable. Nothing had been done on this place in decades to make it habitable. The ludicrous thing is that they were asking $780K for it and had not even bothered to do a simple $500 cleaning job on it! The realtor told us that the owner had just rejected an offer for $720K. I laughed and said, “Wow, they just made the biggest mistake of their life.” The realtor then asked my wife what kind of an offer we would make on it and she, god bless her, said “$600,000. And you would be lucky to get it.” He wasn’t very happy about that of course but the kicker is that he went on to say he had a fiduciary duty to the neighbors to make sure the house sold at that price in order to maintain high comps for the area. Unbe-freakin-lieavable!!!
Dang, now that I think about it, maybe we should have offered $780K with a mandatory $400K cash back at closing.
“…god bless her, said “$600,000. And you would be lucky to get it.” He wasn’t very happy about that of course but the kicker is that he went on to say he had a fiduciary duty to the neighbors to make sure the house sold at that price in order to maintain high comps for the area. Unbe-freakin-lieavable!!!”
That funny… What’s really funny is that I didn’t know Realtors now had a fidicuary to the neighbors. Must’ve been hell getting those contracts signed. You should have asked for a copy of each one. Unbelievable, people who don’t have a command of the english language should be careful about what they say. Actually Realtors as a whole should. The problem is that most know that if it’s not on paper it doesn’t count in court.
I am sure the bank will give a flying fuk when they take it over, then the chorus of the neighbors from the lawn chimes in “IT’S NOT FAIR!!” during the auction.
$600k in Palms, give me a break. 7-8 years ago that house would have fetched MAYBE $250k.
I was going to say that too (250k) but when he said it was a 2/1 I lowered my estimate because 250k was what 3/2s were selling for 8 years ago. It’s probably in gangland too (near Venice Blvd?) and the roads are falling apart in the neighborhoods down there.
Puuleeze.
Funny y’all should say that. I pulled the sales history off Zillow and it went for $270K in 1999. Man, you guys are GOOD! Apparently it was “worth” that much until about 4 years ago when it suddenly tripled. WTF??????
Even $600K is beyond ridiculous. The only reason people justify paying those insane prices is because they expect everyone else will too. Well, that game will soon be up.
Dude, I lived most my life in that area and that type of L.A. dump was selling for 150,000 in 1998. There is no reason to live in West L.A. except the current frenzy of people thinking it’s trendy. It isn’t. It’s a wasteland of traffic infested streets with residential zoning mixed with commercial zoning. Once that is gone, it’s just a suburb of Inglewood. I’m amazed how much people will pay to essentially live in a ghetto of sorts. It tells me they haven’t gotten out much because they don’t know what’s available. If you check zillow.com you’ll find that houses in L.A. sell for about 700/sq foot. Houses in Wheeling, West Virginia sell for $10/sq foot. Yeah, I know but please, it’s not so bad in West Virginia that you could buy 70 houses for the price of 1 house in Los Angeles. Please. Does someone see something wrong here?
Yeah, It’s amazing that more and more people don’t put that thought process together.
It’s the weather as it effects the brain cells and says over and over California is the “golden state” and the extra gold in the house because of the weather gives homeowners the right to ask and expect this “premium”. Status you know comes with a price and all educated buyers are expected to pay for the good life in the golden state.
Dang, now that I think about it, maybe we should have offered $780K with a mandatory $400K cash back at closing
No, a $780K offering with a mandatory $779K back at closing would have been much funnier.
“‘The question is: Are we bottoming out or have we bottomed out?’ Adibi said.”
Funny language, because I still see the market at near the peak, and just starting down the gentle part of the bell curve. Not till next year of the following year will we see the massive price slide many on this blog have been waiting for.
If you have never seen a bottom, then Grab Your A$$ and feel it. The bigger your A$$ the further you have to fall and believe me you will fall and it will not be pretty. If you think it is soft and you will not get hurt, think again as all bottoms hurt when they hit the hard rocks and that is where these FB’s are all headed.
Has the housing bubble stopped beating its wife?
We went to an open house 2 weeks ago in my little mountain town of Running Springs, California, near San Bernardino.
At both houses we went to, at about 2 in the afternoon, we were the first people to show up (according to the gargantuan middle aged women “manning” the open houses). Though to be fair, one couple showed up after we left at one of the houses. The local realty was running an “open house” tour where they handed out a map of all the open houses. I had to contain my urge to say, “320,000 for this dump?”. I think I’ll send the realtor lowball emails without revealing my real name. I wouldn’t want to poison my relationship with them because I’ll still want to buy in a year when they WOULD accept my lowball offer (which will be even lower then).
Since that week of open houses, no more open house tour. I think it must have been pretty useless. I think 3 or 4 more months of essentially zero buyers should soften up their arrogance.
Running Springs?? Boy, let’s see, Venice vs Running Springs…
Hey! Running Springs is the gateway to the San Bernardino National Forest. Harumph.
Yeah, I know. But still, I’ll bet more rich Los Angeles people have houses up here (Lake Arrowhead, Big Bear etc.) than in Venice. Ummm. Ok, well, maybe.
“‘Interest rates have gone up and their payments have gone up drastically and they need to let the property go,’ he said. ‘They were planning to refinance with equity in the property. They were banking betting on appreciation, but that didn’t happen.’”
“Craps! New roller, new roller.”
“‘Interest rates have gone up and their payments have gone up drastically and they need to let the property go,’ he said. ‘They were planning to refinance with equity in the property. They were
bankingbetting on appreciation, but that didn’t happen.’”“Craps! New roller, new roller.”
Lets se if it works this time.